{"url_path":"/sec/hcai/10-k/2026/item-10","section_key":"item-10","section_title":"Item 10 Additional Information**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-13","source_url":"https://www.sec.gov/Archives/edgar/data/1958399/0001213900-26-055775-index.html","accession_number":"0001213900-26-055775","cik":"0001958399","ticker":"HCAI","issuer_name":"Huachen AI Parking Management Technology Holding Co., Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1958399/0001213900-26-055775-index.html","primary_entity_key":"0001958399","primary_entity_name":"Huachen AI Parking Management Technology Holding Co., Ltd"},"word_count":6434,"has_tables":true,"body_markdown":"**Item\n10. Additional Information**\n\n \n\n**10.A. Share capital**\n\n \n\nNot applicable for annual\nreports on Form 20-F.\n\n \n\n**10.B. Memorandum and articles of association**\n\n \n\nThe following are summaries\nof the material provisions of our amended and restated memorandum and articles of association and the Companies Act, insofar as they relate\nto the material terms of our Class A Ordinary Shares. They do not purport to be complete. Reference is made to our amended and restated\nmemorandum and articles of association, a copy of which is filed as an exhibit to the annual report (and which is referred to in this\nsection as, respectively, the “memorandum” and the “articles”).\n\n  \n\n**Voting Rights**\n\n** **\n\nHolders of Class A Ordinary\nShares are entitled to one (1) vote per share, while holders of Class B Ordinary Shares are entitled to thirty (30) votes per share.\n\n** **\n\n**Meetings of shareholders**\n\n** **\n\nAny of our directors may convene\ngeneral meetings of shareholders at such times and in such manner and places within or outside the Cayman Islands as the director considers\nnecessary or desirable. The director convening a general meeting shall give at least five days’ notice of the general meeting to\nthose shareholders whose names on the date the notice is given appear as members in the register of members of the Company and are entitled\nto vote at the meeting, and each of the Company’s directors. Our Board of Directors must convene a general meeting upon the written\nrequest of one or more shareholders holding Ordinary Shares representing no less than 10% of the voting rights of the issued and paid-up\nOrdinary Shares as at the date of the deposit of the requisition carries the right of voting at general meetings of the Company. The notice\nshall specify the place, the day and the hour of the meeting and the general nature of the business to be carried out at the meeting.\nWith the consent of shareholders holding not less than 75% voting rights of the issued and paid-up Ordinary Shares carrying the right\nto attend and vote at a general meeting, that meeting may be convened by such shorter notice and in such manner as those shareholders\nmay think fit. The accidental omission to give notice of a meeting to, or the non-receipt of a notice of a meeting by any shareholder\nshall not invalidate the proceedings at any meeting.\n\n \n\n78\n\n \n\nNo business may be transacted\nat any general meeting unless a quorum is present at the time the meeting proceeds to business. Except as otherwise provided in our M&A,\none or more shareholders present in person or by proxy and holding shares carrying at least one-third of voting rights of all issued and\npaid-up Ordinary Shares carrying the right to attend and vote thereat shall be a quorum. If, within half an hour from the time appointed\nfor the meeting, a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be dissolved. In any other\ncase, it shall stand adjourned to the same day in the next week at the same time and place, and if at the adjourned meeting a quorum is\nnot present within half an hour from the time appointed for the meeting, the shareholders present shall be a quorum and may transact the\nbusiness for which the meeting was called. The chairman, if any, of our Board of Directors shall preside as chairman at every general\nmeeting of the Company, or if there is no such chairman, or if he shall not be present within fifteen minutes after the time appointed\nfor the holding of the general meeting, or is unwilling to act, the directors present shall elect one of their number to be chairman of\nthe general meeting, failing which the shareholders present or by proxy shall choose any person present to be the chairman of that meeting.\n\n \n\n**Meetings of directors**\n\n \n\nSubject to the Companies Act\nand the Articles, the management of our company is entrusted to our Board of Directors, who will make decisions by voting on resolutions\nof directors. At any meeting of directors, a quorum is present if two directors are present, unless otherwise fixed by the directors.\nIf there is a sole director, that director shall be a quorum. A director and his appointed alternate director shall be considered as only\none person for the purpose of calculating quorum. An alternate director or proxy appointed by a director shall be counted in a quorum\nat a meeting at which the director appointing him is not present. A resolution in writing signed by all of the directors shall be valid\nand effectual as if it had been passed at a meeting of the directors, duly convened and held.