NASDAQ: AIHS

From October 2020 to August
2024, we operated an online ride-hailing platform through XXTX, which was a wholly owned subsidiary of Senmiao Consulting. On August
8, 2024, Senmiao Consulting entered into an Acquisition Agreement with Debt Assumption Takeover (the “XXTX Acquisition Agreement”)
with a third party named Jiangsu Yuelaiyuexing Technology Co., Ltd. (the “Purchaser”), and other parties thereto, in connection
with the acquisition (the “Acquisition”) by the Purchaser of 100% of Senmiao’s equity interest in XXTX and its subsidiaries.
On August 20, 2024, the Acquisition was completed and Senmiao disposed of its 100% equity interest in XXTX and its subsidiaries to the
Purchaser, effectively discontinued our operations in the online ride-hailing platform service segment.

During the year ended March 31, 2026, we began evaluating opportunities
to expand its business into AI infrastructure. In furtherance of this initiative, we appointed David Nichols as a strategic advisor to
assist us in advancing its strategy across AI infrastructure, digital infrastructure and new energy initiatives, with a particular focus
on power infrastructure origination, capital formation and institutional partnerships.

Management is currently evaluating several potential AI data center
projects and, with the assistance of its advisors, is conducting commercial, operational and strategic due diligence. We expect to select
one of these opportunities for further development if it determines that the project is commercially viable and consistent with its long-term
strategic objectives. As of the date of this Annual Report, we have not entered into any definitive agreement with respect to any AI data
center or related infrastructure project, and there can be no assurance that any such opportunity will be consummated or successfully
implemented.

We operate our business
in one segment: Automobile Transaction and Related Services (as defined herein below), which constituted a series of services as follows:

Automobile Transactions and Related Services

Our automobile transaction and related services (the “Automobile
Transaction and Related Services”) are mainly comprised of (i) automobile operating lease where we provide car rental services
to individual customers to meet their personal needs with the majority of lease term no more than twelve months (the “Auto Operating
Leasing”); (ii) automobile financing where we provide our customers with auto finance solutions through finance leases (the
“Auto Financing”); (iii) service fees from new energy vehicles (“NEVs”) leasing where we charge NEVs lessees for
a series of the services provided to them based on the chosen product solutions (the “Service for NEVs Leasing”); (iv) monthly
services where we provide management and related services to Partner Platforms and other companies and earn commission from them (the
“Auto Commissions”); (v) service fees from automobile purchase for a series of the services provided to purchasers throughout
the purchase process based on the sales price of the automobiles and relevant services provided (the “Service for Automobile Purchase”);
(vi) default fees we charge to the lessees for early-termination the contracts or other violation behaviors to the contracts (the
“Default Revenue”); and (vii) other supporting services provided to customers (the “Other Services”). Our
Operating Entities started the Purchase and NEVs Services and other supporting services in November 2018, the Auto Operating Leasing and
Auto Financing in March 2019, respectively.

1

The following chart illustrates the constitution
of our automobile transactions and related services:

Auto Operating Leasing

We, through our subsidiary,
Hunan Ruixi and equity investee company, Jinkailong (the “Auto Business Entities”) in China, have generated revenue since
March 2019 from operating lease services, where the Auto Business Entities lease their own automobiles, sublease automobiles leased from
third-parties or rendered from certain online ride-hailing drivers they served before with their authorization, to other individuals,
including new online ride-hailing drivers, for a lease term of no more than twelve months. We also purchase and lease NEVs for subleasing
with the majority of lease term of no more than 12 months. We leased approximately 340 automobiles with an average monthly rental
income of approximately $381 per automobile for the year ended March 31, 2026.

Auto Financing

Hunan Ruixi began offering
auto financing services in March 2019. In a self-operated financing transaction, Hunan Ruixi is a lessor and a customer (i.e., online
ride-hailing driver) is a lessee. Hunan Ruixi offers to the customer a selection of automobiles that were purchased by Hunan Ruixi in
advance. The customer will choose the desirable automobile to be purchased and enter into a finance lease with Hunan Ruixi. During the
term of the finance lease, the customer will have use rights with respect to the automobile. Hunan Ruixi will obtain title to the automobile
upfront and retain such title during the term of the finance lease, as lessor. At the end of the lease term, the customer will pay a minimal
price and obtain full title of the automobile after the finance lease is repaid in full. In connection with the finance lease, the customer
will enter into a service agreement with Hunan Ruixi. We recognized a total interest income of $68,011 for the year ended March 31, 2026.

Service for NEVs Services

Our Auto Business Entities
charge lease service fees to lessees who rent NEVs from us in Changsha, the service contents include: (1) training services covering online
ride-hailing regulations, operational skills, safety and other related aspects; (2) assistance to apply for the Network-Appointed Taxi
Transport Certificate; (3) introducing online ride-hailing business and order-taking skills; (4) providing online ride-hailing operation
and management services; etc. The amount of services fees for NEVs leasing is based on the product solutions. We had revenue of services
of $64,833 from NEVs leasing for the year ended March 31, 2026.

Auto Commissions

Our Auto Business Entities
generated monthly revenues from the management and related services provided to our Partner Platforms and other companies. We generated
revenues of $17,485 from the monthly services commissions during the year ended March 31, 2026.

2

Service for Automobile Purchase

Automobile purchase services are paid by automobile purchasers for
a series of the services we provided to them throughout the purchase process such as credit assessment, installment of GPS devices, ride-hailing
driver qualification and other administrative procedures, which are based on the sales price of the automobiles and relevant services
provided. We generated revenues of $10,046 from automobile purchase for the year ended March 31, 2026.

Default Revenue and Other Services

Our Auto Business Entities
charge the lessees default fees such as early-termination the contracts or other violation behaviors to the contracts, as well as
miscellaneous service revenue for some supporting services provided to customers. We recognized default revenue of $26,025
and $11,185 from other services, for the year ended March 31, 2026, respectively.

Since November 22, 2018,
the acquisition date of Hunan Ruixi, and as of March 31, 2026, the Auto Business Entities have facilitated financing for an aggregate
of 312 automobiles with a total value of approximately $5.4 million, sold an aggregate of 381 automobiles with a total value of approximately
$3.7 million and delivered 470 automobiles under operating leases and 197 automobiles under finance leases to customers, the vast majority
of whom are online ride-hailing drivers.

Discontinued Ride-Hailing Platform Services

From October 2020 to August
2024, we operated our own online ride-hailing platform in China. The platform (called Xixingtianxia) was owned and operated by XXTX,
of which Senmiao Consulting acquired the 100% equity interest pursuant to a series of investment and supplementary agreements. XXTX operated
Xixingtianxia and held a national online reservation taxi operating license, which served online ride-hailing drivers in 22 cities in
China, providing them with a platform to view and take customer orders for rides. XXTX generated revenue from providing services to online
ride-hailing drivers to assist them in providing transportation services to the riders looking for taxi/ride-hailing services. XXTX earned
commissions for each completed order as the difference between an upfront quoted fare and the amount earned by a driver based on actual
time and distance for the ride charged to the rider.

Due to the fierce competition
of the online ride-hailing industry, XXTX had suffered loss in the past. Since December 2023, XXTX had engaged Anhui Lianma Technology
Co., Ltd. (“Anhui Lianma”), a third-party to co-operate the online ride-hailing platform by outsourcing certain daily operation
work to Anhui Lianma in most of cities it operates platform in XXTX and Anhui Lianma will jointly share the operational profits, with
the specific calculation method being defined in the cooperation agreement. However, considering the changes in online ride-hailing industry
and development plan of the Company, on August 8, 2024, we entered into the XXTX Acquisition Agreement with the Purchaser, and certain
other parties thereto. Pursuant to the XXTX Acquisition Agreement, the Purchaser acquired all of the equity interests the XXTX at a total
purchase price of zero, while taking over certain liabilities of XXTX as defined in the XXTX Acquisition Agreement. On August 20, 2024,
the acquisition was completed and we ceased the online ride-hailing platform services.

Our Corporate History

Senmiao was incorporated
in the State of Nevada on June 8, 2017. It established a wholly owned subsidiary, Senmiao Consulting in China in July 2017. Sichuan Senmiao,
a majority owned subsidiary of Senmiao Consulting, was established in China in June 2014. Senmiao Consulting provided services to Sichuan
Senmiao, pursuant to a series of contractual arrangements (the “VIE Agreements”) with Sichuan Senmiao and each of its equity
holders. Senmiao Consulting became the primary beneficiary of Sichuan Senmiao. The contractual arrangements had been in place since the
establishment of Senmiao Consulting (the “Restructuring”). On March 23, 2022, shareholders with 94.5% equity interests of
Sichuan Senmiao and Senmiao Consulting terminated the VIE Agreements. On March 28, 2022, these shareholders further sold a total of 94.5%
equity interests of Sichuan Senmiao to Senmiao Consulting with a total consideration of zero due to continuous loss. Sichuan Senmiao
became the majority owned subsidiary of Senmiao Consulting accordingly.

3

On September 25, 2016, Sichuan
Senmiao acquired a P2P platform (including website, internet content provider (“ICP”) registration, operating systems, servers,
management system, employees and users) from Sichuan Chenghexin Investment and Asset Management Co., Ltd. (“Chenghexin”),
which had established and operated the platform for two years prior to our acquisition (the “Acquisition”), for a total cash
consideration of RMB69,690,000 (approximately $10.1 million). Prior to the Acquisition, Sichuan Senmiao was a holding company that owned
a 60% equity interest in an equity investment fund management company. Sichuan Senmiao sold its 60% equity interest for a cash consideration
of RMB60 million (approximately $8.9 million) immediately following the Acquisition, in order to focus on the online marketplace lending
business. We ceased the online lending services business in October 2019.

On November 21, 2018, Senmiao
entered into an Investment and Equity Transfer Agreement (the “Investment Agreement”) with Hunan Ruixi and all the shareholders
of Hunan Ruixi, pursuant to which Senmiao acquired an aggregate of 60% of the equity interest of Hunan Ruixi with a consideration of zero.
Senmiao closed the acquisition on November 22, 2018 and agreed to make a cash contribution of $6,000,000 to Hunan Ruixi, representing
60% of its registered capital, in accordance with the Investment Agreement. On February 12, 2024, Senmiao, Hunan Ruixi and its other shareholders
entered into a Share Swap Agreement (the “Hunan Ruixi Share Swap Agreement”), pursuant to which, Senmiao purchased 5% equity
interest from other shareholders of Hunan Ruixi at a total purchase price of $472,815, payable in the Company’s shares of common
stock, par value $0.0001 per share at a per share price of the average closing price of a share of common stock reported on the Nasdaq
Capital Market for ten (10) trading days immediately preceding February 1, 2024. On February 27, 2024, the issuance of shares of the Company’s
common stock for this transaction has been completed and on March 28, 2024, the registration procedures for the change in shareholders
was completed. As of the date of this Report, Senmiao has made the cash contributions with aggregated amount of $6,000,000 to Hunan Ruixi.
Hunan Ruixi holds a business license for automobile sales and finance lease and has been engaged in automobile finance lease services
and automobile sales since March 2019 and January 2019, respectively.

