# EDGAR Filing Document

**Accession Number:** 0001743340
**File Stem:** 0001213900-26-053942
**Filing Date:** 2026-5
**Character Count:** 748296
**Document Hash:** b471e577ec1e104fa0359b981b2a886e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-053942.hdr.sgml**: 20260508

**ACCESSION NUMBER**: 0001213900-26-053942

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 105

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260508

**DATE AS OF CHANGE**: 20260508

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Token Cat Ltd
- **CENTRAL INDEX KEY:** 0001743340
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-BUSINESS SERVICES, NEC [7389]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38737
- **FILM NUMBER:** 26959129

**BUSINESS ADDRESS:**
- **STREET 1:** 9F, RUIHAI BUILDING
- **STREET 2:** NO. 21 YANGFANGDIAN ROAD
- **CITY:** BEIJING
- **STATE:** F4
- **ZIP:** 100038
- **BUSINESS PHONE:** 00861063998902

**MAIL ADDRESS:**
- **STREET 1:** 9F, RUIHAI BUILDING
- **STREET 2:** NO. 21 YANGFANGDIAN ROAD
- **CITY:** BEIJING
- **STATE:** F4
- **ZIP:** 100038

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TuanChe Ltd
- **DATE OF NAME CHANGE:** 20180611

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 20-F**

**(Mark One)**

**☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

**☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2025**

**OR**

**☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

**☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**Date of event requiring this shell company report** 

**For the transition period from ___________ to ___________**

**Commission file number: 001-38737**

**Token Cat Limited**

**(Exact name of registrant as specified in its charter)**

**N/A**

**(Translation of Registrant's name into English)**

**Cayman Islands**

**(Jurisdiction of incorporation)**

**Guangsheng Liu, Chief Executive Officer**

**9F, Ruihai Building, No. 21 Yangfangdian Road**

**Haidian District Beijing 100038**

**The People's Republic of China**

**Telephone: +86 16681599729** 

**E-mail: guangshengliu@tokencat.com**

**(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)**

**Securities registered or to be registered, pursuant to Section 12(b) of the Act:**

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| American depositary shares, each representing 4,800 Class A ordinary shares, par value US$0.0001 per share Class A ordinary shares, par value US$0.0001 per share\* | TC | Nasdaq Capital Market |

---

\* Not for trading, but only in connection with the listing on the Nasdaq Capital Market of American depositary shares

**Securities registered or to be registered pursuant to Section 12(g) of the Act.**

**None**

**(Title of Class)**

**Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.**

**None**

**(Title of Class)**

Indicate the number of issued and outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:

---

| | |
|:---|:---|
| Class A ordinary shares, par value US$0.0001 each | 9,486,076,439 shares issued; 8,253,410,439 shares outstanding |
| Class B ordinary shares, par value US$0.0001 each | 55,260,580 shares issued; 55,260,580 shares outstanding |

---

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Of 1934. Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 13(a) of the Exchange Act. ☐

† The
term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board
to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒ International Financial Reporting Standards as issued by the International accounting Standards Board ☐ Other ☐

If "Other" has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [INTRODUCTION](#a_001) | ii |
| [MARKET AND INDUSTRY DATA](#a_002) | v |
| [PART I](#a_003) | 1 |
| [Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](#a_004) | 1 |
| [Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE](#a_005) | 1 |
| [Item 3. KEY INFORMATION](#a_006) | 1 |
| [Item 4. INFORMATION ON THE COMPANY](#a_007) | 40 |
| [Item 4A. UNRESOLVED STAFF COMMENTS](#a_008) | 60 |
| [Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](#a_009) | 60 |
| [Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](#a_010) | 74 |
| [Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](#a_011) | 85 |
| [Item 8. FINANCIAL INFORMATION](#a_012) | 86 |
| [Item 9. THE OFFER AND LISTING](#a_013) | 87 |
| [Item 10. ADDITIONAL INFORMATION](#a_014) | 87 |
| [Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#a_015) | 96 |
| [Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](#a_016) | 97 |
| [PART II](#a_017) | 98 |
| [Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](#a_018) | 98 |
| [Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](#a_019) | 98 |
| [Item 15. CONTROLS AND PROCEDURES](#a_020) | 98 |
| [Item 16. \[Reserved\]](#a_021) | 99 |
| [Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT](#a_022) | 99 |
| [Item 16B. CODE OF ETHICS](#a_023) | 99 |
| [Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES](#a_024) | 99 |
| [Item 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES](#a_025) | 99 |
| [Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS](#a_026) | 99 |
| [Item 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT](#a_027) | 100 |
| [Item 16G. CORPORATE GOVERNANCE](#a_028) | 101 |
| [Item 16H. MINE SAFETY DISCLOSURE](#a_029) | 101 |
| [Item 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](#a_030) | 101 |
| [Item 16J. INSIDER TRADING POLICIES](#a_031) | 101 |
| [Item 16K. CYBERSECURITY](#a_032) | 102 |
| [PART III](#a_033) | 103 |
| [Item 17. FINANCIAL STATEMENTS](#a_034) | 103 |
| [Item 18. FINANCIAL STATEMENTS](#a_035) | 103 |
| [Item 19. EXHIBITS](#a_036) | 103 |
| [INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS](#a_037) | F-1 |

---

i

**INTRODUCTION**

Except where the context otherwise requires and for purposes of this annual report on Form 20-F only:

● "ADRs" refers to the American depositary receipts which, if issued, evidence the ADSs;

● "ADSs" refers to American depositary shares, each of which represents 4,800 Class A ordinary shares;

● "auto dealer(s)" refers to both franchised dealers and secondary dealers;

● "CAGR" refers to compound annual growth rate;

● "China" or "PRC" refers to the People's Republic of China, excluding, for the purpose of this annual report only, Taiwan and the special administrative regions of Hong Kong and Macau;

● "franchised dealer(s)" refers to primary dealers authorized to sell the products of a single brand of automobiles that integrate four standard automotive related businesses, including sales, spare parts, service and survey;

● "GMV" refers to gross merchandise value, reflecting the total sales dollar value for automobiles sold through our marketplace;

● "industry customer(s)" refers to business customers to which we offer services, including auto dealers, automakers, automobile accessory manufacturers, aftermarket service providers and other automotive related goods and service providers;

● "NEV" refers to new energy vehicles;

● "ordinary shares" or "shares" refer to our Class A and Class B ordinary shares of par value US$0.0001 per share;

● "RMB" or "Renminbi" refers to the legal currency of China;

● "SEC" refers to the United States Securities and Exchange Commission;

● "secondary dealer(s)" refers to car dealers that have no automobile manufacturers certification and do not have specific sales brand restrictions;

● "US$," "U.S. dollars," "$" or "dollars" refers to the legal currency of the United States of America;

● "VIEs" refers to TuanChe Internet Information Service (Beijing) Co., Ltd., Shenzhen Drive New Media Co., Ltd., Beijing Internet Drive Technology Co., Ltd. and/or Haina Shuke (Beijing) Technology Co., Ltd. (formerly known as Tansuojixian Technology (Beijing) Co., Ltd.), and their respective subsidiaries, as the context requires; and

● "we," "us," "our," "our company," or "Token Cat" refers to Token Cat Limited and its subsidiaries.

ii

Effective on January 26, 2024, we changed the ratio of the ADSs to Class A ordinary shares from the then ADS ratio of one ADS to sixteen (16) Class A ordinary shares to a new ADS ratio of one ADS representing two hundred and forty (240) Class A ordinary shares.

Effective on or about August 19, 2025, we changed the ratio of the ADSs to Class A ordinary shares from the then ADS ratio of one ADS to 240 Class A ordinary shares to a new ADS ratio of one ADS representing 4,800 Class A ordinary shares. Unless otherwise indicated, ADSs and per ADS amount in this annual report have been retroactively adjusted to reflect the change in ratio for all periods presented.

Names of certain companies provided in this annual report are translated or transliterated from their original Chinese legal names.

Discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.

This annual report on Form 20-F includes our audited consolidated financial statements for the 2023, 2024 and 2025 fiscal years.

This annual report contains translations of certain Renminbi amounts into U.S. dollars at specified rates. Unless otherwise stated, the translation of Renminbi into U.S. dollars has been made at RMB6.9931 to US$1.00, the noon buying rate in effect on December 31, 2025 as set forth in the H.10 Statistical Release of the Federal Reserve Board. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, the rates stated below, or at all. The PRC government imposes controls over its foreign currency reserves in part through direct regulation of the conversion of Renminbi into foreign exchange and through restrictions on foreign trade.

Token Cat Limited, our ultimate Cayman Islands holding company, does not have any substantive operations. We carry out our value-added telecommunications business in China through our subsidiaries in China. Previously, we primarily carried out our business through the VIEs, and their subsidiaries. On October 31, 2025, we completed the sale of 100% of our equity interests in Long Ye International Limited, TuanChe Group Inc., TuanChe Information Limited (a Hong Kong company), and all of the VIE entities associated with the foregoing to the Prime Management Group Limited, a British Virgin Islands company (the "2025 Dispositions"). The final commercial and industrial registration changes with respect to the 2025 Dispositions occurred on December 29, 2025. As of the date of this Annual Report, we no longer operate VIEs in China.

We are subject to PRC laws relating to, among others, restrictions over foreign investments in value-added telecommunications services set out in the Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Version) (the "Negative List (2024 Version)"), promulgated by the Ministry of Commerce ("MOFCOM"), and the National Development and Reform Commission (the "NDRC"), in China. Investors in the ADSs are purchasing equity securities of our ultimate Cayman Islands holding company rather than purchasing equity securities of our wholly owned subsidiaries in China ("WFOEs"). Because of our corporate structure, we are subject to risks due to the interpretation and the application of the current PRC laws and regulations or new PRC laws and regulations promulgated in the future. In 2023, 2024 and 2025 our PRC subsidiaries received cash of nil, nil and nil, respectively, from the VIEs for services rendered to the VIEs and their subsidiaries. In 2023, 2024 and 2025, our PRC subsidiaries paid cash of nil, nil and nil, respectively, to the VIEs for services provided by the VIEs and their subsidiaries.

iii

We face various legal and operational risks and uncertainties related to being based in and having significant operations in China. A China-based company shall comply with applicable laws, regulations and regulatory requirements including without limitations, offshore offerings and cybersecurity and data privacy. We may need to make material changes in our operations to comply with those requirements and/or the value of the ADSs might be affected. PRC government's certain administrative requirements in regulating our operations, the overseas offering and listing of China-based issuers, and foreign investments could significantly limit or completely hinder our ability to offer or continue to offer ADSs and/or other securities to investors and in this nature may result in adverse effect on the value of such securities and cause the value of such securities to significantly decline or be worthless. Our business shall also be conducted in compliance with applicable regulatory requirements of the PRC government and our operations. Furthermore, the PRC government has recently exerted more oversight and control over overseas securities offerings and foreign investment in China-based companies, and these rules could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and may result in adverse effect and/or cause the value of such securities to significantly decline or in extreme cases, become worthless. For further details, see "Item 3. Key Information-D. Risk Factors-Risks Related to Our Corporate Structure" and "Item 3. Key Information-D. Risk Factors-Risks Related to Doing Business in China."

Our financial statements contained in the annual report on Form 20-F for the fiscal years ended December 31, 2024 and 2025 have been audited by our current auditor, JWF Assurance PAC ("JWF"), an independent registered public accounting firm headquartered in Singapore that was not included in the list of PCAOB Identified Firms of having been unable to be inspected or investigated completely by the PCAOB in the PCAOB Determination Report issued in December 2021. Our financial statements contained in the annual report on Form 20-F for the fiscal year ended December 31, 2023 has been audited by our previous auditor, Marcum Asia CPAs LLP ("Marcum Asia"), an independent registered public accounting firm headquartered in New York that was not included in the list of PCAOB Identified Firms of having been unable to be inspected or investigated completely by the PCAOB in the PCAOB Determination Report issued in December 2021.We have not been identified by the SEC as a commission-identified issuer under the Holding Foreign Company Accountable Act (the "HFCA Act"), as of the date of this annual report. On August 26, 2022, the CSRC, MOFCOM, and the PCAOB signed a Statement of Protocol (the "Protocol"), governing inspections and investigations of audit firms based in mainland China and Hong Kong. Pursuant to the Protocol, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong in 2022, and the PCAOB Board vacated its previous determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor's, control. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCA Act if needed. Notwithstanding the foregoing, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, the SEC may prohibit our shares or the ADSs from being traded on a national securities exchange or in the over the counter trading market in the United States. Additionally, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which would amend the HFCA Act and require the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. On December 29, 2022, the Accelerating Holding Foreign Companies Accountable Act was signed into law, and the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA is reduced from three years to two. Furthermore, we and our investors are deprived of the benefits of such PCAOB inspections. If we fail to meet the new listing standards specified in the HFCA Act, we could face possible delisting from the Nasdaq Stock Market, cessation of trading in over the counter market, deregistration from the SEC and/or other risks, which may materially and adversely affect, or effectively terminate, the ADSs trading in the United States.

The ADSs are listed on the Nasdaq Capital Market under the symbol "TC."

iv

**FORWARD-LOOKING STATEMENTS**

This Annual Report contains "forward-looking statements" that represent our beliefs, projections and predictions about future events. All statements other than statements of historical fact are "forward-looking statements" including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management's beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. Words such as "may", "will", "should", "could", "would", "predicts", "potential", "continue", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates" and similar expressions, as well as statements in the future tense, identify forward-looking statements.

Forward-looking statements contained in this report include, but are not limited to, statements about our ability to:

● Grow or expand our existing business segments, including our automotive electronics resale business;

● Expand into new business segments, such as our planned multi-channel network platform business;

● Execute on our business strategy;

● Attract, train and retain effective officers, key employees and directors;

● Identify, evaluate and consummate strategic opportunities in ways that maximize stockholder value;

● Anticipate and react to regulatory changes and uncertainty;

● Continue as a going concern;

● Anticipate the impact of, and respond to applicable new accounting standards;

● Respond to fluctuations in commodity prices and foreign currency exchange rates and political unrest and regulatory changes in international markets from various events;

● Navigate volatile interest rate environments; and

● Maintain our listing on the Nasdaq stock exchange.

These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied by such statements. Actual results may differ materially from expected results described in our forward-looking statements, including with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy and completeness of the publicly available information with respect to the factors upon which our business strategy is based, and on the success of our business.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the times by which, our performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and management's belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to, those factors discussed under the headings "Risk Factors", "Operating and Financial Review and Prospects," "Information on the Company" and elsewhere in this Annual Report.

This Annual Report should be read in conjunction with our audited financial statements and the accompanying notes thereto, which are included in Item 18 of this Annual Report.

**MARKET AND INDUSTRY DATA**

Market data and certain industry forecasts used in this annual report were obtained from internal surveys, market research, publicly available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Similarly, internal surveys, industry forecasts and market research, while believed to be reliable, have not been independently verified, and we make no representation as to the accuracy of such information.

v

**PART I**

**ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not applicable.

**ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE**

Not applicable.

**ITEM 3. KEY INFORMATION**

**Holding Company Structure**

Token Cat Limited is a holding company with no material operations of its own. We conduct our operations primarily through our WFOEs. As a result, our ability to pay dividends depends upon dividends paid by our subsidiaries. If our subsidiaries or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.

Previously, we primarily carried out our business through the VIEs, and their subsidiaries. On October 31, 2025, we completed the 2025 Disposition. The final commercial and industrial registration changes with respect to the 2025 Dispositions occurred on December 29, 2025. As of the date of this Annual Report, we no longer operate VIEs in China.

In addition, our subsidiaries in China are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with the Accounting Standards for Business Enterprise as promulgated by the Ministry of Finance of the PRC ("PRC GAAP"). Under PRC law, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory surplus reserve until such reserve reaches 50% of its registered capital. In addition, our wholly foreign-owned subsidiary in China may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the statutory reserve funds are not distributable as cash dividends.

As an offshore holding company, we are permitted under PRC laws and regulations to provide funding from the proceeds of our offshore fundraising activities to our PRC subsidiaries only through loans or capital contributions, in each case subject to the satisfaction of the applicable government registration and approval requirements. See "Item 3. Key Information-D. Risk Factors-Risks Related to Doing Business in China-PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our initial offering to make loans to or make additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business." As a result, there is uncertainty with respect to our ability to provide prompt financial support to our subsidiaries in China when needed.

The following table sets forth the respective revenue contributions of (1) the VIEs and (2) Token Cat Limited (the "Parent") and our subsidiaries for the periods indicated both in absolute amount and as a percentage of total revenues.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
| The VIEs | 68167 | 42.0 | 50152 | 102.0 | 20339 | 2908 | 64.6 |
| Parent and our subsidiaries | 94200 | 58.0 | (976) | (2.0) | 11152 | 1595 | 35.4 |
| Total revenues | 162367 | 100.0 | 49176 | 100.0 | 31491 | 4503 | 100.0 |

---

The following table sets forth the respective asset contributions of (1) the VIEs and (2) Parent and our subsidiaries as of the date indicated both in absolute amount and as a percentage of total assets.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |  |
| The VIEs | 163789 | 137.20 | 142595 | 323.0 |  |  |  |  |
| Parent and our subsidiaries | (44441) | (37.2) | (98452) | (223.0) | 172877 | 24722 |  | 100.0 |
| Total assets | 119348 | 100.0 | 44143 | 100.0 | 172877 | 24722 |  | 100.0 |

---

**Financial Information Related to the VIEs**

The following table presents the consolidated balance sheet information relating to Token Cat Limited (the "Parent"), the VIEs and the non-variable interest entities as of December 31, 2024, and 2025.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** |
|  | | | **Non—VIE** | **Non—VIE** | | |
|  | **Parent** | **VIE<br> Consolidated** | **WFOE** | **Other <br> subsidiaries** |<br>**Intercompany<br> Elimination** |<br>**Group<br> Consolidated** |
| Cash, cash equivalents and restricted cash | **—** |  |  | 976 | **—** | 976 |
| Amount due from the subsidiaries of the Group | 167518 |  |  | **—** | (167518) | **—** |
| Other current assets | **—** |  |  | 171901 | **—** | 171901 |
| **Total current assets** | **167518** |  |  | **172877** | **(167518)** | **172877** |
| Investments in subsidiaries | (10861) |  |  | **—** | 10861 | **—** |
| Other non—current assets | **—** |  |  | **—** | **—** | **—** |
| **Total non—current assets** | **(10861)** |  |  | **—** | **10861** | **—** |
| **Total assets** | **156657** |  |  | **172877** | **(156657)** | **172877** |
| Accounts payable | **—** |  |  | 6499 | **—** | 6499 |
| Amount due to the subsidiaries of the Group | **—** |  |  | 170857 | (170857) | **—** |
| Other current liabilities | **—** |  |  | 9721 |  | 9721 |
| **Total current liabilities** | **—** |  |  | **187077** | **(170857)** | **16220** |
| Warrant liability | 24377 |  |  | **—** | **—** | 24377 |
| Other non—current liabilities | **—** |  |  | **—** | **—** |  |
| **Total non—current liabilities** | **24377** |  |  | **—** | **—** | **24377** |
| **Total liabilities** | **24377** |  |  | **187077** | **(170857)** | **40597** |
| **Total equity/(deficit)** | **132280** |  |  | **(14200)** | **14200** | **132280** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | | | **Non—VIE** | **Non—VIE** | | |
|  | **Parent** | **VIE<br> Consolidated** | **WFOE** | **Other <br> subsidiaries** |<br>**Intercompany<br> Elimination** |<br>**Group<br> Consolidated** |
| Cash, cash equivalents and restricted cash | 257 | **—** | **—** | 4342 | **—** | 4599 |
| Amount due from the subsidiaries of the Group | 143044 | 122613 | 130706 | 16424 | (412787) | **—** |
| Other current assets | **—** | **—** | **—** | **—** | **—** | **—** |
| Current assets of discontinued operations | **—** | 13886 | 19477 | 85 | **—** | 33448 |
| **Total current assets** | **143301** | **136499** | **150183** | **20851** | **(412787)** | **38047** |
| Investments in subsidiaries, VIEs and subsidiaries of VIEs | (205108) | **—** | **—** | 750987 | (545879) | **—** |
| Non-current assets of discontinued operations | **—** | 6096 | **—** | **—** | **—** | 6096 |
| **Total non—current assets** | **(205108)** | **6096** |  | **750987** | **(545879)** | **6096** |
| **Total assets** | **(61807)** | **142595** | **150183** | **771838** | **(958666)** | **44143** |
| Amount due to the subsidiaries of the Group | 3015 | 231968 | 144121 | 24533 | (403637) | **—** |
| Other current liabilities | 7429 | **—** | **—** | 3412 | **—** | 10841 |
| Current liabilities of discontinued operations | **—** | 48332 | 43856 | 3 | **—** | 92191 |
| **Total current liabilities** | **10444** | **280300** | **187977** | **27948** | **(403637)** | **103032** |
| Warrant liability | 68556 | **—** | **—** | **—** | **—** | 68556 |
| Non-current liabilities of discontinued operations | **—** | 10000 | 3362 |  |  | 13362 |
| **Total non—current liabilities** | **68556** | **10000** | **3362** | **—** | **—** | **81918** |
| **Total liabilities** | **79000** | **290300** | **191339** | **27948** | **(403637)** | **184950** |
| **Total equity/(deficit)** | **(140807)** | **(147705)** | **(41156)** | **743890** | **(555029)** | **(140807)** |

---

The following table presents the consolidated statements of operations and comprehensive loss and cash flows relating to the Parent, the VIEs and the non-variable interest entities for the years ended December 31, 2023, 2024 and 2025.

 

*Consolidated statements of operations and comprehensive (loss)/income data*

 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** |
|  | | | **Non—VIE** | **Non—VIE** | | |
|  | **Parent** | **VIE<br> Consolidated** | **WFOE** | **Other <br> subsidiaries** |<br>**Intercompany<br> Elimination** |<br>**Group<br> Consolidated** |
| **Continuing operations:** | | | | | | |
| **Net revenues** | **—** | **—** | **—** | 5920 | **—** | 5920 |
| **Cost of revenues** | **—** | **—** | **—** | (5752) | **—** | (5752) |
| **Operating expenses** | (24777) | **—** | **—** | (9866) | **—** | (34643) |
| **Loss from operations** | (24777) | **—** | **—** | (9698) | **—** | (34475) |
| Equity in loss of subsidiaries | (9698) | **—** | **—** | **—** | 9698 | **—** |
| Gain from disposal of subsidiaries | 48986 | **—** | **—** | **—** | **—** | 48986 |
| Other income/(loss), net | 28024 | **—** | **—** | **—** | **—** | 28024 |
| Income tax expense |  | **—** | **—** | **—** | **—** | **—** |
| **(Loss)/income from continuing operations, net of tax** | 42535 | **—** | **—** | (9698) | 9698 | 42535 |
| **Discontinued operations:** |  |  |  |  |  |  |
| **(Loss)/income from discontinued operations before income taxes** | (40265) | (13319) | (26950) | 4 | 40265 | (40265) |
| Income tax expense | **—** | **—** | **—** | **—** | **—** | **—** |
| **(Loss)/income from discontinued operations, net of tax** | (40265) | (13319) | (26950) | 4 | 40265 | (40265) |
| **Net income/(loss)** | 2270 | (13319) | (26950) | (9694) | 49963 | 2270 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | | | **Non—VIE** | **Non—VIE** | | |
|  | **Parent** | **VIE<br> Consolidated** | **WFOE** | **Other <br> subsidiaries** |<br>**Intercompany<br> Elimination** |<br>**Group<br> Consolidated** |
| **Continuing operations:** | | | | | | |
| **Net revenues** | **—** | **—** | **—** | **—** | **—** | **—** |
| **Cost of revenues** | **—** | **—** | **—** | **—** | **—** | **—** |
| **Operating expenses** | (32861) | **—** | **—** | (4715) | **—** | (37576) |
| **Loss from operations** | (32861) | **—** | **—** | (4715) | **—** | (37576) |
| Equity in loss of subsidiaries | (4716) | **—** | **—** | **—** | 4716 | **—** |
| Investment loss | **—** | **—** | **—** | **—** | **—** | **—** |
| Other income/(loss), net | (56695) | **—** | **—** | (1) |  | (56696) |
| Income tax expense | **—** | **—** | **—** | **—** | **—** | **—** |
| **(Loss)/income from continuing operations, net of tax** | (94272) | **—** | **—** | (4716) | 4716 | (94272) |
| **Discontinued operations:** |  |  |  |  |  |  |
| **(Loss)/income from discontinued operations before income taxes** | (93719) | (12352) | (81358) | (9) | 93719 | (93719) |
| Income tax expense | **—** | **—** | **—** | **—** | **—** | **—** |
| **(Loss)/income from discontinued operations, net of tax** | (93719) | (12352) | (81358) | (9) | 93719 | (93719) |
| **Net loss** | (187991) | (12352) | (81358) | (4725) | 98435 | (187991) |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** |
|  | | | **Non—VIE** | **Non—VIE** | | |
|  | **Parent** | **VIE<br> Consolidated** | **WFOE** | **Other <br> subsidiaries** |<br>**Intercompany<br> Elimination** |<br>**Group<br> Consolidated** |
| **Continuing operations:** | | | | | | |
| **Net revenues** |  |  |  |  |  |  |
| **Cost of revenues** |  |  |  |  |  |  |
| **Operating expenses** | (24540) |  |  |  |  | (24540) |
| **Loss from operations** | (24540) |  |  |  |  | (24540) |
| Equity in loss of subsidiaries |  |  |  |  |  |  |
| Investment loss |  |  |  |  |  |  |
| Other income/(loss), net | 21380 |  |  |  |  | 21380 |
| Income tax expense |  |  |  |  |  |  |
| **Losse from continuing operations, net of tax** | (3160) |  |  |  |  | (3160) |
| **Discontinued operations:** |  |  |  |  |  |  |
| **(Loss)/income from discontinued operations before income taxes** | (79811) | (418) | (79351) | (42) | 79811 | (79811) |
| Income tax expense |  |  |  |  |  |  |
| **(Loss)/income from discontinued operations, net of tax** | (79811) | (418) | (79351) | (42) | 79811 | (79811) |
| **Net loss** | (82971) | (418) | (79351) | (42) | 79811 | (82971) |

---

*Consolidated cash flow information*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** |
|  | | | **Non—VIE** | **Non—VIE** | | |
|  |<br>**Parent** |<br>**VIE Consolidated** | **WFOE** | **Other<br> subsidiaries** |<br>**Intercompany Elimination** |<br>**Group Consolidated** |
| **Net cash (used in) provided by operating activities** | 4647 | 473 | 61 | (181545) |  | (176364) |
| **Net cash used in investing activities** | (4904) |  |  |  |  | (4904) |
| **Net cash (used in) provided by financing activities** |  | (1450) |  | 165039 |  | 163589 |
| **Effect of exchange rate changes** |  |  |  | 8315 |  | 8315 |
| **Net (decrease) increase in cash and cash equivalents** | (257) | (977) | 61 | (8191) |  | (9364) |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | | | **Non—VIE** | **Non—VIE** | | |
|  |<br>**Parent** |<br>**VIE Consolidated** | **WFOE** | **Other<br> subsidiaries** |<br>**Intercompany Elimination** |<br>**Group Consolidated** |
| **Net cash (used in) provided by operating activities** | (9860) | (22167) | (7038) | &nbsp;&nbsp;&nbsp;&nbsp;4343 |  | (34722) |
| **Net cash used in investing activities** |  |  | (19) |  |  | (19) |
| **Net cash provided by financing activities** | 7112 | 19358 | 3689 |  |  | 30159 |
| **Effect of exchange rate changes** | 1 |  | (1072) |  |  | (1071) |
| **Net (decrease) increase in cash and cash equivalents** | (2747) | (2809) | (4440) | 4343 |  | (5653) |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** |
|  | | | **Non—VIE** | **Non—VIE** | | |
|  |<br>**Parent** |<br>**VIE Consolidated** | **WFOE** | **Other subsidiaries** |<br>**Intercompany Elimination** |<br>**Group Consolidated** |
| **Net cash provided by (used in) operating activities** | 4075 | (15357) | (63583) | (27) |  | (74892) |
| **Net cash used in investing activities** | (59263) |  |  | (56565) | 115828 |  |
| **Net cash provided by financing activities** |  | 13172 | 60063 | 56565 | (115828) | 13972 |
| **Effect of exchange rate changes** | 1024 |  | (954) |  |  | 70 |
| **Net decrease in cash and cash equivalents** | (54164) | (2185) | (4474) | (27) |  | (60850) |

---

**Cash Flows through Our Organization**

Token Cat Limited is a holding company with no material operations of its own. We currently conduct our operations through our WFOEs and their respective subsidiaries. We do not have cash management policies dictating how funds are transferred throughout our organization. We may encounter difficulties in our ability to transfer cash between subsidiaries in China and other subsidiaries largely due to various PRC laws and regulations imposed on foreign exchange.

In 2023, 2024 and 2025, our PRC subsidiaries received cash of nil, nil and nil, respectively, from the VIEs for services rendered to the VIEs and their subsidiaries. In 2023, 2024 and 2025, our PRC subsidiaries paid cash of nil, nil, and nil, respectively, to the VIEs for services provided by the VIEs and their subsidiaries. In each of 2023, 2024 and 2025, our PRC subsidiaries made no dividends or distributions to us. The foregoing cash flows include all distributions and transfers between our Cayman Islands holding company, our subsidiaries and the VIEs as of the date of this annual report. For our 2025 consolidated cash flows and liquidity profile, see "Item 5.B" of this Annual Report on Form 20-F and Note 2 (Going Concern) to our consolidated financial statements in this Annual Report on Form 20-F.

**Our Operations in China and Permissions Required from the PRC Authorities for Our Operations**

We have obtained all licenses, permits or approvals from the PRC regulatory authorities for our continuing business operations. We and the VIEs previously did not obtain requisite permits for the provision of certain livestreaming services when provided at a preliminary stage. We and the VIEs took measures to rectify such defect by entering into collaboration arrangements with the operators of livestreaming platforms holding the requisite permits, and we have not received any inquiry or investigation from any PRC government authority regarding such service provision. These operations constituted part of our discontinued operations disposed of in 2025. However, the licensing requirements in China are constantly evolving, and we may be subject to more stringent regulatory requirements in the relevant jurisdictions in the future. We cannot assure you that we will be able to satisfy such regulatory requirements, and as a result, we may be unable to retain, obtain or renew relevant licenses, permits or approvals in the future. If we fail to do so, we may be subject to administrative penalties or sanctions, which may materially and adversely affect our business, financial condition and results of operations. In addition, if we or our subsidiaries inadvertently conclude that other permissions and approvals, including those from the CAC or the CSRC, are not required or applicable laws, regulations or interpretations change and we and our subsidiaries are required to obtain such permissions or approvals in the future, we and our subsidiaries' operations in China may be subject to sanctions imposed by the relevant PRC regulatory authority, including fines and penalties, revocation of our subsidiaries' licenses and suspension of their respective business, restrictions or limitations on our ability to pay dividends outside of China, regulatory orders, litigation or adverse publicity, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations.

 **

***A. [Reserved]***

 

***B. Capitalization and Indebtedness***

Not applicable.

***C. Reasons for the Offer and Use of Proceeds***

Not applicable.

 ****

***D. Risk Factors***

 

*An investment in the ADSs involves risks. You should carefully consider the risks described below, as well as the other information included or incorporated by reference in this annual report, before making an investment decision. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. The market or trading price of the ADSs could decline due to any of these risks, and you may lose all or part of your investment. In addition, the risks discussed below also include forward-looking statements and our actual results may differ substantially from those discussed in these forward-looking statements. Please note that additional risks not presently known to us, that we currently deem immaterial or that we have not anticipated may also impair our business and operations.*

**Summary Risk Factors**

Our business is subject to numerous risks and uncertainties, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects. These risks are discussed more fully below and include, but are not limited to, risks related to:

***Risks Related to Our Business and Industry***

● Because a significant portion of our historical operations constitutes discontinued operations, our historical financial information may not be indicative of our future performance and may be difficult for investors to evaluate.

● We have recently transitioned our business and disposed of our legacy operations, and we may not be able to successfully execute our new strategy.

● We rely on China's automotive industry for our net revenues and future growth, the prospects of which are subject to many factors, including the relevant government regulations and policies.

● Our revenue is highly concentrated in a small number of customers.

***Risks Related to Our Corporate Structure***

● We may rely on dividends and other distributions on equity paid by our subsidiaries in mainland China and Hong Kong to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct the business.

***Risks Related to Doing Business in China***

● Changes in China's and global evolving economic, political or social conditions or government policies could have material adverse effect on our business, results of operations, financial condition, and the value of our securities.

● There may be changes from time to time with respect to the legal systems of certain markets where we operate, and any failure to comply with laws and regulations could adversely affect us.

● The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with an offshore offering and the subsequent offering under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.

● If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and the ADS holders.

***Risks Related to Our Securities, including the ADSs***

● Trading in our securities on any U.S. stock exchange and the U.S. over-the-counter market may be prohibited under the HFCA Act or the Accelerating Holding Foreign Companies Accountable Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national securities exchanges, such as the Nasdaq, may determine to delist our securities, and our securities may be prohibited from being traded over the counter.

● The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors.

● Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and the ADSs may view as beneficial.

● Substantial future sales or perceived potential sales of the ADSs in the public market could cause the price of the ADSs to decline.

**Risks Related to Our Business and Industry**

***Because a significant portion of our historical operations constitutes discontinued operations, our historical financial information may not be indicative of our future performance and may be difficult for investors to evaluate.***

 ****

Our disposition of the legacy business and the classification of most historical activities as discontinued operations may limit comparability between periods and may make it difficult for investors to assess our ongoing performance trends and prospects. Investors may attribute less value to our historical financial information, analysts may have limited ability to model our future results, and the market price of our securities may be more volatile. In addition, discontinued operations may continue to affect our financial statements through transaction costs, separation costs, liabilities retained or assumed, and potential contingencies.

 ****

***We have recently transitioned our business and disposed of our legacy operations, and we may not be able to successfully execute our new strategy.***

We have disposed of our legacy business effective October 31, 2025, which constitutes discontinued operations, and terminated our relationships with our former VIEs. As a result, we are in the early stages of operating a different business with different operational requirements, risk profile, and capital needs. This transition has required, and may continue to require, significant management attention, changes to internal processes and systems, and additional expenditures. If we do not successfully execute our new strategy, we may not be able to achieve profitability or maintain adequate liquidity, and the market price of our securities could decline.

Our continuing operations are concentrated in a business line launched in the third quarter of 2025. Our limited operating history in this business limits investors' ability to assess our performance, business trends, unit economics, seasonality, and competitive positioning. We may not be able to establish efficient operating processes, scale our sourcing and logistics, or achieve or maintain acceptable margins. If our continuing business does not grow as we anticipate, we may not be able to generate sufficient revenues to support our operations.

***Our auto electronics resale business may be highly competitive and subject to significant pricing pressure, which could reduce our margins and adversely affect our results.***

The auto electronics resale market is fragmented and competitive, and we may compete with established distributors, resellers, online marketplaces, and other intermediaries on price, product availability, delivery times, and service. Competitors may have stronger supplier relationships, larger purchasing volumes, better brand recognition, and greater financial resources. Competitive dynamics may require us to reduce prices, increase marketing or service spend, or accept less favorable terms, any of which could materially adversely affect our gross margin and operating results.

Our auto electronics resale business depends on the availability of auto electronics products that meet our quality, authenticity, and pricing requirements. If we are unable to secure adequate supply, if suppliers reduce allocations, raise prices, change payment terms, or experience disruptions, we may be unable to fulfill customer demand or may have to procure products at unfavorable prices. Supply disruptions, including logistics constraints, import/export disruptions, or supplier financial distress, could increase costs, reduce revenues, and adversely affect customer relationships.

***We may depend on a limited number of suppliers for certain products, and changes in supplier relationships, pricing, or credit terms could materially adversely affect our business.***

We may purchase certain products from a limited number of suppliers, and in some cases we may not have long-term contracts that guarantee supply, pricing, or allocation. If any supplier terminates its relationship with us, reduces supply, materially increases pricing, tightens credit terms, or experiences financial or operational difficulties, we may be unable to obtain sufficient supply on acceptable terms or at all. Qualifying and onboarding alternative suppliers may be time-consuming and costly, and may not result in the same product availability, pricing, or quality.

***We may be unable to effectively manage inventory, and inventory obsolescence, shrinkage, or write-downs could materially adversely affect our results of operations.***

Auto electronics products may be subject to rapid model changes, shifting consumer preferences, and technological evolution. If we purchase inventory in quantities that exceed demand, if products become obsolete, or if we experience theft, damage, or quality issues, we may need to discount products or record inventory write-downs. Because our business may require holding inventory to meet customer demand, failures in inventory forecasting or controls could materially adversely affect our liquidity and results.

***We may face product quality, returns, warranty, and product liability risks, which could harm our reputation and result in significant costs.***

We may sell products that are defective, fail to meet specifications, are subject to recalls, or are alleged to be counterfeit or infringe intellectual property rights. We may incur costs associated with returns, refunds, chargebacks, warranty claims, or customer disputes. In addition, we could be subject to claims for personal injury or property damage allegedly caused by products we sell, which could result in significant liabilities, legal expenses, regulatory scrutiny, reputational harm, and increased insurance costs, and could exceed our available insurance coverage.

***Our revenue is highly concentrated in a small number of customers.***

Our revenue is highly concentrated in a small number of customers, and the loss of one or more of these customers, or adverse changes in their purchasing patterns, payment terms or creditworthiness, could materially and adversely affect our business, financial condition and results of operations. In 2025, all of our revenue of our continuing operations was generated from five customers, and four customers collectively accounted for approximately 97.5% of total revenue, with two customers alone accounting for approximately 33.5% and 33.2%, respectively. Because our continuing operations are at an early stage and currently have a limited customer base, we may experience significant volatility in revenue, accounts receivable, cash flow and working capital if any significant customer reduces, delays or cancels orders, seeks extended payment terms, experiences financial difficulties, or decides to source products or services from other providers. This concentration may also make our results more difficult to forecast, increase our exposure to customer-specific credit risk and collection delays, and reduce our bargaining leverage in pricing and commercial negotiations. If we are unable to diversify our customer base on a timely basis, our business, financial condition, results of operations and the trading price of our ADSs could be materially and adversely affected.

The resale market is subject to heightened risks relating to counterfeit, unauthorized, grey market, stolen, or otherwise unlawful goods. Even if we adopt policies and procedures designed to identify and prevent the sale of unlawful products, those measures may not be successful. We could be subject to claims by customers, brand owners, or other third parties, as well as administrative penalties or other regulatory actions, and negative publicity could materially adversely affect our brand, customer demand, and results of operations.

***We may be subject to liabilities, claims, or ongoing obligations arising out of our disposed legacy business, which could materially adversely affect our financial condition and results.***

Even after the disposition of our legacy business, we may remain subject to liabilities and contingencies related to the legacy operations, including contractual disputes, regulatory inquiries, tax liabilities, employee-related claims, litigation, or indemnification obligations. The ultimate resolution of these matters may be costly and could require significant management time and financial resources.

***We may not be able to successfully develop and launch our contemplated online platform business, and any failure to achieve user adoption or marketplace liquidity could materially adversely affect our business.***

 ****

We are evaluating the launch of a new online platform business. Developing and launching an online platform requires significant investment in technology, marketing, and operations, and involves substantial execution risk. We may not be able to develop a platform that is reliable, scalable, and attractive to users and merchants, or to achieve sufficient user adoption, transaction volume, or network effects. If we do not achieve marketplace liquidity, we may be unable to monetize the platform and may incur losses.

***If we launch an online platform, our ability to attract users and merchants may depend on third-party channels and marketing, and our user acquisition costs may be high.***

Our ability to attract users, buyers, sellers, or other participants to an online platform may depend in part on our ability to generate traffic through third-party channels, such as search engines, application marketplaces, and social media platforms, as well as through paid marketing and promotional activities. Any adverse changes in the features, functionality, ranking, or other terms of major third-party platforms, or increases in marketing costs, could reduce traffic to our platform and materially adversely affect growth.

***If we launch an online platform, we may be subject to heightened regulatory, consumer protection, and transaction compliance risks in China.***

Operating an online platform may subject us to a complex and evolving PRC regulatory framework relating to online transactions, advertising, consumer protection, unfair competition, product quality, payments, and other matters. Regulators may require permits, filings, or licenses for aspects of our platform operations, and may impose heightened obligations relating to merchant management, transaction recordkeeping, dispute resolution, and handling of customer complaints. Failure to comply could result in fines, suspension of operations, reputational harm, or other adverse actions.

***If we launch an online platform, we may be subject to liability or administrative penalties for products sold through our platform, including counterfeit or infringing goods, and our reputation could be materially harmed.***

 ****

Suppliers and third-party merchants on an online platform are generally responsible for sourcing and listing the products they sell. If counterfeit, unauthorized, defective, or otherwise unlawful products are sold through our platform, or if content or listings on our platform are alleged to infringe third-party intellectual property rights or mislead consumers, we may be subject to claims, negative publicity, and penalties. Measures we adopt to verify product authenticity and remove unlawful products or listings may not be successful or timely.

***If we launch an online platform, we may be subject to PRC e-commerce and consumer protection laws that could impose significant obligations on us as a platform operator and could expose us to joint liability.***

PRC authorities and public advocacy groups have increasingly focused on consumer protection and e-commerce platform governance. E-commerce platform operators may be required to take remedial actions against merchants, respond to consumer complaints, and, in certain circumstances, may be held liable if they fail to provide information about merchants or fail to take appropriate action when they know or should have known of infringements or consumer harm. Any expanded obligations, heightened enforcement, or adverse interpretations could increase our compliance costs and expose us to civil, administrative, or other liability.

***If we launch an online platform, we may be required to obtain and maintain permits and licenses in China, and failure to do so could materially adversely affect our business.***

Depending on the scope of our contemplated platform, PRC regulators may require us to obtain, maintain, or renew approvals, filings, and licenses applicable to internet-based and platform operations. These may include licenses or permits that regulators characterize as value-added telecommunications services (such as online data processing and transaction processing services and internet information services). The PRC regulatory framework in this area is evolving and may be interpreted or enforced in ways that are adverse to us, and we may be unable to obtain or maintain required permits or to do so in a timely manner. If we are deemed to be operating without required permits, we could be subject to fines, rectification orders, suspension of operations, or other adverse actions.

***Our online platform (if launched) would rely on third-party payment service providers, and fraud, chargebacks, or payment disruptions could materially adversely affect our business.***

To the extent we accept online payments or facilitate payments between users and merchants, we may rely on third-party payment processing and escrow services and may be exposed to risks relating to fraud, chargebacks, disputed transactions, and merchant misconduct, including situations where a seller fails to deliver goods or delivers defective goods. Any deterioration in the ability of third-party payment providers to provide services to us, increased fraud levels, or increased chargebacks could result in higher costs, loss of customers, reputational harm, and regulatory scrutiny.

***Successful strategic relationships with third-party cooperative partners are important for our future success.***

We have established strategic relationships with third-party business partners from a variety of industries. For example, we have established strategic business relationships with insurance companies that offer automotive insurance products during our offline events. We have also entered into strategic partnerships with Tmall Auto, the automotive arm of Alibaba Group's Tmall, through which we expect to further explore additional growth opportunities along China's automotive transaction value chain. However, we may have disagreements or disputes with such third-party business partners, or our interests may not be aligned with theirs, which could cause disruptions to or terminations of such business collaboration and adversely affect our reputation, results of operations, and financial condition.

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***We face various forms of competition, and if we fail to compete effectively, we may lose market share and our business, prospects, and results of operations may be materially and adversely affected.***

We operate in a competitive industry. As we transition our business operations and service offerings, we expect to encounter more competitors from more industries and markets as well as different forms of competition. Some of these competitors or potential competitors may have longer operating histories and may have better resources than us in terms of funding, management, technology and sales and marketing. Our competitors may be acquired and consolidated by owners who are able to further invest significant resources into our operating field. If we are unable to compete effectively and at a reasonable cost against our existing and future competitors, our business, prospects, and results of operations could be materially and adversely affected.

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***If we are unable to manage business growth or execute growth strategies effectively, our business and prospects may be materially and adversely affected.***

Our net revenues from continuing operations were nil, nil and RMB5.9 million (US$0.8 million) in 2023, 2024 and 2025. Our net revenues in prior fiscal years are primarily attributable to discontinued operations disposed of in 2025. We may not be able to achieve business and revenue growth in the future due to a number of factors, including, among others, our ability to develop and expand our current business segment and planned future business segments, to retain and expand industry customer base, maintain customer satisfaction, compete effectively within the automotive industry, control expenses and acquire the resources for future growth as well as macroeconomic factors that are beyond our control. If our and the operational capabilities fall behind, the quality of our services and efficiency of operations could suffer, which could harm our brand, results of operations and overall business.

In addition, our anticipated development and expansion plans will place a significant strain on our management, systems and resources. Our development and expansion strategies for our planned business segments will require substantial managerial efforts and skills and incurrence of additional expenditures and may subject us to new or increased risks. Moreover, our expansion strategies may incur higher costs than the net revenues generated. Our failure to efficiently or effectively implement growth strategies may limit our future growth and hamper our business strategies.

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***The consolidated financial statements incorporated by reference herein contain disclosures related to our ability to continue as a going concern.***

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. As of December 31, 2025, the Company had an accumulated deficit of RMB1,418.8 million, net cash used in operating activities of RMB176.4 million for 2025, and cash and cash equivalents of only RMB1.0 million at year end. Our current assets as of December 31, 2025 were driven primarily by prepayments and other current assets of RMB165.4 million, including RMB165.3 million of procurement advances, rather than by cash or other immediately available liquid resources. We had net income operations of RMB2.3 million, driven by income from continuing operations of RMB42.5 million primarily due to non-operating items including a RMB49.0 million gain on disposal of subsidiaries and VIEs, a RMB28.0 million fair value gain on warrants; loss from operations was RMB34.5 million.

These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty, such as those relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities.

In response to the conditions described above, management has taken and plans to take the following actions to improve the Company's financial position and operations, including disposing of certain loss-making operations in 2025, and planning to fund development and future operations through business growth and non-dilutive equity financing.

There can be no assurances that these actions will be successful. Should we fail to achieve the above objectives, we may require additional financing to execute our business plans. Such financing may be in the form of equity or debt, the timing, terms, and availability of which cannot be assured. If we are unable to secure necessary capital on acceptable terms or at all, or if we fail to improve gross margins and reduce operating expenses, we may be unable to continue as a going concern or to implement our current expansion strategy.

Our ability to continue as a going concern is dependent on our management's ability to successfully execute the business plan of improving staff efficiency and pursuing potential financing to improve our cash flow from operating and financing activities. Substantially all of our revenue in 2023, 2024 and 2025 was attributable to discontinued operations disposed of in 2025. Based on cash flow projections from operating and financing activities and our current balance of cash and cash equivalents, our management believes that our current cash and cash equivalents and anticipated cash flow from operations upon successful execution of our business plans and financing plans will be sufficient to meet our anticipated cash needs from operations and other commitments for at least the next 12 months from the date of this annual report. However, there is no assurance that the plans will be successfully implemented. Failure to successfully implement the plans will have a material adverse effect on our business, results of operations and financial position, and may materially and adversely affect our ability to continue as a going concern.

Our independent registered public accounting firm included an explanatory paragraph expressing substantial doubt relating to our ability to continue as a going concern in its report on our consolidated financial statements for the year ended December 31, 2025. The inclusion of a going concern explanatory paragraph may negatively impact the trading price of the ADSs, have an adverse impact on our relationship with third parties with whom we do business, including our customers, vendors and employees, and could make it challenging and difficult for us to raise additional debt or equity financing to the extent needed, all of which could have a material adverse impact on our business, results of operations, financial condition and prospects.

For additional information on the above-referenced accounting standards and matters affecting our ability to continue as a going concern, see Note 2 of the financial statements included in this report and the discussion included in "B. Liquidity and Capital Resources-Liquidity and Capital Resources."

***A severe and prolonged downturn in the Chinese or global economy, including a significant decrease in consumer confidence, may materially and adversely affect our business, financial condition and results of operations.***

The growth rate of the Chinese economy has been slowing since 2020 and the Chinese population began to decline in 2022. The Federal Reserve and other central banks outside of China have raised interest rates. The Russia-Ukraine conflict, the Hamas-Israel conflict, the conflict between Iran and the United States and attacks on shipping in the Red Sea and the Strait of Hormuz have heightened geopolitical tensions across the world. The impact of the Russia-Ukraine conflict on Ukraine food exports has contributed to increases in food prices, and the impact of the war between the United States and Iran has contributed to increases in energy prices, and thus to inflation more generally in response to the uncertainty in economic conditions, consumers might delay, reduce or cancel purchases of automobiles, and as a result, our customers may also defer, reduce or cancel purchasing our and products and services. To the extent any fluctuations in the Chinese and global economy significantly affect the demand from automakers or auto dealers for our services or change the spending habits of automobile consumers, our business, results of operations, and financial condition may be materially and adversely affected.

In addition, the economic downturn may reduce the number of automakers and auto dealers in China resulting in the decrease of the demand for our services. Since the early 1990s, many non-automotive enterprises joined China's automotive industry and began to offer new lines of automobiles. An increasing number of foreign brands gradually entered the PRC market primarily by forming joint ventures with Chinese brands. Growing automobile production capacity and production volume have significantly increased the number of auto dealers. By contrast, negative economic trends could lead to market consolidation of automakers and auto dealers, which in effect will reduce our customer base and, in turn, reduce the demand for our services. As a result, our ability to generate net revenues, as well as our business, results of operations and financial condition, will be materially and adversely affected.

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***Material weaknesses in our internal control over financial reporting have been identified, and if we fail to implement and maintain effective internal control over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud.***

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of the Nasdaq Capital Market. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Commencing with our fiscal year ended December 31, 2019, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting in our Form 20-F filing for that year, as required by Section 404 of the Sarbanes-Oxley Act.

Our management has concluded that, as of December 31, 2025, our existing disclosure controls and procedures and internal control over financial reporting were ineffective, due to two material weaknesses. In accordance with U.S. GAAP and financial reporting requirements set forth by the SEC, a "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company's annual or interim consolidated financial statements will not be prevented or detected on a timely basis. The material weaknesses relate to insufficient U.S. GAAP/SEC reporting personnel; weaknesses in revenue/cost grouping and the monthly close process; weaknesses in treasury and bank account controls; inadequate processes for complete and accurate disclosure of changes in Group structure; and a concentration risk arising from significant prepayments for MCN-related equipment. See "Item 15 – Internal Controls" of this Annual Report on Form 20-F for more details.

To remedy the material weaknesses, we have begun to, and will continue to (1) hire additional finance and accounting staff with qualifications and work experiences in U.S. GAAP and SEC reporting requirements to formalize and strengthen the key internal control over financial reporting, (2) establish a more formalized, standardized, and structured monthly financial closing process, including defined responsibilities, closing timelines, account reconciliation procedures, and review controls, (3) strengthen the monitoring and administration of bank accounts across our Company, and for dormant or inactive bank accounts, management will perform timely assessment, follow-up, and closure where appropriate, (4) enhance our internal process over the establishment, change, and disclosure of group entities, and our Chief Financial Officer will be specifically responsible for monitoring changes in our structure, including newly incorporated entities, acquisitions, disposals, ownership changes, and dormant entities, and (5) establish a dedicated team led by our CEO to monitor the subsequent execution of the relevant purchase contract, and closely follow up on the counterparty's financial condition, delivery status, and performance progress, and will maintain active communication with the supplier to facilitate timely delivery and successful implementation of the new MCN project.

If we cease to be a "non-accelerated filer" as such term is defined in Rule 12b-2 under the Exchange Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. In the future, our management may conclude that our internal control over financial reporting remains ineffective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

Our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. In light of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Generally, if we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of the ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

***We may be subject to significant liabilities and enforcement actions if any of our related party transactions are determined to constitute prohibited personal loans under Section 402 of the Sarbanes-Oxley Act.***

Section 402 of the Sarbanes-Oxley Act of 2002 added Exchange Act Section 13(k), which generally prohibits an issuer, directly or indirectly (including through any subsidiary), from extending or maintaining credit, arranging for the extension of credit, or renewing an extension of credit, in the form of a personal loan to or for any director or executive officer. We entered into two related party transactions involving executive officers and their spouses that could be characterized as extensions of credit, depending on how the scope of the arrangements and the related facts and circumstances are evaluated. These transactions are described elsewhere in this annual report under "Related Party Transactions," and include amounts of approximately RMB 12.5 million and RMB 1.5 million respectively. No amounts under these arrangements are outstanding as of the date of this Annual Report.

If any of these arrangements are determined to violate Section 402, we could be required to take remedial actions, including seeking repayment or unwinding the transactions, revising our policies and procedures, and enhancing internal controls and compliance oversight. In addition, we could be subject to governmental investigations and civil, criminal, or administrative sanctions and penalties, and we could face private litigation. The statute of limitations for civil and criminal penalties under Section 402 of the Sarbanes-Oxley Act is five years and six years respectively. Any of the foregoing could require significant management attention and could materially adversely affect our business, financial condition, results of operations, and reputation.

***If we accept all or part of the purchase price for our February 2026 financing in cryptocurrencies, we may be exposed to settlement, custody, valuation, compliance and internal control risks that could adversely affect our liquidity, financial reporting and results of operations.***

On February 12, 2026, we entered into a securities purchase agreement for the sale of a substantial number of Class A ordinary shares, and the purchase price may be paid in fiat money or cryptocurrencies in the sole discretion of the Company. If we elect to accept cryptocurrency consideration, we may be exposed to significant volatility in the value of such assets between signing, receipt, conversion and use of proceeds, and we may be unable to convert any such assets into cash on a timely basis or at expected values. We may also face operational, governance and compliance risks relating to wallet custody, private key management, cybersecurity incidents, counterparty settlement failures, sanctions, anti-money laundering and know-your-customer compliance, and the design and operation of controls over the receipt, valuation, conversion, safeguarding and financial reporting of digital assets. In addition, our existing material weaknesses in internal control over financial reporting, including weaknesses in treasury and bank account controls, could make it more difficult for us to design and implement effective controls over any cryptocurrency settlement arrangements on a timely basis. If we are unable to manage these risks effectively, the expected liquidity benefit of the February 2026 financing could be delayed, reduced or lost, and we could incur losses, regulatory scrutiny, reputational harm or additional accounting and compliance costs, which could materially and adversely affect our business, financial condition, results of operations and prospects.

***Our failure or alleged failure to comply with China's anti-corruption laws or the U.S. Foreign Corrupt Practices Act could result in penalties, which could harm our reputation and have an adverse effect on our business, results of operations, and financial condition.***

We are subject to PRC laws and regulations related to anti-corruption, which prohibit bribery to government agencies, state or government owned or controlled enterprises or entities, to government officials or officials that work for state or government owned enterprises or entities, as well as bribery to non-government entities or individuals. We are also subject to the U.S. Foreign Corrupt Practices Act (the "FCPA"), which generally prohibits companies and any individuals or entities acting on their behalf from offering or making improper payments or providing benefits to foreign officials for the purpose of obtaining or keeping business, along with various other anti-corruption laws. Our existing policies prohibit any such conduct and we are in the process of implementing additional policies and procedures, and providing training, to ensure that we and our employees and other third parties comply with PRC anti-corruption laws and regulations, the FCPA and other anti-corruption laws to which we are subject. There is, however, no assurance that such policies or procedures will work effectively all the time or protect us against liability under the FCPA or other anti-corruption laws. There is no assurance that our employees and other third parties would always comply with our policies and procedures. Further, there is uncertainty in connection with the implementation of PRC anti-corruption laws. We could be held liable for actions taken by our employees and other third parties with respect to our business or any businesses that we may develop or acquire. As of the date of this annual report, significantly all our operations are in the PRC. If we are found not to be in compliance with PRC anti-corruption laws, the FCPA and other applicable anti-corruption laws, we may be subject to criminal, administrative, and civil penalties and other remedial measures, which could have an adverse impact on our business, results of operations and financial condition. Any investigation of any potential violations of the FCPA or other anti-corruption laws by U.S. or foreign authorities, including Chinese authorities, could adversely impact our reputation, cause us to lose customer relationships, subject us to administrative penalties or sanctions, and lead to other adverse impacts on our business, results of operations, and financial condition.

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***If we lose the services of any of our key executive officers, senior management, or other key employees, or are unable to retain, recruit and hire sufficiently qualified staff, our ability to effectively manage and execute our operations and meet our strategic objectives could be harmed.***

Our future success depends on the continued service of our key executive officers, senior management, and other key employees. We have benefited from the leadership of a strong management team with proven vision, rich professional work experience and extensive knowledge of China's automotive industry. We also rely on a number of key staff for the development and operation of our business. In addition, we will need to continue attracting and retaining skilled and experienced staff for our businesses to maintain our competitiveness.

Mr. Wei Wen, our prior director, Chief Executive Officer and Chairman, resigned from his positions with our company effective October 30, 2025. Mr. Simon Li, our prior Chief Financial Officer of the Company, resigned from his position effective October 30, 2025. Neither the resignation of Mr. Wei Wen or Mr. Simon Li was a result of any disagreements with our company on any matter related to the operations, policies, or practices of our company. We may not be able to replace the skill set provided by either Mr. Wei Wen or Mr. Simon Li, which could adversely affect our ability to execute our business plans and could adversely affect our results of operation. Since the resignations of Mr. Wei Wen and Mr. Simon Li, Mr. Guangsheng Liu has served as our Chief Executive Officer, President, Chief Financial Officer and Chairman. Because a significant concentration of leadership, operational, strategic and financial reporting responsibilities resides in one individual at a time when we are transitioning our business, operating with a limited employee base and addressing identified material weaknesses in internal control over financial reporting, our business may be particularly vulnerable if Mr. Liu becomes unable or unwilling to continue in his current roles, is distracted, or does not effectively perform one or more of these functions.