\n\n** **\n\n**Pre-emptive rights**\n\n** **\n\nThere are no pre-emptive rights\napplicable to the issue by us of Class A Ordinary Shares under either Cayman Islands law or our M&A.\n\n \n\n**Winding Up**\n\n** **\n\nOn a return of capital on\nwinding up or otherwise (other than on conversion, redemption or purchase of shares), assets available for distribution among the holders\nof ordinary shares shall be distributed among the holders of our shares in proportion to the capital paid up. If our assets available\nfor distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by\nour shareholders in proportion to the capital paid up.\n\n \n\n**Calls on Class A Ordinary Shares and forfeiture\nof Class A Ordinary Shares**\n\n \n\nOur Board of Directors may\nfrom time to time make calls upon shareholders for any amounts unpaid on their Class A Ordinary Shares in a notice served to such shareholders\nat least 14 days prior to the specified time of payment provided that no call shall be payable at less than one month from the date fixed\nfor the payment of the last preceding call. The Class A Ordinary Shares that have been called upon and remain unpaid are subject to forfeiture\nif the call remains unpaid after a second notice by the directors in accordance with our Articles.\n\n \n\n**Repurchase of Shares**\n\n \n\nThe Companies Act and our\nArticles permit us to purchase our own shares, subject to certain restrictions and requirements. Our directors may only exercise this\npower on our behalf, subject to the Companies Act, our M&A and to any applicable requirements imposed from time to time by the Nasdaq,\nthe U.S. Securities and Exchange Commission, or by any other recognized stock exchange on which our securities are listed.\n\n \n\nProvided the necessary shareholders\nand board approval have been obtained, we may issue shares on terms that are subject to redemption, at our option or at the option of\nthe holders of these shares, on such terms and in such manner, provided the requirements under the Companies Act have been satisfied.\nUnder the Companies Act, the repurchase of any share may be paid out of our company’s profits, out of the share premium account\nor out of the proceeds of a fresh issue of shares made for the purpose of such repurchase, or out of capital. If the repurchase proceeds\nare paid out of our Company’s capital, our Company must, immediately following the date of such payment, be able to pay its debts\nas they fall due in the ordinary course of business. In addition, under the Companies Act, no such share may be repurchased (1) unless\nit is fully paid up, (2) if such repurchase would result in there being no shares outstanding, and (3) unless the manner of purchase (if\nnot so authorized under the memorandum and articles of association) has first been authorized by a resolution of our shareholders. In\naddition, under the Companies Act, our Company may accept the surrender of any fully paid share for no consideration unless, as a result\nof the surrender, the surrender would result in there being no shares outstanding (other than shares held as treasury shares).\n\n \n\n79\n\n \n\n**Variation of Rights Attaching to Shares**\n\n \n\nWhenever the capital of our\ncompany is divided into different classes, the rights attaching to any class of shares (unless otherwise provided by our Articles or terms\nof issue of the shares of that class), whether or not our company is being wound-up, may be varied with the consent in writing of the\nholders of two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of\nthe holders of the shares of the class. The rights conferred upon the holders of the shares of any class issued shall not, unless otherwise\nexpressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation, allotment or issue of further\nshares ranking pari passu with or subsequent to such existing class of shares or the redemption or purchase by the company of shares of\nany other class.\n\n \n\n**Changes in the number of shares we are authorized\nto issue and those in issue**\n\n \n\nWe may from time to time by\nresolution of shareholders in the requisite majorities:\n\n \n\n \n●\namend our Memorandum to increase the authorized share capital of our Company or cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person;\n\n \n\n \n●\nsubdivide our authorized and issued shares into a larger number of shares; and\n\n \n\n \n●\nconsolidate our authorized and issued shares into a smaller number of shares.\n\n** **\n\n**Inspection of books and records**\n\n \n\nHolders of our Class A Ordinary\nShares will have no general right under Cayman Islands law to inspect or obtain copies of our register of members or our corporate records\n(other than copies of our M&A and register of mortgages and charges, and any special resolution passed by our shareholders). However,\nour Board of Directors may determine from to time whether and to what extent the Company’s book and records (or any of them) shall\nbe open to inspection by the shareholders who are not members of our Board of Directors. To that end, we will provide our shareholders\nwith annual audited financial statements.\n\n \n\n**Rights of non-resident or foreign shareholders**\n\n** **\n\nThere are no limitations\nimposed by our M&A on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition,\nthere are no provisions in our M&A governing the ownership threshold above which shareholder ownership must be disclosed.