{"url_path":"/sec/ymt/10-k/2026/item-4","section_key":"item-4","section_title":"Item 4 INFORMATION ON THE COMPANY","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":27677,"has_tables":true,"body_markdown":"ITEM 4.INFORMATION ON THE COMPANY\n\nA.HISTORY AND DEVELOPMENT OF THE COMPANY\n\nWe commenced our business\noperations in China under the brand name of Yi Cun Wang (易村网)\nin 2011 through Yi Cun Tong Da (Beijing) Network Technology Co., Ltd., which was established on August 1, 2011 and renamed as Beijing\nYimutian Xinnong Network Co., Ltd., or Yimutian Xinnong, on June 15, 2015. On June 15, 2015, we also changed our brand name\nto Yimutian. Beijing Douniu was established on May 28, 2015 under the name of Beijing Tian Rong Yi Network Technology Co., Ltd.\nand was changed to its current name on December 26, 2018. Since our inception in 2011, we have been led by our founders and directors,\nMr. Jinhong Deng, Mr. Zhijia Liu and Mr. Mi Zhou, who have nearly two decades of experience in both the agriculture industry\nand the internet technology industry. See “Item 6. Directors, Senior Management and Employees” for more information. We focus\non digitalizing China’s agricultural infrastructure and facilitating transactions of agricultural products from farmland to wholesale\nmarkets and business buyers and to maximize transaction efficiency.\n\nTo further facilitate offshore\nfinancing, we established Yimutian Inc. in the Cayman Islands on January 29, 2014. On February 25, 2014, Yimutian Inc. established\na wholly owned subsidiary, Yimutian Hong Kong Limited, or Yimutian HK, in Hong Kong as an intermediate holding company. Yimutian\nHK further established a wholly owned subsidiary, Beijing Yimutian Network Technology Co., Ltd., or Beijing Yimutian, on May 14,\n2014 in mainland China. Beijing Yimutian currently primarily engages in digital agricultural commerce services.\n\nOn May 30, 2014, we\nentered into a series of contractual agreements with Yimutian Xinnong and its shareholders then through our WFOE. These contractual\nagreements were subsequently replaced and superseded by updated agreements on November 8, 2017, March 27, 2020 and October 18,\n2023, respectively. On December 14, 2016, we entered into a series of contractual agreements with Beijing Douniu (which was under\nthe name of Beijing Tian Rong Yi Network Technology Co., Ltd.) and its shareholders then through our WFOE. These contractual agreements\nwere subsequently replaced and superseded by a series of updated contractual agreements on December 26, 2018 and October 18,\n2023, respectively.\n\nAs a result of the contractual\narrangements, we are considered the primary beneficiary of Yimutian Xinnong and Beijing Douniu for accounting purpose and have consolidated\ntheir operating results in our financial statements under U.S. GAAP, to the extent the conditions for consolidation of these companies\nunder U.S. GAAP were satisfied.\n\n66\n\nOn August 15, 2018,\nYimutian Xinnong established Guangdong Yimutian Network Technology Co., Ltd., or Guangdong Yimutian, which engages in the provision of\ndigital agricultural solutions, as its wholly-owned subsidiary.\n\nIn August 2025, we completed\nour initial public offering and listed our ADSs on the Nasdaq Global Market under the symbol “YMT”. We raised approximately\nUS$11.5 million in net proceeds from the issuance of new shares from the initial public offering after deducting underwriting commissions\nand the other offering expenses payable by us.\n\nOn December 8, 2025, we entered\ninto a securities purchase agreement with a certain institutional investor, pursuant to which we agreed to issue and sell up to an aggregate\nprincipal amount of US$30,000,000 senior convertible promissory note, or the Notes, which are convertible into our ADSs. On December\n8, 2025, we issued and sold to the Investor in the initial closing, a Note in the original principal amount of US$3,370,000. On March\n25, 2026, we issued and sold to the institutional investor the second Note in the original principal amount of US$1,500,000. In connection\nwith the Notes, the Company filed a registration statement on Form F-1 to registered the resale of the ADSs on March 2, 2026, which was\ndeclared effective by the SEC on March 5, 2026. Upon satisfaction of certain other conditions, the securities purchase agreement contemplates\nadditional closings of up to $25,130,000 in aggregate principal amount of additional Notes.\n\nEach Note will bear interest\nat a rate of 10% per annum. Interest is payable in arrears on the first calendar day of each calendar month, beginning January 1, 2026.\nUnless earlier converted, redeemed or extended, the Notes will mature on the one-year anniversary of their respective issuance dates.\nThe holder of Notes may convert all, or any part, of the outstanding principal of the Notes, together with accrued and unpaid interest,\nand any late charges thereon, at any time, at such holder’s option, into ADSs at the lower of (i) the conversion price, initially,\n$1.30 per ADS (subject to adjustment including for anti-dilution events and proportional adjustment upon the occurrence of any share\nsplit or subdivision, share dividend, share consolidation or combination and/or similar transactions, recapitalization or similar event,\nand we refer to such conversion price as adjusted as the “Conversion Price”) and (ii) the Market Price (as defined in the\nNotes) then in effect.\n\nThe Company plans to change the ratio of its American Depositary Shares (“ADSs”) to its Class A ordinary shares (the “ADS\nRatio Change”) from the current ratio of one ADS representing 25 Class A ordinary shares to 375 Class A ordinary shares, effective\non or around May 18, 2026, U.S. Eastern time. For the Company’s ADS holders, the ADS Ratio Change will have the same effect as a\n15-for-1 reverse split. Upon the Effective Date, ADS holders will be required to surrender and exchange every 15 existing ADSs then held\nfor one new ADS. JPMorgan Chase Bank, N.A., as the depositary bank for the Company´s ADS program, will arrange for the exchange.\nThe ADS Ratio Change will have no impact on the Company's underlying Class A ordinary shares, and no ordinary shares will be issued or\ncancelled in connection with the ADS Ratio Change.\n\nOur principal executive offices\nare located at 6/F, Building B-6, Block A, Zhongguancun Dongsheng Technology Campus, No. 66 Xixiaokou Road, Haidian District, Beijing\n100192, People’s Republic of China. Our telephone number at this address is +86 10 57086561. Our registered office in the Cayman\nIslands is located at the offices of Osiris International Cayman Limited, Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, PO\nBox 32311, Grand Cayman KY1-1209, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc.,\nlocated at 122 East 42nd Street, 18th Floor, New York, NY 10168.\n\nSEC maintains an internet\nsite that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the\nSEC on www.sec.gov. You can also find information on our website ir.ymt.com. The information contained on our website is not a part of\nthis annual report.\n\nB.BUSINESS OVERVIEW\n\nOver a decade, we have been\ndedicated to digitalizing China’s agricultural product supply chain infrastructure to streamline the agricultural product transaction\nprocess, making it efficient, transparent, secure, and convenient. We believe that technology plays a critical role in agriculture, contributing\nto increased productivity of the industry. Riding on the wave of agri-tech upgrade and leveraging our profound industry experience\nand accumulated market insights, we provide a comprehensive set of digital solutions to facilitate agricultural product transactions,\nranging from searching, matching, to transaction facilitation and settlement. Additionally, leveraging our industry experience and market\ninsights, we have ventured into the realm of smart farming and agricultural sourcing and trading, further broadening our commercialization\nchannels and animating our other business lines.\n\n67\n\nWe pride ourselves as the\ngo-to platform for merchants by leveraging our innovative technology and industry know-how. Technological capabilities run in our\ngenes ever since we commenced our operations. Our proprietary agricultural algorithm, being accurate and efficient to sort out matching\nproblems amongst buyers, sellers and massive SKUs, processes terabytes of information daily. Leveraging such insights, we are able to\nconstantly improve accuracy in transaction matching and facilitate our decision-making in conducting our new business venture including\nagricultural trading and sourcing and smart farming. We continue to pioneer innovation in the industry through expanding into broader\nareas of AI-powered applications to enhance merchants’ experience and streamline operations. For example, we utilize natural\nlanguage processing technologies adapted from open-source models to enhance the efficiency of collecting supply information from\nsellers, which elevates user experience on our platform. We are also developing an AI-powered customer service system, which leverages\nthe capabilities of third-party large language model. This model is instrumental in promptly acquiring insights into merchant demand\nthrough chat interactions, thereby enhancing our efficiency in transaction matching. Our insightful, accurate and up-to-date market\nquotation database, being the other building block of our success formula, is backed by our dedicated R&D team. About 54%\nof our R&D personnel were senior engineers with over 5 years of work experience as of December 31, 2025. Our large number\nof daily active merchants, acting with diverse characteristics and online behaviors, provide daily feedback and response in real time,\nwhich allows us to continually enrich the quotation database, extend the depth and breadth of our knowledge graph, amass the collective\nintelligence, and harness the power of technology.