{"url_path":"/sec/ymt/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 KEY INFORMATION","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1991605/0001213900-26-057895-index.html","accession_number":"0001213900-26-057895","cik":"0001991605","ticker":"YMT","issuer_name":"Yimutian Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1991605/0001213900-26-057895-index.html","primary_entity_key":"0001991605","primary_entity_name":"Yimutian Inc."},"word_count":49878,"has_tables":true,"body_markdown":"ITEM 3.KEY INFORMATION\n\nOur Holding Company Structure\nand Contractual Arrangements with the VIEs\n\nYimutian Inc. is not an operating\ncompany but a Cayman Islands holding company. Laws, regulations, and rules of mainland China restrict and impose conditions on direct\nforeign investment in certain types of business, including value-added telecommunication business. Accordingly, we conduct operations\nin mainland China primarily through the consolidated variable interest entities, Beijing Douniu Network Technology Co., Ltd. and Beijing\nYimutian Xinnong Network Co., Ltd., or the VIEs, with which we have maintained contractual arrangements and to a lesser extent, through\nour subsidiaries in mainland China, Beijing Yimutian Network Technology Co., Ltd. The VIEs are consolidated for accounting purpose, and\nYimutian Inc. does not own any equity interest in the VIEs. These contractual arrangements entered into with the VIEs allow us to receive\nsubstantially all of the economic benefits of the VIEs, and have an exclusive option to purchase all or part of the equity interests\nin the VIEs when and to the extent permitted by laws of mainland China. These contractual arrangements include exclusive business cooperation\nagreement, exclusive option agreement, equity pledge agreement and powers of attorney. For a summary of such contractual arrangements,\nsee “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements and the VIEs.” As\na result of the contractual arrangements, we are regarded as the primary beneficiary of the VIEs for accounting purpose. We treat them\nas our consolidated affiliated entities under U.S. GAAP, and have consolidated the financial results of these entities in our consolidated\nfinancial statements in accordance with U.S. GAAP, to the extent the conditions for consolidation of the VIEs under U.S. GAAP\nare satisfied. As of December 31, 2023, 2024 and 2025, total assets of the VIEs, excluding amounts due from Yimutian Inc. and its\nother subsidiaries, represented 15.9%, 13.6% and 9.2% of our consolidated total assets as of the same dates, respectively. In 2023, 2024\nand 2025, total revenues of the VIEs and their subsidiaries represented 99.8%, 99.3% and 99.8% of our consolidated total revenues in\nthe same periods, respectively.\n\nEven though these contractual\narrangements allow us to be considered the primary beneficiary of the VIEs for accounting purpose, which results in the consolidation\nof the VIEs’ operating results in our financial statements under U.S. GAAP, such control may be less effective than equity\nownership, and we could face heightened risks and costs in enforcing these contractual arrangements, because there are substantial uncertainties\nregarding the interpretation and application of current and future laws, regulations, and rules of mainland China relating to the legality\nand enforceability of these contractual arrangements. For the risks related to the nominee shareholders of the VIEs, see “Item\n3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Yimutian Inc. is a Cayman Islands holding\ncompany with no operations of its own and we currently conduct our operations in mainland China through our subsidiaries and the VIEs.\nInvestors in our ADSs should note that they are purchasing equity interests in a Cayman Islands holding company rather than equity interests\nin the VIEs in mainland China. Given that there are uncertainties regarding the interpretation and application of current and future\nPRC laws, regulations, and rules relating to the agreements that establish the VIE structure for our operations in mainland China, including\npotential future actions by the mainland China government, if the mainland China government deems that our contractual arrangements with\nthe VIEs do not comply with the laws of mainland China, or if regulations or interpretation of the existing regulations change in the\nfuture, we could be subject to penalties or be forced to relinquish our interests in the VIEs” and “Item 3. Key Information—D.\nRisk Factors—Risks Related to Our Corporate Structure — Any failure by any of the VIEs or their shareholders to\nperform their respective obligations under our contractual arrangements with them would have a material and adverse effect on our business.”\n\n1\n\nOur corporate structure involves\nunique risks to investors in the ADSs. Investors in our ADSs thus are not purchasing equity interest in the VIEs in mainland China but\ninstead are purchasing equity interest in a Cayman Islands holding company. Investors may never directly hold equity interest in the\nVIEs. Our contractual arrangements with the VIEs and their respective shareholders have not been tested in a court of law in mainland\nChina. If the mainland China government deems that our contractual arrangements with the VIEs do not comply with the laws of mainland\nChina, or if these laws, or the interpretation of existing laws, change in the future, we could be subject to material penalties or be\nforced to relinquish our interests in those operations or otherwise significantly change our corporate structure. We and our investors\nface substantial uncertainty that could affect the legality and enforceability of the contractual arrangements with the VIEs and, consequently,\nsignificantly affect our ability to consolidate the financial results of the VIEs and the financial performance of our company as a whole.\nOur ADSs may decline in value or become worthless, if we are unable to claim our contractual control rights over the assets of the VIEs\nthat conduct certain portion of our operations in mainland China. See “Item 3. Key Information—D. Risk Factors—Risks\nRelated to Our Corporate Structure” for detailed discussion.\n\n**Risks and Uncertainties\nRelating to Doing Business in China**\n\n** **\n\nWe and the VIEs face various\nlegal and operational risks and uncertainties related to being based in and have all of the operations in mainland China. The mainland\nChina government has significant oversight and discretion over the conduct of our and the VIEs’ business and may influence our\nand the VIEs’ operations as the government deems appropriate to further regulatory, political and societal goals. For example,\nwe face risks associated with oversight on cybersecurity and data privacy, regulatory approvals of offshore offerings and anti-monopoly regulatory\nactions. In particular, the mainland China government has recently published new policies that significantly affected certain industries\nsuch as the internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding\nour industry that could adversely affect our and the VIEs’ business, financial condition and results of operations. Furthermore,\nthe mainland China government has recently promulgated certain measures to supervise the overseas securities offerings, exerting more\noversight and control over securities offerings and other capital markets activities and foreign investment in companies based in mainland\nChina. Any failure to comply with such new measures over overseas securities offering could significantly limit or completely hinder\nour ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or\nbecome worthless. For more details, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in\nMainland China—We are subject to evolving laws and regulations of mainland China that could require us to modify our current business\npractices and incur increased costs, and the mainland China government’s oversight over our business operations could result in\na material adverse change in our operations and the value of our Class A ordinary shares or ADSs.”\n\nPermissions Required from\nthe PRC Authorities for Our Operations\n\nWe conduct our business through\nour mainland China subsidiaries and the VIEs in mainland China. Our operations in mainland China are governed by mainland China laws\nand regulations. As advised by Global Law Office, our PRC counsel, as of the date of this annual report, our mainland China subsidiaries\nand the VIEs have obtained all material licenses and permits from the mainland China government authorities that are necessary for their\nbusiness operations in China.\n\nWe may be required to obtain\nadditional licenses, permits, filings, or approvals for our business operations in the future. If we or any of the VIEs is found to be\nin violation of any existing or future laws or regulations of mainland China, or fail to obtain or maintain any of the required permits\nor approvals, the PRC regulatory authorities would have discretion to take action in dealing with such violations or failures. In addition,\nif we had inadvertently concluded that such approvals, permits, registrations or filings were not required, or if applicable laws, regulations\nor interpretations change in a way that requires us to obtain such approval, permits, registrations or filings in the future, we may\nbe unable to obtain such necessary approvals, permits, registrations or filings in a timely manner, or at all, and such approvals, permits,\nregistrations or filings may be rescinded even if obtained. Any such circumstance may subject us to fines and other regulatory, civil\nor criminal liabilities, and we may be ordered by the competent government authorities to suspend relevant operations, which will materially\nand adversely affect our business operation. In addition, there can be no assurance that we or the VIEs will be able to maintain the\nexisting licenses, approvals, registrations, permits and filings necessary to operate current business in mainland China, renew any of\nthese upon expiry in the future, or update the existing licenses or obtain additional licenses, approvals, permits, registrations or\nfilings necessary for our business expansion from time to time. If we or the VIEs fail to do so, our business, financial condition and\noperational results may be materially and adversely affected. For risks relating to licenses and approvals required for our operations\nin China, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Any lack of\nrequisite approvals, licenses or permits applicable to our business may subject us to administrative penalties or other government sanctions\nand have a material and adverse effect on our business, financial condition and results of operations.”\n\n2\n\nFurthermore, we and the VIEs\nwill be required to obtain permissions from or complete the filing procedures with the China Securities Regulatory Commission, or the\nCSRC, and may be required to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, in case of any future\nissuance of securities to foreign investors. Any failure to obtain or delay in obtaining such approval or completing such procedures\nwould subject us to sanctions by the CSRC, CAC or other PRC regulatory authorities. These regulatory authorities may impose fines and\npenalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay\nor restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely\naffect our business, financial condition, results of operations, and prospects, as well as the trading price of our ADSs. For more details,\nsee “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We are subject to evolving\nlaws and regulations of mainland China that could require us to modify our current business practices and incur increased costs, and\nthe mainland China government’s oversight over our business operations could result in a material adverse change in our operations\nand the value of our Class A ordinary shares or ADSs” and “Item 3. Key Information—D. Risk Factors—Risks Related\nto Doing Business in China—The approval of and/or filing with the CSRC or other PRC government authorities may be required in connection\nwith our offshore offerings under the laws of mainland China, and, if required, we cannot predict whether or for how long we will be\nable to obtain such approval or complete such filing.”\n\nThe Holding Foreign Companies\nAccountable Act\n\nPursuant to the HFCAA, if\nthe SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections\nby the PCAOB for two consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange\nor in the over-the-counter trading market in the United States. On December 16, 2021, the PCAOB issued a report to notify the SEC of\nits determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in\nmainland China and Hong Kong. The independent registered public accounting firm that we use, Assentsure PAC, is headquartered in Singapore.\nOn December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong\nKong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. On December\n29, 2022, the Consolidated Appropriations Act, 2023, was signed into law, which amended the HFCAA (i) to reduce the number of consecutive\nnon-inspection years required for triggering the prohibitions under the HFCAA from three years to two, and (ii) so that any foreign jurisdiction\ncould be the reason why the PCAOB does not have complete access to inspect or investigate a company’s auditors. As it was originally\nenacted, the HFCAA applied only if the PCAOB’s inability to inspect or investigate because of a position taken by an authority\nin the foreign jurisdiction where the relevant public accounting firm is located. As a result of the Consolidated Appropriations Act,\n2023, the HFCAA now also applies if the PCAOB’s inability to inspect or investigate the relevant accounting firm is due to a position\ntaken by an authority in any foreign jurisdiction. The denying jurisdiction does not need to be where the accounting firm is located.\nEach year, the PCAOB will determine whether it can inspect and investigate completely audit firms in foreign jurisdictions. If the PCAOB\ndetermines in the future that it no longer has full access to inspect and investigate completely accounting firms in to the jurisdiction\nwhere the accounting firm that we use to issue an audit report on our financial statements filed with the Securities and Exchange Commission\nis headquartered, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for\nthe relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future\nfiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the\nHFCAA. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Mainland China—Our ADSs\nmay be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely\nauditors located in mainland China and Hong Kong. The delisting of the ADSs, or the threat of their being delisted, may materially and\nadversely affect the value of your investment.”\n\nCash Flows Through Our\nOrganization\n\nYimutian Inc. and the WFOE\nare not able to make direct capital contributions to the VIEs. However, under the laws and regulations of mainland China, they are permitted\nto remit funds to the VIEs through loans or by making payment to the VIEs for intragroup transactions. In 2023, 2024 and 2025, the WFOE\nmade payments to the VIEs for intragroup transactions in the amounts of RMB30.0 million, RMB6.9 million and RMB22.8 million\n(US$3.3 million), respectively. As of December 31, 2023, 2024 and 2025, the outstanding balance of intragroup transactions\nfrom the WFOE to the VIEs was RMB68.9 million, RMB75.8 million and RMB98.6 million (US$14.1 million), respectively.\n\n3\n\nThe VIEs may transfer cash\nto the WFOE by paying service fees according to the exclusive business cooperation agreement. In 2023, 2024 and 2025, the VIEs transferred\nRMB28.3 million, RMB28.3 million and RMB28.3 million (US$4.0 million), respectively, to our WFOE as service fees\nunder the exclusive business cooperation agreement. We plan to continue to determine the amount of service fees and payment method with\nthe VIEs and their shareholders based on the working capital needs of the VIEs, and settle fees under the contractual arrangements accordingly\nin the future.\n\nIn 2023, 2024 and 2025, no\nassets other than cash flows discussed above were transferred through our organization.\n\nUnder laws and regulations\nof mainland China, we are subject to restrictions on foreign exchange and cross-border cash transfers, including to the Cayman Island\nholding company and U.S. investors. Our ability to distribute earnings to the Cayman Island holding company and U.S. investors\nis also limited. We are a Cayman Islands holding company and rely on dividends and other distributions on equity from our mainland China\nsubsidiaries for our cash requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders\nand service any debt we may incur outside of mainland China. Current mainland China regulations permit our mainland China subsidiaries\nto pay dividends to us only out of their accumulated after-tax profits upon satisfaction of relevant statutory conditions and procedures,\nif any, determined in accordance with Chinese accounting standards and regulations. In addition, our mainland China subsidiaries are\nrequired to set aside at least 10% of its after-tax profits each year, if any, to fund certain reserve funds until the total amount\nset aside reaches 50% of its registered capital. These reserves, together with the registered capital, are not distributable as cash\ndividends. Additionally, if our mainland China subsidiaries incur debt on its own behalf in the future, the instruments governing its\ndebt may restrict its ability to pay dividends or make other distributions to us. In addition, the revenues and assets of our mainland\nChina subsidiaries are generally denominated in Renminbi, which is not freely convertible into other currencies. As a result, any restriction\non currency exchange may limit the ability of our mainland China subsidiaries to pay dividends to us. For more details, see “Item\n3. Key Information—D. Risk Factors—Risks Related to Doing Business in Mainland China—We may rely on dividends and other\ndistributions on equity paid by our subsidiaries in mainland China to fund any cash and financing requirements we may have, and any limitation\non the ability of our subsidiaries in mainland China to make payments to us could have a material and adverse effect on our ability to\nconduct our business” and “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Mainland\nChina—Mainland China regulations of loans to and direct investment in domestic entities by offshore holding companies and governmental\nregulations of currency conversion may restrict or delay us from using the proceeds of our initial public offering or other offshore\nfinancing activities to make loans or additional capital contributions to our subsidiaries in mainland China, which could adversely affect\nour liquidity and our ability to fund and expand our business.”\n\nWe have established stringent\ncontrols and procedures for cash flows within our organization. Each transfer of cash among our Cayman Islands holding company and our\nsubsidiaries is subject to internal approval. To effect a cash transfer, a number of steps are needed, including but not limited to the\nissuance of payment receipt, logging into the online banking system and completing its verification process, inspection of the invoice,\nand payment execution. A single employee is not permitted to complete each and every stage of a cash transfer, but rather only portions\nof the whole procedure. Only the finance department is authorized to make cash transfers. Within the finance department, the roles of\npayment approval, payment execution, record keeping, and auditing are segregated to minimize risk.\n\nWe have not previously declared\nor paid any cash dividend or dividend in kind, and has no plan to declare or pay any dividends in the near future on our shares or the\nADSs representing our Class A ordinary shares. We currently intend to retain most, if not all, of our available funds and any future\nearnings to operate and expand our business. Our board of directors has discretion on whether to distribute dividends, subject to certain\nrequirements of Cayman Islands law. Even if we decide to pay dividends, the form, frequency and amount will depend upon our future operations\nand earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board\nof directors may deem relevant.\n\n4\n\nFor purposes of illustration,\nthe following discussion reflects the hypothetical taxes that might be required to be paid within mainland China, assuming that: (i) we\nhave taxable earnings, and (ii) we determine to pay dividends in the future.\n\n**Tax calculation(1)**\n\nHypothetical pre-tax earnings(2)\n\n100\n%\n\nTax on earnings at statutory rate of 25%(3)\n\n(25\n)%\n\nNet earnings available for distribution\n\n75\n%\n\nWithholding tax at standard rate of 10%(4)\n\n(7.5\n)%\n\nNet distribution to Parent/Shareholders\n\n67.5\n%\n\nNotes:\n\n(1)For purposes of this example, the tax calculation has been simplified. The hypothetical book pre-tax earnings\namount, not considering timing differences, is assumed to equal taxable income in China.\n\n(2)Under the terms of VIE agreements, our WFOE may charge the VIEs for services provided to VIEs. These service\nfees shall be recognized as expenses of the VIEs, with a corresponding amount as service income by our WFOE and eliminate in consolidation.\nFor income tax purposes, our WFOE and VIEs file income tax returns on a separate company basis. The service fees paid are recognized as\na tax deduction by the VIEs and as income by our WFOE and are tax neutral.\n\n(3)Certain of our subsidiaries and VIEs qualify for a 15% preferential income tax rate in China. However,\nsuch rate is subject to qualification, is temporary in nature, and may not be available in a future period when distributions are paid.\nFor purposes of this hypothetical example, the table above reflects a maximum tax scenario under which the full statutory rate would be\neffective.\n\n(4)The PRC Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by\na foreign invested enterprise, or FIE, to its immediate holding company outside of China. A lower withholding income tax rate of 5% is\napplied if the FIE’s immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement\nwith mainland China, subject to a qualification review at the time of the distribution. For purposes of this hypothetical example, the\ntable above assumes a maximum tax scenario under which the full withholding tax would be applied.\n\nFinancial Information Related\nto The VIEs\n\nThe following tables present\nthe condensed consolidating schedule of financial position for Yimutian Inc., WFOE, other subsidiaries, and VIEs and VIEs’ subsidiaries,\nand eliminating adjustments separately for the years / as of the dates presented.\n\nSelected Condensed\nConsolidating Statements of Comprehensive Loss\n\nFor the Year Ended December 31, 2025\n\nYimutian\nInc.\nWFOE\nOther\nSubsidiaries\nVIEs and\nVIEs’\nSubsidiaries\nEliminating\nadjustments\nConsolidated\ntotals\n\n(RMB in thousands)\n\nRevenues\n—\n28,302\n337\n140,318\n(28,302)\n140,655\n\nCost of revenues\n—\n(2,851)\n(132)\n(18,621)\n—\n(21,604)\n\nGross profit\n—\n25,451\n205\n121,697\n(28,302)\n119,051\n\nSelling and marketing expenses, general and administrative expenses and research and development expenses\n(23,387)\n(29,761)\n(3,840)\n(137,133)\n28,302\n(165,819)\n\nOther (income)/expenses, net\n(29)\n3,194\n2\n1,821\n—\n4,988\n\nInterest income\n6\n1\n—\n2\n—\n9\n\nInterest expense\n(592)\n—\n(272)\n(224)\n—\n(1,088)\n\nLoss before income taxes and share of loss of equity method investment\n(24,002)\n(1,115)\n(3,905)\n(13,837)\n—\n(42,859)\n\nIncome tax expense\n—\n—\n—\n—\n—\n—\n\nNet loss\n(24,002)\n(1,115)\n(3,905)\n(13,837)\n—\n(42,859)\n\nNet loss attributable to non-controlling interests\n—\n—\n733\n—\n—\n733\n\nNet loss attributable to Yimutian Inc\n(24,002)\n(1,115)\n(3,172)\n(13,837)\n—\n(42,126)\n\n5\n\nFor the Year Ended December 31, 2024\n\nYimutian\nInc.\nWFOE\nOther\nSubsidiaries\nVIEs and\nVIEs’\nSubsidiaries\nEliminating\nadjustments\nConsolidated\ntotals\n\n(RMB in thousands)\n\nRevenues\n—\n28,350\n1,097\n160,176\n(28,302)\n161,321\n\nCost of revenues\n—\n(2,826)\n(59)\n(27,688)\n—\n(30,573)\n\nGross profit\n—\n25,524\n1,038\n132,488\n(28,302)\n130,748\n\nSelling and marketing expenses, general and administrative expenses and research and development expenses\n(29)\n(33,194)\n(8,578)\n(151,494)\n28,302\n(164,993)\n\nOther income, net\n(14)\n66\n151\n15\n—\n218\n\nInterest income\n3\n1\n1\n7\n—\n12\n\nInterest expense\n—\n—\n(481)\n(483)\n—\n(964)\n\nLoss before income taxes and share of loss of equity method investment\n(40)\n(7,603)\n(7,869)\n(19,467)\n—\n(34,979)\n\nIncome tax expense\n—\n—\n—\n—\n—\n—\n\nShare of income/(loss) of an equity method investment\n—\n—\n1,703\n(1,665)\n—\n38\n\nNet loss\n(40)\n(7,603)\n(6,166)\n(21,132)\n—\n(34,941)\n\nNet loss attributable to non-controlling interests\n—\n—\n31\n10\n—\n41\n\nNet loss attributable to Yimutian Inc\n(40)\n(7,603)\n(6,135)\n(21,122)\n—\n(34,900)\n\nFor the Year Ended December 31, 2023\n\nYimutian\nInc.\nWFOE\nOther\nSubsidiaries\nVIEs and\nVIEs’\nSubsidiaries\nEliminating\nadjustments\nConsolidated\ntotals\n\n(RMB in thousands)\n\nRevenues\n—\n28,302\n441\n187,082\n(28,302)\n187,523\n\nCost of revenues\n—\n(5,008)\n(246)\n(43,994)\n—\n(49,248)\n\nGross profit\n—\n23,294\n195\n143,088\n(28,302)\n138,275\n\nSelling and marketing expenses, general and administrative expenses and research and development expenses\n(9,756)\n(46,227)\n(7,154)\n(203,977)\n28,302\n(238,812)\n\nOther income, net\n—\n292\n7\n524\n—\n823\n\nInterest income\n4\n2\n—\n17\n—\n23\n\nInterest expense\n—\n—\n(64)\n(147)\n—\n(211)\n\nChange in fair value of financial liabilities\n(3,728)\n—\n—\n—\n—\n(3,728)\n\nLoss from derecognition of\nfinancial liabilities\n(1,953)\n—\n—\n—\n—\n(1,953)\n\nLoss before income taxes and share of loss of equity method investment\n(15,433)\n(22,639)\n(7,016)\n(60,495)\n—\n(105,583)\n\nIncome tax expense\n—\n—\n—\n—\n—\n—\n\nShare of loss of an equity method\ninvestment\n—\n—\n—\n(38)\n—\n(38)\n\nNet loss\n(15,433)\n(22,639)\n(7,016)\n(60,533)\n—\n(105,621)\n\nNet loss attributable to\nnon-controlling interests\n—\n—\n3\n8\n—\n11\n\nNet loss\nattributable to Yimutian Inc\n(15,433)\n(22,639)\n(7,013)\n(60,525)\n—\n(105,610)\n\n6\n\nSelected Condensed\nConsolidating Balance Sheets Information\n\nAs of December 31, 2025\n\nYimutian\nInc.\nWFOE\nOther\nSubsidiaries\nVIEs and\nVIEs’\nSubsidiaries\nEliminating\nadjustments\nConsolidated\ntotals\n\n(RMB in thousands)\n\nASSETS\n\nCurrent assets\n\nCash\n106,297\n134\n1,831\n1,224\n—\n109,486\n\nAccounts receivable, net\n—\n—\n—\n945\n—\n945\n\nAmounts due from related parties\n3,357\n—\n—\n—\n—\n3,357\n\nDue from shareholders\n256,794\n—\n—\n—\n(256,794)\n—\n\nIntercompany receivable from Yimutian Inc.\n—\n—\n—\n5,394\n(5,394)\n—\n\nIntercompany receivable from WFOE\n30,300\n—\n—\n11,527\n(41,827)\n—\n\nIntercompany receivable from other subsidiaries(3)\n—\n14,414\n—\n—\n(14,414)\n—\n\nIntercompany receivable from VIEs and VIEs subsidiaries(4)\n—\n98,644\n28,196\n—\n(126,840)\n—\n\nPrepayments and other current assets\n6,827\n344\n7,170\n23,685\n—\n38,026\n\nInventory\n—\n—\n—\n2,301\n—\n2,301\n\nTotal current assets\n403,575\n113,536\n37,197\n45,076\n(445,269)\n154,115\n\nProperty and equipment, net.\n—\n1\n505\n276\n—\n782\n\nOperating lease right-of-use assets\n—\n516\n1,041\n2,078\n—\n3,635\n\nInvestments in subsidiaries\n463,555\n1,800\n450,012\n—\n(915,367)\n—\n\nOther non-current assets\n—\n298\n121\n2,150\n—\n2,569\n\nTotal non-current assets\n463,555\n2,615\n451,679\n4,504\n(915,367)\n6,986\n\nTotal assets\n867,130\n116,151\n488,876\n49,580\n(1,360,636)\n161,101\n\nLIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT)\n\nCurrent liabilities\n\nAccounts payable\n—\n40\n186\n4,988\n—\n5,214\n\nContract liabilities, current\n—\n—\n\n75,718\n—\n75,718\n\nBank loans\n—\n—\n7,000\n10,375\n—\n17,375\n\nConvertible notes payable\n18,449\n—\n—\n—\n—\n18,449\n\nFinancial liabilities\n24,949\n—\n—\n—\n—\n24,949\n\nShareholder loans, at amortized cost\n1,053\n232,715\n—\n35,000\n(202,364)\n66,404\n\nAmounts due to related parties\n3,511\n—\n—\n—\n—\n3,511\n\nIntercompany payable to\nYimutian Inc.\n—\n28,625\n—\n50,884\n(79,509)\n—\n\nIntercompany payable to WFOE(6)\n—\n—\n14,414\n98,644\n(113,058)\n—\n\nIntercompany payable to other subsidiaries(7)\n—\n—\n\n28,196\n(28,196)\n—\n\nIntercompany payable to VIEs and VIEs subsidiaries(8)\n5,394\n—\n11,527\n—\n(16,921)\n—\n\nAccrued expenses and other current liabilities\n24,390\n25,284\n860\n45,379\n—\n95,913\n\nOperating lease liabilities, current\n—\n342\n563\n1,414\n—\n2,319\n\nTotal current liabilities\n77,746\n287,006\n34,550\n350,598\n(440,048)\n309,852\n\nContract liabilities, non-current\n—\n—\n—\n13,104\n—\n13,104\n\nOperating lease liabilities, non-current\n—\n—\n364\n—\n—\n364\n\nTotal non-current liabilities\n—\n—\n364\n13,104\n—\n13,468\n\nTotal liabilities\n77,746\n287,006\n34,914\n363,702\n(440,048)\n323,320\n\nTotal Yimutian Inc. shareholders’ equity/(deficit)\n789,384\n(170,855)\n454,724\n(314,122)\n(950,559)\n(191,428)\n\nNon-controlling interests\n—\n—\n(762)\n—\n29,971\n29,209\n\nTotal shareholders’ equity/(deficit)\n789,384\n(170,855)\n453,962\n(314,122)\n(920,588)\n(162,219)\n\nTotal liabilities and shareholders’ equity\n867,130\n116,151\n488,876\n49,580\n(1,360,636)\n161,101\n\n7\n\n** **\n\nAs of December 31, 2024\n\nYimutian\nInc.\nWFOE\nOther\nSubsidiaries\nVIEs and\nVIEs’\nSubsidiaries\nEliminating\nadjustments\nConsolidated\ntotals\n\n(RMB in thousands)\n\nASSETS\n\nCurrent assets\n\nCash\n129\n111\n995\n1,537\n—\n2,772\n\nAccounts receivable, net\n—\n—\n3\n730\n—\n733\n\nAmounts due from related parties\n3,436\n—\n—\n—\n—\n3,436\n\nIntercompany receivable from Yimutian Inc.\n—\n—\n—\n5,394(1)\n(5,394)\n—\n\nIntercompany receivable from WFOE\n31,014(2)\n—\n—\n—\n(31,014)\n—\n\nIntercompany receivable from other subsidiaries(3)\n—\n12,386\n—\n10,898\n(23,284)\n—\n\nIntercompany receivable from VIEs and VIEs subsidiaries(4)\n—\n75,840\n28,900\n—\n(104,740)\n—\n\nPrepayments and other current assets\n10,960\n507\n5,383\n23,190\n—\n40,040\n\nInventory\n—\n—\n210\n27\n—\n237\n\nTotal current assets\n45,539\n88,844\n35,491\n41,776\n(164,432)\n47,218\n\nProperty and equipment, net.\n—\n4\n35\n1,021\n—\n1,060\n\nOperating lease right-of-use assets\n—\n1,394\n1,745\n6,450\n—\n9,589\n\nInvestments in subsidiaries\n455,976\n1,800\n443,946\n—\n(901,722)\n—\n\nOther non-current assets\n—\n298\n76\n2,782\n—\n3,156\n\nTotal non-current assets\n455,976\n3,496\n445,802\n10,253\n(901,722)\n13,805\n\nTotal assets\n501,515\n92,340\n481,293\n52,029\n(1,066,154)\n61,023\n\nLIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY\n\nCurrent liabilities\n\nAccounts payable\n—\n98\n223\n4,077\n—\n4,398\n\nContract liabilities, current\n—\n—\n114\n87,989\n—\n88,103\n\nBank loans\n—\n—\n5,000\n5,000\n—\n10,000\n\nFinancial liabilities\n20,990\n—\n—\n—\n—\n20,990\n\nShareholder loans, at amortized cost\n1,078\n212,565\n—\n35,000\n—\n248,643\n\nAmounts due to related parties\n3,594\n9,485\n—\n—\n—\n13,079\n\nIntercompany payable to Yimutian Inc.\n—\n28,625(2)\n—\n50,884(5)\n(79,509)\n—\n\nIntercompany payable to WFOE(6)\n—\n—\n12,386\n75,840\n(88,226)\n—\n\nIntercompany payable to other subsidiaries(7)\n—\n—\n—\n28,900\n(28,900)\n—\n\nIntercompany payable to VIEs and VIEs subsidiaries(8)\n5,394\n—\n10,898\n—\n(16,292)\n—\n\nAccrued expenses and other current liabilities\n15,531\n26,480\n1,041\n46,172\n—\n89,224\n\nOperating lease liabilities, current\n—\n718\n629\n3,614\n—\n4,961\n\nTotal current liabilities\n46,587\n277,971\n30,291\n337,476\n(212,927)\n479,398\n\nContract liabilities, non-current\n—\n—\n—\n12,223\n—\n12,223\n\nOperating lease liabilities, non-current\n—\n594\n990\n2,458\n—\n4,042\n\nTotal non-current liabilities\n—\n594\n990\n14,681\n—\n16,265\n\nTotal liabilities\n46,587\n278,565\n31,281\n352,157\n(212,927)\n495,663\n\nTotal mezzanine equity\n1,303,041\n—\n—\n—\n—\n1,303,041\n\n**Intercompany receivable from VIEs and VIEs’ Subsidiaries for preferred shares(9)**\n54,429\n—\n—\n—\n(54,429)\n—\n\nTotal shareholders’ Deficit (equity) attributable to ordinary shareholders\n(902,542)\n(186,225)\n450,043\n(300,400)\n(828,770)\n(1,767,894)\n\nNon-controlling interests\n—\n—\n(31)\n272\n29,972\n30,213\n\nTotal shareholders’ Deficit (equity)\n(902,542)\n(186,225)\n450,012\n(300,128)\n(798,798)\n(1,737,681)\n\nTotal liabilities, mezzanine equity and shareholders’ equity\n501,515\n92,340\n481,293\n52,029\n(1,066,154)\n61,023\n\n8\n\nAs of December 31, 2023\n\nYimutian\nInc.\nWFOE\nOther\nSubsidiaries\nVIEs and\nVIEs’\nSubsidiaries\nEliminating\nadjustments\nConsolidated\ntotals\n\n(RMB in thousands)\n\nASSETS\n\nCurrent assets\n\nCash\n496\n55\n47\n3,231\n—\n3,829\n\nAccounts receivable, net\n—\n—\n—\n139\n—\n139\n\nAmounts due from related parties\n3,386\n7,925\n—\n—\n—\n11,311\n\nIntercompany receivable from Yimutian Inc.\n—\n—\n—\n5,394(1)\n(5,394)\n—\n\nIntercompany receivable from WFOE\n30,558(2)\n—\n—\n—\n(30,558)\n—\n\nIntercompany receivable from other subsidiaries(3)\n—\n5,243\n\n9,455\n(14,698)\n—\n\nIntercompany receivable from VIEs and VIEs subsidiaries(4)\n—\n68,893\n1,275\n—\n(70,168)\n—\n\nPrepayments and other current assets\n10,798\n475\n4,731\n22,411\n—\n38,415\n\nTotal current assets\n45,238\n82,591\n6,053\n40,630\n(120,818)\n53,694\n\nProperty and equipment, net\n—\n7\n41\n2,099\n—\n2,147\n\nOperating lease right-of-use assets\n—\n2,445\n363\n12,581\n—\n15,389\n\nInvestments in subsidiaries\n447,947\n1,800\n436,143\n—\n(885,890)\n—\n\nInvestments in equity investees\n—\n—\n—\n1,122\n—\n1,122\n\nOther non-current assets\n—\n298\n76\n2,833\n—\n3,207\n\nTotal non-current assets\n447,947\n4,550\n436,623\n18,635\n(885,890)\n21,865\n\nTotal assets\n493,185\n87,141\n442,676\n59,265\n(1,006,708)\n75,559\n\nLIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY\n\nCurrent liabilities\n\nAccounts payable\n—\n25\n—\n3,241\n—\n3,266\n\nContract liabilities, current\n—\n—\n168\n98,125\n—\n98,293\n\nBank loans\n—\n—\n4,330\n—\n—\n4,330\n\nFinancial liabilities\n20,681\n—\n—\n—\n—\n20,681\n\nShareholder loans, at amortized cost\n1,062\n185,775\n—\n41,874\n—\n228,711\n\nAmounts due to related parties\n3,541\n17,985\n—\n—\n—\n21,526\n\nIntercompany payable to Yimutian Inc.\n—\n28,625(2)\n—\n50,884(5)\n(79,509)\n—\n\nIntercompany payable to WFOE(6)\n—\n—\n5,243\n68,893\n(74,136)\n—\n\nIntercompany payable to other subsidiaries(7)\n—\n—\n—\n1,275\n(1,275)\n—\n\nIntercompany payable to VIEs and VIEs subsidiaries(8)\n5,394\n—\n9,455\n—\n(14,849)\n—\n\nAccrued expenses and other current liabilities\n15,224\n32,250\n1,833\n50,906\n—\n100,213\n\nOperating lease liabilities, current\n—\n833\n221\n6,870\n—\n7,924\n\nTotal current liabilities\n45,902\n265,493\n21,250\n322,068\n(169,769)\n484,944\n\nContract liabilities, non-current\n—\n—\n—\n14,030\n—\n14,030\n\nOperating lease liabilities, non-current\n—\n1,545\n133\n5,169\n—\n6,847\n\nTotal non-current liabilities\n—\n1,545\n133\n19,199\n—\n20,877\n\nTotal liabilities\n45,902\n267,038\n21,383\n341,267\n(169,769)\n505,821\n\nTotal mezzanine equity\n1,213,769\n—\n—\n—\n—\n1,213,769\n\n**Intercompany receivable from VIEs and VIEs’ Subsidiaries for preferred shares(9)**\n54,429\n—\n—\n—\n(54,429)\n—\n\nTotal shareholders’ Deficit (equity) attributable to ordinary shareholders\n(820,915)\n(179,897)\n421,321\n(282,284)\n(782,510)\n(1,644,285)\n\nNon-controlling interests\n—\n—\n(28)\n282\n—\n254\n\nTotal shareholders’ Deficit (equity)\n(820,915)\n(179,897)\n421,293\n(282,002)\n(782,510)\n(1,644,031)\n\nTotal liabilities, mezzanine equity and shareholders’ equity\n493,185\n87,141\n442,676\n59,265\n(1,006,708)\n75,559\n\nNotes:\n\n(1)Represents the audit fees billed by the auditor\nof Yimutian Inc., which were paid by the VIEs and the VIEs Subsidiaries.\n\n(2)Represents primarily amounts receivable from\nWFOE to Yimutian Inc. in connection with convertible loans issued to Dezhou Decai Industrial\nInnovation Equity Investment Fund (Limited Partnership) (“Dezhou Decai”) in principal\namount of RMB19.5 million in 2022 and, to a lesser extent, amounts receivable from WFOE in\nconnection with advances by Yimutian Inc. to WFOE for business operations.\n\n9\n\n(3)Represents advances made by WFOE and the\nVIEs and the VIEs’ subsidiaries to other subsidiaries for business operations.\n\n(4)Represents advances made by WFOE and other\nsubsidiaries to the VIEs and the VIEs’ subsidiaries for business operations.\n\n(5)Represents amounts payable to Yimutian Inc.\nin connection with certain preferred shareholders’, including our founder’s,\nsubscription of Yimutian Inc.’s Series B, C-2 and D preferred shares in 2023. Prior\nto paying the consideration of the preferred shares to Yimutian Inc., the preferred shareholders,\nincluding our founder, made shareholder loans to the VIEs and the VIEs’ subsidiaries\nin the same amount of the consideration for preferred shares.\n\n(6)Represents advances made by WFOE to the VIEs\nand the VIEs subsidiaries and other subsidiaries for business operations.\n\n(7)Represents advances made by other subsidiaries\nto the VIEs and the VIEs’ subsidiaries for business operations.\n\n(8)\nRepresents advances made by the VIEs and the VIEs’ subsidiaries to other subsidiaries and Yimutian Inc. for business operation.\n\nSelected Condensed\nConsolidating Cash Flows Information\n\nFor the Year Ended December 31, 2025\n\nYimutian\nInc.\nWFOE\nOther\nSubsidiaries\nVIEs and\nVIEs’\nSubsidiaries\nEliminating\nadjustments\nConsolidated\ntotals\n\n(RMB in thousands)\n\nCash Flow\n\nNet cash (used in) provided by operating activities\n(29,924)\n(13,721)\n37\n(5,571)\n—\n(49,179)\n\nNet cash used in investing activities\n—\n—\n(733)\n(117)\n—\n(850)\n\nNet cash provided by financing activities\n134,555\n13,744\n1,614\n5,375\n—\n155,288\n\nEffect of foreign currency exchange rate changes on cash and cash equivalents\n1,537\n—\n(82)\n—\n—\n1,455\n\nNet increase (decrease) in cash and cash equivalents\n106,168\n23\n836\n(313)\n—\n106,714\n\nCash and cash equivalents at the beginning of the year\n129\n111\n995\n1,537\n—\n2,772\n\nCash and cash equivalents at the end of the year\n106,297\n134\n1,831\n1,224\n—\n109,486\n\nFor the Year Ended December 31, 2024\n\nYimutian\nInc.\nWFOE\nOther\nSubsidiaries\nVIEs and\nVIEs’\nSubsidiaries\nEliminating\nadjustments\nConsolidated\ntotals\n\n(RMB in thousands)\n\nCash Flow\n\nNet cash (used in) provided by operating activities\n(31,354)\n(34,659)\n(2,132)\n6,706\n—\n(61,439)\n\nNet cash provided by (used in) investing activities\n149\n—\n(500)\n500\n—\n149\n\nNet cash provided by (used in) financing\nactivities\n30,995\n34,715\n3,558\n(8,900)\n—\n60,368\n\nEffect of foreign currency exchange rate changes on cash and cash equivalents\n(157)\n—\n22\n—\n—\n(135)\n\nNet (decrease) increase in cash and cash equivalents\n(367)\n56\n948\n(1,694)\n—\n(1,057)\n\nCash and cash equivalents at the beginning of the year\n496\n55\n47\n3,231\n—\n3,829\n\nCash and cash equivalents at the end of the year\n129\n111\n995\n1,537\n—\n2,772\n\n10\n\nFor the Year Ended December 31, 2023\n\nYimutian\nInc.