\n\n \n\n**Issuance of additional Class A Ordinary Shares**\n\n** **\n\nOur M&A authorizes our\nBoard of Directors to issue additional Class A Ordinary Shares from time to time as our Board of Directors shall determine, to the extent\nthat there are sufficient authorized but unissued shares.\n\n \n\n**10.C. Material contracts**\n\n \n\nOther than those described\nin this annual report, we have not entered into any material agreements other than in the ordinary course of business.\n\n \n\n**10.D. Exchange controls**\n\n \n\nThe\nCayman Islands currently have no exchange control regulations or currency restrictions. In China, all foreign exchange transactions are\nconducted through People’s Bank of China or other banks authorized to buy and sell foreign exchange at the People’s Bank of\nChina published exchange rate. When People’s Bank of China or other regulatory authorities approve foreign currency payments, payment\napplication forms, supplier invoices, shipping documents, and signed contracts are required. These foreign exchange control procedures\nimposed by the Chinese government authorities may limit the ability of our PRC operating entities to transfer their net assets to us through\nloans, advances or cash dividends. In addition, as an offshore holding company with a Chinese entity, we can only transfer\nfunds to or fund our Chinese operating entity through loans or capital contributions. Any capital contributions or loans we make to operating\nentities in China, including proceeds from this Offering, are subject to PRC regulations and approvals.\n\n \n\n80\n\n \n\n**10.E**. **Taxation**\n\n \n\n**Cayman Islands Taxation**\n\n \n\nThe Cayman Islands currently\nlevies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature\nof inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands\nexcept for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the\nCayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company.\nThere are no exchange control regulations or currency restrictions in the Cayman Islands.\n\n \n\nPayments of dividends and\ncapital in respect of the shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment\nof a dividend or capital to any holder of our Class A Ordinary Shares, nor will gains derived from the disposal of our Class A Ordinary\nShares be subject to Cayman Islands income or corporation tax.\n\n \n\n**PRC Taxation**\n\n** **\n\nUnder the PRC Enterprise Income\nTax Law and its implementation rules, an enterprise established outside of the PRC with a “de facto management body” within\nthe PRC is considered a resident enterprise and will be subject to the enterprise income tax at the rate of 25% on its global income.\nThe implementation rules define the term “de facto management body” as the body that exercises full and substantial control\nover and overall management of the business, productions, personnel, accounts and properties of an enterprise. In April 2009, the State\nAdministration of Taxation issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the\n“de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this\ncircular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals\nor foreigners, the criteria set forth in the circular may reflect the State Administration of Taxation’s general position on how\nthe “de facto management body” test should be applied in determining the tax resident status of all offshore enterprises.\nAccording to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded\nas a PRC tax resident by virtue of having its “de facto management body” in China only if all of the following conditions\nare met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s\nfinancial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s\nprimary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC;\nand (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.\n\n \n\nOn March 17, 2017, the State\nTax Administration promulgated the “Administrative Measures for Adjustment of Special Tax Investigation and Mutual Consultation\nProcedures” (State Administration of Tax Practice Announcement No.6, 2017, which came into force on May 1, 2017), which provides\nthat tax authorities have implemented special tax adjustment monitoring and management for enterprises through related declaration review,\ncontemporaneous data management, profit level monitoring and other means. If an enterprise is found to have special tax adjustment risks,\nthe tax authorities may serve a “Notice” to remind such enterprise of the tax risks. If an enterprise receives a special\ntax adjustment risk alert or finds that it has a special tax adjustment risk, it may adjust the supplementary tax on its own. If the enterprise\nadjusts the supplementary tax by itself, the tax authorities may still carry out special tax investigation and adjustment in accordance\nwith the relevant provisions. If an enterprise requires the tax authorities to confirm the special tax adjustment matters, such as the\npricing principles and methods of related party transactions, the tax authorities shall initiate the special tax investigation procedures.