If one or more of our key personnel are unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all and may incur additional expenses to recruit and train new personnel. In addition, if any of our executive officers, senior management, or key employees joins a competitor or forms a competing company, we may be disadvantaged in the competition and risk losing our know-how, trade secrets, suppliers and customers. Substantially all of our employees, including each of our executive officers, senior management, and key employees, have entered into employment agreements with us, which contain customary non-compete provisions. Although non-compete provisions are generally enforceable under PRC laws, PRC legal practice regarding the enforceability of such provisions is not as well-developed as in countries such as the United States. Therefore, if we lose the services of any of our key executive officers, senior management, or other key employees, or are unable to retain, recruit and hire experienced staff, our ability to effectively manage and execute our operations and meet our strategic objectives could be harmed.

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***If we fail to protect our intellectual property rights, our brand and business performance may suffer.***

We rely on a combination of patents, copyrights, trademarks, trade secrets and other contractual restrictions to protect our intellectual property rights. Nevertheless, these provide only limited protection and the actions we take to protect our intellectual property rights may not be adequate. Furthermore, our pending intellectual property right applications may be rejected. Our trade secrets may become known or be independently discovered by our competitors. Despite our efforts to protect such intellectual properties, such as through copyrights, patents and contractual restrictions, unauthorized parties may still attempt to copy, duplicate or otherwise use our intellectual properties without obtaining our consent. Monitoring unauthorized use of our intellectual properties is difficult and costly, and we cannot be certain that the steps we have taken will effectively prevent the misappropriation of our intellectual properties. Furthermore, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others. Such litigation may be costly and divert management's attention away from our business. An adverse determination in any such litigation would impair our intellectual property rights and may harm our business and reputation. If we are not successful in protecting our intellectual property rights, our business, results of operations and financial condition may be adversely affected.

***Third parties may claim that we infringe their proprietary intellectual property rights, which could cause us to incur significant legal expenses and prevent us from promoting our services.***

Internet, technology and media companies are frequently involved in litigation based on allegations of infringement of intellectual property rights, unfair competition, invasion of privacy, defamation and other violation of other parties' rights. We have not experienced any material claims on these issues against us in the past, but as we face increasing competition and as litigation becomes more common in China in resolving commercial disputes, we face a higher risk of being the subject of intellectual property infringement claims. We may be subject to legal proceedings and claims from time to time relating to the intellectual property of others in the ordinary course of our business. We could also be subject to claims based upon the content that is displayed on our websites or accessible from our websites through links to other websites or information on our websites supplied by third parties. We would spend additional time and costs to investigate and defend in those intellectual property claims and litigations, which may divert resources and management attention from the operation of our websites. Such claims, even if they do not result in liability, may harm our reputation. Any resulting liability or expenses, or changes required of our websites to reduce the risk of future liability, may have a material adverse effect on our business, financial condition, and results of operations.

***The performance and reliability of the internet infrastructure and wireless and landline telecommunications networks in China will affect our operations and growth, including our ability to accommodate prospective customers in the future.***

With our principal executive offices located in China, we conduct central management of consumer data, provide data transmission and communications, and monitor our overall operations, relying on wireless and landline telecommunications networks in China. The national networks in China are connected to the internet through international gateways controlled by the PRC government, which are the only channels through which a domestic user can connect to the internet. These international gateways may not support the demand necessary for the continued growth in internet traffic by users in China. We cannot assure you that the development of China's information infrastructure will be adequate to support our operations and growth. In addition, in the event of any infrastructure disruption or failure, we would have no access to alternative networks and services on a timely basis, if at all, which could have a material adverse effect on our business, results of operations, and prospects.

***Unintended leakage of consumer information or privacy breaches may materially and adversely affect our reputation and business performance.***

During the ordinary course of our business, we collect and store a large amount of automobile consumer data gathered from our offline events and mobile applications we operated. We rely on encryption and authentication technology to provide the security and authentication necessary for secure transmission of such data. However, our security control may not prevent the improper leakage of consumer data. Anyone may circumvent our security measures and misappropriate proprietary information or cause interruptions in our operations. A security breach that leads to leakage of our consumer data could still harm our reputation. Moreover, many jurisdictions have passed laws regulating the storage, sharing, use, disclosure and protection of personally identifiable or other confidential information and data. The Chinese government has enacted a series of laws and regulations relating to the protection of privacy and personal information, under which internet service providers and other network operators are required to clearly indicate the purposes, methods and scope of any information collection and usage, obtain appropriate user consent and establish user information protection systems with appropriate remedial measures. See "Business Overview-Regulations-Regulations Relating to Internet Information Security and Privacy Protection" in this annual report. However, the regulatory framework for privacy protection in China and other jurisdictions is fast-evolving, and therefore is subject to change in the foreseeable future. We cannot assure you that our existing privacy and personal information protection measures will be considered sufficient under the current or future applicable laws and regulations. In addition to laws, regulations and other applicable rules, industry associations or other private parties may adopt different privacy protection standards. Because the interpretation and application of privacy and data protection laws and privacy protection standards is still uncertain, it is possible that these laws or privacy standards may be interpreted and applied in a manner inconsistent with practices. Our actual or perceived failure to comply with industry standards, governmental regulation and other legal obligations related to user privacy could harm our business. We may be required to expend significant capital and other resources to prevent such security breaches or alleviate problems caused by such breaches. Any of the circumstances may materially and adversely affect our business and results of operations.

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***Failure to obtain, renew, or retain licenses, permits or approvals or failure to comply with applicable laws and regulations may affect our ability to conduct business.***

We have obtained all material licenses, permits or approvals from the PRC regulatory authorities for our current operations However, the licensing requirements in China may evolve from time to time, and we may be subject to more stringent regulatory requirements in the relevant jurisdictions in the future. We cannot assure you that we will be able to satisfy such regulatory requirements and as a result we may be unable to retain, obtain or renew relevant licenses, permits or approvals in the future. If we fail to do so, we may be subject to administrative penalties or sanctions, which may materially and adversely affect our business, financial condition, and results of operations.

***We may need additional capital, and we may be unable to obtain such capital in a timely manner or on acceptable terms, or at all.***

We may require additional capital from time to time to grow our business, including to expand our auto electronics resale business, launch our planned improve our operating and technology infrastructure or conduct acquisition of complementary businesses and technologies. Accordingly, we may need to sell additional equity or debt securities or obtain a credit facility. Future issuances of equity or equity-linked securities could significantly dilute our existing shareholders, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A ordinary shares. The incurrence of debt financing would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations or our ability to pay dividends to our shareholders.

Our ability to obtain additional capital is subject to a variety of uncertainties, including:

● our market position and competitiveness in the auto electronics resale industry;

● our ability to successfully expand our continuing auto electronics resale business line and launch our planned online platform business;

● our ability to continue as a going concern;

● our future profitability, overall financial condition, results of operations and cash flows;

● general market conditions for capital raising activities in China and globally; and

● economic, political and other conditions in China and globally.

We may be unable to obtain additional capital in a timely manner or on acceptable terms or at all, and such financing may also be subject to regulatory requirements. On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (the "Overseas Listing Trial Measures") and five relevant guidelines, which became effective on March 31, 2023. The Overseas Listing Trial Measures will comprehensively improve and reform the previous regulatory regime for overseas offering and listing of securities of PRC domestic companies and will regulate both direct and indirect overseas offering and listing of securities of PRC domestic companies by adopting a filing-based regulatory regime. Our ability to obtain additional financings through future overseas offering of securities shall be subject to the Overseas Listing Trial Measures. See "-Risks Related to Doing Business in China-The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offering under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing." If we are unable to obtain adequate financing on terms satisfactory to us and when we require it in the future, our ability to continue to support our business growth and our ability to continue as a going concern could be significantly impaired, and our business and prospects could be adversely affected.

***Seasonality may cause fluctuations in our results of operations.***

Our quarterly net revenues and other results of operations have fluctuated in the past and may continue to fluctuate depending upon a number of factors, many of which are beyond our control. For these reasons, comparing our results of operations on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance. For example, consumer purchases typically slow down in the first quarter, and then increase through the next three quarters of each year. These factors may make our' results of operations difficult to predict and cause our quarterly results of operations to fall short of expectations.

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***Our lack of insurance could expose us to significant costs and business disruption.***

Insurance companies in China offer limited business insurance products and are, to our knowledge, not well-developed in the field of business liability insurance. We do not have any business liability or disruption insurance to cover our operations in China, which, based on public information available to us relating to China's automotive industry, is consistent with customary industry practice in China. We have determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. In addition, we do not maintain any insurance policies covering risks including loss and theft of and damages to our servers or other technology infrastructure. Any uninsured occurrence of business disruption, litigation or natural disaster, or significant damage to our uninsured equipment or technology infrastructure could result in substantial costs and diversion of resources for us and could adversely affect our financial condition and results of operations.

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***Any catastrophe, including outbreak of health pandemics and other extraordinary events, could have a negative impact on our business operations.***

We are vulnerable to natural disasters and other calamities. Fire, floods, typhoons, earthquakes, power loss, telecommunications failures, wars, riots, terrorist attacks or similar events may give rise to server interruptions, breakdowns, system failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to provide our services.

Our business could also be adversely affected by the effects of Ebola virus diseases, H1N1 flu, H7N9 flu, avian flu, Severe Acute Respiratory Syndrome (SARS), COVID-19 or other epidemics. Our business operation could be disrupted if any of our employees is suspected of having any of the aforementioned epidemic diseases or another contagious disease or condition, since it could require our employees to be quarantined and/or our offices to be disinfected. In addition, our business, results of operations and financial condition could be adversely affected to the extent that any of these epidemics harms the Chinese economy in general.

**Risks Related to Our Corporate Structure**

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***The interpretation and implementation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations are still evolving.***

On March 15, 2019, the NPC approved the Foreign Investment Law, which came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in China, i.e., the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. In December 2019, the State Council promulgated the Implementation Regulation on the Foreign Investment Law to further clarify relevant provisions of the Foreign Investment Law, which came into effect on January 1, 2020. The Foreign Investment Law and its implementation regulation embody an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments.

However, since the Foreign Investment Law and its implementation regulation are relatively new, their interpretation and implementation are still evolving and shall be determined in accordance with the laws and regulations in force at the time. For instance, under the Foreign Investment Law, "foreign investment" refers to the investment activities directly or indirectly conducted by foreign individuals, enterprises or other entities in China. Though it does not explicitly classify contractual arrangements as a form of foreign investment, there is no assurance that foreign investment via contractual arrangements would not be deemed as a type of indirect foreign investment activities under the definition in the future. In addition, the definition has a catch-all provision which includes investments made by foreign investors through means stipulated in laws or administrative regulations or other methods prescribed by the State Council. The Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Version) (the "Negative List (2024 version)") stipulates that any domestic enterprise in China engaging in prohibited business under the Negative List shall be subject to review by and shall obtain the consent of the relevant competent PRC authorities for overseas listing, and the foreign investors shall not participate in the operation and management of such enterprise, and the shareholding percentage of the foreign investors in such enterprise shall be subject, mutatis mutandis, to the relevant administrative provisions of the PRC domestic securities investment by foreign investors. In any of these cases, we cannot assure you that our contractual arrangements will not be deemed to be in violation of the market access requirements for foreign investment under the PRC laws and regulations. Furthermore, if future laws, administrative regulations or provisions prescribed by the State Council mandate further actions to be taken by companies with respect to existing contractual arrangements, we cannot assure you that can complete such actions in a timely manner, or at all.

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***We may rely on dividends and other distributions on equity paid by our subsidiaries in mainland China and Hong Kong to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct the business.***

Under our current corporate structure, our ability to pay dividends depends upon dividends paid by our Hong Kong subsidiary, which in turn depends on dividends paid by our subsidiaries in China. To the extent cash or assets in the business is in mainland China or Hong Kong or an entity domiciled in mainland China or Hong Kong, and may need to be used to fund operations outside of mainland China or Hong Kong, whether the funds and assets would be available to fund operations or for other uses outside of mainland China or Hong Kong will be subject to applicable government regulations on our subsidiaries' ability to transfer cash and assets.

Our WFOEs are permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC laws, each of our subsidiary and their subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, after making an allocation to the statutory reserve funds from their after-tax profits, our wholly owned subsidiaries in China may allocate a portion of their after-tax profits based on PRC accounting standards to a discretionary surplus fund at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.

The cash transfer between us and our subsidiaries shall comply with applicable PRC laws and regulations. We may encounter difficulties in our ability to transfer cash between subsidiaries in China and other subsidiaries largely considering PRC laws and regulations on foreign exchange. The majority of our income is denominated in Renminbi, and shortage in foreign currencies may restrict our ability to pay dividends or other payment to satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions can be made in foreign currencies without prior approval from the State Administration of the Foreign Exchange in the PRC as long as certain procedural requirements are met. Approval from appropriate government authorities is required if Renminbi is converted into foreign currency and remitted out of the PRC to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may impose requirements on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders. The PRC government has implemented a series of foreign exchange measures, including vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. It may continue to improve its foreign exchange measures and dividends and other distributions of our subsidiaries in China's may be subjected to such scrutiny and our Cayman Islands holding company's ability to use capital from our subsidiaries in China, and our ability to satisfy our liquidity requirements may be affected.

Our Hong Kong subsidiary may be considered a non-resident enterprise for tax purposes, so that any dividends our subsidiary in China pays to our Hong Kong subsidiary may be regarded as China-sourced income and, as a result, may be subject to PRC withholding tax at a rate of up to 10% unless a tax treaty or similar arrangement provides otherwise. If we are required under the PRC Enterprise Income Tax Law to pay income tax for any dividends we receive from our subsidiaries in China, or if our Hong Kong subsidiary is determined by PRC government authority as receiving benefits from reduced income tax rate due to a structure or arrangement that is primarily tax-driven, it would materially and adversely affect the amount of dividends, if any, we may pay to our shareholders.

If the PRC tax authorities determine that our Cayman Islands holding company is a PRC resident enterprise for enterprise income tax purposes and unless a tax treaty or similar arrangement provides otherwise, we may be required to withhold a 10% tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of the ADSs. In addition, non-resident enterprise shareholders, including the ADS holders, may be subject to PRC tax at a rate of 10% on gains realized on the sale or other disposition of ADSs or ordinary shares if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders, including the ADS holders, and any gain realized on the transfer of ADSs or ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% which in the case of dividends may be withheld at source. Any such tax may reduce the returns on your investment in the ADSs.

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***If the custodians or authorized users of our controlling non-tangible assets, including chops and seals, fail to fulfill their responsibilities, or misappropriate or misuse these assets, our business and operations may be materially and adversely affected.***

Under PRC law, legal documents for corporate transactions, including agreements and contracts that our business relies on, are executed using the chop or seal of the signing entity or with the signature of a legal representative whose designation is registered and filed with the relevant local branch of State Administration for Market Regulations (the "SAMR"). We generally execute legal documents by affixing chops or seals, rather than having the designated legal representatives sign the documents.

We have three major types of chops: corporate chops, contract chops and finance chops. We use corporate chops generally for documents to be submitted to government agencies, such as applications for changing business scope, directors or company name, and for legal letters. We use contract chops for executing leases and commercial contracts. We use finance chops generally for making and collecting payments, including issuing invoices. Use of corporate chops and contract chops must be approved by our' legal department and administrative department, and use of finance chops must be approved by our finance department. The chops of our subsidiaries are generally held by the relevant entities so that documents can be executed locally. Although we usually utilize chops to execute contracts, the registered legal representatives of our subsidiaries have the apparent authority to enter into contracts on behalf of such entities without chops, unless such contracts set forth otherwise.

In order to maintain the physical security of our chops, we generally have them stored in secured locations accessible only to the designated key employees of our legal, administrative or finance departments. Our designated legal representatives generally do not have access to the chops. Although we have approval procedures in place and monitor our key employees, including the designated legal representatives of our subsidiaries, the procedures may not be sufficient to prevent all instances of abuse or negligence. There is a risk that our key employees or designated legal representatives could abuse their authority, for example, by binding our subsidiaries with contracts against our interests, as we would be obligated to honor these contracts if the other contracting party acts in good faith in reliance on the apparent authority of our chops or signatures of our legal representatives. If any designated legal representative obtains control of the chop in an effort to obtain control over the relevant entity, we would need to have a shareholder or board resolution to designate a new legal representative and to take legal action to seek the return of the chop, apply for a new chop with the relevant authorities, or otherwise seek legal remedies for the legal representative's misconduct. If any of the designated legal representatives obtains and misuses or misappropriates our chops and seals or other controlling intangible assets for whatever reason, we could experience disruption to our normal business operations. We may have to take corporate or legal action, which could involve significant time and resources to resolve while distracting management from our operations, and our business and operations may be materially and adversely affected.

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**Risks Related to Doing Business in China**

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***Changes in China's and global evolving economic, political or social conditions or government policies could have material adverse effect on our business, results of operations, financial condition, and the value of our securities.***

We conduct substantially all of our business in China, and substantially all of our assets are located in China. Accordingly, our business, results of operations and financial condition may be influenced to a significant degree by the political and social conditions in China in general and China's economic growth as well as global. While the Chinese economy has experienced significant growth in the past decades, there can be no assurance that the growth would be maintained or be even across sectors. In addition, any severe or prolonged slowdown in the rate of growth of the Chinese and global economy may adversely affect our business and results of operations, leading to a reduction in demand for our products and services and adversely affect our competitive position. Various measures implemented by the PRC government to encourage economic growth may benefit the overall Chinese economy, while we cannot assure you how these measures would impact us. Some of the government measures aim to benefit the overall Chinese economy, but may unexpectedly have a negative effect on us. For example, our financial condition and results of operations may be affected by government regulations capital investments or changes in tax regulations. Some of the stimulus measures designed to boost the Chinese economy may unexpectedly cause higher inflation, which could affect our results of operations and financial condition. For example, certain operating costs and expenses, such as employee compensation and office operating expenses, may increase as a result of higher inflation. Any of the foregoing could result in a material adverse change in our business operations and/or the value of our securities, and cause the value of our securities to significantly decline or become worthless.

Our ability to successfully maintain or grow business operations in China depends on various factors, which are beyond our control. These factors include, among others, macro-economic and other market conditions, political stability, social conditions, measures to control inflation or deflation, changes in the rate or method of taxation, changes in laws, regulations and administrative directives or their interpretation, and changes in industry policies. If we fail to take timely and appropriate measures to adapt to any of the changes or challenges, our business, results of operations and financial condition could be materially and adversely affected.

***There may be changes from time to time with respect to the legal systems of certain markets where we operate, and any failure to comply with laws and regulations could adversely affect us.***

We are governed by PRC laws, rules and regulations. The PRC legal system is a civil law system based on written statutes. Since the late 1970s, the PRC government has promulgated laws and regulations dealing with economic matters, such as foreign investment, corporate organization and governance, commerce taxation and trade, with a view towards developing a comprehensive system of commercial law. However, as many of these laws and regulations are relatively new and continue to evolve, the interpretation and enforcement of these laws and regulations may change from time to time. As a result, we may be required by the regulators to obtain or renew the licenses, permits, approvals, to complete additional filings or registrations for the products and services we offer, or to modify business practices that may subject us to various penalties, including criminal penalties for individual and entity. We cannot assure you that our business operations would not be deemed to violate any existing or future PRC laws or regulations, which in turn could materially and adversely affect our business operations. In addition, the implementation of new rules, laws and regulations may significantly affect the industry in which we operate, which could affect the value of our securities, such as causing our securities to significantly decline in value or become worthless.

In addition, there is a limited volume of published court decisions, which may be cited for reference but are not binding on subsequent cases and have limited precedential value unless the Supreme People's Court otherwise provides. Furthermore, the PRC legal system is composed of rules of local governments and China is geographically large and divided into various provinces and municipalities. As such, different rules may have different and varying applications and interpretations and we may not be aware of applicable rules of local governments in a timely manner. In addition, we may spend substantial cost and times and our resources and management attentions may be significantly distracted in certain administrative and court proceedings, which could materially and adversely affect our business and results of operations.

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***The PRC government may exert substantial influence and certain administrative requirements over the manner of our operations, and the rules and regulations to which we are subject, including the ways they are enforced, may change from time to time. PRC governments' certain administrative requirements in regulating our and the VIE's operations, the overseas offering and listing of China-based issuers and foreign investments may cause us to make material changes to the operations of our subsidiaries in mainland China, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless.***

We mainly conduct the businesses primarily in China. The PRC government has an oversight over the conduct of our businesses according to the PRC laws and regulations. The ability of our subsidiaries to operate in China may be impaired if we fail to meet requirement timely or at all under the changes in its laws and regulations, including those relating to value-added telecommunications service industry, taxation, foreign investment limitations, and other matters, and we fail to meet such requirement timely or at all.

The PRC government may from time to time promulgate new rules and regulations to which our subsidiaries in China would be subject to regulate the manner of the business and operations. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas, and adopting new measures to extend the scope of cybersecurity reviews and new laws and regulations relating to data security. The PRC government may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our subsidiaries in China compliance with such regulations or interpretations. As such, our subsidiaries in China may be subject to various government actions and regulatory requirements in the provinces in which they operate. They could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. They may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.

Furthermore, on February 17, 2023, the CSRC issued the Overseas Listing Trial Measures, which adopts a filing-based regulatory regime for direct and indirect overseas offering and listing of securities of PRC domestic companies. At the press conference held for the Overseas Listing Trial Measures on the same date, officials from the CSRC clarified that the domestic companies that have already been listed overseas on or before March 31, 2023 shall be deemed as existing issuers (the "Existing Issuers"). Existing Issuers are not required to complete the filing procedures immediately and shall be required to file with the CSRC upon the occurrence of certain subsequent matters, such as follow-on offerings of securities. Although we believe that, under existing applicable PRC laws, regulations and regulatory rules, our company and our WFOEs are not required to obtain permission from the CSRC to maintain our listing status on U.S. exchange, and none of them has received any notice of denial of permission to list on a U.S. exchange from any Chinese authorities, we cannot assure you that the relevant PRC government agencies, including the CSRC, would reach the same conclusion as we do. If the CSRC or any other PRC regulatory body in the future determines that we need to file with the CSRC or obtain the CSRC's approval to maintain our listing status on U.S. exchanges or if the CSRC or any other PRC government authorities promulgates any interpretation or implements rules that would require us to file with or obtain approvals of the CSRC or other governmental bodies for any such listing status, and if we fail to comply with such requirements, we may face adverse actions that could have a material and adverse effect on our business, reputation, financial condition, results of operations, prospects, as well as the trading price of the ADSs.

Accordingly, government actions in the future, including any newly promulgation of laws and regulations to regulate the operations of our subsidiaries in China or an offering of securities conducted overseas and/or foreign investment in China-based issuers, which may cause us to make material changes to the operations of our subsidiaries in China, and our ability to offer or continue to offer securities to investors, and/or may cause the value of such securities to significantly decline or be worthless. As of the date of this annual report, we have not received any inquiry, notice, warning, or sanctions regarding our corporate structure, contractual arrangements and operations from the CSRC, CAC or any other PRC government authorities.

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***The filing procedure with the CSRC shall be fulfilled and the approval of other PRC government authorities may be required in connection with our future offshore offering under PRC law, and, we cannot predict whether or for how long we will be able to complete the filing procedure with the CSRC and obtain such approval or complete such filing, if required.***

On July 6, 2021, the relevant PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in accordance with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. These opinions and any related implementation rules to be enacted may subject us to additional compliance requirement in the future. As these opinions were recently issued, official guidance to act upon and the interpretation thereof remain unclear at this time. We cannot assure that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all.

On February 17, 2023, the CSRC promulgated the Overseas Listing Trial Measures and five relevant guidelines, which took effect on March 31, 2023. According to the Overseas Listing Trial Measures, PRC domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to fulfill the filing procedure with the CSRC and report relevant information. The Overseas Listing Trial Measures provides that an overseas listing or offering is explicitly prohibited, if any of the following: (1) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (2) the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (3) the domestic company intending to make the securities offering and listing, or its controlling shareholder(s) and the actual controller, have committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (4) the domestic company intending to make the securities offering and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (5) there are material ownership disputes over equity held by the domestic company's controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller.

The Overseas Listing Trial Measures also provides that if the issuer meets both the following criteria, the overseas securities offering and listing conducted by such issuer will be deemed as indirect overseas offering by PRC domestic companies: (1) 50% or more of any of the issuer's operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; and (2) the issuer's main business activities are conducted in China, or its main place(s) of business are located in China, or the majority of senior management staff in charge of its business operations and management are PRC citizens or have their usual place(s) of residence located in China. Where an issuer submits an application for initial public offering to competent overseas regulators, such issuer must file with the CSRC within three business days after such application is submitted. In addition, the Overseas Listing Trial Measures provide that the direct or indirect overseas listings of the assets of domestic companies through one or more acquisitions, share swaps, transfers or other transaction arrangements shall be subject to filing procedures in accordance with the Overseas Listing Trial Measures. The Overseas Listing Trial Measures also requires subsequent reports to be filed with the CSRC on material events, such as change of control or voluntary or forced delisting of the issuer(s) who have completed overseas offerings and listings.

At a press conference held for these new regulations ("Press Conference"), officials from the CSRC clarified that the domestic companies that have already been listed overseas on or before March 31, 2023 shall be deemed as existing issuers (the "Existing Issuers"). Existing Issuers are not required to complete the filling procedures immediately, and they shall be required to file with the CSRC upon occurrences of certain subsequent matters such as follow-on offerings of securities. According to the Overseas Listing Trial Measures and the Press Conference, the existing domestic companies that have completed overseas offering and listing before March 31, 2023, such as us, shall not be required to perform filing procedures for the completed overseas securities issuance and listing. However, from the effective date of the regulation, any of our subsequent securities offering in the same overseas market or subsequent securities offering and listing in other overseas markets shall be subject to the filing requirement with the CSRC within three working days after the offering is completed or after the relevant application is submitted to the relevant overseas authorities, respectively. If it is determined that any approval, filing or other administrative procedures from other PRC governmental authorities is required for any future offering or listing, we cannot assure you that we, our WFOEs can obtain the required approval or accomplish the required filings or other regulatory procedures in a timely manner, or at all. If we or our WFOEs fail to fulfill filing procedure as stipulated by the Trial Measures or offer and list securities in an overseas market in violation of the Trial Measures, the CSRC may order rectification, issue warnings to us and our WFOEs, and impose a fine of between RMB1,000,000 and RMB10,000,000. Persons-in-charge and other persons that are directly liable for such failure shall be warned and each imposed a fine from RMB500,000 to RMB5,000,000. Controlling shareholders and actual controlling persons of us and our WFOEs that organize or instruct such violations shall be imposed a fine from RMB1,000,000 and RMB10,000,000.

If we fail to obtain the relevant approval or complete the filings and other relevant regulatory procedures, we and our WFOEs may face adverse actions or sanctions by the CSRC or other PRC regulatory agencies. In any such event, these regulatory agencies may impose fines and penalties on our operations in China, delay or restrict the repatriation of the proceeds from offshore fund-raising activities into the PRC or take other actions that could materially adversely affect our business, financial condition, results of operations, reputation and prospects, as well as the trading price of the ADSs.

On September 6, 2024, the NDRC and MOFCOM jointly issued the Negative List (2024 Version), which became effective on November 1, 2024. Pursuant to the Negative List (2024 Version), if a company in China engaging in the prohibited business stipulated in the Negative List (2024 Version) seeks an overseas offering and listing, it shall obtain the approval from the competent governmental authorities. The foreign investors of the issuer shall not be involved in the company's operation and management, and their shareholding percentages shall be subject, mutatis mutandis, to the relevant regulations on the domestic securities investments by foreign investors. As the 2024 Negative List is relatively new, the interpretation and implementation of these new requirements are still evolving, and we may have difficulty in understanding or predicting that whether and to what extent listed companies like us will be subject to these new requirements. If we are required to comply with these requirements and fail to do so on a timely basis, or at all, our business operation, financial condition and business prospect may be adversely and materially affected.

On February 24, 2023, the CSRC published the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the "Provisions on Confidentiality and Archives Administration"), which came into effect on March 31, 2023. The Provisions on Confidentiality and Archives Administration requires that, in the process of overseas issuance and listing of securities by domestic entities, the domestic entities, and securities companies and securities service institutions that provide relevant securities service shall strictly implement the provisions of relevant laws and regulations and the requirements of these provisions, establish and improve rules on confidentiality and archives administration. Where the domestic entities provide with or publicly disclose documents, materials or other items related to the state secrets and government work secrets to the relevant securities companies, securities service institutions, overseas regulatory authorities, or other entities or individuals, the companies shall apply for approval of competent departments with the authority of examination and approval in accordance with law and report the matter to the secrecy administrative departments at the same level for record filing. Where there is unclear or controversial whether or not the concerned materials are related to state secrets, the materials shall be reported to the relevant secrecy administrative departments for determination.

We cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us. If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Measures for Cybersecurity Review and the annual data security review under the Administrative Measures for Internet Data Security (Draft for Comments), are required for our listing status or future offshore offerings, we could not predict whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected. For details, see "- Failure to comply with governmental regulations and other legal obligations concerning data protection and cybersecurity may materially and adversely affect our business."

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***If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and the ADS holders.***

The PRC enterprise income tax law and its implementing rules provide that enterprises established outside of China whose "de facto management bodies" are located in China are considered "resident enterprises" under PRC tax laws. The implementing rules define the term "de facto management bodies" as a management body which substantially manages, or has control over the business, personnel, finance and assets of an enterprise. In April 2009, the State Administration of Taxation (the "SAT"), issued the Notice Regarding the Determination of Chinese-Controlled Overseas Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies ("SAT Circular 82"), which provides that a foreign enterprise controlled by a PRC company or a group of PRC companies will be classified as a "resident enterprise" with its "de facto management body" located within China if all of the following requirements are satisfied: (1) the senior management and core management departments in charge of its daily operations function are mainly in China; (2) its financial and human resources decisions are subject to determination or approval by persons or bodies in China; (3) its major assets, accounting books, company seals, and minutes and files of its board and shareholders' meetings are located or kept in China; and (4) at least half of the enterprise's directors with voting right or senior management reside in China. The SAT issued a bulletin in August 2011 to provide more guidance on the implementation of SAT Circular 82. The bulletin clarifies certain matters relating to resident status determination, post-determination administration and competent tax authorities. Although both the circular and the bulletin only apply to offshore enterprises controlled by PRC enterprises and not those by PRC individuals, the determination criteria set forth in the circular and administration clarification made in the bulletin may reflect the general position of the SAT on how the "de facto management body" test should be applied in determining the tax resident status of offshore enterprises and the administration measures should be implemented, regardless of whether they are controlled by PRC enterprises or PRC individuals.

In addition, the SAT issued a bulletin in January 2014 to provide more guidance on the implementation of SAT Circular 82. This bulletin further provides that, among other things, an entity that is classified as a "resident enterprise" in accordance with the circular shall file the application for classifying its status of residential enterprise with the local tax authorities where its main domestic investors are registered. From the year in which the entity is determined as a "resident enterprise," any dividend, profit and other equity investment gain shall be taxed in accordance with the enterprise income tax law and its implementing rules.

As the tax resident status of an enterprise is subject to the determination by the PRC tax authorities, if we are deemed as a PRC "resident enterprise," we will be subject to PRC enterprise income tax on our worldwide income at a uniform tax rate of 25.0%, although dividends distributed to us from our existing PRC subsidiaries and any other PRC subsidiaries which we may establish from time to time could be exempt from the PRC dividend withholding tax due to our PRC "resident recipient" status. This could have a material adverse effect on our overall effective tax rate, our income tax expenses and our net income. Furthermore, dividends, if any, paid to our shareholders and ADS holders may be decreased as a result of the decrease in distributable profits. In addition, if we were to be considered a PRC "resident enterprise," dividends we pay with respect to the ADS or ordinary shares and the gains realized from the transfer of the ADS or ordinary shares may be considered income derived from sources within China and be subject to PRC withholding tax, which could have a material adverse effect on the value of your investment in us and the price of the ADS.

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***We are subject to the PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental regulations on currency conversion when using the proceeds of our offering of securities to make loans to or make additional capital contributions to our PRC subsidiaries, which could affect our liquidity and our ability to fund and expand our business.***

As an offshore holding company of our PRC subsidiaries, we may make loans to our PRC subsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Such loans to our PRC subsidiaries in China and capital contributions are subject to PRC regulations and approvals. For example, loans by us to our PRC subsidiaries cannot exceed statutory limits and must be filed with the State Administration of Foreign Exchange ("SAFE") via SAFE's official online system. Besides SAFE filing, such loans may also need to be filed with the NDRC or its local branches. In addition, the convertibility of foreign currencies into Renminbi and use of the proceeds might also be subject to PRC regulations. In March 2015, SAFE promulgated SAFE Circular 19, which took effect and replaced certain previous SAFE regulations from June 2015. SAFE further promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Administrative Provisions on Capital Account Foreign Exchange Settlement ("SAFE Circular 16"), effective in June 2016, which, among other things, amend certain provisions of SAFE Circular 19. According to SAFE Circular 19 and SAFE Circular 16, the flow and use of the Renminbi capital converted from foreign currency denominated registered capital of a foreign-invested company is regulated such that Renminbi capital may not be used for business beyond its business scope or to provide loans to persons other than affiliates unless otherwise permitted under its business scope. In October 2019, the SAFE promulgated the Circular Regarding Further Promotion of the Facilitation of Cross-Border Trade and Investment ("SAFE Circular 28"), which was further amended in December 2023, pursuant to which all foreign-invested enterprises can make equity investments in the PRC with their capital funds in accordance with the law. The Circular Regarding Further Optimizing the Cross-border Renminbi Policy to Support the Stabilization of Foreign Trade and Foreign Investment jointly promulgated by the People's Bank of China (the "PBOC"), the NDRC, MOFCOM, the State-owned Assets Supervision and Administration Commission of the State Council, the CBIRC and SAFE on December 31, 2020 and effective on February 4, 2021 allows the non-investment foreign-invested enterprises to make domestic reinvestment with capital denominated in Renminbi in accordance with the law on the premise that they comply with prevailing regulations and the invested projects in China are authentic and compliant.

Violations of the applicable circulars and rules may result in severe penalties, including substantial fines as set forth in the Foreign Exchange Administration Regulations.

Our ability to convert, transfer and use the net proceeds from our overseas offerings or any offering of additional equity securities in China may be affected by the applicable foreign exchange circulars and rules and our ability to convert, transfer and use the net proceeds from our overseas offerings or any offering of additional equity securities, which may adversely affect our business, financial condition and results of operations. As the foreign exchange related regulatory regime and practice are complex and may change from time to time, we cannot assure you that we have complied or will be able to comply with all applicable foreign exchange circulars and rules, or that we will be able to complete the necessary government registrations or filings on a timely basis, if at all, with respect to future loans by us to our PRC subsidiaries or with respect to future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or filings, our ability to contribute additional capital to fund our PRC operations may be negatively affected, which could adversely and materially affect our liquidity and our ability to fund and expand our business.

***There are significant uncertainties in certain treaty benefits enjoyed by our PRC subsidiaries with respect to dividends payable by our PRC subsidiaries to our offshore subsidiaries under the PRC enterprise income tax law relating to the withholding tax liabilities.***

Under the PRC enterprise income tax and its implementation rules, the profits of a foreign-invested enterprise generated through operations, which are distributed to its immediate holding company outside China, will be subject to a withholding tax rate of 10.0%. Pursuant to a special arrangement between Hong Kong and China, such rate may be reduced to 5.0% if a Hong Kong resident enterprise owns at least 25.0% of the equity interest in the PRC company and satisfies other conditions as provided under the special tax arrangement. Our current PRC subsidiaries are wholly owned by our Hong Kong subsidiary.

Moreover, under the Notice of the State Administration of Taxation on Issues regarding the Administration of the Dividend Provision in Tax Treaties promulgated in February 2009, the taxpayer that is a tax resident of the other contracting party to the tax treaty and also the beneficial owner of the relevant dividends needs to satisfy certain conditions to enjoy the benefits under a tax treaty. These conditions include: (1) the taxpayer should be a company as provided in the tax treaty, (2) the taxpayer must directly own the required percentage of equity interests and voting rights in the PRC subsidiaries, and (3) the corporate shareholder to receive dividends from the PRC subsidiaries must have continuously met the direct ownership thresholds during the 12 consecutive months preceding the receipt of the dividends. Additionally, the SAT promulgated the Notice on Issues Related to the "Beneficial Owner" in Tax Treaties in February 2018, which requires the "beneficial owner" to have ownership and the right to dispose of the income or the rights and properties giving rise to the income and generally engage in substantive business activities and sets forth certain detailed factors in determining the "beneficial owner" status. The SAT promulgated the Announcement on How to Recognize the "Beneficial Owner" in Tax Treaties on June 29, 2012, which further clarified and supplemented the application of the Notice on How to Understand and Recognize the "Beneficial Owner" in Tax Treaties. Furthermore, the SAT promulgated the Announcement of the State Administration of Taxation on Issues Relating to "Beneficial Owner" in Tax Treaties ("Circular 9"), in February 3, 2018, which took effect on April 1, 2018, replaced the Notice on How to Understand and Recognize the "Beneficial Owner" in Tax Treaties and the Announcement on How to Recognize the "Beneficial Owner" in Tax Treaties and provides guidance for determining whether a resident of a contracting party is the "beneficial owner" of an item of income under China's tax treaties and tax arrangements.

According to Circular 9, when determining an applicant's status as a "beneficial owner" regarding tax treatments in connection with dividends, interests or royalties in tax treaties, several factors, including without limitation, whether the applicant is obligated to pay more than 50% of its income in 12 months to residents in a third country or region, whether the business operated by the applicant constitutes actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account and analyzed based on specific circumstances. Circular 9 further provides that applicants who intend to prove his or her status as a "beneficial owner" shall submit relevant documents to tax bureau according to the Administrative Measures for Non-Resident Enterprises to Enjoy Treatments under Tax Treaties. Entitlement to a lower tax rate on dividends according to tax treaties or arrangements between the PRC central government and governments of other countries or regions is subject to inspection or approval of the relevant tax authorities. As a result, we cannot assure you that we will be entitled to any preferential withholding tax rate under tax treaties for dividends received from our PRC subsidiaries.

***We face uncertainties with respect to indirect transfers of the equity interests in PRC resident enterprises by their non-PRC holding companies.***

In February 2015, the SAT issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises ("SAT Bulletin 7"). SAT Bulletin 7 extends its tax jurisdiction to transactions involving the transfer of taxable assets through offshore transfer of a foreign intermediate holding company. In addition, SAT Bulletin 7 has introduced safe harbors the purchase and sale of equity through a public securities market. SAT Bulletin 7 also brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets.

In October 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source ("SAT Bulletin 37"), which came into effect in December 2017. The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax.

Where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an Indirect Transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the relevant tax authority. Using a "substance over form" principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

We face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries and investments. Our company may be subject to filing obligations or taxed if our company is transferor in such transactions, and may be subject to withholding obligations if our company is transferee in such transactions, under SAT Bulletin 7 and/or SAT Bulletin 37. For transfer of shares in our company by investors who are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under SAT Bulletin 7 and/or SAT Bulletin 37. As a result, we may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

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***Our ability to receive and use our net revenues effectively may be affected by regulations on currency exchange.***

Substantially all of our net revenues are denominated in Renminbi. As a result, our ability to use net revenues generated in Renminbi to fund any business activities we may have outside China in the future or to make dividend payments to our shareholders and ADS holders in U.S. dollars may be affected by regulations on currency exchange. Under current PRC laws and regulations, Renminbi is freely convertible for current account items, such as trade and service-related foreign exchange transactions and dividend distributions. However, Renminbi is not freely convertible for direct investment or loans or investments in securities outside China, unless such use is approved by SAFE. For example, foreign exchange transactions under our subsidiary's capital account, including principal payments in respect of foreign currency-denominated obligations, remain subject to significant foreign exchange controls and the approval requirement of SAFE. Our ability to obtain foreign exchange for capital expenditures could be affected by these regulations.

Our PRC subsidiaries are permitted to declare dividends to our offshore subsidiary holding their equity interest, convert the dividends into a foreign currency and remit to its shareholder outside China. In addition, in the event that our PRC subsidiaries liquidate, proceeds from the liquidation may be converted into foreign currency and distributed outside China to our overseas subsidiary holding its equity interest.

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***Our subsidiaries in China are subject to restrictions on making dividends and other payments to us.***

We are a holding company and rely principally on dividends paid by our subsidiaries in China for our cash needs, including paying dividends and other cash distributions to our shareholders to the extent we choose to do so, servicing any debt we may incur and paying our operating expenses. Current PRC regulations permit our subsidiaries in China to pay dividends to us only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. Under the applicable requirements of PRC law, our PRC subsidiaries may only distribute dividends after they have made allowances to fund certain statutory reserves. These reserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any such restrictions may materially affect such entities' ability to make dividends or make payments, in service fees or otherwise, to us, which may materially and adversely affect our business, financial condition and results of operations.

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***Fluctuations in exchange rates may have a material adverse effect on your investment.***

The conversion of the Renminbi into foreign currencies, including the U.S. dollar, is based on rates set by the People's Bank of China and by the Board of Governors of the Federal Reserve System. The value of the Renminbi against the U.S. dollar and other currencies is affected by changes in China's political and economic conditions and by China's foreign exchange policies, among other things. We cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar and other currencies in the future. It is difficult to predict how market forces or the PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future.

Any significant appreciation or revaluation of the Renminbi may have a material adverse effect on the value of, and any dividends payable on, the ADS in foreign currency terms. More specifically, if we decide to convert our Renminbi into U.S. dollars, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us. To the extent that we need to convert U.S. dollars we receive from offerings of securities into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion. In addition, appreciation or depreciation in the exchange rate of the Renminbi to the U.S. dollar could materially and adversely affect the price of the ADS in U.S. dollars without giving effect to any underlying change in our business or results of operations.

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***Certain PRC regulations, including the M&A Rules and national security regulations, may require a comprehensive review and approval process which could make it more difficult for us to pursue growth through acquisitions in China.***

The M&A Rules established additional procedures and requirements that could make merger and acquisition activities in China by foreign investors more time-consuming and complex. For example, MOFCOM must be notified in the event a foreign investor takes control of a PRC domestic enterprise. Moreover, certain acquisitions of domestic companies by offshore companies that are related to or affiliated with the same entities or individuals of the domestic companies, are subject to approval by the anti-monopoly law enforcement agency. In addition, the Implementing Rules Concerning Security Review on Mergers and Acquisitions by Foreign Investors of Domestic Enterprises, issued by MOFCOM in August 2011, require that mergers and acquisitions by foreign investors in "any industry with national security concerns" be subject to national security review by MOFCOM. Furthermore, any activities attempting to circumvent such review process, including structuring the transaction through a proxy or contractual control arrangement, are strictly prohibited. Moreover, in December 2020, the NDRC and the MOFCOM promulgated the Measures for Security Review of Foreign Investment, which became effective on January 18, 2021. Pursuant to the Measures for Security Review of Foreign Investment, any foreign investment activities falling in the scope such as important cultural products and services, important information technologies and internet products and services, important financial services, key technologies and other important fields that concern state security while obtaining the actual control over the enterprises invested in, a foreign investor or a party concerned in the PRC shall take the initiative to make a declaration to the working mechanism office prior to making the investment. See "Item 4. Information on the Company—B. Business Overview—Regulation—Regulations Relating to Foreign Investment in Value-added Telecommunications Companies" in this annual report.

We could not assure you that we can comply with these regulations, including their interpretation and implementation, in a timely manner, if at all, and we may also spend additional time and costs for such compliance, whether our ability to complete merger and acquisition transactions in China and our ability to seek growth through acquisitions would be materially and adversely affected.

***It may be difficult for overseas regulators to conduct investigations or collect evidence within China.***

Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, which became effective in March 2020, no foreign securities regulator is allowed to directly conduct investigations or evidence collection activities within the PRC territory. While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for a foreign securities regulator to directly conduct investigations or evidence collection activities within China may further increase the difficulties you face in protecting your interests.

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***A failure by the beneficial owners of our shares who are PRC residents to comply with certain PRC foreign exchange regulations could restrict our ability to distribute profits, restrict our overseas and cross-border investment activities and subject us to liability under PRC law.***

SAFE has promulgated regulations, including the Notice on Relevant Issues Relating to Foreign Exchange Control on Domestic Residents' Investment and Financing and Round-Trip Investment through Special Purpose Vehicles ("SAFE Circular 37"), effective in July 2014, and its appendices, that require PRC residents, including PRC institutions and individuals, to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents' legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a "special purpose vehicle." The term "control" under SAFE Circular 37 is broadly defined as the operation rights, beneficiary rights or decision-making rights acquired by the PRC residents in the offshore special purpose vehicles by such means as acquisition, trust, proxy, voting rights, repurchase, convertible bonds or other arrangements. SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiaries. Further, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for foreign exchange evasion.

These regulations apply to our direct and indirect shareholders who are PRC residents and may apply to any offshore acquisitions or share transfers that we make in the future if our shares are issued to PRC residents. However, in practice, different local SAFE branches may have different views and procedures on the application and implementation of SAFE regulations. As of the date of this annual report, all PRC residents known to us that currently hold direct or indirect interests in our company have completed the necessary registrations with SAFE as required by SAFE Circular 37. However, we may not be informed of the identities of all the PRC residents or entities holding direct or indirect interest in our company, nor can we compel our beneficial owners to comply with the requirements of SAFE Circular 37. As a result, we cannot assure you that these individuals or any other direct or indirect shareholders or beneficial owners of our company who are PRC residents will be able to successfully complete the registration or update the registration of their direct and indirect equity interest as required in the future. If they fail to make or update the registration, our PRC subsidiaries could be subject to fines and legal penalties, and SAFE could restrict our cross-border investment activities and our foreign exchange activities, including restricting our PRC subsidiaries' ability to distribute dividends to, or obtain loans denominated in foreign currencies from, our company, or prevent us from contributing additional capital into our PRC subsidiaries. As a result, our business operations and our ability to make distributions to you could be materially and adversely affected.

***Failure to comply with governmental regulations and other legal obligations concerning data protection and cybersecurity may materially and adversely affect our business.***

We are subject to PRC laws and regulations governing the collecting, storing, sharing, using, processing, disclosure and protection of data on the internet and mobile platforms as well as cybersecurity. The PRC regulators, including the MIIT and the CAC, have been increasingly focused on regulation in the areas of cybersecurity and data protection and governmental authorities have enacted a series of laws and regulations to enhance the protection of privacy and data, which require certain authorization or consent from users prior to collection, use or disclosure of their personal data and also protection of the security of the personal data of such users. The MIIT issued the Order for the Protection of Telecommunications and Internet User Personal Information on July 16, 2013, requiring internet service providers to establish and publish protocols relating to the collection or use of personal information, keep any collected information strictly confidential and take technological and other measures to maintain the security of such information. Institutions and their employees are prohibited from selling or otherwise illegally disclosing a person's personal information obtained during the course of performing duties or providing services. Pursuant to the PRC Cybersecurity Law, effective on June 1, 2017, network operators are required to fulfill certain obligations to safeguard cyber security and enhance network information management. See "Item 4. Information on the Company — B. Business Overview — Regulations — Regulations relating to internet information security and privacy protection" in this annual report.

Moreover, existing PRC privacy, cybersecurity and data protection-related laws and regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may enact new laws and regulations regarding privacy, cybersecurity and data protection-related matters. These developments could adversely affect our business, operating results and financial condition. Any failure or perceived failure by us to comply with new or existing PRC privacy, cybersecurity or data protection laws, regulations, policies, industry standards or legal obligations, or any systems failure or security incident that results in the unauthorized access to, or acquisition, release or transfer of, personally identifiable information or other data relating to customers or individuals may result in governmental investigations, inquiries, enforcement actions and prosecutions, private claims and litigation, fines and penalties, adverse publicity or potential loss of business. For example, on June 10, 2021, the Standing Committee of the National People's Congress (the "Standing Committee of the NPC"), promulgated the PRC Data Security Law, which took effect in September 2021. The PRC Data Security Law provides for data security obligations on entities and individuals carrying out data activities. The PRC Data Security Law also introduces a national security review procedure for those data activities which may affect national security and imposes export restrictions on certain data information. Furthermore, along with the promulgation of the Opinions on Strictly Cracking Down Illegal Securities Activities in accordance with the Law, overseas-listed China-based companies are experiencing a heightened scrutiny over their compliance with laws and regulations regarding data security, cross-border data flow and management of confidential information from PRC regulatory authorities.

On August 20, 2021, the Standing Committee of the NPC issued the Personal Information Protection Law, which has been effective from November 1, 2021 and reiterates the circumstances under which a personal information processor could process personal information and the requirements for such circumstances. The Personal Information Protection Law clarifies the scope of application, the definition of personal information and sensitive personal information, the legal basis of personal information processing and the basic requirements of notice and consent.

On October 29, 2021, the CAC publicly solicited opinions on the Measures for the Security Assessment of Data Cross-border Transfer (Draft for Comments), which requires that any data processor who provides to an overseas recipient important data collected and generated during operations within the territory of the PRC or personal information that should be subject to security assessment shall conduct security assessment. The Measures for the Security Assessment of Data Cross-border Transfer was adopted on July 7, 2022 and took effect on September 1, 2022.

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the "Opinions on Severely Cracking Down on Illegal Securities Activities According to Law," or the Opinions. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. The Opinions and any related implementing rules to be enacted may subject us to compliance requirement in the future. Given the current regulatory environment in the PRC, we are still subject to the uncertainty of different interpretation and enforcement of the rules and regulations in the PRC adverse to us, which may take place quickly with little advance notice.

On December 28, 2021, the CAC published the CAC Revised Measures, which further restates and expands the applicable scope of the cybersecurity review. The CAC Revised Measures took effect on February 15, 2022. Pursuant to the CAC Revised Measures, if a network platform operator holding personal information of over one million users seeks for "foreign" listing, it must apply for the cybersecurity review. In addition, operators of critical information infrastructure purchasing network products and services are also obligated to apply for the cybersecurity review for such purchasing activities. Although the CAC Revised Measures provides no further explanation on the extent of "network platform operator" and "foreign" listing, we do not believe we are obligated to apply for a cybersecurity review pursuant to the CAC Revised Measures, considering that (i) we are not holding personal information of over one million users and it is also very unlikely that we will reach such threshold in the near future; (ii) as of the date of this annual report, we have not received any notice or determination from applicable PRC governmental authorities identifying the PRC operating entities s as critical information infrastructure operators.

On July 7, 2022, the CAC promulgated the Measures on Data Export Security Assessment, which came into effect on September 1, 2022. Such Measures on Data Export Security Assessment requires data processors to apply for a security assessment on data export. On February 24, 2023, the CSRC, the Ministry of Finance, the National Administration of State Secrets Protection and the National Archives Administration released the revised Provisions on Strengthening the Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, or the Provision on Confidentiality, which became effective on March 31, 2023.

On September 24, 2024, the State Council issued the Regulation on the Administration of Cyber Data Security (the "Cyber Data Security Regulation"), which became effective from January 1, 2025. The Cyber Data Security Regulation stipulated certain requirements on network data processing activities, the security and protection of network data, and the reasonable and effective use of network data, and further shed light on the protection of personal information, security of important data, management of cross-border security of network data and obligations of network platform service providers. The Cyber Data Security Regulation required, among others, where network data processing activities carried out by a network data processor affect or may affect national security, national security review shall be conducted in accordance with relevant PRC regulations. However, as the Cyber Data Security Regulation provided no further explanation or interpretation for "affect or may affect national security", if we were deemed having carried our any network data processing activities that "affect or may affect national security", we may be subject to the national security review under article 13 of the Cyber Data Security Regulation, failing which may subject us to fines, penalties, suspension of relevant business and revocation of relevant business permits, and thus our business operations may be adversely affected.

Complying with these obligations concerning data protection and cybersecurity could cause us to incur substantial costs. As the interpretation and application of cybersecurity laws, regulations and standards of the PRC are still evolving, we may be required to make further adjustments to our business practices to comply with the laws, under which circumstances our compliance cost may be increased and our business performance might be affected. We expect that there will continue to be new proposed laws, rules of self-regulatory bodies, regulations and industry standards concerning privacy, data protection and information security in the PRC, and we cannot yet determine the impact such future laws, rules, regulations and standards may have on our business.

Moreover, we may not disclose any personal data or information, unless required by the competent PRC authorities through certain procedures required by the laws, for the purpose of, among others, safeguarding the national security, investigating crimes, investigating infringement of information network communications rights, or cooperating with the supervision and inspection of telecommunications regulatory authorities. Failure to comply with these requirements could subject us to fines and penalties.

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***Our ability to grant share incentive awards to our employees or consultants who are PRC citizens is subject to applicable PRC laws and regulations.***

Pursuant to SAFE Circular 37, PRC residents who participate in stock incentive plans in overseas non-publicly-listed companies may submit applications to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose vehicles. In the meantime, pursuant to the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in a Stock Incentive Plan of an Overseas Publicly-Listed Company issued by SAFE in February 2012 ("SAFE Circular 7"), a qualified PRC agent (which could be the PRC subsidiary of the overseas-listed company) is required to file, on behalf of "domestic individuals" (both PRC residents and non-PRC residents who reside in China for a continuous period of not less than one year, excluding the foreign diplomatic personnel and representatives of international organizations) who are granted shares or share options by the overseas-listed company according to its share incentive plan, an application with SAFE to conduct SAFE registration with respect to such share incentive plan, and obtain approval for an annual allowance with respect to the purchase of foreign exchange in connection with the share purchase or share option exercise. Such PRC individuals' foreign exchange income received from the sale of shares and dividends distributed by the overseas listed company and any other income shall be fully remitted into a collective foreign currency account in China, which is opened and managed by the PRC domestic agent before distribution to such individuals. In addition, such domestic individuals must also retain an overseas entrusted institution to handle matters in connection with their exercise of share options and their purchase and sale of shares. The PRC domestic agent also needs to update registration with SAFE within three months after the overseas-listed company materially changes its share incentive plan or make any new share incentive plans.

We and our directors, executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of no less than one year and who have been granted stock options are subject to these regulations. Failure to complete the SAFE registrations may subject them to fines and legal sanctions, and may also limit our ability to contribute additional capital into our PRC subsidiaries and limit our PRC subsidiaries' ability to distribute dividends to us. Our ability to adopt additional incentive plans for our directors, executive officers and employees is subject to applicable PRC laws. See "Item 4. Information on the Company—B. Business Overview—Regulation—Regulations Relating to Foreign Currency Exchange—Share Option Rules" in this annual report.

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***Labor contract laws in China may adversely affect our results of operations.***

The current PRC labor contract law imposes considerable liabilities on employers and significantly affects the cost of an employer's decision to reduce its workforce. Further, it requires certain terminations be based on the mandatory retirement age. In the event we decide to significantly change or decrease our workforce in a manner that is most advantageous to our business or in a timely and cost-effective manner, our ability to enact such changes shall comply with the Labor Contract Law, thus materially and adversely affecting our financial condition and results of operations.

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***Increases in labor costs and employee benefits in China may adversely affect our business and profitability.***

The PRC economy has been experiencing significant growth, leading to inflation and increased labor costs. China's overall economy and the average wage in China are expected to continue to grow. In addition, we are required by PRC laws and regulations to pay various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our employees. It is subject to the determination of the relevant government agencies whether an employer has made adequate payments of the requisite statutory employee benefits, and employers that fail to make adequate payments may be subject to late payment fees, fines and/or other penalties. Future increases in China's inflation and material increases in labor costs and employee benefits may materially and adversely affect our profitability and results of operations. If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected.

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***Failure to make adequate contributions to various mandatory social security plans and withhold individual income tax as required by PRC regulations may subject us to penalties.***

PRC laws and regulations require us to pay several statutory social welfare benefits for our employees, as applicable, including pensions, medical insurance, work-related injury insurance, unemployment insurance, maternity insurance and housing provident fund contributions. Local governments usually implement localized requirements as to mandatory social security plans considering differences in economic development in different regions. PRC laws and regulations also require us to withhold individual income tax on employees' salaries based on the actual salary of each employee upon payment. Our failure in making contributions to various mandatory social security plans, withholding individual income tax and in complying with applicable PRC labor-related laws may subject us to late payment penalties. With respect to the underpaid statutory social welfare benefits, we may be required to make up the contributions for these plans as well as to pay late fees and fines; with respect to the under withheld individual income tax, we may be required to make up sufficient withholding and pay late fees and fines. If we are subject to late fees or fines in relation to the failure in making contributions to various mandatory social security or withholding individual income tax, our financial condition and results of operations may be affected.

***Regulation and censorship of information disseminated over the internet in China may adversely affect our business and reputation and subject us to liability for information displayed on our website.***

The PRC government has adopted regulations governing internet access and the distribution of news and other information over the internet. Under these regulations, internet content providers and internet publishers are prohibited from posting or displaying over the internet content that, among other things, violates PRC laws and regulations, impairs the national dignity of China, or is reactionary, obscene, superstitious, fraudulent or defamatory. Failure to comply with these requirements may result in the revocation of licenses to provide internet content and other licenses, and the closure of the concerned websites. The website operator may also be held liable for such censored information displayed on or linked to the websites. If our website is found to be in violation of any such requirements, we may be penalized by relevant authorities, and our operations or reputation could be adversely affected.

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***You may experience difficulties in bringing actions and enforcing foreign judgments in Cayman Islands or in China against us, our management or our assets.***

We are incorporated in the Cayman Islands, but most of our and our subsidiaries' operations are conducted in China and most of our and our subsidiaries' assets are located in China. In addition, most of our directors and officers are nationals and/or residents of the PRC, and all or a substantial portion of their assets are located in China. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe we have violated your rights or have a claim against us, either under United States federal or state securities laws or otherwise. Even if you are successful in bringing an action of this kind, we cannot assure you that you could always successfully enforce a judgment against our assets or the assets of our directors and officers based on the laws of the Cayman Islands or the laws of China.

All of our officers and directors and our former officers and directors are residents of PRC or elsewhere outside of the U.S., and the majority of our assets and the assets of such persons are located outside the U.S.