\nWFOE\nOther\nSubsidiaries\nVIEs and\nVIEs’\nSubsidiaries\nEliminating\nadjustments\nConsolidated\ntotals\n\n(RMB in thousands)\n\nCash Flow\n\nNet cash (used in) provided by operating activities\n(4,916)\n(135,301)\n121,258\n1,003\n—\n(17,956)\n\nNet cash (used in) provided by investing activities\n(7,083)\n(6)\n5,019\n(1,160)\n—\n(3,230)\n\nNet cash provided by (used in) financing activities\n12,508\n134,545\n(126,482)\n(2,026)\n—\n18,545\n\nEffect of foreign currency exchange rate changes on cash and cash equivalents\n(202)\n—\n(13)\n—\n—\n(215)\n\nNet increase (decrease) in cash and cash equivalents\n307\n(762)\n(218)\n(2,183)\n—\n(2,856)\n\nCash and cash equivalents at the beginning of the year\n189\n817\n265\n5,414\n—\n6,685\n\nCash and cash equivalents at the end of the year\n496\n55\n47\n3,231\n—\n3,829\n\nA.[RESERVED]\n\nB.CAPITALIZATION AND INDEBTEDNESS\n\nNot applicable.\n\nC.REASONS FOR THE OFFER AND USE OF PROCEEDS\n\nNot applicable.\n\nD.RISK FACTORS\n\nSummary of Risk Factors\n\nAn investment in our ADSs\ninvolves significant risks. You should carefully consider all of the information in this annual report before making an investment in\nour ADSs. Below please find a summary of the principal risks and uncertainties we face, organized under relevant headings. The operational\nrisks associated with being based in and having operations in mainland China also apply to operations in Hong Kong and Macau.\n\nRisks\nRelated to Our Business and Industry\n\n●If\nwe are unable to attract or retain agricultural product sellers, our platform will become\nless appealing to wholesale markets and business buyers, and our business and financial results\nmay be materially and adversely impacted.\n\n●If\nwe are unable to attract or retain buyers of agricultural products, our platform will become\nless appealing to agricultural product sellers, and our business and financial results may\nbe materially and adversely impacted.\n\n●We\nhave incurred net losses since our inception. We cannot guarantee that our monetization strategies\nwill be successful and generate sustainable revenues and realize profitability. If we are\nunable to achieve and maintain profitability in the future, our business, financial condition\nand results of operations may be materially and adversely affected.\n\n●Our\noperating cash outflow, net current liabilities, and preferred shareholder redemption rights\nraise substantial doubt about our ability to continue as a going concern.\n\n●We\nhave limited operating history and our evolving business make it difficult to evaluate our\nfuture prospects and the risks and challenges we may encounter, and our historical growth\nand performance may not be indicative of our future growth and financial results.\n\n11\n\n●Our\nbusiness and results of operations may be materially and adversely affected if inclement\nweather persists or natural disasters occur. Changes in the availability of quality agricultural\nproducts and price fluctuations could also negatively affect our business.\n\n●Our\nbusiness depends heavily on the market recognition and reputation of our brands. Any harm\nto our brands, failure to maintain and enhance our brand recognition or any negative publicity\nabout us, our business, management, business partners or the agricultural B2B industry in\ngeneral, may materially and adversely affect our business, financial condition and results\nof operations.\n\n●Our\nbusiness and results of operations may be materially and adversely affected if we are unable\nto maintain satisfactory user experience or high quality customer service.\n\n●Agricultural\nproduct sellers on our platform deliver their products to wholesale markets or business buyers\nthrough a variety of third-party logistics service providers. Service interruptions,\nfailures, or constraints of these third parties could severely harm our reputation, business\nand prospects.\n\n●We\nmay be subject to complex and evolving laws and regulations regarding cybersecurity, data\nprivacy and data protection. Actual or alleged failure to comply with cybersecurity, data\nprivacy and data protection laws and regulations could damage our reputation, deter current\nand potential users from using our services and subject us to significant legal, financial\nand operational consequences.\n\nRisks Related to\nOur Corporate Structure\n\n●Yimutian Inc. is a Cayman Islands holding company with no operations of its own. We currently conduct\nour operations in mainland China through our subsidiaries and the VIEs. If the mainland China government deems that our contractual arrangements\nwith the VIEs do not comply with the laws of mainland China, or if these laws, or the interpretation of existing laws, change in the future,\nwe could be subject to material penalties or be forced to relinquish our interests in those operations or otherwise significantly\nchange our corporate structure. We and our investors face uncertainty about potential future actions by the mainland China government\nthat could affect the legality and enforceability of the contractual arrangements with the VIEs and, consequently, significantly\naffect our ability to consolidate the financial results of the VIEs and the financial performance of our company as a whole.\n\n●Our contractual arrangements may not be as effective in providing operational control as direct ownership\nand the VIE shareholders may fail to perform their obligations under our contractual arrangements.\n\nRisks Related to\nDoing Business in Mainland China\n\n●The legal system in mainland China evolves rapidly, and the interpretations of laws, regulations and rules\nmay change from time to time. The enforcement of laws in mainland China and rules and regulations in mainland China can change quickly\nwith little advance notice. In addition, their interpretations and enforcement involve uncertainties. Similar to situations of many other\ncountries, the mainland China government has oversight over the conduct of our business and may influence or intervene our operations\nat any time, which could result in a material change in our operations and/or the value of our Class A ordinary shares or ADSs. Furthermore,\nthe mainland China government has recently promulgated certain measures to supervise overseas securities offering of domestic entities,\nindicating an intent to exert more oversight and control over securities offerings and other capital markets activities that are conducted\noverseas and/or foreign investment in mainland China-based companies like us. If we fail to comply with the new measures relating\nto overseas securities offering of domestic entities, such failure could adversely affect the value of our Class A ordinary shares\nor the ADSs, or significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the\nvalue of such securities to significantly decline or in extreme cases, become worthless. For details, see “Item 3. Key Information—D.\nRisk Factors—Risks Related to Doing Business in Mainland China—We are subject to evolving laws and regulations of mainland\nChina that could require us to modify our current business practices and incur increased costs, and the mainland China government’s\noversight over our business operations could result in a material adverse change in our operations and the value of our Class A ordinary\nshares or ADSs.”\n\n●The approval of and/or filing with the CSRC or other PRC government authorities may be required in connection\nwith our offshore offerings under the laws of mainland China, and, if required, we cannot predict whether or for how long we will be able\nto obtain such approval or complete such filing.\n\n●Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the\nPCAOB is unable to inspect or investigate completely auditors located in mainland China and Hong Kong. The delisting of the ADSs,\nor the threat of their being delisted, may materially and adversely affect the value of your investment.\n\n12\n\nRisks Related to\nthe ADSs\n\n●The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors.\n\n●If we fail to meet Nasdaq’s minimum bid price or minimum market value of publicly held shares requirements,\nour ADSs could be subject to delisting, which may significantly reduce the liquidity of our ADSs and cause further declines to the market\nprice of our ADSs.\n\n●Our dual-class voting structure limits your ability to influence corporate matters and could discourage\nothers from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.\n\nRisks Related to Our Business\nand Industry\n\nIf we are unable\nto attract or retain agricultural product sellers, our platform will become less appealing to wholesale markets and business\nbuyers, and our business and financial results may be materially and adversely impacted.\n\nWe rely upon sellers of agricultural\nproducts on our platform, including farmers and food production or processing companies to provide quality agricultural products to wholesale\nmarkets and business buyers. The number of sellers on our platform increased from 3.2 million as of December 31, 2023 to 3.5 million\nas of December 31, 2024 and further increased to 3.7 million as of December 31, 2025. Attracting and retaining new agricultural\nproduct sellers to our platform and engaging existing sellers on our platform are essential for our success. The number of agricultural\nproduct sellers on our platform or the frequency of their use of our platform could fluctuate and may materially decline as a result of\nmany factors, such as the sellers’ perceived failure to achieve expected results and generate profits, the pricing of our services,\nand the emergence of competing platforms and alternative channels for sellers to approach buyers, some of which are beyond our control.\nIf we are unable to effectively help the sellers sell their agricultural products to appropriate business buyers or provide quality services\nthey desire, they may switch to other competing platforms. A decrease in the number of sellers on our platform would make it difficult\nfor us to maintain and increase the variety and quantity of products available on our platform and cause a decline in our income. An insufficient\nnumber of agricultural product sellers on our platform would also reduce our network activity and it may be increasingly difficult for\nbusiness buyers to purchase agricultural products in quality and quantity and at price satisfactory to them, which may lead to reduced\nnumber of buyers and the perceived utility of our platform. Activity on our platform may also fluctuate due to seasonality. See “—Our\nbusiness and operating results may experience seasonal fluctuations” for more information. If agricultural product sellers do not\nestablish or maintain active accounts with us, if we fail to provide high-quality services, or if we cannot otherwise attract and\nretain a sufficient number of agricultural product sellers, our business and results of operations could grow slower than expected or\ndecline significantly.\n\nIf we are unable\nto attract or retain buyers of agricultural products, our platform will become less appealing to agricultural product sellers,\nand our business and financial results may be materially and adversely impacted.\n\nOur success significantly\ndepends on our ability to maintain or expand our network by attracting and retaining buyers on our platform. The number of buyers on our\nplatform increased from 14.8 million as of December 31, 2023 to 16.3 million as of December 31, 2024, and further\nincreased to 17.4 million as of December 31, 2025. The number of buyers on our platform or the frequency of their use of our\nplatform may fluctuate and could decline as a result of a number of factors, including declining number of agricultural product sellers\non our platform, declining variety or decreasing quality of agricultural products available on our platform, dissatisfaction with our\nbrand or reputation, or availability of competing platforms. To make sure our platform is continuously appealing to wholesale market stall\noperators and business buyers, we leverage our decade-long experience in the agriculture industry, our technology capabilities and\nextensive amount of data gathered to enable agricultural product sellers on our platform to supply a vast variety of quality agricultural\nproducts that meet varied needs of wholesale market stall operators and different types of business buyers across different geographical\nlocations. In 2023, 2024 and 2025, over 42% of new buyers on our platform were acquired through word-of-mouth marketing thanks to\nour trusted brand. However, buyer demand and preferences evolve over time, and our ability to remain competitive, grow our business and\nmaintain our market position depends on our ability to continually respond to or anticipate changes in the market conditions and buyer\ndemand and preferences. We may not be able to respond to or anticipate such changes in a timely manner, and inability to adapt to these\nchanges may result in a failure to attract new buyers or retain existing buyers. In addition, we cannot guarantee that our buyers acquisition\nefforts would always be achieved at low costs, or at all. Any reduction in the number or availability of buyers on our platform would\nlikely lead to a reduction in platform usage by agricultural product sellers, which in turn would make our platform less attractive to\nwholesale market stall operators and business buyers, and thus reduce the value of our network and harm our business prospects and future\nresults of operations.\n\n13\n\nWe have incurred\nnet losses since our inception. We cannot guarantee that our monetization strategies will be successful and generate sustainable\nrevenues and realize profitability. If we are unable to achieve and maintain profitability in the future, our business, financial\ncondition and results of operations may be materially and adversely affected.\n\nWe incurred net losses of\nRMB105.6 million in 2023, RMB34.9 million in 2024 and RMB42.9 million\n(US$6.1 million) in 2025. We mainly rely on charging membership fees for services rendered to merchants on our platform as well\nas transaction service fees for transactions facilitated through our platform. We cannot assure you that our monetization efforts will\nbe successful and generate sustainable revenue sources and realize profitability. Our membership base, transaction volume, number of paying\nmerchants and paying merchants’ spending on our platform may decline if merchants find that our services not appealing to them anymore.\nDue to limited track record of our new monetization efforts, we also cannot assure you that these efforts will yield expected results.\nAs a result, we may not be able to achieve or maintain profitability in the future. In addition, our expenses will likely increase in\nthe future as we develop and launch new offerings and technologies, expand in existing and new markets, and continue to invest in our\nplatform. These efforts may be more costly than we expect and may not result in increased revenues or growth in our business as anticipated.\nFurthermore, after we become a public company, we may incur additional compliance, accounting, and other expenses that we did not incur\nas a private company. Any failure to increase our revenues sufficiently to keep pace with our investments and other expenses could prevent\nus from achieving profitability or positive operating cash flow on a consistent basis. If we are unable to successfully address these\nrisks and challenges as we encounter them, our business, financial condition and results of operations could be adversely affected.\n\nOur operating cash\noutflow, net current liabilities, and preferred shareholder redemption rights raise substantial doubt about our ability to continue\nas a going concern.\n\nWe had net cash used in operating\nactivities of RMB18.0 million in 2023, RMB61.4 million in 2024 and RMB45.5\nmillion (US$6.5 million) in 2025. ** **If we are unable to generate sufficient cash from operating activities in\nthe future, our business, results of operations and liquidity may be adversely affected. We also had net current liabilities (current\nliabilities less current assets) of RMB227.8 million as of December 31, 2023, RMB229.7 million as of December 31,\n2024 and RMB151.5 million (US$21.7 million)\nas of December 31, 2025. ** **We may continue to have net current liabilities in the future as our business expands,\nin which case we may face a shortfall of working capital. We will require additional liquidity to continue our operations over the next\n12 months. We are evaluating strategies to obtain the required additional funding for future operations. These strategies may include,\nbut are not limited to, obtaining equity financing, issuing debt or entering into other financing arrangements, obtaining agreements with\nthe existing investors to extend the due dates for outstanding debt, although there is no assurance that we will be successful in obtaining\nsuch additional financing on terms acceptable to us, if at all. In addition, we plan to diversify revenue streams and implement cost saving\nmeasures to grow revenues and decrease expenses. However, the feasibility of such plan is contingent upon many factors out of our control,\nand is highly uncertain and difficult to predict, and we may be unable to successfully execute such plan. As such, we cannot assure you\nthat additional liquidity will be available in amounts or on terms acceptable to us when needed, if at all, and that we will be able to\nsecure sufficient capital on commercially acceptable terms to fund our working capital requirements and planned capital expenditures.\nThese factors give rise to substantial doubt over our ability to continue as a going concern. See “Item 5. Operating and Financial\nReview and Prospects—B. Liquidity and Capital Resources.” The accompanying consolidated financial statements do not include\nany adjustments that might result if we are unable to continue as a going concern and, therefore, be required to realize our assets and\ndischarge our liabilities other than in the normal course of business which could cause investors to suffer the loss of all or a substantial\nportion of their investment. If we were not able to continue as a going concern, or if there were continued doubt about our ability to\ndo so, this may further exacerbate our pressure to obtain additional financing.\n\nWe have limited\noperating history and our evolving business makes it difficult to evaluate our future prospects and the risks and challenges we may\nencounter, and our historical growth and performance may not be indicative of our future growth and financial results.\n\nWe have a limited operating\nhistory. We started to operate our agricultural e-commerce business in 2015 and commenced offering sales-assistance services\nin 2019. Our business continues to evolve. We from time to time introduce new platform features, offerings and services. Our limited operating\nhistory, particularly with respect to monetization, and evolving business nature make it difficult to evaluate our future prospects and\nthe risks and challenges we may encounter. These risks and challenges include our ability to:\n\n●forecast our revenues and budget for and manage our expenses;\n\n●attract new merchants and retain existing merchants in a cost-effective manner;\n\n●comply with existing and new laws and regulations applicable to our business;\n\n●anticipate and respond to macroeconomic changes and changes in the markets in which we operate;\n\n14\n\n●maintain and enhance the value of our reputation and brand;\n\n●effectively compete with other market players;\n\n●effectively manage our growth;\n\n●successfully expand our geographic reach and overcome challenges particular to new geographical markets;\n\n●hire, integrate and retain talented people at all levels of our organization; and\n\n●successfully develop new platform features, offerings and services to enhance the experience of our platform\nparticipants.\n\nAlthough we have experienced\ngrowth historically, we may not be able to continue our growth. You should not consider our historical growth as indicative of our future\nfinancial performance. If we fail to address the risks and difficulties that we face, our business, financial condition and results of\noperations could be adversely affected. Further, because we have limited historical financial data and operate in a rapidly evolving market,\nany predictions about our future revenues and expenses may not be as accurate as they would be if we had a longer operating history or\noperated in a more predictable market. We have encountered in the past, and will continue to encounter in the future, risks and uncertainties\nfrequently experienced by growing companies with limited operating histories in rapidly changing industries. If our assumptions regarding\nthese risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks\nsuccessfully, our results of operations could differ materially from our expectations and our business, financial condition and results\nof operations could be adversely affected.\n\nOur business and\nresults of operations may be materially and adversely affected if inclement weather persists or natural disasters occur. Changes\nin the availability of quality agricultural products and price fluctuations could also negatively affect our business.\n\nThe large number of agricultural\nproducts sold with the help of our platform are mainly produced in various locations in mainland China. Agricultural production in general,\nincluding our smart farming business, is highly susceptible to inclement weather and natural disasters. For example, in July 2021,\nHenan Province of China experienced persistent heavy rains, which led to a temporary closure of our business operations in Zhengzhou,\ncapital of Henan Province, and negatively affected certain of our platform participants located in Henan Province. If inclement weather\npersists or natural disasters or other catastrophic events occur, the supply of agricultural products would be constrained and the quality\nand variety of the products would likely decline, and the prices of agricultural products may also fluctuate significantly, in which case\nit may become difficult for our platform participants to complete transactions at satisfactory prices. Since we generate revenue from\ncharging service fees and commissions from transactions completed on our platform, among others, the decreased transaction activity and\nfluctuation in prices of agricultural products could materially and adversely affect our business and results of operations. In addition,\nas we start to further grow our business throughout the agricultural product supply chain, we could be even more susceptible to such risks.\nInclement weather and natural disasters could cause severe damage to crop we planted together with local partners, which could lead to\nlosses of our investments and thus result in material adverse impacts on our business, results of operations and financial condition.\nApart from inclement weather and natural disasters, outbreaks of diseases such as swine flu and hog cholera could also led to significant\nfluctuations in prices of agricultural products, and thus negatively affect our business and results of operations.\n\n15\n\nEven if there is no inclement\nweather or natural disaster, due to the varying sources of supply for agricultural products sold on our platform, there is no guarantee\nthe quality of such agricultural products will be continuingly consistent and the availability of quality agricultural products may be\nlimited. While we have spent efforts to standardize certain products based on buyers’ needs, but we still, to a large extent, rely\non sellers to supply high-quality agricultural products that meet buyers’ demands. Failure to maintain availability of high-quality products\non our platform may impair buyer confidence and the attractiveness of our platform, which in turn would adversely affect our business,\nresults of operations and financial condition.\n\nOur business depends\nheavily on the market recognition and reputation of our brands. Any harm to our brands, failure to maintain and enhance our brand recognition\nor any negative publicity about us, our business, management, business partners or the agricultural B2B industry in general, may\nmaterially and adversely affect our business, financial condition and results of operations.\n\nWe believe that the market\nrecognition and reputation of our brands have significantly contributed to the success of our business. As a result, maintaining and enhancing\nour brand recognition and reputation are critical to our success and market position. Our reputation and brands may be negatively affected\nby various factors, some of which are difficult or impossible to predict or control, such as:\n\n●our ability to maintain a convenient and reliable user experience as consumer preferences evolve and as\nwe expand into new product categories and new business lines;\n\n●our ability to provide superior services and solutions on our platform;\n\n●our ability to effectively manage the quality of products on our platform;\n\n●the efficiency, reliability and quality of the services and solutions provided by us or third-party truck\ndrivers, logistics service providers and other service providers; and\n\n●our ability to increase brand awareness among existing and potential users through various means.\n\nNegative publicity about us,\nsuch as alleged misconduct by our employees or other parties on our platform, unethical business practices, or rumors relating to our\nbusiness, management, employees, merchants on our platform, or our shareholders and affiliates could cause harm to our reputation, business\nand results of operations. These allegations, even if factually incorrect or based on isolated incidents, may lead to inquiries, regulatory\ninvestigations or legal actions against us. Such actions could substantially damage our brand and reputation and cause us to incur significant\ncosts to defend ourselves. Any negative public perception or publicity regarding our business partners that we cooperate with, or any\nregulatory inquiries or investigations and lawsuits initiated against them, may also have an adverse impact on our brand and reputation.\nIn addition, our brand and reputation could be damaged as a result of the negative publicity about the agricultural B2B industry in general\nor other agricultural e-commerce platforms in mainland China regarding security or product quality issues. If we are unable to maintain\nour reputation, further enhance our brand recognition and increase positive awareness of our platform, our platform participants may be\nreluctant to sell and buy products from our platform, and our results of operations may be materially and adversely affected.\n\nOur business and\nresults of operations may be materially and adversely affected if we are unable to maintain satisfactory user experience or high\nquality customer service.\n\nThe success of our business\nlargely depends on our ability to provide satisfactory user experience and high-quality customer service, which in turn depends on\na variety of factors, such as our ability to continue to provide a reliable and user-friendly interface for our users to showcase,\nbrowse and purchase agricultural products, sellers’ ability to provide reliable and timely delivery of agricultural products, and\nour ability to continue to provide superior after-sales services. Transactions volume may decrease if our platform is severely interrupted\nor otherwise fails to meet our users’ requests. If third-party delivery companies or truck drivers who connect with sellers\nthrough our platform fail to deliver agricultural products in a timely and reliable manner, for which we do not exercise any control,\nor if wholesale markets or business buyers are not satisfied with product quality, our platform participants’ user experience will\nbe impaired and our merchant loyalty could be negatively affected. In addition, we depend on our transaction disputes department and online\ncustomer service representatives to provide online assistance to our users. If our transaction disputes department or online customer\nservice representatives fail to satisfy users’ needs, our reputation and merchant loyalty could be harmed, and we may lose potential\nor existing users, which would result in a decrease in both of the transaction volume on our platform and our revenue. As a result, if\nwe are unable to maintain satisfactory user experience and provide high quality user service, we may not be able to retain existing users\nor attract new users, which could have a material adverse effect on our business, financial condition and results of operations.\n\n16\n\nAgricultural product\nsellers on our platform deliver their products to wholesale markets or business buyers through a variety of third-party logistics\nservice providers. Service interruptions, failures, or constraints of these third parties could severely harm our reputation, business\nand prospects.\n\nSellers of agricultural products\non Douniu App deliver their products to wholesale markets through third-party truck drivers, while sellers on Yimutian App deliver\ntheir products to business buyers through third-party logistics service providers. Interruptions to or failures in services provided\nby these third parties could affect timely and successful delivery of the products to wholesale markets and business buyers. As we do\nnot directly control or manage the operations of these third parties, we are unable to guarantee their performance. Failure to provide\nsatisfactory services by these third parties, such as delays in delivery, product damage or loss during transit, shutdown or termination\nof services may damage our reputation and cause us to lose potential or existing buyers, and may ultimately adversely affect our results\nof operations.\n\nAs some agricultural products\nare perishable, if these third parties fail to deliver products to wholesale market stall operators or business buyers on time and in\ngood condition, stall operators or business buyers may refuse to accept the products and their confidence in our platform may also be\nimpaired. In such event, we cannot assure you that sellers or we will be able to find alternative cost-efficient service providers\nor operators to offer satisfactory services in a timely manner, or at all, which could cause our business and reputation to suffer or\ncause sellers and buyers to switch to other platforms and have negative impact on our operating results.\n\nWe may be subject\nto claims under consumer protection laws, in particular health and safety claims and product liability claims, if property or people\nare harmed by the products sold on our platform.\n\nOur business involves sale\nof food products and is subject to inherent risks of product liability claims and the resulting negative publicity. Food products containing\ncontaminants could be inadvertently sold on or through our platform and, if these contaminants are not eliminated by the time of consumption,\nthey could cause bodily harm or death in severe situations. We are involved in product liability claims brought by buyers on our platform\nfrom time to time. We cannot assure you that product liability claims will not be asserted against us or that we will not be held liable\nfor such incidents in the future. If claims are brought against us under any of these laws, we could be subject to monetary damages and\nactions by regulators, which could have a material adverse effect on our business, financial condition and results of operations. Although\nwe would have legal recourse under the laws of mainland China against the seller that supplied such products, attempting to enforce our\nrights against such seller may be expensive, time-consuming and ultimately futile. Other than monetary damages and regulatory actions,\nany actual or perceived food safety issue or product contamination associated with our platform could result in negative publicities and\nthus seriously harm our reputation. Adverse publicity concerning food safety of agricultural products in mainland China in general could\nalso have a negative impact on our business in addition to the general negative consequences on the whole industry.\n\nIn addition, operators of\ne-commerce platforms may be subject to certain provisions of consumer protection laws even where the operator is not the producer,\nprovider or retailer of the products or services purchased by the consumer. For example, pursuant to the Law of the People’s Republic\nof China on the Protection of Consumer Rights and Interests, or the Consumer Protection Law, if we fail to provide a consumer with the\nname, address and contact details of the seller that sold the defective product, we may be liable to compensate such consumer damages\nsuffered by him/her, even though we are entitled to seek indemnification from sellers. In addition, if we do not take appropriate remedial\naction against sellers for their actions that we know, or should have known, that would infringe upon the rights and interests of consumers,\nwe may be held jointly liable for infringement alongside the sellers. Moreover, the Consumer Protection Law provides that a platform will\nbe held liable for failing to meet any undertaking it made to consumers with regard to products listed on the platform. Furthermore, according\nto the Measures for the Supervision and Administration of Online Transactions, or the Online Transaction Measures, we are required to\nreport violations of applicable consumer protection laws, regulations or administrative rules by sellers to the State Administration for\nMarket Regulation, or SAMR, or its local branches, and take appropriate remedial measures, including ceasing to provide services to the\nrelevant sellers, as a platform. We may also be held jointly liable with sellers that sell agricultural products without proper licenses\nor authorizations. See also “—We are subject to existing and new laws and regulations imposing various requirements on e-commerce business”\nfor further details.\n\n17\n\nWe do not maintain product\nliability insurance for products transacted on our platform, and our rights of indemnity from sellers or suppliers on our platform may\nnot adequately cover us for any liability we may incur. Claims against us, even if they are eventually unsuccessful, could result in significant\nexpenditure of funds and diversion of management time and resources. Any claims against us, whether successful or not, could result in\nloss in confidence on the part of our users, which would be difficult and costly to reestablish, and significantly impair our brand value,\nwhich would have a material and adverse impact on our business, results of operations, financial condition and prospects.\n\nWe are subject to\nexisting and new laws and regulations imposing various requirements on e-commerce business.\n\nE-commerce business is\nsubject to various laws and regulations in mainland China, and the mainland China government authorities may continue to promulgate new\nlaws, regulations and rules governing the e-commerce industry, tighten enforcement of existing laws, rules and regulations, and impose\nadditional requirements and other obligations on our business including the operation of our e-commerce platform and our market promotion\nactivities. Compliance with these laws, regulations and rules may be costly, and any incompliance or associated inquiries, investigations\nand other governmental actions may divert significant management time and attention and our financial resources, bring negative publicity,\nor subject us to liabilities or administrative penalties:\n\n●According to the E-Commerce Law of PRC, e-commerce platform operators who fail to take necessary\nactions when they know or should have known that the merchants on their platform infringe others’ personal or property safety, or\nthe products or services provided by the merchants do not meet the requirements for product safety, or otherwise infringe upon consumers’\nlegitimate rights, will be held jointly liable with the merchants. Additionally, with respect to the products or services affecting consumers’\nlife and health, the e-commerce platform operators will bear responsibilities if they fail to review the qualifications of merchants\nor fail to safeguard the interests of the consumers. We may be held responsible if the agricultural products sold through our platform\ncaused harm to the interests and health of consumers.\n\n●The Measures for the Supervision of Online Transactions (as amended in 2025) also require e-commerce platforms\nto timely remind individual merchants to register with local branches of SAMR if their total annual transaction volume across different\nplatforms exceeds RMB100,000. Our policy expressly requires merchants on our platform that are captured by these rules to complete the\nregistrations. We may lose existing or potential merchants who do not or are unwilling to comply with the registration and related requirements,\nand we may be found liable under the E-Commerce Law and related regulations if we are deemed to have failed to implement the required\nprocedures. Furthermore, the Measures for the Supervision and Administration of Online Trading Platform Rules (promulgated by SAMR and\nCAC, effective February 1, 2026) impose systematic compliance requirements on the formulation, revision and implementation of platform\nrules. These new rules prohibit platforms from using platform rules to force merchants to accept “refund-only” policies, to\nsubscribe to non-essential value-added services such as shipping insurance, to participate in promotional activities against their will,\nor to operate exclusively on a single platform. Compliance with these new measures may increase our operating costs and expose us to additional\nadministrative penalties for any non-compliance.\n\n18\n\n●Among other things, the Interim Provisions for Regulating Promotional Activities of PRC, or the Interim\nProvisions, was designed to promote consumer protection and prohibit false or misleading commercial information used in promotional activities.\nAs a platform operator, we are required by the Interim Provisions to design rules and procedures to foster fair and transparent merchandise\npromotional activities, and assist the authorities in their investigation of violations by platform merchants, which will result in additional\ncompliance costs. In addition, business operators in mainland China are prohibited from inducing consumers into transactions via misleading\npricing terms or engaging in other anti-competitive conducts associated with product price. The Rules on Pricing Behavior of Internet\nPlatforms (jointly issued by NDRC, SAMR and CAC, effective April 10, 2026) further impose systematic requirements on platform pricing,\npromotions and fees, which may increase our compliance burden. If we are found to have violated these laws and regulations, we may be\nsubject to fines and other administrative penalties.