\nIt also stipulates that if the principle of independent transactions is not met, tax authorities may implement a special tax adjustment\nin the full amount of the amount deducted before tax under the following circumstances:\n\n \n\n \n(1)\nThe enterprise and its affiliated parties transfer or accept the right to use intangible assets that do not bring economic benefits and collect or pay royalties;\n\n \n\n \n(2)\nThe enterprise pays royalties to related parties that only own intangible assets but do not contribute to their value;\n\n \n\n \n(3)\nAn enterprise establishes a holding company or a financing company overseas for the main purpose of financing and listing, and pays royalties to overseas affiliated parties only for the incidental benefits arising from the financing and listing activities;\n\n \n\n \n(4)\nThe taxable income or income amount of the enterprise or its affiliated party is reduced because the payment or collection of the price of the labor service transaction between the enterprise and its affiliated party does not meet the principle of independent transactions; and\n\n \n\n \n(5)\nThe enterprise pays fees to overseas related parties that fail to perform their functions, bear risks and have no substantial business activities.\n\n \n\n81\n\n \n\nAlthough we believe all our\nrelated party transactions, including all payments by our PRC subsidiaries and consolidated affiliated entities to our non-PRC entities,\nare made on an arm’s-length basis and our estimates are reasonable, the ultimate decisions by the relevant tax authorities may differ\nfrom the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which\nsuch determination is made.\n\n \n\nWe believe that none of our\nentities outside of China is a PRC resident enterprise for PRC tax purposes. We do not believe that Huachen Cayman meets all of the conditions\nabove. Huachen Cayman is a company incorporated outside the PRC. As a holding company, its key assets are its ownership interests in its\nsubsidiaries, and its key assets are located, and its records (including the resolutions of its Board of Directors and the resolutions\nof its shareholders) are maintained, outside the PRC. For the same reasons, we believe our other entities outside of China are not PRC\nresident enterprises either. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities\nand uncertainties remain with respect to the interpretation of the term “de facto management body.” There can be no assurance\nthat the PRC government will ultimately take a view that is consistent with us.\n\n \n\nHowever, if the PRC tax authorities\ndetermine that Huachen Cayman is a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 20% withholding\ntax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may\nbe subject to a 10% PRC tax on gains realized on the sale or other disposition of Class A Ordinary Shares, if such income is treated as\nsourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or\ngains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax\nwere to apply to such dividends or gains, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable\ntax treaty. However, it is also unclear whether non-PRC shareholders of Huachen Cayman would be able to claim the benefits of any tax\ntreaties between their country of tax residence and the PRC in the event that Huachen Cayman is treated as a PRC resident enterprise.\n\n \n\nProvided that the Company\nis not deemed to be a PRC resident enterprise, holders of our Class A Ordinary Shares who are not PRC residents will not be subject to\nPRC income tax on dividends distributed by us or gains realized from the sale or other disposition of our shares. However, under SAT Circular\n7, where a non-resident enterprise conducts an “indirect transfer” by transferring taxable assets, including, in particular,\nequity interests in a PRC resident enterprise, indirectly by disposing of the equity interests of an overseas holding company, the non-resident\nenterprise, being the transferor, or the transferee or the PRC entity which directly owned such taxable assets may report to the relevant\ntax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence\nof the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding\nor deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee\nor other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for\nthe transfer of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may be at risk of being required\nto file a return and being taxed under SAT Circular 7, and we may be required to expend valuable resources to comply with SAT Circular\n7, or to establish that we should not be taxed under these circulars. See “*Item 3. Key Information — 3.D. Risk Factors—\nRisks Related to Doing Business in China — You may be subject to PRC income tax on dividends from us or on any gain realized on\nthe sale or other disposition of our shares under PRC law*.”