It may also be difficult for our shareholders to effect service of process upon us or those persons in China. As advised by our PRC legal counsel, China currently does not have treaties providing for the reciprocal recognition and enforcement of court judgments with the Cayman Islands, United States and many other countries and regions. Therefore, with respect to matters that are not subject to a binding arbitration provision, we cannot assure you that the judgements of those non-PRC jurisdiction could be unconditionally recognized and enforced judgments of any of those non-PRC jurisdictions in a China court.

**Risks Related to Our Securities, including the ADSs**

***Trading in our securities on any U.S. stock exchange and the U.S. over-the-counter market may be prohibited under the HFCA Act or the Accelerating Holding Foreign Companies Accountable Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national securities exchanges, such as the Nasdaq, may determine to delist our securities, and our securities may be prohibited from being traded over the counter.***

The HFCA Act was enacted on December 18, 2020. Trading in our securities on U.S. markets, including the over-the-counter market, may be prohibited under the HFCA Act if the PCAOB determines that it is unable to inspect or investigate completely our auditor for two consecutive years.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to determine, as contemplated under the HFCA Act, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC adopted amendments to finalize the implementation of disclosure and documentation measures, which require us to identify, in our annual report on Form 20-F, (1) the auditors that provided opinions to the financial statements presented in the annual report, (2) the location where the auditors' report was issued, and (3) the PCAOB ID number of the audit firm or branch that performed the audit work.

On December 16, 2021, the PCAOB issued the HFCA Act Determination Report to notify the SEC of its determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong (the "2021 Determinations"). On August 26, 2022, the PCAOB signed a Statement of Protocol (the "Protocol") with the CSRC and Ministry of Finance of China, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong. The Protocol sets forth, among other terms, that (1) the PCAOB has independent discretion to select any issuer audits for inspection or investigation, (2) the PCAOB gets direct access to interview or take testimony from all personnel of the audit firms whose issuer engagements are being inspected or investigated, (3) the PCAOB has the unfettered ability to transfer information to the SEC in accordance with the Sarbanes-Oxley Act of 2002, and (4) the PCAOB inspectors can see audit work papers without redactions. On December 15, 2022, the PCAOB announced that it was able to conduct inspections and investigations completely of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong in 2022. The PCAOB vacated its previous 2021 Determinations accordingly. However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor's, control. The PCAOB is expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China and Hong Kong in the future. The PCAOB is required under the HFCA Act to make its determination on an annual basis with regards to its ability to inspect and investigate completely accounting firms based in the mainland China and Hong Kong. The possibility of being a "commission-identified issuer" and risk of delisting could continue to adversely affect the trading price of our securities. 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, the PCAOB will make determinations under the HFCA Act as and when appropriate.

Our current auditor, JWF Assurance PAC ("JWF"), is an independent registered public accounting firm headquartered in Singapore. Our previous auditor, Marcum Asia CPAs LLP ("Marcum Asia"), the independent registered public accounting firm that issues the audit report for the fiscal year ended December 31, 2022 and 2023 included in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Marcum Asia is headquartered in New York, New York, and as of the date of this annual report, Marcum Asia is not included in the 2021 Determinations. As a result, we do not expect to be identified as a "commission-identified issuer" under the HFCA Act for the fiscal year ended December 31, 2025 after we file our annual report on Form 20-F for the fiscal year of 2025.

Notwithstanding the foregoing, our ability to retain an auditor subject to PCAOB inspection and investigation, including but not limited to inspection of the audit working papers related to us, may depend on the relevant positions of U.S. and Chinese regulators. If, in the future, we have been identified by the SEC for two consecutive years as a "commission-identified issuer" whose registered public accounting firm is determined by the PCAOB that it is unable to inspect or investigate completely because of a position taken by one or more authorities in China, the SEC may prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States. In addition, it remains unclear what the SEC's implementation process related to the above rules will entail or what further actions the SEC, the PCAOB or Nasdaq will take to address these issues and what impact those actions will have on companies that have significant operations in China and have securities listed on a U.S. stock exchange (including a national securities exchange or over-the-counter stock market). We cannot assure you whether 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. If we fail to meet the new listing standards specified in the HFCA Act, we could face possible delisting from the Nasdaq Stock Market, cessation of trading in over-the-counter market, deregistration from the SEC and/or other risks, which may materially and adversely affect the trading price of the ADSs or terminate the trading of the ADSs in the United States. Such a prohibition would substantially impair your ability to sell or purchase the ADSs when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of the ADSs. Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.

***The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors.***

The trading price of the ADSs is likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, akin to the performance and fluctuation of the market prices of other companies with business operations located mainly in China that have listed their securities in the United States. A number of Chinese companies have listed or are in the process of listing their securities on U.S. stock markets. The securities of some of these companies have experienced significant volatility, including price declines in connection with their initial public offerings. The trading performances of these Chinese companies' securities after their offerings may affect the perception and attitudes of investors toward Chinese companies listed in the United States in general and consequently may impact the trading performance of the ADSs, regardless of our actual operating performance.

In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile due to a number of factors, including the following:

● regulatory developments affecting us or our industry;

● our ability to continue as a going concern;

● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results;

● changes in the market condition, market potential and competition in automobile industry;

● announcements by us of new automobile services, expansions, investments, acquisitions, strategic partnerships or joint ventures (including our planned online platform business);

● fluctuations in global and Chinese economies;

● changes in financial estimates by securities analysts;

● adverse publicity about us;

● additions or departures of our key personnel and senior management;

● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities;

● potential litigation or regulatory investigations; and

● sales or perceived potential sales of additional Class A ordinary shares, the ADSs and the ADSs issuable upon the exercise of outstanding warrants.

Any of these factors may result in large and sudden changes in the volume and price at which the ADSs will trade.

In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management's attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

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***If we do not satisfy the requirements for continued listing on Nasdaq Stock Market, the ADSs could be suspended or delisted from Nasdaq.***

The ADSs are currently listed on the Nasdaq Capital Market. The Nasdaq Listing Rules has minimum requirements that a company must meet for continued listing on the Nasdaq Capital Market. These requirements include maintaining a minimum closing bid price of US$1.00 per ADS for a period of 30 consecutive trading days. On February 17, 2023, we received a notice from Nasdaq that we failed to comply with the minimum closing bid price requirement set forth in Rule 5550(a)(2) of the Nasdaq Listing Rules as the closing bid price per ADS had been below US$1.00 for a period of 30 consecutive business days. The Nasdaq notification letter does not result in the immediate delisting of our securities. Pursuant to Rule 5810(c)(3)(A) of the Nasdaq Listing Rules, we had a compliance period of 180 calendar days, or until August 16, 2023 to regain compliance with Nasdaq's minimum bid price requirement. On February 9, 2024, we received a notification letter (the "Compliance Notice") from the Listing Qualifications Department of the Nasdaq Stock Market Inc. ("Nasdaq"), informing us that the closing bid price of the ADSs had been at US$1.00 per ADS or greater for 10 consecutive business days from January 26 through February 8, 2024, and accordingly, we regained compliance with the Nasdaq Listing Rule 5550(a)(2).

Effective on January 26, 2024, we changed the ratio of the ADSs to Class A ordinary shares from the then ADS ratio of one ADS to sixteen (16) Class A ordinary shares to a new ADS ratio of one ADS representing two hundred and forty (240) Class A ordinary shares. Effective on or about August 19, 2025, we changed the ratio of the ADSs to Class A ordinary shares from the then ADS ratio of one ADS to 240 Class A ordinary shares to a new ADS ratio of one ADS representing 4,800 Class A ordinary shares.

We cannot assure you that we will be able to continue to meet the financial and corporate governance requirements to qualify for continued listing, including the minimum bid price requirement of at least US$1.00 per ADS pursuant to Rule 5550(a)(2) of the Nasdaq Listing Rules. The issuance and sale of any securities in the future may be dilutive to our existing shareholders and may cause the price of the ADSs to decline. The issuance of additional shares by us that has the effect of reducing the price of the trading price of ADSs may also prevent us from being able to maintain compliance with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2), which may result in the ADSs being suspended or delisted from the Nasdaq Capital Market. If a suspension or delisting of the ADSs were to occur, there would be significantly less liquidity in the suspended or delisted ADSs. In addition, our ability to raise additional capital through equity or debt financing would be greatly impaired.

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***Substantial future sales or perceived potential sales of the ADSs in the public market could cause the price of the ADSs to decline.***

Sales of substantial amounts of the ADSs in the public market, or the perception that these sales could occur, could adversely affect the market price of the ADSs. All of the outstanding ADSs are freely transferable without restriction or additional registration under the Securities Act, subject to certain restrictions. Sales of these shares into the market could cause the market price of the ADSs to decline. The sale of ADSs issued upon the exercise of warrant instruments could further dilute the holdings of our then existing shareholders.

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***If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the ADSs and trading volume could decline.***

The trading market for the ADSs will depend in part on the research and reports that securities or industry analysts publish about us or our business. If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades the ADSs or publishes inaccurate or unfavorable research about our business, the market price for the ADSs would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for the ADSs to decline.

 

***Techniques employed by short sellers may drive down the market price of the ADSs.***

Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller's interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.

Public companies that have substantially all of their operations in China have been the subject of short selling. Much of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.

It is not clear what effect such negative publicity could have on us. If we were to become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming, and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business operations, and any investment in the ADSs could be greatly reduced or even rendered worthless.

***Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of the ADSs for return on your investment.***

We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the ADSs as a source for any future dividend income.

Our board of directors has complete discretion as to whether to distribute dividends, subject to applicable laws. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividends may exceed the amount recommended by our board of directors. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in the ADSs will likely depend entirely upon any future price appreciation of the ADSs. We cannot guarantee that the ADSs will appreciate in value or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in the ADSs and you may even lose your entire investment in the ADSs.

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***We may be classified as a passive foreign investment company for United States federal income tax purposes, which could result in adverse United States federal income tax consequences to United States investors in the ADSs or ordinary shares.***

We will be classified as a "passive foreign investment company," or PFIC, if, in the case of any particular fiscal year, either (1) 75.0% or more of our gross income for such year consists of certain types of passive income, or (2) 50.0% or more of the average quarterly value of our assets during such year produce or are held for the production of passive income. Although the law in this regard is unclear, we have historically treated the VIEs as being owned by us for United States federal income tax purposes, not only because we exercise significant influence over the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their results of operation in our financial statements. Assuming that we were the owner of the VIEs for United States federal income tax purposes, and based upon our historical and current income and assets, we do not believe that we were classified as a PFIC for the fiscal year ended December 31, 2025. We disposed of our business operating the VIEs, and we do not expect to be classified as a PFIC for the current fiscal year.

The determination of whether we are or will become a PFIC will depend upon the composition of our income (which may differ from our historical results and current projections) and assets and the value of our assets from time to time, including, in particular, the value of our goodwill and other unbooked intangibles (which may depend upon the market value of the ADSs or ordinary shares from time-to-time and may be volatile). Among other matters, if our market capitalization declines, we may be classified as a PFIC for the fiscal year ended December 31, 2025.

If we are classified as a PFIC in any fiscal year, a U.S. Holder (as defined in "Taxation-United States Federal Income Taxation") may incur significantly increased United States federal income tax on gain recognized on the sale or other disposition of the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants and on the receipt of distributions on the ADSs or ordinary shares (and, if applicable, the Warrants or the Pre-Funded Warrants) to the extent such gain or distribution is treated as an "excess distribution" under the United States federal income tax rules, and such holders may be subject to burdensome reporting requirements. Further, if we are classified as a PFIC for any year during which a U.S. Holder holds the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants. For more information, see "Taxation-United States Federal Income Taxation."

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***Our memorandum and articles of association contains anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares and the ADSs.***

Our memorandum and articles of association contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions. These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. For example, our board of directors has the authority, subject to any resolution of the shareholders to the contrary, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Class A ordinary shares, represented by the ADS or otherwise. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our board of directors decides to issue preferred shares, the price of the ADSs may fall and the voting and other rights of the holders of our Class A ordinary shares and ADSs may be materially and adversely affected. However, under Cayman Islands law, our board of directors may only exercise the rights and powers granted to them under our memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the best interest of our company.

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***Because we are incorporated under Cayman Islands law and conduct our operations primarily in emerging markets, you may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited***

We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by, among other things, our memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands (the "Companies Act"), and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

The courts of the Cayman Islands are unlikely (1) to recognize or enforce against us or our directors or officers judgments of courts of the United States that are predicated upon the civil liability provisions of U.S. securities laws, or (2) in original actions brought in the Cayman Islands to impose liabilities against us or our directors or officers that are predicated upon the federal securities laws of the United States or the securities laws of any state in the United States so far as the liabilities imposed by those provisions are penal in nature.

Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States, the courts of the Cayman Islands will, at common law, recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without re-trial of the merits of the underlying disputes based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the liquidated sum for which judgment has been given provided certain conditions are met. For such a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, is not inconsistent with a Cayman Islands judgment in respect of the same matter, is not impeachable on the grounds of fraud and was not obtained in a manner and is not of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the U.S. courts under civil liability provisions of the U.S. federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

In addition, we conduct substantially all of our business operations in emerging markets, including China, and substantially all of our directors and senior management are based in China. The SEC, U.S. Department of Justice and other authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies and non-U.S. persons, including company directors and officers, in certain emerging markets, including China. Additionally, our public shareholders may have limited rights and few practical remedies in emerging markets where we operate, as shareholder claims that are common in the United States, including class action securities law and fraud claims, generally are difficult or impossible to pursue as a matter of law or practicality in many emerging markets, including China. For example, in China, there are significant legal and other procedures for the SEC, the DOJ and other U.S. authorities to obtaining information needed for shareholder investigations or litigation. Although the competent authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, the regulatory cooperation with the securities regulatory authorities in the United States has not been efficient in the absence of a mutual and practical cooperation mechanism. In China, without the consent of the competent PRC securities regulators and relevant authorities, no organization or individual may provide the documents and materials relating to securities business activities to foreign securities regulators.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or large shareholders than they would as public shareholders of a company incorporated in the United States.

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***We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.***

Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC

● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;

● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

● the selective disclosure rules by issuers of material nonpublic information under Regulation FD.

We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis through press releases, distributed pursuant to the Nasdaq Stock Market Rules. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information, which would be made available to you, were you investing in a U.S. domestic issuer.

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***As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.***

As a Cayman Islands exempted company listed on Nasdaq, we are subject to Nasdaq corporate governance listing standards. However, the Nasdaq Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from Nasdaq corporate governance listing standards. For instance, we are not required to: (1) have a majority of the board be independent; (2) have a compensation committee or a nominating and corporate governance committee consisting entirely of independent directors; or (3) have regularly scheduled executive sessions with only independent directors each year. We intend to rely on some of these exemptions. As a result, you may not be provided with the benefits of certain corporate governance requirements of the Nasdaq Capital Market.

Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent we choose to follow home country practice with respect to corporate governance matters, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

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***The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to vote the Class A ordinary shares represented by your ADSs.***

As a holder of the ADSs, you will only be able to exercise the voting rights with respect to the Class A ordinary shares represented by your ADSs in accordance with the provisions of the deposit agreement. Under the deposit agreement, you may only vote by giving timely voting instructions to the depositary. Upon receipt of your timely voting instructions, the depositary will vote the Class A ordinary shares represented by your ADSs in accordance with those instructions. You will not be able to directly exercise your right to vote with respect to the Class A ordinary shares represented by your ADSs unless you withdraw such shares. Under our memorandum and articles of association, the minimum notice period required for convening a general meeting is seven calendar days. When a general meeting is convened, you may not receive sufficient advance notice to withdraw the Class A ordinary shares represented by your ADSs to allow you to vote with respect to any specific matter. If we ask for your instructions, the depositary will notify you of the upcoming vote and will arrange to deliver our voting materials to you. We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise your right to vote and you may have no legal remedy if the Class A ordinary shares represented by your ADSs are not voted as you requested.

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***The terms of the deposit agreement provide us with a discretionary proxy to vote the Class A ordinary shares represented by your ADSs if you do not timely provide voting instructions to the depositary to vote the Class A ordinary shares at shareholders' meetings, except in limited circumstances, which could adversely affect your interests.***

Under the deposit agreement for the ADSs, if you do not provide the depositary with timely voting instructions, the depositary will give us a discretionary proxy to vote the Class A ordinary shares represented by your ADSs at shareholders' meetings if:

● we have timely provided the depositary with notice of meeting and related voting materials;

● we have instructed the depositary that we wish to receive a proxy to vote uninstructed shares;

● we have informed the depositary that we reasonably do not know any substantial opposition as to a matter to be voted on at the meeting; and

● we have informed the depositary that such matter to be voted on at the meeting is not materially adverse to the interest of shareholders.

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***You may experience dilution of your holdings due to inability to participate in rights offerings.***

We may, from time to time, distribute rights to our shareholders, including rights to acquire securities. Under the deposit agreement, the depositary will not distribute rights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt from registration under the Securities Act with respect to all holders of ADSs, or are registered under the provisions of the Securities Act. The depositary may, but is not required to, attempt to sell these undistributed rights to third parties, and may allow the rights to lapse. We may be unable to establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result.

***You may be subject to limitations on transfer of your ADSs.***

Your ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems expedient in connection with the performance of its duties. The depositary may refuse to deliver, transfer or register transfers of the ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason. In addition, ADS holders may not be able to cancel their ADSs and withdraw Class A ordinary shares when they owe money for fees, taxes and similar charges.

***We have not determined a specific use for a portion of the net proceeds from the October 2025 Offering, and we may use these proceeds in ways with which you may not agree.***

With respect to the specific use of a portion of the net proceeds from the June 2025 Offering, our management plans to use such proceeds for daily operations and will also explore new businesses such as MCN. It should be noted that these attempts are only in their initial stages, and our management will have considerable discretion in deciding how to apply these proceeds. You will not have the opportunity to assess whether the proceeds are being used appropriately before you make your investment decision. We cannot assure you that the net proceeds will be used in a manner that will improve our results of operations or increase the price of the ADSs, nor that these net proceeds will be placed only in investments that generate income or appreciate in value

**ITEM 4. INFORMATION ON THE COMPANY**

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***A. History and development of the company***

We are an exempted company with limited liability incorporated in the Cayman Islands. We commenced our automobile group-purchase facilitation business in 2010. We began our auto show business in the fourth quarter of 2016, and we expanded our auto shows to tier-3 and below cities in 2017. We no longer operate this business segment, and it constitutes discontinued operations.

In the last quarter of 2025, we disposed of substantially all of our legacy business segments in a series of transactions that closed in October 2025. As of the date of this Annual Report, we operate only an automobile electronics resale business that we launched in the last quarter of 2025. This business segment focuses on delivering specified automotive electronic components to customers at negotiated prices.

Previously, we conducted our business through our subsidiaries and the VIEs in China. Over the past few years, we underwent a series of restructurings. In particular:

● *Incorporation of the listing entity*. In September 2012, we incorporated Token Cat Limited (formerly known as TuanChe Limited) as a holding company and proposed listing entity in the Cayman Islands.

● *Incorporation of Hong Kong and PRC subsidiaries*. In October 2012, we established a wholly-owned subsidiary in Hong Kong, TuanChe Information Limited. In January 2013, we also established a wholly-owned subsidiary in China, TuanYuan Internet Technology (Beijing) Co., Ltd. ("TuanYuan"), through which we obtained control over TuanChe Internet Information Service (Beijing) Co., Ltd. ("TuanChe Internet"), based on a series of contractual arrangements.

● *Contractual arrangements*. Due to PRC legal restrictions on foreign ownership in value-added telecommunications services, we previously carried out our business in China through the VIEs and their subsidiaries. In March 2013, we, through TuanYuan, entered into a series of contractual arrangements with (1) TuanChe Internet, and (2) the shareholders of TuanChe Internet, to obtain effective control of TuanChe Internet and its subsidiaries. These contractual arrangements, as revised from time to time, were most recently revised in February 2023. In June 2018, we, through Chema Beijing, entered into a series of contractual arrangements with (1) Tansuojixian Beijing (currently operating as Hainan Shuke), and (2) the shareholders of Tansuojixian Beijing, to obtain effective control of Tansuojixian Beijing and its subsidiaries. In January 2020, in relation to our acquisition of Longye, we, through Sangu Maolu, a wholly owned subsidiary in China, entered into a series of contractual arrangements with (1) Drive New Media and Internet Drive Technology, and (2) their respective shareholders, to obtain effective control of Drive New Media and Internet Drive Technology and their respective subsidiaries.

● *Disposition of legacy business segments*. On October 31, 2025, we approved the sale of 100% of our equity interests in Long Ye International Limited, TuanChe Group Inc., TuanChe Information Limited (a Hong Kong company), and all of the VIE entities associated with the foregoing to the Prime Management Group Limited, a British Virgin Islands company. The final commercial and industrial registration changes with respect to these dispositions occurred on December 29, 2025. As of the date of this Annual Report, we no longer operate VIEs in China As of the date of this Annual Report, we no longer operate VIEs in China, or operate their prior business segments.

● *Planned online platform business segment*. We intend to launch a new business segment in 2026 that we call multi-channel network ("MCN"). MCN will aim to connect content creators and key opinion leaders with brands and advertisers. Our primary services are planned to include comprehensive support such as content creation guidance, business partnership matchmaking, brand promotion, and data analysis. We intend to help influencers enhance their influence while assisting outstanding supply chain companies in expanding their market channels. We also intend to undertake functions such as content incubation, commercial monetization, and traffic operations. We have made preliminary preparations to launch the MCN business, including departmental setup, personnel recruitment, related technology development, and equipment procurement. However, this project carries certain uncertainties and has not generated revenue as of the date of this Annual Report.

Since our incorporation of Token Cat Limited (formerly known as TuanChe Limited) in 2012, we have raised approximately US$146.8 million in equity financing from our dedicated group of investors:

● *Series A financing*. In March 2013, we raised an aggregate of US$700,000 from the issuance of 2,828,393 and 16,970,357 Series A preferred shares to K2 Evergreen Partners L.P. and K2 Partners II L.P., respectively.

● *Series B financing*. In September 2013, we raised an aggregate of US$5,564,856 from the issuance of 4,142,781 and 8,285,562 Series B-1 preferred shares to K2 Evergreen Partners L.P. and K2 Partners II L.P., respectively, and the issuance of 18,193,772 and 4,548,443 series B-2 preferred shares to BAI GmbH and K2 Partners II L.P., respectively.

● *Series C financing*. In August 2014, we raised an aggregate of US$23,658,593 from the issuance of 3,427,812 Series C-1 preferred shares, 5,643,437 Series C-2 preferred shares to BAI GmbH, and 27,765,278 Series C-2 preferred shares to Highland 9 - LUX S.à.r.l. In September 2015, Highland 9 - LUX S.à.r.l. transferred such Series C-2 preferred shares to Highland Capital Partners 9 Limited Partnership, Highland Capital Partners 9-B Limited Partnership, and Highland Entrepreneurs' Fund 9 Limited Partnership, and 483,702 Series C-2 preferred shares to China Equities HK Limited.

● *Series C+ financing*. In June 2017, we raised an aggregate of US$8,682,770 from the issuance of in total 12,593,555 Series C+ preferred shares to Highland Capital Partners 9 Limited Partnership, Highland Capital Partners 9-B Limited Partnership, Highland Entrepreneurs' Fund 9 Limited Partnership, K2 Partners III Limited, K2 Family Partners Limited, BAI GmbH, and AlphaX Partners Fund I, L.P. On December 21, 2015, we entered into a convertible loan agreement with Lanxi Puhua Juli Equity Investment L.P. ("Lanxi Puhua"), in the amount of RMB30.0 million. On August 18, 2017, we issued 6,261,743 Series C+ preferred shares to Puhua Group Ltd, a company designated by Lanxi Puhua, at nominal value, pursuant to the loan agreement and a share purchase agreement dated June 16, 2017.

● *Convertible note financing*. In August 2017, we raised an aggregate principal amount of US$6,300,000 through issuing notes to AlphaX Partners Fund I, L.P., K2 Partners III Limited and K2 Family Partners Limited, and Hongtao Investment-I Ltd (formerly known as Eager Info Investments Limited) pursuant to certain convertible note purchase agreements. In June 2018, the convertible notes were converted into an aggregate of 3,965,043, 1,201,528 and 2,403,057 Series C-4 preferred shares, respectively, all at a conversion price of US$0.8322734 per share.

● *Series D-1 financing*. In June 2018, we raised an aggregate of US$23,350,000 from the issuance of 3,592,664 and 6,453,887 Series D-1 preferred shares to ACEE Capital Ltd. and Honour Depot Limited, respectively.

● *Series D-2 financing*. In September 2018, we raised US$50,000,000 from the issuance of 20,630,925 Series D-2 preferred shares to Beijing Z-Park Fund Investment Center (Limited Partner). In October 2018, we raised US$2,300,000 from the issuance of 949,023 Series D-2 preferred shares to Beijing Shengjing Fengtai Innovation Investment Center (Limited Partner).

● *Initial public offering*. In November 2018, we completed an initial public offering of 2,600,000 ADSs, raising approximately US$15.0 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us.

● *November 2022 Offering*. On November 25, 2022, we completed a registered direct offering with investors for the purchase and sale of (1) 3,654,546 ADSs, (2) certain pre-funded warrants to purchase 1,800,000 ADSs (the "Pre-Funded Warrants") in lieu of the ADSs being offered, and (3) certain warrants to purchase up to 5,454,546 ADSs (the "Warrants"), to certain institutional investors pursuant to a securities purchase agreement dated November 21, 2022, raising approximately US$13.6 million after deducting placement agent fee and the offering expenses payable by us.

*●* *October 2024 Transaction.* On October 24, 2024, we entered into certain securities purchase agreement with certain non-affiliated institutional investor (pursuant to which the Company agreed to sell (1) 241,677 ADSs, and (2) certain pre-funded warrants to purchase up to 520,042 ADSs in a registered direct offering, and (3) in a concurrent private placement, restricted warrants to purchase an aggregate of up to 761,719 ADSs (, for aggregate gross proceeds of approximately $1.1 million.

*●* *February 2025 Offering.* We entered into a securities purchase agreement with certain non-U.S. persons (as defined in Regulation S under the Securities Act of 1933, as amended) on February 28, 2025 to offer and sell up to an aggregate of 7,357,500,000 Class A ordinary shares, par value US$0.0001 per share, at a purchase price of US$0.0031317 per share, for an aggregate purchase price of approximately US$23.04 million. The shares were offered and sold in a private placement conducted outside the United States in reliance on Regulation S under the Securities Act. The net proceeds from the offering are intended to be used for working capital and other general corporate purposes.

*●* *February 2026 Securities Purchase Agreement*. On February 12, 2026, the Company entered into certain securities purchase agreement with certain non-U.S. investors pursuant to which the Company agreed to sell to the purchasers an aggregate of 96,000,000,001 Class A ordinary shares, par value US$0.0001 per share, at a price of $0.0012457 per share to purchase an aggregate of 96,000,000,001 class A Ordinary Shares, for the aggregate purchase price of approximately $119,590,000, which purchase price should be paid by the purchasers in fiat money or in cryptocurrencies, in the sole discretion of the Company. On February 18, the Company issued an aggregate of 96,000,000,001 Class A Ordinary Shares to the Purchasers.

Effective on January 26, 2024, we changed the ratio of the ADSs to Class A ordinary shares from the then ADS ratio of one ADS to sixteen (16) Class A ordinary shares to a new ADS ratio of one ADS representing two hundred and forty (240) Class A ordinary shares. Effective on or about August 19, 2025, we changed the ratio of the ADSs to Class A ordinary shares from the then ADS ratio of one ADS to 240 Class A ordinary shares to a new ADS ratio of one ADS representing 4,800 Class A ordinary shares. Unless otherwise indicated, ADSs and per ADS amount in this annual report have been retroactively adjusted to reflect the change in ratio for all periods presented.

We listed the ADSs on the Nasdaq Capital Market under the symbol "TC" on November 20, 2018 and completed an initial public offering of 2,600,000 ADSs on November 23, 2018, raising approximately US$15.0 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us.

On February 10, 2025, shareholders of the Company approved the change of our company name from TuanChe Limited to Token Cat Limited at the Company's annual general meeting of shareholders, effective upon the open of trading on February 28, 2025. The Company's ADSs will continue trading on the Nasdaq Capital Market under the trading symbol "TC", and the CUSIP number remained unchanged.

Our principal executive offices are located at 9F, Ruihai Building, No. 21 Yangfangdian Road, Haidian District, Beijing 100038, People's Republic of China. Our registered office in the Cayman Islands is located at the offices of Osiris International Cayman Limited, Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, PO Box 32311, Grand Cayman KY1-1209, Cayman Islands. The telephone number of our principal executive offices is (+86-10) 6399-8902. Investors should contact us for any inquiries through the address and telephone number of our principal executive office. Our agent for service of process in the United States is Cogency Global Inc., located at 10 E. 40th Street, 10th Floor, New York, N.Y. 10016, United States. Our principal website is tuanche.com.

For information regarding our principal capital expenditures, see "Item 5. Operating and Financial Review and Prospects-B. Liquidity and Capital Resources-Liquidity and Capital Resources."

SEC maintains an Internet site, http://www.sec.gov, which contains reports, proxy and information statements, and other information regarding us. We also maintain an Internet site, http://ir.tuanche.com/, for investors' information.

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***B. Business Overview***

**Discontinued Operations**

Substantially all of the revenue recognized in 2025 is attributable to discontinued operations. Prior to the 2025 Dispositions, we previously operated the following businesses, which are considered discontinued operations:

 

*Offline marketing solutions*. We and the VIEs organized auto shows and charged industry customers for booth spaces in the auto shows. In addition, we and the VIEs developed special promotion event services to better support industry customers in organizing their special promotion events through various integrated services, including event planning and executing, marketing training and onsite coaching. We and the VIEs charged fixed service fees for special promotion event services. We ceased to operate this business segment in connection with the 2025 Dispositions.

 

*Online marketing services.* We and the VIEs provided online marketing services for our industry customers to increase the efficiency and effectiveness of their marketing campaigns. We ceased to operate this business segment in connection with the 2025 Dispositions.

 

*Referral service for commercial bank.* We and the VIEs collaborated with and facilitated a commercial bank in expanding its cooperation with our and the VIEs' industry customers to grow its auto loan business. We and the VIEs charged the bank service fees for approved loan applications. We and the VIEs ceased to operate the referral services in 2022.

*Social CRM cloud services.* We and the VIEs provided subscription and support services to industry customers, including auto dealers, automakers and automotive service provider, with access to cloud services, software licenses and related support and updates during the term of the arrangement. We ceased to operate this business segment in connection with the 2025 Dispositions.

 

*Referral service for distribution platform.* We and the VIEs commenced customer referral services from the first quarter of 2020 by referring industry customers to Baidu to use the membership services of a Baidu's auto content distribution platform. We ceased to operate this business segment in connection with the 2025 Dispositions.

**Our Current Business Model and Business Plan**

Following the disposition of our legacy business effective December 31, 2025 and the termination of our relationships with our former variable interest entities, our continuing operations consist of two reportable business segments: (i) our automotive electronics resale business, which we launched in the last quarter of 2025, and (ii) our advertising business. We are planning to launch the MCN Platform, which has not yet been launched as of the date of this annual report.

*Automotive Electronics Resale Business Segment*

 

Our automotive electronics resale business focuses on sourcing, holding, and reselling automotive electronics products. We procure products from third-party suppliers and resell them to customers through our sales channels. Our performance in this segment is driven by our ability to obtain sufficient quantities of products that meet our pricing and quality requirements, manage inventory and working capital, maintain efficient warehousing and logistics arrangements, and compete effectively on price, delivery times, and service. This segment requires ongoing attention to supply continuity, inventory aging and obsolescence risk, product quality and returns management, and compliance with applicable product, consumer protection, and commercial regulations.

*Advertising Business Segment*

Our continuing advertising business currently consists primarily of proxy advertising services, through which we help clients promote their brands, services and products on third-party online platforms rather than through the legacy marketing businesses that were disposed of in the 2025 Dispositions. Revenue from this continuing advertising business was RMB0.1 million (US$21 thousand) in 2025, representing 2.5% of our total continuing operations revenue for the year.

*Planned Multi-Channel Network Online Platform Business Segment*

 

The MCN is intended to be a technology-enabled, multi-channel platform designed to connect users, merchants, and other participants and to facilitate transactions and related services. We expect the MCM, once launched, to require significant investment in technology development, platform operations, compliance, and marketing to attract and retain users and merchants and to achieve sufficient scale and marketplace liquidity. Our ability to successfully develop and launch the MCM will depend on, among other things, building reliable and scalable infrastructure, establishing and enforcing platform governance policies for merchant onboarding and product listings, implementing effective payment and customer service processes, and obtaining and maintaining applicable permits and licenses and complying with evolving PRC regulatory requirements that may apply to internet-based platform operations, data security, and consumer protection.

We evaluate performance and allocate resources across these segments based on their respective strategies, operational requirements, and capital needs. Because our legacy business has been disposed of and constitutes discontinued operations, our historical financial information may not be indicative of the future performance of our continuing operations.

**Employees**

As of December 31, 2025, we had 6 full-time employees. The following table sets forth the number of our full-time employees by functions as of the dates indicated.

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| | |
|:---|:---|
| | **As of<br> December 31,<br> 2025** |
| <br>**Functional Area** | **Number of<br> employees** |
| Sales and marketing | &nbsp;&nbsp;&nbsp;&nbsp;2 |
| General and administrative | 4 |
| Total | 6 |

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Our success depends on our ability to attract, retain and motivate qualified employees. We believe that we maintain a good working relationship with our employees, and we have not experienced any material labor disputes as of the date of this annual report. None of our employees is represented by labor unions.

**Legal Proceedings**

From time to time, we may be subject to various claims and legal actions that arise in the ordinary course of our business. We are not currently subject to any threatened or ongoing legal proceedings that, in the opinion of our management, may have a material adverse effect on our business, results of operations or financial condition.

**Regulation**

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***Regulations Relating to Value-added Telecommunications Service***

The Telecommunications Regulations of PRC promulgated in September 2000 and amended in July 2014 and February 2016, respectively, by the State Council and its related implementation rules, including the Catalog of Classification of Telecommunications Business issued by the MIIT, categorize various types of telecommunications and telecommunications-related activities into basic or value-added telecommunications services. The Administrative Measures on Telecommunications Business Operating promulgated in March 2009 and most recently amended in July 2017 by MIIT set forth more specific provisions regarding the types of licenses required to operate value-added telecommunications services, the qualifications and procedures for obtaining such licenses and the administration and supervision of such licenses. Under these regulations, a commercial operator of value-added telecommunications services must first obtain a license for value-added telecommunications business, or value-added telecommunications service license, from the MIIT or its provincial level counterparts.

In September 2000, the State Council promulgated the Administrative Measures on Internet Information Services (the "Internet Content Measures"), which was amended in January 2011. Under the Internet Content Measures, commercial internet information services operator shall obtain a license for value-added telecommunications business. The Internet Content Measures also set out certain restrictions on the provision of internet information services. For example, the internet information providers are prohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others. Furthermore, administration of mobile internet application information services is strengthened through the Regulations for Administration of Mobile Internet Application Information Services (the "MIAIS Regulations"), issued in June 2016 and effective in August 2016, amended in June 2022. The MIAIS Regulations were enacted to regulate mobile application information services (the "App"), the App providers (including App owners or operators) and online App stores. App service providers are required to obtain relevant qualifications pursuant to PRC laws and regulations.

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***Regulations Relating to Foreign Investment in Value-added Telecommunications Companies***

 

*The PRC Foreign Investment Law*

On March 15, 2019, the NPC approved the Foreign Investment Law, which came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law. For more details, see "Item 3. Key Information - Risks Related to our Corporate Structure - The interpretation and implementation of the PRC Foreign Investment Law are still evolving and we may not be able to precisely predict how it may impact the viability of our current corporate structure, corporate governance and business operations."

On December 26, 2019, the State Council issued the Implementation Regulation on the Foreign Investment Law, which came into effect on 1 January 2020, The Implementation Regulation on the Foreign Investment Law further clarified relevant provisions of the Foreign Investment Law. For example, it provides that the existing foreign-invested enterprises established before the effectiveness of the Foreign Investment Law may change their organizational forms, organizational structures, etc. and go through the change of registration procedures in accordance with the Foreign Investment Law and other relevant laws and regulations prior to January 1, 2025, after which the local branches of State Administration for Market Regulations (the "SAMR"), shall stop processing additional registration applications from the said enterprises, and disclose relevant information of such enterprises.

In December 2019, the MOFCOM and the SAMR jointly issued the Measures for Reporting of Foreign Investment Information (the "Foreign Investment Information Measures"), which came into effect on January 1, 2020, and the Interim Administrative Measures for the Record-filing of the Establishment and Modification of Foreign-invested Enterprises were suspended on the same date. Pursuant to the Foreign Investment Information Measures, from January 1, 2020 on, the foreign investors carrying out investment activities directly or indirectly in China and the relevant foreign-invested enterprises shall, through the Enterprise Registration System and the National Enterprise Credit Information Publicity System operated by the SAMR, disclose their investment information to the competent authorities by submitting various reports, including the reports related to their establishments, modifications and cancellations, and their annual reports.

In December 2020, the NDRC and the MOFCOM promulgated Measures for Security Review of Foreign Investment, which became effective on January 18, 2021. The Foreign Investment Security Review Mechanism (the "Security Review mechanism"), in charge of organization, coordination and guidance of foreign investment security review is thereunder established. A working mechanism office shall be established under the NDRC and led by the NDRC and the Ministry of Commerce to undertake routine work on the security review of foreign investment. According to the Security Review Mechanism, foreign investment activities falling in the scope such as important cultural products and services, important information technologies and internet products and services, important financial services, key technologies and other important fields that concern state security while obtaining the actual control over the enterprises invested in, a foreign investor or a party concerned in the PRC shall take the initiative to make a declaration to the working mechanism office prior to making the investment.

***Regulations Relating to Automobile Sales***

The sales of new automobiles within the territory of PRC are principally governed by the Administrative Measures for the Automobile Sales (the "Automobile Sales Measures"), promulgated by the MOFCOM in April 2017, which became effective in July 2017. Pursuant to the Automobile Sales Measures, the auto dealer shall submit its basic information to the National Automobile Circulation Information Administration System of the MOFCOM for record-filing within 90 days after its establishment, update its filing via the system within 30 days after its filed information is changed, and promptly submit the number and types of automobiles sold and other information as required via such system. The Automobile Sales Measures further stipulate that, among other things, (1) automobile suppliers and dealers shall sell automobiles, spare parts and other related products in conformity with relevant regulations and standards, and shall refrain from the sale of products prohibited by applicable laws and regulations, (2) auto dealers shall, in an appropriate manner, expressly indicate the prices of automobiles, spare parts and other related products as well as the rates of charges for various services in their business premises, and shall not charge additional fees beyond the expressly indicated prices, (3) auto dealers shall expressly indicate the quality assurance, warranty service and other after-sales service policies of which customers should be aware in their business premises, (4) auto dealers selling household automobiles shall expressly indicate the information of policies of reparation, replacement and return applicable to household automobiles in their business premises; and (5) auto dealers shall maintain an updated and accurate record of information related to automobiles sold and the customers with a record period of no less than 10 years. Any dealer found to be non-compliant with these requirements may potentially be subject to correction order, warning and/or fines.

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***Regulations Relating to Advertisements***

According to the PRC laws and regulations, companies that engage in advertising activities must obtain from the State Administration for Industry and Commerce (which was integrated into the SAMR with other governmental departments in March 2018) (the "SAIC"), or its local branches a business license which specifically includes operating an advertising business within its business scope. The business license of an advertising company is valid for the duration of its existence, unless the license is suspended or revoked due to a violation of any relevant law or regulation. PRC laws and regulations set forth certain content requirements for advertisements in PRC including, among other things, prohibitions on false or misleading content, superlative wording, socially destabilizing content or content involving obscenities, superstition, violence, discrimination or infringement of the public interest. Advertisers, advertising agencies, and advertising distributors are required by PRC laws and regulations to ensure that the content of the advertisements they prepare or distribute is true and in full compliance with applicable law. In providing advertising services, advertising agencies and advertising distributors must review the supporting documents provided by advertisers for advertisements and verify the content of the advertisements against these supporting documents before publishing.

In February 2023, SAMR issued the Administrative Measures for Internet Advertising (the "Internet Advertising Measures"), which came into effect on May 1, 2023. Pursuant to the Internet Advertising Measures, the internet advertisements refers to the commercial advertisement for direct or indirect marketing of goods or services in the form of text, image, audio, video, or others means through websites, webpages, internet applications, or other internet media. The Internet Advertising Measures specifically sets out the following requirements: (1) advertisements must be identifiable and marked with the word "advertisement" to the extent that consumers are able to distinguish them from non-advertisement information; (2) sponsored search results must be clearly distinguished from organic search results; (3) it is forbidden to send advertisements or advertisement links by email or other instant message without the recipient's permission or induce internet users to click on an advertisement in a deceptive manner; (4) pop-up advertisements must clearly display the close button so that internet users can close the advertisement with one click; and (5) internet information service providers who do not participate in the business activities of internet advertising but only provide internet information services for the internet advertisement are also required to stop publishing illegal advertisement if they know or should have known that the advertising via their service is illegal.

Violation of these laws and regulations may result in penalties, including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, the SAMR or its local branches may revoke violators' licenses or permits for their advertising business operations. Furthermore, advertisers, advertising agencies and advertising distributors may be subject to civil liability if they infringe on the legal rights and interests of third parties.

***Regulations Relating to Internet Information Security and Privacy Protection***

Internet information in China is regulated from a national security standpoint. The Decisions on Preserving Internet Security was enacted by the NPC, in December 2000 and was amended in August 2009, which subject violators to potential criminal punishment in China for any effort to (1) gain improper entry into a computer or system of strategic importance; (2) disseminate politically disruptive information; (3) leak state secrets; (4) spread false commercial information; or (5) infringe intellectual property rights. The Ministry of Public Security of PRC (the "MPS"), has promulgated measures that prohibit use of the internet in ways which, among other things, result in a leak of state secrets or a spread of socially destabilizing content. If an internet information service provider violates these measures, the MPS and its local branches may revoke its operating license and shut down its websites.

In recent years, PRC government authorities have enacted laws and regulations on internet use to protect personal information from any unauthorized disclosure. Under the Several Provisions on Regulating the Market Order of Internet Information Services, issued by the MIIT in December 2011 and effective in March 2012, an internet information service provider may not collect any user personal information or provide any such information to third parties without the consent of the user. An internet information service provider must expressly inform the users of the method, content and purpose of the collection and processing of such user personal information and may only collect such information necessary for the provision of its services. An internet information service provider is also required to properly maintain the user's personal information, and in case of any leak or likely leak of the user's personal information, the internet information service provider must take immediate remedial measures and, in severe circumstances, immediately report to the telecommunications authority. In addition, pursuant to the Decision on Strengthening the Protection of Online Information issued by the Standing Committee of the NPC in December 2012, the Order for the Protection of Telecommunications and Internet User Personal Information issued by the MIIT in July 2013 and came into force in September 2013, any collection and use of user personal information must be subject to the consent of the user, abide by the principles of legality, rationality and necessity and be within the specified purposes, methods and scopes. An internet information service provider must also keep such information strictly confidential, and is further prohibited from divulging, tampering with or destroying any such information, or selling or providing such information to other parties. An internet information service provider is required to take technical and other measures to prevent the collected personal information from any unauthorized disclosure, damage or loss. Any violation of these laws and regulations may subject the internet information service provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of filings, closedown of websites or even criminal liabilities.

Moreover, pursuant to the Ninth Amendment to the Criminal Law issued by the Standing Committee of the NPC in August 2015 which became effective in November 2015, any internet service provider that fails to fulfill the obligations related to internet information security administration as required by applicable laws and refuses to rectify upon orders, shall be subject to criminal penalty for the result of (1) any dissemination of illegal information in large scale; (2) any severe effect due to the leakage of the client's information; (3) any serious loss of criminal evidence; or (4) other severe situation. Any individual or entity that (1) sells or provides personal information to others in a way violating the applicable law, or (2) steals or illegally obtain any personal information, shall be subject to criminal penalty in severe situation. In addition, the Interpretations of the Supreme People's Court and the Supreme People's Procuratorate of the PRC on Several Issues Concerning the Application of Law in Handling Criminal Cases of Infringing Personal Information, issued in May 2017 and effective in June 2017, clarified certain standards for the conviction and sentencing of the criminals in relation to personal information infringement. In addition, the PRC General Provisions of the Civil Law, promulgated in March 2017 and became effective in October 2017, required personal information of individuals to be protected.

In November 2016, the Standing Committee of the NPC released the Internet Security Law, which took effect in June 2017. The Internet Security Law reiterated the requirements regarding collecting and using personal information, including, among others, (1) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of the information collection, the use of information collection, and obtain the consent of those from whom the information is collected; and (2) network operators shall strictly preserve the privacy of user information they collect, and establish and maintain systems to protect user privacy. The Internet Security Law further requires network operators to perform certain functions related to internet security protection and the strengthening of network information management. For instance, under the Internet Security Law, network operators of key information infrastructure generally shall, during their operations in the PRC, store the personal information and important data collected and produced within the territory of the PRC.

In June 2021, the Standing Committee of the NPC promulgated the PRC Data Security Law, which took effect in September 2021. The Data Security Law, among others, provides for a security review procedure for data activities that may affect national security. In November 2021, the CAC released the Administrative Measures for Internet Data Security (Draft for Comments) (the "Draft Measures for Internet Data Security"). In accordance with the Draft Measures for Internet Data Security, data processors, which refers to individuals or organizations that determine the purpose and the manner of processing data, shall apply for a cybersecurity review for the following activities: (1) merger, reorganization or division of internet platform operators that have acquired a large number of data resources related to national security, economic development or public interests to the extent that affects or may affect national security; (2) overseas listing of data processors which process over one million users' personal information; (3) listing in Hong Kong which affects or may affect national security; or (4) other data processing activities that affect or may affect national security. Besides, data processors that are listed overseas shall carry out an annual data security assessment. The Draft Measures for Internet Data Security remains unclear on whether the relevant requirements will be applicable to companies that have been listed in the United States and Hong Kong, such as us. The Draft Measures for Internet Data Security further requires that data processors processing "important data" or listed overseas shall conduct an annual data security assessment by itself or commission a data security service provider to do so, and submit the assessment report for the preceding year to the municipal cybersecurity department by the end of January each year. There is no timetable as to when the Draft Measures for Internet Data Security will be enacted. Furthermore, the Cybersecurity Review Measures, promulgated in December 2021 and effective in February 2022, set forth the cybersecurity review mechanism for critical information infrastructure operators, and provided that critical information infrastructure operators that intend to purchase internet products and services and network platform operators engaging in data processing activities that affect or may affect national security shall be subject to a cybersecurity review.

In July 2021, certain PRC regulatory authorities issued Opinions on Severely Cracking Down on Illegal Securities Activities in accordance with the Law, which, among others, provides for strengthening relevant laws and regulations on data security, cross-border data transmission, and confidential information management. These opinions provided that efforts will be made to revise the regulations on strengthening the confidentiality and file management relating to the offering and listing of securities overseas, to hold overseas listed companies responsible for information security, and to strengthen the standardized management of cross-border information provision mechanisms and procedures.

In July 2021, the State Council issued the Regulations on Protection of Critical Information Infrastructure (the "CIIP Regulations"). Pursuant to the CIIP Regulations, critical information infrastructure shall mean the important network facilities or information systems of key industries or sectors such as public communication and information service, energy, transportation, water conservation, finance, public services, e-government affairs and national defense science, and important network facilities or information systems which may endanger national security, people's livelihood and public interest in case of damage, malfunctioning or data leakage. The CIIP Regulations provide that no individual or organization may carry out any illegal activity of intruding into, interfering with, or sabotaging any critical information infrastructures, or endanger the security of any critical information infrastructures. The CIIP Regulations also require that critical information infrastructure operators shall establish a cybersecurity protection system and accountability system, and that the main responsible person of a critical information infrastructure operator shall take full responsibility for the security protection of such critical information infrastructures. In addition, relevant administration departments of each important industry and sector shall be responsible for formulating the rule of critical information infrastructure determination applicable to their respective industry or sector, and determine the critical information infrastructure operators in their industry or sector.

In July 2022, the CAC issued the Outbound Data Transfer Security Assessment Measures, which took effect on September 1, 2022 and specify that data processors who intend to provide important data and personal information that are collected and generated in the operation within the territory of the PRC to overseas shall be subject to security assessment with the CAC. Under the current Outbound Data Transfer Security Assessment Measures, an entity must apply for a CAC security assessment if it processes personal information of over one million individuals and conducts outbound transfers of personal information, or if it has cumulatively transferred personal information outbound of more than 100,000 individuals or sensitive personal information of more than 10,000 individuals since January 1 of the previous year. Furthermore, any entity that plans to transfer important data outside of China shall apply for a CAC security assessment. In addition, the Outbound Data Transfer Security Assessment Measures sets forth a 6-month grace period, any entity or data controller may within 6 months upon February 28, 2023, take corrective actions and apply for the CAC security assessment.

In January 2019, the Office of the Central Cyberspace Affairs Commission, the MIIT, the Ministry of Public Security, and the SAMR jointly issued an Announcement of Launching Special Crackdown Against Illegal Collection and Use of Personal Information by Apps to carry out special campaigns against mobile apps collecting and using personal information in violation of applicable laws and regulations, which prohibits business operators from collecting personal information irrelevant to their services, or forcing users to give authorization in a disguised manner. In November 2019, the Secretary Bureau of the CAC, the MIIT, the Ministry of Public Security and the SAMR promulgated the Identification Method of Illegal Collection and Use of Personal Information by App, which provides guidance for the regulatory authorities to identify the illegal collection and use of personal information through mobile apps, for the app operators to conduct self-examination and self-correction, and for other participants to voluntarily monitor compliance.

On December 15, 2019, the Provisions on Ecological Governance of Network Information Content was issued by the CAC, which has come into effect on March 1, 2020. These provisions require network information content service platform to perform its duties as the information content administrator, strengthen ecological governance of the network information contents of its own platform, and foster a positive, healthy, progressive and amicable cyber culture.

The MIIT issued the Notice on the Further Special Rectification of Apps Infringing upon Users' Personal Rights and Interests in July 2020, which requires that certain conducts of app service providers should be inspected, including, among others, (i) collecting personal information without the user's consent, collecting or using personal information beyond the necessary scope of providing services, and forcing users to receive advertisements; (ii) requesting user's permission in a compulsory and frequent manner, or frequently launching third-parties apps; and (iii) deceiving and misleading users into downloading apps or providing personal information. The notice also sets forth that the period for the regulatory specific inspection on apps and that the MIIT will order the non-compliant entities to modify their business within five business days, or otherwise to make public announcement to remove the apps from the app stores and impose other administrative penalties.

The Civil Code of PRC, which was promulgated by the NPC in May 2020 and became effective in January 2021, provides that: (1) the personal information of a natural person shall be protected by law; (2) the processing of personal information, including the collection, storage, use, processing, transmission, provision, and disclosure of personal information, shall be carried out pursuant to the principles of lawfulness, appropriateness and necessity, and excessive processing shall not be allowed, among with other conditions as prescribed in the Civil Code of PRC; and (3) an information processor shall not divulge or tamper with the personal information it collects or stores; and, without the consent of a natural person, the information processor shall not illegally provide others with the personal information of the natural person, except for information that is rendered unrecoverable after processing and from which no specific individual may be identified. Moreover, an information processor shall take technical and other necessary measures to ensure the security of the personal information it collects and stores, and prevent information from being leaked, tampered with or lost; and, if personal information has been or may be leaked, tampered with or lost, the information processor shall take remedial measures in a timely manner, inform the natural persons concerned in accordance with relevant provisions, and report the situations to competent departments concerned.

In August 2021, the Standing Committee of the NPC promulgated the Personal Information Protection Law, which took effect in November 2021. The Personal Information Protection Law requires, among others, that (1) the processing of personal information should have a clear and reasonable purpose directly related to the processing and should be conducted in a method that has the minimum impact on personal rights and interests, and (2) the collection of personal information should be limited to the minimum scope as necessary to achieve the processing purpose and avoid the excessive collection of personal information. Personal information processors shall adopt necessary measures to safeguard the security of the personal information that they handle. The offending entities could be ordered to correct, or to suspend or terminate the provision of services, and face confiscation of illegal income, fines or other penalties.

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***Regulations Relating to Consumer Rights Protection and Tort Liabilities***

According to the Laws on Protection of Consumers' Rights and Interests of the PRC, which was latest amended in October 2013, if a consumer's legitimate rights and interests are infringed upon by the goods seller or service provider at a trade fair, such customer may demand compensation from the infringing seller or service provider. If the trade fair is over, the customer may also demand compensation from the undertaker of such trade fair, in which case the undertaker has the right to recover the compensation from the infringing sellers or service providers afterwards.

The Implementation Measures of the PBOC for Protecting Rights and Interests of Financial Consumers (the "Measures for Financial Consumer Protection"), is promulgated by the PBOC in September 2020 and came into force in November 2020. The Measures for Financial Consumer Protection provided that banks and payment institutions shall follow the principles of voluntariness, equality, fairness and integrity, conscientiously assume primary responsibilities for protecting the legitimate rights and interests of financial consumers, and fulfill statutory obligations concerning financial consumer protection. They shall establish and improve internal control systems for financial consumer protection. When handling consumer financial information, banks and payment institutions shall follow the principles of legitimacy, justifiability and necessity, and obtain the explicit consent of financial consumers or their guardians. The Measures for Financial Consumer Protection also require banks and payment institutions to protect the personal financial information of consumers, including personal identification information, property information, account information, credit information, financial transaction information and other information that reflects the conditions of a particular individual.

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***Regulations on Anti-Monopoly Matters Related to Internet Platform Companies***

The PRC Anti-Monopoly Law, which was promulgated in 2008 and last amended in 2022, prohibits monopolistic conducts such as entering into monopoly agreements, abusing market dominance, and undertaking concentrations that may have the effect of eliminating or restricting competition. On February 7, 2021, the Anti-Monopoly Commission of the State Council officially promulgated the Anti-Monopoly Guidelines for Internet Platforms. The guidelines prohibit certain monopolistic conducts of internet platforms to protect market competition, safeguard interests of users and operators who participate in internet platform economics, including without limitation, prohibiting platforms with dominant position from abusing their market dominance (such as discriminating customers in terms of pricing and other transactional conditions using big data and analytics, coercing counterparties into exclusivity arrangements, using technology methods to block competitors' interface, tying or attaching unreasonable trading conditions, compulsory collection of unnecessary user data). In addition, the guidelines also reinforce the requirement of antitrust merger review for internet platform related transactions to safeguard market competition.

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***Regulation Relating to Financial Lease***

Pursuant to the Administrative Measures of Supervision on Financial Leasing Enterprises formulated by the MOFCOM which became effective on October 1, 2013 (the "Administrative Measures"), financial leasing enterprises shall not engage in deposits, loans, entrusted loans or inter-bank borrowing and equity investment unless permission has been granted from relevant departments. The Administrative Measures also contain regulatory provisions specifically focusing on sale-and-leaseback transactions. The leased assets in sale-and-leaseback transactions must be properties that possess economic functions and produce continuous economic benefits. A financial leasing enterprise shall give adequate consideration to and objectively evaluate assets leased back, set purchasing prices for subject matter thereof with reference to reasonable pricing basis in compliance with accounting principles, and shall not purchase any subject matter at a price in excess of the value thereof.

In April 2018, the MOFCOM transferred the duties to promulgate rules and regulations on the operations and supervision of financial leasing enterprises to the newly founded CBIRC. It is uncertain whether the change of the authority may lead to changes in the interpretation and application of existing Administrative Measures or how any such changes might affect financial leasing enterprises. In May 2020, the CBIRC promulgated the Notice of the China Banking and Insurance Regulatory Commission on Promulgation of the Interim Measures for the Supervision and Administration of Finance Leasing Companies (the "Interim Measures for the Finance Leasing Companies"). Pursuant to the Interim Measures for the Finance Leasing Companies, the finance leasing business refers to transaction activities whereby a lessor, in accordance with the selection of lessee on seller and leased property, purchases the leased property from the seller and provides the leased property for the lessee to use, for which the lessor pays the rent, and local financial regulatory authorities at the provincial level shall be specifically responsible for the supervision and administration of finance leasing companies within their respective jurisdictions.

***Regulations Relating to Financing Guarantee***

In August 2017, the State Council promulgated the Regulations on the Supervision and Administration of Financing Guarantee Companies (the "Financing Guarantee Regulations"), which became effective on October 1, 2017. The Financing Guarantee Regulations define "financing guarantee" as a guarantee provided for the debt financing (including but not limited to the extension of loans or issuance of bonds), and set out that the establishment of a financing guarantee company or engagement in the financing guarantee business without approval may result in several penalties, including but not limited to banning, an order to cease business operation, confiscation of illegal gains, fines of up to RMB1,000,000 and criminal liabilities. The Financing Guarantee Regulations also set forth that the outstanding guarantee liabilities of a financing guarantee company shall not exceed ten times of its net assets, and that the outstanding guarantee liabilities of a financing guarantee company vis-à-vis the same guaranteed party shall not exceed 10% of the net assets of the financing guarantee company, while the outstanding guarantee liabilities of a financing guarantee company vis-à-vis the same guaranteed party and its affiliated parties shall not exceed 15% of its net assets.

In April 2018, seven PRC regulatory agencies including the CBIRC, the NDRC and the MIIT, jointly issued four supporting documents (the "CBIRC Circular 1"), including Administration Measures for the Permits to Conduct Financing Guarantee Business, Measures for the Calculation of Outstanding Financing Guarantee Liabilities, Administration Measures for the Assets Ratio of Financing Guarantee Companies, and Guidelines to the Cooperation by and between the Banking Financial Institutions and Financing Guarantee Companies, to set forth implementation measures of the Financing Guarantee Regulations. These measures cover various aspects of business operations of financing guarantee companies, including certain limits on outstanding guarantee liabilities and liability-to-asset ratio, and the requirements on cooperation model with the banking financial institutions.