Hunan Ruixi had a wholly
owned subsidiary, Ruixi Leasing, a PRC limited liability company formed in April 2018 with a registered capital of RMB10 million (approximately
$1.5 million). Ruixi Leasing had no operations and was dissolved in June 2022.

Hunan Ruixi also owns 35%
equity interest in Jinkailong and used to receive economic benefits of the remaining 65% equity interest through two voting agreements
with other shareholders of Jinkailong. On March 31, 2022, the voting agreements were terminated by other shareholders of Jinkailong and
Hunan Ruixi. As a result, Jinkailong ceased to be a VIE. Jinkailong is an automobile transaction and related services company in Chengdu
City, Sichuan Province, China, which primarily targets drivers in the ride-hailing service sector, focus on automobile operating lease,
and facilitates sales and financing transactions for its clients and provides relevant after-transaction services to them. Although Jinkailong
was ceased from our consolidation scope since March 31, 2022, Hunan Ruixi, Corenel and Jiekai continuously provide automobile transaction
and related services similar to Jinkailong in Changsha and Chengdu.

In May 2019, Senmiao formed
its wholly owned subsidiary, Yicheng, with a registered capital of $50 million in Chengdu City, Sichuan Province, China. Yicheng obtained
its business licenses for automobiles sale and has engaged in the sales of automobiles since June 2019. Yicheng used to have a license
of finance lease, which was terminated since June 2022.

On September 11, 2020, Senmiao
Consulting entered into an Investment Agreement relating to XXTX with all the original shareholders of XXTX, pursuant to which Senmiao
Consulting would make an investment of RMB3.16 million (approximately $0.5 million) in XXTX in cash and obtain 51% equity interest accordingly.
As of the date of this Report, the Company had remit approximately full amount of investment to XXTX pertained to above mentioned XXTX
Investment Agreement. On October 23, 2020, the registration procedures for the change in shareholders and registered capital were completed
and XXTX became a majority owned subsidiary of Senmiao Consulting. On February 5, 2021, Senmiao Consulting and all the original shareholders
of XXTX entered into a supplementary agreement related to XXTX’s Investment agreement (the “XXTX Increase Investment Agreement”).
Under the XXTX Increase Investment Agreement, all the shareholders of XXTX agreed to increase the total registered capital of XXTX to
RMB50.8 million (approximately $7.40 million). Senmiao Consulting shall pay another investment amounted to RMB36.84 million (approximately
$5.36 million) in cash in exchange of additional 27.74% of XXTX’s equity interest.

4

On October 22, 2021, the
Company, Senmiao Consulting, XXTX and its other shareholders further entered into a Share Swap Agreement (the “XXTX Share Swap
Agreement”), pursuant to which the Company, through Senmiao Consulting, purchased all of the remaining equity interests the original
shareholders held in XXTX at a total purchase price of $3.5 million, payable in the Company’s shares of common stock, par value
$0.0001 per share at a per share price of the average closing price of a share of common stock reported on the Nasdaq Capital Market
for ten (10) trading days immediately preceding the date of the XXTX Share Swap Agreement. On November 9, 2021, the issuance of 533,167
(5,331,667 pre reverse split) shares of the Company’s common stock for this transaction has been completed and on December 31,
2021, the registration procedures for the change in shareholders was completed. As a result, XXTX became a wholly-owned subsidiary of
Senmiao Consulting.

In December 2020, Senmiao
Consulting formed a wholly owned subsidiary, Corenel, with a registered capital of RMB10.0 million (approximately $1.6 million) in Chengdu
City, Sichuan Province. Corenel is engaged in automobile operating lease since March 2021. On April 16, 2025, Senmiao Consulting
entered into an Equity Transfer Agreement with Jinkailong to transfer its 100% equity in Corenel to Jinkailong at a price of RMB zero.
The transaction was completed on April 17, 2025. Before the disposition, Senmiao Consulting had made a cumulative capital contribution
of RMB14.17 million (approximately $1.95 million) to Corenel.

In April 2021, Senmiao
formed Senmiao Technology (Hong Kong), Limited. (“Senmiao HK”), a limited liability company with a registered capital
of $10,000 in Hong Kong. We hold 99.99% of the equity interests of Senmiao HK.

In March 2022, Corenel
and another company in Chengdu formed a subsidiary, Jiekai, with a registered capital of RMB500,000 (approximately $80,000) in Chengdu
City, Sichuan Province. Corenel holds 51% equity interests of Jiekai. Jiekai is engaged in automobile operating lease business since
April 2022. In July 2023, Corenel transferred all its interest in Jiekai to Corenel’s parent company, Senmiao Consulting, with
a consideration of zero.

On August 8, 2024, Senmiao
Consulting entered into a certain Acquisition Agreement with the Purchaser, and other parties thereto, in connection with the acquisition
(the “Acquisition”) by the Purchaser of 100% of the Company’s equity interest in XXTX and its subsidiaries. On August
20, 2024, the Acquisition was completed and Senmiao Consulting disposed its 100% equity interest in XXTX and its subsidiaries. Before
the disposition, Senmiao Consulting had made a cumulative capital contribution of RMB40.30 million (approximately $5.60 million) to XXTX.

In December 2025,
Senmiao entered into the Sichuan Acquisition Agreement with HMST to transfer its 100% equity in our former subsidiaries Yicheng,
Senmiao Consulting and its subsidiaries (“former subsidiaries in Sichuan”) to HMST for nil consideration, while Senmiao
undertook certain liabilities of $518,388 which were previously assumed by former subsidiaries in Sichuan. The Disposition was
completed on December 31, 2025. Before the disposition, Senmiao had made a cumulative capital contribution of $5,750,000 and
$9,350,032 to Yicheng and Senmiao Consulting, respectively.

In February 2026, Senmiao
established Green Energy Capital Asset Inc. (“Green Energy”), a profit corporation incorporated in the State of Wyoming,
United States. Green Energy is authorized to issue 1,000 zero-par-value common shares and no preferred shares, and we hold 100% of the
common equity interests in Green Energy.

5

Our Corporate Structure

The following diagram illustrates
the Company’s corporate structure as of the date of this Report:

Former Voting Agreements with Jinkailong’s
Other Shareholders

Hunan Ruixi entered into
two voting agreements signed in August 2018 and February 2020, respectively, as amended (the “Voting Agreements”),
with Jinkailong and other Jinkailong’s shareholders holding aggregate of 65% equity interest. Pursuant to the Voting Agreements,
all other Jinkailong’s shareholders will vote in concert with Hunan Ruixi on all fundamental corporate transactions in the event
of a disagreement for periods of 20 years and 18 years, respectively, ending on August 25, 2038.

On March 31, 2022, Hunan
Ruixi entered into an Agreement for the Termination of the Agreement for Concerted Action by Shareholders of Jinkailong (the “Termination
Agreement”), pursuant to which the Voting Agreements mentioned above shall be terminated as of the date of the Termination Agreement.
The termination will not impair the past and future legitimate rights and interests of all parties in Jinkailong. As a result of the
Termination Agreement, we no longer have a controlling financial interest in Jinkailong and have determined that Jinkailong was deconsolidated
from our consolidated financial statements effective as of March 31, 2022. However, as Hunan Ruixi still holds 35% equity interests in
Jinkailong, Jinkailong is our equity investee company since then. As of March 31, 2026, the paid-in capital of Jinkailong was zero.

Customers

The majority of our Operating Entities’ customers are online
ride-hailing drivers. Due to the complexity and difficulty of obtaining registration of various licenses required for driving an online
ride-hailing car, our customers choose to lease automobile from us or become affiliated with us who offer them a simplified and smooth
process to obtain qualified cars for online ride-hailing. The automobile lessees typically lease automobiles which meet the criteria of
cars used for online ride-hailing for their own business in the industry. The automobile purchasers typically become affiliated with Hunan
Ruixi through affiliation agreements pursuant to which Hunan Ruixi, as a qualified management company, provides them post-transaction
management services during the affiliation period, which is usually the same as the term of the Financing Agreements.

Our Auto Business Entities
acquire customers through the network of sales teams from third-party and our related parties, cooperated lease companies and our own
efforts including online advertising and billboard advertising. Our Operating Entities also send out fliers and participate in trade
shows to advertise our services. During the year ended March 31, 2026, we serviced approximately 1,000 customers for our Automobile Transaction
and Related Services.

6

Risk Management

To mitigate risk associated
with our Automobile Transaction and Related Services, our Operating Entities conduct assessments and evaluations of prospective online
ride-hailing drivers as lessees. For an online ride-hailing platform driver who uses our Partner Platforms as well as purchases or leases
automobile from our Auto Business Entities, the assessments also include the requirement from Partner Platforms. We believe our manual
review and verification process is sufficient for the requirements of our current operations.

Our Operating Entities conduct
an initial screening when they receive an application from a prospective automobile buyer/lessee based on credit reports from People’s
Bank of China (the “PBOC”) and third party credit rating companies, and personal information including residence, ethnicity
group, driving history and involvement in legal proceeding. An automobile buyer/lessee must meet the following preliminary criteria:

●
be between 18-65 years
old;

●
reside in the mainland
of China and have the local residential identification;

●
have a driving history
of at least three years;

●
not be subject to on-going
legal proceedings or enforcement;

●
not be listed on a national
delinquent debtor’s list;

●
the value of purchased
automobile matches the income of the candidate.

Additionally, our Operating
Entities arrange a simple in-person interview with the applicant where we gather information on marital/family status, income, assets,
borrowing history and default history, if any. This interview is typically conducted by our Operating Entities’ risk management
staff who will verify the accuracy of information on the prospective driver by cross-checking information provided by the applicant with
other sources. Our Operating Entities will also assess the prospective customer’s potential repayment ability.

Applicants with any of the following attributes will be rejected:

●
engaging in illegal or
criminal activities;

●
involvement in pornography,
gambling, drug dealing and gangster activities and experiences;

●
engaging in usury lending;
or

●
providing fraudulent information.

As for the Cybersecurity
risk assessment as well as the mitigation measure taken by the Company, please refer to the discussion under Item 1C – Cybersecurity
for more details.