\n\nWe have achieved at-scale commercialization\nand have a track record of proven success. Our platform had over 39 million\nmerchants as of December 31, 2025. In 2025, our platform facilitated approximately 103 million\nsearches, 620 million calls and instant messages,\nand over 224 million potential transactions. As\nof December 31, 2025, the merchants presented approximately 22 million\nSKUs on our platform. Building upon our experience in transaction matching since our inception, we connected over 640,000 sellers and\nover 4.6 million buyers in 2025 in the agricultural product supply chain with precise, dynamic and up-to-date information related\nto agricultural product transactions. We further elevate merchant experiences with a full spectrum of services in advertising and client\ncontact privilege by providing the merchants with a suite of online tools. As of December 31, 2025, our geographic footprint covered\nover 340 cities and 2,800 counties, representing over 65% of the primary and secondary agricultural wholesale markets in mainland China.\nWe further entered into the agricultural sourcing and trading business in 2024, broadening procurement channels and sales channels for\nregional buyers and local agricultural producers and processors, respectively, and facilitating sales with reliable, real-time market\ninformation and consistent quality and timely deliveries, achieving greater transaction efficiency in the upstream of the agricultural\nproduct supply chain and leading to increased repeat purchases. As of the date of this annual report, we have established 61 offline\nstores in mainland China to trade agricultural products at cultivation and production sites with sellers and buyers.\n\n** **\n\nOur Business Model\n\nOur journey in the agricultural\nB2B industry began with a platform for information and matching services via Yimutian App. The evolution of the agriculture industry\npropelled by government policies, the permeability of online services and the changing composition and behavior of the participants in\nthe agriculture industry provided us with numerous opportunities. Driven by our mission to make every acre of farmland more valuable\nand harnessing the rising opportunities in the agriculture industry, we have upgraded our business model and successfully built our agricultural\nB2B platform.\n\nIn facilitating transactions\nof agricultural products, we have the following main lines of business: (i) digital agricultural commerce services for efficient\ncirculation of agricultural products, which are mainly offered via the Yimutian App, a versatile, merchant-friendly B2B e-commerce platform,\ncomplemented with offline, sales-assistance services via Douniu App, a platform matching offline transactions of agricultural products\nbetween sellers and wholesale buyers, (ii) agricultural sourcing and trading services that focus on reliable transaction services\nwith sellers at cultivation and production sites and buyers with unmet or underserved demand, (iii) smart farming business, where we\nselectively cultivate produce based on our industry insights and (iv) other digital agricultural solutions, which primarily entail consulting,\nbrand promotion and digital agricultural training programs.\n\nDigital Agricultural\nCommerce Services\n\nOur digital agricultural\ncommerce services are mainly offered via Yimutian App, complemented by sales-assistance services offered via Douniu App. Launched\nin 2015, Yimutian App is a versatile, merchant-friendly B2B e-commerce platform designated for sellers from agricultural production\nbases or factories and buyers scattered in the country. With distinct functions, Yimutian App is the front line of our online\ntraffic attraction to facilitate modular product posting, portray merchant profiles and distribute information to complete the transaction\nmatching. To complement the agricultural e-commerce business and address the downstream need of agricultural product transaction\non the wholesale level, we offer agricultural product sales-assistance services which connect sellers with wholesale\nstallholders via Douniu App. It complements Yimutian App with first-hand market information from the offline transactions\nand refines our omni-channel in reaching the great majority of fragmented merchants groups. We mainly monetize our digital agricultural\ncommerce services through membership services, value-added services and transaction services.\n\n68\n\nIn particular, our digital\nagricultural commerce services mainly benefit sellers of agricultural products and business buyers in the following ways:\n\n****\n\n*Information presentation. *Our\nplatform presents to sellers of agricultural products a wide array of market information and broader sales channels. To address information\nasymmetry in the agricultural product circulation process, we draw on our analytics capabilities and our on-site staff’s effort\nto collect information on the circulation of agricultural products from their respective cultivation sites to different marketplaces,\nand on the prices of agricultural products at stalls of different regional wholesale markets. We present sellers a panoramic view via\nour Apps on the circulation of the types of agricultural products that they intend to sell, so that they are well-informed to make\nimportant business decisions on where to sell, among others, which largely determine the return of their hard work in the past several months.\n\n*Direct purchase channel. *Yimutian\nApp is distinct from a traditional e-commerce platform, through which buyers are rarely provided the opportunity to express their\npreferences before placing an order. In addition to enabling sellers to efficiently sell agricultural products, Yimutian App adopts a\ndirect purchase channel, empowering business buyers to post their demand and specifications for a particular agricultural product so\nthat interested sellers could directly reach out to such buyers and deliver goods that meet their specific needs.\n\n*Targeted sales and marketing\nservices. *From the seller side, sellers can establish their online presence, and promote and sell products\ndirectly to interested buyers online. We offer sellers multiple marketing options, including membership programs and value-added services\nfor brand and product promotion, for which we charge membership fees and value-added services fees, at different price points in\norder to meet their various marketing needs and budgets. With our large buyer base and data insights into product review and rating,\nwe help sellers who offer agricultural products of exceptional quality build up their online presence and thereby gain online traffic.\nFrom the buyer side, we have built advanced algorithms into the Apps that we offer to optimize product selection for business buyers.\nLeveraging our profound insights into buyers’ preferences, which we accumulated in the past 15 years of operation, we train\nour algorithms to be capable of making accurate personalized recommendations to business buyers, which serve as an effective targeted\nmarketing tool for us to attract and retain business buyers. We also collaborate with stallholders at wholesale markets allowing them\nto use our Apps and broaden their communication channels to sellers of agricultural products.\n\n*Sales-assistance services. *Subject\nto the need of sellers, we provide sales-assistance services to sellers who wish to save time and efforts in traveling long distance\nfor the sale of agricultural products at wholesale markets by connecting them with wholesale stallholders and charge them transaction-based service\nfees.\n\n69\n\n*Product standardization guidelines. *The\nacceptance criteria for a particular type of agricultural product varies at wholesale markets of different regions in terms of size,\nshape, packaging and others. For example, stallholders in Beijing Xinfadi wholesale market might require paper packaging for agricultural\nproducts, while stallholders at wholesale markets in Shanghai typically prefer plastic packaging. Such difference is primarily due to\nlocal preferences of business buyers. We collect and present information on grading and standardization of agricultural products to sellers\nof agricultural products to save their cost for manually collecting market information and reduce the risks of their products being rejected\nby local markets. Our offline team regularly visits stalls at different wholesale markets, records and reports the specific requirements\nfor agricultural products from business buyers in different regions of mainland China. Capitalizing on our industry insights accumulated\nfrom both online and offline operations, we present refined information to sellers of agricultural products either via an interactive\nuser interface of our Apps or by our product specialists in person.\n\n*Transportation information. *Sellers\nof agricultural products can receive dispatch and pickup services through our nationwide truck drivers’ network, specifically,\nby connecting a large number of truck drivers who publish information about the transportation services they offer on our platform with\nsellers in need. Traditionally, it takes time for sellers of agricultural products to establish long-term relationship with reliable\ntruck drivers to transport their products to wholesale markets. The parties on both sides of the transaction are often unsophisticated\nin setting up the terms of service and end up suffering from losses when the drivers fail to deliver perishable products before market\ncloses regardless of contribution of fault. Sellers can save the cost to find quality truck drivers through the logistics services provided\nby third parties available on our platform. Sellers can be rest assured that their products are promptly delivered to wholesale markets.\nAdditionally, truck drivers that engage with our platform are benefited from receiving prompt payment, as delivery fees are typically\npaid around 48 hours upon delivery, as opposed to payment upon completion of sale under the conventional transaction model, which\nusually takes approximately a week.