In October 2019, the CBIRC and other eight PRC regulatory agencies promulgated the Supplementary Provisions on the Supervision and Administration of Financing Guarantee Companies (the "Financing Guarantee Supplementary Provisions"). The Financing Guarantee Supplementary Provisions provides that, among others, institutions providing services such as client recommendation and credit assessment to various institutional funding partners shall not render any financing guarantee service, whether directly or in disguised form, without the necessary approval.

In July 2020, the CBIRC implemented the Commercial Banks Online Lending Measure to formulate the regulation regime for online lending business conducted by commercial banks. For example, the Commercial Banks Online Lending Measures set several rules for commercial banks to collaborate with external institutions on online lending, including: (i) commercial banks shall conduct pre-admission assessments on cooperative external institutions and manage such external institutions by a name list; (ii) commercial banks shall not accept any credit enhancement services directly or in disguised form, from third parties without qualification to provide guarantee, credit insurance or guarantee insurance; (iii) the cooperative external institutions (except for an insurance company or an institution with guarantee qualification) shall not charge any interest or expense to the borrower in any form; (iv) commercial banks shall independently conduct the credit approval, contract execution and other core risk control business; (v) the collaboration agreement between the commercial banks and the cooperative external institutions shall be executed in writing and specify the cooperation scope, data confidentiality, transitional arrangement for change or termination of the matters under cooperation, and the commitment of the external institutions for cooperating with the commercial bank in accepting the inspection by the banking regulatory authorities; and (vi) the commercial banks shall fully disclose, in conspicuous place of relevant page, the information of the cooperative external institutions, the information of the cooperative product, as well as rights and responsibilities of the commercial bank and the cooperative external institutions. The Commercial Banks Online Lending Measures set forth a transitional period of these measures, which is two years from the date on which the Commercial Banks Online Lending Measures is implemented. The business newly increased in the transitional period shall comply with the requirement therein, and a plan to rectify the online lending business within such transitional period shall be formulated and submitted to the banking regulatory authority within one month from the implementation date.

In February 2021, the CBIRC promulgated the Circular 24, which sets forth several requirements on the online lending business of the commercial banks, including: (i) the commercial banks shall conduct the risk control measures independently and the core credit assessment and risk control business are prohibited to be outsourced; (ii) except for the commercial banks which have no actual business sites, mainly conduct online business and meet other requirements stipulated by the CBIRC, local commercial banks shall conduct online lending within the jurisdiction where such commercial banks are registered; and (iii) with respect to the online loan business conducted in cooperation with third-party institutions, the capital contribution of cooperative institutions shall not be less than 30% in a single loan.

***Regulations Relating to Intellectual Property Rights***

The PRC has adopted comprehensive legislation governing intellectual property rights, including copyrights, patents, trademarks and domain names.

 

*Copyright*. Copyright in the PRC, including copyrighted software, is principally protected under the Copyright Law of the PRC, which was latest amended in November 2020 and took effect in June 2021 (the "Copyright Law"), and related rules and regulations. Under the Copyright Law, the term of protection for copyrighted software is 50 years.

 

*Patent*. The Patent Law of the PRC that was latest amended in October 2020 and became effective in June 2021 (the "Patent Law"), provides for patentable inventions, utility models and designs. An invention or utility model for which patents may be granted shall have novelty, creativity and practical applicability. The State Intellectual Property Office is responsible for examining and approving patent applications.

 

*Trademark*. The Trademark Law of the PRC that was latest amended in April 2019 and took effect in November 2019 (the "Trademark Law"), and its implementation rules protect registered trademarks. The PRC Trademark Office is responsible for the registration and administration of trademarks throughout the PRC. The Trademark Law has adopted a "first-to-file" principle with respect to trademark registration. In addition, on January 13, 2023, the CNIPA issued the Draft Revision to the Trademark Law of the People's Republic of China (the "Draft Trademark Law"), for public comments. The Draft Trademark Law stipulate that: (1) an application for registration may not be identical to a prior trademark for the same kind of commodity that the applicant has applied for earlier, has been registered, or has been deregistered, revoked or invalidated by public notice within one year before the date of application; (2) applicants shall not apply for trademark registration in bad faith; (3) a trademark registrant shall, within the 12-month period from expiry of every five-year period with effect from the date of approval of trademark registration, explain to the CNIPA the use of the said trademark on the approved commodities or a proper reason for non-use of the said trademark.

 

*Domain Name*. Domain names are protected under the Administrative Measures on the Internet Domain Names promulgated by MIIT in August 2017, which became effective in November 2017 (the "Domain Names Measures"). MIIT is the major regulatory body responsible for the administration of the PRC internet domain names. The Domain Names Measures has adopted a "first-to-file" principle with respect to the registration of domain names.

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***Regulations Relating to Tax***

 

*Enterprise Income Tax*

PRC enterprise income tax is calculated based on taxable income, which is determined under (1) the PRC Enterprise Income Tax Law, promulgated by the NPC and implemented in January 2008 and amended in December 2018 (the "EIT Law"), and (2) the implementation rules to the EIT Law promulgated by the State Council in January 2008 and amended in April 2019. The EIT Law imposes a uniform enterprise income tax rate of 25% on all resident enterprises in the PRC, including foreign-invested enterprises and domestic enterprises, unless they qualify for certain exceptions. According to the EIT Law and its implementation rules, the income tax rate of an enterprise that has been determined to be a high and new technology enterprise may be reduced to 15%.

In addition, according to the EIT Law, enterprises registered in countries or regions outside the PRC but have their "de facto management bodies" located within China may be considered as PRC resident enterprises and are therefore subject to PRC enterprise income tax at the rate of 25% on their worldwide income. Though the implementation rules of the EIT Law define "de facto management bodies" as "establishments that carry out substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc., of an enterprise," the only detailed guidance currently available for the definition of "de facto management body" as well as the determination and administration of tax residency status of offshore-incorporated enterprises are set forth in the Notice Regarding the Determination of Chinese-Controlled Overseas Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies promulgated by SAT in April 2009 ("SAT Circular 82"), the Administrative Measures for Enterprise Income Tax of Chinese-Controlled Overseas Incorporated Resident Enterprises (Trial Version) issued by the SAT in July 2011 ("SAT Bulletin No. 45"), and the Notice on Issues Related To Implementation of Determination of Tax Resident Enterprise on the Basis of De Facto Management Bodies issued by the SAT in January 2014 ("SAT Bulletin No. 9"), all of which provide guidance on the administration as well as the determination of the tax residency status of a Chinese-controlled offshore-incorporated enterprise, defined as an enterprise that is incorporated under the law of a foreign country or territory and that has a PRC company or PRC corporate group as its primary controlling shareholder.

According to SAT Circular 82, a Chinese-controlled offshore-incorporated enterprise will be regarded as a PRC resident enterprise by virtue of having its "de facto management body" in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met:

● the senior management and core management departments in charge of the enterprise's daily operations function are mainly in the PRC;

● financial and human resources decisions of the enterprise are subject to determination or approval by persons or bodies in the PRC;

● the enterprise's major assets, accounting books, company seals, and minutes and files of its board and shareholders' meetings are located or kept in the PRC; and

● 50% or more of the enterprise's directors or senior management with voting right habitually reside in the PRC.

SAT Bulletin No. 45 further clarifies certain issues related to the determination of tax resident status and competent tax authorities. It also specifies that when provided with a copy of Recognition of Residential Status from a resident Chinese-controlled offshore-incorporated enterprise, a payer does not need to withhold income tax when paying certain PRC-sourced income such as dividends, interest and royalties to such Chinese-controlled offshore-incorporated enterprise.

SAT Bulletin No. 9 further provides that, among other things, an entity that is classified as a "PRC resident enterprise" in accordance with the SAT Circular 82 shall file the application for classifying its status of residential enterprise with the local tax authorities where its main domestic investors are registered. From the year in which the entity is determined as a "PRC resident enterprise", any dividend, profit and other equity investment gain shall be taxed in accordance with the EIT Law and its implementing rules.

If we or any of our subsidiaries outside of China were to be considered a PRC "resident enterprise" under the EIT Law, we will be subject to PRC enterprise income tax on our worldwide income at a uniform tax rate of 25.0%. See "Item 3. Key Information-D. Risk Factors-Risks Related to Doing Business in China-If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders."

*Income Tax for Share Transfers*

According to the Public Notice Regarding Certain Enterprise Income Tax Matters on Indirect Transfer of Properties by Non-resident Enterprise ("SAT Bulletin 7"), promulgated by the SAT in February 2015, if a non-resident enterprise transfers the equity interests of a PRC resident enterprise indirectly by transfer of the equity interests of an offshore holding company (other than a purchase and sale of shares issued by a PRC resident enterprise in public securities market) without a reasonable commercial purpose, the PRC tax authorities have the power to reassess the nature of the transaction and the indirect equity transfer will be treated as a direct transfer. As a result, the gain derived from such transfer, which means the equity transfer price less the cost of equity, will be subject to PRC withholding tax at a rate of up to 10%. Under the terms of SAT Bulletin 7, the transfer which meets all of the following circumstances shall be directly deemed as having no reasonable commercial purposes: (1) over 75% of the value of the equity interests of the offshore holding company are directly or indirectly derived from PRC taxable properties; (2) at any time during the year before the indirect transfer, over 90% of the total properties of the offshore holding company are investments within PRC territory, or in the year before the indirect transfer, over 90% of the offshore holding company's revenue is directly or indirectly derived from PRC territory; (3) the function performed and risks assumed by the offshore holding company are insufficient to substantiate its corporate existence; or (4) the foreign income tax imposed on the indirect transfer is lower than the PRC tax imposed on the direct transfer of the PRC taxable properties. In October 2017, SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source ("SAT Bulletin 37"), which, among others, repeals certain rules stipulated in SAT Bulletin 7 and became effective on December 1, 2017. The SAT Bulletin 37 further details and clarifies the tax withholding methods in respect of income of non-resident enterprises.

There is uncertainty as to the application of SAT Bulletin 7. SAT Bulletin 7 may be determined by the PRC tax authorities to be applicable to our prior private equity financing transactions that involved non-resident investors, if any of such transactions are determined by the tax authorities to lack reasonable commercial purpose. As a result, we and our non-resident investors in such transactions may become at risk of being taxed under SAT Bulletin 7, and we may be required to expend valuable resources to comply with SAT Bulletin 7 or to establish that we should not be taxed under the general anti-avoidance rule of the EIT Law, which may have a material adverse effect on our financial condition and results of operations.

*Dividend Withholding Tax*

Pursuant to the EIT Law and its implementation rules, if a non-resident enterprise has not set up an organization or establishment in the PRC, or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%. Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise is reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise. Pursuant to the Notice of the SAT on the Issues concerning the Application of the Dividend Clauses of Tax Agreements ("SAT Circular 81"), promulgated by the SAT in February 2009, a Hong Kong resident enterprise must meet the following conditions, among others, in order to enjoy the reduced withholding tax: (1) it should be a company as provided in the tax treaty; (2) it must directly own the required percentage of equity interests and voting rights in the PRC resident enterprise; and (3) it must have directly owned such percentage in the PRC resident enterprise throughout the 12 months prior to receiving the dividends. In August 2015, the SAT promulgated the Administrative Measures for Non-Resident Taxpayers to Enjoy Treatments under Tax Treaties ("SAT Circular 60"), which became effective in November 2015 and was repealed in January 2020. SAT Circular 60 provides that non-resident enterprises are not required to obtain pre-approval from the relevant tax authority in order to enjoy the reduced withholding tax rate. Instead, non-resident enterprises and their withholding agents may, by self-assessment and on confirmation that the prescribed criteria to enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms and supporting documents when performing tax filings, which will be subject to post-tax filing examinations by the relevant tax authorities. In February 2018, the SAT promulgated the Notice on Issues Related to the "Beneficial Owner" in Tax Treaties, according to which when determining the applicant's status of the "beneficial owner" regarding tax treatments in connection with dividends in the tax treaties, several factors, including without limitation, whether the applicant is obligated to pay more than 50% of its income in twelve months to residents in third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and it will be analyzed according to the actual circumstances of the specific cases. In October 2019, the SAT promulgated the Administrative Measures for Non-Resident Taxpayers to Enjoy Treatments under Tax Treaties ("SAT Circular 35"). SAT Circular 35 became effective on January 1, 2020 and superseded SAT Circular 60 on the same date. Compared to SAT Circular 60, SAT Circular 35 provides that the nonresident enterprises and their withholding agents are not required to submit the supporting documents for tax treaty benefits when performing tax filings. Instead, nonresident enterprises and their withholding agents may retain such supporting documents themselves for the post-tax filing examinations by the relevant tax authorities. According to the Circular on Several Issues regarding the "Beneficial Owner" in Tax Treaties ("Circular 9"), which was issued in February 2018 by the SAT, effective as of April 1, 2018, when determining the applicant's status as the "beneficial owner" regarding tax treatments in connection with dividends, interests or royalties in the tax treaties, several factors, including without limitation, whether the applicant is obligated to pay more than 50% of its income in twelve months to residents in a third country or region, whether the business operated by the applicant constitutes actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account and analyzed based on specific circumstances. This Circular further provides that applicants who intend to prove his or her status as the "beneficial owner" shall submit the relevant documents to the relevant tax bureau according to the Administrative Measures for Non-Resident Enterprises to Enjoy Treatments under Tax Treaties. If our Hong Kong subsidiary satisfies all the requirements under the tax arrangement and receives approval from the relevant tax authority, the dividends paid to the Hong Kong subsidiary would be subject to withholding tax at the standard rate of 5%. See "Item 3. Key Information-D. Risk Factors-Risks Related to Doing Business in China-There are significant uncertainties in certain treaty benefits enjoyed by our PRC subsidiaries with respect to dividends payable by our PRC subsidiaries to our offshore subsidiaries under the PRC enterprise income tax law relating to the withholding tax liabilities."

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***Regulations Relating to Foreign Currency Exchange***

 

*Foreign Currency Exchange*

The principal regulations governing foreign currency exchange in China are the Regulations of the People's Republic of China on Foreign Exchange Administration, promulgated by the State Council and amended in August 2008. Under these regulations, the Renminbi is freely convertible for current account items, including the trade and service-related foreign exchange transactions and other current exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities, unless the prior approval of the SAFE, is obtained and prior registration with SAFE is made.

In August 2008, the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the Relevant Operating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreign-invested Enterprises ("SAFE Circular 142"), was promulgated by the General Affairs Department of SAFE, which regulates the conversion by foreign-invested enterprises of foreign currency capital into Renminbi by restricting how the converted Renminbi may be used. SAFE Circular 142 requires that Renminbi converted from the foreign currency-denominated capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the relevant government authority and may not be used to make equity investments in PRC, unless specifically provided otherwise. SAFE further strengthened its oversight over the flow and use of Renminbi funds converted from the foreign currency-denominated capital of a foreign-invested enterprise. The use of such Renminbi may not be changed without approval from SAFE, and may not be used to repay Renminbi loans if the proceeds of such loans have not yet been used. Any violation of SAFE Circular 142 may result in severe penalties, including substantial fines.

The Notice of the State Administration of Foreign Exchange on Further Improving and Adjusting the Foreign Exchange Administration Policies on Direct Investments was promulgated by SAFE in November 2012 and most recently amended in December 2019, and substantially amends and simplifies the foreign exchange procedure. Pursuant to this circular, the opening of various special purpose foreign exchange accounts, such as pre-establishment expense accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of Renminbi proceeds by foreign investors in the PRC, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. In addition, according to the Notice of the State Administration of Foreign Exchange on Issuing the Provisions on the Foreign Exchange Administration of Domestic Direct Investment of Foreign Investors and the Supporting Documents promulgated by SAFE in May 2013 and most recently amended in December 2019, the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.

In July 2014, SAFE further reformed the foreign exchange administration system in order to satisfy and facilitate the business and capital operations of foreign investment entities, and issued the Notice of the State Administration of Foreign Exchange on the Pilot Reform of the Administrative Approach Regarding the Settlement of the Foreign Exchange Capitals of Foreign-Invested Enterprises in Certain Areas ("SAFE Circular 36"). This circular suspends the application of SAFE Circular 142 in certain areas and allows a foreign-invested enterprise registered in such areas to use the Renminbi capital converted from foreign currency registered capital for equity investments within the PRC if the approved principal business of the foreign-invested enterprise includes investment or it complies with certain foreign exchange procedures.

In March 2015, SAFE released the Notice of the State Administration of Foreign Exchange on Reforming the Administrative Approach Regarding the Settlement of the Foreign Exchange Capitals of Foreign-invested Enterprises ("SAFE Circular 19"), effective in June 2015 and amended in December 2019, which has made certain adjustments to some regulatory requirements on the settlement of foreign exchange capital of foreign-invested enterprises, lifted some foreign exchange restrictions under SAFE Circular 142, and annulled SAFE Circular 142 and SAFE Circular 36. However, SAFE Circular 19 continues to, prohibit foreign-invested enterprises from, among other things, using Renminbi fund converted from its foreign exchange capitals for expenditure beyond its business scope, providing entrusted loans or repaying loans between non-financial enterprises.

In June 2016, SAFE issued the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Administrative Provisions on Capital Account Foreign Exchange Settlement ("SAFE Circular 16"), which took effect on the same day and was further amended in December 2023. Compared to SAFE Circular 19, SAFE Circular 16 provides that, in addition to foreign exchange capital, foreign debt funds and proceeds remitted from foreign listings should also be subject to the discretional foreign exchange settlement. In addition, it also lifted the restriction, that foreign exchange capital under the capital accounts and the corresponding Renminbi capital obtained from foreign exchange settlement should not be used for repaying the inter-enterprise borrowings (including advances by the third party) or repaying bank loans in Renminbi that have been sub-lent to the third party.

In January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification ("SAFE Circular 3"), which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (1) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (2) domestic entities shall hold income to account for previous years' losses before remitting profits. Moreover, pursuant to SAFE Circular 3, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions, contracts and other proof when completing the registration procedures in connection with an outbound investment.

In April 2020, SAFE promulgated the Circular on Optimizing Foreign Exchange Administration to Support the Development of Foreign-related Business ("SAFE Circular 8"), which promoted the nationwide reform of facilitating the payments of incomes under the capital accounts. Pursuant to SAFE Circular 8, under the prerequisite of ensuring true and compliant use of funds and compliance and complying with the prevailing administrative provisions on use of income from capital projects, enterprises which satisfy the criteria are allowed to use income under the capital account, such as capital funds, foreign debt and overseas listing, etc., for domestic payment, without the need to provide proof materials for veracity to the bank beforehand for each transaction.

 

 

*Foreign Exchange Registration of Overseas Investment by PRC Residents*

In July 2014, SAFE promulgated the Notice of the State Administration of Foreign Exchange on the Administration of Foreign Exchange Involved in Overseas Investment, Financing and Roundtrip Investment Conducted by Residents in China via Special-Purpose Companies ("SAFE Circular 37"), which replaced the former circular commonly known as SAFE Circular 75 promulgated by SAFE in October 2005. SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents' legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a "special purpose vehicle." SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as an increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary. Furthermore, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls.

In February 2015, SAFE released the Notice of the State Administration of Foreign Exchange on Further Simplifying and Improving the Policies of Foreign Exchange Administration Applicable to Direct Investment ("SAFE Circular 13"), which has amended SAFE Circular 37 by requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of the special purpose vehicle. However, remedial registration applications made by PRC residents that previously failed to comply with the SAFE Circular 37 continue to fall under the jurisdiction of the relevant local branch of SAFE.

*Share Option Rules*

Pursuant to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies. In addition, under the Notice of the State Administration of Foreign Exchange on Issues Related to Foreign Exchange Administration in Domestic Individuals Participation in Equity Incentive Plans of Companies Listed Abroad issued by SAFE in February 2012 ("SAFE Circular 7"), PRC residents who are granted shares or share options by companies listed on overseas stock exchanges under share incentive plans are required to (1) register with SAFE or its local branches, (2) retain a qualified PRC agent, which may be a PRC subsidiary of the overseas listed company or another qualified institution selected by the PRC subsidiary, to conduct SAFE registration and other procedures with respect to the share incentive plans on behalf of the participants, and (3) retain an overseas institution to handle matters in connection with their exercise of share options, purchase and sale of shares or interests and funds transfers. In addition, the PRC agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the share incentive plan, the PRC agent or the overseas entrusted institution or other material changes. The PRC agents must, on behalf of the PRC residents who have the right to exercise the employee share options, apply to SAFE or its local branches for an annual quota for the payment of foreign currencies in connection with the PRC residents' exercise of the employee share options. The foreign exchange proceeds received by the PRC residents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas listed companies must be remitted into the bank accounts in the PRC opened by the PRC agents before distribution to such PRC residents.

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***Regulations Relating to Dividend Distribution***

Under our current corporate structure, our Cayman Islands holding company may rely on dividend payments from our PRC subsidiaries, which is a wholly foreign-owned enterprise incorporated in China, to fund any cash and financing requirements we may have. Under PRC laws and regulations, wholly foreign-owned enterprises in the PRC may pay dividends only out of accumulated profits, after setting aside annually at least 10% of accumulated after-tax profits as statutory reserve fund, if any, unless these reserves have reached 50% of the registered capital of the enterprises. A wholly foreign-owned enterprise may allocate a portion of its after-tax profits to discretionary surplus fund at its discretion. These statutory reserve funds and discretionary surplus funds may not be distributed as cash dividends. Profit of a wholly foreign-owned enterprise shall not be distributed before the losses thereof for the previous accounting years have been made up. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.

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***Regulations Relating to M&A and Overseas Listings***

Six PRC regulatory agencies, including the CSRC, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, which became effective in September 2006 and was amended in June 2009 (the "M&A Rules"). Foreign investors shall comply with the M&A Rules when they purchase equity interests of a domestic company or subscribe the increased capital of a domestic company, and thus changing the nature of the domestic company into a foreign-invested enterprise; or when the foreign investors establish a foreign-invested enterprise in the PRC and purchase, through such enterprise, any assets of a domestic company and operate such assets; or when the foreign investors purchase the asset of a domestic company, establish a foreign-invested enterprise by injecting such assets and operate the assets. The M&A Rules, among other things, require offshore special purpose vehicles formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals, to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange.

In July 2021, the relevant PRC government authorities issued Opinions on Severely Cracking Down Illegal Securities Activities in accordance with the Laws. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies.

In September 2024, the NDRC and MOFCOM jointly issued the Negative List (2024 Version), which became effective on November 1, 2024. Pursuant to the Negative List (2024 Version), if a domestic company engaging in the prohibited business stipulated in the Negative List (2024 Version) seeks an overseas offering and listing, it shall obtain approval from the competent governmental authorities. Besides, the foreign investors of such company shall not be involved in the company's operation and management, and their shareholding percentage shall be subject, mutatis mutandis, to the relevant regulations on the domestic securities investments by foreign investors.

In February 2023, approved by the State Council, CSRC released new regulations for the filing-based administration of overseas securities offering and listing by domestic companies. The regulations will come into effect on March 31, 2023, which include the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Measures"), and five supporting guidelines. The Trial Measures stipulates that both direct and indirect overseas offering and listing activities are subject to regulation, and clearly defines the circumstances where provisions for direct and indirect overseas offering and listing by domestic companies apply. Specifically, where a domestic company seeks to indirectly offer and list securities in overseas markets, the issuer shall designate a major domestic operating entity, which shall, as the domestic responsible entity, file with the CSRC. Any overseas offering and listing made by an issuer that meets both the following conditions will be determined as indirect: (1) 50% or more of the issuer's operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by domestic companies; and (2) the main parts of the issuer's business activities are conducted in the PRC, or its main places of business are located in the PRC, or the senior managers in charge of its business operation and management are mostly PRC citizens or domiciled in the PRC. The determination as to whether or not an overseas offering and listing by domestic companies is indirect, shall be made on a substance over form basis. According to the Trail Measures, no overseas offering and listing shall be made under any of the following circumstances: (1) where such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (2) where the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (3) where the domestic company intending to make the securities offering and listing, or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (4) where the domestic company intending to make the securities offering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has yet been made thereof; (5) where there are material ownership disputes over equity held by the domestic company's controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller.

According to the Trial Measures, initial public offerings or listings in overseas markets, or subsequent securities offerings and listings of an issuer in other overseas markets than where it has offered and listed, shall be filed with the CSRC within three working days after the relevant application is submitted overseas. Subsequent securities offerings of an issuer in the same overseas market where it has previously offered and listed securities shall be filed with the CSRC within three working days after the offering is completed. A domestic company that seeks to directly or indirectly list its domestic assets in overseas markets through single or multiple acquisitions, share swaps, transfers of shares or other means, shall fulfil the filing procedure with the CSRC within three working days the relevant application is submitted overseas or the first public disclosure of the specifics of the transaction is made by the listed company. Where a domestic company fails to fulfill filing procedure as stipulated by the Trial Measures or offers and lists securities in an overseas market in in violation of the Trial Measures, the CSRC shall order rectification, issue warnings to such domestic company, and impose a fine of between RMB1,000,000 and RMB10,000,000. Persons-in-charge and other persons that are directly liable shall be warned and each imposed a fine of between RMB500,000 and RMB5,000,000. Controlling shareholders and actual controllers of the domestic company that organize or instruct the violations shall be imposed a fine of RMB1,000,000 and RMB10,000,000. Persons-in-charge and other persons that are directly liable shall be each imposed a fine of between RMB500,000 and RMB5,000,000.

In order to support domestic companies overseas securities offering and listing pursuant to laws and regulations, as a supplement to the Trial Measures, the CSRC, Ministry of Finance of PRC, National Administration of State Secrets Protection and National Archives Administration of China, have jointly revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing (, hereinafter referred to as the "revised Provisions"). The revised Provisions became effective on March 31, 2023 with the Trial Measures. The revised Provisions expands its application to cover both direct and indirect overseas offering and listing, and requires that a domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that (1) contain state secrets or working secrets of government agencies shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; or (2) if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. In addition, the domestic company, securities companies and securities service providers shall first obtain approval from the CSRC or other competent Chinese authorities before cooperating with the inspection and investigation by the overseas securities regulator or competent overseas authority, or providing documents and materials requested in such inspection and investigation.

***Regulations Relating to Employment***

Pursuant to the Labor Law of PRC, promulgated by the Standing Committee of NPC in July 1994 and amended in December 2018 (the "Labor Law"), and the Labor Contract Law of PRC, promulgated by Standing Committee of the NPC in June 2007 and amended in December 2012 (the "Labor Contract Law"), employers must execute written employment contracts with full-time employees. If an employer fails to enter into a written employment contract with an employee for more than a month but less than a year from the date on which the employment relationship is established, the employer must rectify the situation by entering into a written employment contract with the employee and pay the employee twice the employee's salary for the period from the day following the lapse of one month from the date of establishment of the employment relationship to the day prior to the execution of the written employment contract. If an employer fails to conclude a written labor contract with a worker within one year as of the date when it employs the worker, it shall be deemed to have concluded an open-ended labor contract with the latter. All employers must compensate their employees with wages equal to at least the local minimum wage. Violations of the Labor Law and the Labor Contract Law may result in fines and other administrative sanctions, and serious violations may result in criminal liabilities.

Enterprises in China are required by the Social Insurance Law of PRC promulgated by the Standing Committee of the NPC in October 2010 which became effective in July 2011 and amended in 2018 (the "Social Insurance Law"), the Regulations on Management of Housing Provident Fund released by the State Council in March 2002 and amended in March 2019, and other related rules and regulations, to participate in certain employee benefit plans, including social insurance funds, namely a pension plan, a medical insurance plan, an unemployment insurance plan, an on-the-job injury insurance plan and a maternity insurance plan, and a housing provident fund, and contribute to the plans or funds in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees as specified by the local government. Failure to make adequate contributions to various employee benefit plans may be subject to fines and other administrative sanctions. According to the Social Insurance Law, an employer that fails to make social insurance contributions may be ordered to rectify the non-compliance and pay the required contributions within a stipulated deadline and be subject to a late fee of 0.05% per day, as the case may be. If the employer still fails to rectify the failure to make social insurance contributions within the deadline, it may be subject to a fine ranging from one to three times the amount overdue. According to the Regulations on Management of Housing Fund, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the required contributions within a stipulated deadline; otherwise, an application may be made to a local court for compulsory enforcement.

***C. Organizational Structure***

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

![](ea028738901_img1.jpg)

The following table sets out the details of our subsidiaries that are significant to us.

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| | | |
|:---|:---|:---|
| **Subsidiaries** | **Place of<br> Incorporation** | **Ownership<br> Interest** |
| New Tuanche New York Inc. ("New Tuanche") | New York | 100% |
| New TuanChe Colorado Inc. | Colorado | 100% |
| New TuanChe PTE. Ltd. | Singapore | 100% |
| New TuanChe Hong Kong Limited | Hong Kong | 100% |
| Shenzhen Feixingjia Information Technology Co., Ltd. | PRC | 100% |
| Beijing Feixingjia Information Technology Co., Ltd. | PRC | 100% |
| Changsha Feixingjia Information Technology Co., Ltd. | PRC | 100% |

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***D. Property, plants and equipment***

See "Item 4. Information on the Company-B. Business Overview-Facilities."

**ITEM 4A. UNRESOLVED STAFF COMMENTS**

None.

**ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

*You should read the following description of our results of operations and financial condition in conjunction with the consolidated audited financial statements and related notes for the years ended December 31, 2025 and 2024. This discussion may contain forward-looking statements about our business and operations. Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under "Item 3. Key Information-3.D. Risk Factors" and elsewhere in this annual report.*

The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included in this annual report. This report contains forward-looking statements. In evaluating our business, you should carefully consider the information provided under the caption "Item 3. Key Information-D. Risk Factors" in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.

**A. Operating Results** 

**Overview**

In 2025, we began a significant transition from its historical automotive marketplace and related marketing businesses to a narrower continuing business conducted through retained PRC subsidiaries, while also taking initial steps to expand into our planned new MCN business segment. Historically, our operations included auto shows, special promotion event services, referral services for a commercial bank, online marketing services, live streaming promotion events, customer referral services and social CRM cloud services, which were conducted through subsidiaries, VIEs and subsidiaries of VIEs. In the last quarter of 2025, we expanded our retained business through PRC subsidiaries engaged in electronic equipment trading. We plan to expand into a new business segment in 2026 based on our planned MCN platform.

A substantial portion of our historical business consisted of an integrated automotive marketplace in China, including the organization of auto shows and the provision of related marketing and technology services to automakers, dealers and other automotive industry participants. In the 2025 Dispositions, we disposed of this business, and it constitutes discontinued operations. For 2025, the discontinued operations generated net revenues of RMB25.6 million and a net loss of RMB40.3 million, and as of December 31, 2025 the discontinued operations reflected total assets of RMB46.7 million and total liabilities of RMB277.4 million. As a result, management believes that period-to-period comparisons are more meaningful if investors distinguish between the legacy businesses that have been disposed of and the retained operations that remained after the transaction.

The Company's continuing business after the 2025 Dispositions is centered on retained PRC subsidiaries and new subsidiaries, including Shenzhen Feixingjia Information Technology Co., Ltd., Beijing Feixingjia Information Technology Co., Ltd. and Changsha Feixingjia Information Technology Co., Ltd., whose stated principal activities include electronic equipment trading and technical support and consulting services. In 2025, continuing operations generated net revenue of RMB5.9 million, consisting principally of RMB5.8 million from the resale of automotive electronic components and RMB0.1 million from our advertising business.

Our continuing auto resale business consists of the sourcing, holding and resale of automotive electronic components through our retained PRC subsidiaries. We procure these products from third-party suppliers and sell them to customers through our sales channels. In 2025, revenue from the resale of automotive electronic components was RMB5.8 million (US$826 thousand), representing 97.5% of our total continuing operations revenue for the year. This business was launched in the last quarter of 2025, and its performance depends on our ability to secure product supply on acceptable terms, manage inventory and working capital efficiently, and maintain competitive pricing and service.

Our continuing advertising business currently consists primarily of proxy advertising services, through which we help clients promote their brands, services and products on third-party online platforms rather than through the legacy marketing businesses that were disposed of in the 2025 Dispositions. Revenue from this continuing advertising business was RMB0.1 million (US$21 thousand) in 2025, representing 2.5% of our total continuing operations revenue for the year.

In 2025, our cost of revenues for the continuing business consisted primarily of the purchase costs of automotive electronic components and certain direct costs associated with online marketing activities. Although the continuing business generated only RMB0.2 million of gross profit in 2025 and recorded a loss from continuing operations after other income and expenses of RMB34.5 million, the Company reported income from continuing operations before income taxes of RMB42.5 million, largely consisting of a RMB49.0 million gain from disposal of subsidiaries and a RMB28.0 million gain from the change in fair value of warrant liabilities in 2025. Net loss from discontinued operations in 2025 was RMB40.3 million. Accordingly, in evaluating the continuing business on a go-forward basis, management believes investors should focus not only on reported earnings, but also on the limited current revenue base of the retained operations and the extent to which future revenue growth and margin expansion are generated from the Company's new operating platform rather than from non-operating items.

Our continuing operations also were highly concentrated in a small number of customers in 2025. All of our 2025 revenue was generated from five customers, and four customers accounted for approximately 97.5% of total revenue. As a result, changes in demand from, or the loss of, any of these customers, or adverse changes in their payment practices, credit terms or purchasing schedules, could materially affect our revenue, accounts receivable, working capital and short-term liquidity. This concentration also reduces forecasting visibility, because the timing, size and renewal of a limited number of customer orders may cause substantial volatility in period-to-period operating results and make it more difficult for us to plan inventory, procurement and cash needs.

We plan to expand into an MCN platform business and related live-streaming activities as part of our post 2025 Dispositions strategy. MCN will aim to connect content creators and key opinion leaders with brands and advertisers. Our primary services are planned to include comprehensive support such as content creation guidance, business partnership matchmaking, brand promotion, and data analysis. We intend to help influencers enhance their influence while assisting outstanding supply chain companies in expanding their market channels. We also intend to undertake functions such as content incubation, commercial monetization, and traffic operations. We have made preliminary preparations to launch the MCN business, including departmental setup, personnel recruitment, related technology development, and equipment procurement. However, this project carries certain uncertainties and has not generated revenue as of the date of this Annual Report.

At the same time, we are actively exploring new business channels and plan to incorporate new business models such as AI and MCN live streaming in the future to further develop our company's business. The company's management also notes that due to the impact of regional geopolitical events, the automotive industry faces increased related costs and reduced consumer willingness to spend. The automotive market is filled with certain uncertainties, which to some extent presents challenges for the company's future business development. We derive our revenue from two reportable operating segments: (i) Sales of automotive electronic component equipment and accessories, mainly consisting of communication device, power module, etc. and (ii) Advertising business.

**Results of Operations**

***Revenues***

We derive our revenue from two reportable operating segments: (i) Sales of automotive electronic component equipment and accessories, mainly consisting of communication device, power module, etc. and (ii) Advertising business. The following table sets forth our revenues by segment and as a percentage of total revenues for the periods indicated:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
| Resale of automotive electronic components from third party |  |  |  |  | 5772 | 826 | 97.5 |
| Advertising business |  |  |  |  | 148 | 21 | 2.5 |
| &nbsp;&nbsp;&nbsp;**Total revenue** |  |  |  |  | **5920** | **847** | **100.0** |

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***Resale of automotive electronic components from third party***

Since the 2025 Dispositions, we generate the majority of our revenues from the sales of resale of automotive electronic components from third parties. Our resales of sourced equipment and accessories from third parties include new energy-related products. It contributed 97.5% of our total revenues in 2025. For the year ended December 31, 2025, revenues from resales of sourced equipment and accessories from third parties were $0.8 million.

***Cost of Revenues***

Our cost of revenues of resale of automotive electronic components is as follows:

For automotive electronic components, we procure a variety of raw materials and components from third-party suppliers, and outsource our manufacturing and order fulfillment activities to third parties. Our product costs fluctuate with the costs of raw materials and underlying product components as well as the prices we are able to negotiate with our contract manufacturers and raw material and component suppliers. Shipping costs for raw materials and components are borne by our suppliers and contract manufacturers.

We offer a warranty ranging from 0 to 2 years. We have the warranty obligations. However, no separate accrual has been made as historical warranty repair costs were nil/immaterial. Warranty provisions will be recognized in the future if and when such costs are probable, estimable, and material.

The following table sets forth our cost of revenues by segment and as a percentage of total cost of revenues for the periods indicated:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
| Resale of automotive electronic components from third party |  |  |  |  | 5752 | 823 | 100.0 |
| &nbsp;&nbsp;&nbsp;Advertising business |  |  |  |  | **—** | **—** | **—** |
| &nbsp;&nbsp;&nbsp;**Total cost of revenues** |  |  |  |  | **5752** | **823** | **100.0** |

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***Gross Profit and Gross Margin***

The following table sets forth the gross profit and gross margin by segment:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
| Resale of automotive electronic components from third party |  |  |  |  | 20 | 3 | 11.9 |
| Advertising business |  |  |  |  | 148 | 21 | 88.1 |
| &nbsp;&nbsp;&nbsp;**Total gross profit** |  |  |  |  | **168** | **24** | **100.0** |

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***General and administrative expenses***

General and administrative expenses decreased by 7.8% from RMB37.6 million for the year ended December 31, 2024 to RMB34.6 million ($5.0 million) for the year ended December 31, 2025.

***Net income (loss)***

For the year ended December 31, 2025, we recorded a net income of RMB42.5 million ($6.1 million) from continuing operations, compared to a net loss of RMB94.3 million for the year ended December 31, 2024. Such change was primarily driven by gain from disposal of subsidiaries and change in fair value of warrant liability. We recorded a total net income for 2025 of RMB2.3 million after a RMB40.3 million loss from discontinued operations.

***Concentrations***

Our continuing operations are highly concentrated in a small number of customers in 2025. All of our 2025 revenue from continuing operations was generated from five customers, and four customers accounted for approximately 97.5% of total revenue. As a result, changes in demand from, or the loss of, any of these customers, or adverse changes in their payment practices, credit terms or purchasing schedules, could materially affect our revenue, accounts receivable, working capital and short-term liquidity. This concentration also reduces forecasting visibility, because the timing, size and renewal of a limited number of customer orders may cause substantial volatility in period-to-period operating results and make it more difficult for us to plan inventory, procurement and cash needs.

**Discontinued Operations**

We historically generated net revenue primarily from offline marketing services, referral services for commercial banks, online marketing services and other services. These historical operations have been classified as discontinued operations.

For the years ended December 31, 2023, 2024 and 2025, net revenues from discontinued operations were RMB162.4 million, RMB49.2 million and RMB25.6 million, respectively.

For the years ended December 31, 2023, 2024 and 2025, cost of revenues from discontinued operations were RMB68.9 million, RMB15.6 million and RMB6.3 million, respectively.

As a result of the foregoing, our gross profit was RMB93.4 million, RMB33.6 million and RMB19.2 million in 2023, 2024 and 2025, respectively, and our gross profit margin was 57.5%, 68.3% and 75.2% in 2023, 2024 and 2025, respectively.

**B. Liquidity and Capital Resources**

**For the years ended December 31, 2025 and 2024**

As of December 31, 2025 and 2024, we had RMB1.0 million ($0.1 million) and RMB4.6 million in cash and cash equivalents, respectively. However, current assets as of December 31, 2025 were driven primarily by prepayments and other current assets of RMB165.4 million, including RMB165.3 million of procurement advances, rather than by cash or other immediately available liquid resources. As a result, the size of our current asset balance should not be viewed as indicating comparable near-term liquidity. Our short-term liquidity depends in significant part on the timing of the delivery, use, recovery or monetization of these prepayments, together with our ability to collect receivables, control operating cash outflows and obtain additional financing as needed.

The accompanying consolidated financial statements and related notes have been prepared in conformity with U.S. GAAP and Securities and Exchange Commission regulations, assuming the Company will continue as a going concern. In evaluating the Company's ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about our ability to continue as a going concern. As of December 31, 2025, we had an accumulated deficit of approximately RMB1,418.8 million, cash and cash equivalents of RMB1.0 million, and net cash used in operating activities of RMB176.4 million for 2025. In addition, although we reported current assets of RMB172.9 million as of December 31, 2025, those current assets were driven primarily by prepayments and other current assets of RMB165.4 million, including RMB165.3 million of procurement advances, rather than by cash or other immediately available liquid resources. We had net income from operations of RMB2.3 million, driven by income from continuing operations of RMB42.5 million primarily due to non-operating items including a RMB49.0 million gain on disposal of subsidiaries and a RMB28.0 million fair value gain on warrants; loss from operations was RMB34.5 million. These conditions raise substantial doubt about our ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. Our independent registered public accounting firm's report on the consolidated financial statements for the year ended December 31, 2025 includes an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.

These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty, such as those relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities.

In response to the conditions described above, management has taken and plans to take the following actions to improve the Company's financial position and operations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. In 2025, the Company optimized its capital structure by disposing of its loss-making operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Company will fund its development and future operations through aggressive business growth and non-dilutive equity financing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Should we fail to achieve the above objectives, we may require additional financing to execute our business plans. Such financing may be in the form of equity or debt, the timing, terms, and availability of which cannot be assured. If we are unable to secure necessary capital on acceptable terms or at all, or if we fail to improve gross margins and reduce operating expenses, it may be unable to implement its current expansion strategy.

Management believes that the actions it is presently taking—which include seeking additional funding and implementing the above strategic plan—will mitigate the conditions that raise substantial doubt and provide the opportunity for us to continue as a going concern. However, these plans are subject to significant uncertainties, and there can be no assurance that we will successfully improve operating cash flows, recover or monetize prepayments on a timely basis, improve gross margins, reduce operating expenses, or obtain additional financing on acceptable terms, if at all.

This discussion should be read together with Note 2 to our consolidated financial statements and the related risk factor under "Item 3. Key Information—D. Risk Factors."

The following table summarizes the company's cash flow data as of December 31, 2025, December 31, 2024 and December 31, 2023:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$** |
| Net cash generated from/(used in) operating activities-continuing operations | 4075 | (5518) | (176898) | (25296) |
| Net cash (used in)/generated from operating activities-discontinued operations | (78967) | (29204) | 534 | 76 |
| **Net cash used in operating activities** | (74892) | (34722) | (176364) | (25220) |
| **Cash flows from investing activities:** |  |  |  |  |
| Disposal of subsidiaries |  |  | (4904) | (701) |
| Net cash used in investing activities-continuing operations |  |  | (4904) | (701) |
| Net cash used in investing activities-discontinued operations |  | (19) |  |  |
| **Net cash used in investing activities** | **—** | **(19)** | **(4904)** | **(701)** |
| **Cash flows from financing activities:** |  |  |  |  |
| Proceeds of offering, net of listing fee |  | 7112 | 165039 | 23600 |
| Net cash generated from financing activities-continuing operations |  | 7112 | 165039 | 23600 |
| Net cash generated from/(used in) financing activities-discontinued operations | 13972 | 23047 | (1450) | (207) |
| **Net cash generated from financing activities** | 13972 | 30159 | 163589 | 23393 |
| **Effect of exchange rate changes on cash** | **70** | **(1071)** | **8315** | **1189** |
| **Net decrease in cash and restricted cash** | **(60850)** | **(5653)** | **(9364)** | **(1339)** |
| **Cash, cash equivalents and restricted cash at beginning of the year** | **76843** | **15993** | **10340** | **1479** |
| **Cash, cash equivalents and restricted cash at end of the year** | **15993** | **10340** | **976** | **140** |

---

***Operating Activities***

Net cash used in operating activities consists primarily of net loss adjusted for non-cash items, including, share-based compensation, gain from disposal of subsidiaries, change in fair value of warrant liability and is adjusted for the impact of changes in working capital. Net cash used in operations for the year ended December 31, 2025 was RMB176.4 million ($25.2 million), representing an increase of RMB141.6 million compared to net cash used in operating activities of RMB34.7 million for the year ended December 31, 2024. The increase in cash used in operating activities is due to the increase in prepayment and other current assets.

***Investing Activities***

Net cash used in investing activities was RMB4.9 million ($0.7 million) for the year ended December 31, 2025, an increase of RMB4.9 million as compared to RMB19 thousand for the year ended December 31, 2024. The increase in cash used in investing activities is due to the disposal of subsidiaries.

***Financing Activities***

Net cash provided by financing activities was RMB163.6 million ($23.4 million) for the year ended December 31, 2025, an increase of RMB133.4 million, as compared to RMB30.2 million net cash provided by financing activities for the year ended December 31, 2024. The increase in cash provided by financing activities was due to a significant increase in cash proceeds from share issuance.

**Cash flows from continuing operations：**

 ****

***Operating Activities***

Net cash used in operating activities consists primarily of net loss adjusted for non-cash items, gain from disposal of subsidiaries, and is adjusted for the impact of changes in working capital. Net cash used in operations for the year ended December 31, 2025 was RMB176.9 million ($25.3 million), compared to net cash used in operating activities of RMB5.5 million for the year ended December 31, 2024. The increase in cash used in operating activities is due to the increase in prepayment and other current assets.

***Investing Activities***

Net cash used in investing activities was RMB4.9 million ($0.7 million) for the year ended December 31, 2025, an increase of RMB4.9 million as compared to nil for the year ended December 31, 2024. The increase in cash used in investing activities is due to the disposal of subsidiaries.

***Financing Activities***

Net cash provided by financing activities was RMB165.0 million ($23.6 million) for the year ended December 31, 2025, an increase of RMB157.9 million, as compared to RMB7.1 million net cash provided by financing activities for the year ended December 31, 2024. The increase in cash provided by financing activities was due to a significant increase in cash proceeds from share issuance.

**Cash flows from discontinued operations:**

***Operating Activities***

Net cash provided by operating activities consists primarily of net loss adjusted for non-cash items, is adjusted for the impact of changes in working capital. Net cash provided in operations as of December 31, 2025 was RMB0.5 million ($76 thousand), representing an increase of RMB29.7 million compared to net cash used in operating activities of RMB29.2 million for year ended December 31, 2024. The increase in cash provided in operating activities is due to the changes in working capital.

***Investing Activities***

Net cash used in investing activities were nil and RMB19 thousand for year ended December 31, 2025 and 2024.

***Financing Activities***

Net cash used in financing activities was RMB1.5 million ($0.2 million) for year ended December 31, 2025, a decrease of RMB24.5 million, as compared to RMB 23.0 million net cash provided by financing activities for year ended December 31, 2024. The decrease in cash provided by financing activities was due to a significant decrease in cash received from short-term borrowings.

**Off-Balance Sheet Arrangements**

Other than as disclosed elsewhere in this annual report, we have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to its shares and classified as shareholder's equity or that are not reflected in its consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.

**Critical Accounting Policies**

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. These principles require our management to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses, cash flow and related disclosure of contingent assets and liabilities. The estimates include, but are not limited to, accounts receivable, revenue recognition, inventory realization, impairment of long-lived assets and income taxes. We base our estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and the actual results, future financial statements will be affected.

Our management believes that among their significant accounting policies, which are described in Note 3 to the audited consolidated financial statements included in this Annual Report, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, our management believes these are the most critical to fully understand and evaluate its financial condition and results of operations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management's estimates and assumptions.

Revenue recognition

The Group recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services using the five steps defined under ASC Topic 606.

The Group determines revenue recognition through the following steps:

● identification of the contract, or contracts, with a customer;

● identification of the performance obligations in the contract;

● determination of the transaction price;

● allocation of the transaction price to the performance obligations in the contract; and

● recognition of revenue when, or as, the Group satisfies a performance obligation

Revenue is recognized upon transfer of control of promised goods or services to a customer.

Revenue is recorded net of Value Added Tax ("VAT") and related surcharges collected from customers, which are subsequently remitted to government authorities.

**Revenue recognition (Continuing operations)**

***Revenue from the resale of automotive electronic components***

The Group generates revenue from the resale of automotive electronic components. The Group identified a single performance obligation, which is to deliver the specified automotive electronic components to customers. The sale price of the electronic component equipment and its accessories are clearly stated in the agreement signed with customers. The Group acts as a principal in these transactions in accordance with ASC 606 and recognizes revenue at a point in time when control of the automotive electronic components is transferred to customers.

 ****

 ****

***Advertising business***

For the marketing information services, the Group generates consumers' demand information through its online channels and provides to the industry customers upon consumers' consent. The Group identified only one performance obligation that is to provide consumer's demand information to the industry customers. The marketing information service fee is charged based on the quantity of consumers' demand information delivered. Revenue is recognized at a point in time upon the delivery of such consumers' demand information.

For the proxy advertising services, with the development of network economy, online advertising has become a trend. The Group's clients pays for ads posting to promote their brand images. The Group connect demands for our clients with popular online platform, such as Tiktok, Kuaishou, Toutiao and etc., to showcase our clients' brands, services or products. It's the most efficient way for the clients to attract more attention. In practice, an account is set up on the platform for the client and the client notifies us to recharging the account when the account is activated. The client will get access to the account, determine when, where or how long to post the ads on its own and operate posting in the account. When the client posts an ad, the platform charges the account. The Group is considered to be a principal in accordance with ASC 606 and revenue is recognized over the period of the contract.

**Revenue recognition (Discontinued operation)**

***Offline marketing services revenue***

Auto shows revenue

The Group's online website and offline infrastructure allow them to organize auto shows, which aim at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. The Group charges a fixed admission fee per auto show event from its industry customers for arranging, decorating and providing booth space at auto shows. The Group has identified one performance obligation for the transaction - providing a decorated venue for auto dealers, automakers and automotive service providers, as the individual service promised in auto show contracts are not distinct individually. As the Group has control of the auto show services and discretion in establishing the price of auto show admission fee to auto dealers, automakers and other automotive service providers, it is considered to be a principal in accordance with ASC 606. The auto shows revenue is recognized on a straight-line basis over the period of the contract, which is usually from two days to four days, when the services are provided.

The auto show business has been fully transformed into an agency model in July 2024. The Group's agency service is developed from the original auto show service. The difference is that the Group arrange, decorate and provide booth space by ourselves in the original auto show service and collect the admission fee, but now the Group entrust the service to the agent, and at the same time to provide promotion services to the agent, and charge the service fee. The Group is considered to be an agent in accordance with ASC 606 and revenue is recognized over the period of the contract.

Special promotion events revenue

The Group provides integrated services to support auto dealers' own special promotion events during a specific period. The services include event planning and execution, marketing, training and onsite coaching, etc. The Group charges a fixed service fee per special promotion event. The Group has identified one performance obligation as the individual service promised in service contracts are not distinct individually. As the Group has control of the service and discretion in establishing the price of the fee to auto dealers, it is considered to be a principal in accordance with ASC 606. The special promotion events revenue is recognized on a straight-line basis over the promotion period of the contract, which is usually one week, when the services are provided.

 ****

***Referral service for commercial bank revenue***

In October 2019, the Group commenced its auto loan referral services in collaboration with a commercial bank. The referral services provided to the bank include (i) referral services and (ii) periodic guarantee for the following time periods: (a) from the date of loan issuance by the commercial bank to the consumer to the date when the consumer's vehicle mortgage registration is completed (the mortgage registration procedures should be completed within 120 days after the loan issuance) and (b) no overdue of more than 30 days for any of the first 3 monthly repayment. The referral service and periodic guarantee are two separate performance obligations that meet the criteria to be considered distinct, of which, referral services revenue is recognized at a point in time upon the delivery of the services and a guarantee liability is recorded at fair value at inception of the loans. Revenue from the periodic guarantee is recognized by a systematic and rational amortization method over the term of guarantee period. The Company has ceased the cooperation since April 2022.

One component of the transaction price is based on the loan performance of the following 12 months since the auto loans were released and the transaction price will be entitled to be received upon the loan performance meet specific criteria. The Group identified that one component as a variable consideration and the Group recognized the revenue when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

***Online marketing services revenue***

The Group's online marketing services revenue primarily include (i) live streaming promotion events services, (ii) customer referral services, (iii) marketing information services and (iv) demand-side platform services.

The Group commenced its live streaming promotion events services from the first quarter of 2020, holding promotional events on the live streaming platform of Zhejiang Tmall Technology Co., Ltd. ("Tmall"), which aims at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. The Group identified only one performance obligation that is to provide the industry customers with arranging, decorating and providing the platform for live show. The Group charges a fixed admission fee per live streaming promotion event from its industry customers. As the Group has control of the services and discretion in establishing the price of live streaming promotion admission fee to auto dealers, automakers and other automotive service providers, it is considered to be a principal in accordance with ASC 606. The live streaming promotion events services revenue is recognized on a straight-line basis over the promotion period of the contract, which is usually one week, when the services are provided.

 ****

***Social CRM cloud services revenue***

On January 13, 2020, the Company completed the acquisition of Longye, a Software-as-a-Service ("SaaS") company who mainly provides subscription and support services to industry customers, including auto dealers, automakers and automotive service providers, with access to cloud services, software licenses and related support and updates during the term of the arrangement. Cloud services allow industry customers to use the Group's multi-tenant software without taking possession of the software. The Group identified the only one performance obligation that is to provide integrated cloud services to industry customers. The Group initially records the subscription and support services fee as deferred revenue upon receipt and then recognizes the revenue on a straight-line basis over the service period, which is usually from one year to five years. The subscription and support services revenue are recognized on a straight-line basis over the period of the contract when the services are provided.

 ****

***Referral service for distribution platform revenue***

The Group also commenced its customer referral services from the first quarter of 2020 by referring its industry customers to Beijing Baidu Netcom Science Technology Co., Ltd. ("Baidu") to use the membership services of a Baidu's auto content distribution platform. The Group identified only one performance obligation that is to provide referral service to Baidu. The Group charges Baidu a fixed rate commission fee based on the membership fee amount for the services rendered. The Group is considered to be an agent in accordance with ASC 606 and revenue is recognized at point-in-time when the industry customers successfully register as a membership of Baidu's auto content distribution platform.

Inventory

Inventories, which are primarily comprised of finished goods for sale, are stated at the lower of cost or net realizable value, using the first-in first-out method. We evaluate the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis. Only defects products can be return to our suppliers.

Warrant liability

We issued warrants to purchase ordinary shares. We evaluate the warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity's Own Equity. Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of warrant liability in the consolidated statement of operations and comprehensive loss.

The fair value of the warrant liabilities was valued using Black Scholes Option Pricing model with (1) risk-free rate, (2) expect warrants life, (3) exercise price of warrant, (4) stock price, (5) standard derivation in the value of stock, and (6) expected dividend yield.

As of December 31, 2024 and 2025, we had RMB68.6 million and RMB24.4million (US$3.5million) of warrant liability. We recognized a gain of RMB20.7 million, a loss of RMB57.1 million and a gain of RMB28.0 million (US$4.0 million) in fair value of warrant liability in 2023, 2024 and 2025, respectively.

Income Taxes

Cayman Islands

Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company in the Cayman Islands to their shareholders, no Cayman Islands withholding tax will be imposed.

New York

Commencing from the year of assessment 2024, the New York's statutory income tax rate is 8%.

Hong Kong

Commencing from the year of assessment 2018/2019, the first HK$2.0 million of profits earned by the Group's subsidiaries incorporated in Hong Kong will be taxed at half the current tax rate (i.e., 8.25%) while the remaining profits will continue to be taxed at the existing 16.5% tax rate. Payments of dividends by the subsidiary to the Company are not subject to withholding tax in Hong Kong. The Ordinance only allows one entity within a group of "connected entities" to be eligible for the two-tier tax rate benefit. Under the Ordinance, it is an entity's election to nominate an entity that will be subject to the two-tier profits tax rate on its Profits Tax Return. The election is irrevocable. TuanChe Information elected the two-tier profits tax rate for its tax years of 2023 and 2024. TuanChe Information applies the two-tier profits tax rate for its provision for current income and deferred taxes. Other HK subsidiaries of the Company elected 16.5% tax rate.

China

Effective from January 1, 2008, the PRC's statutory income tax rate is 25%.

Singapore

The corporate income tax rate is 17%, applicable to both local and foreign companies.

Colorado

The corporate income tax rate is 4.4%, and the state sales tax rate is 2.9%.

**New Accounting Pronouncements**

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses ("Topic 326"). This ASU provides a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset in developing reasonable and supportable forecasts as part of estimating expected credit losses. For public business entities, ASU 2025-05 will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The guidance will be applied on a prospective basis. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the impact of adopting the standard.

Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

Besides the above, the Company's management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted would have a material effect on the consolidated financial statements.

**Quantitative and Qualitative Disclosures about Market Risk**

Credit risk

Cash deposits with banks are held in financial institutions in China, which deposits are not federally insured. Accordingly, the Company has a concentration of credit risk related to the uninsured part of bank deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk.

Concentration

The Company has a concentration risk related to suppliers and customers. The inability of the company to maintain existing relationships with suppliers or to establish new relationships with customers in the future may have a negative impact on the company's ability to obtain goods sold to customers in a price advantageous and timely manner. If the Company is unable to obtain ample supply of goods from existing suppliers or alternative sources of supply, the Company may be unable to satisfy the orders from its customers, which may have a material adverse impact on revenue.

In 2025, we disposed our loss-making legacy business and expanded new business operations through a newly established subsidiary. As a result of the divestiture and related retrospective adjustments, we generated RMB5.9 million in revenue from continuing operations for the fiscal year ended December 31, 2025.

For the fiscal year ended December 31, 2025, substantially all of our revenue, representing 100% of total revenue, was generated from five customers. The revenue contributions from these customers were as follows: 33.5%, 33.2%, 17.1%, 13.7% and 2.5%, respectively.

Our revenue is highly concentrated among a limited number of customers. The loss of, or a significant reduction in, orders from any of these customers, particularly those representing more than 10% of our total revenue (four customers in aggregate accounting for approximately 97.5% of our total revenue), would materially and adversely affect our business, financial condition and results of operations.