\n\n●According to the Anti-Monopoly Compliance Guidelines for Internet Platforms (issued by SAMR on February\n13, 2026), business practices such as deploying big data analytics to set discriminatory terms for merchandise price or other transaction\nterms, coercive exclusivity arrangements with transaction counterparties, blocking of competitor interface through technological means,\nunlawful collection of user data without consent, algorithmic collusion among platforms, organizing or assisting merchants to reach monopoly\nagreements, unfairly high pricing, below-cost sales, “choose-one-of-two” practices, and “nationwide lowest price”\nrequirements, are prohibited. Since these Guidelines have been formally promulgated and are in effect, the regulatory framework for platform\nanti-monopoly compliance has become more concrete. However, as enforcement practices continue to evolve, there remains some uncertainty\nas to how certain provisions will be interpreted and applied in specific circumstances. If we are found to have any non-compliance issues\nby the authorities, we may be subject to fines and other penalties.\n\n●The Interim Provisions on Anti-Unfair Competition in the Internet (SAMR Order No. 91, effective September\n1, 2024) enhance the responsibilities of platform operators, who are required to strengthen the regulation of competitive behaviors within\nthe platform. According to regulations, if platform operators discover that operators within the platform engage in unfair competitive\npractices, sell goods or provide services illegally, or infringe upon the legitimate rights and interests of consumers, they must take\ntimely measures, preserve relevant records, and report to the market supervision authorities at county level or above where the platform\noperator is located; otherwise, the platform operators will face certain administrative penalties. The Internet Anti-Unfair Competition\nProvisions also raise the compliance requirements for platforms, for example, platform operators are not allowed to use service\nagreements, transaction rules, or other means by the operators within the platform to impose unreasonable restrictions or attach\nunreasonable conditions on the transactions, transaction prices, and dealings with other operators within the platform, and\nplatform operators should fairly and reasonably determine the service charges in the service agreements and transaction rules. Moreover,\nthe newly revised Anti-Unfair Competition Law of the PRC (adopted on June 27, 2025, effective October 15, 2025) has expanded the scope\nof prohibited unfair competition practices and increased penalties for violations. These developments may result in additional compliance\ncosts and increased enforcement risks for our platform.\n\n●The impact of the laws or regulations in mainland China governing property rights of virtual currency\non our business has yet to be assessed, and it is not clear what liabilities, if any, we may have relating to the loss of virtual currency\nby merchants. Merchants on our platform purchase Tian Bi (田币)\nto exchange value-added services we offer. However, Tian Bi is not a virtual currency that is exchangeable into Renminbi or any other\ncurrencies or can be consumed on any other platforms. The mainland China government may re-evaluate or amend the virtual currency\nrelated laws and regulations or policies to strengthen the supervision on issuance and operation of such virtual currencies. It is unclear\nwho is the legal owner of virtual items and whether the ownership of virtual items is protected by law. Although we have not been involved\nin any virtual items related lawsuits previously, we cannot assure you that such lawsuits will not be brought against us in the future.\nAny adverse changes in the laws and regulations or policies could impose liabilities on us for loss of virtual currency by merchants on\nour platform. In addition, laws and regulations of mainland China regulating virtual currency are designed for online games. We believe\nTian Bi is not a kind of “game virtual currency” that is subject to the Circular of the Ministry of Culture and the Ministry\nof Commerce on Strengthening the Administration of Virtual Currencies for Online Gaming and other related regulations. However, we cannot\nassure you that the MOC and MOFCOM will hold the same view with us. If the government authorities regard Tian Bi in our platform as a\nkind of “game virtual currency” or new laws and regulations related to virtual currency used on an e-commerce platform\nare promulgated in the future, we may incur additional expenses or invest considerable resources in complying with those requirements.\n\n19\n\nIn light of the evolving legislative\nactivities and varied local implementation practices of consumer protection, anti-monopoly and competition laws and regulations in\nrelation to e-commerce in mainland China, compliance with these laws, regulations, rules, guidelines and implementations may be costly,\nand any incompliance or associated inquiries, investigations and other governmental actions may divert significant management time and\nattention and our financial resources, bring negative publicity, subject us to liabilities or administrative penalties, and may materially\nand adversely affect our financial conditions, operations and business prospects.\n\nWe may be subject\nto complex and evolving laws and regulations regarding cybersecurity, data privacy and data protection. Actual or alleged failure\nto comply with cybersecurity, data privacy and data protection laws and regulations could damage our reputation, deter current\nand potential users from using our services and subject us to significant legal, financial and operational consequences\n\nOur business generates and\nprocesses a large amount of data, and we are subject to laws and regulations regarding cybersecurity, data privacy and data protection\nin mainland China. The legal landscape in this area has undergone significant changes in the past two years. For example, the Standing\nCommittee of the National People’s Congress adopted the amendments to the Cybersecurity Law on October 28, 2025, which took effect\non January 1, 2026, marking the first major revision of this foundational cybersecurity law since its enactment in 2016. The amendments\nexpand the scope of cybersecurity obligations, impose stricter penalties with maximum fines increased to RMB10 million for serious violations,\nand introduce provisions supporting the development and regulation of artificial intelligence. The mainland China government has enacted\na series of laws and regulations on the protection of personally identifiable data in recent years. For example, the CAC released\njointly with several other administrations the Cybersecurity Review Measures on December 28, 2021, which became effective on February 15,\n2022, and underwent further revisions around September 2025. Pursuant to the Cybersecurity Review Measures, network platform operators\nthat possess personal information of over one million individual users shall be subject to cybersecurity review before listing abroad.\nAny failure to timely complete the required cybersecurity review may result in regulatory sanctions including, among others, government\nenforcement actions and investigations, fines, penalties, and suspension of our non-compliant operations, as well as reputational\ndamage or legal proceedings or actions against us, any of which may have material adverse effects on our business, financial condition\nand results of operations. As a network platform operator who possesses personal information of more than one million users for purposes\nof the Cybersecurity Review Measures, we have applied for and completed a cybersecurity review with respect to our initial public offering\npursuant to the Cybersecurity Review Measures. According to the Regulations on Network Data Security Management promulgated by the State\nCouncil on September 24, 2024, a network data processor that handles the personal information of more than 10 million people\nis considered a processor of important data. Processors of important data are required to adopt stricter data security management measures,\nsuch as conducting annual risk assessments of their network data processing activities and submitting risk assessment reports to the relevant\nauthorities at provincial level or above. In cases of mergers, divisions, dissolutions, bankruptcies, or other circumstances that may\naffect the security of important data, the processors of important data shall take measures to ensure the security of network data, and\nreport to the relevant authorities at provincial level or above on the disposal plan for key data, the name and contact information of\nthe recipient. Failure to fulfill these obligations may result in administrative penalties, including fines, suspension of business, and\nrevocation of business qualifications or even business licenses. Furthermore, the National Internet Information Office issued the Measures\nfor the Administration of Personal Information Protection Compliance Audits, which took effect on May 1, 2025. Under these measures, personal\ninformation processors processing the personal information of more than 10 million individuals are required to conduct personal information\nprotection compliance audits at least once every two years. Other personal information processors are required to conduct such audits\nperiodically based on their specific circumstances. Failure to comply may result in enforcement actions and penalties. In the area of\ncross-border data transfers, the Measures for Certification of Personal Information Export, jointly issued by the CAC and the State Administration\nfor Market Regulation on October 17, 2025, took effect on January 1, 2026. This measure establishes the certification pathway for personal\ninformation export, completing the full framework of China’s cross-border data transfer regulatory system, which now includes security\nassessment, standard contract, and certification as the three primary compliance pathways. These evolving requirements may increase our\ncompliance costs and expose us to additional regulatory risks. See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations\nRelating to Cybersecurity, Information Security Protection.”\n\n20\n\nMoreover, ensuring our compliance\nwith the evolving data privacy and protection laws in mainland China have increased our operating cost. While we have adopted a rigorous\nand comprehensive policy for the collection, processing, sharing, disclosure authorization and other aspects of data use and privacy and\ntaken necessary measures to comply with all applicable laws and regulations, we cannot guarantee the effectiveness of these policies and\nmeasures undertaken by us. Additionally, the effectiveness of our privacy and data protection measures is also subject to system failure,\ninterruption, inadequacy, security breaches or cyberattacks. Any failure or perceived failure to comply with all applicable laws and regulations,\nor any failure or perceived failure of our business partners to do so, or any failure or perceived failure of our employees to comply\nwith our internal control measures, may result in negative publicity and legal proceedings or regulatory actions against us, and could\nresult in fines, revocation of licenses, suspension of operations or other legal or administrative penalties, which may in turn damage\nour reputation, discourage current and potential users and subject us to damages, which could have a material adverse effect on our business\nand results of operations.\n\nFurthermore, any inability\nto adequately address data privacy or security-related concerns, complaints, inquiries or allegations, even if unfounded, when they\narise, or to comply with applicable laws, regulations, standards and other obligations relating to data privacy and security, could result\nin additional cost and liability to us, harm our reputation and brand, damage our relationships with merchants, impair users’ trust\nin our privacy practices and make them reluctant to give their consent to share their data with us. As a result, our ability to retain\nor increase our membership base and member engagement may be materially and adversely affected, and we may not be able to maintain or\ngrow our revenue as anticipated, all of which would have a material and adverse effect on our business, financial condition and results\nof operation.\n\nIn addition, we and our counterparties,\nincluding business partners and external service providers, might be subject to contractual obligations regarding the processing of personal\ninformation. While we believe our conduct and our counterparties’ conduct under these agreements are in material compliance with\nall applicable laws, regulations, standards, certifications and orders relating to data privacy or security, we or our counterparties\nmay fail, or be alleged to have failed, to be in full compliance. In the event that our acts or omissions result in alleged or actual\nfailure to comply with applicable laws, regulations, standards, certifications and orders relating to data privacy or security, we may\nincur liability. While we endeavor to include indemnification provisions or other protections in the agreements we enter into with our\ncounterparties to mitigate liability and losses stemming from our counterparties’ acts or omissions, we may not always be able to\nobtain such protections and, even where we can, there is no guarantee that our counterparties will honor such provisions or that such\nprotections will cover the full scope of our liabilities and losses. Any failure or perceived failure of compliance by us or our counterparties\nmay result in proceedings or actions against us, which could harm our reputation and have a material adverse effect on our business and\nprospects.\n\nThe laws and regulations regarding\ncybersecurity, data privacy and data protection are complex and evolving, and the interpretation and application thereof will be determined\non an ad hoc basis depending on the facts and circumstances. These laws and regulations and other similar legal and regulatory developments\ncould affect how we operate our platform, render services and process data, which could negatively impact demand for our services and\nthe efficiency of our services to users. We may incur substantial costs to comply with such new laws and regulations, meet the demands\nof our users relating to their own compliance with applicable laws and regulations and establish and maintain internal compliance policies.\nIf we are unable to comply with the then-applicable laws and regulations, or to address any privacy and data protection concerns,\nsuch actual or alleged failure could damage our reputation, deter current and potential users from using our solutions and could subject\nus to significant legal, financial, and operational consequences.\n\n21\n\nFailure to effectively\ndeal with any fictitious transactions or other fraudulent conduct would materially and adversely affect our business, financial condition\nand results of operations.\n\nWe may face risks with respect\nto fraudulent activities on our platform. For example, merchants on our platform may engage in fictitious or “phantom” transactions\nwith themselves or their collaborators in order to artificially inflate their own ratings on our platform, reputation and search results\nrankings. This activity may harm other sellers by enabling the perpetrating seller to be favored over legitimate sellers, and may harm\nconsumers by deceiving them into believing that a seller is more reliable or trusted than the seller actually is. This activity may also\nresult in inflated transaction volume on our online marketplace. Other parties may also engage in similar or other fraudulent or illegal\nactivities on our platform. See also “—Illegal, improper or otherwise inappropriate activity of sellers, buyers, other users\nor our employees, whether or not occurring while utilizing our platform, could expose us to liability and harm our business, brand, financial\ncondition and results of operations” for more details. Although we have implemented various measures to detect and reduce the occurrence\nof fraudulent activities on our platform, there can be no assurance that such measures will be effective in combating fraudulent. Such\nfictitious transactions and fraudulent conduct may subject us to lawsuits, regulatory investigations, fines and penalties.\n\nMoreover, illegal, fraudulent\nor collusive activities by our employees, such as fraud, bribery or corruption, could also subject us to liability, negative publicity\nor losses. Although we have adopted internal control procedures and policies governing the review and approval of sales activities and\nother matters, we cannot assure you that such procedures and policies will effectively prevent fraud or illegal activity by our employees.\nAny actual or alleged fraudulent or deceptive conduct by our employees could result in negative publicity and severely impair our members’\nconfidence and trust in us, damage our reputation and diminish the value of our brands, and impact our ability to attract new or retain\ncurrent members, which would materially and adversely affect our business, financial condition and results of operations.\n\nThe proper functioning\nof our technology platform is essential to our business. Any failure to maintain the satisfactory performance of our mobile apps\nand websites or any disruption to our technology systems could materially and adversely affect our ability to deliver consistent services\nto users of our platform and harm our business and reputation.\n\nThe proper functioning of\nour technology systems is essential to our business. The satisfactory performance, reliability and availability of our technology systems\nare critical to our success, our ability to attract and retain merchants and our ability to maintain and deliver consistent services to\nmerchants. However, our technology infrastructure may fail to keep pace with increased transaction volumes on our platform, especially\nwith respect to our new product and service offerings, and therefore merchants on our platform may experience delays as we seek to source\nadditional technological capacity, which could impair the merchants’ user experience and harm our reputation and would adversely\naffect our results of operations.\n\nAdditionally, we need to continue\nto upgrade and improve our technology infrastructure to support our business growth. However, we cannot assure you that we will be successful\nin executing these infrastructure upgrades, and the failure to do so may impede our growth. We currently rely on cloud services and servers\noperated by external cloud service providers to store our data, which allows us to analyze a large amount of data simultaneously and to\nupdate our user database and user profiles quickly. Any interruption or delay in the functionality of these external cloud service and\nserver providers may materially and adversely affect the operations of our business.\n\nWe may be unable to monitor\nand ensure high-quality maintenance and upgrade of our technology systems and infrastructure on a real-time basis, and users\nmay experience service outages and delays in accessing and using our platform. In addition, we may experience surges in online traffic\nand orders associated with promotional activities and generally as we scale, which can put additional demand on our platform at specific\ntimes. Our technology or infrastructure may not always function properly. We face the risk of system interruptions caused by telecommunications\nfailures, computer viruses, hacking or other attempts to harm our systems. Such interruptions may result in the unavailability or slowdown\nof our platform and compromise the quality of our services, which in turn could potentially diminish the volume of products sold and negatively\nimpact the overall appeal of our platform. Our servers may also be vulnerable to computer viruses, physical or electronic break-ins and\nsimilar disruptions, which could lead to system interruptions, slowdown or unavailability of mobile app, delays or errors in transaction\nprocessing, loss of data or the inability to provide high-quality services to our platform users. The occurrence of any of such incidents\ncould cause significant disruption to our daily operations. As a result, our reputation may suffer material and adverse impacts, leading\nto potential decline in our market share and exposing us to liability claims.\n\n22\n\nIf we fail to adopt\nnew technologies such as data analytics or adapt our website, mobile applications and systems to changing user requirements or emerging\nindustry standards, our business may be materially and adversely affected.\n\nTo remain competitive, it\nis imperative that we continually enhance and improve the responsiveness, functionality and features of our mobile applications and website.\nThe internet technology industry undergoes rapid technological evolution, accompanied by evolving user requirements and preferences, and\nthe frequent introductions of new services based on new technologies and the emergence of new industry standards and practices, any of\nwhich could render our existing technologies and systems obsolete. If we do not spend our development budget efficiently on commercially\nsuccessful and innovative technologies, we may not realize the expected benefits of our strategy. We also cannot assure you that we will\nbe able to effectively use new technologies or adapt our website, mobile applications, proprietary technologies and systems to meet evolving\nuser requirements or emerging industry standards. If we are unable to adapt in a cost-effective and timely manner in response to\nchanging market conditions or user requirements, whether for technical, legal, financial or other reasons, our business, prospects, financial\ncondition and results of operations may be materially and adversely affected.\n\nOur success depends, in part,\non our ability to identify, develop, acquire or license leading technologies that are useful for our business, and to respond to technological\nadvances such as data analytics and emerging industry standards and practices in a cost-effective and timely manner. A core functionality\nof our platform is to effectively match sellers with suitable business buyers and other users on our platform, which is heavily reliant\non our customized recommendation and data analytics technology capabilities. As a result, our technology capabilities play a vital role\nin retaining and attracting merchants to our platform. We have made substantial investments in developing and applying new technologies,\nincluding machine learning and data analytics, across our platform and in our services and solutions. We intend to continue investing\nsignificant resources in developing new technologies and offerings of services and products. We have also incurred significant amount\nof research and development expenses for the development of these technologies. If our investments in research and development fail to\nyield satisfactory results, we may encounter challenges in effectively matching sellers with suitable buyers or providing optimal product\nrecommendations to merchants. As a result, merchants may switch to a competitor platform if ours fail to meet their expectations. In addition,\neffective management of some of the other important aspects of our operations, such as sales and marketing activities, also relies on\nour informed decision-making supported by our data analytics and other technologies. Any failure to improve our technology capabilities\nin data analytics and other technologies, or any shortcomings in producing satisfactory results with our technology capabilities, may\nmaterially and adversely affect our user retention, financial condition and results of operations.\n\nOur new initiatives, such\nas agricultural sourcing and trading services, also carry a high level of risk, as each involves emerging industries and unproven business\nstrategies and technologies, for which we may have limited or no prior development or operational experience. Because such offerings are\nnew and the technologies used to support them are evolving rapidly, they will likely involve unforeseen expenses, regulatory challenges,\nand other risks. There can be no assurance that demand for such initiatives will exist or be sustained at the levels that we anticipate,\nor that any of these initiatives will gain sufficient traction or market acceptance to generate sufficient revenues to offset any new\nexpenses or liabilities associated with these new investments. It is also possible that competing service and product offerings developed\nby others may render our service and product offerings less competitive or outdated. Further, our development efforts with respect to\nnew service and product offerings and technologies could distract management from current operations, and will divert capital and other\nresources from our more established service and product offerings and technologies. Even if we succeed in developing new service and product\nofferings or technologies, regulatory authorities may subject us to new rules or restrictions in response to our innovations, which could\nincrease our expenses or prevent us from successfully commercializing these new initiatives. If we do not realize the expected benefits\nfrom our investments, our business, financial condition, operating results, and prospects may be adversely impacted. See also “—If\nwe are unable to effectively manage our growth or implement our business strategies, our business, financial condition and results of\noperations may be materially and adversely affected.”\n\n23\n\nIf we are unable\nto effectively manage our growth or implement our business strategies, our business, financial condition and results of operations\nmay be materially and adversely affected.\n\nOur business has become increasingly\ncomplex in terms of both the type and scale of business we operate. Any further expansion may increase the complexity of our operations\nand place a significant strain on our managerial, operational, financial and human resources. Our current and planned personnel, systems,\nprocedures and controls may not be adequate to support our future operations. We cannot assure you that we will be able to effectively\nmanage our growth or to implement these systems, procedures and control measures successfully. If we are unable to do so, our business\nand prospects may be materially and adversely affected.\n\nWe are also actively pursuing\nvarious growth initiatives, strategies and operating plans to enhance our business. Specifically, we are implementing a number of monetization\nstrategies to boost our revenue growth, including increasing our investment in agricultural sourcing and trading services. Additionally,\nwe plan to further strengthen our position as a market leader in the agricultural B2B industry in China. To further support our growth,\nwe plan to continue to invest in infrastructure development and technology innovation. All of these initiatives and efforts will require\nsignificant managerial, financial and human resources, and we cannot assure you that our business strategies will be successfully implemented\nor generate sustainable revenues and profit or that our new business initiatives will be successful. If we are not able to manage our\ngrowth or execute our strategies effectively, our expansion efforts may not be successful and our business and prospects may be materially\nand adversely affected. In particular, the monetization strategies in relation to new business initiatives are new and still evolving,\nsome of which are at the inception or trial stage and may prove to be unsuccessful. It may also take longer than expected for us to achieve\na desired market share in a highly competitive environment, or for merchants to accept the newly launched services.\n\nThe anticipated benefits from\nthese efforts are based on assumptions that may prove to be inaccurate. If, for any reason, the benefits we realize fall short of our\nestimates or if the implementation of these growth initiatives, strategies and operating plans negatively impact our operations, exceed\nexpected costs, or take longer to effectuate than we expect, or if our assumptions are proven inaccurate, our business, financial condition\nand results of operations may be materially and adversely affected.\n\nWe may face challenges\nin expanding service and product offerings on our platform.\n\nThe sellers on our platform\noffer a wide range of agricultural products, including vegetables, fruit, pasture products, seeds and seedlings, aquatic products, herbal\nmedicine, agricultural and sideline products, nuts and dried fruit, tea, oil crops, industrial crops, mushroom and fungi, cattle feed,\nagricultural groceries, fertilizer, flower and bonsai, pesticide, agricultural equipment and facilities, and more. Expansion of product\nofferings in both categories and items introduce new risks and challenges. Our limited familiarity with these products and lack of buyer\ndata relating to these products may make it challenging for us to accurately anticipate buyer demand and preferences, inspect and control\nquality and ensure proper handling and delivery. As a result of selling such products, sellers may experience undesirable sales volume,\nreceive increasing number of buyer complaints about such products and face costly product liability claims, which could harm our brand\nand reputation as well as our financial performance. We may also be involved in disputes with sellers in connection with these claims\nand complaints.\n\nAs we broaden the range of\nour product offerings, we will need to efficiently collaborate with a large number of new sellers while establishing and maintaining mutually\nbeneficial relationships with our existing and new sellers. To support our growth and our expansion, we will need to devote management,\noperating, financial and human resources which may divert our attention from existing businesses, incur upfront costs, and require the\nimplementation of a variety of new and upgraded management, operating, financial and human resource systems, procedures and controls.\nThere is no assurance that we will be able to implement all of these systems, procedures and control measures successfully or address\nthe various challenges in expanding our future businesses and operations effectively. It may also be difficult for us to achieve profitability\nin the new product categories and our profit margin, if any, may be lower than initially anticipated, which would adversely affect our\noverall results of operations. We cannot assure you that we will be able to recoup our investments in introducing these new product categories.\n\n24\n\nAny lack of requisite\napprovals, licenses or permits applicable to our business may subject us to administrative penalties or other government sanctions\nand have a material and adverse effect on our business, financial condition and results of operations.\n\nIn accordance with the laws\nand regulations of mainland China, we are required to maintain various approvals, licenses, permits and filings to operate our business.\nAs advised by Global Law Office, as of the date of this annual report, our PRC counsel, our mainland China subsidiaries and the VIEs have\nobtained all material licenses and permits from the mainland China government authorities that are necessary for our business operations\nin mainland China. However, the interpretation of the legal requirements regarding certain licenses and permits is determined by the government\nauthorities on an ad hoc basis depending on the facts and circumstances. We cannot assure you that the government authorities’ current\ninterpretation on such licensing requirements will remain the same in the future. In addition, with respect to the business (including\nthe business content and business model) we currently operate or will operate in the future, government authorities may require us to\nobtain additional licenses or permits or provide stricter supervision requirements with respect to the manner and scope of our operations.\nWe cannot guarantee that we will not be subject to any penalties, sanctions, fines or other administrative measures as a result of non-compliance with\nany of our past operations. If we or the VIEs are determined necessary to obtain relevant licenses, there is no guarantee that we or the\nVIEs would be able to obtain such licenses or permits or meet all the supervision requirements in a timely manner, or at all. If we or\nthe VIEs fail to do so, we may not be able to continue our ordinary course of business consistent with past practice, or at all, and may\nalso be subject to fines and certain other penalties.\n\nWe depend on our\nsenior management team to grow and operate our business, and if we are unable to hire, retain, manage, and motivate our key personnel,\nour business may be harmed.\n\nOur future success depends\non our continued ability to identify, hire, develop, manage, motivate, and retain qualified personnel, particularly those who have specialized\nskills and experience in technology fields and the agriculture industry. Further, we may not be able to retain the services of our key\nemployees or other members of senior management in the future. In particular, we rely on Mr. Jinhong Deng, our founder, chairman\nand chief executive officer, who is critical to our business and strategic direction.\n\nWe do not maintain key person\nlife insurance for any member of our senior management. Any changes in our senior management team may be disruptive to our business. If\nwe fail to retain or effectively replace members of our senior management team, or if our senior management team fails to work together\neffectively and to execute our plans and strategies, our business could be harmed.\n\nOur growth strategy also depends\non our ability to expand our organization by attracting and retaining high-quality personnel. Identifying, recruiting, training,\nintegrating, managing, and motivating talented individuals will require significant time, expense, and attention. Competition for talent\nis intense. In particular, hiring for technical personnel is highly competitive in China. If we are unable to effectively attract and\nretain qualified personnel, our business could be harmed.\n\nWe currently rely\non commercial banks for payment processing and escrow services on our platform. If these payment services are restricted or curtailed\nin any way, are offered to us on less favorable terms, or become unavailable to us or our merchants for any reason, our business may be\nmaterially and adversely affected.\n\nAll online payments for products\nsold on our platform are settled through commercial banks. Our business depends on the billing, payment and escrow systems of these payment\nservice providers to maintain accurate records of payments of sales proceeds by buyers and collect such payments. If the quality, utility,\nconvenience or attractiveness of these payment processing and escrow services declines, or we have to change the pattern of using these\npayment services for any reason, the attractiveness of our platform could be materially and adversely affected.\n\nBusiness involving online\npayment services is subject to a number of risks that could materially and adversely affect third-party online payment service providers’\nability to provide payment processing and escrow services to us, including:\n\n●dissatisfaction with these online payment services or decreased use of their services by buyers and sellers;\n\n●increasing competition, including from other established Chinese internet companies, payment service providers\nand companies engaged in other financial technology services;\n\n●changes to rules or practices applicable to payment systems that link to commercial banks;\n\n●breach of buyers’ personal information and concerns over the use and security of information collected\nfrom buyers;\n\n●service outages, system failures or failures to effectively scale the system to handle large and growing\ntransaction volumes;\n\n25\n\n●increasing costs to commercial banks, including fees charged by banks to process transactions through\nonline payment channels, which would also increase our costs of revenues; and\n\n●failure to manage funds accurately or loss of funds, whether due to employee fraud, security breaches,\ntechnical errors or otherwise.\n\nIn particular, secured transmission\nof confidential information such as credit card numbers and personal information over public networks is essential to maintain merchant\nconfidence. We do not have control over the security measures of online payment vendors, and security breaches of the online payment systems\nthat we use could expose us to litigation and possible liability for failing to secure confidential merchant information and could, among\nother things, damage our reputation and the perceived security of all of the online payment systems that we use. If a well-publicized internet\nor mobile network security breach were to occur, sellers and buyers concerned about the security of their online financial transactions\nmay become reluctant to transact through our platform even if the publicized breach did not involve payment systems or methods used by\nus. In addition, there may be billing software errors that would damage user confidence in these online payment systems. If any of the\nabove were to occur and damage our reputation or the perceived security of the online payment systems we use, we may lose users and users\nmay be discouraged from purchasing on our website, which may have an adverse effect on our business.\n\nIn addition, certain commercial\nbanks in China impose limits on the amounts that may be transferred by automated payment from buyers’ bank accounts to their linked\naccounts with online payment services. We cannot predict whether these and any additional restrictions that could be put in place would\nhave a material adverse effect on our platform.