\n\n*Transaction security. *A\nmajor challenge in e-commerce transactions is that the quality of products may not meet the buyers’ expectations upon delivery.\nThe challenge is more prominent for agricultural products because they are typically perishable and product returns make them more likely\nto become unsaleable, and they are often sold in large quantities via our platform. To address such challenges, our platform is designed\nto allow business buyers on our platform to make specific requirements about the quality, quantity and other criteria of the products\nthey need to align the buyers’ and sellers’ expectations in advance to enable more successful transactions. To enhance the\noverall transaction security of buyers who transact online through our platform, buyers’ payments will not be released until they\nconfirm satisfactory receipt of the products purchased, and we also provide prompt after-sales customer service support in the event\nthey receive products with material defects. In addition, we encourage sellers on our platform to make a deposit that may be withdrawn\nto compensate buyers in cases of buyer dissatisfaction and complaints. Additionally, Douniu App helps sellers of agricultural products\nsecure their revenue within a shorter time frame upon satisfaction of their performance. To ensure transaction security, the payment\nprocess requires stallholders to upload their electronic accounting entries or pictures of accounting records after they complete a transaction\nwith their customers. Once a transaction is completed and recorded by stallholders, the sales proceeds will be disbursed to sellers after\ndeducting transaction-based service fees and other relevant fees in the sales process, such as labor cost and logistics service\nfee. We deploy on-the-ground staff to inspect the transaction processes to maintain the integrity of the payment settlement mechanism.\n\nRevenue from our digital\nagricultural commerce services is mainly derived from (i) membership services, (ii) value-added services, and (iii) transaction\nservices. In 2023, 2024 and 2025, revenue from digital agricultural commerce services was RMB170.9 million and RMB152.6 million\nand RMB135.3 million (US$19.4 million), respectively,\nrepresenting 91.1%, 94.6% and 96.2%, respectively, of\nour total revenue for the corresponding year.\n\nAgricultural Sourcing\nand Trading Services\n\nIn recent years, we recognize\nthat online e-commerce platforms face inherent limitations in fully encompassing the entire agricultural product supply chain, as\nwholesale-level transactions frequently occur offline. The offline agricultural product market is characterized by a dynamic environment,\nwith fluctuating market conditions and a complex transaction process that includes receipt, inspection, sorting, packing, and logistics.\nFurthermore, the market is often challenged by non-transparent pricing, lack of product standardization, variable supplier fulfillment\ncapabilities, and a general lack of post-sale services. These factors have contributed to a growing market demand for standardized\ntransaction services that offer transparent pricing and reliable and quality pre-sale and post-sale support.\n\n70\n\nIn 2024, we launched a new\nbusiness venture—agricultural sourcing and trading—to penetrate deeper in the supply chain under the brand name “Wolaicai,”\nwhich phonetically resembles “I purchase for you” in Chinese. Through the agricultural sourcing and trading business, we\nleverage our market insights accumulated from the Apps, as well as our extensive network of buyers and sellers, and directly make the\ndeal and complete the transaction between local agricultural producers and processors from cultivation and production sites and buyers\nwith regional or bulk procurement capacities in both online and offline environment, achieving greater transaction efficiency in the\nupstream of the agricultural product supply chain. By establishing stores around select cultivation and production sites, we deploy three\nto four sales representatives that procure fresh harvests from local farmers and cooperatives and sell those products within a short\ntime to business buyers who express interests in such products with specified standardization requirement. In addition, we also sell\nagricultural inputs such as fertilizers to sellers for their convenience and as a way to expand our revenue sources.\n\nThe new business venture\nprovides local agricultural producers and processors with real-time market information on product standardization and pricing, mitigating\nrisks arising from information asymmetry between individual brokers and the producers and processors. To buyers, the agricultural sourcing\nand trading business shortens the business process for buyers with regional or bulk procurement capacities, reducing their costs in relation\nto site visits and the risks agricultural product losses due to extended storage.\n\nAdditionally, our robust\nnetwork of sales representatives that function as local and regional brokers plays a crucial role in this business line. These brokers\nare responsible for managing procurement at production sites, ensuring that the products meet the required standards and are delivered\non time. Their expertise and local knowledge enable us to source high-quality products consistently, further enhancing the reliability\nof our services.\n\nThe integration of our agricultural\nsourcing and trading services with our existing offerings, such as the Yimutian App, allows us to leverage vast amounts of data on buyer\nbehavior and market trends. This data-driven approach enables us to identify emerging market opportunities and tailor our sourcing\nstrategies accordingly. By understanding the specific needs of our buyers, we can optimize our procurement processes and offer competitive\npricing, thereby attracting more merchants to our platform. To ensure the quality of our personnel and sustainability of this business\nline, we have implemented a sales representative evaluation mechanism, retaining only the sales representatives with stellar performance\nin the longer term. We believe that a stable and high quality workforce would ultimately contribute to a high profit margin for this\nbusiness line.\n\nThe diagram below illustrates\nour agricultural sourcing and trading services and our core capabilities:\n\n71\n\nSmart Farming\n\nRiding on years of experience\nin serving buyers and sellers to facilitate transactions of agricultural products, we have accumulated valuable knowledge, information\nand industry know-how on agricultural product categories, production regions, market dynamics, upstream and downstream sales cycle,\nand supply and procurement trends. We have also fostered deep relationships with various upstream and downstream participants in the\nagricultural product supply chain. Drawing on such knowledge and resources, we commenced smart farming business in 2023 through collaboration\nwith local business partners to selectively cultivate produce in order to capture new business opportunities and monetize on our actionable\nindustry insights and deep connections with key participants along the agriculture supply chain. As the business was in the trial-and-error stage,\nrevenue generated from smart farming was immaterial in 2023. Our involvement in smart farming has provided us with valuable insights\ninto the upstream agricultural product supply chain, which have been instrumental in identifying potential monetization channels that\nwe plan to explore and develop in the future.\n\nOur smart farming business\nis closely integrated with our agricultural sourcing and trading services as well as our digital agricultural commerce services, creating\nsignificant synergies that enhance the overall efficiency and sustainability of our operations. Leads and orders from our Apps and sales\nrepresentatives from agricultural sourcing and trading business ensure a steady demand for the products cultivated through our smart\nfarming initiatives. This information helps us identify high-demand SKUs and optimize our production processes to meet market needs\nefficiently.\n\nAs we are availed of each\nof the key steps along the supply chain, from product selection and planting to marketing, distribution, and direct sales through our\nsmart farming business, our digital agricultural commerce services can be further refined and enhanced by collecting first-hand accounts\nof transaction data and behaviors and analyzing evolving merchant needs. This synergy among our business lines creates a powerful growth\nengine, ensuring a consistent supply of high-quality products, meeting market demand efficiently, and driving sustainable revenue\ngrowth.\n\nOther Digital\nAgricultural Solutions\n\nWe pride ourselves for the\ninsights and industry know-hows that we accumulated through our exemplary twelve years of operation. Such insights not only\nfacilitate our optimization of digital agricultural commerce business, but also enable us to pursue other business opportunities, ranging\nfrom consulting and brand promotion to digital agriculture training programs. In 2018, we developed and launched our proprietary digital\nagricultural solution platform purposefully built to analyze the current market dynamics.** **This powerful platform presents\nreal-time analyses and dynamic price related information throughout the agricultural product circulation process via a dynamic interface.\nIn particular, market information available thereon includes (i) the trend of supply and demand at different local wholesale markets,\n(ii) the geographic location of purchase channels, (iii) the types and characteristics of the purchase channels, (iv) the\nsupply and distribution information of production regions, (v) the competitive landscape of production regions, and (vi) the\nchanges in competitive landscape of production regions. With our broad geographic coverage and sustainable seller and buyer network,\nthe digital agricultural solution platform continues to accumulate broad and in-depth information on location of transaction, time\nof transaction, associated merchants and products, and prices and specifications of agricultural products, among others.