**C. Research and Development, Patents and Licenses, etc.**

See "Item 4. Information on the Company—B. Business Overview—Technology" and "Item 4. Information on the Company—B. Business Overview—Intellectual Property."

**D. Trend Information** 

Following the disposition of our legacy operations in the 2025 Dispositions, our continuing operations comprise an automotive electronics resale business launched in the third quarter of 2025 and a planned multi-channel network (MCN) platform that had not generated revenue as of the date of this report. We expect several trends and uncertainties to materially affect our results. Our current revenue base is limited, and we incurred a loss from operations of RMB34.5 million in 2025 against gross profit of RMB0.17 million, with income from continuing operations of RMB42.5 million driven primarily by non-operating items including a RMB49.0 million gain on disposal of subsidiaries and a RMB28.0 million change in fair value of warrant liabilities; as a result, period-to-period comparisons will be affected by the timing and magnitude of non-operating items. Our revenue is highly concentrated among a small number of customers, with five customers accounting for 100% of 2025 revenue and four customers representing approximately 97.5%, and any change in orders, pricing, or credit terms from these customers could materially affect our revenue, margins, and cash flows. We made significant prepayments of RMB165.3 million in 2025 to support our planned MCN business, which remained outstanding as of May 8, 2026. Our ability to fund operations depends on improving operating cash flows and obtaining additional financing. We used RMB171.5 million in operating cash in 2025 and ended the year with RMB1.0 million of cash and cash equivalents, and our consolidated financial statements include a going concern disclosure reflecting substantial doubt about our ability to continue as a going concern. Broad macroeconomic conditions in the automotive sector, including supply availability and pricing dynamics, and our execution of the planned MCN platform, are likely to influence our future revenue trajectory, margin profile, and liquidity.

**E. Critical Accounting Estimates** 

We prepare financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect the reported amounts of our assets and liabilities and the disclosure of our contingent assets and liabilities at the end of each fiscal period and the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) allowance for credit loss; (iii) goodwill; (iv) impairment of long-lived assets; and (v) warrant liability. See Note 3—Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements.

**Revenue Recognition(Continuing operations)**

We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services using the five steps defined under ASC Topic 606.

We determine revenue recognition through the following steps:

● identification of the contract, or contracts, with a customer;

● identification of the performance obligations in the contract;

● determination of the transaction price;

● allocation of the transaction price to the performance obligations in the contract; and

● recognition of revenue when, or as, we satisfy a performance obligation.

Revenue is recognized upon transfer of control of promised goods or services to a customer.

Revenue is recorded net of Value Added Tax ("VAT"), and related surcharges collected from customers, which are subsequently remitted to government authorities.

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Revenue from the resale of automotive electronic components

The Group generates revenue from the resale of automotive electronic components. The Group identified a single performance obligation, which is to deliver the specified automotive electronic components to customers. The sale price of the electronic component equipment and its accessories are clearly stated in the agreement signed with customers. The Group acts as a principal in these transactions in accordance with ASC 606 and recognizes revenue at a point in time when control of the automotive electronic components is transferred to customers.

Other revenue

For the marketing information services, the Group generates consumers' demand information through its online channels and provides to the industry customers upon consumers' consent. The Group identified only one performance obligation that is to provide consumer's demand information to the industry customers. The marketing information service fee is charged based on the quantity of consumers' demand information delivered. Revenue is recognized at a point in time upon the delivery of such consumers' demand information.

For the proxy advertising services, with the development of network economy, online advertising has become a trend. The Group's clients pays for ads posting to promote their brand images. The Group connect demands for our clients with popular online platform, such as Tiktok, Kuaishou, Toutiao and etc, to showcase our clients' brands, services or products. It's the most efficient way for the clients to attract more attention. In practice, an account is set up on the platform for the client and the client notifies us to recharging the account when the account is activated. The client will get access to the account, determine when, where or how long to post the ads on its own and operate posting in the account. When the client posts an ad, the platform charges the account. The Group is considered to be an agent in accordance with ASC 606 and revenue is recognized over the period of the contract.

 

 

**Revenue recognition (Discontinued operations)**

 

*Auto show revenue*

Historically, our and the VIEs' online website and offline infrastructure allowed us and the VIEs to organize auto shows, which aimed at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. We and the VIEs charged a fixed admission fee per auto show event to industry customers for arranging, decorating and providing booth space at auto shows. We have identified one performance obligation for the transaction, providing a decorated venue for auto dealers, automakers and automotive service providers, as the individual service promised in auto show contracts are not distinct individually. As we have control of the auto show services and discretion in establishing the price of auto show admission fee to auto dealers, automakers and other automotive service providers, we are considered to be a principal in accordance with ASC 606. The auto shows revenue is recognized on a straight-line basis over the period of the contract, which is usually from two days to four days, when the services are provided.

The auto show business fully transformed into an agency model in July 2024. The Group's agency service is developed from the original auto show service. The difference is that the Group arrange, decorate and provide booth space by ourselves in the original auto show service and collect the admission fee, but now the Group entrust the service to the agent, and at the same time to provide promotion services to the agent, and charge the service fee. The Group is considered to be an agent in accordance with ASC 606 and revenue is recognized over the period of the contract. The auto show business was disposed of as part of the 2025 Dispositions, and constitutes discontinued operations.

 

*Special promotion event service revenue*

Historically, we and the VIEs provided integrated services to support industry customers' special promotion events during a specific period, which include event planning and execution, marketing training and onsite coaching. We and the VIEs charged a fixed service fee per special promotion event. We have identified one performance obligation, as the individual service promised in service contracts are not distinct individually. As we had control of the special promotion event services and discretion in establishing the price of services fees to industry customers, we are considered to be a principal in accordance with ASC 606. Revenue generated from the special promotion event services is recognized on a straight-line basis over the period of the contract, which is usually one week, when the services are provided. The special integrated services business was disposed of as part of the 2025 Dispositions, and constitutes discontinued operations.

***Online marketing services revenue***

Historically, our Subsidiaries and the VIEs' online marketing services revenue primarily included (i) live streaming promotion events services, (ii) customer referral services, (iii) marketing information services and (iv) demand-side platform services.

We and the VIEs commenced live streaming promotion events services from the first quarter of 2020, holding promotion events on the live streaming platform of Tmall, which aims at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. We identified only one performance obligation to provide the industry customers with services to arrange, decorate and provide platforms for live shows. We charge a fixed admission fee per live streaming promotion event from industry customers. As we had control of the services and discretion in establishing the price of live streaming promotion admission fee to auto dealers, automakers and other automotive service providers, it is considered to be a principal in accordance with ASC 606. The live streaming promotion events revenue is recognized on a straight-line basis over the period of the contract, which is usually one week, when the services are provided. The online marketing services business was disposed of as part of the 2025 Dispositions, and constitutes discontinued operations.

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***Other revenue***

Historically, for the marketing information services, we generated consumers' demand information through online channels and provide to the industry customers upon consumers' consent. We identified only one performance obligation to provide information regarding consumer demand for industry customers. The marketing information service fee is charged based on the quantity of consumers' demand information delivered. Revenue is recognized at a point in time upon the delivery of such consumers' demand information.

Our clients paid for ads posting to promote their brand images. We connected demands for our clients with popular online platform, such as Tiktok, Kuaishou, Toutiao and etc, to showcase our clients' brands, services or products. We are considered to be an agent in accordance with ASC 606 and revenue is recognized over the period of the contract. The promotion business was disposed of as part of the 2025 Dispositions, and constitutes discontinued operations.

**Allowance for credit loss**

The carrying value of accounts receivable is reduced by an allowance that reflects our best estimate of the amounts that will not be collected. An allowance for credit loss is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. To estimate expected credit losses, we have identified the relevant risk characteristics of the receivables which include size and nature. Receivables with similar risk characteristics have been grouped into pools. For each pool, we consider the past collection experience, current economic conditions and future economic conditions (external data and macroeconomic factors). This is assessed at each quarter based on the specific facts and circumstances. There have been no significant changes in the assumptions since adoption. Accounts receivable balances are written off against the allowance when they are determined to be uncollectible. Notes receivable represents notes receivable issued by reputable financial institutions that entitle us to receive the full face amount from the financial institutions at maturity.

Assumptions Used. Our allowance for credit losses is based on its assumptions regarding the probability of default. The expected probability of payment and time to default, which include assumptions about macroeconomic factors and recent performance.

**Impairment of long-lived assets**

Long-lived assets or asset group, including intangible assets with finite lives, are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than we had originally estimated.

We primarily consider the following factors when evaluating impairment:

significant underperformance relative to projected operating results;

significant changes in the overall business strategy;

significant adverse changes in legal or business environment; and

significant competition, unfavorable industry trends, or economic outlook.

When these events occur, we evaluate the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, we recognize an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets.

Future cash flow assumptions. We performed qualitative analysis regarding the existence of impairment indicators pursuant to ASC 360-10-35-21 and concluded that there are indicators that the asset group might be impaired mainly due to recurring net losses and operating cash out-flows for the years ended December 31, 2025. Thus, we performed the quantitative asset group impairment testing by calculating the undiscounted cash flow to test for recoverability. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, we recognize an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets.

**Warrant liability**

We issued warrants to purchase ordinary shares. We evaluate the warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity's Own Equity. Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of warrant liability in the consolidated statement of operations and comprehensive loss.

The fair value of the warrant liabilities was valued using Black Scholes Option Pricing model with (1) risk-free rate, (2) expect warrants life, (3) exercise price of warrant, (4) stock price, (5) standard derivation in the value of stock, and (6) expected dividend yield.

As of December 31, 2024 and 2025, we had RMB68.6 million, and RMB24.4 million (US$3.5 million) of warrant liability. We recognized a gain of RMB20.7 million, a loss of RMB57.1 million and a gain of RMB28.0 (US$4.0 million) in fair value of warrant liability in 2023, 2024 and 2025, respectively.

**ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

**A Directors and Senior Management**

Mr. Wei Wen, our former director, Chief Executive Officer and Chairman, resigned from his positions with our company effective October 30, 2025. Mr. Simon Li, our former Chief Financial Officer of the Company, resigned from his position effective October 30, 2025. Neither the resignation of Mr. Wei Wen or Mr. Simon Li was a result of any disagreements with our company on any matter related to the operations, policies, or practices of our company. The following table sets forth information regarding our directors and senior management as of the date of this annual report:

---

| | | |
|:---|:---|:---|
| **Directors and Executive Officers** | **Age** | **Position/Title** |
| Guangsheng Liu | 42 | Chief Executive Officer, President, Chief Financial Officer and Chairman |
| Furong Tian | 44 | Independent Director |
| Yicheng Yang | 33 | Independent Director |
| Wentao Deng | 38 | Independent Director |

---

**Guangsheng Liu** has served as our Chief Executive Officer, President, Chief Financial Officer and Chairman since October 2025. He has served as a Senior Partner of Jingdong Medicine since December 2015 and currently holds this position. From December 2013 to December 2015, he served as the Chief Technology Officer of Beijing Dream Castle Information Technology Co., Ltd. Mr. Deng also served as the Chief Technology Officer of Beijing Beisheng Tiandi Petroleum Technology Development Co., Ltd. from July 2008 to December 2013. Mr. Liu attended Inner Mongolia University of Finance and Economics and received his bachelor's degree in Computer Science and Technology in 2008.

From August 2023 to February 2026, Ms. Furong Tian served as Finance Manager of Beijing Taihua Digital Intelligence Business Management Co., Ltd. From April 2020 to February 2023, Ms. Tian served as Finance Manager of Shenzhou Wangwei Technology (Beijing) Co., Ltd. From May 2011 to April 2014, Ms. Tian worked at Pricewaterhouse Coopers Zhong Tian LLP as an auditor. Ms. Tian has a master's degree in Financial Management from Tianjin Polytechnic University.

**Wentao Deng** has served as the Founder of Shenzhen Yucai Consulting Management Co., Ltd. since June 2016 to Feb 2024. From October 2015 to May 2016, Mr. Deng served as the Chief Financial Officer of Xiaoke Internet Financial Services Co., Ltd. Mr. Deng attended Jiangnan University and received his bachelor's degree in Accounting in 2014.

**Yicheng Yang** was the deputy manager at Dark Pool Asset Management from June 2018 to April 2020, where he maintained equity pledges and supervised assets management. From November 2017 to February 2016, he was a director of securities department at Bluestone Securities (New Zealand) Limited, where he managed the sales team, developed and coordinated the complete closed-loop process of compliance, risk control, settlement and customer service. Mr. Yang attended Jiangsu University of Science and Technology and received his bachelor's degree in mechanical design, manufacturing and automation. He attended Singapore Management University and received his master's degree of science in international trading.

***B. Compensation***

**Compensation of Directors and Executive Officers**

In 2025, the aggregate cash compensation to directors and executive officers was approximately RMB1.4 million (US$0.2 million). The reason the company has not yet made the payment is that it is currently facing some temporary liquidity constraints. After negotiation, the payment has been deferred. Our directors and officers participate in our share incentive plan. See "-Share Incentive Plan." We do not pay or set aside any amounts for pension, retirement or other benefits for our directors and officers, except our contributions on behalf of our officers located in China to a government-mandated multi-employer defined contribution plan.

**Share Incentive Plan**

 ****

***2018 Share Incentive Plan***

We adopted the Share Incentive Plan we adopted in June 2018 (the "2018 Plan") to attract and retain best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business. Under the 2018 Plan, the maximum aggregate number of Shares which may be issued pursuant to all awards (including incentive share options) are 38,723,321 shares, representing 15.0% of the total outstanding shares of our company on an as-converted basis as of the date of the adoption of the Plan. As of the date of this annual report, all ordinary shares have been granted and there are vested under the 2018 Plan.

The following paragraphs describe the principal terms of the 2018 Plan:

 ****

***Types of awards***. The 2018 Plan permits the awards of options, restricted shares or restricted share units.

 ****

***Plan administration***. Our board of directors or a committee of one or more members of the board will administer the 2018 Plan. The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant.

 ****

***Award agreement***. Awards granted under the 2018 Plan are evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event of the grantee's employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.

 ****

***Eligibility***. We may grant awards to our employees, directors and consultants of our company, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries.

 ****

***Vesting schedule***. In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement.

 ****

***Restricted shares***. Restricted shares are subject to such restrictions on transferability and other restrictions as the committee may impose.

 ****

***Exercise of options***. The committee determines the exercise price of each option, which is set forth in the Award Agreement. The committee also determines the exercise time and conditions for each option, provided that the maximum exercisable term is 10 years absent amendment or modification.

***Transfer restrictions***. Awards may not be transferred in any manner by the recipient except under limited circumstances, including by will or the laws of descent and distribution, unless otherwise provided by the plan administrator.

 ****

***Termination and amendment of the Plan***. The committee, with the prior approval of the board, may terminate, amend or modify the 2018 Plan, subject to some limitations.

 ****

***2023 Share Incentive Plan***

On March 13, 2023, we adopted our 2023 Share Incentive Plan (the "2023 Plan"), to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. We may grant options, restricted shares, restricted share units and other equity-based awards under the 2023 Plan to our employees, directors and consultants. Under the 2023 Plan, a total of 169,172,564 Class A ordinary shares were initially reserved for issuance. As of the date of this annual report, all restricted shares have been issued and granted, vested under the 2023 Plan.

The following paragraphs describe the principal terms of the 2023 Plan:

 ****

***Types of awards***. The 2023 Plan permits the awards of options, restricted shares or restricted share units.

 ****

***Plan administration***. The 2023 Plan shall be administered by the board or a committee of one or more members of the board to whom the board shall delegate the authority to grant or amend awards to participants other than any of the committee members. Any grant or amendment of awards to any committee member shall then require an affirmative vote of a majority of the board members who are not on the committee.

 ****

***Award agreement***. Awards granted under the 2023 Plan are evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event of the grantee's employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.

 ****

***Eligibility***. We may grant awards to our employees, directors and consultants of our company, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries.

 ****

***Vesting schedule***. In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement.

 ****

***Restricted shares***. Restricted shares are subject to such restrictions on transferability and other restrictions as the committee may impose.

 ****

***Exercise of options***. The committee determines the exercise price of each option, which is set forth in the Award Agreement. The committee also determines the exercise time and conditions for each option, provided that the maximum exercisable term is 10 years absent amendment or modification.

 ****

***Transfer restrictions***. Awards may not be transferred in any manner by the recipient except under limited circumstances, including by will or the laws of descent and distribution, unless otherwise provided by the plan administrator.

 ****

***Termination and amendment of the Plan***. The committee, with the prior approval of the board, may terminate, amend or modify the 2023 Plan, subject to some limitations.

***2024 Share Incentive Plan***

On February 10, 2025, we adopted our 2024 Share Incentive Plan (the "2024 Plan"), to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. We may grant options, restricted shares, restricted share units and other equity-based awards under the 2024 Plan to our employees, directors and consultants. Under the 2024 Plan, a total of 105,874,468 Class A ordinary shares were initially reserved for issuance. As of the date of this annual report, there were 0 restricted shares issued and 0 restricted shares outstanding under the 2024 Plan.

The following paragraphs describe the principal terms of the 2024 Plan:

 ****

***Types of awards***. The 2024 Plan permits the awards of options, restricted shares or restricted share units.

 ****

***Plan administration***. The 2024 Plan shall be administered by the board or a committee of one or more members of the board to whom the board shall delegate the authority to grant or amend awards to participants other than any of the committee members. Any grant or amendment of awards to any committee member shall then require an affirmative vote of a majority of the board members who are not on the committee.

 ****

***Award agreement***. Awards granted under the 2024 Plan are evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event of the grantee's employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.

 ****

***Eligibility***. We may grant awards to our employees, directors and consultants of our company, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries.

 ****

***Vesting schedule***. In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement.

 ****

***Restricted shares***. Restricted shares are subject to such restrictions on transferability and other restrictions as the committee may impose.

 ****

***Exercise of options***. The committee determines the exercise price of each option, which is set forth in the Award Agreement. The committee also determines the exercise time and conditions for each option, provided that the maximum exercisable term is 10 years absent amendment or modification.

 ****

***Transfer restrictions***. Awards may not be transferred in any manner by the recipient except under limited circumstances, including by will or the laws of descent and distribution, unless otherwise provided by the plan administrator.

 ****

***Termination and amendment of the Plan***. The committee, with the prior approval of the board, may terminate, amend or modify the 2024 Plan, subject to some limitations.

***2025 Share Incentive Plan***

On November 17, 2025, we adopted our 2025 Share Incentive Plan (the "2025 Plan"), to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. We may grant options, restricted shares, restricted share units and other equity-based awards under the 2025 Plan to our employees, directors and consultants. Under the 2025 Plan, a total of 1,237,314,318 Class A ordinary shares were initially reserved for issuance. As of the date of this annual report, there were 0 restricted shares issued and 0 restricted shares outstanding under the 2025 Plan.

The following paragraphs describe the principal terms of the 2025 Plan:

 ****

***Types of awards***. The 2025 Plan permits the awards of options, restricted shares or restricted share units.

 ****

***Plan administration***. The 2025 Plan shall be administered by the board or a committee of one or more members of the board to whom the board shall delegate the authority to grant or amend awards to participants other than any of the committee members. Any grant or amendment of awards to any committee member shall then require an affirmative vote of a majority of the board members who are not on the committee.

 ****

***Award agreement***. Awards granted under the 2025 Plan are evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event of the grantee's employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.

 ****

***Eligibility***. We may grant awards to our employees, directors and consultants of our company, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries.

 ****

***Vesting schedule***. In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement.

 ****

***Restricted shares***. Restricted shares are subject to such restrictions on transferability and other restrictions as the committee may impose.

 ****

***Exercise of options***. The committee determines the exercise price of each option, which is set forth in the Award Agreement. The committee also determines the exercise time and conditions for each option, provided that the maximum exercisable term is 10 years absent amendment or modification.

 ****

 ****

***Transfer restrictions***. Awards may not be transferred in any manner by the recipient except under limited circumstances, including by will or the laws of descent and distribution, unless otherwise provided by the plan administrator.

 ****

***Termination and amendment of the Plan***. The committee, with the prior approval of the board, may terminate, amend or modify the 2025 Plan, subject to some limitations.

***2026 Share Incentive Plan***

On Mar 17, 2026, we adopted our 2026 Share Incentive Plan (the "2026 Plan"), to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. We may grant options, restricted shares, restricted share units and other equity-based awards under the 2026 Plan to our employees, directors and consultants. Under the 2026 Plan, a total of 21,139,467,404 Class A ordinary shares were initially reserved for issuance. As of the date of this annual report, there were nil restricted shares issued and nil restricted shares outstanding under the 2026 Plan.

The following paragraphs describe the principal terms of the 2026 Plan:

 ****

***Types of awards***. The 2026 Plan permits the awards of options, restricted shares or restricted share units.

 ****

***Plan administration***. The 2026 Plan shall be administered by the board or a committee of one or more members of the board to whom the board shall delegate the authority to grant or amend awards to participants other than any of the committee members. Any grant or amendment of awards to any committee member shall then require an affirmative vote of a majority of the board members who are not on the committee.

 ****

***Award agreement***. Awards granted under the 2026 Plan are evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event of the grantee's employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.

 ****

***Eligibility***. We may grant awards to our employees, directors and consultants of our company, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries.

 ****

***Vesting schedule***. In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement.

 ****

***Restricted shares***. Restricted shares are subject to such restrictions on transferability and other restrictions as the committee may impose.

 ****

***Exercise of options***. The committee determines the exercise price of each option, which is set forth in the Award Agreement. The committee also determines the exercise time and conditions for each option, provided that the maximum exercisable term is 10 years absent amendment or modification.

 ****

***Transfer restrictions***. Awards may not be transferred in any manner by the recipient except under limited circumstances, including by will or the laws of descent and distribution, unless otherwise provided by the plan administrator.

 ****

***Termination and amendment of the Plan***. The committee, with the prior approval of the board, may terminate, amend or modify the 2026 Plan, subject to some limitations.

The following table sets forth information on restricted shares that we have awarded or have agreed to award as of May 8, 2026 pursuant to the 2018 Plan, 2023 Plan, the 2024 Plan, 2025 Plan and the 2026 Plan.

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| | | |
|:---|:---|:---|
|  | **Number of**<br>**Restricted**<br>**Shares Awarded(1)** | <br>**Grant Date** |
| **Directors and Executive Officers** | |  |
| Wei Wen# | \* | July 1, 2018 |
| Simon Li# | \* | June 15, 2023 |
| Jianchen Sun | \* | July 1, 2018 |
| Hui Yuan | \* | July 1, 2019 |
| Guangsheng Liu |  |  |
| Total | 13509456 |  |

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\* Less than 1% of our total outstanding shares on an as-converted basis.

# Former director or executive officer.

(1) The
 restricted shares awarded under the Plan are held by Best Cars Limited, the nominee of our equity incentive trust. See "-Equity
 Incentive Trust."

***Equity Incentive Trust***

An equity incentive trust was established pursuant to a deed dated June 13, 2018 among us, The Core Trust Company Limited, as the trustee, and Best Cars Limited, as a nominee. Best Cars Limited, a company organized and existing under the laws of the British Virgin Islands, is wholly owned by The Core Trust Company Limited, a trust company established in Hong Kong. The registered office of Best Cars Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. Through the equity incentive trust, our Class A ordinary shares underlying equity awards granted pursuant to our 2018 Plan may be provided to certain of recipients of such equity awards. As of March 28, 2025, Best Cars Limited held 6,663,321 Class A ordinary shares pursuant to our 2018 Plan. Upon satisfaction of vesting conditions and exercise by a grant recipient, the trustee will transfer the Class A ordinary shares underlying the relevant equity awards to such grant recipient.

To the extent permitted under the 2018 Plan and applicable law and regulations, the trustee shall follow the instruction of the Board or a committee of the Board consisting one or more members of the Board in respect of the exercise of voting rights (if any) and powers in relation to the Class A ordinary shares held by Best Cars Limited until they have been transferred outside of the trust and/or the nominee to the personal accounts of the relevant grant recipient.

***Clawback Policy***

We have adopted a policy, effective November 30, 2023, for the recovery of erroneously awarded incentive-based compensation (the "Clawback Policy") providing for the recovery of certain incentive-based compensation from current and former executive officers in the event of material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. A copy of the Clawback Policy is filed as Exhibit 97.1 to this Annual Report on Form 20-F.

***C. Board Practices***

**Board of Directors**

Our board of directors consists of five directors. A director is not required to hold any shares in our company for qualification, and may be an individual or a company. A director may vote with respect to any contract, proposed contract, or arrangement in which he or she is materially interested provided (1) such director, if his interest in such contract or arrangement is material, has declared the nature of his interest at the earliest meeting of the board at which it is practicable for him to do so, either specifically or by way of a general notice and (2) if such contract or arrangement is a transaction with a related party, such transaction has been approved by the audit committee. A director may exercise all the powers of the company to borrow money, mortgage or charge its undertaking, property and assets (present and future) and uncalled capital, or any part thereof, to issue debentures, debenture stock, bonds and other securities whether outright or as collateral security for any obligation of the company or of any third party.

**Committees of the Board of Directors**

Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, and has adopted a charter for each of the three committees. Each committee's members and functions are described below.

***Audit Committee***. Our audit committee consists of Ms. Furong Tian Mr. Yi cheng Yang and Mr. Wentao Deng and is chaired by Ms. Furong Tian. Each of the members of the audit committee satisfies the "independence" requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules and meet the independence standards under Rule 10A-3 under the Exchange Act. We have determined that Ms. Furong Tian qualifies as an "audit committee financial expert."

The audit committee will oversee our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee will be responsible for, among other things:

● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm;

● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;

● discussing the annual audited financial statements with management and the independent registered public accounting firm;

● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies;

● reviewing and reassessing annually the adequacy of our audit committee charter;

● meeting separately and periodically with management and the independent registered public accounting firm;

● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and

● reporting regularly to the board.

***Compensation Committee***. Our compensation committee consists of Ms. Furong Tian, Mr. Yicheng Yang and Mr. Wentao Deng, and is chaired by Ms. Furong Tian. Mr. Wentao Deng and Mr. Yicheng Yang satisfy the "independence" requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules. As a foreign private issuer, we have elected to not have our compensation committee consist of entirely independent directors. The compensation committee will evaluate or recommend to the board of directors for actions all matters related to the company's annual compensation and/or bonus plan, equity incentive plans, and other employee-related compensation matters, and will also approve all management compensation levels and arrangements. The compensation committee will be responsible for, among other things:

● reviewing and approving, or recommending to the board for its approval, the total compensation package for our chief executive officer and other executive officers;

● reviewing and recommending to the board for determination with respect to the compensation of our nonemployee directors;

● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and

● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person's independence from management.

***Nominating and Corporate Governance Committee***. Our nominating and corporate governance committee consists of Mr. Yicheng Yang and Mr. Wentao Deng, and is chaired by Mr. Wentao Deng. Mr. Wentao Deng and Mr. Yicheng Yang satisfy the "independence" requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules. As a foreign private issuer, we have elected to not have our nominating and corporate governance committee consist of entirely independent directors. The nominating and corporate governance committee will assist the board in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating and corporate governance committee will be responsible for, among other things:

● recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board;

● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, age, skills, experience and availability of service to us;

● selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself;

● developing and reviewing the corporate governance principles adopted by the board and advising the board with respect to significant developments in the law and practice of corporate governance and our compliance with such laws and practices; and

● evaluating the performance and effectiveness of the board as a whole.

**Duties of Directors**

Under Cayman Islands law, our directors owe to us fiduciary duties, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than what may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care, and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time. Our company may have the right to seek damages if a duty owed by our directors is breached.

**Terms of Directors and Officers**

Pursuant to the amended and restated memorandum and articles of association, our officers are elected by and serve at the discretion of the board. An appointment of a director may be on terms that the director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between our company and the director, if any, but no such term shall be implied in the absence of express provision. Each director whose term of office expires shall be eligible for re-election at a meeting of the shareholders or re-appointment by our board of directors. The office of a director will be vacated if the director (1) becomes bankrupt or makes any arrangement or composition with his creditors; (2) dies or is found to be or becomes of unsound mind; (3) resigns his office by notice in writing to the Company; (4) without special leave of absence from the board of directors, is absent from meetings of the board of directors for three consecutive meetings and the board of directors resolves that his office be vacated; or (5) is removed from office pursuant to any other provision of the amended and restated memorandum and articles of association.

**Employment Agreements**

We have entered into employment agreements with our executive officers. Each of our executive officers is employed for a specified time period, which will be automatically extended for successive one-year terms unless either party gives the other party a prior written notice to terminate employment. We may terminate the employment for cause, at any time, without advance notice or remuneration, for certain acts of the executive officer, including conviction or pleading of guilty to a felony, fraud, misappropriation or embezzlement; negligent or dishonest act to our detriment; misconduct or failure to perform his or her duty; disability; or death. An executive officer may terminate his or her employment at any time with a one-month prior written notice if there is a material and substantial reduction in such executive officer's existing authority and responsibilities or at any time if the termination is approved by our board of directors.

Each executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information. Each executive officer has also agreed to assign to us all his or her all inventions, improvements, designs, original works of authorship, formulas, processes, compositions of matter, computer software programs, databases, mask works and trade secrets.

***D. Employees***

As December 31, 2023, 2024 and 2025, we had 324, 116 and 23 full-time employees. Employee numbers for 2023 and 2024 included employees associated with discontinued operations, while 2025 reflected only employees associated with continuing operations. The following table sets forth the numbers of our subsidiaries and VIEs' full-time employees by functions as of the dates indicated.

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| | | | |
|:---|:---|:---|:---|
|  | **As of the December 31,** | **As of the December 31,** | **As of the December 31,** |
|  | **2023** | **2024** | **2025** |
| Sales and marketing | 252 | 70 | 2 |
| General and administrative | 44 | 37 | 4 |
| Research and development | 28 | 9 |  |
| Total | 324 | 116 | 6 |

---

As required by PRC laws and regulations, we participate in various employee social security plans for our and, prior to the 2025 Dispositions, the VIEs' employees that are administered by local PRC governments, including housing, pension, medical insurance and unemployment insurance. We compensate our employees with basic salaries and performance-based bonuses. None of our employees is represented by any collective bargaining arrangements. Our success depends on our ability to attract, retain and motivate qualified employees. We believe that we maintain a good working relationship with our employees, and we have not experienced any material labor disputes as of the date of this annual report. None of our employees is represented by labor unions.

***E. Share Ownership***

The following table sets forth information concerning the beneficial ownership of our ordinary shares as of May 8, 2026 by:

● each of our directors and executive officers (including directors and officers who resigned in 2025); and

● each person known to us to beneficially own 5.0% or more of our ordinary shares.

The calculations in the table below are based on the fact that there were 126,781,540,440 ordinary shares outstanding as May 8, 2026, (2) 55,260,580 Class B ordinary shares.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant, or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Ordinary shares <br> Beneficially Owned** | **Ordinary shares <br> Beneficially Owned** | **Ordinary shares <br> Beneficially Owned** | **Voting Power<br> Beneficially<br> Owned** |
|  | **Class A<br> Ordinary<br> Shares** | **Class B<br> Ordinary<br> Shares** | **% †** | **% †** |
| **Directors and Executive Officers\*\*** | | | | |
| Wei Wen (1)# | 4687164 | 55260580 | \* | 36.8% |
| Hui Yuan | \* |  | \* | \* |
| Guangsheng Liu |  |  |  |  |
| Simon Li# | \* |  | \* |  |
| Jintao Lin# |  |  |  |  |
| Wentao Deng |  |  |  |  |
| Yicheng Yang |  |  |  |  |
| Directors and executive officers as a group | 4687164 | 55260580 | \* | 36.8% |
| **Principal Shareholders** |  |  |  |  |
| WW Long Limited (2) | 2188380 | 55260580 | \* | 36.8% |
| Sabby Volatility Warrant Master Fund, Ltd. (3) | 377780009 |  | \* | \* |

---

\* Less than 1% of our total outstanding shares as of May 8, 2026.

\*\* The business address of our directors and executive officers is 9F, Ruihai Building, No. 21 Yangfangdian Road, Haidian District, Beijing 100038, People's Republic of China.

# Former director and/or officer who resigned during the fiscal year ended December 31, 2025.

† For
each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned
by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right
to acquire upon exercise of option, warrant or other right within 60 days after May 8, 2026.

---

| | |
|:---|:---|
| † † | For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class. Each holder of Class A ordinary shares is entitled to one vote per share and each holder of our Class B is entitled to 100 votes per share on all matters submitted to them for vote. Our Class B ordinary shares are convertible at any time by the holder thereof into Class A ordinary shares on a one-for-one basis. |

---

(1) Represents (i) 2,498,78 Class A ordinary shares held in the name of Mr. Wei Wen by Best Cars Limited, representing the number of restricted shares granted to Mr. Wei Wen that have vested as of March 20, 2024, (ii) 2,188,160 Class A ordinary shares represented by ADSs by WW Long Limited, (iii) 220 Class A ordinary shares held by WW Long Limited, and (iv) 55,260,580 Class B ordinary shares directly held by WW Long Limited, a company organized and existing under the laws of the British Virgin Islands and wholly owned by Mr. Wei Wen. The registered office of WW Long Limited is Start Chambers, Wickham's Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.

(2) WW
 Long Limited is a British Virgin Islands company wholly owned by Mr. Wei Wen. The registered office of WW Long Limited is Start Chambers,
 Wickham's Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.

(3) Represents 22,236,240 Class A Ordinary Shares, represented by 92,651 ADSs, ADS warrants to purchase up to 761,719 ADSs issued on October 28, 2024, and ADS warrants to purchase up to 7,589,347 ADSs issued on November 23, 2022, held by Sabby Volatility Warrant Master Fund, Ltd., as of the date of this annual report. All warrants contain blocker provisions such that they cannot be exercised to the extent such exercise would cause the holder, together with its affiliates, to beneficially own in excess of 4.99% of the Ordinary Shares outstanding. Sabby Management, LLC is the investment manager of Sabby Volatility Warrant Master Fund, Ltd. and shares voting and investment power with respect to these shares in this capacity. As manager of Sabby Management, LLC, Hal Mintz also shares voting and investment power on behalf of Sabby Volatility Warrant Master Fund, Ltd. Each of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over the securities listed except to the extent of their pecuniary interest therein.

As of May 8, 2026, a total of 266,633,962 Class A ordinary shares are held by four record holders in the United States, including The Bank of New York Mellon, the depositary of the ADS program, representing 2.7% of our total outstanding shares. None of our outstanding Class B ordinary shares are held by record holders in the United States. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

For information regarding our stock options, see "Item 5. Operating and Financial Review and Prospects-A. Operating Results-Critical Accounting Policies-Share-based Compensation."

 ****

***F. Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation***

Not applicable.

**ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

 ****

***A. Major Shareholders***

See "Item 6. Directors, Senior Management and Employees-E. Share Ownership."

 ****

***B. Related Party Transactions***

**Contractual Arrangements with the VIEs and Their Respective Shareholders**

We, through our WFOEs, previously entered into a series of contractual arrangements with the VIEs and their respective shareholders, which collectively allowed us to (1) exercise significant influence over each of the VIEs; (2) receive substantially all of the economic benefits of the VIEs; and (3) have an exclusive call option to purchase all or part of the equity interests in and/or assets of each of the VIEs when and to the extent permitted by PRC laws.

Due to the divestiture of the legacy business during the current period, the related VIE structure no longer exists. As of the date of this Annual Report, the Company has no VIE structure in place and has no contractual arrangements in place with the VIEs.

**Outsourcing Agreement with STDC**

In 2023, 2024 and 2025, we entered into outsourcing service agreements with Shanghai Three Drivers Culture Media Co., Limited ("STDC"), of which we own 49% equity interest. The outsourcing service expenses provided by STDC for us is, RMB4.0 million, RMB5.2 million and RMB6.4 million (US$0.9 million) for the years ended December 31, 2023, 2024 and 2025 respectively. In 2023, 2024 and 2025, we entered into promotion service agreements with STDC, under which the promotion service expenses provided by us for STDC is RMB1.0 million, nil and RMB10.3 million (US$1.5 million) for the years ended December 31, 2023, 2024 and 2025. The prepayment balance is RMB1,125, nil and RMB62 thousand (US$9 thousand) as of December 31, 2023, 2024 and 2025, respectively. The other current liabilities balance is nil, RMB813 and nil as of December 31, 2023, 2024 and 2025, respectively. The outsourcing agreements with STDC were transferred in connection with the 2025 Dispositions.

**Transaction with Mr. Wei Wen** 

In 2023, we provided RMB12.6 million to Mr. Wei Wen, the then-chairman of the board, the chief executive officer of our company, who used the fund to assist business development with third parties on behalf of our company, and Mr. Wei Wen repaid RMB12.5 million to us in 2023. In 2024, we received RMB9.1 million from Mr. Wen, which used for operations of the company. As of the end of 2023, Mr. Wei Wen owed the RMB0.1 million, which was repaid and settled in full in January 2024 with no outstanding debts. From June to December 2024, due to the company's financial constraints, Mr. Wen made multiple payments totaling RMB9.1 million to the company for cash flow. All outstanding debts between Mr. Wen and the company have been settled as of December 31, 2025. Mr. Wei Wen resigned from his positions with our company effective October 30, 2025. Section 402 of the Sarbanes-Oxley Act prohibits personal loans to directors and executive officers.

**Transaction with Mr. Hui Yuan**

On November 22, 2023, we received a loan of RMB1.5 million from the spouse of Mr. Hui Yuan, the chief operating officer of our company, for purposes of turnover support. In 2024, we repaid RMB0.5 million to the spouse of Mr. Yuan, and in 2025, we repaid RMB1.0 million to Mr. Yuan. As of December 31, 2025, the loan with the spouse of Mr. Yuan has been fully settled. Mr. Yuan has resigned from his position as COO of the group since September 29, 2025.

 **Transaction with Mr. Guangsheng Liu**

For the years ended December 31, 2025, the Company received RMB0.4 million from CEO, Mr. Liu, which was used for operations of the company. The other current liabilities balance due to CEO are nil and RMB0.4 million as of December 31, 2024 and 2025.

**Private Placements**

See "Item 4. Information on the Company-A. History and Development of the Company."

**Shareholders Agreement**

See "Item 4. Information on the Company-A. History and Development of the Company."

**Employment Agreements**

See "Item 6. Directors, Senior Management and Employees-C. Board Practices-Employment Agreements."

**Share Incentive Plan**

See "Item 6. Directors, Senior Management and Employees-B. Compensation-Share Incentive Plan."

***C. Interests of Experts and Counsel***

Not applicable.

**ITEM 8. FINANCIAL INFORMATION**

 ****

***A Consolidated Statements and Other Financial Information***

We have appended consolidated financial statements filed as part of this annual report.

**Legal Proceedings**

See "Item 4. Information on the Company-B. Business Overview-Legal Proceedings."

**Dividend Policy**

We have not declared or paid any dividends. We do not have any present plans to pay any cash dividends on our ordinary shares or the ADSs in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

Our board of directors has complete discretion in deciding the payment of any future dividends, subject to applicable laws. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividends may exceed the amount recommended by our board of directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of its profits, realized or unrealized, or from any reserve set aside from profits which its directors determine is no longer required or out of the share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts due in the ordinary course of business. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. The declaration and payment of dividends will depend upon, among other things, our future operations and earnings, capital requirements and surplus, our financial condition, contractual restrictions, general business conditions and other factors as our board of directors may deem relevant.

We are a holding company incorporated in the Cayman Islands. We may rely on dividends from our subsidiaries in China for our cash requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. See "Item 3. Key Information-D. Risk Factors-Risks Related to Doing Business in China-Our subsidiaries in China are subject to restrictions on making dividends and other payments to us."

If we pay any dividends, we will pay those dividends which are payable in respect of the Class A ordinary shares underlying the ADSs to the depositary, as the registered holder of such Class A ordinary shares, and the depositary will then pay such amounts to the ADS holders in proportion to the Class A ordinary shares underlying the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. Cash dividends on our Class A ordinary shares, if any, will be paid in U.S. dollars.

 ****

***B. Significant Changes***

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

**ITEM 9. THE OFFER AND LISTING**

 ****

***A. Offer and Listing Details***

The ADSs are listed on the Nasdaq Capital Market under the symbol "TC." Each ADS represents 4,800 Class A ordinary shares or right to receive 4,800 Class A ordinary shares.

 ****

***B. Plan of Distribution***

Not applicable.

 ****

***C. Markets***

The ADSs have been listed for trading on the Nasdaq Capital Market under the symbol "TC" since November 20, 2018.

 ****

***D. Selling Shareholders***

Not applicable.

 ****

***E. Dilution***

Not applicable.

**F. Expenses of the Issue**

Not applicable.

**ITEM 10. ADDITIONAL INFORMATION**

 ****

***A. Share Capital***

Not applicable.

***B. Memorandum and Articles of Association***

We are an exempted company with limited liability incorporated under the laws of the Cayman Islands and our affairs are governed by our memorandum and articles of association, as amended and restated from time to time, and Companies Act (Revised) of the Cayman Islands, which we refer to as the Companies Act below, and the common law of the Cayman Islands.

We incorporate by reference into this annual report our Ninth Amended and Restated Memorandum and Articles of Association, filed as Exhibit 99.1 of Form 6-K furnished on February 3, 2026 to the Securities and Exchange Commission. Our shareholders adopted our eighth amended and restated memorandum and articles of association by a special resolution of the shareholders on February

3, 2026.See Exhibit 2.4 to this annual report for a summary description of material rights and obligations of our securities provided under the currently effective memorandum and articles of association.

 ****

***C. Material Contracts***

We entered into a securities purchase agreement with certain accredited investors on November 21, 2022 to offer and sell (1) 3,654,546 ADSs, (2) the Pre-Funded Warrants to purchase 1,800,000 ADSs in lieu of the ADSs at an exercise price of US$0.001 per ADS, and (3) the Warrants to purchase up to 5,454,546 ADSs at an exercise price of US$2.75 per ADS (the "November 2022 Offering"). Each Pre-Funded Warrant is exercisable for one ADS at an exercise price of US$0.001. The combined purchase price of each Pre-Funded Warrant and the accompanying Warrants is US$2.749. The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. Each Warrant is exercisable for one ADS at an exercise price of US$2.75 per ADS. The Warrants will be immediately exercisable and will expire on the fifth anniversary of the original issuance date. As of December 31, 2025, 1,800,000 pre-funded warrants had been exercised.

We entered into a securities purchase agreement with certain accredited investors on October 24, 2024 to offer and sell (1) 241,677 ADSs and 520,042 pre-funded warrants to purchase ADSs ("Pre-Funded Warrant") and (2) 761,719 ADSs warrants to purchase ADSs("Warrant") (the "October 2024 Offering"). Each Warrant is exercisable to purchase one ADS for $1.45 and each Pre-Funded Warrant is exercisable to purchase one ADS for $0.001. The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The Warrants will be immediately exercisable and will expire on the fifth anniversary of the original issuance date. As of December 31, 2025, 520,042 pre-funded warrants had been exercised.

We entered into a securities purchase agreement with certain non-U.S. persons (as defined in Regulation S under the Securities Act of 1933, as amended) on February 28, 2025 to offer and sell up to an aggregate of 7,357,500,000 Class A ordinary shares, par value US$0.0001 per share, at a purchase price of US$0.0031317 per share, for an aggregate purchase price of approximately US$23.04 million (the "February 2025 Offering"). The shares were offered and sold in a private placement conducted outside the United States in reliance on Regulation S under the Securities Act. The net proceeds from the offering are intended to be used for working capital and other general corporate purposes.

We have not entered into any material contracts other than in the ordinary course of business and other than those described in "Item 4. Information on the Company," "Item 7. Major Shareholders and Related Party Transactions-B. Related Party Transactions," in this "Item 10. Additional Information-C. Material Contracts" or elsewhere in this annual report on Form 20-F.

 ****

***D. Exchange Controls***

See "Item 4. Information on the Company-B. Business Overview-Regulation-Regulations Relating to Foreign Currency Exchange".

***E. Taxation***

The following discussion of material Cayman Islands, PRC and United States federal income tax consequences of an investment in the ADSs or Class A ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment in the ADSs or Class A ordinary shares, such as the tax consequences under state, local and other tax laws.

**Cayman Islands Taxation** 

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties applicable to payments to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of the shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our shares, nor will gains derived from the disposal of the shares be subject to Cayman Islands income or corporation tax.

Pursuant to Section 6 of the Tax Concessions Act (As Revised) of the Cayman Islands, we may apply for an undertaking from the Financial Secretary of the Cayman Islands:

● That no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income, gains or appreciations shall apply to us or our operations; and

● in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable (i) on or in respect of the shares, debentures or other obligations of the Company; or (ii) by way of the withholding in whole or in part of any relevant payment as defined in section 6(3) of the Tax Concessions Act (As Revised).

**PRC Taxation**

See "Item 4. Information on the Company-B. Business Overview-Regulation-Regulations Relating to Tax."

**United States Federal Income Taxation**

The following discussion is a summary of material United States federal income tax considerations relating to the ownership and disposition of the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants by a U.S. Holder, as defined below, that holds the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants as "capital assets" (generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended (the "Code"). This discussion is based upon existing United States federal income tax law as of the date of this annual report, which is subject to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the Internal Revenue Service (the "IRS"), with respect to any United States federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion does not address all aspects of United States federal income taxation that may be important to particular investors in light of their individual circumstances, including investors subject to special tax rules (such as, for example, financial institutions, insurance companies, regulated investment companies, real estate investment trusts, broker-dealers, traders in securities that elect mark-to-market treatment, partnerships or other pass-through entities and their partners or investors, tax-exempt organizations (including private foundations)), investors who are subject to special tax accounting rules under Section 451(b) of the Code, investors who are not U.S. Holders, investors that own (directly, indirectly, or constructively) the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants representing 10% or more of our stock (by vote or by value), investors that hold their ADSs, ordinary shares, Warrants or Pre-Funded Warrants as part of a straddle, hedge, conversion, constructive sale or other integrated transaction, or investors that have a functional currency other than the U.S. dollar, persons who acquired the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants pursuant to the exercise of any employee share option or otherwise as compensation, or certain former citizens or long-term residents of the United States, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this discussion does not address any United States federal non-income, state or local, or non-United States tax considerations, the alternative minimum tax, or the Medicare contribution tax on net investment income. Each potential investor is urged to consult its tax advisor regarding the United States federal, state or local and non-United States income and other tax considerations of an investment in the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants.

 ****

***General***

For purposes of this discussion, a "U.S. Holder" is a beneficial owner of the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants that is, for United States federal income tax purposes, (1) an individual who is a citizen or resident of the United States, (2) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District of Columbia, (3) an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (4) a trust (a) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (b) that has otherwise elected to be treated as a United States person under the Code.

If a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners of a partnership holding the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants are urged to consult their tax advisors regarding an investment in the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants.

The discussion below assumes the deposit agreement and any related agreement will be complied with in accordance with its terms.

For United States federal income tax purposes, a U.S. Holder of ADSs will generally be treated as the beneficial owner of the underlying shares represented by the ADSs. Accordingly, exchanges of ordinary shares for ADSs will generally not be subject to United States federal income tax.

 ****

***Passive foreign investment company considerations***

A non-United States corporation, such as our company, will be classified as a "passive foreign investment company," or PFIC, for United States federal income tax purposes, if, in the case of any particular fiscal year, either (1) 75% or more of its gross income for such year consists of certain types of "passive" income or (2) 50% or more of its average quarterly assets during such year is attributable to assets that produce or are held for the production of passive income. For this purpose, cash is categorized as a passive asset and the company's unbooked intangibles associated with active business activities may generally be classified as active assets. Passive income generally includes, among other things, dividends, interest, rents, royalties, and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other non-United States corporation in which we own, directly or indirectly, more than 25% (by value) of the stock.

The determination of whether we will be or become a PFIC will depend upon the composition of our income (which may differ from our historical results and current projections) and assets and the value of our assets from time to time, including, in particular the value of our goodwill and other unbooked intangibles (which may depend upon the market value of the ADSs or ordinary shares from time-to-time and may be volatile). In addition, although the law in this regard is unclear, we historically treated the VIEs as being owned by us for United States federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we combine and consolidate their operating results in our consolidated financial statements. Assuming that we were the owner of the VIEs for United States federal income tax purposes in the applicable periods, based upon the historical and current value of our assets, composition of our income and assets and value of the ADSs and ordinary shares, we do not believe we were classified as a PFIC for the fiscal year ended December 31, 2024 and we do not expect to be classified as a PFIC for the current fiscal year. Among other matters, if our market capitalization declines, we may be classified as a PFIC for the current fiscal year or future fiscal years. It is also possible that the IRS, may challenge our classification or valuation of our goodwill and other unbooked intangibles, which may result in our company being, or becoming classified as, a PFIC for the current fiscal year or one or more future fiscal years.

The determination of whether we will be or become a PFIC may also depend, in part, on how, and how quickly, we use our liquid assets and cash. Under circumstances where we retain significant amounts of liquid assets, or if the VIEs were not treated as owned by us for United States federal income tax purposes for the applicable periods, our risk of being classified as a PFIC may substantially increase. Because there are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each fiscal year, there can be no assurance that we will not be a PFIC for the fiscal year ended December 31, 2024 or any future fiscal year or that the IRS will not take a contrary position. If we are classified as a PFIC for any year during which a U.S. Holder holds the ADSs or ordinary shares, we generally would continue to be treated as a PFIC for all succeeding years during which such U.S. holder holds the ADSs or ordinary shares.

The discussion below under "Taxation of distributions on ADSs and ordinary shares" and "Sale or other disposition of ADSs or ordinary shares" is written on the basis that we will not be classified as a PFIC for United States federal income tax purposes.

The United States federal income tax rules that apply if we are classified as a PFIC for the current fiscal year or any subsequent fiscal year are discussed below under "Passive foreign investment company rules."

***Taxation of distributions on ADSs and ordinary shares***

Subject to the PFIC rules described below, any cash distributions (including the amount of any PRC tax withheld) paid on the ADSs or ordinary shares out of our current or accumulated earnings and profits, as determined under United States federal income tax principles, will generally be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by the U.S. Holder, in the case of ordinary shares, or by the depositary bank, in the case of ADSs. Because we do not intend to determine our earnings and profits on the basis of United States federal income tax principles, any distribution will generally be treated as a "dividend" for United States federal income tax purposes. Under current law, a non-corporate recipient of dividend income will generally be subject to tax on dividend income from a "qualified foreign corporation" at the lower rates applicable to "qualified dividend income" rather than the marginal tax rates generally applicable to ordinary income, provided that certain holding period and other requirements are met.

A non-United States corporation (other than a corporation that is classified as a PFIC for the fiscal year in which the dividend is paid or the preceding fiscal year) will generally be considered to be a qualified foreign corporation (1) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program, or (2) with respect to any dividend it pays on stock (or ADSs in respect of such stock) which is readily tradable on an established securities market in the United States. The ADSs are listed on NASDAQ. We believe, but cannot assure you, that the ADSs will be readily tradable on an established securities market in the United States and that we will be a qualified foreign corporation with respect to dividends paid on the ADSs. Since we do not expect that our ordinary shares will be listed on established securities markets, it is unclear whether dividends that we pay on our ordinary shares that are not backed by ADSs currently meet the conditions required for the reduced tax rate. There can be no assurance that the ADSs will continue to be considered readily tradable on an established securities market in later years. In the event we are deemed to be a PRC resident enterprise under the Enterprise Income Tax Law (see "-PRC Taxation"), we may be eligible for the benefits of the Agreement Between the Government of the United States of America and the Government of the People's Republic of China for the Avoidance of Double Taxation and the Prevention of Tax Evasion with Respect to Taxes on Income, or the United States-PRC income tax treaty (which the Secretary of the Treasury of the United States has determined is satisfactory for this purpose), in which case we would be treated as a qualified foreign corporation with respect to dividends paid on our ordinary shares (regardless of whether such shares are backed by ADSs) or ADSs. U.S. Holders are urged to consult their tax advisors regarding the availability of the reduced tax rate on dividends in their particular circumstances. Dividends received on the ADSs or ordinary shares will not be eligible for the dividends received deduction allowed to qualifying corporations under the Code.

For United States foreign tax credit purposes, dividends paid on the ADSs or ordinary shares will generally be treated as income from foreign sources and will generally constitute passive category income. In the event that we are deemed to be a PRC resident enterprise under the Enterprise Income Tax Law, a U.S. Holder may be subject to PRC withholding taxes on dividends paid, if any, on the ADSs or ordinary shares. A U.S. Holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any foreign withholding taxes imposed on dividends received on the ADSs or ordinary shares. A U.S. Holder who does not elect to claim a foreign tax credit for foreign tax withheld may instead claim a deduction for United States federal income tax purposes in respect of such withholding, but only for a year in which such holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex. U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

***Sale or other disposition of ADSs or ordinary shares***

Subject to the PFIC rules discussed below, a U.S. Holder will generally recognize capital gain or loss, if any, upon the sale or other disposition of ADSs or ordinary shares in an amount equal to the difference between the amount realized upon the disposition and the holder's adjusted tax basis in such ADSs or ordinary shares. Any capital gain or loss will be long-term capital gain or loss if the ADSs or ordinary shares have been held for more than one year and will generally be United States source gain or loss for United States foreign tax credit purposes. Long-term capital gains of non-corporate U.S. Holders are currently eligible for reduced rates of taxation. In the event that we are treated as a PRC resident enterprise under the EIT Law, and gain from the disposition of the ADSs or ordinary shares is subject to tax in the PRC (see "-PRC Taxation"), such gain may be treated as PRC source gain for foreign tax credit purposes under the United States-PRC income tax treaty. The deductibility of a capital loss may be subject to limitations. U.S. Holders are urged to consult their tax advisors regarding the tax consequences if a foreign tax is imposed on a disposition of the ADSs or ordinary shares, including the availability of the foreign tax credit under their particular circumstances.

 ****

***Passive foreign investment company rules***

If we are classified as a PFIC for any fiscal year during which a U.S. Holder holds the ADSs or ordinary shares, unless the U.S. Holder makes one of certain elections (as described below), the U.S. Holder will, except as discussed below, be subject to special tax rules that have a penalizing effect, regardless of whether we remain a PFIC, on (1) any excess distribution that we make to the U.S. Holder (which generally means any distribution paid during a fiscal year to a U.S. Holder that is greater than 125% of the average annual distributions paid in the three preceding fiscal years or, if shorter, the U.S. Holder's holding period for the ADSs or ordinary shares), and (2) any gain realized on the sale or other disposition, including, under certain circumstances, a pledge, of ADSs or ordinary shares. Under the PFIC rules:

● the excess distribution and/or gain will be allocated ratably over the U.S. Holder's holding period for the ADSs or ordinary shares;

● the amount of the excess distribution or gain allocated to the fiscal year of distribution or gain and to any fiscal years in the U.S. Holder's holding period prior to the first fiscal year in which we are classified as a PFIC (each such fiscal year, a pre-PFIC year) will be taxable as ordinary income; and

● the amount of the excess distribution or gain allocated to each prior fiscal year, other than the current fiscal year of distribution or gain or a pre-PFIC year, will be subject to tax at the highest tax rate in effect applicable to the individuals or corporations, as appropriate, for that other fiscal year, and will be increased by an additional tax equal to interest on the resulting tax deemed deferred with respect to each such other fiscal year.

If we are a PFIC for any fiscal year during which a U.S. Holder holds the ADSs or ordinary shares and any of our non-United States subsidiaries or other corporate entities in which we own equity interests is also a PFIC, such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. Each U.S. Holder is advised to consult its tax advisors regarding the application of the PFIC rules to any of our lower-tier PFICs.

If we are a PFIC for any fiscal year during which a U.S. Holder holds the ADSs or ordinary shares, we will continue to be treated as a PFIC with respect to such U.S. Holder for all succeeding years during which the U.S. Holder holds the ADSs or ordinary shares, unless we were to cease to be a PFIC and the U.S. Holder makes a "deemed sale" election with respect to the ADSs or ordinary shares. If such election is made, the U.S. Holder will be deemed to have sold the ADSs or ordinary shares it holds at their fair market value and any gain from such deemed sale would be subject to the rules described in the preceding two paragraphs. After the deemed sale election, so long as we do not become a PFIC in a subsequent fiscal year, the ADSs or ordinary shares with respect to which such election was made will not be treated as shares in a PFIC and, as a result, the U.S. Holder will not be subject to the rules described above with respect to any "excess distribution" the U.S. Holder receives from us or any gain from an actual sale or other disposition of the ADSs or ordinary shares. Each U.S. Holder is strongly urged to consult its tax advisors as to the possibility and consequences of making a deemed sale election if we are and then cease to be a PFIC and such an election becomes available to the U.S. Holder.

As an alternative to the foregoing rules, a U.S. Holder of "marketable stock" in a PFIC may make a mark-to-market election with respect to the ADSs, provided that the ADSs are "regularly traded" (as specially defined) on NASDAQ, which is a qualified exchange or other market for these purposes. No assurances may be given regarding whether the ADSs qualify, or will continue to qualify, as being regularly traded in this regard. If a mark-to-market election is made, the U.S. Holder will generally (1) include as ordinary income for each fiscal year that we are a PFIC the excess, if any, of the fair market value of ADSs held at the end of the fiscal year over the U.S. Holder's adjusted tax basis in such ADSs and (2) deduct as an ordinary loss the excess, if any, of the U.S. Holder's adjusted tax basis in the ADSs over the fair market value of such ADSs held at the end of the fiscal year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. The U.S. Holder's adjusted tax basis in the ADSs would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. Holder makes an effective mark-to-market election, in each year that we are a PFIC any gain recognized upon the sale or other disposition of the ADSs will be treated as ordinary income and any loss will be treated as ordinary loss, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. Because our ordinary shares, Warrants and Pre-Funded Warrants are not listed on a stock exchange, U.S. Holders will not be able to make a mark-to-market election with respect to our ordinary shares, Warrants and Pre-Funded Warrants.