\n\n \n\n**United States Federal\nIncome Tax Considerations**\n\n \n\nThe following discussion is\na summary of U.S. federal income tax considerations generally applicable to the ownership and disposition of our Class A Ordinary Shares\nby a U.S. Holder (as defined below) that acquires our Class A Ordinary Shares and holds our Ordinary Shares as “capital assets”\n(generally, property held for investment) under the U.S. Internal Revenue Code of 1986, as amended, or the Code. This discussion is based\nupon existing U.S. federal tax law, which is subject to differing interpretations or change, possibly with retroactive effect. No ruling\nhas been sought from the Internal Revenue Service, or the IRS, with respect to any U.S. federal income tax considerations described below,\nand there can be no assurance that the IRS or a court will not take a contrary position. This discussion, moreover, does not address the\nU.S. federal estate, gift, and alternative minimum tax considerations, the Medicare tax on certain net investment income, information\nreporting or backup withholding or any state, local, and non-U.S. tax considerations, relating to the ownership or disposition of our\nClass A Ordinary Shares. The following summary does not address all aspects of U.S. federal income taxation that may be important to particular\ninvestors in light of their individual circumstances or to persons in special tax situations such as:\n\n \n\n \n●\nbanks and other financial institutions;\n\n \n\n \n●\ninsurance companies;\n\n \n\n82\n\n \n\n \n●\npension plans;\n\n \n\n \n●\ncooperatives;\n\n \n\n \n●\nregulated investment companies;\n\n \n\n \n●\nreal estate investment trusts;\n\n \n\n \n●\nbroker-dealers;\n\n \n\n \n●\ntraders that elect to use a mark-to-market method of accounting;\n\n \n\n \n●\ncertain former U.S. citizens or long-term residents;\n\n \n\n \n●\ntax-exempt entities (including private foundations);\n\n \n\n \n●\nindividual retirement accounts or other tax-deferred accounts;\n\n \n\n \n●\npersons liable for alternative minimum tax;\n\n \n\n \n●\npersons who acquire their Class A Ordinary Shares pursuant to any employee share option or otherwise as compensation;\n\n \n\n \n●\ninvestors that will hold their Class A Ordinary Shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction for U.S. federal income tax purposes;\n\n \n\n \n●\ninvestors that have a functional currency other than the U.S. dollar;\n\n \n\n \n●\npersons that actually or constructively own 10% or more of our Class A Ordinary Shares (by vote or value); or\n\n \n\n \n●\npartnerships or other entities taxable as partnerships for U.S. federal income tax purposes, or persons holding the Class A Ordinary Shares through such entities,\n\n \n\nall of whom may be subject\nto tax rules that differ significantly from those discussed below.\n\n \n\nEach U.S. Holder is urged\nto consult its tax advisor regarding the application of U.S. federal taxation to its particular circumstances, and the state, local, non-U.S.,\nand other tax considerations of the ownership and disposition of our Class A Ordinary Shares.\n\n \n\n**General**\n\n \n\nFor purposes of this discussion,\na “U.S. Holder” is a beneficial owner of our Class A Ordinary Shares that is, for U.S. federal income tax purposes:\n\n \n\n \n●\nan individual who is a citizen or resident of the United States;\n\n \n\n \n●\na corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under the laws of the United States or any state thereof or the District of Columbia;\n\n \n\n \n●\nan estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or\n\n \n\n83\n\n \n\n \n●\na trust (i) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust, or (ii) that has otherwise validly elected to be treated as a U.S. person under the Code.\n\n \n\n \n●\nIf a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our Class A Ordinary Shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding our Class A Ordinary Shares and their partners are urged to consult their tax advisors regarding an investment in our Class A Ordinary Shares.\n\n \n\n**Passive Foreign\nInvestment Company Considerations**\n\n \n\nA non-U.S. corporation, such\nas our company, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year if either (i) 75% or more of its\ngross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (determined\non the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive\nincome, or the asset test. Passive income generally includes, among other things, dividends, interest, rents, royalties, and gains from\nthe disposition of passive assets. Passive assets are those which give rise to passive income, and include assets held for investment,\nas well as cash, assets readily convertible into cash, and working capital. The company’s goodwill and other unbooked intangibles\nare taken into account and may be classified as active or passive depending upon the relative amounts of income generated by the company\nin each category. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of\nany other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock.\n\n \n\nBased upon our current and\nprojected income and assets and projections as to the market price of our Class A Ordinary Shares, we do not expect to be a PFIC for the\ncurrent taxable year or the foreseeable future. However, no assurance can be given in this regard because the determination of whether\nwe are or will become a PFIC is a factual determination made annually that will depend, in part, upon the composition and classification\nof our income and assets, including the relative amounts of income generated by our potential strategic investment business as compared\nto our other businesses, and the value of the assets held by our potential strategic investment business as compared to our other businesses.