\n\n*Consulting. *The\nbroad and in-depth analyses from the platform have helped us streamline and enhance the operations of our digital agricultural commerce\nbusiness. As such, we are empowered to match buyers more accurately with sellers of agricultural products meeting buyers’ specifications\nand enable sellers to increase the market recognition of their brands and harness better opportunities in selling their products to downstream\nbuyers on better price terms. Our technology capabilities and industry know-how have also addressed the policy objectives in revitalizing\nrural regions of mainland China and developing the agriculture industry through digitalization and have been recognized by local governments\nin mainland China. With the mission to propel the digitalization of the agriculture industry, we have provided Ministry of Commerce of\nthe PRC with pricing trend and supply and demand information on agricultural products drawing on our distinguished capability in comprehensively\nanalyzing market information.\n\n72\n\n*Brand promotion. *With\nour profound insights into buyers’ preferences and the application of our proprietary knowledge graphs in respect of the circulation\nof agricultural products, we help local governments in mainland China to build and promote their local agricultural product brands through\noffline conferences, online advertising and promotion. As such government-sponsored brands attain an increasing level of market\nrecognition, local governments have more pricing power over their locally grown products, thereby generating higher profits and more\nreturns for local farmers and other sellers of agricultural products.\n\n*Digital agriculture\ntraining programs. *With the aim to support local governments in developing the agriculture industry, we pilot\na series of digital agriculture training programs under Project Lighthouse, which are training programs offered to farmers with scaled\nbusiness, agricultural production bases, agricultural production cooperatives and brokers of agricultural products to educate them on\nhow to efficiently broaden their sales channels by selling their products through online platform such as ours. The main objectives of\nProject Lighthouse are to promote rural economic development and foster the digitalization of the agriculture industry from the upstream\nof the agricultural product supply chain by educating millennial farmers in different agricultural production bases how to better utilize\nthe internet for business purpose. Since we launched Project Lighthouse in 2020, we have hosted over 100 training programs across mainland\nChina, and the footprints of Project Lighthouse have covered various rural regions of Guangdong, Hunan, Sichuan and Inner Mongolia, among\nothers. Building upon the accolades that we earned from the recipients of the training programs, we not only spread practical know-how on\nthe usage of digital platforms to help sellers of the agricultural products in achieving financial gains, but also effectively broaden\nour merchant acquisition channels and improve merchant acquisition efficiency.\n\nRevenue from other digital\nagricultural solutions is mainly derived from technology services to local governments. In 2023, 2024 and 2025, revenue from other digital\nagricultural solutions was RMB17.6 million, RMB8.7 million and RMB5.3 million\n(US$0.8 million), respectively, representing 9.4%, 5.4% and 3.8%,\nrespectively, of our total revenue for the corresponding year.\n\n** **\n\nValue We Bring to Merchants\n\nOur agricultural B2B platform\nserves various participants in the agricultural product supply chain comprising both sellers and buyers of agricultural products. The\nseller side primarily includes farmers, agricultural production bases, agricultural production cooperatives, food processing manufacturers\nand brokers, while the buyer side mainly includes business buyers such as wholesale buyers, restaurants and grocery stores. We act as\na bridge that connects sellers and buyers in the agricultural product supply chain by providing them with a full spectrum of services,\nfrom presentation of productions and marketing information, product standardization, marketing, researching and matching of agricultural\nsupply and demand, to coordinating transportation of products and settling sales proceeds, in order to resolve information asymmetry,\nfacilitate agricultural product transactions and maximize transaction efficiency.\n\nWith our purpose-built technology\nsolutions and extensive industry insights, we are poised to enhance efficiency in the circulation of agricultural products. We strive\nto achieve a virtuous cycle through offering quality services to industry participants throughout the agricultural product supply chain\nand further honing our expertise in the agricultural B2B industry leveraging our data insights, thereby providing more personalized and\nsatisfactory services to merchants and solidifying our market leading position.\n\nValue to sellers\nof agricultural products\n\nWe deliver benefits to sellers\nof agricultural products, including farmers, agricultural production bases, agricultural production cooperatives, food processing manufacturers\nand brokers of agricultural products, in the following ways:\n\n●*Nationwide agricultural\nproduct circulation network*. Our platform provides sellers of agricultural products with\na broad and diverse agricultural product circulation network on a nationwide basis and connects\nthem with numerous buyers in various locations.\n\n●*Transparent and real-time\ninformation*. Real-time information on supply, demand and pricing makes agricultural product\ntransactions transparent and helps farmers maximize their economic interests. The insightful\nknowledge graph empowers sellers to timely identify the most suitable markets with the highest\ndemand and best prices of agricultural products, especially with respect to crops that are\nharvested only during a particular season of the year. Therefore, sellers can complete transactions\npromptly and at competitive prices, reducing the risk of losses in situations where the agricultural\nproducts begin to perish due to prolonged selling window and potentially increasing sellers’\nfinancial returns.\n\n73\n\n●*Valuable sales and marketing\nservices*. We offer sales and marketing services via a suite of online tools, among others,\nwhich enable sellers to effectively promote their products targeting buyers with such demand\nvia online chats, among other channels, saving a substantial amount of time and resources\nduring the agricultural product transaction process.\n\n●*Secure and reliable transaction\nprocess*. Our platform offers a secure and reliable payment settlement process to ensure\nsellers are paid promptly after the sale of their products.\n\nValue to buyers\nof agricultural products and stallholders\n\nWe collaborate with and support\nstallholders at wholesale markets to address the needs of business buyers. We deliver benefits to business buyers and stallholders in\nthe following ways:\n\n●*Optimal and stable buying\noptions*. Capitalizing on our industry insights, our platform presents stallholders and\nbusiness buyers price quotation and other market information on numerous agricultural products,\nallowing them to compare prices and purchase the exact products that they need. Moreover,\nbusiness buyers, including restaurants and grocery stores, can timely secure alternative\nsupply channels should they suffer from temporary or permanent supply shortage.\n\n●*Product standardization\nguidelines*. With our profound insights into local wholesale markets, we have established\nguidelines for classification of agricultural products, which we adopt to guide sellers during\nthe cultivation stage, so that the agricultural products they sell will meet the standards\nprescribed by local wholesale markets. As such, stallholders and business buyers can easily\nprocure agricultural products that meet their specifications.\n\n●*Disintermediation and transparency*.\nOur platform effectively reduces vertical layers of intermediaries throughout the industry\nchain by connecting sellers and buyers of agricultural products via the platform, and in\nturn reduces the costs in relation to the circulation of agricultural products, such as commission\nfees traditionally paid to intermediaries and communication costs spent to physically visit\ndifferent wholesale markets to identify the best prices.\n\n●*Payment security*. Our\nplatform not only provides convenience to buyers as they are not required to physically examine\nthe agricultural products on sale, but also ensures security of payments after-sale by releasing\nthe payment only upon buyers’ confirmation of receipt and satisfaction of the products\nthey ordered.\n\nPricing Strategies\n\nWe employ different pricing\nstrategies leveraging our industry insights and depending on the features of services offered.\n\nAt the outset, we mainly\nconsider our operating expenses, market condition and characteristics of the agricultural B2B industry when making pricing decisions.\nOn Douniu App, for example, we charge sellers of agricultural products relatively higher fees than those charged to stallholders at wholesale\nmarkets, because sellers of agricultural products typically heavily rely on our services only during harvest seasons, while stallholders\nare in need of our services all year round. Additionally, depending on how our merchant base receives our services, we routinely adjust\npricing for profit maximization.\n\nGenerally, we offer sellers\nmemberships of digital agricultural commerce services and sales and marketing value-added services at various fixed price tiers\nleveraging our in-depth analyses of merchants’ and buyers’ profiles and predictions of their potential transactions\nvolumes. In our agricultural sourcing and trading business, we determine the price of products we procure and the price of products we\nsell after considering factors including market price, demand, quality of products, and a reasonable profit margin, among other factors.