If a U.S. Holder makes a mark-to-market election in respect of a corporation classified as a PFIC and such corporation ceases to be classified as a PFIC, the U.S. Holder will not be required to take into account the mark-to-market gain or loss described above during any period that such corporation is not classified as a PFIC.

Because a mark-to-market election cannot be made for any lower-tier PFICs that a PFIC may own, a U.S. Holder who makes a mark-to-market election with respect to the ADSs may continue to be subject to the general PFIC rules with respect to such U.S. Holder's indirect interest in any of our non-United States subsidiaries or other corporate entities in which we own equity interests that is classified as a PFIC.

We do not intend to provide information necessary for U.S. Holders to make qualified electing fund elections, which, if available, would result in tax treatment different from the general tax treatment for PFICs described above.

As discussed above under "Taxation of distributions on ADSs and ordinary shares," dividends that we pay on the ADSs or ordinary shares will not be eligible for the reduced tax rate that applies to qualified dividend income if we are classified as a PFIC for the fiscal year in which the dividend is paid or the preceding fiscal year. In addition, if a U.S. Holder owns the ADSs or ordinary shares during any fiscal year that we are a PFIC, the holder must file an annual information return with the IRS. Each U.S. Holder is urged to consult its tax advisor concerning the United States federal income tax consequences of purchasing, holding, and disposing ADSs or ordinary shares if we are or become a PFIC, including the possibility of making a mark-to-market election and the unavailability of the qualified electing fund election.

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***Taxation of the Pre-Funded Warrants***

Although the law in this area is not completely settled, the Pre-Funded Warrants are generally expected to be treated as outstanding stock for U.S. federal income tax purposes. Accordingly, upon exercise, no income, gain or loss should be recognized upon the exercise of a Pre-Funded Warrants, and the holding period of a Pre-Funded Warrants should carry over to the ADS received. The tax basis of the Pre-Funded Warrants should carry over to the ADS received upon exercise increased by the exercise price. U.S. Holders contemplating the acquisition of Pre-Funded Warrants should discuss with their personal tax advisor the consequences of the purchase, ownership and disposition of the Pre-Funded Warrants, as well as the exercise of, certain adjustments to, and any payments in respect of the Pre-Funded Warrants (including potential alternative characterizations).

 

*Distributions*

The taxation of a distribution received with respect to a Pre-Funded Warrants is unclear. It is possible such a distribution would be treated as a distribution as described above under "-Taxation of distributions on ADSs and ordinary shares" and "-Passive foreign investment company rules", although other treatments may also be possible. Notwithstanding the foregoing, we do not believe that the Pre-Funded Warrants will be readily tradable on an established securities market in the United States and therefore we will not be a qualified foreign corporation with respect to distributions paid on the Pre-Funded Warrants, if any. U.S. Holders should consult their tax advisors regarding the proper treatment of any payments in respect of the Pre-Funded Warrants.

*Sale or other taxable disposition of Pre-Funded Warrants*

Upon the sale, exchange or other taxable disposition of a Pre-Funded Warrants, in general, a U.S. Holder will recognize taxable gain or loss measured by the difference, if any, between (1) the amount of cash and the fair market value of any property received upon such taxable disposition, and (2) such U.S. Holder's adjusted tax basis in the Pre-Funded Warrant. Such gain or loss generally will be taxed as described above under "-Sale or other disposition of ADSs or ordinary shares." It is not entirely clear how various aspects of the rules described above in "-Passive foreign investment company rules" would apply to the sale of a Pre-Funded Warrants, including whether a U.S. Holder would be able to make a mark-to-market election or a qualified electing fund election with respect to its Pre-Funded Warrants. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to their ownership of Pre-Funded Warrants.

 

*Exercise of Pre-Funded Warrants*

If we are a PFIC for any fiscal year during which a U.S. Holder holds the Pre-Funded Warrants, we will continue to be treated as a PFIC with respect to such U.S. Holder for all succeeding years during which the U.S. Holder holds the Pre-Funded Warrants or ADSs received upon exercise of the Pre-Funded Warrants. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to their ownership of Pre-Funded Warrants.

 

*Certain adjustments to the Pre-Funded Warrants*

Under Section 305 of the Code, an adjustment to the number of ADSs that will be issued on the exercise of the Pre-Funded Warrants, or an adjustment to the exercise price of the Pre-Funded Warrants, may be treated as a constructive distribution to U.S. Holders if, and to the extent that, such adjustment has the effect of increasing the U.S. Holder's proportionate interest in our earnings and profits or assets, depending on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution of cash or other property to our stockholders). Any such constructive distribution would be taxable whether or not there is an actual distribution of cash or other property. See above under "-Taxation of distributions on ADSs and ordinary shares," "-Passive foreign investment company rules" and "-Taxation of the Pre-Funded Warrants-Distributions."

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***Taxation of the Warrants***

 

*Sale or other taxable disposition of the Warrants*

Upon the sale, exchange or other taxable disposition of a Warrant, in general, a U.S. Holder will recognize taxable gain or loss measured by the difference, if any, between (1) the amount of cash and the fair market value of any property received upon such taxable disposition, and (2) such U.S. Holder's adjusted tax basis in the Warrant. Such gain or loss generally will be taxed as described above under "-Sale or other disposition of ADSs or ordinary shares." It is not entirely clear how various aspects of the rules described above in "-Passive foreign investment company rules" would apply to the sale of a Warrant. However, a U.S. Holder may not make a mark-to-market election or a qualified electing fund election with respect to its Warrants. As a result, if a U.S. Holder sells or otherwise disposes of Warrants and we were a PFIC at any time during the U.S. Holder's holding period of such Warrants, any gain recognized generally would be treated as an excess distribution, taxed as described above. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to their ownership of Warrants.

 

*Exercise of Warrants*

Upon the exercise of a Warrant for cash, in general, U.S. holders will not recognize gain or loss for U.S. federal income tax purposes. A U.S. Holder's initial tax basis in the ADSs received will equal such U.S. Holder's adjusted tax basis in the Warrant exercised increased by the exercise price. It is unclear whether U.S. Holder's holding period for the ADSs received on exercise will commence on the day of exercise or the following day; however, in either case, the holding period will not include the holding period of the Warrant. If we are a PFIC for any fiscal year during which a U.S. Holder holds the Warrants, we will continue to be treated as a PFIC with respect to such U.S. Holder for all succeeding years during which the U.S. Holder holds the Warrants or ADSs received upon exercise of the Warrant. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to their ownership of Warrants.

*Expiration of Warrants*

A U.S. Holder who allows a Warrant to expire will generally recognize a loss for U.S. federal income tax purposes equal to the adjusted tax basis of the Warrant. In general, such a loss will be a capital loss, and will be a short-term or long-term capital loss depending on the holder's holding period for the Warrant.

 

*Certain adjustments to the Warrants*

Under Section 305 of the Code, an adjustment to the number of ADSs that will be issued on the exercise of the Warrants, or an adjustment to the exercise price of the Warrants, may be treated as a constructive distribution to U.S. Holders if, and to the extent that, such adjustment has the effect of increasing the U.S. Holder's proportionate interest in our earnings and profits or assets, depending on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution of cash or other property to our stockholders). Adjustments to the exercise price of Warrants made pursuant to a bona fide reasonable adjustment formula that has the effect of preventing dilution of the interest of the holders of the Warrants should generally not be considered to result in a constructive distribution. Any such constructive distribution would be taxable whether or not there is an actual distribution of cash or other property. See above under "-Taxation of distributions on ADSs and ordinary shares" and "-Passive foreign investment company rules."

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***Information reporting and backup withholding***

Certain U.S. Holders are required to report information to the IRS relating to an interest in "specified foreign financial assets" (as defined in the Code), including shares issued by a non-United States corporation, for any year in which the aggregate value of all specified foreign financial assets exceeds $50,000 (or a higher dollar amount prescribed by the IRS), subject to certain exceptions (including an exception for shares held in custodial accounts maintained with a United States financial institution). These rules also impose penalties if a U.S. Holder is required to submit such information to the IRS and fails to do so.

In addition, U.S. Holders may be subject to information reporting to the IRS and backup withholding with respect to dividends on and proceeds from the sale or other disposition of the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants. Information reporting will apply to payments of dividends on, and to proceeds from the sale or other disposition of the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants by a paying agent within the United States to a U.S. Holder, other than U.S. Holders that are exempt from information reporting and properly certify their exemption. A paying agent within the United States will be required to withhold at the applicable statutory rate, currently 24%, in respect of any payments of dividends on, and the proceeds from the disposition of, the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants within the United States to a U.S. Holder (other than U.S. Holders that are exempt from backup withholding and properly certify their exemption) if the holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with applicable backup withholding requirements. U.S. Holders who are required to establish their exempt status generally must provide a properly completed IRS Form W-9. Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder's United States federal income tax liability. A U.S. Holder generally may obtain a refund of any amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS in a timely manner and furnishing any required information. Each U.S. Holder is advised to consult with its tax advisor regarding the application of the United States information reporting rules to their particular circumstances.

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***F. Dividends and Paying Agents***

Not applicable.

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***G. Statement by Experts***

Not applicable.

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***H. Documents on display***

We have previously filed with the SEC our registration statement on Form F-1 (File Number 333-227940), as amended, to register our ordinary shares in relation to our initial public offering.

We are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F within four months after the end of each fiscal year. Copies of reports and other information, when so filed, may be inspected without charge and may be obtained at prescribed rates at the public reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system.

As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

We will furnish The Bank of New York Mellon, the depositary of the ADSs, with all notices of shareholders' meetings and other reports and communications that are made generally available to our shareholders. The depositary will make such notices, reports and communications available to holders of ADSs and, upon our request, will mail to all record holders of ADSs the information contained in any notice of a shareholders' meeting received by the depositary from us. We will, upon request, furnish our shareholders with our annual reports, which will include a review of operations and annual audited consolidated financial statements prepared in conformity with U.S. GAAP.

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***I. Subsidiary Information***

For a list of our significant subsidiaries, see "Item 4. Information on the Company-C. Organizational Structure."

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***J. Annual Report to Security Holders***

Not applicable.

**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

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***Credit Risk***

Financial instruments that potentially subject us to the concentration of credit risk consist of cash and cash equivalents, restricted cash, accounts receivable and prepayment and other current assets. As of December 31, 2024 and 2025, all of our cash and cash equivalents, restricted cash were held in large reputable financial institutions located in the United States of America or China, which management considers being of high credit quality. Accounts receivable is typically unsecured and is derived from revenue earned from our businesses. We perform ongoing credit evaluations of the financial condition of our customers. We establish a provision for credit losses based upon estimates, factors surrounding the credit risk of specific customers and other information.

***Foreign Exchange Risk***

Substantially all of our net revenues and expenses are denominated in Renminbi, which is the functional currency of our subsidiaries in China. Therefore, we have limited exposure to foreign exchange risk for operating activities, and we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. Although in general, our exposure to foreign exchange risks should be limited, the value of your investment in the ADSs will be affected by the foreign exchange rate between U.S. dollars and Renminbi because the value of our business is effectively denominated in Renminbi, while the ADSs will be traded in U.S. dollars.

Renminbi is not freely convertible into foreign currencies for capital account transactions. The value of the Renminbi against the U.S. dollar and other currencies is affected by, among other things, changes in China's political and economic conditions and China's foreign exchange policies. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S. dollar, and the Renminbi appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the Renminbi and the U.S. dollar remained within a narrow band. Since June 2010, the Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future. Our cash and cash equivalents, restricted cash, and term deposits denominated in RMB amounted to nil, nil and RMB0.2 million (US$30 thousand) as of December 31, 2023, 2024 and 2025 respectively.

**ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

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***A. Debt Securities***

Not applicable.

***B. Warrants and Rights***

Not applicable.

***C. Other Securities***

Not applicable.

***D. American Depositary Shares***

**Fees and Expenses**

The ADS holders are required to pay the following service fees to the depositary bank, the Bank of New York Mellon, and certain taxes and governmental charges (in addition to any applicable fees, expenses, taxes and other governmental charges payable on the deposited securities represented by any of your ADSs):

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| | |
|:---|:---|
| **Persons depositing or withdrawing shares or ADS holders must pay:** | **For:** |
| US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) | Issuance of ADSs, including issuances resulting from a distribution of Class A ordinary shares or rights or other property Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates |
| US$.05 (or less) per ADS | Any cash distribution to ADS holders |
| A fee equivalent to the fee that would be payable if securities distributed to you had been Class A ordinary shares and the Class A ordinary shares had been deposited for issuance of ADSs | Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders |
| US$.05 (or less) per ADS per calendar year | Depositary services |
| Registration or transfer fees | Transfer and registration of Class A ordinary shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw Class A ordinary shares |
| Expenses of the depositary | Cable and facsimile transmissions (when expressly provided in the deposit agreement) Converting foreign currency to U.S. dollars |
| Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or Class A ordinary shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes | As necessary |
| Any charges incurred by the depositary or its agents for servicing the deposited securities | As necessary |

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The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing Class A ordinary shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable (or by selling a portion of securities or other property distributable) to ADS holders that are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

From time to time, the depositary may make payments to us to reimburse us for costs and expenses generally arising out of establishment and maintenance of the ADS program, waive fees and expenses for services provided to us by the depositary or share revenue from the fees collected from ADS holders. In performing its duties under the deposit agreement, the depositary may use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the depositary and that may earn or share fees, spreads or commissions.

The depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the deposit agreement and the rate that the depositary or its affiliate receives when buying or selling foreign currency for its own account. The depositary makes no representation that the exchange rate used or obtained in any currency conversion under the deposit agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to ADS holders, subject to the depositary's obligations under the deposit agreement. The methodology used to determine exchange rates used in currency conversions is available upon request.

**Payment by Depositary**

We received a payment of US$397,863 from the Bank of New York Mellon in 2019. As of December 31, 2025, we did not receive any additional payment from the Bank of New York Mellon.

**PART II**

**ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

None.

**ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

**Material Modifications to the Rights of Security Holders**

See "Item 10. Additional Information" for a description of the rights of securities holders, which remain unchanged.

**ITEM 15. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

Our management, with the participation of our chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.

Notwithstanding management's assessment that our internal control over financial reporting was ineffective as of December 31, 2025 due to the material weaknesses described below, we believe that the consolidated financial statements included in this annual report fairly present our financial position, results of operations and cash flows for the fiscal years covered thereby in all material respects.

**Management's Annual Report on Internal Control over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of its published consolidated financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules promulgated by the SEC, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, it used the criteria established within the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, our management has concluded that, as of December 31, 2025, our internal control over financial reporting was ineffective due to the material weaknesses identified below.

In accordance with reporting requirements set forth by the SEC, a "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company's annual or interim consolidated financial statements will not be prevented or detected on a timely basis. The material weaknesses, one of which was first identified in the course of preparing our consolidated financial statements for the years ended December 31, 2016 and 2017, relate to (1) lack of sufficient financial reporting and accounting personnel with U.S. GAAP and SEC reporting expertise; (2) weaknesses in financial reporting controls over revenue and cost grouping and in the monthly financial closing process, including ineffective account reconciliations; (3) weaknesses in treasury and bank account controls, including monitoring, documentation, and bank confirmation processes; (4) inadequate processes and documentation to ensure complete and accurate disclosure of changes in Group structure; and (5) concentration risk arising from significant prepayments for MCN-related equipment affecting liquidity monitoring and related controls. We do not believe that the material weaknesses had a significant impact on our financial reporting.

To remedy the material weaknesses, we have begun, and will continue to, (1) hire additional finance and accounting staff with qualifications and work experiences in U.S. GAAP and SEC reporting requirements to formalize and strengthen the key internal control over financial reporting. (2) establish a more formalized, standardized, and structured monthly financial closing process, including defined responsibilities, closing timelines, account reconciliation procedures, and review controls, (3) strengthen the monitoring and administration of bank accounts across our Company, and for dormant or inactive bank accounts, management will perform timely assessment, follow-up, and closure where appropriate¸(4) enhance our internal process over the establishment, change, and disclosure of group entities, and our Chief Financial Officer will be specifically responsible for monitoring changes in our structure, including newly incorporated entities, acquisitions, disposals, ownership changes, and dormant entities, and (5) establish a dedicated team led by our CEO to monitor the subsequent execution of the relevant purchase contract, and closely follow up on the counterparty's financial condition, delivery status, and performance progress, and will maintain active communication with the supplier to facilitate timely delivery and successful implementation of the new MCN project.

We intend to remediate the material weaknesses in multiple phases and expect that we will incur certain costs for implementing our remediation measures. However, we cannot assure you that we will remediate our material weaknesses in a timely manner. See "Item 3. Key Information-D. Risk Factors-Risks Related to Our Business and Industry-Material weaknesses in our internal control over financial reporting have been identified, and if we fail to implement and maintain effective internal control over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud."

Since we qualified as a "non-accelerated filer" as defined in Rule 12b-2 under the Exchange Act as of December 31, 2025, this annual report on Form 20-F does not include an attestation report of our independent registered public accounting firm.

**Changes in Internal Control over Financial Reporting**

Other than as described above, there were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**ITEM 16. [Reserved]**

**ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT**

Our board of directors has determined that Ms. Furong Tian, an independent director (under the standards set forth in Rule 5605(a)(2) of the Nasdaq Stock Market Rules and Rule 10A-3 under the Exchange Act) and the chairman of our audit committee, is our audit committee financial expert.

**ITEM 16B. CODE OF ETHICS**

Our board of directors has adopted our code of conduct and ethics, a code that applies to members of the board of directors including its chairman and other senior officers, including the chief executive officer, the chief financial officer and the chief operations officer. This code is publicly available on our website at http://ir.tuanche.com/.

**ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by our current auditor, an independent registered public accounting firm, JWF Assurance PAC, and our previous auditor, an independent registered public accounting firm, Marcum Asia CPAs LLP, for the years indicated. We did not pay any other fees to our independent registered public accounting firms during the periods indicated below.

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| | | | |
|:---|:---|:---|:---|
|  | **2023** | **2024** | **2025** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Audit fees (1) | 2272 | 2779 | 2264 |

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(1) Audit
 Fees are defined as the standard audit work that needs to be performed each year in order to issue opinions on our consolidated financial
 statements and agreed-upon procedures performed in relation to interim financial information.

**ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

None.

**ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**

None.

**ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT**

On July 12, 2024, the audit committee of our board approved the dismissal of Marcum Asia CPAs LLP. ("MarcumAsia") as the Company's independent registered public accounting firm, effective July 8, 2024. The auditor's report of MarcumAsia on the Company's consolidated financial statements as of and for the years ended December 31, 2022 and 2023 did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit report contained an uncertainty about the Company's ability to continue as a going concern.

During the year ended December 31, 2023 and through the subsequent interim period preceding MarcumAsia's dismissal, there were no "disagreements" (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K) between the Company and MarcumAsia on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of MarcumAsia would have caused MarcumAsia to make reference to the subject matter thereof in its reports for such fiscal years and interim period.

During the year ended December 31, 2023 and through the subsequent interim period preceding the dismissal of MarcumAsia, there were no "reportable events" within the meaning of Item 16F(a)(1)(v) of Form 20-F, other than material weaknesses in the Company's internal control over financial reporting, occurred within the two fiscal years of the Company ended December 31, 2022 and 2023 and subsequently up to the date of dismissal, the material weaknesses relate to (1) lack of sufficient financial reporting and accounting personnel, especially those with U.S. GAAP knowledge, and (2) lack of a proper and timely financial account closing procedures for certain expenditures.

We furnished a copy of this disclosure to MarcumAsia and have requested that MarcumAsia furnish us with a letter addressed to the SEC stating whether such firm agrees with the above statements or, if not, stating the respects in which it does not agree. We have received the requested letter from MarcumAsia, and a copy of the letter was furnished as Exhibit 99.1 to the report on Form 6-K we furnished to the Commission on July 12, 2024.

On July 12, 2024, the Audit Committee approved the engagement of JWF Assurance PAC ("JWF") as the Company's independent registered public accounting firm to audit the Company's consolidated financial statements as of and for the fiscal year ending December 31, 2024. On July 12, 2024, the Audit Committee approved the engagement of JWF as the Company's independent registered public accounting firm to audit the Company's consolidated financial statements as of and for the fiscal year ending December 31, 2025.

During the year ended December 31, 2023 and through the subsequent interim period preceding JWF's engagement, the Company has not consulted with JWF regarding (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report was provided to the Company nor oral advice was provided that JWF concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).

**ITEM 16G. CORPORATE GOVERNANCE**

As a Cayman Islands company listed on the Nasdaq Capital Market, we are subject to the Nasdaq Capital Market corporate governance listing standards. However, Nasdaq Capital Market rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq Capital Market corporate governance listing standards. We intend to follow the following home country practices in lieu of the Nasdaq Listing Rules as follows:

● Nasdaq Listing Rule 5605(b)(1) requires listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to comply with the above requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our board to consist of independent directors. Currently, a majority of our board members are independent.

● We do not intend to follow Nasdaq's requirements regarding holding an annual meeting of shareholders, or regarding shareholder approval for certain issuances of securities under Nasdaq Listing Rule 5635. Under our Memorandum and Articles of Association, our board of directors is authorized to issue securities including in connection with certain events such as the acquisition of shares or assets of another company, the establishment of or amendments to equity-based compensation plans for employees, a change of control of us, rights issues at or below market price, certain private placements and issuance of convertible notes, and the issuance of 20% or more of our outstanding ordinary shares.

Other than those described above, there are no significant differences between our corporate governance practices and those followed by U.S. domestic companies under Nasdaq Capital Market corporate governance listing standards. We may in the future decide to use the foreign private issuer exemption with respect to some or all the other Nasdaq corporate governance rules. As a result, our shareholders may be afforded less protection than they otherwise would under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. We may utilize these exemptions for as long as we continue to qualify as a foreign private issuer.

See "Item 3. Key Information-D. Risk Factors-Risks Related to Our Ordinary Shares and ADSs-As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards."

**ITEM 16H. MINE SAFETY DISCLOSURE**

Not applicable.

**ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

**ITEM 16J. INSIDER TRADING POLICIES**

We have adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of the Company's securities by directors, senior management, and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to the Company. A copy of the Company's insider trading policy is filed as Exhibit 11.2 to this annual report.

**ITEM 16K. CYBERSECURITY** 

**Cybersecurity Risk Management and Strategy**

To maintain a consistently high level of service experience for our clients, preserve the confidentiality, integrity, and availability of our information systems, safeguard our assets, data, intellectual property, and network infrastructure, while meeting regulatory requirements, it is crucial to effectively manage cybersecurity risks. To achieve this, we have implemented a comprehensive cybersecurity risk management framework, which is integrated in our overall enterprise risk management system and processes and is internally managed.

Our dedicated cybersecurity staff is tasked with assessing, identifying and managing risks related to cybersecurity threats and, under the leadership of our head of cybersecurity, is responsible for:

● risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment;

● development of risk-based action plans to manage identified vulnerabilities and implementation of new protocols and infrastructure improvements;

● cybersecurity incident investigations;

● monitoring threats to sensitive data and unauthorized access to our systems;

● secure access control measures applied to critical IT systems, equipment and devices, designed to prevent unauthorized users, processes, and devices from accessing IT systems and data;

● developing and executing protocols to ensure that information regarding cybersecurity incidents is promptly shared with the board of directors, as appropriate, to allow for risk and materiality assessments and to consider disclosure and notice requirements; and

● developing and implementing training on cybersecurity, information security and threat awareness.

There were no cybersecurity incidents during the year ended December 31, 2025, that resulted in an interruption to our operations, known losses of any critical data or otherwise had a material impact on our strategy, financial condition or results of operations. However, the scope and impact of any future incident cannot be predicted. See "Item 3D-Risk Factors" for more information on how material cybersecurity attacks may impact our business.

**Governance**

Our board of directors acknowledges the significance of robust cybersecurity management programs and actively participates in overseeing and reviewing our cybersecurity risk profile and exposures.

The board of directors receives reports on cybersecurity risks, including recent legislative developments and evolving standards on cybersecurity, key issues, priorities and challenges in our cybersecurity management, and relevant data or metrics. The board of directors also receives prompt and timely information regarding any significant cybersecurity incidents, as well as ongoing updates regarding any such incidents. Furthermore, in the event of any significant updates or adjustments to our cybersecurity related policies, the head of cybersecurity will present them to the board of directors for their review and approval.

Our head of cybersecurity leads the overall assessment, identification and management of risks related to cybersecurity threats. He works collaboratively within our Group and receives regular briefings on cybersecurity matters, such as report on cybersecurity incidents and responses and remedial measures. Our head of cybersecurity has more than fifteen years of relevant experience in risk management, cybersecurity and information technology.

Our head of cybersecurity and their dedicated staff are responsible for the daily management of our cybersecurity efforts. This includes updates and refinement of cybersecurity policies, execution and management of cybersecurity measures, and the preparation of regular reports on cybersecurity execution. Their primary focus is to consistently update our cybersecurity programs and mitigation strategies, ensuring they align with industry best practices and procedures.

**PART III**

**ITEM 17. FINANCIAL STATEMENTS**

We have elected to provide financial statements pursuant to Item 18.

**ITEM 18. FINANCIAL STATEMENTS**

Our consolidated financial statements are included at the end of this annual report.

**ITEM 19. EXHIBITS**

**EXHIBIT INDEX**

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| | |
|:---|:---|
| **Exhibit No.** | **Description of Exhibit** |
| 1.1 | [Ninth Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 3.1 of our Form 6-K filed with the Securities and Exchange Commission on February 3, 2026).](http://www.sec.gov/Archives/edgar/data/1743340/000121390026011523/ea027537801ex3-1_token.htm) |
| 2.1 | [Registrant's specimen American depositary receipt (included in Exhibit 2.3).](https://www.sec.gov/Archives/edgar/data/1743340/000114420418054919/tv503170_ex4-3.htm) |
| 2.2 | [Registrant's specimen certificate for ordinary shares (incorporated by reference to Exhibit 4.2 of our Registration Statement on Form F-1 (file No. 333-227940) filed with the Securities and Exchange Commission on October 23, 2018).](https://www.sec.gov/Archives/edgar/data/1743340/000114420418054919/tv503170_ex4-2.htm) |
| 2.3 | [Form of deposit agreement by and among the Registrant, the depositary and holders of the American Depositary Receipts (incorporated by reference to Exhibit 4.3 of our Registration Statement on Form F-1 (file No. 333-227940) filed with the Securities and Exchange Commission on October 23, 2018).](https://www.sec.gov/Archives/edgar/data/1743340/000114420418054919/tv503170_ex4-3.htm) |
| 2.4\* | [Description of Securities.](ea028738901ex2-4.htm) |
| 3.1 | [Shareholders Agreement, among the Registrant and other parties thereto dated September 29, 2018 (incorporated by reference to Exhibit 4.4 of our Registration Statement on Form F-1 (file no. 333-227940) filed with the Securities and Exchange Commission on October 23, 2018).](https://www.sec.gov/Archives/edgar/data/1743340/000114420418054919/tv503170_ex4-4.htm) |
| 4.1 | [Form of Employment Agreement between the Registrant and the executive officers of the Registrant (incorporated by reference to Exhibit 10.1 of our Registration Statement on Form F-1 (file No. 333-227940) filed with the Securities and Exchange Commission on October 23, 2018).](https://www.sec.gov/Archives/edgar/data/1743340/000114420418054919/tv503170_ex10-1.htm) |
| 4.2 | [Form of Indemnification Agreement between the Registrant and its directors and executive officers (incorporated by reference to Exhibit 10.2 of our Registration Statement on Form F-1 (file No. 333-227940) filed with the Securities and Exchange Commission on October 23, 2018).](https://www.sec.gov/Archives/edgar/data/1743340/000114420418054919/tv503170_ex10-2.htm) |
| 4.3 | [English translation of Exclusive Business Cooperation Agreement between TuanYuan and TuanChe Internet dated February 14, 2023 (incorporated by reference to Exhibit 4.3 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on March 29, 2023).](https://www.sec.gov/Archives/edgar/data/1743340/000141057823000397/tc-20221231xex4d3.htm) |
| 4.4 | [English translation of Exclusive Call Option Agreement among TuanYuan, TuanChe Internet and its shareholders dated February 14, 2023 (incorporated by reference to Exhibit 4.4 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on March 29, 2023).](https://www.sec.gov/Archives/edgar/data/1743340/000141057823000397/tc-20221231xex4d4.htm) |
| 4.5 | [English translation of Equity Pledge Agreement among TuanYuan, TuanChe Internet and its shareholders dated February 14, 2023 (incorporated by reference to Exhibit 4.5 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on March 29, 2023).](https://www.sec.gov/Archives/edgar/data/1743340/000141057823000397/tc-20221231xex4d5.htm) |
| 4.6 | [English translations of Consent Letter granted by the spouse of each individual shareholder of TuanChe Internet dated February 14, 2023 (incorporated by reference to Exhibit 4.6 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on March 29, 2023).](http://www.sec.gov/Archives/edgar/data/1743340/000141057823000397/tc-20221231xex4d6.htm) |
| 4.7 | [English translations of Powers of Attorney granted by the shareholders of TuanChe Internet dated February 14, 2023 (incorporated by reference to Exhibit 4.7 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on March 29, 2023).](https://www.sec.gov/Archives/edgar/data/1743340/000141057823000397/tc-20221231xex4d7.htm) |
| 4.8 | [English translation of Exclusive Business Cooperation Agreement between Sangu Maolu and Internet Drive Technology dated May 31, 2019 (incorporated by reference to Exhibit 4.8 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 18, 2020).](https://www.sec.gov/Archives/edgar/data/1743340/000110465920063152/tm206459d1_ex4-8.htm) |
| 4.9 | [English translation of Exclusive Call Option Agreement among Sangu Maolu, Internet Drive Technology and its shareholders dated May 31, 2019 (incorporated by reference to Exhibit 4.9 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 18, 2020).](https://www.sec.gov/Archives/edgar/data/1743340/000110465920063152/tm206459d1_ex4-9.htm) |
| 4.10 | [English translation of Equity Pledge Agreement among Sangu Maolu, Internet Drive Technology and its shareholders dated May 31, 2019 (incorporated by reference to Exhibit 4.10 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 18, 2020).](https://www.sec.gov/Archives/edgar/data/1743340/000110465920063152/tm206459d1_ex4-10.htm) |
| 4.11 | [English translations of Consent Letter granted by the spouse of each individual shareholder of Internet Drive Technology dated May 31, 2019 (incorporated by reference to Exhibit 4.11 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 18, 2020).](https://www.sec.gov/Archives/edgar/data/1743340/000110465920063152/tm206459d1_ex4-11.htm) |
| 4.12 | [English translations of Powers of Attorney Agreement between Sangu Maolu and the shareholders of Internet Drive Technology dated May 31, 2019 (incorporated by reference to Exhibit 4.12 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 18, 2020).](https://www.sec.gov/Archives/edgar/data/1743340/000110465920063152/tm206459d1_ex4-12.htm) |
| 4.13 | [English translation of Exclusive Business Cooperation Agreement between Sangu Maolu and Drive New Media dated May 31, 2019 (incorporated by reference to Exhibit 4.13 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 18, 2020).](https://www.sec.gov/Archives/edgar/data/1743340/000110465920063152/tm206459d1_ex4-13.htm) |

---

---

| | |
|:---|:---|
| **Exhibit No.** | **Description of Exhibit** |
| 4.14 | [English translation of Exclusive Call Option Agreement among Sangu Maolu, Drive New Media and its shareholders dated May 31, 2019 (incorporated by reference to Exhibit 4.14 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 18, 2020).](https://www.sec.gov/Archives/edgar/data/1743340/000110465920063152/tm206459d1_ex4-14.htm) |
| 4.15 | [English translation of Equity Pledge Agreement among Sangu Maolu, Drive New Media and its shareholders dated May 31, 2019 (incorporated by reference to Exhibit 4.15 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 18, 2020).](https://www.sec.gov/Archives/edgar/data/1743340/000110465920063152/tm206459d1_ex4-15.htm) |
| 4.16 | [English translations of Consent Letter granted by the spouse of each individual shareholder of Drive New Media dated May 31, 2019 (incorporated by reference to Exhibit 4.16 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 18, 2020).](https://www.sec.gov/Archives/edgar/data/1743340/000110465920063152/tm206459d1_ex4-16.htm) |
| 4.17 | [English translations of Powers of Attorney Agreement between Sangu Maolu and the shareholders of Drive New Media dated May 31, 2019 (incorporated by reference to Exhibit 4.17 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 18, 2020).](https://www.sec.gov/Archives/edgar/data/1743340/000110465920063152/tm206459d1_ex4-17.htm) |
| 4.18 | [English translation of Exclusive Business Cooperation Agreement between Chema Technology (Beijing) Co., Ltd. and Tansuo Jixian Technology (Beijing) Co., Ltd. dated June 24, 2018 (incorporated by reference to Exhibit 4.19 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1743340/000110465921066394/tm211772d1_ex4-19.htm) |
| 4.19 | [English translation of Exclusive Call Option Agreement between and among Chema Technology (Beijing) Co., Ltd., Wei Wen, Jianchen Sun, Congwu Chen, and Tansuo Jixian Technology (Beijing) Co., Ltd. dated June 24, 2018 (incorporated by reference to Exhibit 4.20 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1743340/000110465921066394/tm211772d1_ex4-20.htm) |
| 4.20 | [English translation of Equity Pledge Agreement between and among Chema Technology (Beijing) Co., Ltd., Wei Wen, Jianchen Sun, Congwu Chen, and Tansuo Jixian Technology (Beijing) Co., Ltd. dated June 24, 2018 (incorporated by reference to Exhibit 4.21 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1743340/000110465921066394/tm211772d1_ex4-21.htm) |
| 4.21 | [English translation of Consent Letter granted by the spouse of Wei Wen and Jianchen Sun, shareholders of Tansuo Jixian Technology (Beijing) Co., Ltd. dated June 23, 2020 (incorporated by reference to Exhibit 4.22 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1743340/000110465921066394/tm211772d1_ex4-22.htm) |
| 4.22 | [English translation of Consent Letter granted by the spouse of Congwu Chen, a shareholder of Tansuo Jixian Technology (Beijing) Co., Ltd. dated June 24, 2020 (incorporated by reference to Exhibit 4.23 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1743340/000110465921066394/tm211772d1_ex4-23.htm) |
| 4.23 | [English translations of Powers of Attorney granted by the shareholders of Tansuo Jixian Technology (Beijing) Co., Ltd. dated June 24, 2020 (incorporated by reference to Exhibit 4.24 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1743340/000110465921066394/tm211772d1_ex4-24.htm) |
| 4.24 | [Share Incentive Plan (incorporated by reference to Exhibit 10.8 of our Registration Statement on Form F-1 (file No. 333-227940) filed with the Securities and Exchange Commission on October 23, 2018).](https://www.sec.gov/Archives/edgar/data/1743340/000114420418054919/tv503170_ex10-8.htm) |
| 4.25 | [Form of Pre-Funded Warrant issued by the Registrant (incorporated by reference to Exhibit 4.1 of our current report on Form 6-K (file No. 001-38737) furnished with the SEC on November 23, 2022).](https://www.sec.gov/Archives/edgar/data/1743340/000110465922121735/tm2231039d1_ex4-1.htm) |
| 4.26 | [Form of Warrant issued by the Registrant (incorporated by reference to Exhibit 4.2 of our current report on Form 6-K (file No. 001-38737) furnished with the SEC on November 23, 2022).](https://www.sec.gov/Archives/edgar/data/1743340/000110465922121735/tm2231039d1_ex4-2.htm) |
| 4.27 | [Securities Purchase Agreement, dated February 12, 2026, by and among the Company and the Purchasers (incorporated by reference to Exhibit 99.1 to our Form 6-K furnished with the Securities and Exchange Commission on February 12, 2026)](http://www.sec.gov/Archives/edgar/data/1743340/000121390026016456/ea027702201ex99-1_token.htm) |
| 8.1 | [List of subsidiaries and affiliated entities of the Registrant (incorporated by reference to Exhibit 8.1 of our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 28, 2024)](http://www.sec.gov/Archives/edgar/data/1743340/000110465924040494/tc-20231231xex8d1.htm) |
| 10.1 | [2023 Share Incentive Plan (incorporated by reference to Exhibit 4.27 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on March 29, 2023).](https://www.sec.gov/Archives/edgar/data/1743340/000141057823000397/tc-20221231xex4d27.htm) |
| 10.2 | [2024 Share Incentive Plan (incorporated by reference to Exhibit 4.28 of our Annual Report on Form 20-F (file No. 001-38737) filed with the Securities and Exchange Commission on March 28, 2025).](https://www.sec.gov/Archives/edgar/data/1743340/000101376225004225/ea023365801ex4-28_tokencat.htm) |
| 10.3 | [2025 Share Incentive Plan (incorporated by reference to Exhibit 10.1 of our Registration Statement on Form S-8 (file No. 333-292062) filed with the Securities and Exchange Commission on December 11, 2025))](http://www.sec.gov/Archives/edgar/data/1743340/000121390025120339/ea026904201ex10-1_token.htm) |
| 10.4 | [2026 Share Incentive Plan (incorporate by reference to Exhibit 10.1 of our Registration Statement on Form S-8 (file No. 333-294661) filed with the Securities and Exchange Commission on March 26, 2026))](http://www.sec.gov/Archives/edgar/data/1743340/000121390026034860/ea028354501ex10-1.htm) |
| 11.1 | [Code of business conduct and ethics (incorporated by reference to Exhibit 99.1 of our Registration Statement on Form F-1 (file No. 333-227940) filed with the Securities and Exchange Commission on October 23, 2018).](https://www.sec.gov/Archives/edgar/data/1743340/000114420418054919/tv503170_ex99-1.htm) |
| 11.2 | [Insider Trading Policy (incorporated by reference to Exhibit 11.2 to our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 28, 2025)](http://www.sec.gov/Archives/edgar/data/1743340/000101376225004225/ea023365801ex11-2_tokencat.htm) |
| 12.1\* | [CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ea028738901ex12-1.htm) |
| 12.2\* | [CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ea028738901ex12-2.htm) |
| 13.1\*\* | [CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ea028738901ex13-1.htm) |
| 13.2\*\* | [CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ea028738901ex13-2.htm) |
| 15.1\* | [Consent of Marcum Asia CPAs LLP.](ea028738901ex15-1.htm) |
| 15.2\* | [Consent of JWF Assurance PAC](ea028738901ex15-2.htm) |
| 97.1 | [Compensation Recovery Policy of TuanChe Limited (incorporated by reference to Exhibit 97 of our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 28, 2024)](https://www.sec.gov/Archives/edgar/data/1743340/000110465924040494/tc-20231231xex97.htm) |
| 101.INS\* | XBRL Instance Document. |
| 101.SCH\* | XBRL Taxonomy Extension Schema Document. |

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\* Filed with this annual report on Form 20-F. <br> \*\* Furnished with this annual report on Form 20-F.

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

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| | | |
|:---|:---|:---|
| **TOKEN CAT LIMITED** | **TOKEN CAT LIMITED** | **TOKEN CAT LIMITED** |
| By: | /s/ Guangsheng Liu | /s/ Guangsheng Liu |
|  | Name: | Guangsheng Liu |
|  | Title: | Chairman & Chief Executive Officer |

---

Date: May 8, 2026

**INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [Report of independent registered public accounting firm-JWF Assurance PAC (PCAOB ID Number 7095)](#f_001) | F-2 |
| [Report of independent registered public accounting firm-Marcum Asia CPAs LLP (PCAOB ID Number 5395)](#f_002) | F-4 |
| [Consolidated balance sheets as of December 31, 2024 and 2025](#f_003) | F-5 |
| [Consolidated statements of operations and comprehensive loss for the years ended December 31, 2023, 2024 and 2025](#f_004) | F-6 |
| [Consolidated statements of changes in equity for the years ended December 31, 2023, 2024 and 2025](#f_005) | F-7 |
| [Consolidated statements of cash flows for the years ended December 31, 2023, 2024 and 2025](#f_006) | F-8 |
| [Notes to consolidated financial statements](#f_007) | F-9 |

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**Report of Independent Registered Public Accounting Firm**

To the Board of Directors and Shareholders of Token Cat Limited (formerly known as TuanChe Limited)

***Opinion on the Financial Statements***

We have audited the accompanying consolidated balance sheets of Token Cat Limited and its subsidiaries (collectively, the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, changes in shareholders' equity, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We also have audited the retrospective adjustments related to the discontinued operation described in Note 4, that were applied to the 2023 financial statements. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2023 financial statements of the Company other than with respect to these adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2023 financial statements taken as a whole.

***Explanatory Paragraph – Going Concern***

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2, the Company has incurred significant negative cash flows from operating activities, and there was accumulated deficit and limited cash balances to cover current liabilities and obligations as of December 31, 2025. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

***Basis for Opinion***

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provides a reasonable basis for our opinion.

***Critical Audit Matters***

Critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

***Fair Value Measurement of Warrant Liabilities***

As discussed in notes 3 (f), 13 and 17 to the consolidated financial statements, the Company had RMB68.6 million and RMB24.3 million (US$3.5 million) of warrant liability as of December 31, 2024 and 2025. The Company measures its warrants at fair value on initial measurements, immediately prior to exercise of the warrants and at each balance sheet date. Fair value is the price that would be paid to transfer the liability in an orderly transaction between market participants at the measurement date. The Company's warrant liabilities are measured at fair value on Black Scholes Option Pricing model. For the year ended December 31, 2025, management recognized a gain on change in fair value of warrant liability of RMB28.0 million (US$4.0 million) in the consolidated statements of operations and comprehensive loss.

We considered this a critical audit matter due to the valuation of warrants requires the application of the Black-Scholes option-pricing model, which is highly sensitive to inputs such as the expected volatility of the Company's stock price. Volatility assumptions are based on historical data and forward-looking market trends, requiring significant auditor judgment to assess their reasonableness.

*How the Critical Audit Matter Was Addressed in the Audit*

Our approach to addressing the matter involved the following procedures, among others:

⮚ Obtained the valuation report and warrant agreements and reviewed the independent point estimate of the fair values of the warrants immediately prior to exercise and at each balance sheet date and:

- Tested the underlying data used in developing the fair values using the Black-Scholes model.

Evaluated the reasonableness of the significant assumptions used by management related to the Company's weighted average share price by considering (i) current and past performance; (ii) external market and industry data; (iii) discussions with management and those charged with governance; (iv) review and analyse the terms and conditions outlined in the warrant agreements; and (v) evidence obtained in other areas of the audit.

⮚ Recalculated the change in fair value of warrant liability recorded in the consolidated statements of operations and comprehensive loss.

⮚ Assessed the adequacy of the disclosure made in the consolidated financial statements.

***Discontinued operations***

As discussed in notes 3 (g) and 4 to the consolidated financial statements, the Company sold 100% of the equity interest in Longye, a Cayman Islands company, Long Ye Information Technology Limited, a Hong Kong company ("Long Ye HK"), Beijing Sangu Maolu Information Technology Co., Ltd., a PRC company ("Sangu Maolu"), TuanChe Information Limited, a Hong Kong company, ("Tuanche HK"), TuanYuan Internet Technology (Beijing) Co., Ltd., a PRC company ("TuanYuan"), TuanChe Group Inc., a Cayman Islands company, ("Tuanche Cayman"), Tuanche Information Group Limited, a Hong Kong company ("Tuanche Info"), Chema Technology (Beijing) Co., Ltd., a PRC company ("Chema"), for an aggregate consideration of the US$1 and completed on 31 October 2025. The Company determined the sale of the disposal group should be reported as discontinued operations in accordance with Accounting Standard Codification ("ASC") 205-20, Discontinued Operations ("ASC 205-20"). Therefore, the related assets and liabilities of the disposal group are retrospectively classified as assets and liabilities of discontinued operations in the Company's December 31, 2024, consolidated balance sheet. Additionally, the operations of the disposal group are reported as income from discontinued operations in the Company's accompanying consolidated statements of operations and comprehensive income for all periods presented.

We identified the accounting and disclosure of the discontinued operations related to the disposal group as a critical audit matter given the significant judgments made by management to apply ASC 205-20. Auditing these judgments, including the gain on the disposal of RMB48.9 million (US$7.0 million), was significant to the Company's financial results, and required a higher degree of auditor judgment and an increased extent of effort.

*How the Critical Audit Matter Was Addressed in the Audit*

Our approach to addressing the matter involved the following procedures, among others:

⮚ We read minutes of the Board of Directors that evidenced proper authorization and approval of the disposition. <br>⮚ We analyzed the terms of the disposal agreement and tested the resulting calculation of the pre-tax gain on the disposal recognized at the disposal date.

---

| | |
|:---|:---|
| ⮚ | We evaluated the reasonableness of the Company's segregation of assets and liabilities that are classified as discontinued operations by inspecting the Company's accounting data for retrospective reclassifications made to prior period financial statements to present the disposal business as discontinued operations. |

---

⮚ We evaluated the Company's classification for discontinued operations, including its earnings per share, for the current and prior periods.

⮚ Assessed the adequacy of the disclosure made in the consolidated financial statements.

*/S/* JWF Assurance PAC

We have served as the Company's auditors since 2024.

JWF Assurance PAC

Singapore

May 8, 2026

PCAOB ID Number 7095

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and Board of Directors of Token Cat Limited (formerly known as TuanChe Limited)

**Opinion on the Financial Statements**

We have audited, before the effects of the adjustments to retrospectively present the discontinued operations as described in Note 4, the accompanying consolidated statements of operations and comprehensive loss, changes in equity and cash flows of Token Cat Limited (the "Company") for the year ended December 31, 2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements, before the effects of the adjustments to retrospectively present the discontinued operations as described in Note 4, present fairly, in all material respects, the results of its operations and its cash flows of the Company for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively present discontinued operations as described in Note 4, accordingly, we do not express an opinion or any other form of assurance about whether such retrospective adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors.

**Explanatory Paragraph – Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

/s/ Marcum Asia CPAs LLP

Marcum Asia CPAs LLP

We have served as the Company's auditor from 2021 to 2024.

New York, NY

March 28, 2024

PCAOB ID Number 5395

**TOKEN CAT LIMITED**

**CONSOLIDATED BALANCE SHEETS**

(All amounts in thousands, except for share and per share data, unless otherwise stated)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Note** | **December 31,<br> 2024** | **December 31,<br> 2025** | **December 31,<br> 2025** |
|  |  | | | **US$** |
|  |  | **RMB** | **RMB** | **Note 3(e)** |
| **ASSETS** |  | | | |
| **Current assets:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents |  | 4599 | 976 | 140 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 5 |  | 6522 | 933 |
| &nbsp;&nbsp;&nbsp;Prepayment and other current assets, net | 6 |  | 165379 | 23649 |
| &nbsp;&nbsp;&nbsp;Current assets of discontinued operations | 4 | 33448 |  |  |
| **Total current assets** |  | **38047** | **172877** | **24722** |
| **Non-current assets:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Non-current assets of discontinued operations | 4 | 6096 |  |  |
| **Total non-current assets** |  | **6096** |  |  |
| **Total assets** |  | **44143** | **172877** | **24722** |
| **LIABILITIES AND EQUITY** |  |  |  |  |
| **Current liabilities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable |  |  | 6499 | 929 |
| &nbsp;&nbsp;&nbsp;Advance from customers |  |  | 189 | 27 |
| &nbsp;&nbsp;&nbsp;Salary and welfare benefits payable |  | 805 | 2017 | 288 |
| &nbsp;&nbsp;&nbsp;Other taxes payable | 8 | 6856 | 4 | 1 |
| &nbsp;&nbsp;&nbsp;Payables due to related parties | 15 | 572 | 397 | 57 |
| &nbsp;&nbsp;&nbsp;Payable third-party loans | 9 | 1078 | 6208 | 888 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 10 | 1530 | 906 | 130 |
| &nbsp;&nbsp;&nbsp;Current liabilities of discontinued operations | 4 | 92191 |  |  |
| **Total current liabilities** |  | **103032** | **16220** | **2320** |
| &nbsp;&nbsp;&nbsp;Warrant liability | 17 | 68556 | 24377 | 3486 |
| &nbsp;&nbsp;&nbsp;Non-current liabilities of discontinued operations | 4 | 13362 |  |  |
| **Total non-current liabilities** |  | **81918** | **24377** | **3486** |
| **Total liabilities** |  | **184950** | **40597** | **5806** |
| **Commitments and contingencies** | 15 |  |  |  |
| **Shareholders' equity:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Class A ordinary shares: US$0.0001 par value; 800,000,000 shares authorized; 707,460,523 shares issued and 686,203,839 shares outstanding as of December 31, 2024; 24,000,000,000 shares authorized; 9,486,076,439 shares issued and 8,253,410,439 shares outstanding as of December 31, 2025 |  | 480 | 5899 | 844 |
| &nbsp;&nbsp;&nbsp;Class B ordinary shares: US$0.0001 par value; 60,000,000 shares authorized, and 55,260,580 issued and outstanding as of December 31, 2024; 1,800,000,000 shares authorized, and 55,260,580 issued and outstanding as of December 31, 2025 |  | 35 | 35 | 5 |
| &nbsp;&nbsp;&nbsp;Treasury stock (12,765,549 treasury stock as of December 31, 2024; 8,548,547 treasury stock as of December 31, 2025) |  | (34526) | (13113) | (1875) |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital |  | 1323281 | 1501288 | 214681 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit |  | (1421097) | (1418827) | (202890) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive (loss)/income |  | (8980) | 56998 | 8151 |
| **Total shareholders' equity** |  | **(140807)** | **132280** | **18916** |
| **TOTAL LIABILITIES AND EQUITY** |  | **44143** | **172877** | **24722** |

---

The accompanying notes are an integral part of these consolidated financial statements.

 

**TOKEN CAT LIMITED**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

(All amounts in thousands, except for share and per share data, unless otherwise stated)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Note** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  |  | **2023** | **2024** | **2025** | **2025** |
|  |  | | | | **US$** |
|  |  | **RMB** | **RMB** | **RMB** | **Note 3(e)** |
| **Continuing operations:** |  |  |  |  |  |
| **Net revenues** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Resale of automotive electronic components |  |  |  | 5772 | 826 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advertising business |  |  |  | 148 | 21 |
| **Total net revenues** |  |  |  | **5920** | **847** |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of revenues |  |  |  | (5752) | (823) |
| **Gross profit** |  |  |  | **168** | **24** |
| **Operating expenses:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses |  | (24540) | (37576) | (34643) | (4955) |
| **Total operating expenses** |  | **(24540)** | **(37576)** | **(34643)** | **(4955)** |
| **Loss from continuing operations** |  | **(24540)** | **(37576)** | **(34475)** | **(4931)** |
| **Other income/(expenses):** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income, net |  | 146 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain from disposal of subsidiaries |  |  |  | 48986 | 7005 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrant liability |  | 20732 | (57066) | 28024 | 4007 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income, net |  | 502 | 370 |  |  |
| **(Loss)/income from continuing operations before income taxes** |  | **(3160)** | **(94272)** | **42535** | **6081** |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax benefit |  |  |  |  |  |
| **Net (loss)/income from continuing operations** |  | **(3160)** | **(94272)** | **42535** | **6081** |
| **Discontinued operations:** |  |  |  |  |  |
| Loss from discontinued operations before income taxes |  | (79811) | (93719) | (40265) | (5758) |
| Income tax expense, net |  |  |  |  |  |
| **Loss from discontinued operations, net of tax** |  | (79811) | (93719) | (40265) | (5758) |
| **Net (loss)/income** |  | **(82971)** | **(187991)** | **2270** | **323** |
| **Other comprehensive income/(loss):** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments |  | 125 | (689) | 9230 | 1320 |
| **Total other comprehensive income/(loss)** |  | **125** | **(689)** | 9230 | 1320 |
| **Total comprehensive (loss)/income** |  | **(82846)** | **(188680)** | **11500** | **1643** |
| **Net (loss)/income attributable to the Token Cat Limited's ordinary shareholders per share** |  |  |  |  |  |
| Basic and diluted from continuing operations | 14 | (0.01) | (0.18) | 0.07 | 0.01 |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted from discontinued operations | 14 | (0.19) | (0.18) | (0.07) | (0.01) |
| **Weighted average number of ordinary shares** |  |  |  |  |  |
| Basic and diluted from continuing operations | 14 | 406802365 | 520221825 | 569105909 | 569105909 |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted from discontinued operations | 14 | 406802365 | 520221825 | 569105909 | 569105909 |
| **Share-based compensation expenses included in:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling and marketing expenses |  | 74 | 4343 | 27 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses |  | 7720 | 19150 | 24533 | 3508 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development expenses |  | 1752 | 4901 |  |  |

---

The accompanying notes are an integral part of these consolidated financial statements.

**TOKEN CAT LIMITED**

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

(All amounts in thousands, except for share and per share data, unless otherwise stated)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary shares** | **Ordinary shares** | **Ordinary shares** | **Ordinary shares** | **Treasury stock** | **Treasury stock** | | | | |
|  | **Number of**<br>**Class A**<br>**Ordinary**<br>**Shares** |<br><br>**Amounts** | **Number of**<br>**Class B**<br>**Ordinary**<br>**Shares** |<br><br>**Amounts** |<br><br>**Shares** |<br><br>**Amounts** |<br>**Additional**<br>**paid-in**<br>**capital** |<br><br>**Accumulated**<br>**deficit** |<br>**Accumulated**<br>**other**<br>**comprehensive**<br>**loss** |<br>**Total**<br>**shareholders'**<br>**Equity** |
|  | | **RMB** | | **RMB** | | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| **Balance at December 31, 2022** | **342329496** | **235** | **55260580** | **35** | **(14907047)** | **(45886)** | **1296951** | **(1150135)** | **(8416)** | **92784** |
| Shares issuance for vested restricted shares | 20593750 | 1 |  |  |  |  | (1) |  |  |  |
| Share-based compensation |  |  |  |  |  |  | 9546 |  |  | 9546 |
| Net loss from continuing operations |  |  |  |  |  |  |  | (3160) |  | (3160) |
| Net loss from discontinued operations |  |  |  |  |  |  |  | (79811) |  | (79811) |
| Foreign currency translation adjustment |  |  |  |  |  |  |  |  | 125 | 125 |
| **Balance at December 31, 2023** | **362923246** | **236** | **55260580** | **35** | **(14907047)** | **(45886)** | **1306496** | **(1233106)** | **(8291)** | **19484** |
| Shares issuance for vested restricted shares | 139375000 | 102 |  |  |  |  | (102) |  |  |  |
| Share-based compensation |  |  |  |  | 2141498 | 11360 | 17034 |  |  | 28394 |
| Issuance of common shares and Pre-funded warrants, net of issuance costs | 198812640 | 142 |  |  |  |  | (147) |  |  | (5) |
| Net loss from continuing operations |  |  |  |  |  |  |  | (94272) |  | (94272) |
| Net loss from discontinued operations |  |  |  |  |  |  |  | (93719) |  | (93719) |
| Foreign currency translation adjustment |  |  |  |  |  |  |  |  | (689) | (689) |
| **Balance at December 31, 2024** | **701110886** | **480** | **55260580** | **35** | **(12765549)** | **(34526)** | **1323281** | **(1421097)** | **(8980)** | **(140807)** |
| Shares issuance for vested restricted shares | 25905000 | 18 |  |  |  |  | (18) |  |  |  |
| Share-based compensation |  |  |  |  | 4217002 | 21413 | 3147 |  |  | 24560 |
| Disposal of subsidiaries |  |  |  |  |  |  |  |  | 56748 | 56748 |
| Issuance of common shares and Pre-funded warrants, net of issuance costs | 7357500000 | 5270 |  |  |  |  | 159769 |  |  | 165039 |
| Cashless exercise of common stock warrants exercise | 183801600 | 131 |  |  |  |  | 15109 |  |  | 15240 |
| Net income from continuing operations |  |  |  |  |  |  |  | 42535 |  | 42535 |
| Net loss from discontinued operations |  |  |  |  |  |  |  | (40265) |  | (40265) |
| Foreign currency translation adjustment |  |  |  |  |  |  |  |  | 9230 | 9230 |
| **Balance at December 31, 2025** | **8268317486** | **5899** | **55260580** | **35** | **(8548547)** | **(13113)** | **1501288** | **(1418827)** | **56998** | **132280** |

---

The accompanying notes are an integral part of these consolidated financial statements.