Post-Financing Services and Collection Monitor

The Drivers Management department
and Post Financing Management department of our Auto Business Entities are in charge of monitoring and managing monthly payments by the
purchaser/lessee. Every car purchased or leased through us has a GPS device installed, which helps us locate the car. Our Drivers Management
monitor the daily gross income of our served online ride-hailing drivers through our Partner Platforms as well as trace the location
of each car at least every day. If there is any indicator such as the driver’s daily income is far behind the average level or
the trajectory is unusual, our Drivers Management department shall contact the driver immediately and deliver the case to the Post Financing
Management department to repose the car if necessary. The Drivers Management also monitor the daily using expenditures of each car such
as the traffic violations penalty and maintenance expenses once a week. The car shall be reposed if the accumulated amount of those expenses
exceeds the threshold. After a car is repossessed, our Auto Business Entities store it in a warehouse and later re-lease it to new customers
or dispose of the automobile in accordance with law and relevant contracts. If our Auto Business Entities are unable to repossess collateral
from a delinquent automobile purchaser/lessee, they may commence a lawsuit against such purchaser/lessee.

7

Competition

The online ride-hailing
industry in China is intensively competitive and full of rapid changes in technology, shifting user preferences and frequent introduction
of new services and products. There were approximately 100 automobile leasing companies that provide automobile purchasing and leasing
services to online ride-hailing drivers in Changsha City as of June 2026. Meanwhile, Didi Chuxing Technology Co., Ltd. (“Didi”)
takes over 80% market share of the online ride-hailing platforms in China according to the public information. As of June 2026, there
were approximately 50 companies who have established business relationships with Didi in Changsha. We face significant competition primarily
from companies that operate in Changsha City, such as Changsha XiangyuZitai Automobile Leasing Service Co., Ltd.

Many of our competitors
are well-capitalized and offer discounted services, driver incentives, discounts and promotions, innovative service and product offerings,
and alternative pricing models, which may be more attractive to consumers than those that we offer. Further, some of our current or potential
competitors have, and may in the future continue to have, greater resources and access to larger driver and consumer bases in a particular
geographic market. In addition, our competitors in certain geographic markets enjoy substantial competitive advantages such as greater
brand recognition, longer operating histories, better localized knowledge, and more supportive regulatory regimes. As a result, such
competitors may be able to respond more quickly and effectively than us in such markets to new or changing opportunities, technologies,
consumer preferences, regulations, or standards, which may render our products or offerings less attractive. In addition, future competitors
may share in the effective benefit of any regulatory or governmental approvals and litigation victories we may achieve, without having
to incur the costs we have incurred to obtain such benefits.

Regulations

This section sets forth
a summary of the most significant rules and regulations that affect our business activities in China or the rights of our stockholders
to receive dividends and other distributions from us.

Regulations Related to Cybersecurity, Information
Security and Confidentiality of User Information

PRC government authorities
have enacted laws and regulations with respect to Internet information security and protection of personal information from any abuse
or unauthorized disclosure. Internet information in China is regulated and restricted from a national security standpoint.

The Ministry of Public Security
of the People’s Republic of China (the “MPS”) has promulgated measures that prohibit use of the Internet in ways that,
among other things, result in leaks of government secrets or the spread of socially destabilizing content. The MPS and its local counterparts
have authority to supervise and inspect domestic websites to carry out its measures. Internet information service providers that violate
these measures may have their licenses revoked and their websites shut down.

Cybersecurity and Information Security

For description of the historical
regulatory landscape of Cybersecurity and Information Security, please refer to pages 15 to 19 in our annual report on Form 10-K for
the fiscal year ended March 31, 2023 filed with the SEC on July 13, 2023, which is incorporate by reference herein.

On March 22, 2024, CAC adopted
Regulations to Promote and Standardize Cross-Border Data Flows. The new regulation optimizes and adjusts the outbound data transfer system,
including security assessment for outbound data transfer, cross-border transfer of personal information through concluding standard contract,
and personal information protection certification. The new regulations appropriately relax the conditions for cross-border flow of data
and narrow the scope of data outbound security assessment, so as to facilitate cross-border flow of data and reduce the compliance costs
of enterprises.

8

On September 24, 2024, the CAC promulgated the Regulations for the
Administration of Network Data Security, which came into effect on January 1, 2025. The Regulations for the Administration of Network
Data Security restate and further specify the legal requirements for personal information, important data, cross-border data transfer,
network platform services, and data security. Among others, if the network data processing activities have or may have impacts on national
security, such activities shall be subject to national security review in accordance with relevant laws and regulations. Any failure to
comply with such requirements may subject us to suspension of services, fines, revocation of relevant business permits or business licenses
and other penalties.

Personal Information Protection

The Several Provisions on
Regulating the Market Order of Internet Information Services, issued by the MIIT on December 29, 2011 and effective on March 15, 2012,
stipulate that internet information service providers may not collect any user personal information or provide any such information to
third parties without the consent of a user, unless otherwise stipulated by laws and administrative regulations. “User Personal
information” is defined as information relevant to the users that can lead to the recognition of the identity of the users independently
or in combination with other information. 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 as necessary for
the provision of its services. An internet information service provider is also required to properly store user personal information,
and in case of any leak or likely leak of the user personal information, the internet information service provider must take immediate
remedial measures and, in severe circumstances, make an immediate report to the telecommunications regulatory authority.

The Decision on Strengthening
the Protection of Online Information, issued by the SCNPC on December 28, 2012, and the Order for the Protection of Telecommunication
and Internet User Personal Information, issued by the MIIT on July 16, 2013, stipulate that 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 scope. 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 proving 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 the above decision or order may subject the internet information service
provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancelation of filings, closedown of websites or
even criminal liabilities.

With respect to the security
of information collected and used by mobile apps, pursuant to the Announcement of Conducting Special Supervision against the Illegal
Collection and Use of Personal Information by Apps, which was issued by the CAC, the MIIT, the Ministry of Public Security, and the State
Administration for Market Regulation on January 23, 2019, app operators shall collect and use personal information in compliance with
the Cybersecurity Law and shall be responsible for the security of personal information obtained from users and take effective measures
to strengthen personal information protection. Furthermore, app operators shall not force their users to make authorization by means
of default settings, bundling, suspending installation or use of the app or other similar means and shall not collect personal information
in violation of laws, regulations or breach of user agreements. Such regulatory requirements were emphasized by the Notice on the Special
Rectification of Apps Infringing upon User’s Personal Rights and Interests, which was issued by MIIT on October 31, 2019. On November
28, 2019, the CAC, the MIIT, the Ministry of Public Security and the State Administration for Market Regulation jointly issued the Methods
of Identifying Illegal Acts of Apps to Collect and Use Personal Information. This regulation further illustrates certain commonly seen
illegal practices of app operators in terms of personal information protection.

On March 12, 2021, the Secretary
Bureau of the CAC, the General Office of the MIIT, the General Office of the MPS and the General Office of the MSA jointly issued the
Provision on Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, which prescribed the scope of
necessary personal information that may be collected by common applications, include map navigation applications, online car booking
applications and other 37 common applications. For online car booking applications, the necessary personal information includes cell
phone numbers of registered users; rider’s departure place, arrival place, location information, travel track and payment information
such as payment time, payment amount and payment channel. Applications shall not deny users’ access to the basic functional services
if the users do not agree to provide personal information outside those necessary ones.

9

On August 20, 2021, the
SCNPC promulgated the Personal Information Protection Law, which took effect on November 1, 2021. Pursuant to the Personal Information
Protection Law, “personal information” refers to any kind of information related to an identified or identifiable individual
as electronically or otherwise recorded and exclude anonymized information. The processing of personal information includes the collection,
storage, use, processing, transmission, provision, disclosure and deletion of personal information. The Personal Information Protection
Law applies to the processing of personal information of individuals within the territory of the PRC, as well as personal information
processing activities outside the territory of PRC, for the purpose of providing products or services to natural persons located within
PRC, for analyzing or evaluating the behaviors of natural persons located within PRC, or for other circumstances as prescribed by laws
and administrative regulations. A personal information processor may process the personal information of this individual only under the
following circumstances: (i) where consent is obtained from the individual; (ii) where it is necessary for the execution or performance
of a contract to which the individual is a party, or where it is necessary for carrying out human resource management pursuant to employment
rules or collective contracts made and executed in accordance with laws; (iii) where it is necessary for performing a statutory responsibility
or statutory obligation; (iv) where it is necessary in response to a public health emergency, or for protecting the life, health or property
of a natural person in the case of an emergency; (v) where the personal information is processed within a reasonable scope to carry out
news reporting, supervision by public opinions or any other activity for public interest purposes; (vi) where the personal information,
which has already been disclosed by the individual or otherwise legally disclosed, is processed within a reasonable scope; or (vii) any
other circumstance as provided by laws or administrative regulations. In principle, the consent of an individual must be obtained for
the processing of his or her personal information, except under the circumstances of the aforementioned items (ii) to (vii). Where personal
information is to be processed based on the consent of an individual, such consent shall be a voluntary and explicit indication of intent
given by such individual on a fully informed basis. If laws or administrative regulations provide that the processing of personal information
shall be subject to a separate consent or written consent of the individual concerned, such provisions shall prevail. In addition, the
processing of the personal information of a minor under 14 years old must obtain the consent by a parent or a guardian of such minor
and the personal information processors must adopt special rules for processing personal information of minors under 14 years old.

In the meantime, the PRC regulatory authorities
have also enhanced the supervision and regulation on cross-border data transmission. For example, on October 29, 2021, the Measures for
the Security Assessment of Cross-border Data Transmission (Draft for Comment) were proposed by the CAC for public comments, which require
that any data processor providing important data collected and generated during operations within the PRC or personal information that
should be subject to security assessment according to law to an overseas recipient shall conduct security assessment. The final Measures
was promulgated on July 7, 2022 and was effective on September 1, 2022. The measures provide five circumstances, under any of which data
processors shall, through the local cyberspace administration at the provincial level, apply to the CAC for security assessment of data
cross-border transfer. These circumstances include: (i) where the data to be transferred to an overseas recipient are personal information
or important data collected and generated by operators of critical information infrastructure; (ii) where the data to be transferred
to an overseas recipient contain important data; (iii) where a personal information processor that has processed personal information
of more than one million people provides personal information overseas; (iv) where the personal information of more than 100,000 people
or sensitive personal information of more than 10,000 people are transferred overseas accumulatively; or (v) other circumstances under
which security assessment of data cross-border transfer is required as prescribed by the CAC. As of the date of this Report, the above
measures have not been formally adopted, and substantial uncertainties still exist with respect to the enactment timetable, final content,
interpretation and implementation of these measures and how they will affect our business operation.

Our Chinese subsidiary and
affiliates have incurred, and will continue to incur, significant expenses in an effort to comply with cybersecurity and information security
standards and protocols imposed by law, regulation, industry standards or contractual obligations to the date of this Report in all material
respects. However, changes in existing laws or regulations or adoption of new laws and regulations relating to cybersecurity and information
security, particularly any new or modified laws or regulations that require enhanced protection of certain types of data or new obligations
with regard to data retention, transfer or disclosure, could greatly increase the cost to us of providing our service offerings, require
significant changes to our operations or even prevent us from providing certain service offerings in jurisdictions in which we currently
operate or in which we may operate in the future.