\nFor value-added services offered through online tools that are developed and tailored to meet different demands from merchants,\nwe typically price them based on the features offered. For smart farming business, we monetize mainly through the sales of the agricultural\nproducts, the price of which are typically subject to market conditions.\n\n74\n\nResearch and Development\n\nWe believe research and development\nis the engine propelling every stage of our business development. As of December 31, 2025, we had 50\nemployees focusing on research and development. The R&D team is led by technology veterans with abundant work experience in\nthe agricultural and technology industries and is tasked to enhance technology infrastructure, conduct quality testing, develop value-added services,\nconduct front-end research and development such as designing smartphone applications, websites and mini programs, manage customer\nrelationships and develop marketplace technologies. About 54%\nof our R&D staff had more than 5 years of work experience as of December 31, 2025. Our R&D priority is to enhance user\nexperience, user stickiness and transaction volume by developing advanced algorithms in knowledge graphs and AI technology.\n\nSales and Marketing\n\nWe market our platform both\nonline and offline. We employ a variety of marketing activities to promote our brands and services. Our online marketing activities mainly\nconsist of displaying paid marketing and promotional materials on social media platforms and search engines. Our offline marketing activities\ninclude promotions via traditional media, such as outdoor advertisements, public relations activities, as well as sponsored events to\nincrease our visibility and promote our brand. Project Lighthouse, under which we partner with local governments to offer training programs\nto farmers, agricultural production bases, agricultural production cooperatives and brokers, has helped local governments develop their\nlocal economy and earned accolades from mainstream media. For more information on our collaboration with local governments through Project\nLighthouse, please see “—Corporate Social Responsibilities—Project Lighthouse.” We also locally deploy offline\nmarketing personnel mainly in Zhengzhou and Wuhan, who are responsible for the marketing activities specific to each type of services\noffered by us, aiming at converting local sellers and buyers of agricultural products into our platform users through free educational\nprograms.\n\nWe believe that our one-stop platform,\nwith a wide variety of services and products offered thereon and positive merchant experience, makes us a reputable brand and is our\nbest and most effective marketing tools. In 2023, 2024 and 2025, we acquired over 42% of new merchants on our platform through word-of-mouth marketing,\nthanks to our reputable and trusted brand. Despite the acquisition cost of such merchants is close to nil, such merchants contribute\ngreat value to our business. They often interact with our platform over a long-term and spend more time on our platform than merchants\nacquired via other means.\n\nTechnology\n\nTechnology Infrastructure\n\nTechnology infrastructure\nunderpins our quality and merchant-friendly services and features. We have purposefully designed our superior technology infrastructure\nto be versatile for upgrades and ongoing maintenance. As of December 31, 2025, we had constructed over 339\nmodules which are standardized and versatile for configurations and combinations in various business scenarios. Capitalizing on our proprietary\ncross-platform front-end engine, we are capable of developing programs that are highly compatible across various online platforms.\nThe engine is equipped to process and analyze programming codes and quickly launch our mini programs tailored for different major online\nplatforms, while ensuring that such programs can offer merchants a smooth experience. Our efficient development process is manifested\nby a relatively short application update cycle, which is typically between one to two weeks. We have further streamlined our operations\nby adopting multi-cloud servers to stabilize connectivity and automate the local deployment process.\n\n75\n\nDeep Learning\n\nWe leverage deep learning\nto deliver an optimized experience for merchants using our platform. In 2019, we formed a specialized algorithms team, which has achieved\nsignificant progress in intelligent customized recommendation, among other key breakthroughs that improve our operational efficiency.\nWe have developed knowledge graphs that help us better analyze the relationships among agricultural product categories, agricultural\nproduction bases, wholesale markets, buyers and sellers of agricultural products. The knowledge graphs have helped us more precisely\nmatch buyers and sellers of agricultural products, select the optimal transportation routes for agricultural products, become better\ninformed on popular products and consumption trend every day, and provide more reliable and practical recommendations to sellers\nof agricultural products and guide them to attain financial gains.\n\nDrawing on our deep understanding\nof sellers and buyers on our platform, our intelligent customized recommendation is now equipped to quickly and accurately identify the\nproducts that merchants intend to sell or purchase. In addition, we use our proprietary deep learning model and other industry-leading algorithmic\nmodels to interpret texts, graphics and videos of agricultural products and therefore enhance the efficiency and precision of customized\nrecommendations when a merchant conducts a search. We developed two engines in traffic attraction and merchant engagement in a multi-media context,\nnamely, (i) content recommendation engines and (ii) voice call robots. Content recommendation engines distribute pictures and\ntexts based on merchant profiles, which are portrayed via our full-rounded software development kit tools with transaction preference\nand historical records. We further expand into voice call robots with automatic speech recognition, neural text to speech and natural\nlanguage understanding technologies. These allows our sales robots instantly grab merchants’ needs and respond with the best solutions.\nThe functionality of our sales robots has been validated by their approximately 5.8 million outbound calls in 2025. Additionally,\nwe are in the process of enhancing our capabilities in AI to integrate it with our offering stacks, such as multimedia content generation\nin product promotion, etc.\n\nData Analytics\n\nOur data analytics capabilities\nunderpinning our digital agricultural commerce services have enabled easy access to transparent market information for both sellers and\nbuyers and facilitated transaction matching between them with efficiency, riding on our real-time analyses and accurate prediction\non the pricing trend and supply and demand of various produce and agricultural by-products. Leveraging our profound industry insights,\nwe also develop and deploy our proprietary digital agricultural solution platform to provide accurate price predictions, generate detailed\nreports on pricing and circulation of agricultural products from farmland to different marketplaces. Drawing on our analysis of activities\nconducted through our platform, coupled with external data collected from public sources, the digital agricultural solution platform\nis equipped to present:\n\n●key agricultural production\nbases for major agricultural products and their supply capabilities, including the type of\nthe respective product;\n\n●the flow of major agricultural\nproducts between key agricultural production bases and key wholesale markets, and demand\nfor a particular product among different wholesale markets;\n\n●the trend of supply and demand\nfor major agricultural products with comparison to the same period of last year;\n\n●a broad range of price-related information\nin connection with major agricultural products supplied by different agricultural production\nbases and sold to different wholesale markets, with comparison to the highest and lowest\nprices in the current and previous years;\n\n●business profiles of top sellers;\nand\n\n●geographic concentration of\nbuyers.\n\nFor more information on the\nservices we provide through the deployment of our digital agricultural solution, please see “Our Business Model—Other Digital\nAgricultural Solutions.”\n\n76\n\nIntellectual Property\n\nIntellectual property rights\nare fundamental to our business, and we devote significant time and resources to their development and protection. We rely on a combination\nof patent, trademark, copyright and domain name protection in mainland China, as well as confidentiality procedures and contractual provisions\nto protect our intellectual property. In general, our employees must enter into a standard employment contract which includes a clause\nacknowledging that all inventions, trade secrets, developments and other processes generated by them on our behalf are our properties,\nand assigning to us any ownership rights that they may claim in those works. Despite our precautions, however, third parties may obtain\nand use intellectual property that we own or license without our consent. As of the date of this annual report, we had not found any\nmaterial breaches of our intellectual property rights. However, unauthorized use of our intellectual property by third parties and the\nexpenses incurred in protecting our intellectual property rights from such unauthorized use may adversely affect our business and results\nof operations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We may\nnot be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.”