 

**TOKEN CAT LIMITED**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

(All amounts in thousands, except for share and per share data, unless otherwise stated)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | | | | **US$** |
|  | **RMB** | **RMB** | **RMB** | **Note 3(e)** |
| **Cash flows from operating activities** |  |  |  |  |
| **Net (loss)/income** | **(82971)** | **(187991)** | **2270** | **323** |
| Net (loss)/income from continuing operations | (3160) | (94272) | 42535 | 6081 |
| Net loss from discontinued operations | (79811) | (93719) | (40265) | (5758) |
| Adjustment to reconcile net (loss)/income to net cash used in operating activities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Share-based compensation | 9546 | 28394 | 24560 | 3512 |
| &nbsp;&nbsp;&nbsp;Gain from disposal of subsidiary |  |  | (48986) | (7005) |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant liability | (20732) | 57066 | (28024) | (4007) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities-continuing operations: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts and notes receivable |  | 9797 | (6522) | (933) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayment and other current assets | (4085) |  | (165379) | (23649) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable |  |  | 6499 | 929 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance from customers |  |  | 189 | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salary and welfare benefits payable |  | 805 | 1212 | 173 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other taxes payable | 112 | 101 | (6852) | (980) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 22394 | (7409) | 3870 | 556 |
| **Net cash generated from/(used in) operating activities-continuing operations** | **4075** | **(5518)** | **(176898)** | **(25296)** |
| **Net cash (used in)/generated from operating activities-discontinued operations** | **(78967)** | **(29204)** | **534** | **76** |
| **Net cash used in operating activities** | **(74892)** | **(34722)** | **(176364)** | **(25220)** |
| **Cash flows from investing activities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Disposal of subsidiaries |  |  | (4904) | (701) |
| **Net cash used in investing activities-continuing operations** | **—**  | **—**  | **(4904)** | **(701)** |
| **Net cash used in investing activities-discontinued operations** | **—**  | **(19)** | **—**  | **—**  |
| **Net cash used in investing activities** | **—**  | **(19)** | **(4904)** | **(701)** |
| **Cash flows from financing activities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds of offering, net of listing fee |  | 7112 | 165039 | 23600 |
| **Net cash generated from financing activities-continuing operations** | **—**  | **7112** | **165039** | **23600** |
| **Net cash generated from/(used in) financing activities-discontinued operations** | **13972** | **23047** | **(1450)** | **(207)** |
| **Net cash generated from financing activities** | **13972** | **30159** | **163589** | **23393** |
| **Effect of exchange rate changes on cash and cash equivalents** | 70 | (1071) | 8315 | 1189 |
| **Net decrease in cash and restricted cash** | (60850) | (5653) | (9364) | (1339) |
| **Cash, cash equivalents and restricted cash at beginning of the year** | 76843 | 15993 | 10340 | 1479 |
| **Cash, cash equivalents and restricted cash at end of the year** | 15993 | 10340 | 976 | 140 |
| **Less: Cash, cash equivalents and restricted cash of discontinued operations at the end of the year** | 12989 | 5741 | **—**  | **—**  |
| **Cash and cash equivalent of continuing operations at the end of the year** | 3004 | 4599 | 976 | 140 |
| **Supplemental disclosures of cash flow information:** |  |  |  |  |
| Cash paid for interest expense from continuing operations |  |  |  |  |
| Cash paid for interest expense from discontinued operations | (337) | (465) | (1181) | (169) |
| **Supplemental schedule of non-cash investing and financing activities:** |  |  |  |  |
| Right-of-use assets obtained in exchange for new operating lease liabilities from continuing operations | 2813 | 1080 | **—**  | **—**  |
| Right-of-use assets disposed as reduction of operating lease liabilities due to lease termination from discontinued operations | **—**  | 71 | **—**  | **—**  |

---

The accompanying notes are an integral part of these consolidated financial statements.

**TOKEN CAT LIMITED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**1.** **Organization and Reorganization** 

Token Cat Limited (the "Company", formerly known as TuanChe Limited) was incorporated in the Cayman Islands on September 28, 2012. The Company is a holding company and conducts its business mainly through its subsidiaries, variable interest entities ("VIEs") and subsidiaries of VIEs (collectively referred to as the "Group"). The Group commenced operations through TuanChe Internet, a PRC company established by several PRC citizens in May 2012. TuanChe Internet holds an Internet Content Provider ("ICP") license to operate Tuanche.com that provides internet information services to automobile manufacturers, car dealers and consumers.

The Group is primarily engaged in the operation of providing auto shows, special promotion events services, referral service for a commercial bank, online marketing services and other related businesses in the People's Republic of China (the "PRC" or "China"). The Group commenced its auto shows business from the fourth quarter of 2016. In June 2018, the Group commenced its virtual dealership business, marketing information services and demand-side platform services. In January 2019, the Group commenced its special promotion events business. In October 2019, the Group commenced its referral services in collaboration with a commercial bank. In the first quarter of 2020, the Group acquired Longye International Limited ("Longye") and commenced a subscription and support service, and it also commenced its live streaming promotion events services and customer referral services. In 2025, the Group expanded its business through its PRC subsidiaries to include the procurement and sales of electronic equipment, diversifying its revenue streams beyond its core automotive digital marketing and technology services.

On September 10, 2025, the Company entered into a share purchase agreement with Prime Management Group Limited, a British Virgin Islands company. Pursuant to the share purchase agreements, the Group transferred 100% of the outstanding equity interest in Longye, a Cayman Islands company, Long Ye Information Technology Limited, a Hong Kong company ("Long Ye HK"), Beijing Sangu Maolu Information Technology Co., Ltd., a PRC company ("Sangu Maolu"), TuanChe Information Limited, a Hong Kong company, ("Tuanche HK"), TuanYuan Internet Technology (Beijing) Co., Ltd., a PRC company ("TuanYuan"), TuanChe Group Inc., a Cayman Islands company, ("Tuanche Cayman"), Tuanche Information Group Limited, a Hong Kong company ("Tuanche Info"), Chema Technology (Beijing) Co., Ltd., a PRC company ("Chema"), for an aggregate consideration of the US$1. For details of the transaction please refer to Note 4 – Discontinued operations. The organizing auto shows and providing marketing services have been presented as discontinued operations ("Discontinued Operations") retroactively for the periods presented in the consolidated financial statements for fiscal years ended December 31, 2024 and 2023.

Following the disposal, as of December 31, 2025, the Group expanded its business through its PRC subsidiaries to include the procurement and sales of electronic equipment, diversifying its revenue streams beyond its core automotive digital marketing and technology services.

---

| | | | |
|:---|:---|:---|:---|
| <br>**Major Subsidiaries** | <br>**Place and year of**<br>**incorporation** | **Percentage of**<br>**direct or indirect**<br>**economic ownership** | <br>**Principal activities** |
| New TuanChe New York Inc. (US) | New York, USA 2024 | 100 | Investment holding |
| New TuanChe Colorado Inc. (US) | Colorado, USA 2025 | 100 | Investment holding |
| New TuanChe PTE. LTD. (Singapore) | Singapore 2025 | 100 | Investment holding |
| New TuanChe Hong Kong Limited (HK) | Hong Kong, PRC 2024 | 100 | Investment holding |
| Shenzhen Feixingjia Information Technology Co., Ltd. | Shenzhen, PRC 2024 | 100 | Electronic equipment trading,technical support and consulting services |
| Beijing Feixingjia Information Technology Co.,Ltd. | Beijing, PRC 2025 | 100 | Electronic equipment trading,technical support and consulting services |
| Changsha Feixingjia Information Technology Co., Ltd. | Changsha, PRC 2025 | 100 | Technical support and consulting services |

---

**1.** **Organization and Reorganization (Continued)** 

Consolidation of Variable Interest Entities

VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs and their subsidiaries with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

There are no consolidated assets of the VIEs and the VIEs' subsidiaries that are collateral for the obligations of the VIEs and the VIEs' subsidiaries and can only be used to settle the obligations of the VIEs and the VIEs' subsidiaries.

As the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors or beneficial interest holders of the VIEs do not have recourse to the general credit of the Company for any of the liabilities of the VIEs in normal course of business.

There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs and the VIEs' subsidiaries. However, if the VIEs and the VIEs' subsidiaries ever need financial support, the Company or its subsidiaries may, at their option and subject to statutory limits and restrictions, provide financial support to the VIEs and the VIEs' subsidiaries through loans to the shareholder of the VIEs and the VIEs' subsidiaries or entrustment loans to the VIEs and the VIEs' subsidiaries.

As of October 31, 2025, all VIEs and the VIEs' subsidiaries have been disposed.

The following combined financial information of the Group's VIEs as of December 31, 2024 and 2025 and for the years ended December 31, 2023, 2024 and 2025 were included in the accompanying consolidated financial statements of the Group as follows:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| &nbsp;&nbsp;&nbsp;Current assets of discontinued operations | 136499 |  |
| &nbsp;&nbsp;&nbsp;Non-current assets of discontinued operations | 6096 |  |
| **Total assets of discontinued operations** | **142595** |  |
| **Total liabilities of discontinued operations** | **290300** |  |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **December 31,**<br>**2023** | **December 31,**<br>**2024** | **December 31,**<br>**2025** |
|  | **RMB** | **RMB** | **RMB** |
| Net revenues from discontinued operations | **68167** | **50152** | **20339** |
| Net loss from discontinued operations | **(418)** | **(12352)** | **(13318)** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended**  | **For the year ended**  | **For the year ended**  |
|  | **December 31,**<br>**2023** | **December 31,**<br>**2024** | **December 31,**<br>**2025** |
|  | **RMB** | **RMB** | **RMB** |
| **Discontinued operations:** |  |  |  |
| Net cash (used in)/ generated from operating activities | (15357) | (22167) | 473 |
| Net cash generated from investing activities |  |  |  |
| Net cash generated from/ (used in) financing activities | 13172 | 19358 | (1450) |

---

**2.** **Going Concern** 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. As of December 31, 2025, the Company had an accumulated deficit of RMB1,418.8 million and net cash used in operating activities of RMB 176.4 million.

These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty, such as those relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities.

In response to the conditions described above, management has taken and plans to take the following actions to improve the Company's financial position and operations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. In 2025, the Company optimized its capital structure by disposing of its loss-making operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Company will fund its development and future operations through steady business growth and non-dilutive equity financing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Should the Group fail to achieve the above objectives, it may require additional financing to execute its business plans. Such financing may be in the form of equity or debt, the timing, terms, and availability of which cannot be assured. If the Group is unable to secure necessary capital on acceptable terms or at all, or if it fails to improve gross margins and reduce operating expenses, it may be unable to implement its current expansion strategy.

Management believes that the actions it is presently taking—which include seeking additional funding and implementing the above strategic plan—will mitigate the conditions that raise substantial doubt and provide the opportunity for the Company to continue as a going concern.

**3.** **Significant Accounting Policies** 

**a)** **Basis of presentation** 

The consolidated financial statements of the Group have been prepared in accordance with U.S. GAAP. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below.

**b)** **Reclassifications** 

The Company changed the presentation of revenue within its consolidated statements of operations retrospectively. Disaggregation of revenue has been changed as a result of the disposal of discontinued operations. Amounts for the comparative prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported net income or financial position and do not represent a restatement of any previously reported financial results.

**c)** **Principles of consolidation** 

The consolidated financial statements include the financial statements of the Company, its subsidiaries, VIEs and subsidiaries of VIEs for which the Company is the primary beneficiary.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity's economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity.

All transactions and balances among the Company, its subsidiaries, VIEs and subsidiaries of VIEs have been eliminated upon consolidation.

**3.** **Significant Accounting Policies (Continued)** 

**d)** **Use of estimates** 

The preparation of the Group's consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the balance sheet date and reported revenues and expenses during the reported periods in the consolidated financial statements and accompanying notes. Significant accounting estimates include, but are not limited to determining the provision for accounts receivable, provision for prepayment and other current assets, assessment for valuation allowance of deferred tax assets, valuation and recognition of share-based compensation expenses, impairment assessment on goodwill and long-lived assets, long-term investments and valuation of warrant liabilities at fair value.

**e)** **Functional currency and foreign currency translation** 

The Group uses Renminbi ("RMB") as its reporting currency. The functional currency of the Company and its overseas subsidiaries which incorporated in the Cayman Islands and Hong Kong is United States dollars ("US$"). The functional currency of the Group's PRC entities is RMB.

Translations of balances in the consolidated balance sheets, consolidated statements of operations and comprehensive loss and consolidated statements of cash flows from RMB into US$ as of and for the year ended December 31, 2025 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.9931 representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2025. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2025, or at any other rate.

In the consolidated financial statements, the financial information of the Company and other entities located outside of the PRC have been translated into RMB. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, and expenses, gains and loss are translated using the average rate for the year. Translation adjustments are reported as foreign currency translation adjustments, and are shown as a component of other comprehensive income/(loss) in the consolidated statements of operations and comprehensive loss.

Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Net gains and loss resulting from foreign exchange transactions are included in foreign exchange loss in the consolidated statements of operations and comprehensive loss.

**f)** **Fair value measurements** 

Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:

● Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

● Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

● Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Group's financial instruments include cash and cash equivalents, restricted cash, accounts and notes receivable, prepayment and other current assets, long-term investments, short-term borrowings, accounts payable, other payables, guarantee liabilities and other liabilities of which the carrying values approximate their fair value due to their short term in nature and other liabilities.

The fair value of warrant liability was determined using the Black Scholes Model, with level 3 inputs (Note 17).

**3.** **Significant Accounting Policies (Continued)** 

**g)** **Discontinued operations** 

A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity's financial results and operations. In the consolidated statements of operations and comprehensive loss, result from discontinued operations is reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. Cash flows for discontinuing operations are presented separately in Note 4. In order to present the financial effects of the continuing operations and discontinued operations, revenues and expenses arising from intra-group transactions are eliminated except for those revenues and expenses that are considered to continue after the disposal of the discontinued operations.

Non-current assets or disposal groups are classified as assets held for sale when the carrying amount is to be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset or disposal group must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets.

On October 31, 2025, the Company completed the disposal of the disposal groups.

**h)** **Cash, cash equivalents and restricted cash** 

Cash and cash equivalents mainly represent cash on hand, demand deposits placed with large reputable banks in the United States of America or China, and highly liquid investments that are readily convertible to known amounts of cash and with original maturities from the date of purchase with terms of three months or less. As of December 31, 2024 and 2025, there were cash at bank and demand deposits with original terms of less than three months denominated in US dollars amounting to approximately US$0.6 million and US$0.14 million, respectively (equivalent to approximately RMB4.6 million and RMB1.0 million, respectively).

**i)** **Accounts and notes receivables, net** 

Accounts and notes receivables are recorded at amortized cost, net of allowances for current expected credit losses ("CECL") in accordance with ASC Topic 326, as updated by ASU 2025-05. Management regularly reviews outstanding accounts and provides an allowance for doubtful accounts. When collection of the original invoice amounts is no longer probable, the Company will either partially or fully write off the balance against the allowance for credit loss.

**j)** **Property, equipment and software, net** 

Property, equipment and software are stated at cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the following estimated useful lives:

---

| | |
|:---|:---|
| **Category** | **Estimated useful life** |
| Furniture and electronic equipment | 3 years |
| Vehicles | 10 years |
| Software | 5 years |
| Leasehold improvements | Shorter of expected lives of leasehold improvements and lease term |

---

Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property, equipment and software is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of operations and comprehensive loss.

**3.** **Significant Accounting Policies (Continued)** 

**k)** **Intangible assets, net** 

Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets acquired in a business combination were recognized initially at fair value at the date of acquisition. Intangible assets with finite useful lives are amortized using a straight-line method of amortization that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The estimated useful life for the intangible assets is as follows:

---

| | |
|:---|:---|
| **Category** | **Estimated useful life** |
| Customer relationships | 3 years |
| Trade names | 10 years |
| Developed technology | 7 years |

---

**l)** **Long-term investments** 

For equity investments which the Company does not have significant influence, and whose fair value is not readily determinable, the cost less impairment accounting is applied ("measurement alternative"). Gain or loss are realized when such investment is sold or when dividends are declared or payments are received.

Investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC Topic 323 *Investments-Equity Method and Joint Ventures*. The Company adjusts the carrying amount of equity method investment for its share of the income or loss of the investee and reports the recognized income or loss in the consolidated statements of operations and comprehensive loss. The Company's share of the income or loss of an investee are based on the shares of common stock and in-substance common stock held by the Company.

The Company evaluates its equity investments for impairment at each reporting date, or more frequently if events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Factors considered by the Company when determining whether an investment has been other-than-temporarily-impaired, include, but are not limited to, the length of the time and the extent to which the market value has been less than cost, the financial condition and near-term prospects of the investee, and the Company's intent and ability to retain the investment until the recovery of its cost.

**m)** **Goodwill** 

Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. We allocate the cost of an acquired entity to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price for acquisitions over the fair value of the net assets acquired, including other intangible assets, is recorded as goodwill. Goodwill is not amortized, but impairment of goodwill is tested on at least an annual basis or whenever events or changes in circumstances indicate that the carrying value of the reporting unit exceeds its fair value.

We first assess qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount, including goodwill. The qualitative assessment includes our evaluation of relevant events and circumstances affecting our single reporting unit, including macroeconomic, industry, market conditions and our overall financial performance. If qualitative factors indicate that it is more likely than not that our reporting unit's fair value is less than its carrying amount, then we will perform the quantitative impairment test by comparing the reporting unit's carrying amount, including goodwill, to its fair value. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess.

We applied significant judgment in developing the fair value of our single reporting unit. Fair value of the reporting unit is estimated by us using a discounted cash flow model which requires us to make judgments and assumptions related to future revenues, discount rate and terminal growth rate. The probabilities of the success of the clinical trials based on the status of these trials and reference to the industry benchmark were also incorporated into the assumption of future revenues.

**n)** **Impairment of long-lived assets** 

Long-lived assets or asset group, including intangible assets with finite lives, are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets.

**3.** **Significant Accounting Policies (Continued)** 

**o)** **Revenue recognition** 

The Group recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services using the five steps defined under ASC Topic 606.

The Group determines revenue recognition through the following steps:

● identification of the contract, or contracts, with a customer;

● identification of the performance obligations in the contract;

● determination of the transaction price;

● allocation of the transaction price to the performance obligations in the contract; and

● recognition of revenue when, or as, the Group satisfies a performance obligation

Revenue is recognized upon transfer of control of promised goods or services to a customer.

Revenue is recorded net of Value Added Tax ("VAT") and related surcharges collected from customers, which are subsequently remitted to government authorities.

***Revenue from the resale of automotive electronic components***

The Group generates revenue from the resale of automotive electronic components. The Group identified a single performance obligation, which is to deliver the specified automotive electronic components to customers. The sale price of the electronic component equipment and its accessories are clearly stated in the agreement signed with customers. The Group acts as a principal in these transactions in accordance with ASC 606 and recognizes revenue at a point in time when control of the automotive electronic components is transferred to customers.

 ****

***Advertising business***

For the marketing information services, the Group generates consumers' demand information through its online channels and provides to the industry customers upon consumers' consent. The Group identified only one performance obligation that is to provide consumer's demand information to the industry customers. The marketing information service fee is charged based on the quantity of consumers' demand information delivered. Revenue is recognized at a point in time upon the delivery of such consumers' demand information.

For the proxy advertising services, with the development of network economy, online advertising has become a trend. The Group's clients pay for ads posting to promote their brand images. The Group connect demands for our clients with popular online platforms, such as Tiktok, Kuaishou, Toutiao and etc, to showcase our clients' brands, services or products. It's the most efficient way for the clients to attract more attention. In practice, an account is set up on the platform for the client and the client notifies us to recharging the account when the account is activated. The client will get access to the account, determine when, where or how long to post the ads on its own and operate posting in the account. When the client posts an ad, the platform charges the account. The Group is considered to be an principle in accordance with ASC 606 and revenue is recognized over the period of the contract.

 ****

 ****

**3.** **Significant Accounting Policies (Continued)** 

 ****

**o)** **Revenue recognition (Continued)** 

 ****

***Offline marketing services revenue***

Auto shows revenue

The Group's online website and offline infrastructure allow them to organize auto shows, which aim at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. The Group charges a fixed admission fee per auto show event from its industry customers for arranging, decorating and providing booth space at auto shows. The Group has identified one performance obligation for the transaction - providing a decorated venue for auto dealers, automakers and automotive service providers, as the individual service promised in auto show contracts are not distinct individually. As the Group has control of the auto show services and discretion in establishing the price of auto show admission fee to auto dealers, automakers and other automotive service providers, it is considered to be a principal in accordance with ASC 606. The auto shows revenue is recognized on a straight-line basis over the period of the contract, which is usually from two days to four days, when the services are provided.

The auto show business has been fully transformed into an agency model in July 2024. The Group's agency service is developed from the original auto show service. The difference is that the Group arrange, decorate and provide booth space by ourselves in the original auto show service and collect the admission fee, but now the Group entrust the service to the agent, and at the same time to provide promotion services to the agent, and charge the service fee. The Group is considered to be an agent in accordance with ASC 606 and revenue is recognized over the period of the contract.

Special promotion events revenue

The Group provides integrated services to support auto dealers' own special promotion events during a specific period. The services include event planning and execution, marketing, training and onsite coaching, etc. The Group charges a fixed service fee per special promotion event. The Group has identified one performance obligation as the individual service promised in service contracts are not distinct individually. As the Group has control of the service and discretion in establishing the price of the fee to auto dealers, it is considered to be a principal in accordance with ASC 606. The special promotion events revenue is recognized on a straight-line basis over the promotion period of the contract, which is usually one week, when the services are provided.

 ****

***Referral service for commercial bank revenue***

In October 2019, the Group commenced its auto loan referral services in collaboration with a commercial bank. The referral services provided to the bank include (i) referral services and (ii) periodic guarantee for the following time periods: (a) from the date of loan issuance by the commercial bank to the consumer to the date when the consumer's vehicle mortgage registration is completed (the mortgage registration procedures should be completed within 120 days after the loan issuance) and (b) no overdue of more than 30 days for any of the first 3 monthly repayment. The referral service and periodic guarantee are two separate performance obligations that meet the criteria to be considered distinct, of which, referral services revenue is recognized at a point in time upon the delivery of the services and a guarantee liability is recorded at fair value at inception of the loans. Revenue from the periodic guarantee is recognized by a systematic and rational amortization method over the term of guarantee period. The Company has ceased the cooperation since April 2022.

One component of the transaction price is based on the loan performance of the following 12 months since the auto loans were released and the transaction price will be entitled to be received upon the loan performance meet specific criteria. The Group identified that one component as a variable consideration and the Group recognized the revenue when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

**3.** **Significant Accounting Policies (Continued)** 

**o)** **Revenue recognition (Continued)** 

***Online marketing services revenue***

The Group's online marketing services revenue primarily include (i) live streaming promotion events services, (ii) customer referral services, (iii) marketing information services and (iv) demand-side platform services.

The Group commenced its live streaming promotion events services from the first quarter of 2020, holding promotional events on the live streaming platform of Zhejiang Tmall Technology Co., Ltd. ("Tmall"), which aims at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. The Group identified only one performance obligation that is to provide the industry customers with arranging, decorating and providing the platform for live show. The Group charges a fixed admission fee per live streaming promotion event from its industry customers. As the Group has control of the services and discretion in establishing the price of live streaming promotion admission fee to auto dealers, automakers and other automotive service providers, it is considered to be a principal in accordance with ASC 606. The live streaming promotion events services revenue is recognized on a straight-line basis over the promotion period of the contract, which is usually one week, when the services are provided.

 ****

***Social CRM cloud services revenue***

On January 13, 2020, the Company completed the acquisition of Longye, a Software-as-a-Service ("SaaS") company who mainly provides subscription and support services to industry customers, including auto dealers, automakers and automotive service providers, with access to cloud services, software licenses and related support and updates during the term of the arrangement. Cloud services allow industry customers to use the Group's multi-tenant software without taking possession of the software. The Group identified the only one performance obligation that is to provide integrated cloud services to industry customers. The Group initially records the subscription and support services fee as deferred revenue upon receipt and then recognizes the revenue on a straight-line basis over the service period, which is usually from one year to five years. The subscription and support services revenue are recognized on a straight-line basis over the period of the contract when the services are provided.

 ****

***Referral service for distribution platform revenue***

The Group also commenced its customer referral services from the first quarter of 2020 by referring its industry customers to Beijing Baidu Netcom Science Technology Co., Ltd. ("Baidu") to use the membership services of a Baidu's auto content distribution platform. The Group identified only one performance obligation that is to provide referral service to Baidu. The Group charges Baidu a fixed rate commission fee based on the membership fee amount for the services rendered. The Group is considered to be an agent in accordance with ASC 606 and revenue is recognized at point-in-time when the industry customers successfully register as a membership of Baidu's auto content distribution platform.

**3.** **Significant Accounting Policies (Continued)** 

**p)** **Cost of revenues** 

Costs of revenues, consist primarily of rental costs for auto show venues, venue set-up costs, security costs, the purchase costs of automotive electronic components and other direct costs. The cost of revenue also consists of sales lead information acquisition cost for online marketing services.

**q)** **Selling and marketing expenses** 

Selling and marketing expenses consist primarily of advertising and promotional expenses, salaries and other compensation-related expenses for the Group's sales and marketing personnel. Advertising and promotional expenses consist primarily of costs for the promotion of corporate image, online and offline events. The Group expenses all advertising and promotional expenses as incurred and classifies them under selling and marketing expenses.

**r)** **Leases** 

The Group accounts for lease under ASC 842 and has elected to utilize the short-term lease recognition exemption and, for those leases with a lease term of 12 months or less, the Group did not recognize operating lease right-of-use ("ROU") assets or operating lease liabilities.

The Group determines if an arrangement is a lease and determines the classification of the lease, as either operating or finance, at commencement. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the lease payments over the lease term at commencement date.

As the Group's leases do not provide an implicit rate, an incremental borrowing rate is used based on the information available at the commencement date, to determine the present value of lease payments. The incremental borrowing rate approximates the rate the Group would pay to borrow in the currency of the lease payments for the weighted-average life of the lease.

The operating lease ROU assets also include any lease payments made prior to lease commencement and exclude lease incentives and initial direct costs incurred if any. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

If there are lease agreements that contain both lease and non-lease components, they are accounted for separately based on their relative standalone price.

**3.** **Significant Accounting Policies (Continued)** 

**s)** **Share-based compensation** 

Share-based compensation expenses arise from share-based awards, including share options for the purchase of ordinary shares and restricted shares. The Company accounts for share-based awards granted to employees and nonemployee in accordance with ASC 718 *Compensation-Stock Compensation*. For share options for the purchase of ordinary shares granted to employees determined to be equity classified awards, the related share-based compensation expenses are recognized in the consolidated financial statements based on their grant date fair values which are calculated using the binomial option pricing model. The determination of the fair value is affected by the share price as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee share option exercise behavior, risk-free interest rates and expected dividends. The fair value of the ordinary shares is assessed using the income approach/discounted cash flow method, with a discount for lack of marketability, given that the shares underlying the awards were not publicly traded at the time of grant. Since November 21, 2018, when the Company's ordinary shares were public traded, the fair value of the ordinary shares was determined at the closing price of the shares on the grant date. Share-based compensation expenses are recorded net of actual forfeitures using straight-line method during the service period requirement, such that expenses are recorded only for those share-based awards that are expected to ultimately vest.

If a share-based award is modified after the grant date, the Group evaluates for such modifications in accordance with ASC 718 *Compensation—Stock Compensation,* additional compensation expenses are recognized in an amount equal to the excess of the fair value of the modified equity instrument over the fair value of the original equity instrument immediately before modification. The additional compensation expenses are recognized immediately on the date of modification or over the remaining requisite service period, depending on the vesting status of the award.

**t)** **Taxation** 

*Income taxes*

Current income taxes are provided on the basis of income/(loss) for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and any tax loss and tax credit carry forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates or tax laws is recognized in the consolidated statements of operations and comprehensive loss in the period the change in tax rates or tax laws is enacted. A valuation allowance is provided to reduce the amount of deferred income tax assets if it is considered more likely than not that some portion or all of the deferred income tax assets will not be realized.

 

*Uncertain tax positions*

In order to assess uncertain tax positions, the Group applies a more likely than not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Group recognizes interest and penalties, if any, under accrued expenses and other current liabilities on its consolidated balance sheet and under other expenses in its consolidated statements of operations and comprehensive loss. The Group did not have any significant unrecognized uncertain tax positions as of December 31, 2024and 2025.

**3.** **Significant Accounting Policies (Continued)** 

**u)** **Net loss per share** 

Basic and diluted net loss per share is computed by dividing losses attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period.

During the years ended December 31, 2023, 2024 and 2025, the Group has 3,880,000, 25,905,000 and nil ordinary shares issuable upon the vest of restricted shares as potentially dilutive ordinary shares and are excluded from the calculation for the three years, as their effects would be anti-dilutive.

**v)** **Comprehensive loss** 

Comprehensive loss is defined to include all changes in equity of the Group during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Other comprehensive (loss)/income, as presented on the consolidated balance sheets, consists only of accumulated foreign currency translation adjustments.

**w)** **Non-controlling interests** 

Non-controlling interests are recognized to reflect the portion of the equity of majority-owned subsidiary which is not attributable, directly or indirectly, to the controlling shareholder. Non-controlling interests are classified as a separate line item in the equity section of the Group's consolidated balance sheets and have been separately disclosed in the Group's consolidated statements of operations and comprehensive loss to distinguish the interests from that of the Company.

**x)** **Treasury stock** 

The Company accounts for treasury shares using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury shares account on the consolidated balance sheets. At retirement of the treasury shares, the ordinary shares account is charged only for the aggregate par value of the shares. The excess of the acquisition cost of treasury shares over the aggregate par value is allocated between additional paid-in capital (up to the amount credited to the additional paid-in capital upon original issuance of the shares) and retained earnings.

**y)** **Segment reporting** 

The Group uses the management approach in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Group's chief operating decision maker identified as the Chief Executive Officer for making operating decisions, allocating resources and assessing performance as the source for determining the Group's reportable segments. The Group's CODM reviews consolidated results including revenue and operating income at a consolidated level. This resulted in two reportable segments in the Group: (1) the automotive electronics resale; and (2) the advertising business.

**z)** **Warrant liability** 

In connection with the issuance of ordinary shares, the Group issued warrants to purchase ordinary shares. The Group evaluates the warrants under Accounting Standards Codification ("ASC") 815-40, Derivatives and Hedging—Contracts in Entity's Own Equity. Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of warrant liability in the consolidated statement of operations and comprehensive loss.

**3.** **Significant Accounting Policies (Continued)** 

---

| | |
|:---|:---|
| **aa)** | **Concentrations and Risks** |

---

*Credit risk*

Financial instruments that potentially subject the Group to the concentration of credit risk consist of cash and cash equivalents, restricted cash, accounts receivable and prepayment and other current assets. As of December 31, 2024 and 2025, all of the Group's cash and cash equivalents were held in large reputable financial institutions located in the United States of America or China, which management consider being of high credit quality. Accounts receivable is typically unsecured and is derived from revenue earned from the Company's businesses.

 

*Major customers*

In 2025, we disposed our loss-making legacy business and expanded new business operations through a newly established subsidiary. As a result of the divestiture and related retrospective adjustments, we did not generate any revenue for the fiscal year ended December 31, 2024.

In 2025 and 2024, revenue derived from the Company's top four customers accounted for 97.5% and nil of total revenue, respectively.

Disclosure of details regarding the Company's top four customers in respect of the concentration of sales revenues generated from third-party customers:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended** | **Year Ended** | **Year Ended** |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** |
|  | **RMB** | **RMB** | **RMB** |
| Customer A | 1984 | 33.5% |  |
| Customer B | 1966 | 33.2% |  |
| Customer C | 1012 | 17.1% |  |
| Customer D | 809 | 13.7% |  |
| **Total** | **5771** | **97.5%** |  |

---

---

| | |
|:---|:---|
| **bb)** | **Recently issued accounting pronouncements** |

---

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses ("Topic 326"). This ASU provides a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset in developing reasonable and supportable forecasts as part of estimating expected credit losses. For public business entities, ASU 2025-05 will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The guidance will be applied on a prospective basis. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance.

**cc)** **Inventory**

Inventories, which are primarily comprised of finished goods for sale, are stated at the lower of cost or net realizable value, using the first-in first-out method. We evaluate the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis. Only defects products can be return to our suppliers.

**4.** **Discontinued operations** 

On October 13, 2025, the Company held an extraordinary general meeting of the holders of the Company's ordinary shares at which a resolution was approved authorizing the disposal of Long Ye International Limited, a Cayman Islands company ("Long Ye"), Long Ye Information Technology Limited, a Hong Kong company ("Long Ye HK"), Beijing Sangu Maolu Information Technology Co., Ltd., a PRC company ("Sangu Maolu"), TuanChe Information Limited, a Hong Kong company, ("Tuanche HK"), TuanYuan Internet Technology (Beijing) Co., Ltd., a PRC company ("TuanYuan"), TuanChe Group Inc., a Cayman Islands company, ("Tuanche Cayman"), TuanChe Information Group Limited, a Hong Kong company ("Tuanche Info"), Chema Technology (Beijing) Co., Ltd., a PRC company ("Chema",together with Long Ye, Long Ye HK, Beijing Sangu Maolu, Tuanche HK, TuanYuan, Tuanche Cayman and Tuanche Info, the "Targets"), for a nominal cash consideration of US$1.

The Company's primary business is operating an integrated automotive marketplace in China. The disposed entities (e.g., TuanChe Internet Information Service (Beijing) Co., Ltd., Sangu Maolu, Chema Technology) are the primary vehicles through which the Company conducted its main operations, including organizing auto shows and providing marketing services.

As of October 31, 2025, the Company ceased to participate in the operations and management of the disposed business.

In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and non-current liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes benefit, shall be reported as a component of net loss separate from the net loss of continuing operations in accordance with ASC 205-20-45.Assets and liabilities related to the Discontinued Business to be transferred were reclassified as assets/liabilities of discontinued operations as of December 31, 2024, while results of operations related to the Discontinued Business, including comparatives, were reported as gain from discontinued operations for the year ended December 31, 2023, 2024 and 2025.

Gain on disposal

---

| | |
|:---|:---|
|  | **Year ended December 31,<br> 2025** |
|  | **RMB** |
| Total net liabilities of the Disposal Group | 230750 |
| Add: Writes-off of net amounts due from disposed subsidiaries - loss | (125016) |
| Less: disposal proceeds |  |
| Gain on disposal before reclassification of cumulative foreign currency translation differences of the Disposal Group to profit or loss | 105734 |
| Reclassification of cumulative foreign currency translation losses of the Disposal Group to profit or loss | (56748) |
| **Gain on disposal** | **48986** |

---

Results of discontinued operations:

---

| | | | |
|:---|:---|:---|:---|
|  | **2023** | **Year ended December 31,**<br>**2024** | **Ten months ended October 31,**<br>**2025** |
|  | **RMB** | **RMB** | **RMB** |
| **Net revenues** | **162367** | **49176** | **25571** |
| &nbsp;&nbsp;&nbsp;Cost of revenues | (68942) | (15596) | (6332) |
| **Gross profit** | **93425** | **33580** | **19239** |
| **Operating expenses:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling and marketing expenses | (157004) | (54476) | (42489) |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | (20126) | (15530) | (13043) |
| &nbsp;&nbsp;&nbsp;Research and development expenses | (11267) | (11890) | (1551) |
| &nbsp;&nbsp;&nbsp;Impairment of long-lived assets | (1515) | (4048) |  |
| **Total operating expenses** | (189912) | **(85944)** | **(57083)** |
| **Loss from discontinued operations** | **(96487)** | **(52364)** | **(37844)** |
| **Other income/(expenses):** |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expenses, net | (289) | (999) | (1935) |
| &nbsp;&nbsp;&nbsp;Gain/(loss) from equity method investments | 181 | 532 | (57) |
| &nbsp;&nbsp;&nbsp;Impairment of goodwill |  | (45561) |  |
| &nbsp;&nbsp;&nbsp;Other income, net | 16784 | 4673 | (429) |
| **Loss from discontinued operations before income taxes** | **(79811)** | **(93719)** | **(40265)** |
| &nbsp;&nbsp;&nbsp;Income tax benefit |  |  |  |
| **Net loss from discontinued operations** | **(79811)** | **(93719)** | **(40265)** |

---

**4.** **Discontinued operations (Continued)** 

Assets and liabilities of the discontinued operations:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **October 31,<br> 2025** |
|  | **RMB** | **RMB** |
| **ASSETS** | | |
| **Current assets:** | | |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 1697 | 904 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 4044 | 4000 |
| &nbsp;&nbsp;&nbsp;Accounts and notes receivable, net | 12756 | 9383 |
| &nbsp;&nbsp;&nbsp;Prepayment and other current assets, net | 14951 | 26373 |
| **Total current assets** | **33448** | **40660** |
| **Non-current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Long-term investments | 6096 | 6039 |
| &nbsp;&nbsp;&nbsp;Total non-current assets | 6096 | 6039 |
| **Total assets** | **39544** | **46699** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 13875 | 2807 |
| &nbsp;&nbsp;&nbsp;Advance from customers | 8874 | 2035 |
| &nbsp;&nbsp;&nbsp;Salary and welfare benefits payable | 4707 | 15921 |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | 31734 | 26284 |
| &nbsp;&nbsp;&nbsp;Other taxes payable | 1012 | 751 |
| &nbsp;&nbsp;&nbsp;Current portion of deferred revenue | 798 |  |
| &nbsp;&nbsp;&nbsp;Short-term operating lease liabilities | 3378 | 5070 |
| &nbsp;&nbsp;&nbsp;Payables due to related parties | 10354 |  |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 17459 | 214581 |
| **Total current liabilities** | **92191** | **267449** |
| &nbsp;&nbsp;&nbsp;Long-term borrowings | 10000 | 10000 |
| &nbsp;&nbsp;&nbsp;Long-term operating lease liabilities | 3362 |  |
| **Total non-current liabilities** | **13362** | **10000** |
| **Total liabilities** | **105553** | **277449** |

---

Cash flows of the discontinued operations:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | |
|  | **2023** | **2024** | **For the <br> ten months<br> ended<br> October 31,**<br>**2025** |
|  | **RMB** | **RMB** | **RMB** |
| **Net cash used in discontinued operations** |  |  |  |
| Net cash(used in) /generated from operating activities | (78967) | (29204) | 534 |
| Net cash generated from/(used in) investing activities |  | (19) |  |
| Net cash generated from/(used in) financing activities | 13972 | 23047 | (1450) |

---

**5.** **Accounts receivables, net** 

Accou**nt**s **r**eceivables are consisted of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2024** | **December 31,<br> 2025** | **December 31,<br> 2025** |
|  | **RMB** | **RMB** | **RMB** | **RMB** |
| Accounts receivable |  |  |  | 6522 |
| Less: allowance for doubtful accounts | |  | |  |
| **Accounts receivable, net** | | &nbsp;&nbsp;&nbsp;&nbsp; — | | **6,522** |

---

The accounts receivable has been fully collected subsequent to the end of the fiscal year.

**6.** **Prepayment and other current assets, net** 

The following is a summary of prepayments and other current assets:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2025** |
|  | **RMB** | **RMB** |
| Procurement advance |  | 165270 |
| Others |  | 109 |
| Less: provisions for prepayment and other current assets |  |  |
| **Total prepayment and other current assets, net** |  | **165379** |

---

The aforementioned prepayment mainly occurred as the company sought to enhance its profitability by exploring and experimenting with new methods such as live streaming and MCN business live streaming, in order to integrate with current new media. To better carry out the above-mentioned business, the company externally procured relevant equipment and systems.

Details of prepayments owed to the Company's major suppliers are summarized in the table below.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **No.** | **Counterparty** | **Nature of Goods/Services** | **Total Contract Value** | **Prepaid<br> Amount** |
|  |  |  | **RMB** | **RMB** |
| 1 | &nbsp;&nbsp;Beijing Fanyi Trading Co., Ltd. | &nbsp;&nbsp;Live-streaming equipment and platform technical support | 35761 | 28609 |
| 2 | &nbsp;&nbsp;Hangzhou Guihang Trading Co., Ltd. | &nbsp;&nbsp;Computing power equipment | 170541 | 136661 |
| **Total** |  |  | **206302** | **165270** |

---

As of the financial statements authorization date of May 8, 2026, the prepayment closing balance was RMB 165.3 million.

**7.** **Taxation** 

**a)** **Income taxes** 

**Cayman Islands**

Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company in the Cayman Islands to their shareholders, no Cayman Islands withholding tax will be imposed.

**New York**

Commencing from the year of assessment 2024, the New York's statutory income tax rate is 8%.

**Hong Kong**

Commencing from the year of assessment 2018/2019, the first HK$2.0 million of profits earned by the Group's subsidiaries incorporated in Hong Kong will be taxed at half the current tax rate (i.e., 8.25%) while the remaining profits will continue to be taxed at the existing 16.5% tax rate. Payments of dividends by the subsidiary to the Company are not subject to withholding tax in Hong Kong. The Ordinance only allows one entity within a group of "connected entities" to be eligible for the two-tier tax rate benefit. Under the Ordinance, it is an entity's election to nominate an entity that will be subject to the two-tier profits tax rate on its Profits Tax Return. The election is irrevocable. TuanChe Information elected the two-tier profits tax rate for its tax years of 2023 and 2024. TuanChe Information applies the two-tier profits tax rate for its provision for current income and deferred taxes. Other HK subsidiaries of the Company elected 16.5% tax rate.

 ****

***China***

Effective from January 1, 2008, the PRC's statutory income tax rate is 25%.

**Singapore**

The corporate income tax rate is 17%, applicable to both local and foreign companies.

**Colorado**

The corporate income tax rate is 4.4%, and the state sales tax rate is 2.9%.

Loss before provision for income taxes is attributable to the following geographic locations:

---

| | | |
|:---|:---|:---|
|  | **For the year ended <br> December 31,** | **For the year ended <br> December 31,** |
|  | **2024** | **2025** |
| PRC | (93714) | (40608) |
| Foreign | (94277) | 42878 |
| **Total (loss)/income before income taxes** | **(187991)** | **2270** |

---

**7.** **Taxation (Continued)** 

**a)** **Income taxes (Continued)** 

*Continuing operations*

---

| | | |
|:---|:---|:---|
|  | **For the year ended <br> December 31,** | **For the year ended <br> December 31,** |
|  | **2024** | **2025** |
| PRC |  | (343) |
| Foreign | (94272) | 42878 |
| **Total (loss)/income from continuing operations before income taxes** | **(94272)** | **42535** |

---

*Discontinued operations*

---

| | | |
|:---|:---|:---|
|  | **For the year ended <br> December 31,**<br>**2024** | **For the ten months ended October 31,**<br>**2025** |
| PRC | (93714) | (40265) |
| Foreign | (5) |  |
| **Total loss from discontinued operations before income taxes** | **(93719)** | **(40265)** |

---

The following table presents a reconciliation of the differences between the statutory income tax rate and the Company's effective income tax rate for the years ended December 31, 2023, 2024 and 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **December 31,** | **December 31,** | **December 31,** |
|  | **2023** | **2024** | **2025** |
|  | % | % | % |
| Statutory income tax rate of the PRC | 25.0 | 25.0 | 25.0 |
| Permanent differences | 1.2 | 6.9 | 2.6 |
| Change in valuation allowance | (19.8) | (17.7) | (18.0) |
| Effect of preferential tax rate | (5.5) |  | (5.9) |
| Effect of different tax rates in other jurisdictions (offshore entities) | (0.9) | (14.2) | (3.7) |
| Others |  |  |  |
| Effective income tax rate |  |  |  |

---

*Continuing operations*

 

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2023** | **2024** | **2025** |
|  | % | % | % |
| Statutory income tax rate of the PRC |  | 25.0 | 25.0 |
| Permanent differences |  |  | (0.2) |
| Change in valuation allowance |  | (0.4) | (7.9) |
| Effect of preferential tax rate |  |  | (0.8) |
| Effect of different tax rates in other jurisdictions (offshore entities) |  | (24.6) | (16.1) |
| Others |  |  |  |
| Effective income tax rate |  |  |  |

---

 

**7.** **Taxation (Continued)** 

**a)** **Income taxes (Continued)** 

*Discontinued operations*

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | |
|  | **December 31,** | **December 31,** | |
|  | **2023** | **2024** | **For the ten months ended**<br>**October 31,**<br>**2025** |
|  | % | % | % |
| Statutory income tax rate of the PRC | 25.0 | 25.0 | 25.0 |
| Permanent differences | 1.2 | 13.6 | 2.9 |
| Change in valuation allowance | (19.8) | (35.0) | (20.5) |
| Effect of preferential tax rate | (5.5) |  | (7.1) |
| Effect of different tax rates in other jurisdictions (offshore entities) | (0.9) | (3.6) | (0.3) |
| Others |  |  |  |
| Effective income tax rate |  |  |  |

---

**b)** **Deferred tax assets and liabilities** 

The following table presents the tax impact of significant temporary differences that give rise to the deferred tax assets as of December 31, 2024 and 2025.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2025** |
|  | **RMB** | **RMB** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Advertising expense in excess of deduction limit | 65460 | 70205 |
| &nbsp;&nbsp;&nbsp;Accrued expense and other payables | 1785 | 1839 |
| &nbsp;&nbsp;&nbsp;Allowance for doubtful accounts | 8526 | 9469 |
| &nbsp;&nbsp;&nbsp;Net operating tax loss carry forwards | 95864 | 97771 |
| &nbsp;&nbsp;&nbsp;Decrease due to disposal of subsidiaries |  | (178142) |
| Total deferred tax assets | **171635** | **1142** |
| &nbsp;&nbsp;&nbsp;Less: valuation allowance | (171635) | (1142) |
| **Net deferred tax assets** |  |  |

---

*Continuing operations*

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2025** |
|  | **RMB** | **RMB** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Net operating tax loss carry forwards | 377 | 1142 |
| Total deferred tax assets | **377** | **1142** |
| &nbsp;&nbsp;&nbsp;Less: valuation allowance | (377) | (1142) |
| **Net deferred tax assets** |  |  |

---

*Discontinued operations*

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **For the <br> ten months<br> ended<br> October 31, <br> 2025** |
|  | **RMB** | **RMB** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Advertising expense in excess of deduction limit | 65460 | 70205 |
| &nbsp;&nbsp;&nbsp;Accrued expense and other payables | 1785 | 1839 |
| &nbsp;&nbsp;&nbsp;Allowance for doubtful accounts | 8526 | 9469 |
| &nbsp;&nbsp;&nbsp;Net operating tax loss carry forwards | 95487 | 96629 |
| &nbsp;&nbsp;&nbsp;Decrease due to disposal of subsidiaries |  | (178142) |
| Total deferred tax assets | **171258** |  |
| &nbsp;&nbsp;&nbsp;Less: valuation allowance | (171258) | —) |
| **Net deferred tax assets** |  |  |

---

**7.** **Taxation (Continued)** 

**b)** **Deferred tax assets and liabilities (Continued)** 

The Group does not believe that sufficient positive evidence exists to conclude that the recoverability of the above deferred tax assets of all entities of the Group is more likely than not to be realized. The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward periods, the Group's experience with tax attributes expiring unused and tax planning alternatives. Valuation allowances have been established for deferred tax assets based on a more-likely-than-not threshold. Under the applicable accounting standards, management has considered the Group's history of losses and concluded that it is more likely than not that the Group will not generate future taxable income prior to the expiration of the majority of net operating losses. Accordingly, as of December 31, 2023, 2024 and 2025, a nil, RMB377 and RMB1,142 valuation allowance from continuing operations has been established respectively. Consequently, the Group has provided full valuation allowances on the related deferred tax assets.

The movements of the valuation allowance are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31,<br> 2023** | **December 31,<br> 2024** | **December 31,<br> 2025** |
|  | **RMB** | **RMB** | **RMB** |
| Deferred tax assets valuation allowance movement: |  |  |  |
| Balance at the beginning of the year | 145788 | 159513 | 171635 |
| Allowance made during the year | 16392 | 32703 | 8489 |
| Reduction due to unrealized NOLs and adjustments | (2667) | (20581) | (840) |
| Decrease due to disposal of subsidiaries |  |  | (178142) |
| **Balance at end of year** | **159513** | **171635** | **1142** |

---

*Continuing operations*

 

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31,<br> 2023** | **December 31,<br> 2024** | **December 31,<br> 2025** |
|  | **RMB** | **RMB** | **RMB** |
| Deferred tax assets valuation allowance movement: |  |  |  |
| Balance at the beginning of the year |  |  | 377 |
| Allowance made during the year |  | 377 | 765 |
| **Balance at end of year** |  | **377** | **1142** |

---

*Discontinued operations*

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31,<br> 2023** | **December 31,<br> 2024** | **December 31,<br> 2025** |
|  | **RMB** | **RMB** | **RMB** |
| Deferred tax assets valuation allowance movement: |  |  |  |
| Balance at the beginning of the year | 145788 | 159513 | 171258 |
| Allowance made during the year | 16392 | 32326 | 7724 |
| Reduction due to unrealized NOLs and adjustments | (2667) | (20581) | (840) |
| Decrease due to disposal of subsidiaries |  |  | (178142) |
| **Balance at end of year** | **159513** | **171258** |  |

---

**7.** **Taxation (Continued)** 

**b)** **Deferred tax assets and liabilities (Continued)** 

As of December 31, 2024 and 2025, certain entities of the Group had PRC net operating tax loss carry forwards of RMB855,071 and RMB392 respectively. As of December 31, 2024, and 2025, the Company had Hong Kong losses of RMB332 and nil respectively.

As of December 31, 2025, net operating tax loss carry forwards in PRC is expected to expire is as follows:

---

| | | |
|:---|:---|:---|
|  | **RMB** | **RMB** |
| Loss expiring in 2026 |  |  |
| Loss expiring in 2027 |  |  |
| Loss expiring in 2028 |  |  |
| Loss expiring in 2029 |  |  |
| Loss expiring in 2030 | | 392 |
|  | | **392** |

---

**c)** **Withholding income tax** 

The enterprise income tax ("EIT") Law also imposes a withholding income tax of 10% on dividends distributed by a foreign-invested entity ("FIE") to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company's jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. The Cayman Islands, where the Company incorporated, does not have such tax treaty with China. According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by a FIE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate that may be lowered to 5% (if the foreign investor owns directly at least 25% of the shares of the FIE). The State Administration of Taxation ("SAT") further promulgated Circular 601 on October 27, 2009, which provides that tax treaty benefits will be denied to "conduit" or shell companies without business substance and that a beneficial ownership analysis will be used based on a "substance-over-form" principle to determine whether or not to grant the tax treaty benefits. Further, the SAT promulgated the Notice on Issues Related to the "Beneficial Owner" in Tax Treaties in February 2018, which requires the "beneficial owner" to have ownership and the right to dispose of the income or the rights and properties giving rise to the income and generally engage in substantive business activities and sets forth certain detailed factors in determining the "beneficial owner" status.

As of December 31, 2024 and 2025, the Company did not record any such withholding tax of its subsidiaries in the PRC as they are still in accumulated deficit position.

The Company's operating subsidiaries in PRC are subject to examination by the relevant tax authorities. According to the PRC Tax Administration and Collection Law, the statute of limitation is three years and extended to five years if the amount of tax underpaid is RMB 100,000 or more. For special tax adjustments, such as transfer pricing adjustments under CFC rules, adjustments under the general anti-avoidance rules, the statute of limitation is ten years. There is no statute of limitation for tax evasion, refusal to pay tax, or defrauding of tax payment.

**d)** **Uncertain tax position** 

The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2024 and 2025, the Group did not have any unrecognized uncertain tax positions and the Group does not believe that its unrecognized tax benefits will change over the next twelve months. For the years ended December 31, 2024 and 2025, the Company did not incur any interest and penalties related to potential underpaid income tax expenses.

As of December 31, 2025, the tax years ended December 31, 2018 through 2024 for the Group's subsidiaries in the PRC are generally subject to examination by the PRC tax authorities. The tax years ended December 31, 2017 through 2024 for the Group's subsidiaries in Hong Kong are generally subject to examination by the Hong Kong tax authorities.

**8.** **Other taxes payable** 

The following is a summary of other taxes payable as of December 31, 2024 and 2025:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2025** |
|  | **RMB** | **RMB** |
| Withholding individual income taxes for employees | 6856 |  |
| VAT payables |  | 3 |
| Others |  | 1 |
| **Total** | **6856** | **4** |

---

**9.** **Payable third-party loans** 

The following is a summary of payable third-party loans as of December 31, 2024 and 2025:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2025** |
|  | **RMB** | **RMB** |
| Third-party loans | 1078 | 6208 |
| **Total** | **1078** | **6208** |

---

The following is a summary repayment term as of December 31, 2025:

---

| | | |
|:---|:---|:---|
|  | **Maturity date** | **Principal amount** |
|  |  | **RMB** |
| Loan 1 | 2026-8-26 | 1054 |
| Loan 2 | 2026-8-31 | 1154 |
| Loan 3 | 2026-3-31 | 903 |
| Loan 4 | 2026-8-31 | 304 |
| Loan 5 | 2026-11-30 | 98 |
| Loan 6 | 2026-7-31 | 984 |
| Loan 7 | 2026-9-30 | 252 |
| Loan 8 | 2026-10-31 | 706 |
| Loan 9 | 2026-11-30 | 753 |
| **Total** |  | **6208** |

---

The loans are short-term loans without interest and are all used for daily operating expenses.

**10.** **Other current liabilities** 

The following is a summary of other current liabilities as of December 31, 2024 and 2025:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2025** |
|  | **RMB** | **RMB** |
| Professional service fee | 1124 | 897 |
| Others | 406 | 9 |
| **Total** | **1530** | **906** |

---

**11.** **Employee Benefits** 

The following table presents the Group's employee welfare benefits expenses for the years ended December 31, 2023, 2024 and 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended** | **For the year ended** | **For the year ended** |
|  | **December 31,** | **December 31,** | **December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Continuing operations: |  |  |  |
| Medical and welfare defined contribution plan |  |  | 27 |
| Other employee benefits |  |  |  |
| **Total from continuing operations** |  |  | **27** |
| Discontinued operations: |  |  |  |
| Medical and welfare defined contribution plan | 11688 | 8381 | 3688 |
| Other employee benefits | 45 | 31 | 10 |
| **Total from discontinued operations** | **11733** | **8412** | **3698** |
| **Total** | **11733** | **8412** | **3725** |

---

**12.** **Share-based Compensation** 

**Description of stock option plan and Share option replacement**

In July 2012, the Group permits the grant of options of the Company to relevant directors, officers, other employees and consultants of the Company. Option awards are granted with an exercise price determined by the Board of Directors. Those option awards generally vest over a period of four years.

The Group recognizes share-based compensation expenses in the consolidated statements of operations and comprehensive loss based on awards ultimately expected to vest, after considering actual forfeitures.

The Company has replaced these share options with restricted shares for all employees and nonemployees on June 15, 2018.

In June 2018, the directors of the Company (the "Directors") approved the TuanChe Limited Share Incentive Plan (the "Share Incentive Plan"). Under the Share Incentive Plan, 38,723,321 ordinary shares were issued to Best Cars for the restricted share awards at consideration of nil. Meanwhile, the incentive share options granted to employees and nonemployees of the Company were replaced by the restricted shares. As a result of the Share Incentive Plan, on June 15, 2018, a total of 15,473,653 share options of the Company were replaced by 13,740,480 restricted shares. The restricted shares awards are subject to the original vesting schedule of the replaced share options. The Company has recognized the incremental expenses immediately for those vested share options, the unvested portion will be recognized as expenses over the remaining vesting periods.

On March 13, 2023, Directors approved the 2023 Share Incentive Plan (the "2023 Plan"), to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of the Group's business. The Group grant restricted shares under the 2023 Plan to the Group's employees, directors and consultants. Those restricted shares generally vest over a period of nil to 4 years. Under the 2023 Plan, a total of 169,172,564 Class A ordinary shares were initially reserved for issuance. As of December 31, 2024, all restricted shares have been issued and granted under the 2023 Plan.

For years ended December 31, 2023, 2024 and 2025, the Company has granted 20,900,000, 161,400,000 and nil restricted shares to its employees. The total fair value of RMB5.4 million, RMB17.8 million and nil million for those granted restricted shares will be recognized as expenses over the vesting periods of nil to 4 years.

A summary of the restricted shares activities is presented below:

---

| | | |
|:---|:---|:---|
|  | **Number of<br> restricted<br> shares** | **Weighted-<br> Average<br> Grant-Date<br> Fair Value** |
|  | | **US$** |
| **Outstanding as of December 31, 2023** | **3880000** | **0.155** |
| Granted | 161400000 | 0.015 |
| Vested | (139375000) | 0.010 |
| **Outstanding as of December 31, 2024** | **25905000** | **0.065** |
| Granted |  |  |
| Vested | 25905000 | 0.065 |
| **Outstanding as of December 31, 2025** | **—** | **—** |

---

For the years ended December 31, 2023, 2024 and 2025, total share-based compensation expenses recognized by the Group for the restricted shares granted were RMB9.5 million, RMB28.4 million and RMB24.6 million, respectively.

**13.** **Equity** 

**Ordinary shares and Pre-funded Warrant**

On November 23, 2022, the Company issued 58,472,736 ordinary shares for a registered direct offering of approximately $15.0 million. The aggregate proceeds the Company received from this offering, net of commissions and other offering expenses, were $13.7 million. The offering consisted of (1) 3,654,546 ADSs and 1,800,000 pre-funded warrants to purchase ADSs ("Pre-Funded Warrant") and (2) 5,454,546 ADSs warrants to purchase ADSs("Warrant"). Each Warrant is exercisable to purchase one ADS for $2.75 and each Pre-Funded Warrant is exercisable to purchase one ADS for $0.001. Each ADS represents sixteen (16) Class A ordinary shares of the Company. The Pre-Funded Warrant became immediately exercisable upon issuance and may be exercised at any time until all of the Pre-Funded Warrant are exercised in full. The Warrant has a term of five years from the issuance date. On November 25, 2022, 800,000 pre-funded warrants had been exercised, 12,800,000 ordinary shares were issued upon such exercise.

The Company determined that the Pre-Funded Warrant meet the requirements for equity classification. The Pre-Funded warrants were recorded at their fair value on the date of issuance as a component of total equity. In addition, since these Pre-Funded warrants are exercisable for a nominal amount, they have been shown as exercised when issued and as outstanding common stock in the consolidated financial statements and earnings per share calculations. 1,000,000 pre-funded warrants had been exercised on January 30, 2024.

On October 24, 2024, the Company issued 58,024,480 ordinary shares for a registered direct offering of approximately $1.1 million. The aggregate proceeds the Company received from this offering, net of commissions and other offering expenses, were $0.9 million. The offering consisted of (1) 241,677 ADSs and 520,042 pre-funded warrants to purchase ADSs ("Pre-Funded Warrant") and (2) 761,719 ADSs warrants to purchase ADSs("Warrant"). Each Warrant is exercisable to purchase one ADS for $1.45 and each Pre-Funded Warrant is exercisable to purchase one ADS for $0.001. Each ADS represents two hundred and forty (240) Class A ordinary shares of the Company. The Pre-Funded Warrant became immediately exercisable upon issuance and may be exercised at any time until all of the Pre-Funded Warrant are exercised in full. The Warrant has a term of five years from the issuance date. In October 2024, 520,042 pre-funded warrants had been exercised, 124,810,080 ordinary shares were issued upon such exercise.