\n\nThe commercial banks that\nwe work with are subject to the supervision of the People’s Bank of China, or the PBOC. The PBOC may publish rules, guidelines\nand interpretations from time to time regulating the operation of financial institutions and payment service providers that may in turn\naffect the pattern of services provided by such entities for us. For example, in November 2017, the PBOC published a notice, or the\nPBOC No. 217 Notice, on the investigation and administration of illegal offering of settlement services by financial institutions and\nthird-party payment service providers to unlicensed entities. The PBOC No. 217 Notice intended to prevent unlicensed entities from\nusing licensed payment service providers as a conduit for conducting the unlicensed payment settlement services, so as to safeguard the\nfund security and information security. In connection with provision of settlement services, Yimutian Xinnong entered into a cooperative\nagreement on payment services with CITIC Bank Co., Ltd. Beijing Branch in August 2018, pursuant to which the commercial bank, as\na licensed payment company, opens an internal special account to receive payment from buyers and provide settlement services to sellers\non our platform. Douniu Technology also entered into a similar cooperative agreement on payment services with Ping An Bank Co., Ltd. Shenzhen\nBranch in December 2019. We believe that our practice of receiving settlement services from commercial banks is not in violation\nof the PBOC No. 217 Notice because the commercial bank opens an internal special account to receive payment from the buyers and we will\nsubmit to the bank materials verifying the truthfulness of the transactions and the bank will also verify other information if it deems\nnecessary before it distributes the payment to merchants and us. In addition, in October 2024, our PRC counsel consulted with the\nPBOC Beijing Branch, the competent authority in respect of payment business in China, which confirmed that it would not actively take\nregulatory actions against the companies that received settlement services from commercial banks. However, we cannot assure you that if\nrequired by the PBOC or new legislation, our cooperative payment service providers will not suspend their services or explore new models\nto offer their services to us, in which case we may not be able to claim our ownership and exclusive control of the payments from the\nbuyers in the bank accounts opened with the relevant commercial banks, and we may incur additional expenses or invest considerable resources\nin complying with the requirements. If the PBOC or other government authorities deem our cooperation with payment service providers to\nbe violative of law, we may also have to suspend or terminate our cooperation with these payment service providers or explore new models\nfor using their services.\n\nWe cannot assure you that\nwe will be successful in entering and maintaining amicable relationships with these commercial banks and online payment service providers.\nIdentifying, negotiating and maintaining relationships with these providers require significant time and resources. Our current agreements\nwith these service providers also do not prohibit them from working with our competitors. They could choose to terminate their relationships\nwith us or propose terms that we cannot accept. Moreover, we cannot guarantee that the terms we negotiated with these payment service\nproviders, including the payment processing fee rates, will remain as favorable. If the terms with these payment service providers become\nless favorable to us, such as the increase of payment processing fee rate, we may have to raise the transaction services fees for certain\nof our merchants, which may cause us to lose merchants, or absorb the additional costs by ourselves, both of which may materially and\nadversely affect our business, financial condition and results of operations. Furthermore, these service providers may not perform as\nexpected under our agreements with them, and we may have disagreements or disputes with such payment service providers, any of which could\nadversely affect our brand and reputation as well as our business operations.\n\n26\n\nOur online marketing\nservices constitute internet advertisement, which subjects us to laws, rules and regulations applicable to advertising.\n\nWe provide online marketing\nservices to sellers of agricultural products. Pursuant to the Measures on Internet Advertisement, or the Internet Advertisement Measures,\nwhich was promulgated by SAMR and took effect in May 2023 to regulate any advertisement published on the internet, including but\nnot limited to, through websites, webpage and apps, in the form of narrative, picture, audio and video, the Advertising Law and the relevant\nprovisions of the Internet Advertisement Measures apply to the internet information service providers. As such, our online marketing services\nand other related services constitute internet advertisement. See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations\nRelating to Advertisement” for more details.\n\nPRC advertising laws, rules\nand regulations require advertisers, advertising operators and advertising distributors to ensure that the content of the advertisements\nthey prepare or distribute is fair and accurate and is in full compliance with applicable law. Violation of these laws, rules or regulations\nmay result in penalties, including fines, confiscation of advertising fees and orders to cease dissemination of the advertisements. In\ncircumstances involving serious violations, the mainland China government may suspend or revoke a violator’s business license or\nlicense for operating advertising business. In addition, the Internet Advertising Measures requires paid search results to be distinguished\nfrom natural search results so that consumers will not be misled as to the nature of these search results. As such, we are obligated to\ndistinguish others from the merchants who purchase online marketing and related services or the listings by these merchants. Any penalties\nor fines for any failure to comply with these requirements may significantly reduce the attractiveness of our platform and increase our\ncosts and could have a material adverse effect on our business, financial condition and results of operations.\n\nIn addition, PRC advertising\nlaws and regulations prohibit or restrict certain types of advertising. For example, advertisements for certain products such as tobacco\nare not allowed to be published, and advertisements for other products and services such as fodder, seeds, breeding livestock and poultry,\naquatic seedlings and breeding are subject to certain content restrictions and other regulations. Moreover, for advertising content related\nto specific types of products and services, advertisers, advertising operators and advertising distributors must confirm that the advertisers\nhave obtained requisite government approvals, including the advertiser’s operating qualifications, proof of quality inspection of\nthe advertised products, and, with respect to certain industries, government approval of the content of the advertisement and filing with\nthe local authorities. Pursuant to the Internet Advertising Measures, we are required to take steps to monitor the content of advertisements\ndisplayed on our platforms. Complying with the abovementioned requirements requires considerable resources and time, and could significantly\naffect the operation of our business, while at the same time also exposing us to increased liability under relevant laws, rules and regulations.\nThe costs associated with complying with these laws, rules and regulations, including any penalties or fines for our failure to so comply\nif required, could have a material adverse effect on our business, financial condition and results of operations. Any further change in\nthe classification of our online marketing and other related services by the mainland China government may subject us to additional legal\nand regulatory requirements, which may significantly impact our operations and materially affect our business and prospects.\n\n27\n\nIllegal, improper\nor otherwise inappropriate activity of sellers, buyers, other users or our employees, whether or not occurring while utilizing\nour platform, could expose us to liability and harm our business, brand, financial condition and results of operations.\n\nWe rely on sellers and stallholders\nat wholesale markets to supply and sell agricultural products on our platform and on truck drivers or third-party couriers to deliver\nagricultural products to wholesale markets and business buyers. Illegal, improper or otherwise inappropriate activities, which may include\nassault, abuse, theft and other misconducts, of sellers, buyers or other platform participants or our employees, including such activities\nby individuals who may have previously participated in our platform but no longer receive or provide services offered through it, or those\nby individuals who intentionally impersonate users of our platform, could adversely affect our brand, business, financial condition and\nresults of operations. While we have implemented various measures intended to anticipate, identify and address the risk of these types\nof activities, these measures may not adequately address or prevent all illegal, improper or otherwise inappropriate activity by other\nparties and we may not be able to exercise effective control over the conduct of other parties including our employees. In the event of\nany unsatisfactory performance, lack of certain qualifications or licenses, misconduct, or illegal acts, such as dishonesty, personal\ntorts or extortion, by parties other than our employees, result in any disputes, such disputes may involve us and we may suffer reputational\nand financial damage even if we are not held liable. At the same time, if the measures we have taken to guard against these illegal, improper\nor otherwise inappropriate activities are too restrictive and inadvertently prevent or discourage sellers, buyers or other platform participants\nfrom remaining engaged on our platform, or if we are unable to implement and communicate these measures fairly and transparently or are\nperceived to have failed to do so, the growth and retention of the number of sellers, buyers and other platform participants on our platform\nand their utilization of our platform could be negatively impacted. Further, any negative publicity related to the foregoing, whether\nsuch incident occurred on our platform or on our competitors’ platforms, could adversely affect our reputation and brand, which\ncould negatively affect demand for platforms like ours, and potentially lead to increased regulatory or litigation exposure. Any of the\nforegoing risks could harm our business, financial condition and results of operations.\n\nOur business and\noperating results may experience seasonal fluctuations.\n\nOur business and operating\nresults may experience seasonality and are not necessarily indicative of future performance. For example, there is typically a decline\nof fruit procurement in July and around the Chinese New Year, while the procurement amounts during spring and fall are generally higher\nthan other periods of a year. This is mainly because summer procurements of vegetable and fruit are primarily sourced locally, rather\nthan remotely from other cities or provinces through online platforms. In addition, user activities on our platform were relatively less\nfrequent during the Chinese New Year holiday in the first quarter of each year and the summer months mainly due to the impact of\nnatural disasters such as flood in cultivation sites and key logistics nexuses for the circulation of agricultural products. As a result,\nour operating results in the second and fourth quarters of a calendar year are generally higher than those of other quarters. In addition\nto seasonality, other factors, many of which are out of our control, can also cause fluctuations in our operating results, such as our\nability to attract and retain merchants, shifts in merchants’ needs and behavior patterns, our ability to effectively manage our\ngrowth, potential harm to our brand or reputation, changes in regulatory environments, and other risks described elsewhere in this annual\nreport. There can be no assurance that our historical operating patterns will continue in future periods, as many of these factors are\nunpredictable and beyond our control or influence. The quarterly fluctuations in our revenue and results of operations could result in\nvolatility and cause the price of our ADSs to decline.\n\nIf we fail to implement and\nmaintain an effective system of internal control over financial reporting, we may be unable to accurately report our results of\noperations and prevent fraud, and investor confidence and the market price of our ADSs may be materially and adversely affected.\n\nEffective internal control\nover financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure control and\nprocedures, are designed to prevent fraud. In the course of preparing and auditing our consolidated financial statements, we and our independent\nregistered public accounting firm identified one material weakness in our internal control over financial reporting as of December 31,\n2025, in accordance with the standards established by the PCAOB. According to the U.S. Public Company Accounting Oversight Board,\nor the PCAOB, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial\nreporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim consolidated\nfinancial statements will not be prevented or detected on a timely basis.\n\nThe material weakness that\nhas been identified relates to our lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP\nand SEC reporting requirements to properly address complex U.S. GAAP accounting issues and related disclosures. We have taken measures\nand plan to continue to take measures to remedy this material weakness. For details, see “Item 15. Controls and Procedures—Internal\nControl Over Financial Reporting.” The implementation of these measures may not fully address the material weakness in our internal\ncontrol over financial reporting, and we cannot conclude that it has been fully remedied. Our failure to correct this material weakness\nor our failure to discover and address any other material weaknesses could result in inaccuracies in our financial statements and could\nalso impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis.\n\n28\n\nWe are a public company in\nthe United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002,\nor Section 404, requires that we include a report from management on our internal control over financial reporting in our annual\nreport on Form 20-F beginning with our annual report for the fiscal year ending December 31, 2026. In addition, once we\ncease to be an “emerging growth company” as such term is defined in the Jumpstart Our Business Startups Act, or the JOBS Act,\nour independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial\nreporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management\nconcludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting\nits own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which\nour controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition,\nafter we become a public company, our reporting obligations may place a significant strain on our management, operational and financial\nresources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.\n\nDuring the course of documenting\nand testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other weaknesses\nand deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control\nover financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on\nan ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Generally speaking,\nif we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial\nstatements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial\ninformation. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading\nprice of the ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse\nof corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil\nor criminal sanctions.\n\nIf the single\nfacility where substantially all of our computer and communications hardware is located fails, our business, results of operations\nand financial condition would be harmed.\n\nOur ability to provide high\nquality services depends in part on the efficient and uninterrupted operation of our computer and communications systems. Substantially\nall of the computer hardware necessary to operate our platform is located at a single leased facility. Our systems and operations are\nvulnerable to damage or interruption from human error, fire, flood, power loss, telecommunications failure, terrorist attacks, acts of\nwar, break-ins, earthquake and similar events. We have redundant systems and data centers in multiple locations for disaster backup and\nrecovery purposes, and our business interruption insurance may be insufficient to compensate us for losses that may occur. In addition,\nour servers are vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to interruptions,\ndelays, loss of critical data, the inability to accept and fulfill customer orders or the unauthorized disclosure of confidential user\ndata. The occurrence of any of the foregoing risks could substantially harm our business and results of operations.\n\nMerchant growth\nand activity on mobile devices depends upon effective use of mobile operating systems, networks and standards that we do not control.\n\nSubstantially all of our online\nservices are offered through mobile applications. Merchants have to download our mobile applications for their particular devices as opposed\nto accessing our sites from an internet browser on their mobile device. As new mobile devices and platforms are released, it is difficult\nto predict the problems we may encounter in developing applications for these alternative devices and platforms, and we may need to devote\nsignificant resources to the development, support and maintenance of such applications. In addition, our future growth and our results\nof operations could suffer if we experience difficulties in the future in integrating our mobile applications into mobile devices or if\nproblems arise with our relationships with providers of mobile operating systems or mobile application download stores, if our applications\nreceive unfavorable treatment compared to competing applications on the download stores, or if we face increased costs to distribute or\nhave users use our mobile applications. We are further dependent on the interoperability of our sites with popular mobile operating systems\nthat we do not control, such as iOS and Android, and any changes in such systems that degrade the functionality of our sites or give preferential\ntreatment to competitive sites could adversely affect the usage of our sites on mobile devices. In the event that it is more difficult\nfor merchants to access and use our sites on their mobile devices, or if merchants choose not to access or to use our sites on their mobile\ndevices or to use mobile products that do not offer access to our sites, the growth of merchants using our platform could be harmed and\nour business, financial condition and operating results may be adversely affected.\n\n29\n\nWe rely on\ncertain key operating metrics to evaluate the performance of our business, and perceived inaccuracies in such metrics may harm our\nreputation and negatively affect our business.\n\nWe rely on certain key operating\nmetrics, such as annual paying merchants as a percentage of active merchants, to evaluate the performance of our business. These metrics\nare calculated using our internal data and have not been validated by an independent third party. While these numbers are based on what\nwe believe to be reasonable estimates, there are inherent challenges in measuring how our services. For example, individuals who have\nmultiple accounts and devices registered with our platform could result in an overstatement of the number of merchants on our platform.\nWe are also subject to the risk associated with artificial manipulation of data. Our operating metrics may also differ from estimates\npublished by third parties or from similarly titled metrics used by other companies due to differences in methodology and assumptions.\nIf these metrics are perceived to be inaccurate by investors or investors make investment decisions based on operating metrics we disclosed\nbut with their own methodology and assumptions or those published or used by third parties or other companies, our reputation may be harmed,\nwhich could negatively affect our business, and we may also face potential lawsuits or disputes.\n\nWe are dependent\non app stores to distribute our mobile apps.\n\nWe currently collaborate with\nApple’s app store and major Android app stores to distribute our mobile applications to users. As such, the promotion, distribution\nand operation of our applications are subject to such distribution platforms’ standard terms and policies for application developers,\nwhich are subject to the interpretation of, and frequent changes by, these distribution platforms. If these third-party distribution\nplatforms modify their terms and conditions in a manner that negatively impacts our business, or refuse to distribute our applications,\nor if any other major distribution platform with which we would like to seek collaboration refuses to collaborate with us in the future\non commercially favorable terms, our business, financial condition and results of operations may be materially and adversely affected.\n\nWe have granted,\nand may continue to grant share-based incentive awards, which may result in increased share-based compensation expenses,\nand you may incur immediate and substantial dilution.\n\nWe believe the granting of share-based compensation is of significant\nimportance to our ability to attract and retain key personnel and employees. We have adopted the 2015 share incentive plan in December 2015,\nor the 2015 Plan, and the 2025 share incentive plan, or the 2025 Plan, to incentivize our employees, directors and consultants. See\n“Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers—Share Incentive\nPlans.” We plan to continue to grant share-based compensation to employees in the future,\nwhich could result in an increase in our expenses associated with share-based compensation, which may in turn have an adverse effect\non our results of operations.\n\nFurthermore, the perceived\nvalue of the equity awards is an important factor for prospective candidates and existing employees when considering their employment\nwith us. Thus, any decline in the perceived value of our equity or equity awards could have an adverse impact on our ability to attract\nor retain highly skilled employees. Furthermore, there is no assurance that the number of shares reserved for issuance under our share\nincentive plans will be sufficient to grant equity awards adequate to recruit new employees and to compensate existing employees, which\nposes a potential challenge for us to provide competitive equity-based compensation to attract and retain talent.\n\n30\n\nWe face certain\nlegal and regulatory risks relating to certain real properties that we lease.\n\nWe do not own any properties,\nand we leased certain properties in mainland China for business operations purposes. Certain lessors of the leased properties in mainland\nChina have not provided us with valid property ownership certificates or any other documentation proving their right to lease those properties\nto us. In addition, certain leased properties had been mortgaged before we leased the property. As of the date of this annual report,\nwe are not aware of any actions or claims raised by any third parties challenging our use of these properties we currently lease, nor\nhave we received any notices from the government authorities of mainland China. We cannot assure you that these leases will not be subject\nto any challenges, lawsuits or other actions taken against the properties leased by us. If our lessors are not the owners of these properties\nor they have not obtained consents from the owners or their lessors or permits from the government authorities, their rights with respect\nto the properties might be successfully challenged and our leases could be invalidated. If these leases are invalid, we may be forced\nto relocate the operations, which could adversely affect our business, financial condition and results of operations. If we fail to find\nsuitable replacement properties on terms acceptable to us for the affected operations at a timely manner, or at all, our business, financial\ncondition and results of operations may be materially and adversely affected.\n\nIn addition, the lease agreements\nof our leased properties in mainland China have not been registered with the government authorities of mainland China as required by laws\nof mainland China, and although failure to do so does not in itself invalidate the leases, we may be exposed to potential fines if we\nfail to rectify within the prescribed time period after receiving notices from the government authorities of mainland China.\n\nWe may not be able\nto prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.\n\nWe regard our trademarks,\ncopyrights, patents, domain names, know-how, proprietary technologies, and similar intellectual property as critical to our success, and\nwe rely on a combination of intellectual property laws and contractual arrangements, including confidentiality agreements with our employees\nand third parties, to protect our proprietary rights. Despite these measures, any of our intellectual property rights could be challenged,\ninvalidated, circumvented or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages.\nIn addition, although we are not aware of any copycat websites or mobile apps that attempt to cause confusion or traffic diversion from\nus at the moment, we may become an attractive target to such attacks in the future because of our brand recognition in the agricultural\nB2B industry in China.\n\nIn addition, there can be\nno assurance that our patent applications would be approved, that any issued patents would adequately protect our intellectual property,\nor that such patents would not be challenged by third parties or found by a judicial authority to be invalid or unenforceable. If the\ntrademark authority grants rulings in favor of any third party, we may be prohibited from using the trade name and logo for our mobile\napp in our business operations, and, as a result, we may need to change the name and logo of our mobile app, which may have an adverse\neffect on our business.\n\nConfidentiality agreements\nmay be breached by counterparties, and there may not be adequate remedies available to us for any such breach. Accordingly, we may not\nbe able to effectively protect our intellectual property rights or to enforce our contractual rights in mainland China. Policing any unauthorized\nuse of our intellectual property is difficult and costly and the steps that we take may be inadequate to prevent the infringement or misappropriation\nof our intellectual property. In the event that we resort to litigation to enforce our intellectual property rights, such litigation could\nresult in substantial costs and a diversion of our managerial and financial resources, and could put our intellectual property at risk\nof being invalidated or narrowed in scope. There can be no assurance that we would prevail in such litigation, and even if we manage to\nprevail, we may not obtain a meaningful recovery. In addition, our trade secrets may be leaked or otherwise become available to, or be\nindependently discovered by, our competitors. Any failure in maintaining, protecting or enforcing our intellectual property rights could\nhave a material adverse effect on our business, financial condition and results of operations.\n\nWe may be subject\nto intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.\n\nWe cannot be certain that\nour operations or any aspects of our business do not or would not infringe upon or otherwise violate patents, copyrights or other intellectual\nproperty rights held by third parties. We have been, and from time to time in the future may be, subject to legal proceedings and claims\nrelating to the intellectual property rights of others. In addition, there may be other third-party intellectual property that is\ninfringed by our services or other aspects of our business. There could also be existing patents of which we are not aware that our services\nmay inadvertently infringe. There can be no assurance that holders of patents purportedly relating to some aspect of our technology platform\nor business, if any such holders exist, would not seek to enforce such patents against us in mainland China or any other jurisdictions\nas applicable. As the application and interpretation of patent laws of mainland China and the procedures and standards for granting patents\nin mainland China are still evolving, we cannot assure you that we do not and will not violate patent-related laws and regulations\nin mainland China, which may subject us to patent disputes. If we are found to have violated the intellectual property rights of others,\nwe may be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may\nincur licensing fees or be forced to develop alternatives of our own. In addition, we may incur significant expenses, and may be forced\nto divert management’s time and other resources from our business and operations to defend against these third-party infringement\nclaims, regardless of their merits. Successful infringement or licensing claims made against us may result in significant monetary liabilities\nand may materially disrupt our business and operations by restricting or prohibiting our use of the intellectual property in question,\nwhich may materially and adversely affect our business, financial condition and results of operations.\n\n31\n\nIncreasing focus\nwith respect to environmental, social and governance matters may impose additional costs on us or expose us to additional risks.\nFailure to comply with the laws and regulations on environmental, social and governance matters may subject us to penalties and adversely\naffect our business, financial condition and results of operations.\n\nRegulatory authorities and\npublic advocacy groups have been increasingly focusing on environment, social and governance, or ESG, issues in recent years, making\nour business more sensitive to ESG issues and changes in governmental policies and laws and regulations associated with environment protection\nand other ESG-related matters. Investor advocacy groups, certain institutional investors, investment funds, and other influential\ninvestors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the implications\nand social cost of their investments. Regardless of the industry, increased focus from investors and the regulatory authorities on ESG\nand similar matters may hinder access to capital, as investors may decide to reallocate capital or to not commit capital as a result of\ntheir assessment of a company’s ESG practices. Any ESG concern or issue could increase our regulatory compliance costs. If we do\nnot adapt to or comply with the evolving expectations and standards on ESG matters from investors and the regulatory authorities or are\nperceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement\nto do so, we may suffer from reputational damage and the business, financial condition, and the price of our ADSs could be materially\nand adversely effected.\n\nOur platform and\nproprietary technologies are highly technical, and any undetected errors could adversely affect our business.\n\nOur platform is a complex\nsystem composed of many interoperating components and incorporates software that is highly complex. Our business is dependent upon our\nability to prevent system interruption on our platform. Our software may now or in the future contain undetected errors, bugs, or vulnerabilities.\nSome errors in our software code may only be discovered after the code has been released. Bugs in our software, misconfigurations of our\nsystems, and unintended interactions between systems could result in our failure to comply with certain national or regional reporting\nobligations, or could cause downtime that would impact the availability of our services to platform participants.\n\nDevelopment of proprietary\ntechnologies is time-consuming, expensive and complex, and may involve unforeseen difficulties. We may encounter technical obstacles,\nand it is possible that we may discover additional problems that prevent our technologies from operating properly and consequently adversely\naffect our information infrastructure and other aspects of our business where our technologies are applied. If the provision of our services\ndoes not function reliably or fails to achieve merchants’ and business partners’ expectations in terms of performance, we\nmay lose existing, or fail to attract new, merchants or business partners, which may damage our reputation and adversely affect our business.\n\nWe have from time to time\nfound defects or errors in our system and technologies and may discover additional defects in the future that could result in platform\nunavailability or system disruption. In addition, we have experienced outages on our platform in the past. If sustained or repeated, any\nof these outages could reduce the attractiveness of our platform to platform participants. In addition, our release of new software in\nthe past has inadvertently caused, and may in the future cause, interruptions in the availability or functionality of our platform. Any\nerrors, bugs, or vulnerabilities discovered in our code or systems after release could result in an interruption in the availability of\nour platform or a negative experience for platform participants, and could also result in negative publicity and unfavorable media coverage,\ndamage to our reputation, loss of platform users, loss of revenues or liability for damages, regulatory inquiries, or other proceedings,\nany of which could adversely affect our business and financial results.\n\n32\n\nWe may not be able\nto develop our existing information infrastructure and technologies, recoup the investments we have made for such development, continue\nto innovate or adapt to industry changes, which may materially and adversely affect our business, financial condition, results of operations\nand prospects.\n\nThe agricultural B2B industry\nis characterized by rapid technological advancements, evolving industry standards and regulatory requirements, introductions of new services\nas well as changing merchants’ demands. We are also impacted by changes and developments in the agriculture and other related industries\nin which we operate. These changes and developments necessitate ongoing innovation, and failure to do so would have a material adverse\neffect on our business, financial condition and results of operations.\n\nWe may need to constantly\nupgrade our information infrastructure to increase scalability, improve performance and additional built-in functionality of our\nplatform, to keep pace with our business growth, which may require significant investments of time and resources, including hardware upgrades,\nsoftware updates, and recruitment and training of new engineering personnel. Failure to improve our information infrastructure accordingly\nmay materially affect our ability to adopt new services, and could result in unanticipated system disruptions, slow response times and\nimpaired platform participants’ user experiences, which may, in turn, materially and adversely affect our business, financial condition,\nresults of operation, prospects and reputation.\n\nMeanwhile, we have been enhancing\nour technological capabilities and developing a number of technologies to support our business operations. If we experience problems with\nthe functionality and effectiveness of our technologies in the course of development, or if we fail to continually improve our technologies\nto meet our business needs as expected, our business, financial condition, results of operation, prospects and reputation could be materially\nand adversely affected.\n\nFurthermore, we invested and\nexpect to continually invest, significant amounts in upgrading our information infrastructure and developing our technologies. We are\nlikely to recognize costs associated with these investments earlier than the anticipated benefits and the return on these investments\nmay be lower or slower to materialize than expected. We may not be able to recover our capital expenditures or investments, in part or\nin full, or the recovery process may take longer than expected. As a result, the carrying value of the related assets may be subject to\nan impairment charge, which may materially and adversely affect our financial condition and results of operations.\n\nSecurity breaches\nand attacks against our systems and network or against the servers and computer systems of the third parties we rely on, and any\npotential resultant breach or failure to otherwise protect confidential and proprietary information, could damage our reputation and\nadversely affect our business, financial condition and results of operations.\n\nWe rely heavily on technology,\nparticularly the internet, to provide high-quality online services. However, our technology operations are vulnerable to disruptions\narising from human error, natural disasters, power failure, computer viruses, spam attacks, unauthorized access and other similar events.\nDisruptions to, or instability of, our technology or external technology that allows our members to use our online services could materially\nharm our business, financial condition and result of operations.\n\nAlthough we have employed\nsignificant resources to develop security measures against breaches, our cybersecurity measures may not detect or prevent all attempts\nto compromise our systems, including distributed denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks,\nsocial engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored\nin and transmitted by our systems or that we otherwise maintain. Breaches of our cybersecurity measures could result in unauthorized access\nto our systems, misappropriation of information or data, deletion or modification of merchant information, or a denial-of-service or\nother interruption to our business operations. As techniques used to obtain unauthorized access to or sabotage systems change frequently\nand may not be known until launched against us, we may be unable to anticipate, or implement adequate measures to protect against, these\nattacks. In addition, we may not be able to prevent third parties, especially hackers or other individuals or entities engaging in similar\nactivities, from illegally obtaining such confidential or private information we hold as a result of merchants’ visits to our website\nand use of our mobile applications. Such individuals or entities obtaining such merchants’ confidential or private information may\nfurther engage in various other illegal activities using such information. In addition, we have limited control or influence over the\nsecurity policies or measures adopted by third-party providers of online payment services through which some of our users may elect\nto make payment for purchases. Any negative publicity on our website’s or mobile applications’ safety or privacy protection\nmechanisms and policies, and any claims asserted against us or fines imposed upon us as a result of actual or perceived failures, could\nhave a material and adverse effect on our public image, reputation, financial condition and results of operations.