\n\nAs of December 31, 2025,\nour significant subsidiaries owned 250 registered trademarks\nin various categories and registered with the China Trademark Office and had 17\npatents registered with the State Intellectual Property Office of China in mainland China. In addition, our significant subsidiaries\nhad 86 software copyrights and 8\nother copyrights registered with the State Copyright Bureau of China, and owned 33\ndomain names as of December 31, 2025.\n\nInformation Security and\nPrivacy\n\nWe are committed to protecting\npersonal information and privacy of all users of our online platform, including sellers and buyers of agricultural products, stallholders\nat wholesale markets, truck drivers and other third parties. We collect personal information and other data from our users and use such\ndata during our operations only with their prior consent. We have established and implemented policies across our platform on data collection,\nprocessing and usage to safeguard the data we collect, and we regularly review these polices and their implementation.\n\nWe follow strict procedures\nin collecting, transmitting, storing and using user data pursuant to our data security and privacy policies. Before we collect any user\ndata, we must notify users that we are collecting their data, explain why the data is being collected and how it will be used, and obtain\nthe users’ consent to collect the relevant data. We provide our users a copy of our privacy policy to inform them of the scope\nand purpose of the data we collect. Once collected, user data is transmitted and stored using encrypted and desensitized methods. We\ngrant classified access to confidential personal data only to employees with relevant authorizations with strictly defined and layered\naccess to our data and systems.\n\nWe maintain a comprehensive\ndata security program to protect the confidentiality and integrity of our data across all aspects of data collection and processing.\nWe utilize a variety of technologies to protect our servers from fire, physical shock, theft and other forms of physical harm. On the\nback end, our servers, databases and information technology networks utilize firewalls, anti-DDoS, intrusion prevention systems, real-time server\nmonitoring and other network cybersecurity technologies. We also utilize a wide range of protective technologies at the application level,\nincluding security access code systems, web application firewalls and simulated hacking tests. We back up user and historical data on\na regular basis using “hot” backup systems to minimize the risk of data loss or leakage. We also conduct frequent reviews\nof our backup and data recovery systems, including through regular disaster recovery testing, to ensure that our systems are operating\nproperly.\n\nIn the course of our operations,\nwe have from time to time been subject to regulatory scrutiny regarding our compliance of data privacy and protection rules. We are committed\nto cooperating with the regulatory authorities to identify and rectify any issues. For more information about the data privacy and security\nrisks that we face, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We\nmay be subject to complex and evolving laws and regulations regarding cybersecurity, data privacy and data protection. Actual or alleged\nfailure to 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\n77\n\nCorporate Social Responsibilities\n\nWe believe a critical component\nof our success has been our corporate culture, which focuses on development in the long run and not be blinded by immediate interests.\nOur achievements and initiatives in the area of corporate social responsibility include the following:\n\nProject Lighthouse\n\nWith the aim to support local\ngovernments in developing the agricultural sector, we have been offering training programs under Project Lighthouse to farmers with scaled\nbusiness, agricultural production bases, agricultural production cooperatives and brokers to educate them on how to efficiently broaden\ntheir sales channels by selling their products through online platform such as ours. The main objectives of Project Lighthouse are to\npromote rural economic development and foster the digitalization of the agriculture industry from the upstream of the agricultural product\nsupply chain by educating millennial farmers in different agricultural production bases how to better utilize the internet for business\npurpose. Since we launch Project Lighthouse in 2020, we have hosted over 100 training programs across mainland China, and the footprints\nof Project Lighthouse have covered various rural regions of Guangdong, Hunan, Sichuan and Inner Mongolia, among others. Building upon\nthe accolades that we earned from the recipients of the training programs, we not only spread practical know-how on the usage of\ndigital platforms to help sellers of the agricultural products in achieving financial gains, but also effectively broaden our merchant\nacquisition channels and improve merchant acquisition efficiency.\n\nPoverty Alleviation\nThrough E-Commerce\n\nSince 2017, we have integrated\na special poverty alleviation channel located on the front page of the interactive display of Yimutian App. The special channel is designed\nto showcase the agricultural products and their respective suppliers who are from impoverished counties of mainland China. Drawing on\nour broad merchant base and high daily merchant traffic, the poverty alleviation channel is able to capture tens of thousands of visits\nevery day. In addition, we have collaborated with local governments of impoverished counties and co-host Poverty Alleviation\nDay to expand the market exposure and transaction opportunities of agricultural products originated from impoverished counties since 2017.\n\nSeasonality\n\nHistorically, user activities\non our platform were relatively less frequent during the Chinese New Year holiday in the first quarter of each year and the summer months\nmainly due to the impact of natural disasters such as flood in cultivation sites and key logistics nexuses for the circulation of agricultural\nproducts. In addition, there is typically a decline of fruit procurement in July and around the Chinese New Year, while the procurement\namounts during spring and fall are generally higher than other periods of a year.\n\nCompetition\n\nAlthough there is no single\ncompetitor that can provide the broad range of services like us, we face competition in each of our business lines, and there may be new\nentrants emerging, in each of our business lines, and these market players compete to attract, engage and retain sellers and buyers. Some\nof these competitors are backed by internet giants in mainland China. Key competitive factors among internet platforms for agricultural\nB2B e-commerce services are scale and breadth of services provided, pricing, technology and data, and execution capabilities. Key\ncompetitive factors among internet platforms for agricultural wholesale services are scale and breadth of services provided, pricing,\ntechnology and data, and execution capabilities.\n\nEach of our business lines\nis subject to rapid market change and the potential development of new business models and the entry of new and well-funded competitors.\nOther companies may also enter into business combinations or alliances that strengthen their competitive positions. Some of our current\ncompetitors have, and future competitors may have, greater financial, technical or marketing resources, longer operating histories, greater\nbrand recognition or larger consumer bases than we do. Such development may further intensify the competition of the agricultural B2B\nindustry in mainland China.\n\nInsurance\n\nWe maintain social welfare\ninsurance for our employees in accordance with the laws and regulations of mainland China in all material aspects. We believe that our\ninsurance coverage is in line with the industry practice and is adequate to cover our liabilities for our employees.\n\n78\n\nRegulations\n\nWe operate in an increasingly\ncomplex legal and regulatory environment. We are subject to a variety of PRC laws, rules and regulations across numerous aspects of our\nbusiness. This section sets forth a summary of the principal PRC laws, judicial interpretations, rules and regulations relevant to our\nbusiness and operations in mainland China.\n\n*Regulations Relating to\nForeign Investment*\n\nOn March 15, 2019, the\nNational People’s Congress of the PRC, or the NPC, promulgated the Foreign Investment Law of the PRC, or the Foreign Investment\nLaw or the FIL, taking effect on January 1, 2020, and replaced the Wholly Foreign-owned Enterprises Law, the Sino-foreign Equity\nJoint Ventures Law, and the Sino-foreign Cooperative Joint Ventures Enterprise Law. The Foreign Investment Law defines foreign investment\nas any investment activity directly or indirectly carried out in the PRC by one or more foreign natural persons, enterprises or other\norganizations, or the foreign investor(s), and specifically stipulates four forms of investment activities as foreign investments, namely,\n(i) establishment of a foreign-invested enterprise in the PRC by a foreign investor, either individually or collectively with\nany other investor; (ii) obtaining shares, equities, property shares or any other similar rights or interests of an enterprise in\nthe PRC by a foreign investor; (iii) investment in any new project in the PRC by a foreign investor, either individually or collectively\nwith any other investor; and (iv) investment in any other means stipulated under laws, administrative regulations or provisions prescribed\nby the State Council. However, the Foreign Investment Law does not explicitly refer to the contractual arrangements under the “variable\ninterest equity” structure as a form of foreign investment. The Foreign Investment Law stipulates that foreign investment includes\n“foreign investors invest in the PRC through any other means under laws, administrative regulations, or provisions prescribed by\nthe State Council.” It is possible that future laws, administrative regulations or provisions of the State Council may specify contractual\narrangements as a form of foreign investment, and hence it is uncertain as to whether our contractual arrangements will be recognized\nas foreign investment. The Foreign Investment Law further provides that the organizational form, organizational structure and their activities\nof foreign-invested enterprises shall be governed by the provisions of the PRC Company Law, the PRC Partnership Enterprise Law and\nother relevant laws.