10

Regulations Related to Online Ride-Hailing
Industry

Specific licenses and permits
are also required for the drivers and vehicles engaged in the online ride-hailing industry.

In order to manage the rapidly
growing online ride-hailing service market and control relevant risks, on July 27, 2016, seven ministries and commissions, including
the Ministry of Transport (the “MOT”), jointly promulgated the Interim Measures for the Administration of Online Taxi Booking
Business Operations and Services, which was amended on December 28, 2019 and November 30, 2022, which legalizes online
ride-hailing platforms and requires the online ride-hailing services to meet the requirements set out by the Interim Measures and obtain
requisite service licenses and take full responsibility of the ride services to ensure the safety of riders. According to the Interim
Measures, (i) the competent transport department of the State Council shall be responsible for guiding the administration of online ride
hailing services nationwide, (ii) the competent transport department of the government of a province or an autonomous region shall be
responsible for guiding the administration of online ride hailing services within its respective administrative region, and (iii) the
competent transport department of a municipality directly under the central government, a city divided into districts, a county, or other
competent administrative department designated by the government shall be responsible for the specific administration of online ride hailing
service. Before carrying out online ride hailing services, an online ride hailing service platform must obtain a permit for the online
ride hailing business and complete the record filing of internet information services with the provincial communications administration
in the place of its enterprise registration. Such platform must be capable of exchanging and processing the relevant information and data
with its servers located within the PRC, establish a sound operational management system, work safety management system and service quality
assurance system, and fulfill other conditions as prescribed. Platforms that conduct the online ride hailing business without obtaining
the necessary permit may be subject to an order of correction, a warning by the local authority, a fine of RMB10,000 (US$1,450) to RMB30,000
(US$4,349), or even criminal liabilities if a violation constitutes a crime. Vehicles used for online ride hailing services must also
satisfy certain conditions in order to obtain the transportation permit for vehicles used for online ride hailing services, including,
among others, installation of satellite navigation system and emergency alarm devices, and meeting certain operational safety criteria.
The Interim Measures also impose certain requirements on drivers engaged in online ride hailing services, including, among others, a driving
experience of more than three years and no transport or driving related or violent criminal offense or violent crime record. Drivers must
meet the prescribed conditions and pass the relevant exams before they can obtain the driver’s license for online ride hailing services.
Platforms may be subject to an order of correction and a fine of RMB5,000 (US$725) to RMB10,000 (US$1,450), and in severe cases a fine
of RMB10,000 (US$1,450) to RMB30,000 (US$4,349), if the relevant vehicle or driver providing the online ride hailing services has not
obtained the applicable permit. Furthermore, the Interim Measures also provide that competent local governmental authorities may formulate
detailed implementing rules for their respective regions in accordance with the Interim Measures and in light of local conditions.

Following the promulgation
of the Interim Measures, various local governmental authorities have promulgated implementing rules to further stipulate the detailed
requirements for online ride hailing service platforms, vehicles and drivers, including the major cities of our operations. On November 5,
2016, the Municipal Communications Commission of Chengdu City and a number of municipal departments jointly issued the Implementation
Rules for the Administration of Taxi Management Services for Chengdu Network, which was replace by the one promulgated on July 26,
2021. On August 10, 2017, the Transportation Commission of Chengdu further issued guidelines on compliance requirements for online
ride-hailing businesses, including Working Process for the Online Appointment of Taxi Drivers Qualification Examination and Issuance
and Online Appointment Taxi Transportation Certificate Issuance Process. On November 28, 2016, Guangzhou Municipal People’s Government
promulgated Interim Measures for the Management of Online Ride Hailing Operation and Service in Guangzhou, as amended on November 14,
2019. On July 23, 2018, the General Office of Changsha Municipal People’s Government issued the “Detailed Rules for
the Administration of Online Booking Taxi Management Services for Changsha”. On June 12, 2019, the Municipal Communications Commission
of Changsha City further issued “Transfer and Registration Procedures of Changsha Online Booking of Taxi”. According to these
regulations and guidelines, three licenses or certificates are required for operating the online ride-hailing business: (1) online
ride-hailing service platforms is required to obtain the online reservation taxi operating license; (2) automobiles used for online
ride-hailing are required to obtain the online reservation taxi transport certificate (the “automobile certificate”); (3)
online ride-hailing drivers are required obtain the online reservation taxi driver’s license (the “driver’s license”).
Those regulations also stipulate a series of detailed requirements for the online ride-hailing platforms, drivers and automobiles in
different cities.

11

As of March 31, 2026, all
of our online ride-hailing drivers who leased our automobiles or used our services have obtained the driver’s license, and all of
the cars used for online ride-hailing services which we provided management services to have the automobile certificate. Without requisite
automobile certificate or driver’s license, these drivers may be suspended from providing online ride-hailing services, confiscated
their illegal income and subject to fines of up to 10 times of their illegal income. We are in the process of assisting the drivers to
obtain the required certificate and license, such as providing registered and training services. However, there is no guarantee that all
of the drivers who run their online ride-hailing business would be able to obtain all the certificates and licenses.

On February 7, 2022, the
MIIT, the MPS and several other governmental authorities jointly promulgated the Notice on Strengthening the Joint Supervision of the
Entire Chain of Online Ride Hailing Industry, which provides that the departments of transportation, telecommunications, public security,
human resources and social security, the People’s Bank of China, taxation, market regulation and internet information shall accelerate
the establishment of a collaborative supervision mechanism led by the transportation department for new forms of transportation at the
provincial and municipal levels, or the joint supervision mechanism. This notice requires relevant governmental authorities to optimize
service processes, strictly control industry access, and urge online ride hailing platforms not to grant access to drivers and vehicles
with no valid licenses. In case certain violations by online ride hailing platforms trigger the supervisions of various governmental
authorities or different provinces and have serious adverse impacts, the relevant authorities of the State Council may organize joint
regulatory talks and urge the online ride hailing platforms to rectify. If the online ride hailing platforms commit serious violations
but refuse to rectify, the relevant governmental authorities of the municipal level or above may initiate joint supervision and report
such violations to the inter-ministerial joint meeting mechanism, and the Ministry of Transport shall take the lead and work together
with the CAC, the MIIT, the MPS and other governmental authorities, or instruct their relevant local counterparts, to take measures in
accordance with laws, including ordering online ride hailing platforms to suspend services in the region, suspend the release of apps
or take down the apps, etc. According to this notice, the joint supervision mechanism shall apply to certain violations of laws and regulations
by online ride hailing platforms, which include (i) engaging in online ride hailing business or in a disguised form without obtaining
the permit for online ride hailing business; (ii) failing to secure that the vehicles and drivers providing services have relevant licenses
and professional qualifications, dispatching orders to drivers and vehicles that have not obtained the corresponding licenses, failing
to transmit relevant data information to online ride hailing supervision information exchange platform as required or other serious violations
of laws and regulations occurring in the process of operating online ride hailing business; (iii) low-price dumping, fraud, and unreasonably
differential treatment of individuals in terms of transaction conditions; (iv) endangering network security, data security, or infringing
on the rights and interests of users’ personal information; (v) illegal operation of payment and settlement business; (vi) serious
infringement of the labor security rights and interests of the drivers; (vii) failure to pay taxes in accordance with the law; and (viii)
other serious violations that endanger public interests, disrupt social order, and affect social security and stability.

Regulations Relating to Vehicle Rental
Services

Pursuant to the Administration
Measures for Operations and Services of Small and Micro Passenger Vehicles issued by the Ministry of Transport on December 20, 2020 and
last amended on August 11, 2021, rental business operators of small and micro passenger vehicles shall carry out record-filing procedures
with the city or county level counterparts of the Ministry of Transport where the business operations are conducted, within 60 days after
completing the relevant registration formalities with the local counterparts of the State Administration for Market Regulation, or within
60 days after establishing new service agencies to carry out relevant business activities. To qualify for the record filing procedures,
an applicant entity shall satisfy, among others, the following requirements: (i) being an independent legal person registered under the
PRC law; (ii) the vehicles used for rental business operations passing quality inspections, and the registered nature of these vehicles
being “rental”; (iii) having the business premises and management personnel eligible for the rental business; (iv) establishing
corresponding service institutions and having corresponding service capabilities locally; (v) developing comprehensive operation and management
systems, service procedures, safety management systems, and emergency response plans. Failure to complete the record-filing procedures
may subject the rental business operators of small and micro passenger vehicles to orders to rectify and fines ranging from RMB3,000 (US$434)
to RMB10,000 (US$1,450). All vehicles used for our Auto Operating Leasing have obtained the required licenses and completed the registration.

12

Regulations Related to Value-Added Telecommunication
Business Certificates and Foreign Investment Restrictions

Among all of the applicable
laws and regulations, the Telecommunications Regulations of the People’s Republic of China, or the Telecom Regulations, promulgated
by the PRC State Council in September 25, 2000 and amended on July 29, 2014 and February 6, 2016, respectively, is the primary governing
law, and sets out the general framework for the provision of telecommunications services by domestic PRC companies. Under the Telecom
Regulations, telecommunications service providers are required to procure operating licenses prior to their commencement of operations.
The Telecom Regulations distinguish “basic telecommunications services” from “value-added telecommunications services”,
or “VATS”. VATS are defined as telecommunications and information services provided through public networks, and are further
divided into Class I VATS and Class II VATS. The Telecom Catalogue was issued as an attachment to the Telecom Regulations to categorize
telecommunications services as either basic or value-added. The Telecom Catalogue was most recently updated in June 2019, categorizing
online data and transaction processing, information services, among others, as Class II VATS.

The Administrative Measures
on Telecommunications Business Operating Licenses, promulgated by the MIIT in 2009 and most recently amended in July 2017, which set
forth more specific provisions regarding the types of licenses required to operate VATS, the qualifications and procedures for obtaining
such licenses and the administration and supervision of such licenses. Under these regulations, a commercial operator of VATS must first
obtain a VATS License, from the MIIT or its provincial level counterparts, otherwise such operator might be subject to sanctions including
corrective orders and warnings from the competent administration authority, fines and confiscation of illegal gains and, in the case
of significant infringements, the websites may be ordered to close.

According to the Special
Entry Management Measures (Negative List) for the Access of Foreign Investment (2021 version) and the Administrative Regulations on Foreign-Invested
Telecommunications Enterprises, which were most recently amended by the State Council on April 7, 2022 and took effect on May 1, 2022,
the equity interest of foreign investors in value-added telecommunications enterprises that are open for foreign investment according
to China’s WTO commitment may not exceed 50%, except as otherwise stipulated by the state. Foreign investment in entities holding
VATS Licenses for internet data center services, content delivery network services, domestic internet protocol virtual private network
services and internet access services, which are not open for foreign investment according to China’s WTO commitment, are generally
prohibited, except that qualified telecommunication service providers incorporated in Hong Kong or Macau may hold up to 50% equity interest
in such entities according to the Mainland and Hong Kong Closer Economic Partnership Agreement or the Mainland and Macao Closer Economic
Partnership Agreement, respectively. From May 1, 2022, the amended Administrative Regulations on Foreign-Invested Telecommunications
Enterprises canceled the qualification requirement on the primary foreign investor in a foreign invested value-added telecommunications
enterprise for having a good track record and operational experience in the value-added telecommunications industry as stipulated in
the previous version.