\n\n33\n\nFurthermore, we are also subject to cybersecurity risks inherent to\nthird-party companies that we rely on who also possess or have access to our data. We were informed, in July of 2025, by our underwriter\nfor the initial public offering that it had suffered a cybersecurity incident and specifically a ransomware incident, which has resulted\nin unauthorized access to some of the underwriter’s systems and data, and the exfiltration of certain data from the underwriter’s\nsystems as well. Based on information currently available to the underwriter regarding the incident, the underwriter believes confidential\ninformation regarding our company that we had provided to the underwriter in connection with its due diligence for our initial public\noffering was included in the data that was exfiltrated. We believe that any such risk is manageable and can be absorbed and addressed\nby our existing cybersecurity policies, procedures, and controls.\n\nSave as disclosed above, as\nof the date of this annual report, we had not been subject to any types of attacks that had materially and adversely affected our business\noperations. However, we and third parties that we rely on may experience cybersecurity incidents due to human error, malfeasance, system\nerrors or vulnerabilities, or other issues. We may not have the resources or technical sophistication to anticipate or prevent rapidly\nevolving types of cyberattacks. Actual or perceived cybersecurity incidents relating to our data or confidential information could subject\nus to regulatory investigations and orders, litigation, indemnity obligations, damages, penalties, fines and other costs in connection\nwith actual and alleged contractual breaches, violations of applicable laws and regulations and other liabilities. We do not currently\nmaintain errors, omissions, and cyber liability insurance policies covering certain security and privacy damages. There can be no assurance\nthat we would not in the future be subject to such attacks that may result in material damages or remediation costs. If we are unable\nto avert these attacks and security breaches, we could be subject to significant legal and financial liability, our reputation would be\nharmed and we could sustain substantial revenue loss from lost sales and user dissatisfaction.\n\nSome of our technologies\nare adapted from open source or third-party models, which may pose particular risks to our technologies and platform in a manner\nthat could have a material and adverse effect on our business, financial condition and results of operations.\n\nWe use open source and third-party models\nin connection with our technologies and anticipate using such models in the future. Open source model is generally freely accessible,\nusable and modifiable. Certain open source or third-party licenses may, in certain circumstances, require us to offer the components\nof our platform that incorporate the open source or third-party model for no cost, that we make available source code for modifications\nor derivative works we create based upon, incorporating or using the open source or third-party model and that we license such modifications\nor derivative works under the terms of the particular open source or third-party license. The terms of certain open source or third-party licenses\nto which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open source or third-party software\nlicenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide the features or\nuse the technologies related to the open source or third-party model subject to those licenses. While we monitor our use of open\nsource and third-party models and try to ensure that none is used in a manner that would require us to disclose our proprietary source\ncode or that would otherwise breach the terms of the underlying agreement, such use could inadvertently occur, or claims could be made\nthat such use had occurred. If an author or other third party that distributes the model we use were to allege that we had not complied\nwith the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such\nallegations and could be subject to significant damages, including being enjoined from using the technologies that are adapted from or\nrely on the open source or third-party models, offering the features of our platform that relate to the open source or third-party model,\nand being required to comply with the foregoing conditions, which could disrupt our ability to use the affected technologies or offer\nthe affected features on our platform.\n\nAdditionally, we could face\nclaims from third parties claiming ownership of, or demanding release of, any open source model or derivative works that we have developed\nusing such models, which could include proprietary source code, or otherwise seeking to enforce the terms of the applicable open source\nlicense. These claims could result in litigation and could require us to make our software source code freely available, purchase a costly\nlicense or cease using the implicated technologies or offering the implicated features on our platform unless and until we can recode\nor reengineer such source code in a manner that avoids infringement. This reengineering process could require us to expend significant\nadditional research and development resources, and we may not be able to complete the reengineering process successfully. In addition\nto risks related to license requirements, use of certain open source model can lead to greater risks than use of third-party commercial\nsoftware, as open source licensors generally do not provide support, warranties, indemnification or other contractual protection regarding\ninfringement claims or the quality of the code. There is little legal precedent in this area and any actual or claimed requirement to\ndisclose our proprietary source code or pay damages for breach of contract could harm our business and could help third parties, including\nour competitors, develop technologies and platforms that are similar to or better than ours. Any of the foregoing could have a material\nadverse effect on our competitive position, business, financial condition and results of operations.\n\n34\n\nThe use of open-source software\nmay also present additional security risks because the source code for open-source software is publicly available, which may make\nit easier for hackers and other parties to determine how to breach our website and systems that rely on open-source software. Any\nof these risks could be difficult to eliminate or manage, and, if not addressed, could have a material adverse effect on our business,\nresults of operations, financial condition and prospects.\n\nWe may not have\nsufficient insurance coverage to cover our business risks.\n\nWe provide social security\ninsurance for our employees as required by mainland China laws, and we also provide supplemental commercial medical insurance for our\nemployees. We may not be able to acquire any insurance for certain types of risks such as business liability or service disruption insurance\nfor all of our operations in mainland China, and our coverage may not be adequate to compensate for all losses that may occur, particularly\nwith respect to loss of business or operations. For example, we do not maintain business interruption insurance, nor do we maintain key-man life\ninsurance. Any business disruption, litigation, regulatory action, outbreak of epidemic disease or natural disaster could also expose\nus to substantial costs and diversion of resources. There can be no assurance that our insurance coverage is sufficient to prevent us\nfrom any loss or that we will be able to successfully claim our losses under our current insurance policy on a timely basis, or at all.\nIf we incur any loss that is not covered by our insurance policies, or the compensated amount is significantly less than our actual loss,\nour business, financial condition and results of operations could be materially and adversely affected.\n\nOur operations depend\non the performance of the internet infrastructure and telecommunications networks in mainland China.\n\nThe successful operation of\nour business depends on the performance of the internet infrastructure and telecommunications networks in mainland China. Almost all access\nto the internet is maintained through state-owned telecommunications operators under the administrative control and regulatory supervision\nof the MIIT. Moreover, we have entered into contracts with various subsidiaries of a limited number of telecommunications service\nproviders at provincial level and rely on them to provide us with data communications capacity through local telecommunications lines.\nWe have limited access to alternative networks or services in the event of disruptions, failures or other problems with mainland China’s\ninternet infrastructure or the telecommunications networks provided by telecommunications service providers. With the expansion of our\nbusiness, we may be required to upgrade our technology and infrastructure. However, we have no control over the costs of the services\nprovided by telecommunications service providers. If the prices we pay for telecommunications and internet services rise significantly,\nour results of operations may be materially and adversely affected. If internet access fees or other charges to internet members increase,\nour member traffic may decline and our business may be harmed.\n\nWe may require additional capital\nto pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances. If we are unable\nto generate sufficient cash flows or if capital is not available to us, our business, operating results, financial condition and prospects could\nbe adversely affected.\n\nIf we are unable to generate\nsufficient cash flows, we would require additional capital to pursue our business objectives and respond to business opportunities, challenges,\nor unforeseen circumstances, as well as to make marketing expenditures to improve our brand awareness, develop new services, further improve\nour existing services, build and maintain our offline facilities, enhance our operating infrastructure, and acquire complementary businesses\nand technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. However, additional funds\nmay not be available when we need them on terms that are acceptable to us or at all. Volatility in the equity and credit markets, including\ndue to macroeconomic conditions, may also have an adverse effect on our ability to obtain equity or debt financing. An inability to obtain\nadequate financing or financing on terms satisfactory to us when we require it could significantly limit our ability to continue to pursue\nour business objectives and to respond to business opportunities, challenges, or unforeseen circumstances, and may adversely affect our\nbusiness, operating results, financial condition, and prospects.\n\n35\n\nIf we raise additional\ncapital, it may dilute our shareholders’ ownership in us or cause our shareholders to be subordinated to the rights of senior\nsecurity holder.\n\nWe may need to raise additional\nfunds through public or private debt or equity financings in order to meet various objectives, such as:\n\n●acquiring businesses, users, technologies, services;\n\n●taking advantage of growth opportunities, including more rapid expansion;\n\n●making capital improvements to increase our capacity;\n\n●developing new services or funding service development requirements; and\n\n●responding to competitive pressures.\n\nAny additional capital raised\nthrough the sale of equity, or convertible debt securities, may dilute our shareholders’ respective ownership percentages in us.\nFurthermore, any additional debt or equity financing we may need may not be available on terms favorable to us, or at all. If future financing\nis not available or is not available on acceptable terms, we may not be able to raise additional capital, which could significantly limit\nour ability to implement our business plan or grow our business.\n\nWe, and our directors and\nofficer, may be involved in legal and/or regulatory proceedings that are expensive and time consuming and, if resolved adversely, that\nmay materially adversely affect us.\n\nWe, and our directors or officers,\nmay be subject to disputes with various counterparties with which we transact from time to time in the ordinary course of our business,\nsuch as service providers, customers, competitors and investors, which may lead to legal proceedings. These proceedings, if and when materialize,\ncould have a material adverse effect on our business, results of operations and financial condition. Claims arising out of actual or alleged\nviolations of law could also be asserted against us by consumers and businesses that utilize our services, by competitors, or by governmental\nentities in civil or criminal investigations and proceedings or by other entities. These claims could be asserted under a variety of laws,\nincluding but not limited to consumer finance laws, product liability laws, consumer protection laws, intellectual property laws, unfair\ncompetition laws, privacy laws, labor and employment laws, securities laws, real estate laws, tort laws, contract laws, property laws\nand employee benefit laws. For example, we are currently subject to certain ongoing contract disputes as well as other proceedings in\nmainland China. These cases are still ongoing, but we believe the claims are without merit and we will defend ourselves accordingly. We\nare unable, however, to predict the outcome of these cases, or reasonably estimate a range of possible loss, if any, given the current\nstatus of the proceedings. We have not recorded any accrual for expected loss payments with respect to these cases as of the date of this\nannual report and do not believe that any of the ongoing claims is material to our overall business operations. There is no guarantee\nthat we will be successful in defending ourselves in legal and administrative actions or in asserting our rights under various laws. Even\nif we are successful in our attempt to defend ourselves in legal and administrative actions or to assert our rights under various laws,\nenforcing our rights against the various parties involved may be expensive, time-consuming and ultimately futile. These actions could\nexpose us to negative publicity and to substantial monetary damages and legal defense costs, injunctive relief and criminal and civil\nfines and penalties, including but not limited to suspension or revocation of licenses to conduct business.\n\n36\n\nAcquisitions, strategic\nalliances and investments could be costly, difficult to integrate, disrupt our business and adversely affect our results of operations\nand value of your investment.\n\nAs we continue to expand our\noperations, we have and may in the future enter into strategic alliances or to acquire substantial asset or equities from a pool of candidates\nthat fit our criteria. We are not certain that we will be able to consummate any such transactions in the future or identify those candidates\nthat would result in the most successful combinations, or that future acquisitions will be able to be consummated at reasonable prices\nand terms. We cannot assure you that we will realize the anticipated benefits of these or any future acquisitions. The pursuit of potential\nacquisitions may divert the attention of management and cause us to incur various expenses related to identifying, investigating and pursuing\nsuitable acquisitions, whether or not they are consummated.\n\nIn addition, increased competition\nfor acquisition candidates could result in fewer acquisition opportunities for us and higher acquisition prices. Strategic investments\nor acquisitions will involve risks commonly encountered in business relationships, including:\n\n●lack of suitable acquisition candidates;\n\n●intense competition with other auction groups or new industry consolidators for suitable acquisitions;\n\n●deterioration of our financial capabilities;\n\n●difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products\nand services of the acquired business;\n\n●non-performance by, or conflicts of interest with, the parties with whom we enter into investments\nor alliances;\n\n●inability of the acquired technologies, products or businesses to achieve expected levels of revenue,\nprofitability, productivity or other benefits;\n\n●difficulties in retaining, training, motivating and integrating key personnel;\n\n●diversion of management’s time and resources from our normal daily operations;\n\n●difficulties in successfully incorporating licensed or acquired technology and rights into our platform\nand service offerings;\n\n●difficulties in maintaining uniform standards, controls, procedures and policies within the combined organizations;\n\n●difficulties in retaining relationships with users, employees and third-party service providers of\nthe acquired business;\n\n●risks of entering markets in which we have limited or no prior experience;\n\n●regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any\nnecessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired\nbusiness;\n\n●assumption of contractual obligations that contain terms that are not beneficial to us, require us to\nlicense or waive intellectual property rights or increase our risk for liability;\n\n●failure to successfully further develop the acquired technology or maintain acquired facilities;\n\n●liability for activities of the acquired business before the acquisition, including intellectual property\ninfringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities;\n\n●potential disruptions to our ongoing businesses; and\n\n●unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions.\n\n37\n\nWe may not make any investments\nor acquisitions, and we cannot guarantee that any future investments or acquisitions will be successful, beneficial for our business strategy,\nor generate sufficient revenues to offset the associated acquisition costs or otherwise yield the intended benefits. In addition, we cannot\nassure you that any future investment in or acquisition of new businesses or technology will lead to the successful development of new\nor enhanced service offerings, or that any new or enhanced technology or services, if developed or offered, will achieve market acceptance\nor prove to be profitable. Furthermore, we may fail to identify or secure suitable acquisition, investment and other strategic opportunities,\nor our competitors may capitalize on such opportunities before we do, which could impair our ability to compete effectively with our competitors\nand adversely affect our growth prospects and results of operations.\n\n** **\n\n**The current tensions in international trade\nand rising international political tensions may adversely affect our business, financial condition, and results of operations.**\n\nIn recent years, there have\nbeen heightened trade and political tensions in international relations, particularly between the United States and China. These tensions\nhave affected both diplomatic and economic ties between the two countries and created uncertainties to the international economy as a\nwhole. Heightened tensions could reduce levels of trade, investments, technological exchanges, and other economic activities between major\neconomies. The existing tensions and any further deterioration in the relationship between the United States and China and between other\ncountries may have a negative impact on the general, economic, political, and social conditions around the globe, United States and China\nin particular, and thus adversely impact our business, financial condition, and results of operations.\n\nThe U.S. government has implemented\npolicies restricting international trade and investment, such as tariffs, export controls, economic or trade sanctions, and foreign investment\nfiling and approval requirements. These actions may materially and adversely affect international trade, global financial markets, and\nthe stability of the global economic condition. For example, since early 2025, the United States has implemented significant changes to\nU.S. trade policy with China, including by imposing additional tariffs on Chinese imports. China has responded by imposing, and proposing\nto impose additional or higher tariffs on products imported from the United States, among other measures. There remains considerable uncertainty\nregarding future tariff rates and the trajectory of U.S.-China trade relations. It also remains uncertain whether increased tariffs and\ntrade tensions will create further disruptions and uncertainties to the international trade and lead to a downturn to the global economy.\n\nIn addition, the United States\ngovernment has taken efforts to limit the outbound U.S. investments to China. On August 9, 2023, the Biden administration of the United\nStates released an executive order directing the Department of Treasury to create an outbound foreign direct investment review program\nthat would require reporting on or (in more narrow circumstances) prohibit investments by U.S. persons involving “covered national\nsecurity technologies and products.” On October 28, 2024, the Department of Treasury issued a final rule to implement the executive\norder, providing details on technical specifications and other aspects of the operative regulations, which came into effect on January\n2, 2025. This is referred to as the Outbound Investment Rule. The Outbound Investment Rule imposes investment prohibitions and notification\nrequirements on U.S. persons for a wide range of investments in entities associated with “countries of concern,” currently\nonly China, that are engaged in activities relating to (i) semiconductors and microelectronics, (ii) quantum information technologies,\nand (iii) artificial intelligence systems. These entities are collectively defined as “Covered Foreign Persons.” U.S. persons\nsubject to the Outbound Investment Rule are prohibited from making, or required to report, transactions involving Covered Foreign Persons\nthat are defined as “covered transactions,” although the Outbound Investment Rule excludes some investments from the scope\nof covered transactions, including those in publicly traded securities. The Outbound Investment Rule introduces new hurdles and uncertainties\nfor cross-border collaborations, investments, and funding opportunities of China-based issuers including us. We do not believe that Yimutian\nInc. would be defined as a Covered Foreign Person under the Outbound Investment Rule because we do not engage in a “covered activity”\n(as defined in the Outbound Investment Rule) or otherwise meet the definition of Covered Foreign Persons provided in the Outbound Investment\nRule. However, there is no assurance that the U.S. Department of Treasury will take the same view as ours. If we were to be deemed a “Covered\nForeign Person,” and if U.S. persons were to engage in a “covered transaction” (as defined under the Outbound Investment\nRule) that involves the acquisition of our equity interests, such U.S. persons may need to make a notification pursuant to the Outbound\nInvestment Rule. In addition, even though U.S. persons’ acquisitions of publicly traded securities (such as our ADSs) will be exempted\nfrom the scope of covered transactions under the Outbound Investment Rule, the rule could still limit our ability to raise capital or\ncontingent equity capital from U.S. investors given that the relevant laws, regulations, and policies continue to evolve and we cannot\nrule out the possibility of being deemed a Covered Foreign Person in the future due to different views taken by the U.S. Department of\nTreasury, potential amendments to the Outbound Investment Rule or the introduction of additional regulations. For example, on February\n21, 2025, the White House released President Trump’s “America First Investment Policy” memorandum, outlining several\ninitiatives to incentivize investment from U.S. allies and partners while restricting investments involving “foreign adversaries,”\nincluding China. Among other things, the policy aims to expand the industry sectors covered by the U.S. outbound investment regulations\nand supplement outbound restrictions through the imposition of sanctions. As of the date of this annual report, the proposed changes under\nthe America First Investment Policy are not implemented. In addition, on December 18, 2025, the Comprehensive Outbound Investment National\nSecurity Act of 2025, or the COINS Act, was enacted as part of the National Defense Authorization Act for Fiscal Year 2026. The COINS\nAct largely preserves the core framework of the Outbound Investment Rule while expanding its scope and coverage in certain respects such\nas expanding covered activities in high-performance computing and supercomputing and hypersonic systems and including more countries of\nconcern The COINS Act will not become effective until the U.S. Department of the Treasury issues implementing regulations, which must\nbe promulgated through notice-and-comment rulemaking and no later than March 13, 2027. Accordingly, the Treasury may amend, expand or\notherwise modify existing outbound investment prohibitions and restrictions pursuant to the COINS Act. If our ability to raise such capital\nis significantly and negatively affected, it could be detrimental to our business, financial condition and prospects, and our ADSs may\nsignificantly decline in value.\n\n38\n\nRising political tensions could reduce levels of trades, investments,\ntechnological exchanges, and other economic activities across the globe, which would have a material adverse effect on global economic\nconditions and the stability of global financial markets. Any of these factors could have a material adverse effect on the demand of our\nservices, and thus negatively affect our business, prospects, financial condition, and results of operations.\n\n** **\n\n**A severe or prolonged downturn in the Chinese\nor global economy could materially and adversely affect our business and financial condition.**\n\nThe global macroeconomic environment\nfaces numerous challenges. The growth rate of the Chinese economy has been slowing since 2010 and the Chinese population began to decline\nin 2022. The Russia-Ukraine conflict, the Hamas-Israel conflict, the conflict in the Persian Gulf and surrounding areas as far west as\nIsrael and Lebanon, and the restrictions at various times on shipping through the straits of Hormuz and the Red Sea have heightened geopolitical\ntensions across the world. The impact of the regional conflicts has contributed to increases in food and energy prices and thus to inflation\nmore generally, with the potential for even more serious consequences if oil and gas facilities are destroyed or shipping is affected\nfor an extended period of time. There have also been concerns about the relationship between China and other countries which may potentially\nhave economic effects. In particular, there is significant uncertainty about the future relationship between the United States and China\nwith respect to a wide range of issues including trade policies, treaties, government regulations and tariffs. Economic conditions\nin China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected\nor perceived overall economic growth rate in China. As a result, any severe or prolonged slowdown in the global or Chinese economy may\nmaterially and adversely affect our business, results of operations and financial condition.\n\nWe face risks related\nto natural disasters, extreme weather conditions, health epidemics, and other catastrophic incidents, which could significantly disrupt our\noperations.\n\nNatural disasters, including\nearthquakes, extreme weather conditions, as well as health scares related to epidemic diseases, and any similar event could materially\nimpact our business. If a disaster or other disruption were to occur in the future that affects the regions where we operate our business,\nour operations could be materially and adversely affected due to loss of personnel and damages to property and the agricultural products\nthat we plant under the smart farming business. Even if we are not directly affected, such a disaster or disruption could affect our operations\nor financial condition as we conduct nationwide operations in mainland China.\n\nIn addition, our business\ncould be affected by public health epidemics, such as the outbreak of avian influenza, severe acute respiratory syndrome, or SARS, Zika\nvirus, Ebola virus, coronavirus or other disease. In recent years, outbreaks of COVID-19 resulted in quarantines, travel restrictions\nand the temporary closure of businesses and facilities worldwide. In particular, the COVID-19 related control measures have had an\nimpact on logistics services. Uncertainties existed with respect to the timely delivery of agricultural products to be shipped to buyers,\nwhich led to decreases in trading volumes, paying ratios and the number of active merchants on our platform. As a result, our business\nand financial results were adversely affected from early 2020 to late 2022.\n\n39\n\nRisks Related to Our Corporate\nStructure\n\nYimutian Inc. is\na Cayman Islands holding company with no operations of its own and we currently conduct our operations in mainland China through\nour subsidiaries and the VIEs. Investors in our ADSs should note that they are purchasing equity interests in a Cayman Islands holding\ncompany rather than equity interests in the VIEs in mainland China. Given that there are uncertainties regarding the interpretation and\napplication of current and future PRC laws, regulations, and rules relating to the agreements that establish the VIE structure for\nour operations in mainland China, including potential future actions by the mainland China government, if the mainland China government\ndeems that our contractual arrangements with the VIEs do not comply with the laws of mainland China, or if regulations or interpretation\nof the existing regulations change in the future, we could be subject to penalties or be forced to relinquish our interests in the VIEs.\n\nAccording to the Announcement\nof the Ministry of Industry and Information Technology on Launching the Pilot Program of Expanding the Opening-up in Value-added Telecommunications\nServices, issued by the MIIT on April 8, 2024, the restrictions on foreign shareholding percentages for information services, including\ninformation releasing platforms and information delivery services (excluding internet news information, online publishing, online audio-visual services,\nand internet-based cultural businesses) are lifted. Each of the VIEs, i.e., Beijing Douniu and Yimutian Xinnong, currently holds\nan ICP License to operate business that involves the provision of internet information services. Despite the lifting of restrictions on\nforeign shareholding percentages, in accordance with the laws and regulations effective at the time Beijing Douniu and Yimutian Xinnong\napplied for the ICP Licenses (including the Regulations for the Administration of Foreign-Invested Telecommunications Enterprises\n(2022 revision) promulgated by the State Council on December 11, 2001 and last amended on March 29, 2022 and the applicable\nversions of the Special Administrative Measures on Access of Foreign Investment, published by the National Development and Reform Commission,\nor the NDRC, and the Ministry of Commerce), foreign investors are prohibited from holding more than 50% equity interest in any enterprise\nengaged in such internet information provision businesses.\n\nYimutian Inc. is a Cayman\nIslands exempted company with limited liability, and we currently operate our businesses in mainland China through our subsidiaries and\nthrough contractual arrangements with the VIEs instead of holding any equity interests in the VIEs. Yimutian Inc., through its wholly\nowned subsidiary in mainland China, has entered into a series of contractual arrangements with the VIEs, which enable us to (i) direct\nactivities of the VIEs that most significantly affect the economic performance of the VIEs; (ii) receive substantially all of the\neconomic benefits of the VIEs, to the extent that we have satisfied the conditions for consolidation of the VIEs under U.S. GAAP\nand (iii) have an exclusive option to purchase all or part of the equity interests and assets in the VIEs when and to the extent\npermitted by law of mainland China. As a result of these contractual arrangements, we are regarded as the primary beneficiary of the VIEs,\nand thus consolidate their financial results as the VIEs under the U.S. GAAP. See “Item 4. Information on the Company—C.\nOrganizational Structure—Contractual Arrangements and the VIEs.”\n\nIn the opinion of Global Law\nOffice, our PRC counsel, (i) the ownership structures of our WFOE and the VIEs in mainland China are not in violation of mandatory\nlaws and regulations of mainland China currently in effect in all material respects; and (ii) the contractual arrangements between\nour WFOE, the VIEs and the respective shareholders of the VIEs governed by laws of mainland China are not in violation of mandatory laws\nor regulations of mainland China currently in effect in all material respects, and valid and binding upon each party to such arrangements\nin accordance with their terms.However, our PRC counsel has also advised us that the interpretation and application of current and future\nlaws, regulations and rules of mainland China are evolving, and thus the regulatory authorities of mainland China may take a view that\nis contrary to the opinion of our PRC counsel. If the mainland China government finds that the contractual arrangements do not comply\nwith the restrictions or prohibitions on foreign investment in certain sectors, or if the mainland China government otherwise finds that\nYimutian Inc. or the VIEs are in violation of laws or regulations of mainland China or lack the necessary permits or licenses to operate\nour business, the regulatory authorities of mainland China, including the MIIT and SAMR, would have discretion in dealing with such violations\nor failures, including, without limitation:\n\n●revoking the business licenses and/or operating licenses of such entities;\n\n●discontinuing or placing restrictions or onerous conditions on our operation through any transactions\nbetween our subsidiaries in mainland China and the VIEs;\n\n40\n\n●imposing fines, confiscating the income from our subsidiaries in mainland China or the VIEs, or imposing\nother requirements with which we or the VIEs may not be able to comply;\n\n●requiring us to restructure our ownership structure or operations, including terminating the contractual\narrangements with the VIEs and deregistering the equity pledges of the VIEs, which in turn would affect our ability to consolidate, derive\neconomic interests from, or exert effective control over the VIEs;\n\n●restricting or prohibiting our use of the proceeds of our initial public offering or other offshore financing\nactivities to fund our business and operations in mainland China and our right to collect revenues; or\n\n●taking other regulatory or enforcement actions that could be harmful to our business.\n\nAny of these events could\ncause significant disruption to our business operations and severely damage our reputation, which would in turn materially and adversely\naffect our business, financial condition and results of operations. If occurrences of any of these events result in our inability to direct\nthe activities of the VIEs in mainland China that most significantly impact its economic performance, and/or our failure to receive the\neconomic benefits from our consolidated variable interest entities, we may not be able to consolidate their financial results in our consolidated\nfinancial statements in accordance with U.S. GAAP.\n\nWe believe, to the best of\nour knowledge, our contractual arrangements do not violate any applicable laws and regulations of mainland China currently in force in\nall material aspects. However, because the interpretation and application of current and future laws and regulations of mainland China\nare evolving, we cannot preclude the possibility that the regulatory authorities of mainland China may take a view that is contrary to\nours. If any of these occurrences results in our inability to direct the activities of the VIEs or our failure to receive the economic\nbenefits from the VIEs or our inability to claim our contractual control rights over the assets of the VIEs that conduct substantially\nall of our operations in mainland China, we may not be able to consolidate the entity in our consolidated financial statements in accordance\nwith U.S. GAAP, which could materially and adversely affect our financial condition and results of operations and cause our ADSs\nto significantly decline in value or become worthless.\n\nOur contractual\narrangements may not be as effective in providing operational control as direct ownership and the VIE shareholders may fail to perform\ntheir obligations under our contractual arrangements.\n\nWe operate our businesses\nin mainland China through our subsidiaries and through contractual arrangements with the VIEs instead of holding all the equity interests\nin the VIEs. Our revenue and cash flow from our such businesses are attributed to the VIEs. The contractual arrangements may not be as\neffective as direct ownership in providing us with control over the VIEs. Direct ownership would allow us, for example, to directly or\nindirectly exercise our rights as a shareholder to effect changes in the boards of directors of the VIEs, which, in turn, could effect\nchanges, subject to any applicable fiduciary obligations at the management level. However, under the contractual arrangements, as a legal\nmatter, if the VIEs or their equity holders fail to perform their respective obligations under the contractual arrangements, we may have\nto incur substantial costs and expend significant resources to enforce those arrangements and resort to litigation or arbitration and\nrely on legal remedies under laws in mainland China. These remedies may include seeking specific performance or injunctive relief and\nclaiming damages, any of which may not be effective. In the event we are unable to enforce these contractual arrangements or we experience\nsignificant delays or other obstacles in the process of enforcing these contractual arrangements, we may not be able to exert effective\ncontrol over the VIEs and may lose control over the assets owned by the VIEs. As a result, we may be unable to consolidate the VIEs in\nour consolidated financial statements, which could materially and adversely affect our financial condition and results of operations.