\n\nThe Foreign Investment Law\nstipulates that China implements a management system of pre-establishment national treatment plus a negative list to foreign investment\nand the government generally will not expropriate foreign investment, except under special circumstances, in which case it will provide\nfair and reasonable compensation to foreign investors. Foreign investors are barred from investing in prohibited industries on the negative\nlist and must comply with the specified requirements when investing in restricted industries on that list. When a license is required\nto enter a certain industry, a foreign investor must apply for one, and the government must treat the application the same as one by a\ndomestic enterprise, except where laws or regulations provide otherwise. In addition, foreign investors or foreign-invested enterprises\nare required to file information reports and foreign investment in certain sensitive industrial sectors shall be subject to the national\nsecurity review. In addition, the Implementation Rules of the Foreign Investment Law of the PRC, taking effect on January 1, 2020,\nclarifies that the Foreign Investment Law and its implementation rules also apply to investments by foreign-invested enterprises\nin China.\n\nOn December 26, 2019,\nthe Supreme People’s Court of China promulgated the Interpretations on Certain Issues Regarding the Application of Foreign Investment\nLaw, taking effect on January 1, 2020, pursuant to which “investment contracts” are defined as the agreements formed\nas a result of direct or indirect investments in China by foreign investors, namely, foreign individuals, foreign enterprises or other\nforeign organizations, including contracts for establishment of foreign investment enterprises, share transfer contracts, equity transfer\ncontracts, contracts for transfer of property or other similar interests, contracts for newly-built projects and etc. Any claim to\ninvalidate an investment contract will be supported by courts if such investment contract is decided to be entered into for purposes of\nmaking foreign investments in the “prohibited industries” under the negative list or for purposes of investing in the “restricted\nindustries” without satisfaction of conditions set out in the negative list. However, the foregoing judicial interpretation does\nnot explicitly construe the contractual arrangements under the “variable interest equity” structure as “investment contracts”\nfor the purpose of the Foreign Investment Law.\n\n79\n\n*Regulations Relating\nto Value-added Telecommunication Services*\n\nLicenses\nfor Value-added Telecommunications Services\n\nThe Telecommunications Regulations\nof the PRC, or the Telecommunications Regulations, provides a regulatory framework for telecommunications services providers in the PRC,\nwhich was promulgated by the State Council on September 25, 2000 and last amended on February 6, 2016, taking effect as of the\ndate of its promulgation. The Telecommunications Regulations classify telecommunications services into two categories, namely basic telecommunications\nservices and value-add telecommunications services. According to the Catalog of Telecommunications Businesses attached to the Telecommunications\nRegulations on September 25, 2000 and last amended by the Ministry of Industry and Information Technology, or the MIIT, on June 6,\n2019, information services provided via public communication network or Internet, and online data processing and transaction processing\nfall within value-added telecommunications services. The Telecommunications Regulations require value-added telecommunications\nservices providers to obtain an operating license from the MIIT or its provincial-level counterparts prior to the commencement of\ntheir operations.\n\nThe Administrative Measures\non Internet Information Services, or the Internet Information Measures, was promulgated by the State Council on September 25, 2000\nand last amended on December 6, 2024, taking effect on January 20, 2025. According to the Internet Information Measures, internet\ninformation services refer to services that provide internet information to online users, and are categorized as either commercial or\nnon-commercial internet information services. Commercial internet information services operators, which provide information through\nInternet to online users with charge of payment, shall obtain a license for value-added telecommunications services, or the VATS\nLicense, covering the business scope of internet information service from the government agency, namely Internet Content Provider License,\nor the ICP License, prior to engaging in any commercial internet information services business within China. In addition, if the internet\ninformation services involve provision of news, publication, education, medicine, health, pharmaceuticals, medical equipment and other\nservices that statutorily require approvals from other additional government authorities, such approvals must be obtained before applying\nthe ICP License. Furthermore, the Internet Information Measures and other measures also forbid Internet activities that constitute the\ndissemination of any content that propagates obscenity, pornography, gambling and violence, incites the commission of crimes or infringes\nupon the lawful rights and interests of third parties. If an internet information service provider detects information transmitted on\ntheir system that falls within the specifically forbidden scope, such provider must terminate such transmission, delete such information\nimmediately, keep records and report to the responsible government authorities. Breach of any of these operational requirements by an\ninformation service provider will result in the revocation of its ICP license and, in serious cases, the shutting down of its website.\nFor clearance, according to the Administrative Provisions on Mobile Internet Application Information Services, which was promulgated by\nthe CAC on June 28, 2016, recently amended on June 14, 2022, taking effect on August 1, 2022, the provision of information\nservices via mobile apps is subject to the laws and regulations of mainland China governing internet information services.\n\nThe Administrative Measures\nfor Telecommunications Business Operating Permit, or the Telecom Permit Measures, was promulgated by the MIIT on March 5, 2009 and\namended on July 3, 2017. The Telecom Permit Measures categorize telecom operating licenses into two types for operators in the PRC,\nnamely, licenses for basic telecommunications services and the VATS License. The operation scope of the license shall specify in detail\nthe permitted activities that the licensed enterprise can engage in, and the approved telecommunication services operator shall conduct\nits business within the operation scope listed in its VATS License. In addition, a telecom service operator that has obtained a permit\nfor telecom service operation shall participate in annual inspection which is conducted by the MIIT or its provincial level counterparts.\nThe holder of a VATS License is required to obtain approval from the original permit-issuing authority for any change of its shareholders.\nMoreover, the new version of the Telecom Permit Measures issued by the MIIT on July 3, 2017 removed the previous requirement of requiring\nany enterprise holding the license for operation of trans-regional value-added telecommunications business to go through the\nrecord-filing formalities.\n\nTo comply with the laws and\nregulations, Yimutian Xinnong has obtained a value-added telecommunications business license for its electronic data interchange\nbusiness, or EDI License, which will remain effective until January 4, 2031, and a value-added telecommunications business license\nfor internet information services, or ICP License, which will remain effective until November 19, 2029. Beijing Douniu has obtained an\nICP License which will remain effective until April 25, 2029.\n\n80\n\nRestrictions\non Foreign Investment in Value-added Telecommunications Services\n\nAccording to the latest Special\nAdministrative Measures for the Entry of Investment (Negative List), or the Negative List, promulgated by the Ministry of Commerce, or\nthe MOFCOM, and the National Development and Reform Commission, or the NDRC, taking effect on November 1, 2024, the provision of\nvalue-added telecommunications services falls in the restricted industries and the percentage of foreign ownership cannot exceed\n50% (except for e-commerce, domestic multi-party communication, store-and-forward and call center).\n\nThe Regulations for the Administration\nof Foreign-Invested Telecommunications Enterprises (2022 revision), or the FITE Regulations, was promulgated by the State Council\non December 11, 2001 and was last amended on March 29, 2022. According to the newly amended FITE Regulations, although it remains\nunchanged that foreign investors shall not acquire more than 50% of the equity interest of such foreign-invested telecommunications\nenterprise (except as otherwise provided by the State), the prerequisite of stringent performance and operational experience for foreign\ninvestor(s) of such foreign-invested telecommunications enterprise engaging in value-added telecommunication services is\nremoved and no longer required. The foreign-invested telecommunications enterprises that meet these requirements must obtain approvals\nfrom the MIIT or its authorized local branches, before launching the value-added telecommunications business in the PRC.