Meanwhile, the Circular
of Ministry of Industry and Information Technology Concerning Lifting Restrictions on the Proportion of Foreign Equity in Online Data
Processing and Transaction Processing Business (E-commerce) (the “Circular 196”), which was promulgated on June 19, 2015,
provides that foreign investors are permitted to invest up to 100% of the registered capital in a foreign-invested telecommunication
enterprise engaging in the operation of online data processing and transaction processing (E-commerce). However, foreign investors are
only permitted to invest up to 50% of the registered capital in a foreign-invested telecommunication enterprise that engages in the operation
of Internet information services. While Circular 196 permits foreign ownership, in whole or in part, of online data and deal processing
businesses (E-commerce), a sub-set of value-added telecommunications services, it is not clear whether our online ride-hailing platform
would be deemed as online data and deal processing. See “Risk Factors — Risks Related to Doing Business
in China — We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related
businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse
effect on our business and results of operations.”

13

Regulations Related to Internet Advertising

The Measures for Administration
of Internet Advertising (the “Internet Advertising Measures”), were adopted by the MSA and became effective on May 1, 2023.
The Internet Advertising Measures regulate Internet advertising activities. According to the Internet Advertising Measures, Internet advertisers
are responsible for the authenticity of the content of advertisements. The identity, administrative license, cited information and other
certificates that advertisers are required to obtain in publishing Internet advertisements shall be true and valid. Internet advertisements
shall be distinguishable and prominently marked as “advertisements” in order to enable consumers to identify them as advertisements.
Publishing and circulating advertisements through the Internet shall not affect the normal use of the Internet by users. It is not allowed
to induce users to click on the content of advertisements by any fraudulent means, or to attach advertisements or advertising links in
the emails without permission. The Internet Advertising Measures also impose several restrictions on the forms of advertisements and activities
used in advertising. “Internet advertising” as defined in the Internet Advertising Measures refers to commercial advertisements
that directly or indirectly promote goods or services through websites, web pages, Internet applications or other Internet media in various
forms, including texts, pictures, audio clips and videos. Where Internet advertisements are not identifiable and marked as “advertisements”,
a fine of not more than RMB100,000 (US$14,497) may be imposed in accordance with Advertising Law. A fine ranging from RMB5,000 (US$725)
to RMB30,000 (US$4,349) may be imposed for any failure to provide a prominently marked “CLOSE” button to ensure “one-click
closure”. Advertisers who induce users to click on the content of advertisements by fraudulent means or without permission, attach
advertisements or advertising links in the emails shall be imposed a fine ranging from RMB5,000 (US$725) to RMB30,000 (US$4,349). Our
marketplace is in the process of complying with the new Internet Advertising Measures during our advertising activities.

Regulations Related to Company Establishment,
Dividend Distribution and Foreign Investment

The establishment, operation
and management of corporate entities in China is governed by the Company Law of the PRC (the “Company Law”), which was issued
by the SCNPC and was last amended in December 2023 and will come into effect as from July 1, 2024. The Company Law applies to both PRC
domestic companies and foreign-invested companies. All of our subsidiary in China is subject to the Company Law. According to the Company
Law, companies established in the PRC are either limited liability companies or joint stock limited liability companies.

The establishment procedures,
approval procedures, registered capital requirements, foreign exchange matters, accounting practices, taxation and labor matters of a
wholly foreign-owned enterprise are regulated by the Foreign Investment Law and the Implementing Rules of the PRC Foreign Investment Law
(the “Implementing Rules”), which was approved by the National People’s Congress of China in March 2019 and December
2019, respectively. The PRC Foreign Investment Law and the Implementing Rules both took effect on January 1, 2020 and replaced three major
previous laws on foreign investments in China, namely, the Sino-foreign Equity Joint Venture Law, the Sino-foreign Cooperative Joint Venture
Law and the Wholly Foreign-owned Enterprise Law, and their respective implementing rules. According to these regulations, foreign-invested
enterprises in the PRC may only pay dividends out of their accumulated profit, if any, determined in accordance with PRC accounting standards
and regulations. However, relevant PRC laws and regulations permit payments of dividends by the Group’s entities incorporated in
the PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. A PRC
company is required to set aside general reserves of at least 10% of its after-tax profit, until the cumulative amount of such reserves
reaches 50% of its registered capital unless the provisions of laws regarding foreign investment provide otherwise. As of March 31, 2026,
the total respective registered capital of the Company’s direct subsidiary was $10.0 million.

In addition, PRC companies
may allocate a portion of their after-tax profits based on PRC accounting standards to employee welfare and bonus funds at their discretion.
These reserves and employee welfare and bonus funds are not distributable as cash dividends. A PRC company may not distribute any profits
until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with
distributable profits from the current fiscal year.

As of March 31, 2026, the Company’s subsidiary incorporated in
the PRC has suffered accumulated loss and the Company concluded all the subsidiaries did not have abilities to transfer a portion of their
net assets to the Company either in the form of dividends, loans or advances. Furthermore, even though the Company currently does not
require any such dividends, loans or advances from the PRC entities for working capital and other funding purposes, the Company may in
the future require additional cash resources from them due to changes in business conditions, to fund future acquisitions and development,
or merely to declare and pay dividends or distributions to its shareholders

14

Except for the above, there
is no other restriction under PRC laws and regulations for PRC companies on use of proceeds generated by the Group’s subsidiaries
to satisfy any obligations of the Company, as long as the PRC company completed all required procedures, including the tax payment certification
and tax declaration.

The investment activities
in China of foreign investors are also governed by the Foreign Investment Law and the Implementing Rules. Pursuant to the Foreign Investment
Law, “foreign investments” refer to investment activities conducted by foreign investors (including foreign natural persons,
foreign enterprises or other foreign organizations) directly or indirectly in the PRC, which include any of the following circumstances:
(i) foreign investors setting up foreign-invested enterprises in the PRC solely or jointly with other investors, (ii) foreign investors
obtaining shares, equity interests, property portions or other similar rights and interests of enterprises within the PRC, (iii) foreign
investors investing in new projects in the PRC solely or jointly with other investors, and (iv) investment in other methods as specified
in laws, administrative regulations, or as stipulated by the State Council. The Implementing Rules introduce a see-through principle
and further provide that foreign-invested enterprises that invest in the PRC are also governed by the PRC Foreign Investment Law and
the Implementing Rules.

The Foreign Investment Law
and the Implementing Rules provide that a system of pre-entry national treatment and negative list shall be applied for the administration
of foreign investment, where “pre-entry national treatment” means that the treatment given to foreign investors and their
investments at market entry stage is no less favorable than that given to domestic investors and their investments, and “negative
list” means the special administrative measures for foreign investment’s entry to specific fields or industries, which will
be proposed by the competent investment department of the State Council in conjunction with the competent commerce department of the
State Council and other relevant departments, and be reported to the State Council for promulgation, or be promulgated by the competent
investment department or competent commerce department of the State Council after being reported to the State Council for approval. Foreign
investments beyond the negative list will be granted national treatment. Foreign investors shall not invest in the prohibited fields
as specified in the negative list, and foreign investors who invest in the restricted fields shall comply with the special requirements
on the shareholding, senior management personnel, etc. In the meantime, relevant competent government departments will formulate a catalogue
of industries for which foreign investments are encouraged according to the needs for national economic and social development, to list
the specific industries, fields and regions in which foreign investors are encouraged and guided to invest.

The current industry entry
clearance requirements governing investment activities in the PRC by foreign investors are set out in two categories, namely the Special
Entry Management Measures (Negative List) for the Access of Foreign Investment (2024 version), or the 2024 Negative List, as promulgated
by the National Development and Reform Commission and the MOFCOM on September 6, 2024 and taking effect on November 1, 2024, and the
Encouraged Industry Catalogue for Foreign Investment (2022 version) as promulgated by the National Development and Reform Commission
and the MOFCOM on October 26, 2022 and taking effect on January 1, 2023. Industries not listed in these two catalogues are generally
deemed “permitted” for foreign investment unless specifically restricted by other PRC laws. Industries not listed in these
two catalogues are generally deemed “permitted” for foreign investment unless specifically restricted by other PRC laws.
Our Automobile Transaction and Related Services is not listed in 2024 Negative List.

Meanwhile, the PRC Foreign
Investment Law provides that foreign-invested enterprises established according to the existing laws regulating foreign investment may
maintain their structure and corporate governance within five years after the implementing of the Foreign Investment Law. Furthermore,
the PRC Foreign Investment Law provides several protective rules and principles for foreign investors and their investments in the PRC,
including, among others, that a foreign investor may freely transfer into or out of China, in Renminbi or a foreign currency, its contributions,
profits, capital gains, income from disposition of assets, royalties of intellectual property rights, indemnity or compensation lawfully
acquired, and income from liquidation, among others, within China; local governments shall abide by their commitments to the foreign
investors; governments at all levels and their departments shall enact local normative documents concerning foreign investment in compliance
with laws and regulations and shall not impair legitimate rights and interests, impose additional obligations onto foreign-invested enterprises,
set market access restrictions and exit conditions, or intervene with the normal production and operation activities of foreign-invested
enterprises; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation
shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; and mandatory technology
transfer is prohibited.

15

In addition, pursuant to
the Foreign Investment Law, the Implementing Rules, and the Information Reporting Measures for Foreign Investment jointly promulgated
by the MOFCOM and the MSA, which took effect on January 1, 2020, a foreign investment information reporting system was established and
foreign investors or foreign-invested enterprises must report investment information to competent commerce departments of the PRC government
through the enterprise registration system, the enterprise credit information publicity system and the foreign investment information
reporting system, and the relevant government authorities shall share such investment information to the competent commerce departments
in a timely manner. We are subject to these regulatory requirements.

Regulations Related to Labor and Social
Security

Pursuant to the PRC Labor Law, the PRC Labor Contract Law and the Implementing
Regulations of the Employment Contracts Law, labor relationships between employers and employees must be executed in written form. Wages
may not be lower than the local minimum wage. Employers must establish a system for labor safety and sanitation, strictly abide by state
standards and provide relevant education to their employees. Employees are also required to work in safe and sanitary conditions.