\n\n41\n\nThe interpretation\nand implementation of the enacted Foreign Investment Law may change from time to time, and these potential changes may impact our\nbusiness, financial condition and results of operations.\n\nOn March 15, 2019, the\nNational People’s Congress of the PRC promulgated the Foreign Investment Law of the PRC, or the Foreign Investment Law, which came\ninto effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in mainland China, namely, the\nSino-foreign Equity Joint Venture Enterprise Law of the PRC, the Sino-foreign Cooperative Joint Venture Enterprise Law of the\nPRC and the Wholly Foreign-invested Enterprise Law of the PRC, together with their implementation rules and ancillary regulations.\nThe Foreign Investment Law embodies an expected regulatory trend of mainland China to rationalize its foreign investment regulatory regime\nin line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign\nand domestic investments. The interpretation and implementation of the Foreign Investment Law is still evolving and may change from time\nto time, especially in regard to, including, among other things, the nature of consolidated affiliated entity contractual arrangements\nand specific rules regulating the organization form of foreign-invested enterprises within the five-year transition period.\nFor instance, though the Foreign Investment Law does not explicitly classify contractual arrangements as a form of foreign investment,\nit contains a catch-all provision under the definition of “foreign investment,” which includes investments made by foreign\ninvestors in mainland China through means stipulated in laws or administrative regulations or other methods prescribed by the State Council.\nTherefore, we cannot assure you that future laws, administrative regulations or provisions promulgated by the State Counsel will not construe\ncontractual arrangements as a form of foreign investment. Furthermore, if future laws, administrative regulations or provisions prescribed\nby the State Council mandate further actions to be taken by companies with respect to existing contractual arrangements, such as unwinding\nour existing contractual arrangements and/or disposal of our related business operations, we may face substantial uncertainties as to\nwhether we can complete such actions in a timely manner, or at all. Failure to take timely and appropriate measures to cope with any of\nthese or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, corporate governance\nand business operations.\n\nAny failure by any\nof the VIEs or their shareholders to perform their respective obligations under our contractual arrangements with them would have a material and\nadverse effect on our business.\n\nIf any of the VIEs or their\nshareholders fail to perform their respective obligations under the contractual arrangements, we may have to incur substantial costs and\nexpend additional resources to enforce such arrangements. We may also have to rely on legal remedies under law of mainland China, including\nseeking specific performance or injunctive relief, and claiming damages, which we cannot assure you will be effective under law of mainland\nChina. For example, if the shareholders of any of the VIEs refuse to transfer their equity interest in such VIEs to us or our designee\nif we exercise the purchase option pursuant to these contractual arrangements, or if they otherwise act in bad faith toward us, then we\nmay have to take legal actions to compel them to perform their contractual obligations. In addition, if any third parties claim any interest\nin such shareholders’ equity interests in any of the VIEs, our ability to exercise shareholders’ rights or foreclose the share\npledge according to the contractual arrangements may be impaired. If these or other disputes between the shareholders of the VIEs and\nthird parties were to impair our ability to direct the activities of and receive economic benefits from the VIEs, our ability to consolidate\nthe financial results of the VIEs would be affected, which would in turn result in a material adverse effect on our business, operations\nand financial condition.\n\nIn addition, the shareholders\nof the VIEs may be involved in personal disputes with third parties or other incidents that may have an adverse effect on their respective\nequity interests in the VIEs and the validity or enforceability of the contractual arrangements. For instance, in the event that such\nshareholder divorces his or her spouse, the spouse may claim that the equity interest of the VIEs held by such shareholder is part of\ntheir marital or community property and should be divided between such shareholder and his or her spouse. If such claim is supported by\nthe competent court, the equity interest may be obtained by the shareholder’s spouse or another third party who is not bound by\nour contractual arrangements, which could make us unable to direct the activities of and receive economic benefits from the VIEs. Even\nif we receive a consent letter from the spouse of a nominee shareholder of the VIEs where such spouse undertakes that he or she would\nnot take any actions to interfere with the contractual arrangements, including by claiming that the equity interest of the VIEs held by\nsuch shareholder is part of their marital or community property, we cannot assure you that these undertakings will be complied with or\neffectively enforced. Similarly, if any of the equity interests of the VIEs are inherited by a third party on whom the current contractual\narrangements are not binding, we may not be able to direct activities of the VIEs that most significantly affect the economic performance\nof the VIEs or receive substantially all of the economic benefits of the VIEs, which could cause significant disruption to our business\noperations and harm our financial condition and results of operations.\n\n42\n\nAll the agreements under\nour contractual arrangements are governed by law of mainland China. Accordingly, these contracts would be interpreted in accordance with\nlaw of mainland China, and any disputes would be resolved in accordance with legal procedures in mainland China.\n\nAll the agreements under our\ncontractual arrangements are governed by mainland China law and provide for the resolution of disputes through arbitration in mainland\nChina, which means that these agreements would be subject to interpretation in accordance with the laws of mainland China and any disputes\narising therefrom would be resolved in accordance with legal procedures in mainland China. We face uncertainties regarding the ultimate\noutcome of such arbitration should legal action become necessary. In addition, under law of mainland China, rulings by arbitrators are\nfinal, parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards within\na prescribed time limit, the prevailing parties may only enforce the arbitration awards in courts of mainland China, which would require\nadditional expenses and time. In the event we are unable to enforce these contractual arrangements, or if additional time or procedures\nare required in the process of enforcing these contractual arrangements, we may not be able to direct activities of the VIEs that most\nsignificantly affect the economic performance of the VIEs or receive substantially all of the economic benefits of the VIEs, and our ability\nto conduct our business may be negatively affected.\n\nThe shareholders\nof the VIEs may have actual or potential conflicts of interest with us, which may materially and adversely affect our business and\nfinancial condition.\n\nThe shareholders of the VIEs\nmay have actual or potential conflicts of interest with us. These shareholders may breach, or cause the VIEs to breach, or refuse to renew,\nthe existing contractual arrangements we have with them and the VIEs, which would have a material and adverse effect on our ability to\neffectively control the VIEs and receive economic benefits from them. For example, the shareholders may be able to cause our agreements\nwith the VIEs to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements\nto us on a timely basis. We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the best\ninterests of our company or such conflicts will be resolved in our favor.\n\nWe may invoke the right under\nthe equity pledge agreements with the shareholders of the VIEs to enforce the equity pledge in the case of any shareholder’s breach\nof the contractual arrangements. For individuals who are also our directors and officers, we rely on them to abide by the laws of the\nCayman Islands, which provide that directors and officers owe a fiduciary duty to the company that requires them to act in good faith\nand in what they believe to be the best interests of the company and not to use their position for personal gains. The shareholders of\nthe VIEs have executed powers of attorney to appoint the WFOE or a person designated by the WFOE to vote on their behalf and exercise\nvoting rights as shareholders of the VIEs. If we cannot resolve any conflict of interest or dispute between us and the shareholders of\nthe VIEs with these contractual arrangements, we would have to rely on legal proceedings, which could result in disruption of part of\nour business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.\n\nContractual arrangements\nin relation to the VIEs may be subject to scrutiny by the tax authorities of mainland China and they may determine that we or\nthe VIEs owe additional taxes, which could negatively affect our financial condition and the value of your investment.\n\nUnder applicable laws and\nregulations of mainland China, arrangements and transactions among related parties may be subject to audit or challenge by the tax authorities\nof mainland China within ten years after the taxable year when the transactions are conducted. We could face material and adverse\ntax consequences if the mainland China tax authorities determine that the VIE contractual arrangements were not entered into on an arm’s-length basis\nin such a way as to result in an impermissible reduction in taxes under applicable laws, rules and regulations of mainland China, and\nadjust the income of the VIEs in the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result\nin a reduction of expense deductions recorded by the VIEs for tax purposes in mainland China, which could in turn increase its tax liabilities\nwithout reducing tax expenses of our subsidiaries in mainland China. In addition, the tax authorities of mainland China may impose late\npayment fees and other penalties on the VIEs for the adjusted but unpaid taxes according to the applicable regulations. Our financial\nposition could be materially and adversely affected if the VIEs’ tax liabilities increase or if it is required to pay late payment\nfees and other penalties.\n\n43\n\nWe may lose the\nability to use, or otherwise benefit from, the licenses, approvals and assets held by the VIEs, which could severely disrupt our business,\nrender us unable to conduct some of our business operations and constrain our growth.\n\nAs part of our contractual\narrangements with the VIEs, the VIEs hold certain assets (including equity interests in the subsidiaries of the VIEs), licenses and permits\nthat are material to our business operations, such as the ICP License and the EDI License. The contractual arrangements contain terms\nthat specifically obligate VIEs’ shareholders to ensure the valid existence of the VIEs and restrict the disposal of material assets\nof the VIEs. However, in the event the VIEs’ shareholders breach the terms of these contractual arrangements and voluntarily liquidate\nthe VIEs, or the VIEs declare bankruptcy and all or part of its assets become subject to liens or rights of third-party creditors,\nor are otherwise disposed of without our consent, we may be unable to conduct some or even all of our business operations or otherwise\nbenefit from the assets held by the VIEs, which could have a material adverse effect on our business, financial condition and results\nof operations. Furthermore, if any of the VIEs undergoes a voluntary or involuntary liquidation proceeding, its shareholders or unrelated\nthird-party creditors may claim rights to some or all of the assets of such VIE, thereby hindering our ability to operate our business\nas well as constraining our growth.\n\nWe rely on our WFOE\nand the VIEs for certain operations in mainland China. We also rely on dividends and other payments from the VIEs to pay dividends\nand other cash distributions to our shareholders, and any limitation on the ability of the VIEs to pay dividends to us could have a material\nadverse effect on our ability to pay dividends to our shareholders.\n\nYimutian Inc. is a Cayman\nIslands holding company and relies principally on dividends and other distributions paid by its subsidiaries in mainland China for cash\nneeds, including paying dividends and other cash distributions to our shareholders, servicing any debt we and the VIEs may incur and paying\nour and the VIEs’ operating expenses. If the VIEs incur debt on their own behalf in the future, the instruments governing the debt\nmay restrict their ability to pay dividends or make other distributions to us.\n\nCurrent laws and regulations\nof mainland China permit our subsidiaries in mainland China to pay dividends to us only out of its retained earnings, if any, determined\nin accordance with Chinese accounting standards and regulations and the VIEs shall make up its losses of previous years when conducting\noutward remittance. Under the applicable requirements of laws and regulations of mainland China, the VIEs is required to set aside at\nleast 10% of its accumulated after-tax profits based on PRC accounting standards each year to fund certain statutory reserves until\nthe accumulated amount of such reserve reaches 50% of its registered capital. At its discretion, the WFOE may allocate a portion of its\nafter-tax profits based on PRC accounting standards to its discretionary reserve fund, or its staff welfare and bonus funds. These\nreserve funds and staff welfare and bonus funds are not distributable as cash dividends. Any limitation on the ability of our subsidiaries\nto pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions\nthat could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.\n\nRisks Related to Doing\nBusiness in Mainland China\n\nWe are subject to\nevolving laws and regulations of mainland China that could require us to modify our current business practices and incur increased\ncosts, and the mainland China government’s oversight over our business operations could result in a material adverse change\nin our operations and the value of our Class A ordinary shares or ADSs.\n\nOur principal operating subsidiaries\nand the VIEs are incorporated under and governed by the laws of mainland China. The legal system of mainland China is based on written\nstatutes. Prior court decisions may be cited for reference, but have limited precedential value. In 1979, the mainland China government\nbegan to promulgate a comprehensive system of laws and regulations governing economic matters in general, such as foreign investment,\ncorporate organization and governance, commerce, taxation and trade.\n\n44\n\nAs all of our business is\nconducted in mainland China, our operations are principally governed by laws and regulations of mainland China. The legal system in mainland\nChina evolves rapidly, and the interpretations of laws, regulations and rules may change from time to time.\n\nAs a result, we may be required\nto modify our business practices and incur additional costs from time to time to maintain compliance with the requirements. The enforcement\nof laws in mainland China and rules and regulations in mainland China can change quickly with little advance notice. Their interpretations\nand enforcement involve uncertainties. These uncertainties could limit the legal protections available to us. In addition, a mainland\nChina-based company, such as our company, may be subject to applicable processes or procedural requirements in order to obtain or\nmaintain permits or licenses required to conduct business in mainland China. In the absence of required permits or licenses, government\nauthorities could impose material sanctions or penalties on us. In addition, we may have to resort to administrative and court proceedings\nto enforce the legal protection that we enjoy either by law or contract. However, litigation typically takes time, which may result in\nsubstantial costs and diversion of our resources and management attention, and we cannot predict the outcome of administrative and court\nproceedings.\n\nSimilar to situations of many\nother countries, the mainland China government has oversight over the conduct of our business and may influence or intervene our operations\nat any time, which could result in a material change in our operations and/or the value of our Class A ordinary shares or ADSs. Recent\nregulatory developments in mainland China may subject us to additional regulatory review, including the cybersecurity review, data security\nassessment and disclosure requirement, or otherwise restrict our ability to offer securities and raise capital outside mainland China,\nall of which may affect the business of us and the VIEs and the value of our securities. Regulatory authorities in mainland China may\nin the future release regulations or policies regarding our industry that may have an impact on our business, financial condition and\nresults of operations. Furthermore, the mainland China government has recently promulgated certain measures to supervise overseas securities\noffering of domestic entities, indicating an intent to exert more oversight and control over securities offerings and other capital markets\nactivities that are conducted overseas and/or foreign investment in mainland China-based companies like us. If we fail to comply\nwith the new measures relating to overseas securities offering of domestic entities, such failure could adversely affect our business,\nfinancial condition and results of operations and the value of our Class A ordinary shares or the ADSs, or significantly limit or\ncompletely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly\ndecline or in extreme cases, become worthless.\n\nThe approval of\nand/or filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings under the laws\nof mainland China, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such\nfiling.\n\nOn July 6, 2021, the relevant\nPRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law. These opinions\nemphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by the\nPRC-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal\nwith the risks and incidents faced by mainland China-based overseas-listed companies.\n\nOn February 17, 2023, the\nCSRC released the Trial Measures, and several supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures,\ndomestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure and\nreport relevant information to the CSRC. If a domestic company fails to complete the filing procedure or conceals any material fact or\nfalsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as order to\nrectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable\npersons may also be subject to administrative penalties, such as warnings and fines between RMB1 million and RMB10 million. See “Item\n4. Information on the Company—B. Business Overview—Regulation—Regulations Relating to M&A Rules and Overseas Listing.”\n\n45\n\nOn February 24, 2023, the\nCSRC, jointly with other government authorities, promulgated the Provisions on Strengthening the Confidentiality and Archives Administration\nRelated to the Overseas Securities Offering and Listing by Domestic Enterprises, which took effect on March 31, 2023. According to these\nprovisions, domestic companies, whether offering and listing securities overseas directly or indirectly, must strictly abide the applicable\nlaws and regulations when providing or publicly disclosing, either directly or through their overseas listed entities, documents and materials\nto securities services providers such as securities companies and accounting firms or overseas regulators in the process of their overseas\noffering and listing. If such documents or materials contain any state secrets or government authorities work secrets, domestic companies\nmust obtain the approval from competent government authorities according to the applicable laws, and file with the secrecy administrative\ndepartment at the same level with the approving government authority. Furthermore, these provisions also provides that securities companies\nand securities service providers shall also fulfill the applicable legal procedures when providing overseas regulatory institutions and\nother relevant institutions and individuals with documents or materials containing any state secrets or government authorities work secrets\nor other documents or materials that, if divulged, will jeopardize national security or public interest. See “Item 4. Information\non the Company—B. Business Overview—Regulations—Regulations Relating to M&A Rules and Overseas Listing.” Since\nthese provisions were promulgated only recently, uncertainties still exist with respect to the interpretation and implementation of such\nprovisions and how they will affect us.\n\nIn addition, we cannot assure\nyou that any new rules or regulations promulgated in the future will not impose additional requirements on us. If it is determined in\nthe future that any additional approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity\nreview under the Measures for Cybersecurity Review, are required for our offshore offerings, it is uncertain whether we can or how long\nit will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected.\nAny failure to obtain or delay in obtaining such approval or completing such filing procedures for our offshore offerings, or a rescission\nof any such approval or filing if obtained by us, would subject us to sanctions by the CSRC or other PRC regulatory authorities for failure\nto seek CSRC approval or filing or other government authorization for our offshore offerings. These regulatory authorities may impose\nfines and penalties on our operations in mainland China, limit our ability to pay dividends outside of mainland China, limit our operating\nprivileges in mainland China, delay or restrict the repatriation of the proceeds from our offshore offerings into mainland China or take\nother actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well\nas the trading price of our listed securities. The CSRC or other PRC regulatory authorities also may take actions requiring us, or making\nit advisable for us, to halt our offshore offerings before settlement and delivery of the shares offered. Consequently, if investors engage\nin market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement\nand delivery may not occur. In addition, if any regulatory authorities later promulgate new rules or explanations requiring that we obtain\ntheir approvals or accomplish the required filing or other regulatory procedures for our prior offshore offerings, we may be unable to\nobtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties or negative\npublicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation,\nand the trading price of our listed securities.\n\nOur ADSs may be\nprohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely\nauditors located in mainland China and Hong Kong. The delisting of the ADSs, or the threat of their being delisted, may materially\nand adversely affect the value of your investment.\n\nPursuant to the HFCAA, if\nthe SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections\nby the PCAOB for two consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange\nor in the over-the-counter trading market in the United States.\n\nOn December 16, 2021,\nthe PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered\npublic accounting firms headquartered in mainland China and Hong Kong. The independent registered public accounting firm that we\nuse, Assentsure PAC, is headquartered in Singapore. On December 15, 2022, the PCAOB removed mainland China and Hong Kong from\nthe list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. On December 29,\n2022, the Consolidated Appropriations Act, 2023, was signed into law, which amended the HFCAA (i) to reduce the number of consecutive\nnon-inspection years required for triggering the prohibitions under the HFCAA from three years to two, and (ii) so that\nany foreign jurisdiction could be the reason why the PCAOB does not have complete access to inspect or investigate a company’s auditors.\nAs it was originally enacted, the HFCAA applied only if the PCAOB’s inability to inspect or investigate because of a position taken\nby an authority in the foreign jurisdiction where the relevant public accounting firm is located. As a result of the Consolidated Appropriations\nAct, 2023, the HFCAA now also applies if the PCAOB’s inability to inspect or investigate the relevant accounting firm is due to\na position taken by an authority in any foreign jurisdiction. The denying jurisdiction does not need to be where the accounting firm is\nlocated.\n\n46\n\nEach year, the PCAOB will\ndetermine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.\nIf the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in the\njurisdiction where the accounting firm that we use to issue an audit report on our financial statements filed with the SEC is headquartered,\nwe would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the\nrelevant fiscal year. In accordance with the HFCAA, our securities would be prohibited from being traded on a national securities exchange\nor in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for\ntwo consecutive years in the future. If our shares and ADSs are prohibited from trading in the United States, there is no certainty\nthat we will be able to list on a non-U.S. exchange or that a market for our shares will develop outside of the United States.\nA prohibition of being able to trade in the United States would substantially impair your ability to sell or purchase our ADSs when\nyou wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our ADSs. Also,\nsuch a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material\nadverse impact on our business, financial condition, and prospects.\n\nIncreases in labor\ncosts, including wages, and enforcement of more stringent labor laws and regulations in mainland China, could adversely affect\nour business, financial condition and results of operations.\n\nOverall economy and the average\nwage in mainland China have increased in recent years and are expected to continue to grow. The average wage level for our employees\nhas also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to increase.\nUnless we are able to pass on these increased labor costs to those who pay for our services, our results of operations may be materially\nand adversely affected.\n\nUnder the PRC Social Insurance\nLaw and the Administrative Measures on Housing Provident Fund, employees are required to participate in pension insurance, work-related injury\ninsurance, medical insurance, unemployment insurance, maternity insurance, and housing provident funds, and employers are required, together\nwith their employees or separately, to pay contribution to social insurance and housing provident funds for their employees. Government\nagencies may examine whether an employer has made adequate payments of the requisite statutory employee benefits, and employers who fail\nto make adequate payments may be subject to late payment fees, fines and/or other penalties. As of the date of this annual report, certain\nof our subsidiaries in mainland China and the VIEs failed to make adequate contribution of social insurance and housing provident fund\nfor their employees based on an amount required by applicable laws of mainland China. In addition, certain subsidiaries and the VIEs made\ncontribution of social insurance and housing provident fund for their employees in the name of certain third-party institutions,\nrather than in their own name. Competent authorities in mainland China may require us to pay, or in the case of any shortfalls, to cover,\nsuch social insurance and housing fund contributions, or require us to make contribution for our employees in the name of our subsidiaries\nand the VIEs. We could also be subject to fines and legal sanctions due to any failure to make social insurance and housing fund contributions\nfor our employees.\n\nIn addition, we have been\nsubject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory\nemployee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and\nmaternity insurance to designated government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law and its\nimplementation rules, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration,\ndetermining the term of employees’ probation and unilaterally terminating labor contracts. In the event that we decide to terminate\nsome of our employees or otherwise change our employment or labor practices, the PRC Labor Contract Law and its implementation rules may\nlimit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and\nresults of operations.\n\nAs the interpretation and\nimplementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practices do not\nand will not violate labor-related laws and regulations in mainland China, which may subject us to labor disputes or government investigations.\nWe cannot assure you that we have complied or will be able to comply with all labor-related law and regulations regarding including\nthose relating to obligations to make social insurance payments and contribute to the housing funds. If we are deemed to have violated\nlabor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial condition\nand results of operations will be adversely affected.\n\n47\n\nAny severe or prolonged\nslowdown in the global or Chinese economy may adversely affect our business and results of operations.\n\nWe have conducted all of\nour operations in mainland China and all of our revenues have been derived from our operations in mainland China. Our results of operations\nand prospects are, to a significant degree, subject to economic, political and legal developments in mainland China, as well as the global\neconomic conditions in general. The global macroeconomic environment still faces numerous challenges. The Russia-Ukraine conflict,\nthe Hamas-Israel conflict and the attacks on shipping in the Red Sea have heightened geopolitical tensions across the world. The\nimpact of the Russia-Ukraine conflict on Ukraine food exports has contributed to increases in food prices and thus to inflation\nmore generally. There have also been concerns about the relationship between China and other countries which may potentially have economic\neffects. In particular, there is significant uncertainty about the future relationship between the United States and China with\nrespect to a wide range of issues including trade policies, treaties, government regulations and tariffs. Economic conditions in the\nareas where we operate are sensitive to global economic conditions, as well as changes in domestic economic and political policies and\nthe expected or perceived overall economic growth rate. Any severe or prolonged slowdown in the economic conditions in the areas where\nwe operate may materially and adversely affect the business, results of operations and our financial condition.\n\nHeightened tensions\nin international relations, including between the United States and China, may adversely affect our business, financial condition\nand results of operations.\n\nThere have been heightened\ntensions in international economic relations in recent years and these tensions may continue to escalate in the future. These tensions\nhave resulted in changes in international trade policies and, as they further escalate, may result in additional barriers to trade. For\nexample, the tensions between the United States and China in recent years have led to additional, or higher tariffs imposed by the United\nStates on products imported from China and restrictions on the sale of certain products into the United States. China has responded by\nimposing, and proposing to impose additional, or higher tariffs on products imported from the United States, among other measures. While\ncross-border business currently is not an area of our focus, if we plan to expand our business internationally in the future, any\nunfavorable government policies on international trade may affect consumer demands, our ability to provide certain products through our\nplatform or our ability to provide services in certain countries.\n\nIn addition, international\npolitical tensions have escalated and continue to be subject to uncertainties with respect to a wide range of issues. For example, the\nU.S. government has adopted measures aiming to prohibit or restrict U.S. investment in China-associated companies that operate in\ncertain industries. Rising political tensions could reduce levels of trades, investments, technological exchanges, and other economic\nactivities, which would materially and adversely affect the global economic conditions and the stability of global financial markets.\nThese developments may also lead to increased compliance costs, operational disruptions, and potential constraints on our access to capital\nmarkets. Any further escalation of international tensions may have a negative impact on the general, economic, political, and social\nconditions of the countries where we intend to operate in the future and may adversely impact our business, financial condition and results\nof operations.\n\nRecent litigation\nand negative publicity surrounding mainland China-based companies listed in the United States may negatively impact the trading\nprice of our ADSs.\n\nWe believe that recent litigation\nand negative publicity surrounding companies with operations in mainland China that are listed in the United States have negatively\nimpacted the stock prices of these companies. Certain politicians in the United States have publicly warned investors to shun mainland\nChina-based companies listed in the United States. The SEC and the PCAOB also issued a joint statement on April 21, 2020,\nreiterating the disclosure, financial reporting and other risks involved in the investments in companies that are based in emerging markets\nas well as the limited remedies available to investors who might take legal action against such companies. Furthermore, various equity-based research\norganizations have recently published reports on mainland China-based companies after examining their corporate governance practices,\nrelated party transactions, sales practices and financial statements, and these reports have led to special investigations and listing\nsuspensions on U.S. national exchanges. Any similar scrutiny on us, regardless of its lack of merit, could cause the market price\nof our ADSs to fall, divert management resources and energy, cause us to incur expenses in defending ourselves against rumors, and increase\nthe premiums we pay for director and officer insurance.\n\n48\n\nWe may rely on\ndividends and other distributions on equity paid by our subsidiaries in mainland China to fund any cash and financing requirements we\nmay have, and any limitation on the ability of our subsidiaries in mainland China to make payments to us could have a material and adverse\neffect on our ability to conduct our business.\n\nYimutian Inc. is a Cayman\nIslands holding company and relies principally on dividends and other distributions on equity from its subsidiaries and the VIEs in mainland\nChina for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders\nand services of any debt we may incur. The ability of the subsidiaries and the VIEs in mainland China to distribute dividends is based\nupon their distributable earnings. Current regulations in mainland China permit our subsidiaries and the VIEs in mainland China to pay\ndividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting\nstandards and regulations. In addition, each of our subsidiaries and the VIEs in mainland China is required to set aside at least 10%\nof its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital.\nThese reserves are not distributable as cash dividends. If our subsidiaries and the VIEs in mainland China incur debt on their own behalf\nin the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.\n\nTo address the persistent\ncapital outflow and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank\nof China and the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital regulation measures in the subsequent months,\nincluding stricter vetting procedures for mainland China-based companies to remit foreign currency for overseas acquisitions, dividend\npayments and shareholder loan repayments. For instance, the People’s Bank of China issued the Circular on Further Clarification\nof Relevant Matters Relating to Offshore RMB Loans Provided by Domestic Enterprises on November 26, 2016, which provides that offshore\nRMB loans provided by a domestic enterprise to offshore enterprises with which it has an equity relationship shall not exceed 30% of\nthe domestic enterprise’s most recent audited owner’s equity, and such percentage limit has been increased to 50% in January 2021.\nThe circular may constrain our subsidiaries in mainland China’ ability to provide offshore loans to us. The mainland China government\nmay strengthen its capital regulations from time to time and dividends and other distributions of our subsidiaries in mainland China\nmay be subject to tightened scrutiny in the future. Any limitation on the ability of our subsidiaries in mainland China to pay dividends\nor make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could\nbe beneficial to our business, pay dividends, or otherwise fund and conduct our business.\n\nIn addition, the Enterprise\nIncome Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by\nChinese companies to non-mainland-China resident enterprises unless reduced under treaties or arrangements between the central government\nof mainland China and governments of other countries or regions where the non-mainland-China resident enterprises are tax resident.\n\nThe custodians\nor authorized members of our controlling non-tangible assets, including chops and seals, may fail to fulfill their responsibilities,\nor misappropriate or misuse these assets.\n\nUnder law of mainland China,\nlegal documents for corporate transactions, including agreements and contracts, are executed using the chop or seal of the signing entity\nor with the signature of a legal representative whose designation is registered and filed with SAMR. A company chop or seal may\nserve as the legal representation of the company towards third parties even when unaccompanied by a signature.