On February 10, 2025, the Company held an annual general meeting of shareholders. Passing the resolutions that the authorized share capital be increased from US$100,000 divided into 1,000,000,000 shares comprising of (i) 800,000,000 Class A Ordinary Shares of a par value of US$0.0001 each, (ii) 60,000,000 Class B Ordinary Shares of a par value of US$0.0001 each and (iii) 140,000,000 shares of a par value of US$0.0001 each to US$3,000,000 divided into 30,000,000,000 shares comprising of (i) 24,000,000,000 Class A Ordinary Shares of a par value of US$0.0001 each, (ii) 1,800,000,000 Class B Ordinary Shares of a par value of US$0.0001 each, and (iii) 4,200,000,000 shares of a par value of US$0.0001 each of such class or classes as the Board may determine, by the creation of (i) 23,200,000,000 Class A Ordinary Shares of a par value of US$0.0001 each, (ii) 1,740,000,000 Class B Ordinary Shares of a par value of US$0.0001 each and (iii) 4,060,000,000 shares of a par value of US$0.0001 each of such class or classes as the Board may determine.

On March 3, 2025, the Company entered into certain securities purchase agreement with certain "non-U.S. Persons" (the "Purchasers") as defined in Regulation S of the Securities Act of 1933, as amended pursuant to which the Company agreed to sell up to an aggregate of 7,357,500,000 Class A ordinary shares, par value $0.0001 per share, at a price of $0.0031317 per Share, for an aggregate purchase price of approximately $23.0 million. Upon satisfying all closing conditions, the Offering was consummated on June 27, 2025. The Company issued an aggregate of 7,357,500,000 Class A Ordinary Shares to the Purchasers.

On September 11, 2025, the company issued 183,801,600 Class A Ordinary Shares due to the exercise of warrants issued on November 23, 2022.

On November 17, 2025, Directors approved the 2025 Equity Incentive Plan (the "2025 Plan"), to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of the Group's business. The Group grant restricted shares under the 2025 Plan to the Group's employees, directors and consultants. Those restricted shares generally vest over a period of nil to 5 years. On December 15, 2025, a total of 1,237,314,316 Class A ordinary shares were issued. As of December 31, 2025, there are no shares granted under the 2025 Plan.

**Warrant**

On November 23, 2022, the Warrant are classified as a liability and the fair value allocated to the Warrant was RMB36.8 million. On October 28, 2024, the Warrant are classified as a liability and the fair value allocated to the Warrant was RMB6.9 million. The warrant liability will be re-measured at each reporting period until the warrant are exercised or expire and any changes will be recognized in the statement of operations and comprehensive loss. The fair value of Warrant was RMB24.4 million as of December 31, 2025.

**14.** **Net Loss Per Share** 

As the Group incurred losses for the years ended December 31, 2023, 2024 and 2025, the potential ordinary shares including unvested restricted shares of 3,880,000, 25,905,000 and nil were anti-dilutive and excluded from the calculation of diluted net loss per share of the Company.

Effective on January 26, 2024, the Company changed the ratio of the ADSs to Class A ordinary shares from the then ADS ratio of one ADS to sixteen (16) Class A ordinary shares to a new ADS ratio of one ADS representing two hundred and forty (240) Class A ordinary shares.

Effective on August 19, 2025, the Company changed the ratio of the ADSs to Class A ordinary shares from the then ADS ratio of one ADS to two hundred and forty (240) Class A ordinary shares to a new ADS ratio of one ADS representing four thousand and eight hundred (4,800) Class A ordinary shares.

The following table sets forth the computation of basic and diluted net loss per share for the years ended December 31, 2023, 2024 and 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended <br> December 31** | **For the year ended <br> December 31** | **For the year ended <br> December 31** |
|  | **2023** | **2024** | **2025** |
| **Numerator:** |  |  |  |
| Net (loss)/income from continuing operations attributable to Token Cat Limited's shareholders | (3160) | (94272) | 42535 |
| Net loss from discontinued operations attributable to Token Cat Limited's shareholders | (79811) | (93719) | (40265) |
| Net (loss)/income attributable to Token Cat Limited's shareholders | (82971) | (187991) | 2270 |
| **Denominator:** |  |  |  |
| Weighted average number of ordinary shares outstanding, basic and diluted | 406802365 | 520221825 | 569105909 |
| Basic and diluted net (loss)/income per share from continuing operations attributable to Token Cat Limited's shareholders | (0.01) | (0.18) | 0.07 |
| Basic and diluted net loss per share from discontinued operations attributable to Token Cat Limited's shareholders | (0.19) | (0.18) | (0.07) |
| **Basic and diluted net (loss)/income per share attributable to Token Cat Limited's shareholders** | **(0.20)** | **(0.36)** | **—**  |

---

**15.** **Commitments and contingencies** 

**Litigation**

From time to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, management does not believe that the ultimate outcome of any unresolved matters, individually and in the aggregate, is reasonably possible to have a material adverse effect on the Group's financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and the Group's view of these matters may change in the future. The Group records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Group reviews the need for any such liability on a regular basis. The Group has not recorded any material liabilities in this regard as of December 31, 2024 and 2025.

**16.** **Related party transactions and balance** 

For the years ended December 31, 2025, the Company received RMB397 from CEO, Mr. Liu, which was used for operations of the company. The other current liabilities balance due to CEO are nil and RMB397 as of December 31, 2024 and 2025.

**17.** **Fair Value Measurement** 

**Assets measured at fair value on a nonrecurring basis**

The Company measured its property, equipment and software, equity investments, intangible assets and goodwill at fair value on a nonrecurring basis whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable.

**Assets and liabilities measured at fair value on a recurring basis**

The Company measured its warrant at fair value on a recurring basis. As the Company's warrant is not traded in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of warrant. This instrument is categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. The Company did not transfer any assets or liabilities in or out of level 3 during the years ended December 31, 2025.

The following table presents the fair value hierarchy for the Group's liabilities that are measured and recorded at fair value as of December 31, 2024 and 2025:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2024** | **2024** | **2024** | **2025** | **2025** | **2025** | **2025** |
|  | **Level 1<br> Inputs** | **Level 2<br> Inputs** | **Level 3<br> Inputs** | **Level 1<br> Inputs** | **Level 2<br> Inputs** | **Level 3<br> Inputs** | **Balance at fair value** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **US$** |
| Warrant liability |  |  | 68556 |  |  | 24377 | 3486 |

---

On November 23, 2022, October 28, 2024, the Group issued 5,454,546 and 761,719 ADSs warrants, respectively. The warrants entitle the holder to purchase one ADS of our common stock at an exercise price equal to US$2.75 and US$1.45 per ADS at any time on or after their issuance date and on or prior to the close of business 5 years after the issuance date (the "Termination Date"). The Group determined that these warrants are free standing financial instruments that are legally detachable and separately exercisable from the common stock included in the public share offering. The Group evaluates the warrants under Accounting Standards Codification ("ASC") 815-40, Derivatives and Hedging—Contracts in Entity's Own Equity. Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of warrant liability in the consolidated statement of operations and comprehensive loss.

On October 24, 2024, the Group pursuant to Section 3(b) of the ADS Warrant, the number of ADSs issued on November 23, 2022 has been adjusted from 5,454,546 to10,349,111 ADSs warrants with US$1.45 strike. On February 28, 2025,the Group pursuant to Section 3(a) and 3(c) of the ADS Warrant, the number of ADSs issued on November 23, 2022 has been adjusted from 10,349,111 to19,957,214 ADSs warrants with US$0.75161 strike. On September 11, 2025, the warrants issued on November 23, 2022 had 2,946,220 ADSs warrants exercised.

On February 28, 2025,the Group pursuant to Section 3(a) and 3(c) of the ADS Warrant, the number of ADSs issued on October 28, 2024 has been adjusted from 761,719 to1,468,898 ADSs warrants with US$0.75161 strike.

The Company adopted Black Scholes model to assess the warrant's fair value. Management is responsible for determining the fair value and assessing a number of factors. The valuation involves complex and subjective judgements as well as the Company's best estimates on the valuation date. Key inputs related to the Black Scholes model for the valuation of the fair value of warrants are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Issuance date<br> November 23,<br> 2022** | **As of<br> December 31,<br> 2023** | **As of<br> December 31,<br> 2024** | **As of<br> December 31,<br> 2025** |
| Expiration of warrant (years) | 5 | 3.9 | 2.9 | 1.9 |
| Stock price per ADS (US$) | 1.17 | 0.20 | 1.13 | 0.35 |
| Exercise price per ADS (US$) | 2.75 | 2.75 | 1.45 | 0.75 |
| Risk-free rate | 3.96% | 3.92% | 4.27% | 3.73% |
| Dividend yield |  |  |  |  |
| Standard derivation in the value of stock | 132.3% | 132.8% | 140.7% | 135.7% |
| Calculated fair value per ADS (US$) | 0.95 | 0.10 | 0.85 | 0.18 |

---

**17.** **Fair Value Measurement (Continued)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Issuance date<br> October 28,<br> 2024** | **As of<br> December 31,<br> 2024** | **As of<br> December 31,<br> 2025** |
| Expiration of warrant (years) | 5 | 4.8 | 3.8 |
| Stock price per ADS (US$) | 1.48 | 1.13 | 0.35 |
| Exercise price per ADS (US$) | 1.45 | 1.45 | 0.75 |
| Risk-free rate | 4.11% | 4.37% | 3.73% |
| Dividend yield |  |  |  |
| Standard derivation in the value of stock | 125.4% | 127.8% | 135.7% |
| Calculated fair value per ADS (US$) | 1.27 | 0.95 | 0.26 |

---

The warrants outstanding and fair values at each of the respective valuation dates of the warrants issued on November 23, 2022 are summarized below:

---

| | | | |
|:---|:---|:---|:---|
|  | **Warrants<br> Outstanding<br> Issued on<br> November 23,<br> 2022** | **Calculated Fair<br> Value per ADS** | **Fair <br> Value** |
|  | | **US$** | **RMB** |
| **Fair Value as of November 23, 2022** | **5454546** | **0.95** | **36838** |
| Gain on change in fair value of warrant liability |  |  | (11219) |
| Effect of exchange rate changes |  |  | (1243) |
| **Fair Value as of December 31, 2022** | **5454546** | **0.64** | **24376** |
| Gain on change in fair value of warrant liability |  |  | (20732) |
| Effect of exchange rate changes |  |  | 308 |
| **Fair Value as of December 31, 2023** | **5454546** | **0.10** | **3952** |
| Modification of warrants | 4894565 |  |  |
| Loss on change in fair value of warrant liability |  |  | 58818 |
| Effect of exchange rate changes |  |  | 610 |
| **Fair Value as of December 31, 2024** | **10349111** | **0.85** | **63380** |
| Modification of warrants | 9608103 |  |  |
| Loss on change in fair value of warrant liability |  |  | (25630) |
| Exercised | (2946220) |  | (15080) |
| Effect of exchange rate changes |  |  | (998) |
| **Fair Value as of December 31, 2025** | **17010994** | **0.18** | **21672** |

---

The warrants outstanding and fair values at each of the respective valuation dates of the warrants issued on October 28, 2024 are summarized below:

---

| | | | |
|:---|:---|:---|:---|
|  | **Warrants<br> Outstanding<br> Issued on<br> October 28,<br> 2024** | **Calculated Fair<br> Value per ADS** | **Fair <br> Value** |
|  | | **US$** | **RMB** |
| **Fair Value as of October 28, 2024** | **761719** | **1.27** | **6888** |
| Gain on change in fair value of warrant liability |  |  | (1752) |
| Effect of exchange rate changes |  |  | 40 |
| **Fair Value as of December 31, 2024** | **761719** | **0.95** | **5176** |
| Modification of warrants | 707179 |  |  |
| Gain on change in fair value of warrant liability |  |  | (2394) |
| Effect of exchange rate changes |  |  | (77) |
| **Fair Value as of December 31, 2024** | **1468898** | **0.26** | **2705** |

---

**17.** **Fair Value Measurement (Continued)** 

The following table summarizes the activities related to fair value of the warrants issued on November 23, 2022 and October 28, 2024:

---

| | | |
|:---|:---|:---|
|  | **For the Year Ended<br> December 31,** | **For the Year Ended<br> December 31,** |
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
| Fair value of warrants at beginning of the year (Level 3) | 3952 | 68556 |
| Issuances | 6888 |  |
| Exercised |  | (15080) |
| Change in fair value | 57066 | (28024) |
| Effect of exchange rate changes | 650 | (1075) |
| **Fair value of warrants at end of the year (Level 3)** | **68556** | **24377** |

---

**18.** **Restricted Net Assets** 

Relevant PRC laws and regulations permit PRC companies to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Additionally, the Company's PRC subsidiaries can only distribute dividends upon approval of the shareholders after they have met the PRC requirements for appropriation to the general reserve fund and the statutory surplus fund respectively. The general reserve fund and the statutory surplus fund require that annual appropriations of 10% of net after-tax income should be set aside prior to payment of any dividends. As a result of these and other restrictions under PRC laws and regulations, the PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company either in the form of dividends, loans or advances, which restricted portion amounted to nil as of December 31, 2025 including the paid-in capital, additional paid-in capital and the statutory reserves of the Company's PRC subsidiaries. Even though the Company currently does not require any such dividends, loans or advances from the PRC subsidiaries for working capital and other funding purposes, the Company may in the future require additional cash resources from its PRC subsidiaries due to changes in business conditions, to fund future acquisitions and developments, or merely declare and pay dividends to or distributions to the Company's shareholders.

**19.** **Subsequent event** 

On March 17, 2026, the Group adopted the 2026 Share Incentive Plan (the "2026 Plan"), to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. The Group may grant options, restricted shares, restricted share units and other equity-based awards under the 2026 Plan to its employees, directors and consultants. Under the 2026 Plan, a total of 21,139,467,404 Class A ordinary shares were initially reserved for issuance. As of the date of these consolidated financial statements, there were nil restricted shares issued and nil restricted shares outstanding under the 2026 Plan.

On February 12, 2026, the Company entered into certain securities purchase agreement with certain non-U.S. investors pursuant to which the Company agreed to sell to the purchasers an aggregate of 96,000,000,001 Class A ordinary shares, par value US$0.0001 per share, at a price of $0.0012457 per share to purchase an aggregate of 96,000,000,001 class A Ordinary Shares, for the aggregate purchase price of approximately $119,590,000, which purchase price should be paid by the purchasers in fiat money or in cryptocurrencies, in the sole discretion of the Company. On February 18, the Company has issued an aggregate of 96,000,000,001 Class A Ordinary Shares to the Purchasers.

Effective February 6, 2026, Mr. Jintao Lin resigned as a director of the Company. Effective February 6, 2026, the Board appointed Ms.Furong Tian as a director of the Company and the chair of the Audit Committee.

On February 24 and 28, 2026, the company issued 60,000,000 and 96,000,000 Class A Ordinary Shares due to the exercise of warrants issued on November 23, 2022.

The Group evaluated subsequent events through May 8, 2026, the date on which the consolidated financial statements were issued, the Group did not identify any other subsequent events that require recognition and disclosure in the consolidated financial statements.

## Exhibit 2.4

**Exhibit 2.4**

**Description of rights of each class of securities**

**registered under Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act")**

American Depositary Shares ("ADSs"), each representing 4,800 Class A ordinary shares of Token Cat Limited ("we," "our," "our company," or "us"), are listed and traded on the Nasdaq Capital Market and, in connection with this listing (but not for trading), the Class A ordinary shares are registered under Section 12(b) of the Exchange Act. This exhibit contains a description of the rights of (i) the holders of Class A ordinary shares, (ii) the holders of ADSs, (iii) the holders of the warrants and pre-funded warrants. Class A ordinary shares underlying the ADSs are held by The Bank of New York Mellon, as depositary, and holders of ADSs will not be treated as holders of the Class A ordinary shares.

**Description of Class A Ordinary Shares**

The following is a summary of material provisions of our currently effective eighth amended and restated memorandum and articles of association (the "Memorandum and Articles of Association"), as well as the Companies Act (as amended) of the Cayman Islands (the "Companies Act") insofar as they relate to the material terms of our ordinary shares. Notwithstanding this, because it is a summary, it may not contain all the information that you may otherwise deem important. For more complete information, you should read the entire Ninth Amended and Restated Memorandum and Articles of Association, which was filed as Exhibit 3.1 to our Form 6-K filed with the Securities and Exchange Commission on February 3, 2026.

***Type and Class of Securities (Item 9.A.5 of Form 20-F)***

The par value of Class A ordinary share is US$0.0001 per share. The number of Class A ordinary shares that had been issued as of the end of the latest fiscal year is provided on the cover of the annual report on Form 20-F for the latest fiscal year. Certificates representing the ordinary shares are issued in registered form. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their ordinary shares. Our authorized share capital consists of US$480,600,000 divided into 4,806,000,000,000 shares comprising of (i) 4,800,000,000,000 Class A Ordinary Shares of a par value of US$0.0001 each, (ii) 1,800,000,000 Class B Ordinary Shares of a par value of US$0.0001 each and (iii) 4,200,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with Article 9 of the articles of association of the Company.

***Preemptive Rights (Item 9.A.3 of Form 20-F)***

Our shareholders do not have preemptive rights.

***Limitations or Qualifications (Item 9.A.6 of Form 20-F)***

We have a dual-class voting structure such that our ordinary shares consist of Class A ordinary shares and Class B ordinary shares. Each Class A ordinary share shall entitle the holder thereof to one vote on all matters subject to the vote at general meetings of our company, and each Class B ordinary share shall entitle the holder thereof to one hundred (100) votes on all matters subject to the vote at general meetings of our company. Due to the super voting power conferred upon holders of Class B ordinary shares, the voting power of holders of our Class A ordinary shares may be materially limited.

***Rights of Other Types of Securities (Item 9.A.7 of Form 20-F)***

Not applicable.

***Rights of Class A Ordinary Shares (Item 10.B.3 of Form 20-F)***

*Classes of Ordinary Shares*

Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. Holders of our Class A ordinary shares and Class B ordinary shares will have the same rights except for voting and conversion rights. Our ordinary shares are issued in registered form and are issued when registered in our register of shareholders. We may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their shares.

*Conversion*

Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of any Class B ordinary share by a holder thereof to any person who is not an Affiliate (as defined in our Memorandum and Articles of Association) of such holder, or upon a change of ultimate beneficial ownership of any Class B ordinary share to any person or entity who is not an Affiliate of the registered holder of such share, such Class B ordinary shares will be automatically and immediately converted into an equal number of Class A ordinary shares.

*Dividends*

The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors, subject to our Memorandum and Articles of Association. In addition, our shareholders may by an ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. Our Memorandum and Articles of Association provide that our directors may, before recommending or declaring any dividend, set aside out of the funds legally available for distribution such sums as they think proper as a reserve or reserves which shall, in the absolute discretion of our directors, be applicable for meeting contingencies or for equalising dividends or for any other purpose to which those funds may be properly applied. Under the laws of the Cayman Islands, our company may pay a dividend out of either our profits or share premium account, provided that in no circumstances may a dividend be paid if, immediately after this payment, this would result in our company being unable to pay its debts as they fall due in the ordinary course of business.

*Voting Rights*

Holders of Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote by our shareholders, except as may otherwise be required by law or provided for in our Memorandum and Articles of Association. In respect of matters requiring shareholders' vote, each Class A ordinary share entitles the holder thereof to one vote, and each Class B ordinary share entitles the holder thereof to 100 votes. Voting at any shareholders' meeting is by show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded. A poll may be demanded by the chairman of such meeting or any shareholder present in person or by proxy at the meeting.

An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast by those shareholders entitled to vote who are present in person or by proxy at a general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast attaching to the outstanding ordinary shares cast by those shareholders entitled to vote who are present or by proxy at a general meeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of our company, as permitted by the Companies Act and our Memorandum and Articles of Association. A special resolution will be required for important matters such as a change of name or making changes to our Memorandum and Articles of Association. We may, among other things, subdivide or consolidate our shares by ordinary resolution.

*General Meetings of Shareholders.*

As a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders' annual general meetings. Our Memorandum and Articles of Association provide that we may (but are not obliged to) in each year hold a general meeting as our annual general meeting in which case we shall specify the meeting as such in the notices calling it, and the annual general meeting shall be held at such time and place as may be determined by our directors.

Shareholders' general meetings may be convened by the chairman of our board of directors or a majority of our board of directors. Advance notice of at least seven (7) calendar days is required for the convening of our annual general shareholders' meeting (if any) and any other general meeting of our shareholders. A quorum required for any general meeting of shareholders consists of one or more shareholder present or by proxy or, if a corporation or other non-natural person by its duly authorized representative, representing not less than one-third of all votes attaching to the issued and outstanding shares in our company entitled to vote at general meetings.

The Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company's articles of association. Our Memorandum and Articles of Association provide that upon the requisition of shareholders representing in aggregate not less than one-third (1/3) of all votes attaching to the issued and outstanding shares of our company entitled to vote at general meetings as at the date of the deposit of the requisition, our board is obliged to convene an extraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting. However, our Memorandum and Articles of Association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders.

*Transfer of Ordinary Shares*

Subject to the restrictions in our Memorandum and Articles of Association as set out below, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by our board of directors.

Our board of directors may, in its absolute discretion, decline to register any transfer of any share which is not fully paid up or on which we have a lien. Our board of directors may also decline to register any transfer of any share unless:

● the instrument of transfer is lodged with us, accompanied by the certificate for the shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

● the instrument of transfer is in respect of only one class of shares;

● the instrument of transfer is properly stamped, if required;

● in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four; and

● a fee of such maximum sum as NASDAQ may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof.

If our directors refuse to register a transfer they shall, within three calendar months after the date on which the transfer was lodged with us, send to each of the transferor and the transferee notice of such refusal.

The registration of transfers may, after compliance with any notice requirement of NASDAQ, be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 calendar days in any calendar year as our board may determine.

*Liquidation*

On a return of capital or the winding up of our company, if the assets available for distribution amongst our shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst our shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay the whole of the share capital, the assets will be distributed so that the losses are borne by our shareholders in proportion to the par value of the shares held by them.

 

*Calls on Shares and Forfeiture of Shares*

 

Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 calendar days prior to the specified time and place of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.

*Redemption, Repurchase and Surrender of Shares*

 

We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders of these shares, on such terms and in such manner as may be determined by our board of directors or by the shareholders by special resolution. Our company may also repurchase any of our shares (including any redeemable shares) on such terms and in such manner as have been approved by our board of directors or by an ordinary resolution of our shareholders. Under the Companies Act, the redemption or repurchase of any share may be paid out of our company's profits or out of the proceeds of a new issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if our company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding or (c) if our company has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.

*Inspection of Books and Records*

 

Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records (save for our Memorandum and Articles, special resolutions of shareholders and our register of mortgages and charges). See "Where You Can Find More Information."

***Requirements to Change the Rights of Holders of Class A Ordinary Shares (Item 10.B.4 of Form 20-F)***

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*Variations of Rights of Shares*

 

If at any time, our share capital is divided into different classes of shares, the rights attached to any class of shares may, subject to any rights or restrictions for the time being attached to any class, be materially adversely varied with the consent in writing of the holders of two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of the class or series. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, subject to any rights or restrictions for the time being attached to the Shares of that class, be deemed to be materially adversely varied by, inter alia, the creation, allotment or issue of further Shares ranking pari passu with or subsequent to them or the redemption or purchase of any shares of any class by our company. The rights of the holders of shares shall not be deemed to be materially adversely varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights.

***Limitations on the Rights to Own Class A Ordinary Shares (Item 10.B.6 of Form 20-F)***

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There are no limitations under the laws of the Cayman Islands or under the Memorandum and Articles of Association that limit the right of non-resident or foreign owners to hold or vote Class A ordinary shares, other than anti-takeover provisions contained in the Memorandum and Articles of Association which may limit the ability of others to acquire control of our company or cause our company to engage in change-of-control transactions.

***Provisions Affecting Any Change of Control (Item 10.B.7 of Form 20-F)***

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*Anti-Takeover Provisions*

 

Some provisions of our Memorandum and Articles of Association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:

● authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders; and

● limit the ability of shareholders to requisition and convene general meetings of shareholders.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our Memorandum and Articles of Association for a proper purpose and for what they believe in good faith to be in the best interests of our company.

***Ownership Threshold (Item 10.B.8 of Form 20-F)***

There are no provisions under Cayman Islands law applicable to the Company, or under the Memorandum and Articles of Association, the Company to disclose shareholder ownership above any particular ownership threshold.

***Differences Between the Law of Different Jurisdictions (Item 10.B.9 of Form 20-F)***

The Companies Act is derived, to a large extent, from the older Companies Acts of England, but does not follow recent English statutory enactments and accordingly there are significant differences between the Companies Act and the current Companies Act of England. In addition, the Companies Act differs from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

*Mergers and Similar Arrangements*

The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (1) "merger" means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (2) a "consolidation" means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company's articles of association. The plan must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a declaration as to the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders of that Cayman subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that member agrees otherwise. For this purpose a company is a "parent" of a subsidiary if it holds issued shares that together represent at least 90% of the votes at a general meeting of the subsidiary.

The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands.

Save in certain limited circumstances, a shareholder of a Cayman constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting to the merger or consolidation, provide the dissenting shareholder complies strictly with the procedures set out in the Companies Act. The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.

Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the Grand Court of the Cayman Islands can be expected to approve the arrangement if it determines that:

● the statutory provisions as to the required majority vote have been met;

● the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;

● the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and

● the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.

The Companies Act also contains a statutory power of compulsory acquisition which may facilitate the "squeeze out" of dissentient minority shareholder upon a tender offer. When a tender offer is made and accepted by holders of 90% of the shares affected within four months, the offeror may, within a two-month period commencing on the expiration of such four month period, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.

If an arrangement and reconstruction is thus approved, or if a tender offer is made and accepted, a dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

*Shareholders' Suits*

 

In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company, and as a general rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands court can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto) which permit a minority shareholder to commence a class action against or derivative actions in the name of our company to challenge actions where:

● a company acts or proposes to act illegally or ultra vires and is therefore incapable of ratification by the shareholders;

● the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and

● those who control our company are perpetrating a "fraud on the minority."

*Indemnification of Directors and Executive Officers and Limitation of Liability*

 

Cayman Islands law does not limit the extent to which a company's memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Memorandum and Articles of Association provide that that we shall indemnify our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such directors or officer, other than by reason of such person's dishonesty, willful default or fraud, in or about the conduct of our company's business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.

In addition, we have entered into indemnification agreements with our directors and executive officers that provide such persons with additional indemnification beyond that provided in our Memorandum and Articles of Association.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

*Directors' Fiduciary Duties*

 

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to our company and therefore it is considered that he owes the following duties to our company, including a duty to act bona fide in the best interests of our company, a duty not to make a profit based on his position as director (unless our company permits him to do so), a duty not to put himself in a position where the interests of our company conflict with his personal interest or his duty to a third party, and a duty to exercise powers for the purpose for which such powers were intended. A director of a Cayman Islands company owes to our company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.

*Shareholder Action by Written Consent*

 

Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. The Companies Act and our Memorandum and Articles of Association provide that our shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.

*Shareholder Proposals*

 

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

The Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company's articles of association. Our Memorandum and Articles of Association allow our shareholders holding in aggregate not less than one-third of all votes attaching to the issued and outstanding shares of our company entitled to vote at general meetings to requisition an extraordinary general meeting of our shareholders, in which case our board is obliged to convene an extraordinary general meeting and to put the resolutions so requisitioned to a vote at such meeting. Other than this right to requisition a shareholders' meeting, our Memorandum and Articles of Association do not provide our shareholders with any other right to put proposals before annual general meetings or extraordinary general meetings. As an exempted Cayman Islands company, we may but are not obliged by law to call shareholders' annual general meetings.

*Cumulative Voting*

 

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation's certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder's voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but our Memorandum and Articles of Association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

*Removal of Directors*

 

Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our Memorandum and Articles of Association, directors may be removed with or without cause, by an ordinary resolution of our shareholders. An appointment of a director may be on terms that the director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between the Company and the director, if any; but no such term shall be implied in the absence of express provision. Each director whose term of office expires shall be eligible for re-election at a meeting of the Shareholders or reappointment by the Board. In addition, a director's office shall be vacated if the director (1) becomes bankrupt or makes any arrangement or composition with his creditors; (2) dies or is found to be or becomes of unsound mind; (3) resigns his office by notice in writing to our company; (4) without special leave of absence from our board of directors, is absent from three consecutive meetings of the board and the board resolves that his office be vacated; or (5) is removed from office pursuant to any other provisions of our Memorandum and Articles of Association.

*Transactions with Interested Shareholders*

 

The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an "interested shareholder" for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target's outstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target's board of directors.

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, the directors of the Company are required to comply with the fiduciary duties which they owe to our company under Cayman Islands law, including the duty to ensure that, in their opinion, any such transaction are entered into bona fide in the best interests of our company, and are entered into for proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.

*Dissolution; Winding Up*

 

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation's outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.

Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if our company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so. Under the Companies Act and our Memorandum and Articles of Association, our company may be dissolved, liquidated or wound up by a special resolution of our shareholders.

*Variation of Rights of Shares*

 

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Islands law and our Memorandum and Articles of Association, if our share capital is divided into more than one class of shares, we may materially adversely vary the rights attached to any class with the written consent of the holders of two-thirds of the issued shares of that class or with the sanction of ordinary special resolution passed at a separate meeting of the holders of the shares of that class.

*Amendment of Governing Documents*

 

Under the Delaware General Corporation Law, a corporation's governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under the Companies Act and our Memorandum and Articles of Association, our memorandum and articles of association may only be amended by a special resolution of our shareholders.

*Rights of Non-Resident or Foreign Shareholders*

 

There are no limitations imposed by our Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our Memorandum and Articles of Association that require the Company to disclose shareholder ownership above any particular ownership threshold.

***Changes in Capital (Item 10.B.10 of Form 20-F)***

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Our shareholders may from time to time by ordinary resolution:

● increase our share capital by such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe;

● consolidate and divide all or any of our share capital into shares of a larger amount than our existing shares;

● sub-divide our existing shares, or any of them into shares of a smaller amount as fixed by the Memorandum and Articles of Association, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; or

● cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled.

Our shareholders may by special resolution reduce our share capital or any capital redemption reserve in any manner permitted by law.

**Debt Securities (Item 12.A of Form 20-F)**

Not applicable.

**Warrants and Rights (Item 12.B of Form 20-F)**

On November 25, 2022, we completed a registered direct offering with investors for the purchase and sale of (1) 3,654,546 ADSs, (2) certain pre-funded warrants to purchase 1,800,000 ADSs (the "Pre-Funded Warrants") in lieu of the ADSs being offered, and (3) certain warrants to purchase up to 5,454,546 ADSs (the "Warrants"), to certain institutional investors pursuant to a securities purchase agreement dated November 21, 2022.

***The Warrants***

The following summary of certain terms and provisions of the Warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions of the Warrants that are incorporated by reference to this prospectus supplement and accompanying prospectus. You should carefully review the terms and provisions of the Warrants for a complete description of the terms and conditions of the Warrants.

*Exercise Price and Duration of the Warrants*. Each ADS, representing the underlying Class A ordinary shares, exercisable pursuant to Warrants will have an exercise price per ADS of US$2.75. The Warrants are exercisable immediately upon issuance, and at any time thereafter up to the fifth anniversary of the issuance date. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and splits, subsequent equity sales, subsequent rights offerings, distributions, fundamental transactions or similar events affecting our Class A ordinary share and also upon any distributions of assets, including cash, stock or other property to our shareholders. No fractional shares will be issued upon exercise of the Warrants. A Warrant holder may exercise its Warrants only for a whole number of shares.

*Exercisability.* The Warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the Class A ordinary shares underlying the Warrants under the Securities Act is effective and available for the issuance of such shares, or an exemption from registration under the Securities Act is available for the issuance of such shares, by payment in full in immediately available funds for the number of Class A ordinary shares represented by the ADSs purchased upon such exercise.

Cashless Exercise. If at the time of exercise there is no effective registration statement registering, or the prospectus contained therein is not available for the resale of the Class A ordinary shares represented by the ADSs underlying the Warrants, then the Warrants may also be exercised, in whole or in part, at such time by means of a cashless exercise, in which case the holder would receive upon such exercise the net number of Class A ordinary shares represented by the ADSs determined according to the formula set forth in the Warrants. Upon the expiry of the fifth anniversary of the issuance date, the Warrants will be automatically exercised via the cashless exercise mechanism.

*Exercise Limitation.* A holder will not have the right to exercise any portion of the Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or, upon the election of the holder, 9.99%) of the number of Class A ordinary shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. However, any holder may increase or decrease such percentage, provided that any increase will not be effective until the 61st day after such election.

*Transferability*. Subject to applicable laws, the Warrants may be transferred, in whole or in part, at the option of the holder, upon surrender of the Warrants to us or our designated agent, together with the appropriate instruments of transfer.

*Trading Market*. There is no established public trading market for the Warrants being issued in this Offering, and we do not expect a market to develop. We do not intend to apply for listing of the Warrants on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the Warrants will be limited.

*Fundamental Transactions*. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power that we may exercise and will assume all of our obligations under the Warrants with the same effect as if such successor entity had been named in the warrant document itself. If holders of our Class A ordinary shares are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to the consideration it receives upon any exercise of the Warrants following such fundamental transaction. In addition, in certain circumstances, upon a fundamental transaction, the holder will have the right to require us to repurchase its the Warrants at its fair value using the Black Scholes option pricing formula; provided, however, that, if the fundamental transaction is not within our control, including not approved by our board of directors, then the holder shall only be entitled to receive the same type or form of consideration (and in the same proportion), at the Black Scholes value of the unexercised portion of the Warrants, that is being offered and paid to the holders of our Class A ordinary shares in connection with the fundamental transaction.

*Rights as a Shareholder*. Except as otherwise provided in the Warrants or by virtue of such holder's ownership of our Class A ordinary shares, the holder of a Warrant does not have the rights or privileges of a holder of our Class A ordinary shares, including any voting rights, until the holder exercises the Warrants.

*Amendment and Waiver*. The Warrants may be modified or amended or the provisions thereof waived with the written consent of our company on the one the hand and a holder on the other hand.

***Pre-Funded Warrants***

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The following summary of certain terms and provisions of the Pre-Funded Warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions of the Pre-Funded Warrants that are incorporated by reference to this prospectus supplement and accompanying prospectus. You should carefully review the terms and provisions of Pre-Funded Warrants for a complete description of the terms and conditions of the Pre-Funded Warrants.

The term "pre-funded" refers to the fact that the purchase price of the ADSs in this offering includes almost the entire exercise price that will be paid under the Pre-Funded Warrants, except for a nominal remaining exercise price of US$0.001 per ADS. The purpose of the Pre-Funded Warrants is to enable investors that may have restrictions on their ability to beneficially own more than 4.99% (or, upon election of the holder, 9.99%) of our outstanding Class A ordinary shares following the consummation of this Offering the opportunity to make an investment in our Company without triggering their ownership restrictions, by receiving Pre-Funded Warrants in lieu of our ADSs which would result in such ownership of more than 4.99% (or 9.99%) of our outstanding ordinary shares, and receive the ability to exercise their option to purchase the shares underlying the Pre-Funded Warrants at such nominal price at a later date.

 

*Duration and Exercise Price*. Each Pre-Funded Warrant offered hereby has an initial exercise price of US$0.001. The Pre-Funded Warrants are immediately exercisable and may be exercised at any time until the Pre-Funded Warrants are exercised in full. The exercise price and number of ADSs, representing the underlying Class A ordinary shares, issuable upon exercise is subject to appropriate adjustment in the event of stock dividends and splits, subsequent equity sales, subsequent rights offerings, distributions, fundamental transactions or similar events affecting our ADSs and the exercise price.

*Exercisability*. The Pre-Funded Warrants are exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of ADSs purchased upon such exercise (except in the case of a cashless exercise as discussed below). Purchasers of the Pre-Funded Warrants in this offering may elect to deliver their exercise notice following the pricing of the offering and prior to the issuance of the Pre-Funded Warrants at closing to have their Pre-Funded Warrants exercised immediately upon issuance and receive ADSs underlying the Pre-Funded Warrants upon closing of this offering. A holder (together with its affiliates) may not exercise any portion of the Pre-Funded Warrants to the extent that the holder would own more than 4.99% (or, upon election of the holder, 9.99%) of the outstanding ordinary shares. No fractional ADSs will be issued in connection with the exercise of a Pre-Funded Warrant. In lieu of fractional shares, we will round up to the next whole share.

*Cashless Exercise*. In lieu of making the cash payment otherwise contemplated to be made to us upon exercise of a Pre-Funded Warrant in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of ADSs determined according to a formula set forth in the Pre-Funded Warrants.

*Transferability*. Subject to applicable laws, a Pre-Funded Warrant may be transferred, in whole or in part, at the option of the holder upon surrender of the Pre-Funded Warrants to us or our designated agent, together with the appropriate instruments of transfer.

*Trading Market*. There is no established public trading market for the Pre-Funded Warrants being issued in this offering, and we do not expect a market to develop. We do not intend to apply for listing of the Pre-Funded Warrants on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the Pre-Funded Warrants will be limited.

**Other Securities (Item 12.C of Form 20-F)**

Not applicable.

**Description of American Depositary Shares (Items 12.D.1 and 12.D.2 of Form 20-F)**

The Bank of New York Mellon, as depositary, will register and deliver the ADSs. Each ADS represents ownership of 16 Class A ordinary shares, deposited with The Hongkong and Shanghai Banking Corporation Limited, as custodian for the depositary in Hong Kong. Each ADS will also represent any other securities, cash or other property which may be held by the depositary. The deposited Class A ordinary shares together with any other securities, cash or other property held by the depositary are referred to as the deposited securities. The depositary's principal executive office at which the ADSs will be administered is located at 240 Greenwich Street, New York, New York 10286.

You may hold ADSs either (A) directly (i) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (ii) by having uncertificated ADSs registered in your name, or (B) indirectly by holding a security entitlement in ADSs through your broker or other financial institution that is a direct or indirect participant in The Depository Trust Company, also called DTC. If you hold ADSs directly, you are a registered ADS holder, also referred to as an ADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.

Registered holders of uncertificated ADSs will receive statements from the depositary confirming their holdings.

As an ADS holder, we will not treat you as one of our shareholders and you will not have shareholder rights. The laws of the Cayman Islands govern shareholder rights. The depositary will be the holder of the Class A ordinary shares underlying your ADSs. As a registered holder of ADSs, you will have ADS holder rights. A deposit agreement among us, the depositary, ADS holders and all other persons indirectly or beneficially holding ADSs sets out ADS holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADSs.

The following is a summary of the material provisions of the deposit agreement. For more complete information, you should read the entire deposit agreement and the form of ADR which contains the terms of your ADSs. The deposit agreement has been filed with the SEC as an exhibit to a Registration Statement on Form F-6 (File No. 333-227940) for our company. The form of ADR is on file with the SEC (as a prospectus) and was filed on October 23, 2018.

***Dividends and Other Distributions***

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*How will you receive dividends and other distributions on the Class A ordinary shares?*

 

The depositary has agreed to pay or distribute to ADS holders the cash dividends or other distributions it or the custodian receives on Class A ordinary shares or other deposited securities, upon payment or deduction of its fees and expenses. You will receive these distributions in proportion to the number of Class A ordinary shares your ADSs represent.

● *Cash*. The depositary will convert any cash dividend or other cash distribution we pay on the Class A ordinary shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any government approval is needed and cannot be obtained, the deposit agreement allows the depositary to distribute the foreign currency only to those ADS holders to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account of the ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest.

Before making a distribution, any withholding taxes, or other governmental charges that must be paid will be deducted. See "Taxation." The depositary will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, you may lose some of the value of the distribution.

● *Class A Ordinary Shares*. The depositary may distribute additional ADSs representing any Class A ordinary shares we distribute as a dividend or free distribution. The depositary will only distribute whole ADSs. It will sell Class A ordinary shares which would require it to deliver a fraction of an ADS (or ADSs representing those Class A ordinary shares) and distribute the net proceeds in the same way as it does with cash. If the depositary does not distribute additional ADSs, the outstanding ADSs will also represent the new Class A ordinary shares. The depositary may sell a portion of the distributed Class A ordinary shares (or ADSs representing those Class A ordinary shares) sufficient to pay its fees and expenses in connection with that distribution.

● *Rights to purchase additional shares*. If we offer holders of our securities any rights to subscribe for additional shares or any other rights, the depositary may (1) exercise those rights on behalf of ADS holders, (2) distribute those rights to ADS holders or (3) sell those rights and distribute the net proceeds to ADS holders, in each case after deduction or upon payment of its fees and expenses. To the extent the depositary does not do any of those things, it will allow the rights to lapse. In that case, you will receive no value for them. The depositary will exercise or distribute rights only if we ask it to and provide satisfactory assurances to the depositary that it is legal to do so. If the depositary will exercise rights, it will purchase the securities to which the rights relate and distribute those securities or, in the case of Class A ordinary shares, new ADSs representing the new Class A ordinary shares, to subscribing ADS holders, but only if ADS holders have paid the exercise price to the depositary. U.S. securities laws may restrict the ability of the depositary to distribute rights or ADSs or other securities issued on exercise of rights to all or certain ADS holders, and the securities distributed may be subject to restrictions on transfer.

● *Other Distributions*. The depositary will send to ADS holders anything else we distribute on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, the depositary has a choice. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case ADSs will also represent the newly distributed property. However, the depositary is not required to distribute any securities (other than ADSs) to ADS holders unless it receives satisfactory evidence from us that it is legal to make that distribution. The depositary may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution. U.S. securities laws may restrict the ability of the depositary to distribute securities to all or certain ADS holders, and the securities distributed may be subject to restrictions on transfer.

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders. We have no obligation to register ADSs, shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADSs, shares, rights or anything else to ADS holders. *This means that you may not receive the distributions we make on our Class A ordinary shares or any value for them if it is illegal or impractical for us to make them available to you.*

 

***Deposit, Withdrawal and Cancellation***

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*How are ADSs issued?*

 

The depositary will deliver ADSs if you or your broker deposits Class A ordinary shares or evidence of rights to receive Class A ordinary shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of ADSs in the names you request and will deliver the ADSs to or upon the order of the person or persons that made the deposit.

*How can ADS holders withdraw the deposited securities?*

 

You may surrender your ADSs to the depositary for the purpose of withdrawal. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver the Class A ordinary shares and any other deposited securities underlying the ADSs to the ADS holder or a person the ADS holder designates at the office of the custodian. Or, at your request, risk and expense, the depositary will deliver the deposited securities at its office, if feasible. However, the depositary is not required to accept surrender of ADSs to the extent it would require delivery of a fraction of a deposited share or other security. The depositary may charge you a fee and its expenses for instructing the custodian regarding delivery of deposited securities.

*How do ADS holders interchange between certificated ADSs and uncertificated ADSs?*

 

You may surrender your ADR to the depositary for the purpose of exchanging your ADR for uncertificated ADSs. The depositary will cancel that ADR and will send to the ADS holder a statement confirming that the ADS holder is the registered holder of uncertificated ADSs. Upon receipt by the depositary of a proper instruction from a registered holder of uncertificated ADSs requesting the exchange of uncertificated ADSs for certificated ADSs, the depositary will execute and deliver to the ADS holder an ADR evidencing those ADSs.

***Voting Rights***

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*How do you vote?*

 

ADS holders may instruct the depositary how to vote the number of deposited Class A ordinary shares their ADSs represent. If we request the depositary to solicit your voting instructions (and we are not required to do so), the depositary will notify you of a shareholders' meeting and send or make voting materials available to you. Those materials will describe the matters to be voted on and explain how ADS holders may instruct the depositary how to vote. For instructions to be valid, they must reach the depositary by a date set by the depositary. The depositary will try, as far as practical, subject to the laws of the Cayman Islands and the provisions of our articles of association or similar documents, to vote or to have its agents vote the Class A ordinary shares or other deposited securities as instructed by ADS holders. If we do not request the depositary to solicit your voting instructions, you can still send voting instructions, and, in that case, the depositary may try to vote as you instruct, but it is not required to do so.

*Except by instructing the depositary as described above, you will not be able to exercise voting rights unless you surrender your ADSs and withdraw the Class A ordinary shares. However, you may not know about the meeting enough in advance to withdraw the Class A ordinary shares.* In any event, the depositary will not exercise any discretion in voting deposited securities and it will only vote or attempt to vote as instructed.

We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise voting rights and there may be nothing you can do if your shares are not voted as you requested.

If we asked the depositary to solicit your instructions at least 30 days before the meeting date, but the depositary does not receive voting instructions from you by the specified date and we confirm to the depositary that:

● we wish to receive a proxy to vote uninstructed shares;

● we reasonably do not know of any substantial shareholder opposition to a particular question; and

● the particular question is not materially adverse to the interests of shareholders,

the depositary will consider you to have authorized and directed it to give, and it will give, a discretionary proxy to a person designated by us to vote the number of deposited securities represented by your ADSs as to that question.

In order to give you a reasonable opportunity to instruct the depositary as to the exercise of voting rights relating to the deposited Class A ordinary shares, if we request the depositary to disseminate a notice, we will give the depositary notice of the meeting, details concerning the matters to be voted upon and copies of materials to be made available to the ADS holders in connection with the meeting not less than 30 days prior to the meeting date.

**Fees and Expenses**

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| | |
|:---|:---|
| Persons depositing or withdrawing Class A ordinary shares or ADS holders must pay: | For: |
| US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) | Issuance of ADSs, including issuances resulting from a distribution of Class A ordinary shares or rights or other property |
|  | Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates |
| US$.05 (or less) per ADS | Any cash distribution of ADS holders |
| A fee equivalent to the fee that would be payable if securities distributed to you had been Class A ordinary shares and the Class A ordinary shares had been deposited for issuance of ADSs | Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders |
| US$.05 (or less) per ADS per calendar year | Depositary services |
| &nbsp;&nbsp;&nbsp;&nbsp;Registration or transfer fees | Transfer and registration of Class A ordinary shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw Class A ordinary shares |
| Expenses of the depositary | Cable and facsimile transmissions (when expressly provided in the deposit agreement) |
|  | Converting foreign currency to U.S. dollars |
| Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or Class A ordinary shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes | As necessary |
| Any charges incurred by the depositary or its agents for servicing the deposited securities | As necessary |

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The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing Class A ordinary shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable (or by selling a portion of securities or other property distributable) to ADS holders that are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

From time to time, the depositary may make payments to us to reimburse us for costs and expenses generally arising out of establishment and maintenance of the ADS program, waive fees and expenses for services provided to us by the depositary or share revenue from the fees collected from ADS holders. In performing its duties under the deposit agreement, the depositary may use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the depositary and that may earn or share fees, spreads or commissions.

The depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the deposit agreement and the rate that the depositary or its affiliate receives when buying or selling foreign currency for its own account. The depositary makes no representation that the exchange rate used or obtained in any currency conversion under the deposit agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to ADS holders, subject to the depositary's obligations under the deposit agreement. The methodology used to determine exchange rates used in currency conversions is available upon request.

***Payment of Taxes***

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You will be responsible for any taxes or other governmental charges payable on your ADSs or on the deposited securities represented by any of your ADSs. The depositary may refuse to register any transfer of your ADSs or allow you to withdraw the deposited securities represented by your ADSs until those taxes or other charges are paid. It may apply payments owed to you or sell deposited securities represented by your ADSs to pay any taxes owed and you will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to ADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.

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***Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited Securities***

The depositary will not tender deposited securities in any voluntary tender or exchange offer unless instructed to do by an ADS holder surrendering ADSs and subject to any conditions or procedures the depositary may establish.

If deposited securities are redeemed for cash in a transaction that is mandatory for the depositary as a holder of deposited securities, the depositary will call for surrender of a corresponding number of ADSs and distribute the net redemption money to the holders of called ADSs upon surrender of those ADSs.

If there is any change in the deposited securities such as a sub-division, combination or other reclassification, or any merger, consolidation, recapitalization or reorganization affecting the issuer of deposited securities in which the depositary receives new securities in exchange for or in lieu of the old deposited securities, the depositary will hold those replacement securities as deposited securities under the deposit agreement. However, if the depositary decides it would not be lawful and practical to hold the replacement securities because those securities could not be distributed to ADS holders or for any other reason, the depositary may instead sell the replacement securities and distribute the net proceeds upon surrender of the ADSs.

If there is a replacement of the deposited securities and the depositary will continue to hold the replacement securities, the depositary may distribute new ADSs representing the new deposited securities or ask you to surrender your outstanding ADRs in exchange for new ADRs identifying the new deposited securities.

If there are no deposited securities underlying ADSs, including if the deposited securities are cancelled, or if the deposited securities underlying ADSs have become apparently worthless, the depositary may call for surrender or of those ADSs or cancel those ADSs upon notice to the ADS holders.

***Amendment and Termination***

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*How may the deposit agreement be amended?*

 

We may agree with the depositary to amend the deposit agreement and the ADRs without your consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, or prejudices a substantial right of ADS holders, it will not become effective for outstanding ADSs until 30 days after the depositary notifies ADS holders of the amendment. *At the time an amendment becomes effective, you are considered, by continuing to hold your ADSs, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended.*

 

*How may the deposit agreement be terminated?*

 

The depositary will initiate termination of the deposit agreement if we instruct it to do so. The depositary may initiate termination of the deposit agreement if

● 60 days have passed since the depositary told us it wants to resign but a successor depositary has not been appointed and accepted its appointment;

● we delist our shares from an exchange on which they were listed and do not list the shares on another exchange;

● we appear to be insolvent or enter insolvency proceedings;

● all or substantially all the value of the deposited securities has been distributed either in cash or in the form of securities;

● there are no deposited securities underlying the ADSs or the underlying deposited securities have become apparently worthless; or

● there has been a replacement of deposited securities.

If the deposit agreement will terminate, the depositary will notify ADS holders at least 90 days before the termination date. At any time after the termination date, the depositary may sell the deposited securities. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the deposit agreement, unsegregated and without liability for interest, for the pro rata benefit of the ADS holders that have not surrendered their ADSs. Normally, the depositary will sell as soon as practicable after the termination date.

After the termination date and before the depositary sells, ADS holders can still surrender their ADSs and receive delivery of deposited securities, except that the depositary may refuse to accept a surrender for the purpose of withdrawing deposited securities or reverse previously accepted surrenders of that kind if it would interfere with the selling process. The depositary may refuse to accept a surrender for the purpose of withdrawing sale proceeds until all the deposited securities have been sold. The depositary will continue to collect distributions on deposited securities, but, after the termination date, the depositary is not required to register any transfer of ADSs or distribute any dividends or other distributions on deposited securities to the ADSs holder (until they surrender their ADSs) or give any notices or perform any other duties under the deposit agreement except as described in this paragraph.

***Limitations on Obligations and Liability***

*Limits on our Obligations and the Obligations of the Depositary; Limits on Liability to Holders of ADSs*

The deposit agreement expressly limits our obligations and the obligations of the depositary. It also limits our liability and the liability of the depositary. We and the depositary:

● are only obligated to take the actions specifically set forth in the deposit agreement without negligence or bad faith, and the depositary will not be a fiduciary or have any fiduciary duty to holders of ADSs;

● are not liable if we are or it is prevented or delayed by law or by events or circumstances beyond our or its ability to prevent or counteract with reasonable care or effort from performing our or its obligations under the deposit agreement;

● are not liable if we or it exercises discretion permitted under the deposit agreement;

● are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the deposit agreement, or for any special, consequential or punitive damages for any breach of the terms of the deposit agreement;

● have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the deposit agreement on your behalf or on behalf of any other person;

● may rely upon any documents we believe or it believes in good faith to be genuine and to have been signed or presented by the proper person;

● are not liable for the acts or omissions of any securities depository, clearing agency or settlement system; and

● the depositary has no duty to make any determination or provide any information as to our tax status, or any liability for any tax consequences that may be incurred by ADS holders as a result of owning or holding ADSs or be liable for the inability or failure of an ADS holder to obtain the benefit of a foreign tax credit, reduced rate of withholding or refund of amounts withheld in respect of tax or any other tax benefit.

In the deposit agreement, we and the depositary agree to indemnify each other under certain circumstances.

***Requirements for Depositary Actions***

Before the depositary will deliver or register a transfer of ADSs, make a distribution on ADSs, or permit withdrawal of Class A ordinary shares, the depositary may require:

● payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any Class A ordinary shares or other deposited securities;

● satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and

● compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents.

The depositary may refuse to deliver ADSs or register transfers of ADSs when the transfer books of the depositary or our transfer books are closed or at any time if the depositary or we think it advisable to do so.

***Your Right to Receive the Class A Ordinary Shares Underlying your ADSs***

ADS holders have the right to cancel their ADSs and withdraw the underlying Class A ordinary shares at any time except:

● when temporary delays arise because: (1) the depositary has closed its transfer books or we have closed our transfer books; (2) the transfer of Class A ordinary shares is blocked to permit voting at a shareholders' meeting; or (3) we are paying a dividend on our Class A ordinary shares;

● when you owe money to pay fees, taxes and similar charges; or

● when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of Class A ordinary shares or other deposited securities.

This right of withdrawal may not be limited by any other provision of the deposit agreement.

***Direct Registration System***

In the deposit agreement, all parties to the deposit agreement acknowledge that the Direct Registration System, also referred to as DRS, and Profile Modification System, also referred to as Profile, will apply to the ADSs. DRS is a system administered by DTC that facilitates interchange between registered holding of uncertificated ADSs and holding of security entitlements in ADSs through DTC and a DTC participant. Profile is feature of DRS that allows a DTC participant, claiming to act on behalf of a registered holder of uncertificated ADSs, to direct the depositary to register a transfer of those ADSs to DTC or its nominee and to deliver those ADSs to the DTC account of that DTC participant without receipt by the depositary of prior authorization from the ADS holder to register that transfer.

In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties to the deposit agreement understand that the depositary will not determine whether the DTC participant that is claiming to be acting on behalf of an ADS holder in requesting registration of transfer and delivery as described in the paragraph above has the actual authority to act on behalf of the ADS holder (notwithstanding any requirements under the Uniform Commercial Code). In the deposit agreement, the parties agree that the depositary's reliance on and compliance with instructions received by the depositary through the DRS/Profile system and in accordance with the deposit agreement will not constitute negligence or bad faith on the part of the depositary.

***Shareholder Communications; Inspection of Register of Holders of ADSs***

The depositary will make available for your inspection at its office all communications that it receives from us as a holder of deposited securities that we make generally available to holders of deposited securities. The depositary will send you copies of those communications or otherwise make those communications available to you if we ask it to. You have a right to inspect the register of holders of ADSs, but not for the purpose of contacting those holders about a matter unrelated to our business or the ADSs.

***Jury Trial Waiver***

The deposit agreement provides that, to the extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws. If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable in the facts and circumstances of that case in accordance with applicable case law.

***Arbitration Provision***

The deposit agreement gives the depositary or an ADS holder asserting a claim against us the right to require us to submit that claim to binding arbitration in New York under the International Arbitration Rules of the American Arbitration Association, including any securities law claim. However, a claimant could also elect not to submit its securities law claim to arbitration and instead bring such claim in any court having jurisdiction of it. The deposit agreement does not give us the right to require anyone to submit such claim to arbitration.

## Exhibit 12.1

**Exhibit 12.1**

**Certification by the Principal Executive Officer**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Guangsheng Liu, certify that:

1. I have reviewed this annual report on Form 20-F of Token Cat Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: | May 8, 2026 |
| By: | /s/ Guangsheng Liu |
| Name: | Guangsheng Liu |
| Title: | Chief Executive Officer |

---

## Exhibit 12.2

**Exhibit 12.2**

**Certification by the Principal Financial Officer**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Guangsheng Liu, certify that:

1. I have reviewed this annual report on Form 20-F of Token Cat Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: | May 8, 2026 |
| By: | /s/ Guangsheng Liu |
| Name: | Guangsheng Liu |
| Title: | Chief Financial Officer |

---

## Exhibit 13.1

**Exhibit 13.1**

**Certification by the Principal Executive Officer**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

In connection with the Annual Report of Token Cat Limited (the "Company") on Form 20-F for the year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Guangsheng Liu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report
 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information
 contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| May 8, 2026 |  |  |
|  | By: | /s/ Guangsheng Liu |
|  | Name: | Guangsheng Liu |
|  | Title: | Chief Executive Officer |

---

## Exhibit 13.2

**Exhibit 13.2**

**Certification by the Principal Financial Officer**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

In connection with the Annual Report of Token Cat Limited (the "Company") on Form 20-F for the year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Guangsheng Liu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| May 8, 2026 |  |  |
|  | By: | /s/ Guangsheng Liu |
|  | Name: | Guangsheng Liu |
|  | Title: | Chief Financial Officer |

---

## Exhibit 15.1

**Exhibit 15.1**

![](ea028738901_ex15-1img1.jpg)

<u>Independent Registered Public Accounting Firm's Consent</u>

We consent to the incorporation by reference in the Registration Statement of Token Cat Limited (formerly known as TuanChe Limited) on Form S-8 (Nos. 333-271636, 333-292062 and 333-294661) and Form F-3 (Nos. 333-264942 and 333-292192) of our report dated March 28, 2024 relating to the financial statements of Token Cat Limited appearing in this Annual Report on Form 20-F for the year ended December 31, 2025. We also consent to the reference to us under the heading "Experts" in the Registration Statement on Form F-3 (Nos. 333-264942 and 333-292192).

/s/ Marcum Asia CPAs LLP

Marcum Asia CPAs LLP

Beijing, China

May 8, 2026

## Exhibit 15.2

**Exhibit 15.2**

<u>INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S CONSENT</u>

We consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-271636, 333-292062 and 333-294661) and Form F-3 (Nos. 333-264942 and 333-292192) of our report dated May 8, 2026, relating to the consolidated financial statements of Token Cat Limited (formerly known as TuanChe Limited) and subsidiaries, which appears in this Annual Report on Form 20-F for the year ended December 31, 2025.

/s/ JWF Assurance PAC

Singapore,

May 8, 2026