Under PRC laws, rules and
regulations, including the Social Insurance Law, the Interim Regulations on the Collection and Payment of Social Security Funds and the
Regulations on the Administration of Housing Accumulation Funds, employers are required to contribute, on behalf of their employees,
to a number of social security funds, including funds for basic pension insurance, unemployment insurance, basic medical insurance, occupational
injury insurance, maternity leave insurance and housing accumulation funds. These payments are made to local administrative authorities
and any employer who fails to contribute may be fined and ordered to pay the deficit amount. See “Risk Factors — Risks
Related to Doing Business in China — Failure to make adequate contributions to various employee benefit plans as
required by PRC regulations may subject us to penalties.”

Anti-money Laundering Regulation

The PRC Anti-money Laundering
Law, which became effective in January 2007, sets forth the principal anti-money laundering requirements applicable to financial
institutions, as well as non-financial institutions with anti-money laundering obligations, including the adoption of precautionary and
supervisory measures, establishment of various systems for client identification, retention of clients’ identification information
and transactions records, and reports on large transactions and suspicious transactions. According to the PRC Anti-money Laundering Law,
financial institutions subject to the PRC Anti-money Laundering Law include banks, credit unions, trust investment companies, stock brokerage
companies, futures brokerage companies, insurance companies and other financial institutions as listed and published by the State Council,
while the list of the non-financial institutions with anti-money laundering obligations will be published by the State Council. The PBOC
and other governmental authorities issued a series of administrative rules and regulations to specify the anti-money laundering
obligations of financial institutions and certain non-financial institutions, such as payment institutions. However, the State Council
has not promulgated the list of the non-financial institutions with anti-money laundering obligations.

Regulation Related to the Payment Services of Non-financial
Institutions

According to Measures for
the Administration of Payment Services of Non-Financial Institutions which were promulgated by PBOC on June 14, 2010, effective
on September 1, 2010 and amended on April 29, 2020, and Implementing Rules for the Measures for the Administration of
Payment Services of Non-Financial Institution which were promulgated by the PBOC, effective on December 1, 2010 and amended on June 2,
2020, the payment services provided by non-financial institutions refer to some or all of the following monetary capital transfer services
provided by the non-financial institutions as intermediary agencies between payers and payees: (1) payment through the internet;
(2) issuance and acceptance of prepaid cards; (3) bankcard acquiring; and (4) other payment services as determined by
the PBOC. Non-financial institutions which provide payment services shall obtain a “Payment Business License” and become
a “payment institution.” Payment Business License is valid for five years from the date of issuance. Payment institutions
shall carry out business activities in compliance with the scope of business approved by the Payment Business License, and shall not
outsource any business, transfer, lease, or lend its Payment Business License. Any non-financial institution or individual shall not
directly or indirectly engage in payment business without the approval of the PBOC.

16

On May 9, 2019, the
MOT, the PBOC, the NDRC, the MPS, the State Administration of Market Regulation (the “SAMR”) and NFRAC, jointly issued the
Measures for the Administration of User Funds in New Forms of Transport Business (Trial) (the “Trial Measures on Administration
of User Funds”) which became effective on June 1, 2019. According to the Trial Measures on Administration of User Funds, an
operating enterprise shall open a special deposit account for user deposits and a special deposit account for prepayments, respectively,
as are nationwide unique at the bank in the place of its registration in mainland China, and the bank where the special deposit accounts
are opened shall be the depository bank to preserve user funds.

Regulations on Intellectual Property

The PRC has adopted legislation
governing intellectual property rights, including copyrights, trademarks and patents. The PRC is a signatory to major international conventions
on intellectual property rights and is subject to the Agreement on Trade Related Aspects of Intellectual Property Rights as a result
of its accession to the World Trade Organization in December 2001.

The SCNPC amended the Copyright
Law in 2001, 2010 and 2020 to widen the scope of works and rights that are eligible for copyright protection. The amended, the Copyright
Law extends copyright protection to Internet activities, products disseminated over the Internet and software products. In addition,
there is a voluntary registration system administered by the China Copyright Protection Center. To address copyright infringement related
to content posted or transmitted over the Internet, the National Copyright Administration and former Ministry of Information Industry
jointly promulgated the Administrative Measures for Copyright Protection Related to the Internet in April 2005. These measures became
effective in May 2005.

On December 20, 2001,
the SCNPC promulgated the new Regulations on Computer Software Protection, effective from January 1, 2002, and revised in 2013,
which are intended to protect the rights and interests of the computer software copyright holders and encourage the development of software
industry and information economy. In the PRC, software developed by PRC citizens, legal persons or other organizations is automatically
protected immediately after its development, without an application or approval. Software copyrights may be registered with the designated
agency and if registered, the certificate of registration issued by the software registration agency will be the primary evidence of
the ownership of the copyright and other registered matters. On February 20, 2002, the National Copyright Administration of the
PRC introduced the Measures on Computer Software Copyright Registration, which outline the operational procedures for registration of
software copyright, as well as registration of software copyright license and transfer contracts. The Copyright Protection Center of
China is mandated as the software registration agency.

The PRC Trademark Law, adopted
in 1982 and revised in 1993, 2001, 2013 and 2019, respectively, protects the proprietary rights to registered trademarks. The Trademark
Office under the SAIC handles trademark registrations and may grant a term of ten years for registered trademarks, which may be extended
for another ten years upon request. Trademark license agreements shall be filed with the Trademark Office for record. In addition, if
a registered trademark is recognized as a well-known trademark, the protection of the proprietary right of the trademark holder may reach
beyond the specific class of the relevant products or services.

The Patent Law of the PRC
and its Implementation Rules provide for three types of patents: invention, utility model and design. The duration of a patent right
is either 10 years or 20 years from the date of application, depending on the type of patent right.

Domain names are protected
under the Administrative Measures on Internet Domain Names promulgated by the MIIT on August 24, 2017 and effective as of November 1,
2017. Our domain name registrations are handled through domain name service agencies established under the relevant regulations, and
applicants become domain name holders upon successful registration.

Regulations Related to Foreign Exchange

The principal regulations
governing foreign currency exchange in China are the Foreign Exchange Administration Regulations, which were most recently amended in
August 2008. Payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions,
can usually be made in foreign currencies without prior approval from the State Administration of Foreign Exchange (“SAFE”)
by complying with certain procedural requirements. By contrast, approval from or registration with appropriate PRC authorities or banks
authorized by appropriate PRC authorities is required where RMB capital is to be converted into foreign currency and remitted out of
China to pay capital expenses.

17

SAFE promulgated the Notice
of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested
Enterprises (“Circular 19”), effective on June 1, 2015, in replacement of SAFE Circular 142 (the Circular on the Relevant
Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested
Enterprises. According to Circular 19, the flow and use of the RMB capital converted from foreign currency-denominated registered capital
of a foreign-invested company is regulated such that RMB capital may not be used for the issuance of RMB entrusted loans or the repayment
of inter-enterprise loans or the repayment of banks loans that have been transferred to a third party. Although Circular 19 allows RMB
capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity investments
within the PRC, it also reiterates the principle that RMB converted from the foreign currency-denominated capital of a foreign-invested
company may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear whether SAFE will permit such
capital to be used for equity investments in the PRC in actual practice. SAFE promulgated the Notice of the State Administration of Foreign
Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account (the “Circular 16”),
effective on June 9, 2016, which reiterates some of the rules set forth in Circular 19, but changes the prohibition against
using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company to issue RMB entrusted
loans to a prohibition against using such capital to issue loans to non-associated enterprises. Violations of SAFE Circular 19 or Circular
16 could result in administrative penalties.

From 2012, SAFE has promulgated
several circulars to substantially amend and simplify the current foreign exchange procedure. Pursuant to these circulars, the opening
of various special purpose foreign exchange accounts, the reinvestment of RMB 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. In addition, domestic companies are no longer limited to extend cross-border loans to their offshore subsidiaries
but are also allowed to provide loans to their offshore parents and affiliates and multiple capital accounts for the same entity may
be opened in different provinces. SAFE also promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange
Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which specifies that
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 February 2015, SAFE promulgated SAFE Circular 13, which took effect on June 1,
2015. SAFE Circular 13 delegates the power to enforce the foreign exchange registration in connection with inbound and outbound direct
investments under relevant SAFE rules from local branches of SAFE to banks, thereby further simplifying the foreign exchange registration
procedures for inbound and outbound direct investments.

On January 26, 2017,
SAFE issued the Notice of State Administration of Foreign Exchange on Improving the Check of Authenticity and Compliance to Further Promote
Foreign Exchange Control (the “SAFE Circular 3”), which stipulates several capital control measures with respect to the outbound
remittance of profit from domestic entities to offshore entities, including (i) 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 (ii) domestic entities shall hold income to account for previous years’ losses before remitting the 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.

On October 23, 2019, SAFE
promulgated the Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade
and Investment, or Circular 28, which permits non-investment foreign-invested enterprises to use their capital funds to make equity investments
in China, with genuine investment projects and in compliance with effective foreign investment restrictions and other applicable laws.
However, as the Circular 28 was newly issued, there are still substantial uncertainties as to its interpretation and implementations
in practice.

18

Regulations Relating to Offshore Special
Purpose Companies Held by PRC Residents

SAFE promulgated the Circular
on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles
(the “SAFE Circular 37”) in July 2014 that requires PRC residents or entities to register with SAFE or its local branch
in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.
In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes
material events relating to any change of basic information (including change of such PRC citizens or residents, name and operation term),
increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions.

SAFE Circular 37 was issued
to replace SAFE Circular 75 (the Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents Engaging in Financing
and Roundtrip Investments via Overseas Special Purpose Vehicles). SAFE further enacted the Notice on Further Simplifying and Improving
the Foreign Exchange Management Policies for Direct Investment (the “SAFE Circular 13”) effective from June 1, 2015,
which allows PRC residents or entities to register with qualified banks in connection with their establishment or control of an offshore
entity established for the purpose of overseas investment or financing. However, remedial registration applications made by PRC residents
that previously failed to comply with the SAFE Circular 37 continue to fall under the jurisdiction of the relevant local branch of SAFE.
In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the
PRC subsidiary of that special purpose vehicle may be prohibited from distributing profits 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. Moreover, failure to comply with the various SAFE registration requirements described above could result
in liability under PRC law for evasion of foreign exchange controls.

See “Risk Factors — Risks Related to Doing
Business in China — PRC regulations relating to offshore investment activities by PRC residents may limit our PRC
subsidiary’s ability to increase their registered capital or distribute profits to us or otherwise expose us or our PRC resident
beneficial owners to liability and penalties under PRC law.”