\n\nIn order to secure the use\nof our chops and seals, we have established internal control procedures and rules for using these chops and seals. In any event that\nthe chops and seals are intended to be used, the responsible personnel will submit the application, which will then be verified and approved\nby authorized employees in accordance with our internal control procedures and rules. In addition, in order to maintain the physical\nsecurity of our chops, we generally have them stored in secured locations accessible only to authorized employees.\n\nAlthough we monitor such\nauthorized employees, the procedures may not be sufficient to prevent all instances of abuse or negligence. There is a risk that our\nemployees could abuse their authority, for example, by entering into a contract not approved by us or seeking to gain control of one\nof our subsidiaries. If any employee obtains, misuses or misappropriates our chops and seals or other controlling non-tangible assets\nfor whatever reason, we could experience disruption to our normal business operations. We may have to take corporate or legal action,\nwhich could involve significant time and resources to resolve and divert management from our operations.\n\n49\n\nMainland China\nregulations of loans to and direct investment in domestic entities by offshore holding companies and governmental regulations of\ncurrency conversion may restrict or delay us from using the proceeds of our initial public offering or other offshore financing activities\nto make loans or additional capital contributions to our subsidiaries in mainland China, which could adversely affect our liquidity\nand our ability to fund and expand our business.\n\nAs an offshore holding company\nwith subsidiaries in mainland China, we may transfer funds to our mainland China subsidiaries by means of loans or capital contributions.\nAny funds we transfer to our subsidiaries in mainland China, either as a shareholder loan or as an increase in registered capital, are\nsubject to mainland China regulations and approval by or registration with government authorities in mainland China. According to the\nregulations on foreign-invested enterprises, or the FIEs, in mainland China, capital contributions to our subsidiaries in mainland\nChina are subject to registration with SAMR or its local counterpart and registration with a local bank authorized by SAFE. In addition,\n(i) any foreign loan procured by our subsidiaries in mainland China is required to be registered with SAFE or its local branches\nand (ii) our subsidiaries in mainland China may not procure loans which exceed the difference between its total investment amount\nand registered capital or, as an alternative, they may only procure loans subject to the calculation approach and limitation as provided\nby the People’s Bank of China.\n\nOn March 30, 2015, SAFE\npromulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises,\nor SAFE Circular 19, which took effect as of June 1, 2015 and was last amended in March 2023. SAFE Circular 19 launched\na nationwide reform of the administration of the settlement of the foreign exchange capitals of FIEs and allows FIEs to settle their\nforeign exchange capital at their discretion, but continues to prohibit FIEs from using the Renminbi fund converted from their foreign\nexchange capital for expenditure beyond their business scopes, providing entrusted loans or repaying loans between nonfinancial enterprises.\nSAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or\nSAFE Circular 16, effective on June 9, 2016. Pursuant to SAFE Circular 16, enterprises registered in mainland China may\nalso convert their foreign debts from foreign currency to Renminbi on a discretionary basis. SAFE Circular 16 provides an integrated\nstandard for conversion of foreign exchange under capital account items (including, but not limited, to foreign currency capital and\nforeign debts) on a discretionary basis which applies to all enterprises registered in mainland China. SAFE Circular 16 reiterates the\nprinciple that Renminbi converted from foreign currency-denominated capital of a company may not be directly or indirectly used\nfor purposes beyond its business scope or prohibited by laws or regulations in mainland China, while such converted Renminbi shall not\nbe provided as loans to its non-affiliated entities. Violations of SAFE Circular 19 and SAFE Circular 16 could result in administrative\npenalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold, including\nthe net proceeds from our initial public offering or other offshore financing activities, to our mainland China subsidiaries, which may\nadversely affect our liquidity and our ability to fund and expand our business in mainland China. On October 23, 2019, SAFE further\nissued the Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-Border Trade\nand Investment, or SAFE Circular 28, which took effect on the same day. SAFE Circular 28 allows non-investment foreign-invested enterprises\nto use their capital funds to make equity investments in mainland China as long as such investments do not violate then effective negative\nlist for foreign investments and the target investment projects are genuine and in compliance with laws. In addition, SAFE Circular 28\nstipulates that qualified enterprises in certain pilot areas may use their capital income from registered capital, foreign debt and overseas\nlisting, for the purpose of domestic payments without providing authenticity certifications to the banks in advance for those domestic\npayments. On April 10, 2020, SAFE promulgated the Circular of SAFE on Optimizing Foreign Exchange Administration to Support the\nDevelopment of Foreign-related Business the reform of facilitating the payments of incomes under the capital accounts shall be promoted\nnationwide. Violations of these circulars or any future foreign exchange related rules could result in severe monetary or other penalties.\n\nIn light of the various requirements\nimposed by the mainland China regulations on loans to, and direct investment in, domestic entities by offshore holding companies, we\ncannot assure you that we will be able to obtain the necessary government approvals or complete the necessary registrations in a timely\nmanner, or at all, with respect to future capital contributions or foreign loans by us to our mainland China subsidiaries. If we fail\nto receive such approvals or complete such registration or filing, our ability to use the proceeds from our initial public offering or\nother offshore financing activities to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity\nand our ability to fund and expand our business.\n\n50\n\nThe M&A Rules\nand certain other regulations in mainland China establish complex procedures for some acquisitions of Chinese companies by foreign investors, which\ncould make it more difficult for us to pursue growth through acquisitions in mainland China.\n\nThe Rules on Merger &\nAcquisition of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six regulatory agencies in mainland China\non August 8, 2006 and amended on June 22, 2009, and some other regulations and rules concerning mergers and acquisitions established\nadditional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and\ncomplex, including requirements in some instances that the MOFCOM be notified in advance of any change-of-control transaction in\nwhich a foreign investor takes control of a domestic enterprise in mainland China. Moreover, the PRC Anti-monopoly Law, or the Anti-monopoly Law,\npromulgated by the SCNPC on June 24, 2022, requires that SAMR shall approve in advance of any concentration of undertaking if certain\nthresholds are triggered. In addition, the security review related regulations and rules including Notice of the General Office of the\nState Council on the Establishment of the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors\nand the Security Review Rules issued by General Office of the PRC State Council effective on March 4, 2011 and the Provisions on\nthe National Security Review of Foreign Mergers and Acquisitions of Domestic Enterprises or the National Security Review Provisions,\nissued by the MOFCOM effective on September 1, 2011 specify that mergers and acquisitions by foreign investors that raise “national\ndefense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic\nenterprises that raise “national security” concerns are subject to strict review by the MOFCOM, and the rules prohibit any\nactivities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement.\nIn the future, we may grow our business by acquiring complementary businesses. The anti-monopoly enforcement agencies of mainland\nChina have in recent years strengthened enforcement under the PRC Anti-monopoly Law. As a result, we may receive greater scrutiny\nand attention from regulators and more frequent and stringent investigation or review by regulators, which will increase our compliance\ncosts, and it could be time-consuming to comply with the regulations described above to complete future transactions. Furthermore,\nany required approval processes, including obtaining approval from the MOFCOM or its local counterparts may delay or inhibit our ability\nto complete such transactions, which could affect our ability to expand our business or maintain our market share.\n\nFluctuations in\nexchange rates could have an adverse effect on our results of operations and the value of your investment.\n\nThe conversion of Renminbi\ninto other currencies, including U.S. dollars, is based on rates set by the People’s Bank of China. The Renminbi has fluctuated\nagainst other currencies, at times significantly and unpredictably. The value of Renminbi against other currencies is affected by changes\nin China’s political and economic conditions and by China’s foreign exchange policies, among other things. It is difficult\nto predict how market forces or government policies may impact the exchange rate between Renminbi and other currencies in the future.\n\nLimited hedging options are\navailable in mainland China to reduce our exposure to exchange rate fluctuations. As of the date of this annual report, we have not entered\ninto any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may enter into hedging\ntransactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge\nour exposure or at all. In addition, our currency exchange losses may be magnified by foreign exchange regulations of mainland China\nthat restrict our ability to convert Renminbi into foreign currency. As a result, fluctuations in exchange rates may have a material\nadverse effect on your investment.\n\nIn mainland China,\nregulations relating to offshore investment activities by domestic residents may subject our domestic resident beneficial owners\nor our subsidiaries in mainland China to liability or penalties, limit our ability to inject capital into our subsidiaries in mainland\nChina, limit ability of our subsidiaries in mainland China to increase their registered capital or distribute profits to us, or\nmay otherwise adversely affect us.\n\nSAFE issued Circular on Several\nIssues concerning Foreign Exchange Administration for Domestic Residents to Engage in Financing and in Return Investments via Overseas\nSpecial Purpose Companies, or Circular No. 75, on October 21, 2005, which became effective on November 1, 2005. Under\nCircular 75, prior registration with the local SAFE branch is required for domestic residents to establish or to control an offshore\ncompany for the purposes of financing that offshore company with assets or equity interests in an onshore enterprise located in mainland\nChina. In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’\nOffshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, which repealed\nand replaced Circular 75 in its entirety. SAFE Circular 37 requires domestic residents (including mainland China individuals and mainland\nChina corporate entities) to register with SAFE or its local branches in connection with their establishment or control of an offshore\nentity established for the purpose of overseas investment or financing with such domestic residents’ legally owned assets or equity\ninterests in domestic enterprises or offshore assets or interests. SAFE Circular 37 is applicable to our shareholders who are domestic\nresidents and may be applicable to any offshore acquisitions that we make in the future. See “Item 4. Information on the Company—B.\nBusiness Overview—Regulations—Regulations Relating to Foreign Exchange.”\n\n51\n\nWe are committed to complying\nwith these regulations and to ensuring that our shareholders and beneficial owners who are subject thereto will comply with the SAFE\nrules and regulations. However, because the implementation of the regulatory requirements by the authorities of mainland China will be\ndetermined on an ad hoc basis depending on the facts and circumstances, we cannot assure you that such registration will always be practically\navailable in all circumstances as provided in those regulations.\n\nWe have requested shareholders\nor beneficial owners who directly or indirectly hold shares in our Cayman Islands holding company and are known to us as being domestic\nresidents to complete their registration with or to obtain approval by the local SAFE, the NDRC, or the MOFCOM branches. However, we\nmay not be informed of the identities of all the mainland China individuals or entities holding direct or indirect interest in our company,\nnor can we compel our beneficial owners to comply with the SAFE registration requirements. As a result, we cannot assure you that all\nof our shareholders or beneficial owners who are domestic residents have complied with, and will in the future make, obtain or update\nany applicable registrations or approvals required by SAFE, the NDRC and the MOFCOM regulations. Any failure or inability by such shareholders,\nbeneficial owners or our subsidiaries to comply with SAFE, the NDRC and the MOFCOM regulations may subject us to fines or legal sanctions,\nsuch as restrictions on our cross-border investment activities or ability of our subsidiaries in mainland China to distribute dividends\nto, or obtain foreign exchange-denominated loans from, our company or prevent us from making distributions or paying dividends.\nAs a result, our business operations and our ability to make distributions to you could be materially and adversely affected.\n\nAny failure to\ncomply with regulations of mainland China regarding the registration requirements for employee stock incentive plans may subject the\nChinese plan participants or us to fines and other legal or administrative sanctions.\n\nPursuant to SAFE Circular 37,\ndomestic residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications to\nSAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies. In February 2012,\nSAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock\nIncentive Plan of Overseas Publicly Listed Company. Pursuant to these rules, domestic citizens of mainland China and non-domestic citizens\nwho reside in mainland China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas\npublicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could\nbe the subsidiaries in mainland China of such overseas-listed company, and complete certain other procedures. In addition, an overseas-entrusted institution\nmust be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests.\nWe and our executive officers and other employees who are mainland China citizens or who reside in mainland China for a continuous period\nof not less than one year and who have been granted options are subject to these regulations as our company is an overseas-listed company.\nFailure to complete SAFE registrations may subject them to fines and legal sanctions, and there may be additional restrictions on the\nability of them to exercise their stock options or remit proceeds gained from sale of their stock into mainland China. We also face regulatory\nuncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees\nunder mainland China law. See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations\nRelating to Foreign Exchange.”\n\nIn addition, the State Administration\nof Taxation, or the SAT has issued circulars concerning employee share options or restricted shares. Under these circulars, employees\nworking in mainland China who exercise share options, or whose restricted shares or restricted share units vest, will be subject to individual\nincome tax of mainland China. Our subsidiaries in mainland China have obligations to file documents related to employee share options\nor restricted shares with tax authorities and to withhold individual income taxes of those employees related to their share options,\nrestricted shares or restricted share units. In addition, the sales of the ADSs or shares held by such mainland China individual employees\nafter their exercise of the options, or the vesting of the restricted shares or restricted share units, are also subject to mainland\nChina individual income tax. If the employees fail to pay, or the subsidiaries in mainland China fail to withhold, their income taxes\naccording to the laws, rules and regulations, the subsidiaries in mainland China may face sanctions imposed by the tax authorities or\nother government authorities of mainland China.\n\n52\n\nIf we are classified\nas a mainland China resident enterprise for mainland China enterprise income tax purposes, such classification could result in unfavorable\ntax consequences to us and our non-mainland-China shareholders and ADS holders.\n\nUnder the PRC Enterprise\nIncome Tax Law and its implementation rules, an enterprise established outside of mainland China with its “de facto management\nbody” within mainland China is considered a “resident enterprise” and will be subject to the enterprise income tax\non its global income at the rate of 25%. The implementation rules define the term “de facto management body” as the body\nthat exercises full and substantial control and overall management over the business, productions, personnel, accounts and properties\nof an enterprise. In 2009, the SAT, issued the Notice of the SAT Regarding the Determination of Chinese-Controlled Offshore Incorporated\nEnterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or SAT Circular 82, and was amended in 2014\nand 2017, which provides certain specific criteria for determining whether the “de facto management body” of a mainland China-controlled enterprise\nthat is incorporated offshore is located in mainland China. Although this circular only applies to offshore enterprises controlled by\nmainland China enterprises or mainland China enterprise groups, not those controlled by mainland China individuals or foreigners, the\ncriteria set forth in the circular may reflect the SAT’s general position on how the “de facto management body” test\nshould be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, an offshore\nincorporated enterprise controlled by a mainland China enterprise or a mainland China enterprise group will be regarded as a mainland\nChina tax resident by virtue of having its “de facto management body” in mainland China and will be subject to mainland China\nenterprise income tax on its global income only if all of the following conditions are met: (i) the senior management and core management\ndepartments in charge of its daily operations function have their presence mainly in mainland China; (ii) its financial and human\nresources decisions are subject to determination or approval by persons or bodies in mainland China; (iii) its major assets, accounting\nbooks, company seals, and minutes and files of its board and shareholders’ meetings are located or kept in mainland China; and\n(iv) not less than half of the enterprise’s directors or senior management with voting rights habitually reside in mainland\nChina. Further to SAT Circular 82, in June 2018 the SAT amended the Measures for the Administration of Income Tax for Chinese-Funded Holding\nResident Enterprises Registered Abroad (for Trial Implementation), or the SAT Bulletin 45, to provide more guidance on the implementation\nof SAT Circular 82. SAT Bulletin 45 provides for procedures and administration details of determination on resident status and administration\non post-determination matters.\n\nWe believe our company is\nnot a mainland China resident enterprise for mainland China tax purposes. However, the tax resident status of an enterprise is subject\nto determination by mainland China tax authorities and the interpretation of the term “de facto management body.” If the\ntax authorities of mainland China determine that our company is a mainland China resident enterprise for enterprise income tax purposes,\nwe will be subject to mainland China enterprise income on our worldwide income at the rate of 25%. Furthermore, we are required to withhold\na 10% withholding tax from dividends we pay to our shareholders (including our ADS holders) that are non-resident enterprises. In\naddition, non-resident enterprise shareholders (including our ADS holders) may be subject to tax of mainland China at a rate of\n10% on gains realized on the sale or other disposition of ADSs or Class A ordinary shares, if such gain is treated as derived from\na source of mainland China. Furthermore, if we are deemed a mainland China resident enterprise, dividends paid to our non-mainland China\nindividual shareholders (including our ADS holders) and any gain realized on the sale or other disposition of ADSs or Class A ordinary\nshares by such shareholders (including ADS holders) may be subject to tax of mainland China at a rate of 20% (which in the case of dividends\nmay be withheld at source). These rates may be reduced by an applicable tax treaty, but it is unclear whether non-mainland China\nshareholders (including ADS holders) of our company would, in practice, be able to obtain the benefits of any tax treaties between their\ncountry of tax residence and mainland China in the event that we are treated as a mainland China resident enterprise. Any such tax may\nreduce the returns on your investment in the ADSs or Class A ordinary shares.\n\n53\n\nWe face uncertainty\nwith respect to indirect transfers of equity interests in mainland China resident enterprises by their non-mainland China\nholding companies.\n\nOn February 3, 2015,\nthe SAT issued the Public Notice Regarding Certain Enterprise Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident\nEnterprises, or the SAT Bulletin 7. SAT Bulletin 7 extends its tax jurisdiction to transactions involving the transfer of taxable assets\nthrough offshore transfer of a foreign intermediate holding company. In addition, SAT Bulletin 7 has introduced safe harbors for internal\ngroup restructurings and the purchase and sale of equity securities through a public securities market. SAT Bulletin 7 also brings challenges\nto both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets.\n\nOn October 17, 2017,\nthe SAT issued the Public Notice on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, or the SAT\nBulletin 37, which came into effect on December 1, 2017 and was amended in June 15, 2018. The SAT Bulletin 37 further\nclarifies the practice and procedure of the withholding of non-resident enterprise income tax.\n\nWhere a non-resident enterprise\ntransfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an Indirect Transfer,\nthe non-resident enterprise as either transferor or transferee, or the mainland China entity that directly owns the taxable assets,\nmay report such Indirect Transfer to the tax authorities. Using a “substance over form” principle, the tax authority of mainland\nChina may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for\nthe purpose of reducing, avoiding or deferring tax of mainland China. As a result, gains derived from such Indirect Transfer may be subject\nto enterprise income tax of mainland China, and the transferee or other person who is obligated to pay for the transfer is obligated\nto withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a mainland China resident enterprise.\nBoth the transferor and the transferee may be subject to penalties under tax laws in mainland China if the transferee fails to withhold\nthe taxes and the transferor fails to pay the taxes.\n\nWe face uncertainties as\nto the reporting and other implications of certain past and future transactions where taxable assets in mainland China are involved,\nsuch as offshore restructuring, sale of the shares in our offshore subsidiaries and investments. Our company may be subject to filing\nobligations or taxed if our company is transferor in such transactions, and may be subject to withholding obligations if our company\nis transferee in such transactions, under SAT Bulletin 7 and/or SAT Bulletin 37. For transfer of shares in our company by investors who\nare non-mainland-China resident enterprises, our subsidiaries in mainland China may be requested to assist in the filing under SAT\nBulletin 7 and/or SAT Bulletin 37. As a result, we may be required to expend valuable resources to comply with SAT Bulletin 7 and/or\nSAT Bulletin 37 or to request the transferors from whom we purchase taxable assets to comply with these bulletins, or to establish that\nour company should not be taxed under these bulletins, which may have a material adverse effect on our financial condition and results\nof operations.\n\nOur subsidiaries\nin mainland China may be obliged to withhold individual income taxes for the individual transferors during several historical share\ntransfer transactions where our subsidiaries are transferees.\n\nThere exist several historical\nshare transfer transactions where some of our subsidiaries in mainland China were transferees and certain individuals were transferers.\nFor each such share transfer transaction, our subsidiary involved was regarded as a withholding agent, having obligations to make tax\ndeclaration to competent tax authorities and withhold individual income taxes on behalf of transferor for his or her share transfer income.\nAlthough the historical share transfers were conducted for either nil or nominal consideration, we cannot rule out the possibilities\nthat the consideration of such transactions and corresponding taxable income will be verified and adjusted by tax authorities under certain\ncircumstances as specified in appliable tax laws, and thus our subsidiaries will be required to withhold relevant individual income taxes\ntherefor. Failure to fulfill any of such obligations related to individual share transfer transactions may subject our subsidiaries to\npenalties under tax laws in mainland China.\n\n54\n\nYou may experience\ndifficulties in effecting service of legal process, enforcing foreign judgments or bringing actions against us based on foreign\nlaws.\n\nYimutian Inc. is an exempted\ncompany incorporated with limited liability under the laws of the Cayman Islands. We conduct all of our operations in mainland China.\nAs a result, the ability of a shareholder of our company to effect service of process upon us inside mainland China or to enforce against\nus or them in mainland China any judgment obtained from non-mainland China courts is subject to the laws and regulations of mainland\nChina, and there is uncertainty as to whether an investor will be able to effect such service of process or enforcement of judgment.\n\nThe recognition and enforcement\nof foreign judgments are basically provided for under the PRC Civil Procedures Law, which was promulgated by the National People’s\nCongress of the PRC, or the NPC, on April 9, 1991, and was last amended by SCNPC on December 24, 2021, taking effect as of\nJanuary 1, 2022. Courts in mainland China may recognize and enforce foreign judgments in accordance with the requirements of the\nPRC Civil Procedures Law based either on treaties between the PRC and the country where the judgment is made or on principles of reciprocity\nbetween jurisdictions. China does not have written treaties providing for the reciprocal recognition and enforcement of judgments of\ncourts with the United States, the Cayman Islands or many other countries and regions. In addition, according to the PRC Civil Procedures\nLaw, the courts in mainland China will not enforce a foreign judgment if it is decided as having violated the basic principles of laws\nof mainland China or national sovereignty, security or public interest. Therefore, recognition and enforcement in mainland China of judgments\nof a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision are subject\nto determination in accordance with the laws and regulations of mainland China on an ad hoc basis depending on the facts and circumstances.\n\nThe SEC, U.S. Department\nof Justice and other U.S. authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies\nand non-U.S. persons, including company directors and officers, in certain emerging markets, including mainland China. Legal and\nother obstacles to obtaining information needed for investigations or litigation or to obtaining access to funds outside the United States,\nlack of support from local authorities, and other various factors make it difficult for the U.S. authorities to pursue actions against\nnon-U.S. companies and individuals, who may have engaged in fraud or other wrongdoings. Additionally, public shareholders investing\nin the ADSs have limited rights and few practical remedies in emerging markets where we operate, as shareholder claims that are common\nin the United States, including class actions under securities law and fraud claims, generally are difficult or impossible to pursue\nas a matter of law or practicality in many emerging markets, including mainland China. As a result of all of the above, you may have\nmore difficulties in protecting your interests in your emerging market investments.\n\nIt may be difficult\nfor overseas regulators to conduct investigation or collect evidence within mainland China.\n\nShareholder claims or regulatory\ninvestigation that are common in the United States may be difficult to pursue as a matter of law or practicality in many foreign\njurisdictions, including mainland China. For example, in mainland China, there are legal, procedural or other requirements on providing\ninformation needed for regulatory investigations or litigation initiated outside mainland China. Although the authorities in mainland\nChina may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement\ncross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may\nnot be efficient in the absence of a mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC\nSecurities Law, or Article 177, which became effective in March 2020, no overseas securities regulator is allowed to directly\nconduct investigation or evidence collection activities within the territory of the PRC. While detailed interpretation of or implementation\nrules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation\nor evidence collection activities within mainland China may increase difficulties faced by you in protecting your interests.\n\nRisks Related to the ADSs\n\nThe trading price\nof the ADSs is likely to be volatile, which could result in substantial losses to investors.\n\nAs of the date of this annual\nreport, the trading price of our ADSs has been volatile since our ADSs started to trade on the Nasdaq on August 19, 2025. The trading\nprice of the ADSs is likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad\nmarket and industry factors, including the performance and fluctuation of the market prices of other companies with business operations\nlocated mainly in mainland China that have listed their securities in the United States. In addition to market and industry factors,\nthe price and trading volume for the ADSs may be highly volatile for factors specific to our own operations, including the following:\n\n●variations in our net revenues,\nearnings and cash flows;\n\n55\n\n●announcements of new investments,\nacquisitions, strategic partnerships or joint ventures by us or our competitors;\n\n●announcements of new offerings,\nsolutions and expansions by us or our competitors;\n\n●changes in financial estimates\nby securities analysts;\n\n●detrimental adverse publicity\nabout us, our services or our industry;\n\n●announcements of new regulations,\nrules or policies relevant to our business;\n\n●additions or departures of\nkey personnel;\n\n●our controlling shareholder’s\nbusiness performance and reputation;\n\n●release of lock-up or\nother transfer restrictions on our outstanding equity securities or sales of additional equity\nsecurities; and\n\n●potential litigation or regulatory\ninvestigations.\n\nAny of these factors may\nresult in large and sudden changes in the volume and price at which the ADSs will trade. Furthermore, the stock market in general experiences\nprice and volume fluctuations that are often unrelated or disproportionate to the operating performance of companies like us. These broad\nmarket and industry fluctuations may adversely affect the market price of our ADSs. Volatility or a lack of positive performance in our\nADS price may also adversely affect our ability to retain key employees, most of whom have been granted equity incentives.\n\nIn the past, shareholders\nof public companies have often brought securities class-action suits against those companies following periods of instability in\nthe market price of their securities. If we were involved in a class-action suit, it could divert a significant amount of our management’s\nattention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which\ncould harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our\nability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant\ndamages, which could have a material adverse effect on our financial condition and results of operations.\n\nIf we fail to meet\nNasdaq’s minimum bid price or minimum market value of publicly held shares requirements, our ADSs could be subject to delisting,\nwhich may significantly reduce the liquidity of our ADSs and cause further declines to the market price of our ADSs.\n\nOur ADSs are currently listed\non the Nasdaq Global Market under the trading symbol “YMT.” The Nasdaq Listing Rules have minimum requirements that a company\nmust meet for continued listing on Nasdaq. These requirements include maintaining a minimum closing bid price of US$1.00 per ADS and\na minimum market value of publicly held shares of US$15 million for a period of 30 consecutive trading days.\n\nOn November 6, 2025, we received\na written notice from Nasdaq indicating that we no longer meet the continued listing requirement of minimum Market Value of Publicly\nHeld Shares (“MVPHS”) for Nasdaq, because our MVPHS for the last 30 consecutive business days was below the minimum MVPHS\nrequirement of US$15 million. We were granted a grace period of 180 calendar days, expiring on May 5, 2026, in which to regain compliance.\nTo regain compliance, our MVPHS must close at US$15 million or more for a minimum of ten consecutive business days during the compliance\nperiod, unless Nasdaq exercises its discretion to extend this ten-day period.\n\nOn April 2, 2026, we received\nanother written notice from Nasdaq indicating we are not in compliance with the US$1.00 minimum bid price requirement under the Nasdaq\nListing Rules. Based on the closing bid price of the our ADSs from February 18, 2026 to April 1, 2026, we have not met the minimum bid\nprice requirement set forth in the Nasdaq Listing Rules during that period. We were granted a grace period of 180 calendar days, expiring\non September 29, 2026, in which to regain compliance. To regain compliance, the closing bid price of our ADSs must meet or exceed US$1.00\nper ADS for at least ten consecutive business days during the compliance period, unless Nasdaq exercises its discretion to extend this\nten-day period.\n\n56\n\nWe are currently evaluating\noptions to regain compliance with Nasdaq’s continued listing requirements. Although we will\nuse all reasonable efforts to achieve compliance with the minimum bid price and minimum MVPHS requirements, there can be no assurance\nthat we will be able to regain compliance with these requirements or will otherwise be in compliance with other Nasdaq continued listing\nrequirements. If we will not be able to cure the deficiencies in a timely manner, or if we are otherwise not eligible, Nasdaq will provide\nnotice that our securities will be subject to delisting. The delisting of our ADSs may significantly reduce the liquidity of our ADSs,\ncause further declines to the market price of our ADSs, and make it more difficult for us to obtain adequate financing to support our\ncontinued operation.\n\nWe are an emerging\ngrowth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.\n\nWe are an “emerging\ngrowth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from requirements applicable to other\npublic companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor\nattestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 for so long as we remain an emerging growth\ncompany. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain\ninformation they may deem important.\n\nThe JOBS Act also provides\nthat an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a\nprivate company is otherwise required to comply with such new or revised accounting standards. This election allows us to delay the adoption\nof new or revised accounting standards that have different effective dates for public and private companies until those standards apply\nto private companies, and as a result of this election our financial statements may not be comparable to those of companies that comply\nwith public company effective dates, including other emerging growth companies that have not made this election.\n\nYou may experience dilution\nof your holdings due to the inability to participate in rights offerings.\n\nWe may, from time to time,\ndistribute rights to our shareholders, including rights to acquire securities. Under the deposit agreement, the depositary will not distribute\nrights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt\nfrom registration under the Securities Act with respect to all holders of ADSs, or are registered under the provisions of the Securities\nAct. The depositary may, but is not required to, attempt to sell these undistributed rights to third parties, and may allow the rights\nto lapse. We may be unable to establish an exemption from registration under the Securities Act, and we are under no obligation to file\na registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared\neffective. Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings\nas a result.\n\nIf securities\nor industry analysts cease to publish research or reports about our business, or if they adversely change their recommendations\nregarding the ADSs, the market price for the ADSs and trading volume could decline.\n\nThe trading market for the\nADSs will be influenced by research or reports that industry or securities analysts publish about our business. If one or more analysts\nwho cover us downgrade the ADSs, the market price for the ADSs would likely decline. If one or more of these analysts cease to cover\nus or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market\nprice or trading volume for the ADSs to decline.