\nBecause there are uncertainties in the application of the relevant rules, it is possible that the IRS may challenge our classification\nof certain income and assets as non-passive, which may result in our being or becoming classified as a PFIC in the current or subsequent\nyears. Furthermore fluctuations in the market price of our Class A Ordinary Shares may cause us to be a PFIC for the current or future\ntaxable years because the value of our assets for purposes of the asset test, including the value of our goodwill and unbooked intangibles,\nmay be determined by reference to the market price of our Class A Ordinary Shares from time to time (which may be volatile). In estimating\nthe value of our goodwill and other unbooked intangibles, we have taken into account our market capitalization. Among other matters, if\nour market capitalization is less than anticipated or subsequently declines, we may be or become a PFIC for the current or future taxable\nyears. The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised\nin the initial public offering. Under circumstances where our revenues from activities that produce passive income significantly increases\nrelative to our revenues from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash\nfor active purposes, our risk of becoming a PFIC may substantially increase.\n\n \n\nIf we are a PFIC for any year\nduring which a U.S. Holder holds our Class A Ordinary Shares, we generally will continue to be treated as a PFIC for all succeeding years\nduring which such U.S. Holder holds our Class A Ordinary Shares unless, in such case, we cease to be treated as a PFIC and such U.S. Holder\nmakes a deemed sole election.\n\n \n\nThe discussion below under\n“—Dividends” and “—Sale or Other Disposition” is written on the basis that we will not be or become\nclassified as a PFIC for U.S. federal income tax purposes. The U.S. federal income tax rules that apply generally if we are treated as\na PFIC are discussed below under “—Passive Foreign Investment Company Rules.”\n\n \n\n**Dividends**\n\n \n\nAny cash distributions paid\non our Class A Ordinary Shares out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles,\nwill generally be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by\nthe U.S. Holder. Because we do not intend to determine our earnings and profits on the basis of U.S. federal income tax principles, any\ndistribution we pay will generally be treated as a “dividend” for U.S. federal income tax purposes. Dividends received on\nour Class A Ordinary Shares will not be eligible for the dividends received deduction allowed to corporations in respect of dividends-received\nfrom U.S. corporations.\n\n \n\nIndividuals and other non-corporate\nU.S. Holders may be subject to tax on any such dividends at the lower capital gain tax rate applicable to “qualified dividend income,”\nprovided that certain conditions are satisfied, including that (i) our Class A Ordinary Shares on which the dividends are paid are readily\ntradable on an established securities market in the United States, (ii) we are neither a PFIC nor treated as such with respect to a U.S.\nHolder for the taxable year in which the dividend is paid and the preceding taxable year, and (iii) certain holding period requirements\nare met. We intend to list the Class A Ordinary Shares on Nasdaq Capital Market. Provided that this listing is approved, we believe that\nthe ordinary should generally be considered to be readily tradeable on an established securities market in the United States. There can\nbe no assurance that the Class A Ordinary Shares will continue to be considered readily tradable on an established securities market in\nlater years. U.S. Holders are urged to consult their tax advisors regarding the availability of the lower rate for dividends paid with\nrespect to the Class A Ordinary Shares.\n\n \n\n84\n\n \n\nFor U.S. foreign tax credit\npurposes, dividends paid on our Class A Ordinary Shares will generally be treated as income from foreign sources and will generally constitute\npassive category income. The rules governing the foreign tax credit are complex and U.S. Holders are urged to consult their tax advisors\nregarding the availability of the foreign tax credit under their particular circumstances.\n\n \n\n**Sale or Other Disposition**\n\n \n\nA U.S. Holder will generally\nrecognize gain or loss upon the sale or other disposition of Class A Ordinary Shares in an amount equal to the difference between the\namount realized upon the disposition and the holder’s adjusted tax basis in such Class A Ordinary Shares. Such gain or loss will\ngenerally be capital gain or loss. Any such capital gain or loss will be long term if the Ordinary Shares have been held for more than\none year. Non-corporate U.S. Holders (including individuals) generally will be subject to United States federal income tax on long-term\ncapital gain at preferential rates. The deductibility of a capital loss may be subject to limitations. Any such gain or loss that the\nU.S. Holder recognizes will generally be treated as U.S. source income or loss for foreign tax credit limitation purposes, which could\nlimit the availability of foreign tax credits. Each U.S. Holder is advised to consult its tax advisor regarding the tax consequences if\na foreign tax is imposed on a disposition of our Class A Ordinary Shares, including the applicability of any tax treaty and the availability\nof the foreign tax credit under its particular circumstances.