SAFE Regulations Relating to Employee Stock
Incentive Plans

On February 15, 2012,
SAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock
Incentive Plans of Overseas Publicly-Listed Companies (the “Stock Option Rules”), which replaced the Application Procedures
of Foreign Exchange Administration for Domestic Individuals Participating in Employee Stock Ownership Plans or Stock Option Plans of
Overseas Publicly-Listed Companies issued by SAFE on March 28, 2007. Under the Stock Option Rules and other relevant rules and
regulations, PRC residents who participate in a stock incentive plan in an overseas publicly listed company are required to register
with SAFE or its local branches and complete certain other procedures. Participants of a stock incentive plan who are PRC residents must
retain a qualified PRC agent, which could be a PRC subsidiary of such overseas publicly listed company or another qualified institution
selected by such PRC subsidiary, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf
of its participants. Such participants must also retain an overseas entrusted institution to handle matters in connection with their
exercise of stock options, the purchase and sale of corresponding shares or interests and fund transfers. In addition, the PRC agent
is required to amend the SAFE registration with respect to our share incentive plans if there are any material changes to the share incentive
plans, the PRC agent or the overseas entrusted institution or other material changes. In addition, SAFE Circular 37 provides that PRC
residents who participate in a share incentive plan of an overseas unlisted special purpose company may register with SAFE or its local
branches before exercising rights. See “Risk Factors — Risks Related to Doing Business in China — Any
failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC
plan participants or us to fines and other legal or administrative sanctions.”

19

Regulations Related to Enterprise Income
Tax

Under the PRC Enterprise
Income Tax Law (the “EIT Law”), which became effective on January 1, 2008, an enterprise established outside the PRC
with “de facto management bodies” within the PRC is considered a “resident enterprise” for PRC enterprise income
tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. In 2009, the State Administration
of Taxation (the “SAT”) issued the Notice Regarding the Determination of Chinese-Controlled Overseas Incorporated Enterprises
as PRC Tax Resident Enterprise on the Basis of De Facto Management Bodies (the “SAT Circular 82”), which provides certain
specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated
offshore is located in China. Further to SAT Circular 82, in 2011, the SAT issued the Administrative Measures for Enterprise Income Tax
of Chinese-Controlled Offshore Incorporated Resident Enterprises (Trial) (the “SAT Bulletin 45”) to provide more guidance
on the implementation of SAT Circular 82.

According to SAT Circular
82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be considered 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 worldwide
income only if all of the following conditions are met: (a) the senior management and core management departments in charge of its
daily operations function have their presence mainly in the PRC; (b) its financial and human resources decisions are subject to
determination or approval by persons or bodies in the PRC; (c) its major assets, accounting books, company seals, and minutes and
files of its board of directors and shareholders’ meetings are located or kept in the PRC; and (d) more than half of the enterprise’s
directors or senior management with voting rights habitually reside in the PRC.

Although SAT Circular 82
and SAT Bulletin 45 only apply to offshore-incorporated enterprises controlled by PRC enterprises or PRC enterprise groups and not those
controlled by PRC individuals or foreigners, the determination criteria set forth therein may reflect the SAT’s general position
on how the term “de facto management body” could be applied in determining the tax resident status of offshore enterprises,
regardless of whether they are controlled by PRC enterprises, individuals or foreigners.

The State Administration of Taxation has promulgated several rules
and notices to tighten the scrutiny over acquisition transactions in recent years, including the Notice on Strengthening Administration
of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises (the “SAT Circular 698”), the Notice on Several
Issues Regarding the Income Tax of Non-PRC Resident Enterprises (the “SAT Circular 24”) and the Bulletin on Issues of Enterprise
Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises (the “SAT Bulletin 7”). Pursuant to these rules
and notices, if a non-PRC resident enterprise transfers its equity interests in a PRC tax resident enterprise, such non-PRC resident transferor
must report to the tax authorities at the place where the PRC tax resident enterprise is located and is subject to a PRC withholding tax
of up to 10%. In addition, if a non-PRC resident enterprise indirectly transfers so-called PRC Taxable Properties, referring to properties
of an establishment or a place of business in China, real estate properties in China and equity investments in a PRC tax resident enterprise,
by disposition of the equity interests in an overseas non-public holding company without a reasonable commercial purpose and resulting
in the avoidance of PRC enterprise income tax, the transfer will be re-characterized as a direct transfer of the PRC Taxable Properties
and gains derived from the transfer may be subject to a PRC withholding tax of up to 10%. SAT Bulletin 7 has listed several factors to
be taken into consideration by the tax authorities in determining if an indirect transfer has a reasonable commercial purpose. However,
regardless of these factors, an indirect transfer satisfying all the following criteria will be deemed to lack a reasonable commercial
purpose and be taxable in the PRC: (i) 75% or more of the equity value of the intermediary enterprise being transferred is derived directly
or indirectly from PRC Taxable Properties; (ii) at any time during the one year period before the indirect transfer, 90% or more of the
asset value of the intermediary enterprise (excluding cash) is comprised directly or indirectly of investments in the PRC, or 90% or more
of its income is derived directly or indirectly from the PRC; (iii) the functions performed and risks assumed by the intermediary enterprise
and its subsidiary that directly holds the PRC Taxable Properties is limited and is insufficient to prove its economic substance; and
(iv) the foreign tax payable on the gain derived from the indirect transfer of the PRC Taxable Properties is lower than the potential
PRC tax on the direct transfer of those assets. On the other hand, indirect transfers falling into the scope of the safe harbors under
SAT Bulletin 7 may not be subject to PRC tax. The safe harbors include qualified group restructurings, public market trades and exemptions
under tax treaties.

Under SAT Bulletin 7 and
other PRC tax regulations, in the case of an indirect transfer, entities or individuals obligated to pay the transfer price to the transferor
must act as withholding agents and are required to withhold the PRC tax from the transfer price. If they fail to do so, the seller is
required to report and pay the PRC tax to the PRC tax authorities. If neither party complies with the tax payment or withholding obligations
under SAT Bulletin 7, the tax authority may impose penalties such as late payment interest on the seller. In addition, the tax authority
may also hold the withholding agents liable and impose a penalty of 50% to 300% of the unpaid tax on them. The penalty imposed on the
purchasers may be reduced or waived if the withholding agents have submitted the relevant materials in connection with the indirect transfer
to the PRC tax authorities in accordance with SAT Bulletin 7.

20

Regulations Related to PRC Value-Added
Tax

In March 2016, the
Ministry of Finance and the State Administration of Taxation further promulgated the Notice on Fully Promoting the Pilot Plan for Replacing
Business Tax by Value-Added Tax (“VAT”), which became effective on May 1, 2016. Pursuant to the pilot plan and relevant
notices, VAT is generally imposed in lieu of business tax in the modern service industries, including the value-added telecommunication
services, on a nationwide basis. VAT of a rate of 6% applies to revenue derived from the provision of some modern services. Certain small
taxpayers under PRC law are subject to reduced value-added tax at a rate of 3%. Unlike business tax, a taxpayer is allowed to offset
the qualified input VAT paid on taxable purchases against the output VAT chargeable on the modern services provided.

On April 4, 2018, the
Ministry of Finance and the State Administration of Taxation issued the Notice on Adjustment of VAT Rates, which came into effect on
May 1, 2018. According to the abovementioned notice, the taxable goods previously subject to VAT rates of 17% and 11% respectively
become subject to lower VAT rates of 16% and 10% respectively starting from May 1, 2018. Furthermore, according to the Announcement
on Relevant Policies for Deepening Value-added Tax Reform jointly promulgated by the Ministry of Finance, the State Administration of
Taxation and the General Administration of Customs, which became effective on April 1, 2019, the taxable goods previously subject
to VAT rates of 16% and 10% respectively become subject to lower VAT rates of 13% and 9% respectively starting from April 1, 2019.

Furthermore, on December
25, 2024, the SCNPC released the Value-Added Tax Law of the PRC, which will become effective from January 1, 2026. Pursuant to the Value-Added
Tax Law, any entities and individuals that sell goods, services, intangible assets, or immovable, or import goods within the territory
of the PRC are taxpayers of VAT and shall pay the VAT in accordance with the law and regulation. Except as stipulated otherwise, the
rate of VAT for sale of goods, labor services of processing, repair or replacement, or tangible movable property leasing services or
import of goods is 13%, the rate of VAT for sale of agricultural products, transportation, postal, basic telecommunications, construction,
or immovable leasing services, sale of immovable, or transfer of the rights to use land is 9%. In addition to the above circumstances,
the rate of VAT for sale of services or intangible assets is 6%.

Pursuant to applicable PRC
regulations promulgated by the Ministry of Finance of China and the SAT, we are required to pay a VAT at a rate of 6% for our different
services and 13% for our automobile, operating lease and finance lease, with respect to revenues derived from the provision of Automobile
Transaction and Related Services. A taxpayer is allowed to offset the qualified input VAT paid on taxable purchases against the output
VAT chargeable on the revenue from services provided.

21

Regulations Related to Mergers and Acquisitions

On August 8, 2006,
six PRC regulatory agencies, including China Securities Regulatory Commission (the “CSRC”), promulgated the Regulations on
Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), which became effective on September 8,
2006 and were amended on June 22, 2009. 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 domestic enterprises or individuals
to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange. On September 21, 2006,
the CSRC published a notice specifying the documents and materials that are required to be submitted for obtaining CSRC approval.

The M&A Rules, and other
recently adopted regulations and rules concerning mergers and acquisitions established additional procedures and requirements that
could make merger and acquisition activities by foreign investors more time consuming and complex. For example, the M&A Rules require
that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise,
if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national
economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark
or PRC time-honored brand. Moreover, the Anti-Monopoly Law promulgated by the SCNPC on August 30, 2007 and effective as of August 1,
2008 requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared
by MOFCOM before they can be completed. In addition, on February 3, 2011, the General Office of the State Council promulgated a
Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “Circular
6”), which officially established a security review system for mergers and acquisitions of domestic enterprises by foreign investors.
Further, on August 25, 2011, MOFCOM promulgated the Regulations on Implementation of Security Review System for the Merger and Acquisition
of Domestic Enterprises by Foreign Investors (the “MOFCOM Security Review Regulations”), which became effective on September 1,
2011, to implement Circular 6. Under Circular 6, a security review is required for mergers and acquisitions by foreign investors having
“national defense and security” concerns and mergers and acquisitions by which foreign Investors may acquire the “de
facto control” of domestic enterprises with “national security” concerns. Under the MOFCOM Security Review Regulations,
MOFCOM will focus on the substance and actual impact of the transaction when deciding whether a specific merger or acquisition is subject
to security review. If MOFCOM decides that a specific merger or acquisition is subject to security review, it will submit it to the Inter-Ministerial
Panel, an authority established under Circular 6 led by the NDRC and MOFCOM under the leadership of the State Council, to carry out the
security review. The regulations prohibit foreign investors from bypassing the security review by structuring transactions through trusts,
indirect investments, leases, loans, control through contractual arrangements or offshore transactions. There is no explicit provision
or official interpretation stating that the merger or acquisition of a company engaged in the marketplace lending business requires security
review.