\n\nThe sale or availability\nfor sale of substantial amounts of ADSs could adversely affect their market price.\n\nSales of substantial amounts\nof ADSs in the public market, or the perception that these sales could occur, could adversely affect the market price of the ADSs and\ncould materially impair our ability to raise capital through equity offerings in the future. We cannot predict what effect, if any, market\nsales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future\nsale will have on the market price of the ADSs. In addition, if we issue additional ordinary shares, either through private transactions\nor in the public markets in the United States or other jurisdiction, your ownership interests in our company would be diluted and this,\nin turn, would have an adverse effect on the price of our ADSs.\n\n57\n\nTechniques employed\nby short sellers may drive down the market price of the ADSs.\n\nShort selling is the practice\nof selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical\nsecurities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities\nbetween the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that\npurchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short\nsellers publish, or arrange for the publication of, negative opinions regarding the issuer and its business prospects in order to create\nnegative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led\nto selling of shares in the market.\n\nPublic companies that have\nsubstantially all of their operations in mainland China have been the subject of short selling. Much of the scrutiny and negative publicity\nhave centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities\nand mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a\nresult, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are\nsubject to shareholder lawsuits and/or SEC enforcement actions.\n\nIt is not clear what effect\nsuch negative publicity could have on us. If we were to become the subject of any unfavorable allegations, whether such allegations are\nproven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend\nourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can\nproceed against the short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such\na situation could be costly and time-consuming, and could distract our management from growing our business. Even if such allegations\nare ultimately proven to be groundless, allegations against us could severely impact our business operations, and any investment in the\nADSs could be greatly reduced or even rendered worthless.\n\nForum selection\nprovisions in our memorandum and articles of association and our deposit agreement with the depositary bank could limit\nthe ability of holders of our Class A ordinary shares, ADSs or other securities to obtain a favorable judicial forum for disputes\nwith us, our directors and officers, the depositary bank, and potentially others.\n\nOur currently effective memorandum\nand articles of association provide that the United States District Court for the Southern District of New York (or, if the United States\nDistrict Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in\nNew York County, New York) are the exclusive forum within the United States for the resolution of any complaint asserting a cause\nof action arising under the Securities Act and the Exchange Act. Our deposit agreement also provides that the United States\nDistrict Court for the Southern District of New York (or, if (i) the United States District Court for the Southern District\nof New York lacks subject matter jurisdiction over a particular dispute or (ii) the designation of the United States District Court\nfor the Southern District of New York as the exclusive forum for any particular dispute is, or becomes, invalid, illegal or unenforceable,\nthe state courts in New York County, New York) is the exclusive forum for the resolution of any complaint asserting a cause\nof action arising under the Securities Act or the Exchange Act. However, the enforceability of similar federal court choice of forum\nprovisions has been challenged in legal proceedings in the United States, and it is possible that a court could find this type of\nprovision to be inapplicable, unenforceable, or inconsistent with other documents that are relevant to the filing of such lawsuits. If\na court were to find the federal choice of forum provision contained in our memorandum and articles of association or our deposit\nagreement to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other\njurisdictions. If upheld, the forum selection clause in our memorandum and articles of association, as well as the forum selection\nprovisions in the deposit agreement, may limit a security-holder’s ability to bring a claim against us, our directors and officers,\nthe depositary bank, and potentially others in his or her preferred judicial forum, and this limitation may discourage such lawsuits.\nIn addition, the Securities Act provides that both federal and state courts have jurisdiction over suits brought to enforce any duty\nor liability under the Securities Act or the rules and regulations thereunder. Accepting or consent to this forum selection provision\ndoes not constitute a waiver by you of compliance with federal securities laws and the rules and regulations thereunder. You may not\nwaive compliance with federal securities laws and the rules and regulations thereunder. The exclusive forum provision in our memorandum\nand articles of association will not operate so as to deprive the courts of the Cayman Islands from having jurisdiction over matters\nrelating to our internal affairs.\n\n58\n\nThe depositary\nfor the ADSs will give us a discretionary proxy to vote our Class A ordinary shares underlying your ADSs at shareholders’\nmeetings if you do not give voting instructions to the depositary, except in limited circumstances, which could adversely affect\nyour interests.\n\nUnder the deposit agreement\nfor the ADSs, the depositary will give us a discretionary proxy to vote our Class A ordinary shares underlying your ADSs at shareholders’\nmeetings if you do not give voting instructions to the depositary, unless:\n\n●we have failed to timely provide\nthe depositary with our notice of meeting and related voting materials;\n\n●we have instructed the depositary\nthat we do not wish a discretionary proxy to be given;\n\n●we have informed the depositary\nthat there is substantial opposition as to a matter to be voted on at the meeting; or\n\n●a matter to be voted on at\nthe meeting, if approved, would materially and adversely affect the rights of shareholders.\n\nThe effect of this discretionary\nproxy is that, if you fail to give voting instructions to the depositary, you cannot prevent our ordinary shares underlying your ADSs\nfrom being voted, absent the situations described above, and it may make it more difficult for shareholders to influence our management.\nHolders of our ordinary shares are not subject to this discretionary proxy.\n\nBecause we do not\nexpect to pay dividends in the foreseeable future, you must rely on a price appreciation of the ADSs for a return on your investment.\n\nWe currently intend to retain\nmost, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we\ndo not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the ADSs as a source\nfor any future dividend income.\n\nOur board of directors has\ndiscretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders\nmay by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. In either case, all\ndividends are subject to certain restrictions under Cayman Islands law, namely that our company may pay a dividend out of either profit\nor a share premium account, provided always that in no circumstances may a dividend be paid if this would result in our company being\nunable to pay its debts as they fall due in the ordinary course of business.\n\nEven if our board of directors\ndecides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations\nand cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial\ncondition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment\nin the ADSs will likely depend entirely upon any future price appreciation of the ADSs. There is no guarantee that the ADSs will appreciate\nin value or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in the ADSs and\nyou may even lose your entire investment in the ADSs.\n\n59\n\nYou may face difficulties\nin protecting your interests, and your ability to protect your rights through U.S. courts maybe limited, because Yimutian Inc.\nis incorporated under Cayman Islands law.\n\nYimutian Inc. is an exempted\ncompany incorporated with limited liability under the laws of the Cayman Islands. The corporate affairs of Yimutian Inc. are governed\nby our memorandum and articles of association, as amended and restated from time to time, the Companies Act (As Revised) of the Cayman\nIslands and the common law of the Cayman Islands. The rights of shareholders to take action against our directors, actions by our minority\nshareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law\nof the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman\nIslands as well as from the common law of England and Wales, the decisions of whose courts are of persuasive authority, but are not binding,\non a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law may\nbe narrower in scope or less developed than they would be under statutes or judicial precedent in some jurisdictions in the United States.\nIn particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states, such\nas Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, with\nrespect to Cayman Islands companies, plaintiffs may face special obstacles, including but not limited to those relating to jurisdiction\nand standing, in attempting to assert derivative claims in state or federal courts of the United States. In addition, while under\nDelaware law, controlling shareholders owe fiduciary duties to the companies they control and their minority shareholders, under Cayman\nIslands law, our controlling shareholders do not owe any such fiduciary duties to our company or to our minority shareholders. Accordingly,\nour controlling shareholders may exercise their powers as shareholders, including the exercise of voting rights in respect of their shares,\nin such manner as they think fit, subject only to very limited equitable constraints. One of the examples of such constraint is that\nthe exercise of voting rights to amend the memorandum or articles of association of a Cayman Islands company must be exercised in good\nfaith for the benefit of our company as a whole.\n\nShareholders of Cayman Islands\nexempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of register\nof members of these companies (other than the memorandum and articles of association, special resolutions which have been passed by shareholders\nand register of mortgages and charges). Under Cayman Islands law, the names of our current directors can be obtained from a search conducted\nat the Registrar of Companies in the Cayman Islands. Our directors have discretion under our articles of association to determine whether\nor not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available\nto our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a\nshareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.\n\nCertain corporate governance\npractices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other\njurisdictions such as the United States. If we choose to follow home country practice, our shareholders may be afforded less protection\nthan they otherwise would under rules and regulations applicable to U.S. domestic issuers.\n\nAs a result of all of the\nabove, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management,\nmembers of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the\nUnited States. For a discussion of significant differences between the provisions of the Companies Act (As Revised) of the Cayman\nIslands and the laws applicable to companies incorporated in the United States and their shareholders, see “Item 10. Additional\nInformation—B. Memorandum and Articles of Association—Differences in Corporate Law.”\n\nCertain judgments\nobtained against us by our shareholders may not be enforceable.\n\nWe are an exempted company\nlimited by shares incorporated under the laws of the Cayman Islands and substantially all of our assets are located outside of the United States.\nAll of our current operations are conducted in mainland China. As a result, it may be difficult or impossible for you to bring an action\nagainst us or against our directors and executive officers in the United States in the event that you believe that your rights have\nbeen infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind,\nthe laws of the Cayman Islands and of mainland China may render you unable to enforce a judgment against our assets or the assets of\nour directors and officers. For more information regarding relevant laws of the Cayman Islands and of mainland China, see “Item\n6. Directors, Senior Management and Employees—E. Share Ownership—Enforceability of Civil Liabilities.” However, the\ndeposit agreement gives you the right to submit claims against us to binding arbitration, and arbitration awards may be enforceable against\nus and our assets in mainland China even when court judgments are not.\n\n60\n\nADSs holders may\nnot be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes\nto the plaintiff(s) in any such action.\n\nThe deposit agreement governing\nthe ADSs representing our Class A ordinary shares provides that, to the fullest extent permitted by applicable law, ADS holders\nwaive any right they may have to a trial by jury in any suit, action or proceeding against us or the depositary directly or indirectly\narising out of, based on or relating in any way to our shares or other deposited securities, the ADSs or the ADRs, the deposit agreement\nor any transaction contemplated therein, or the breach thereof (whether based on contract, tort, common law or any other theory), including\nany suit, action, claim or proceeding under the U.S. federal securities laws.\n\nIf we or the depositary were\nto oppose a jury trial based on this waiver, the court would have to determine whether the waiver was enforceable based on the facts\nand circumstances of the case in accordance with applicable state and federal law. To our knowledge, the enforceability of a contractual\npre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated\nby the United States Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally\nenforceable, including under the laws of the State of New York, which govern the deposit agreement, or by a federal or state court\nin the State of New York, which has nonexclusive jurisdiction over matters arising under the deposit agreement. In determining whether\nto enforce a contractual pre-dispute jury trial waiver, courts will generally consider whether a party knowingly, intelligently\nand voluntarily waived the right to a jury trial. We believe that this would be the case with respect to the deposit agreement and the\nADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before investing in the ADSs.\n\nIf you or any other owners\nor holders of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs,\nincluding claims under federal securities laws, you or such other owners or holders may not be entitled to a jury trial with respect\nto such claims, which may have the effect of limiting and discouraging lawsuits against us or the depositary. If a lawsuit is brought\nagainst us or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which\nwould be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have, including\noutcomes that could be less favorable to the plaintiff(s) in any such action.\n\nNevertheless, if this jury\ntrial waiver is not permitted by applicable law, an action could proceed under the terms of the deposit agreement with a jury trial.\nNo condition, stipulation or provision of the deposit agreement or the ADSs serves as a waiver by any owner or holder of ADSs or by us\nor the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations\npromulgated thereunder.\n\nThe voting rights\nof holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct the\nvoting of the Class A ordinary shares underlying the ADSs.\n\nAs an exempted company with\nlimited liability incorporated in the Cayman Islands, Yimutian Inc. is not obliged by the Companies Act (As Revised) to call shareholders’\nannual general meetings. As a holder of ADSs, you will not have any direct right to attend general meetings of our company or to cast\nany votes at such meetings. You will only be able to exercise the voting rights which attach to the Class A ordinary shares underlying\nthe ADSs indirectly by giving voting instructions to the depositary in accordance with the provisions of the deposit agreement. Under\nthe deposit agreement, you may vote only by giving voting instructions to the depositary, as holder of the Class A ordinary shares\nunderlying the ADSs. Upon receipt of your voting instructions, the depositary may try to vote the Class A ordinary shares underlying\nthe ADSs in accordance with your instructions. If we ask for your instructions, then upon receipt of your voting instructions, the depositary\nwill try to vote the underlying Class A ordinary shares in accordance with those instructions. If we do not instruct the depositary\nto ask for your instructions, the depositary may still vote in accordance with instructions you give, but it is not required to do so.\nYou will not be able to directly exercise any right to vote with respect to the underlying Class A ordinary shares unless you cancel\nthe ADSs and withdraw the shares and become the registered holder of such shares prior to the record date for the general meeting. When\na general meeting is convened, you may not receive sufficient advance notice of the meeting to enable you to withdraw the shares underlying\nthe ADSs and become the registered holder of such shares prior to the record date for the general meeting to allow you to attend the\ngeneral meeting and to vote directly with respect to any specific matter or resolution to be considered and voted upon at the general\nmeeting. In addition, under our currently effective memorandum and articles of association, for the purposes of determining those shareholders\nwho are entitled to attend and vote at any general meeting, our directors may close our register of members and/or fix in advance a record\ndate for such meeting, and such closure of our register of members or the setting of such a record date may prevent you from withdrawing\nthe Class A ordinary shares underlying the ADSs and becoming the registered holder of such shares prior to the record date, so that\nyou would not be able to attend the general meeting or to vote directly. Where any matter is to be put to a vote at a general meeting,\nthe depositary will notify you of the upcoming vote and deliver our voting materials to you, if we ask it to. We cannot assure you that\nyou will receive the voting materials in time to ensure you can direct the depositary to vote your shares. In addition, the depositary\nand its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions.\nThis means that you may not be able to exercise your right to direct how the shares underlying the ADSs are voted and you may have no\nlegal remedy if the shares underlying the ADSs are not voted as you requested.\n\n61\n\nHolders of the ADSs\nmay not receive cash dividends if the depositary decides it is impractical to make them available to such holders.\n\nThe depositary will pay cash\ndividends on the ADSs only to the extent that we decide to distribute dividends on our ordinary shares or other deposited securities,\nand we do not have any present plan to pay any cash dividends on our ordinary shares in the foreseeable future. To the extent that there\nis a distribution, the depositary of the ADSs has agreed to pay to holders of the ADSs the cash dividends or other distributions it or\nthe custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses. Holders of the ADSs\nwill receive these distributions in proportion to the number of ordinary shares the ADSs represent. However, the depositary may, at its\ndiscretion, decide that it is inequitable or impractical to make a distribution available to any holders of the ADSs. For example, the\ndepositary may determine that it is not practicable to distribute certain property through the mail, or that the value of certain distributions\nmay be less than the cost of mailing them. In these cases, the depositary may decide not to distribute such property to holders of the\nADSs.\n\nOur currently effective\nmemorandum and articles of association contain anti-takeover provisions that could discourage a third party from acquiring\nus and adversely affect the rights of holders of our ordinary shares and ADSs.\n\nOur currently effective memorandum\nand articles of association contain provisions to limit the ability of others to acquire control of our company or cause us to engage\nin change-of-control transactions, including provisions that authorize our board of directors to issue preferred shares in one or\nmore series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further\nvote or action by our shareholders. These provisions could have the effect of depriving our shareholders of an opportunity to sell their\nshares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender\noffer or similar transaction.\n\nWe are entitled\nto amend the deposit agreement and to change the rights of ADS holders under the terms of such agreement, or to terminate the deposit\nagreement, without the prior consent of the ADS holders.\n\nWe are entitled to amend\nthe deposit agreement and to change the rights of the ADS holders under the terms of such agreement, without the prior consent of the\nADS holders. We and the depositary may agree to amend the deposit agreement in any way we decide is necessary or advantageous to us.\nAmendments may reflect, among other things, operational changes in the ADS program, legal developments affecting ADSs or changes in the\nterms of our business relationship with the depositary. In the event that the terms of an amendment impose or increase any fees on a\nper ADS basis, charges or expenses (other than share transfer or other taxes and other governmental charges, transfer or registration\nfees, the transaction fee per cancellation request (including any cancellation request made through SWIFT, facsimile transmission or\nany other method of communication) applicable delivery expenses or other such fees, charges or expenses, or that would otherwise prejudice\nany substantial existing right of the ADS holders, such amendment will not become effective as to outstanding ADSs until the expiration\nof 30 days after notice of that amendment has been disseminated to the ADS holders, but no prior consent of the ADS holders is required\nunder the deposit agreement. Furthermore, we may decide to terminate the ADS facility at any time for any reason. For example, terminations\nmay occur when the ADSs are delisted from the stock exchange in the United States on which the ADSs are listed and we do not list\nthe ADSs on another stock exchange in the United States, nor is there a symbol available for over-the-counter trading of the\nADSs in the United States. If the ADS facility will terminate, ADS holders will receive at least 30 days’ prior notice,\nbut no prior consent is required from them. Under the circumstances that we decide to make an amendment to the deposit agreement that\nis disadvantageous to ADS holders or terminate the deposit agreement, the ADS holders may choose to sell their ADSs or surrender their\nADSs and become direct holders of the underlying ordinary shares, but will have no right to any compensation whatsoever.\n\nYou may be subject\nto limitations on the transfer of the ADSs.\n\nThe ADSs are transferable\non the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems it expedient\nin connection with the performance of its duties and in emergencies, and on weekends and public holidays. The depositary may refuse to\ndeliver, transfer or register transfers of the ADSs generally when our share register or the books of the depositary are closed, or at\nany time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental\nbody, or under any provision of the deposit agreement, or for any other reason.\n\n62\n\nOur dual-class voting\nstructure limits your ability to influence corporate matters and could discourage others from pursuing any change of control transactions\nthat holders of our Class A ordinary shares and ADSs may view as beneficial.\n\nOur authorized and issued\nordinary shares are divided into Class A ordinary shares and Class B ordinary shares (with certain shares remaining undesignated,\nwith power for our directors to designate and issue such classes of shares as they think fit.) Holders of Class B ordinary shares\nare entitled to twenty (20) votes per share, while the holder of Class A ordinary shares will be entitled to one vote per share.\nEach Class B ordinary share is convertible into an equal number of Class A ordinary share at any time by the holders thereof,\nwhile Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.\n\nAs of February 28, 2026,\nMr. Jinhong Deng, our founder, chairman of the board of directors and chief executive officer, was able to exercise 75.79% of the\ntotal voting power of our issued and outstanding share capital. For more details, see “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” As a result\nof the dual-class share structure and the concentration of ownership, the holders of Class B ordinary shares will have considerable\ninfluence over matters such as decisions regarding mergers and consolidations, election of directors, and other significant corporate\nactions. Any conversion of Class B ordinary shares into Class A ordinary shares may dilute the percentage ownership of the\nexisting holders of Class A ordinary shares within their class of ordinary shares. In addition, the holders of Class B ordinary\nshares may take actions that are not in the best interest of us or our other shareholders. This concentration of ownership may discourage,\ndelay, or prevent a change in control of our company, which could have the effect of depriving our other shareholders of the opportunity\nto receive a premium for their shares as part of a sale of our company and may reduce the price of the ADSs. This concentrated control\nwill limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover, or other\nchange of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial.\n\nThe dual-class structure\nof our ordinary shares may adversely affect the trading market for the ADSs.\n\nCertain shareholder advisory\nfirms have announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including\nthe S&P 500, to exclude companies with multiple classes of shares and companies whose public shareholders hold no more than 5% of\ntotal voting power from being added to such indices. In addition, several shareholder advisory firms have announced their opposition\nto the use of multiple class structures. As a result, the dual class structure of our ordinary shares may prevent the inclusion of the\nADSs representing Class A ordinary shares in such indices and may cause shareholder advisory firms to publish negative commentary\nabout our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices\ncould result in a less active trading market for the ADSs. Any actions or publications by shareholder advisory firms critical of our\ncorporate governance practices or capital structure could also adversely affect the value of the ADSs.\n\nThe requirements\nof being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain\nqualified board members.\n\nAs a public company, our\nmanagement have additional obligations that require their attention and we incur additional legal, accounting and other expenses that\nwe have not incurred as a private company, including costs associated with public company reporting requirements. We also have incurred\nand will incur costs associated with the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act\nand related rules implemented or to be implemented by the SEC and the rules of Nasdaq. The expenses incurred by public companies generally\nfor reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and\nfinancial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate\nthese costs with any degree of certainty. These laws and regulations could also make it more difficult or costly for us to obtain certain\ntypes of insurance, including director and officer liability insurance and we may be forced to accept reduced policy limits and coverage\nor incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult\nfor us to attract and retain qualified persons to serve on our board of directors, our board committees or as our executive officers\nand will require our management and personnel to devote a substantial amount of time to comply with these rules and regulations.\n\n63\n\nYimutian Inc. is\na “controlled company” as defined under the Nasdaq Stock Market Rule. As a result, we will qualify for, and intend to\nrely on, exemptions from certain corporate governance requirements that would otherwise provide protection to shareholders of other\ncompanies.\n\nYimutian Inc. is a “controlled\ncompany” as defined under the Nasdaq Stock Market Rules because Mr. Deng owns more than 50% of our total voting power. For\nso long as we remain a controlled company, we may rely on certain exemptions from the corporate governance rules. As a result, you will\nnot have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. Even\nif we cease to be a controlled company, we may still rely on exemptions available to foreign private issuers, including being able to\nadopt home country practices in relation to corporate governance matters. See “—We are a foreign private issuer within the\nmeaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic\npublic companies” and “—As an exempted company incorporated in the Cayman Islands, Yimutian Inc. is permitted to adopt\ncertain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards.\nThese practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq listing standards.”\n\nWe are a foreign\nprivate issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable\nto U.S. domestic public companies.\n\nBecause we qualify as a foreign\nprivate issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States\nthat are applicable to U.S. domestic issuers, including:\n\n●the rules under the Exchange Act\nrequiring the filing with the SEC of quarterly reports on Form 10-Q, quarterly certifications\nby the principal executive and financial officers or current reports on Form 8-K;\n\n●the sections of the Exchange Act\nregulating the solicitation of proxies, consents or authorizations in respect of a security\nregistered under the Exchange Act;\n\n●the sections of the Exchange Act\nrequiring insiders to file public reports of their stock ownership and trading activities\nand liability for insiders who profit from trades made in a short period of time;\n\n●the selective disclosure rules\nby issuers of material nonpublic information under Regulation FD; and\n\n●certain audit committee independence\nrequirements in Rule 10A-3 of the Exchange Act.\n\nWe are required to file an\nannual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results\non a quarterly basis as press releases, distributed pursuant to the rules and regulations of Nasdaq. Press releases relating to financial\nresults and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file\nwith or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic\nissuers. For example, U.S. domestic issuers are required to file annual reports within 60 to 90 days from the end of each fiscal\nyear. As a result, you may not be afforded the same protections or information that would be made available to you were you investing\nin a U.S. domestic issuer.\n\n64\n\nAs an exempted\ncompany incorporated in the Cayman Islands, Yimutian Inc. is permitted to adopt certain home country practices in relation to corporate\ngovernance matters that differ significantly from the Nasdaq listing standards. These practices may afford less protection to\nshareholders than they would enjoy if we complied fully with the Nasdaq listing standards.\n\nAs a Cayman Islands exempted\ncompany listed on Nasdaq, we are subject to the Nasdaq Stock Market listing standards. However, Nasdaq rules permit a foreign private\nissuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman\nIslands, which is our home country, may differ significantly from the Nasdaq listing standards. We currently intend to follow Cayman\nIslands corporate governance practices in lieu of the corporate governance requirements of Nasdaq that listed companies must have a\nmajority of independent directors. To the extent that we choose to follow home country practice in the future, our shareholders may be\nafforded less protection than they otherwise would enjoy under the Nasdaq listing standards applicable to U.S. domestic issuers.\n\nThere can be no\nassurance that we will not be a passive foreign investment company for U.S. federal income tax purposes, which could result in adverse\nU.S. federal income tax consequences to U.S. investors in the ADSs or Class A ordinary shares.\n\nIn general, a non-U.S. corporation\nis a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for any taxable year in which\n(i) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) consists of assets that produce,\nor are held for the production of, passive income (the “asset test”), or (ii) 75% or more of its gross income consists\nof passive income. Although the law in this regard is not entirely clear, we treat our VIEs and their subsidiaries as being owned by\nus for U.S. federal income tax purposes because we control their management decisions and are entitled to substantially all of the\neconomic benefits associated with them. As a result, we consolidate their results of operations in our consolidated U.S. GAAP financial\nstatements. If it were determined, however, that we are not the owner of our VIEs and their subsidiaries for U.S. federal income\ntax purposes, we may be treated as a PFIC for the current and subsequent taxable years.\n\nAssuming that we are the owner of the VIEs for U.S. federal income\ntax purposes, and based upon the current and anticipated value of our assets and the composition of our income and assets, including goodwill\nand other unbooked intangibles, we do not believe we were a PFIC for our taxable year ended December 31, 2025. However, no assurance can\nbe given in this regard because the determination of whether we will be or become a PFIC for any taxable year is a fact intensive determination\nmade annually that depends, in part, upon the composition and classification of our income and assets. Fluctuations in the market price\nof our ADSs may cause us to be or become classified as a PFIC for the current or future taxable years because the value of our assets\nfor purposes of the asset test, including the value of our goodwill and unbooked intangibles, may be determined by reference to the market\nprice of our ADSs from time to time (which may be volatile). In particular, recent declines in the market price of our ADSs significantly\nincreased our risk of becoming a PFIC. The market price of our ADSs may continue to fluctuate considerably and, consequently, we cannot\nassure you of our PFIC status for any taxable year. Furthermore, the composition of our income and assets may also be affected by how,\nand how quickly, we use our liquid assets. Under circumstances where revenues from activities that produce passive income significantly\nincrease relative to our revenues from activities that produce non-passive income, or where we determine not to deploy significant amounts\nof cash for active purposes, our risk of being or becoming classified as a PFIC may substantially increase.\n\nIf we were to be or become\na PFIC in any taxable year during which a U.S. Holder (as defined in “Item 10. Additional Information—E. Taxation—United\nStates Federal Income Tax Considerations”) holds our ADSs or ordinary shares, certain adverse U.S. federal income tax consequences\ncould apply to such U.S. Holder. For more information see “Item 10. Additional Information—E. Taxation—United States\nFederal Income Tax Considerations—Passive Foreign Investment Company Considerations” and “Item 10. Additional Information—E.\nTaxation—United States Federal Income Tax Considerations—Passive Foreign Investment Company Rules.”\n\n65\n\nWe incur increased\ncosts as a result of being a public company.\n\nAs a public company, we incur\nsignificant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002,\nas well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of\npublic companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate\nactivities more time-consuming and costly.\n\nAs a result of becoming a\npublic company, we will need to increase the number of independent directors and adopt policies regarding internal controls and disclosure\ncontrols and procedures. We also expect that operating as a public company will make it more difficult and more expensive for us to obtain\ndirector and officer liability insurance with acceptable policy limits and coverage, should we decide to purchase such insurance. In\naddition, we will incur additional costs associated with our public company reporting requirements. It may also be more difficult for\nus to find qualified persons to serve on our board of directors or as executive officers. We are currently evaluating and monitoring\ndevelopments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of\nadditional costs we may incur or the timing of such costs.\n\nIn the past, shareholders\nof a public company often brought securities class action suits against companies following periods of instability in the market price\nof those companies’ securities. If we were involved in a class action suit, it could divert a significant amount of our management’s\nattention and other resources from our business and operations, which could harm our results of operations and require us to incur significant\nexpenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability\nto raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages,\nwhich could have a material adverse effect on our financial condition and results of operations.\n\nIn addition, after we are\nno longer an “emerging growth company,” we expect to incur significant expenses and devote substantial management effort\ntoward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules\nand regulations of the SEC."}