\n\n \n\n**Passive Foreign\nInvestment Company Rules**\n\n \n\nIf we are classified as a\nPFIC for any taxable year during which a U.S. Holder holds our Class A Ordinary Shares, and unless the U.S. Holder makes a mark-to-market\nelection (as described below), the U.S. Holder will generally be subject to special tax rules on (i) any excess distribution that we make\nto the U.S. Holder (which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than 125 percent\nof the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. Holder’s holding period for\nthe Class A Ordinary Shares), and (ii) any gain realized on the sale or other disposition, including, under certain circumstances, a pledge,\nClass A Ordinary Shares. Under the PFIC rules:\n\n \n\n \n●\nthe excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the Class A Ordinary Shares;\n\n \n\n \n●\nthe amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income; and\n\n \n\n \n●\nthe amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for that year, increased by an additional tax equal to the interest on the resulting tax deemed deferred with respect to each such taxable year.\n\n \n\nAs an alternative to the foregoing\nrules, a U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to- market election with respect to\nsuch stock. If a U.S. Holder makes this election with respect to our Class A Ordinary Shares, the holder will generally(i) include\nas ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of Class A Ordinary Shares held\nat the end of the taxable year over the adjusted tax basis of such Class A Ordinary Shares and (ii) deduct as an ordinary loss the excess,\nif any, of the adjusted tax basis of the Class A Ordinary Shares over the fair market value of such Class A Ordinary Shares held at the\nend of the taxable year, but such deduction will only be allowed to the extent of the net amount previously included in income as a result\nof the mark-to-market election. The U.S. Holder’s adjusted tax basis in the Class A Ordinary Shares would be adjusted to reflect\nany income or loss resulting from the mark-to-market election. If a U.S. Holder makes a mark-to- market election in respect of our Class\nA Ordinary Shares and we cease to be classified as a PFIC, the holder will not be required to take into account the gain or loss described\nabove during any period that we are not classified as a PFIC. If a U.S. Holder makes a mark-to-market election, any gain such U.S. Holder\nrecognizes upon the sale or other disposition of our Class A Ordinary Shares in a year when we are a PFIC will be treated as ordinary\nincome and any loss will be treated as ordinary loss, but such loss will only be treated as ordinary loss to the extent of the net amount\npreviously included in income as a result of the mark-to-market election.\n\n \n\nThe mark-to-market election\nis available only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15\ndays during each calendar quarter, or regularly traded, on a qualified exchange or other market, as defined in applicable United States\nTreasury regulations. Our Class A Ordinary Shares will be treated as marketable stock upon their listing on Nasdaq Capital Market. We\nanticipate that our Class A Ordinary Shares should qualify as being regularly traded, but no assurances may be given in this regard.\n\n \n\nBecause a mark-to-market election\ncannot technically be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the PFIC rules with respect\nto such U.S. Holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S.\nfederal income tax purposes.\n\n \n\n85\n\n \n\nWe do not intend to provide\ninformation necessary for U.S. Holders to make qualified electing fund elections which, if available, would result in tax treatment different\nfrom (and generally less adverse than) the general tax treatment for PFICs described above.\n\n \n\nIf a U.S. Holder owns our\nClass A Ordinary Shares during any taxable year that we are a PFIC, the holder must generally file an annual IRS Form 8621. You should\nconsult your tax advisor regarding the U.S. federal income tax consequences of owning and disposing of our Class A Ordinary Shares if\nwe are or become a PFIC.\n\n \n\n**10.F. Dividends and paying agents**\n\n \n\nNot applicable for annual\nreports on Form 20-F.\n\n \n\n**10.G. Statement by experts**\n\n \n\nNot applicable for annual\nreports on Form 20-F.\n\n \n\n**10.H. Documents on display**\n\n \n\nWe are subject to the information\nrequirements of the Exchange Act. In accordance with these requirements, the Company files reports and other information with the SEC.\nYou may read and copy any materials filed with the SEC at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You\nmay obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web\nsite at http://www.sec.gov that contains reports and other information regarding registrants that file electronically with the\nSEC.\n\n \n\n**10.I. Subsidiary Information**\n\n \n\nNot applicable.\n\n \n\n**10.J. Annual Report to Security Holders**\n\n \n\nNot applicable."}