Regulations Related to Overseas Listings

On February 17, 2023, the
CSRC promulgated the Overseas Listing Trial Measures (the “Trial Measures”), and relevant five guidelines on the application
of regulatory rules, which took effect from March 31, 2023, requiring Chinese domestic companies’ overseas offerings and listings
of equity securities be filed with the CSRC. On the same date, the CSRC circulated Supporting Guidance Rules No. 1 through No. 5, Notes
on the Trial Measures, Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and relevant
CSRC Answers to Reporter Questions, or collectively, the Guidance Rules and Notice, on CSRC’s official website. The Trial Measures
clarify the scope of overseas offerings and listings by Chinese domestic companies which are subject to the filing and reporting requirements
thereunder, and provide, among others, that Chinese domestic companies that have already directly or indirectly offered and listed securities
in overseas markets prior to the effectiveness of the Overseas Listing Trial Measures shall fulfil their filing obligations and report
relevant information to the CSRC within three working days after conducting a follow-on offering of equity securities on the same overseas
market, and follow the relevant reporting requirements within three working days upon the occurrence and public disclosure of any specified
circumstances provided thereunder, including (i) change of control; (ii) investigations or sanctions imposed by overseas securities regulatory
agencies or other relevant competent authorities; (iii) change of listing status or transfer of listing segment and (iv) voluntary or
mandatory delisting. In addition, where the main business of an issuer undergoes material change after overseas offering and listing,
and is therefore beyond the scope of business stated in the filing documents, such issuer shall follow the relevant reporting requirements
within three working days after occurrence of the changes. Any future securities offerings and listings outside mainland China by Chinese
domestic companies, including but not limited to follow-on offerings, secondary listings and going private transactions, will be subject
to the filing with the CSRC under the Overseas Listing Trial Measures. For violations of these provisions or measures, the competent
Chinese authorities may impose administrative regulatory measures, such as orders for correction, warnings, fines, and may pursue legal
liability in accordance with law.

22

The Trial Measures, together
with the Guidance Rules and Notice prescribe that, amongst others: (1) criteria to determine whether an issuer will be required to go
through the filing procedures under the Trial Measures; (2) exemptions from immediate filing requirements for issuers including those
that have already been listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Measures,
but these issuers shall still be subject to filing procedures if they conduct refinancing or are involved in other circumstances that
require filing with the CSRC; (3) a negative list of types of issuers banned from listing or offering overseas, such as issuers whose
affiliates have been recently convicted of bribery and corruption; (4) issuers’ compliance with web security, data security, and
other national security laws and regulations; (5) issuers’ filing and reporting obligations, such as obligation to file with the
CSRC after it submits an application for initial public offering to overseas regulators, and obligation after offering or listing overseas
to file with the CSRC after it completes subsequent offerings and to report to the CSRC material events including change of control or
voluntary or forced delisting of the issuer; and (6) the CSRC’s authority to fine both issuers and their relevant shareholders
for failure to comply with the Trial Measures, including failure to comply with filing obligations or committing fraud and misrepresentation.

The Overseas Listing Trial
Measures provide that if an issuer meets both of the following criteria, the overseas securities offering and listing conducted by such
issuer will be deemed as an indirect overseas offering and listing by PRC domestic companies: (i) 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 (ii) the main parts of the issuer’s business activities are conducted
in mainland China, or its main place(s) of business are located in mainland 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 mainland 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.

The Trial Measures provide
the CSRC with power to warn, fine, and issue injunctions against both PRC domestic companies, their controlling shareholders, and their
advisors in listing or offering securities (collectively, the “Subject Entities”), as well as individuals directly responsible
for these Subject Entities (the “Subject Individuals”). For failure to comply with the Trial Measures Negative List or the
Trial Measures Filing Obligations, or materially false or misleading statements in the filing and reporting required by the Trial Measures:
(1) PRC domestic companies, and their controlling shareholders if the controlling shareholders induced the PRC domestic companies’
failure to comply, severally, may face warnings, injunctions to comply, and fines between RMB1 million and RMB10 million ($144,970 and
$1,449,696); the Subject Individuals in these entities may severally, face warnings and fines between RMB0.5 million and RMB5 million
($72,485 and $724,848). (2) Advisors in listing or offering securities that failed to dutifully advise the PRC domestic companies and
their controlling shareholders in complying with the Trial Measures and caused such failures to comply can face warnings and fines between
RMB0.5 million and 5 million ($72,485 and $724,848); the Subject Individuals in these advisor entities may, severally, face warnings and
fines between RMB0.2 million and RMB2 million ($28,994 and $289,939).

Furthermore, on February
24, 2023, the CSRC, together with certain other PRC governmental authorities, promulgated the Provisions on Strengthening Confidentiality
and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, or the Revised Confidentiality and Archives
Administration Provisions, which took effect on March 31, 2023. According to the Revised Confidentiality and Archives Administration
Provisions, Chinese companies that directly or indirectly conduct overseas offerings and listings, shall strictly abide by the relevant
laws and regulations on confidentiality when providing or publicly disclosing, either directly or through their overseas listed entities,
documents and materials to securities services providers such as securities companies and accounting firms or overseas regulators in
the process of their overseas offering and listing. In the event such documents or materials contain state secrets or working secrets
of government agencies, the Chinese companies shall first obtain approval from competent authorities according to law, and file with
the secrecy administrative department at the same level with the approving authority. In the event that such documents or materials,
if divulged, will jeopardize national security or public interest, the Chinese companies shall strictly fulfill relevant procedures stipulated
by applicable national regulations. The Chinese companies shall also provide a written statement of the specific state secrets and sensitive
information provided when providing documents and materials to securities companies and securities service providers, and the securities
companies and securities service providers shall properly retain such written statements for inspection. According to the Revised Confidentiality
and Archives Administration Provisions, where overseas securities regulators or relevant competent authorities request to inspect, investigate
or collect evidence from Chinese domestic companies concerning their overseas offering and listing or their securities firms and securities
service providers that undertake securities business for such Chinese domestic companies, such inspection, investigation and evidence
collection must be conducted under the cross-border regulatory cooperation mechanism, and the CSRC or competent authorities of the Chinese
government will provide necessary assistance pursuant to bilateral and multilateral cooperation mechanism.

23

Human Capital

As of the date of this Report,
we have a total of 28 full-time employees including three executive officers.

The following table sets
forth the breakdown of our employees by function in our Automobile Transaction and Related Services:

Function
Number of

Employees

Management
2

Legal & Risk Management
2

Operations
4

Marketing
1

Drivers & Automobile Management and Services
6

Human Resources & Administration
2

Finance and Accounting
3

Total
20

All of our employees are
based in the city of Changsha, where our main operations are located.

We believe we offer our
employees competitive compensation packages and work environment that encourages initiative and is based on merit, and as a result, we
have generally been able to develop and maintain our human capital, including attracting and retaining qualified personnel and a stable
core management team.

As required by PRC regulations,
we participate in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution
plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan and
a housing provident fund. We are required under PRC law to make contributions to employee benefit plans at specified percentages of the
salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by the local government from time to time.
We have not made adequate employee benefit payments, and may be required to make up the contributions for these plans as well as to pay
late fees and fines. See “Risk Factors — Risks Related to Doing Business in China — Failure
to make adequate contributions to various employee benefit plans as required by PRC regulations may subject us to penalties.”
We are subject to and comply with PRC regulations regarding labor and social security. See “Regulations – Regulations
Related to Labor and Social Security.”

We enter into standard labor
and confidentiality agreements with each of our employees. We believe that we maintain a good working relationship with our employees,
and we have not experienced any major labor disputes.

Seasonality

We have observed seasonal
trends or patterns in revenues related to our Automobile Transaction and Related Services. Because of the PRC National Holiday in October,
New Year’s Day, and the traditional Lunar New Year in January or February, there is a seasonal decrease in the demand of automobile
purchase/leasing in certain months during the six months ended March 31 (our third and fourth fiscal quarter). For example, we expect
to experience higher user traffic during the Chinese National holiday due to the strong demand in the tourism. Other seasonal trends
that may affect us or China’s online ride-hailing industry generally may develop, and current seasonal trends may become more extreme,
all of which would contribute to fluctuations in our results of operations.

Our results of operations
in future quarters or years may fluctuate and deviate from the expectations of our investors, and any occurrence that disrupts our business
during any particular quarters could have a disproportionately material adverse effect on our liquidity and results of operations.

24

Research and Development

With an aim to standardize
our transaction process and achieve higher operating efficiency, we are developing an integrated information system for our Automobile
Transaction and Related Services. The system comprises modules for procurement, qualification assessment, delivery and post-transaction
management which covers the whole transaction process. We have completed the development of certain functions such as information entry
and delivery which are being tested by us. We launched the system in March 2020 and keep upgrading the system to support our business
expansion.

Intellectual Property

We regard our trademarks,
domain names, know-how, proprietary technologies and similar intellectual property as critical to our success, and we rely on PRC trademark
and trade secret law and confidentiality, invention assignment and non-compete agreements with our employees and others to protect our
proprietary rights. We own 8 trademarks. We have also registered numerous domain names, including www.51ruixi.com, www.senmiaotech.com
and senmiaotechir.com. The information on our websites is not part of, or incorporated in, this Report.

Despite our efforts to protect
our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our technology. Monitoring unauthorized
use of our technology is difficult and costly, and we cannot be certain that the steps we have taken will prevent misappropriation of
our technology. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result
in substantial costs and diversion of our resources.

In addition, third parties
may initiate litigations against us alleging infringement of their proprietary rights or respond to our litigations declaring their non-infringement
of our intellectual property rights. In the event of a successful claim of infringement and our failure or inability to develop non-infringing
technology or license the infringed or similar technology on a timely basis, our business could be harmed. Moreover, even if we are able
to license the infringed or similar technology, license fees could be substantial and may adversely affect our results of operations.

See “Risk Factors — Risks
Related to Our Business — We may not be able to prevent others from unauthorized use of our intellectual property,
which could harm our business and competitive position.” and “— We may be subject to intellectual property infringement
claims, which may be expensive to defend and may disrupt our business and operations.”

Insurance

We consider our insurance
coverage to be adequate as we have in place all the mandatory insurance policies required by Chinese laws and regulations and in accordance
with the commercial practices in our industry. The Auto Business Entities have obtained accident insurance and commercial liability insurance,
which are mandatory, on all the automobiles they purchased for sales, leasing or financing and pass on the costs of such insurance to
their customers in the sale/leasing/financing transaction. We provide social security insurance including pension insurance, unemployment
insurance, work-related injury insurance and medical insurance for our employees. We do not maintain any property insurance policies,
business interruption insurance or general third-party liability insurance, nor do we maintain product liability insurance or key-man
insurance. We consider our insurance coverage to be sufficient for our business operations in China.

25