\n\nOn June 19, 2015, the\nMIIT issued the Circular on Loosening the Restrictions on Shareholding by Foreign Investors in Online Data Processing and Transaction\nProcessing Business (Operational E-commerce), or the Circular No. 196. Circular No. 196 allows a foreign investor to hold 100% of the\nequity interest in a PRC entity that provides online data processing and transaction processing services, or the operational e-commerce.\nIn respect of the application for a permit for any foreign-invested enterprise engaging in operational e-commerce, the requirements\nfor the proportion of foreign equity are governed by the Circular No.196 while other requirements and approval procedures are subject\nto the FITE Regulations.\n\nOn April 8, 2024, the\nMIIT issued the Announcement of the Ministry of Industry and Information Technology on Launching the Pilot Program of Expanding the Opening-up in\nValue-added Telecommunications Services, pursuant to which, in certain approved pilot areas, the restrictions on foreign shareholding\npercentages for the following value-added telecommunications services shall be lifted: internet data centers, content distribution\nnetworks, internet access services, online data processing and transaction processing, information services, including information releasing\nplatforms and information delivery services (excluding Internet news information, online publishing, online audio-visual services,\nand Internet-based cultural businesses), and information protection and processing services. The approved pilot areas currently include\nthe Comprehensive Demonstration Zone for Expanding Opening-up in the Services Sector in Beijing, the Lingang Special Area of China\n(Shanghai) Free Trade Zone for Leading Socialist Modernization, the Hainan Free Trade Port, and the Pilot Demonstration Area of Socialism\nwith Chinese Characteristics in Shenzhen.\n\nTo comply with the above foreign\ninvestment restrictions, we rely on contractual arrangements with the VIEs to operate our business in China. However, there remain substantial\nuncertainties with respect to the interpretation and application of existing or future PRC laws and regulations on foreign investment.\nSee “Item 3. Key Information—D. Risks Factors—Risks Related to Our Corporate Structure”. If our current ownership\nstructure is found to be in violation of current or future PRC laws, rules or regulations regarding the legality of foreign investment\nin value-added telecommunications services and other types of businesses in which foreign investment is restricted or prohibited,\nwe could be subject to severe penalties.\n\n*Regulations Relating\nto Food Business*\n\nOur PRC subsidiaries and VIEs\nengaging in food wholesale and retail business are subject to laws and regulations relating to the food safety and food operation.\n\nFood\nSafety in General\n\nOn February 28, 2009,\nthe Standing Committee of the National People’s Congress of the PRC, or the SCNPC promulgated the Food Safety Law of the PRC, or\nthe Food Safety Law, which took effect on June 1, 2009 and was respectively amended on April 24, 2015, December 29, 2018,\nApril 29, 2021 and September 12, 2025, taking effect on December 1, 2025. On July 20, 2009, the State Council promulgated\nthe Implementation Regulations of the Food Safety Law of the PRC, or the Implementation Regulations, which took effect on July 20,\n2009 and was respectively amended on February 6, 2016 and October 11, 2019, taking effect on December 1, 2019. The Food\nSafety Law and the Implementation Regulations have set up a system of the supervision, monitoring and appraisal on food safety risks,\ncompulsory adoption of food safety standards in the PRC.\n\n81\n\nOnline\nFood Safety\n\nUnder Article 62 of the\nFood Safety Law, the provider of a third-party online food trading platform shall register the legal names of food traders admitted\nto the platform and define their food safety management responsibilities; and check the permits of those that are required to obtain food\noperation permits. Where the provider of a third-party online food trading platform discovers that any food trader admitted to the\nplatform violates the Food Safety Law, it shall stop the violation in a timely manner and immediately file a report with the food safety\nsupervision and administration department of the local people’s government at the county level; and if it discovers any serious\nillegal act, it shall immediately stop providing online trading platform services.\n\nThe Measures on the Punishments\nand Disciplinary Actions for Online Food Safety, or the Online Food Safety Measures, was promulgated by the SFDA on July 13, 2016\nand last amended on March 18, 2025, taking effect on May 1, 2025, which aims to investigate and punish illegal acts related\nto online food safety, and to strengthen the supervision and administration of online food safety. SAMR and the local counterparts of\nSAMR at or above the county level are the responsible authorities for the supervision and guidance of the investigation and punishment\non illegal conducts concerning online food safety. According to the Online Food Safety Measures, the provider of a third-party online\nfood trading platform or a food producer or trader engaging in trade through the websites it built shall, within thirty (30) working days\nafter obtaining approval of the competent department of communications, undergo the recordation formalities with the competent market\nregulatory authority of the place where it is located, and obtain the recordation number. Where the provider of a third-party online\nfood trading platform or a food producer or trader engaging in trade through the websites it built, fails to fulfill the corresponding\nobligation of recordation, the local market regulatory authority at or above the county level shall order it to take corrective action\nand impose on it a fine of not more than RMB10,000.\n\nTo comply with the laws and\nregulations, Yimutian Xinnong has completed the filing as required for a provider of third-party online food trading platform. Beijing\nDouniu has completed the filing as required for a provider of third-party online food trading platform.\n\n*Regulations Relating\nto Agricultural Product Quality and Consumer Protection*\n\nWe are subject to the Agricultural\nProduct Quality Law and the Consumer Protection Law as an online platform operator of agricultural product and other commodities.\n\nAgricultural\nProduct Quality Law\n\nPursuant to the Agricultural\nProduct Quality and Safety Law of the PRC, or the Agricultural Product Quality Law, which was promulgated by the SCNPC on September 2,\n2022, taking effect on January 1, 2023, the agricultural products sold shall meet the quality and safety standards of agricultural\nproducts, and antistaling agents, preservatives, additives and packaging materials used in the process of packaging, preservation, storage\nand transportation of agricultural products shall be in conformity with the mandatory standards set by the State and other provisions\non the quality and safety of agricultural products. Producers and distributors of agricultural products that sell agricultural products\nthrough online platforms shall strictly perform their quality and safety responsibilities in accordance with the Agricultural Product\nQuality Law and other laws and regulations, to ensure that the agricultural products they sell conform to quality and safety standards.\nOnline platform operators shall strengthen the management of agricultural product producers and distributors in accordance with law.\n\n82\n\nConsumer\nProtection Law\n\nThe Law of the People’s\nRepublic of China on the Protection of Consumer Rights and Interests, or the Consumer Protection Law, was promulgated by the SCNPC on\nOctober 31, 1993 and subsequently amended on August 27, 2009, October 25, 2013, taking effect as of March 15, 2014.\nThe Consumer Protection Law sets out the obligations of business operators and the rights and interests of the consumers in China. Under\nthe Consumer Protection Law, business operators must guarantee that the commodities they sell satisfy the requirements for personal or\nproperty safety, provide consumers with authentic information about the commodities, and guarantee the quality, function, usage and period\nof validity of the commodities. Failure to comply with the Consumer Protection Law may subject the business operators to civil liabilities\nsuch as refunding purchase prices, replacement of commodities, repairing, ceasing damages, compensation, and restoring reputation, and\neven subject the business operators or the responsible individuals to criminal penalties when personal damages are involved or if the\ncircumstances are severe. The Consumer Protection Law further strengthens the protection of consumers and imposes more stringent requirements\nand obligations on business operators, especially on the business operators through the internet. The consumers, whose interests are infringed\nwhile purchasing goods or receiving services via an online trading platform, have the right to claim damages from vendors of the goods\nor service providers. Where the operator of the online trading platform cannot provide the real name, address and effective contact of\nthe vendor or the service provider, the consumer shall have the right to claim damages directly from the operator of the online trading\nplatform. If the operator of an online trading platform clearly knows or should have known that a vendor or a service provider uses its\nplatform to commit acts that have infringed the legitimate rights of consumers, such as sell defective products to the consumers, but\nfails to take necessary measures, such operator shall take joint and severable liabilities with the vendor or the service provider.\n\nThe Regulations on the Implementation\nof Law of the People’s Republic of China on the Protection of Consumer Rights and Interests, or the Implementation Regulations of\nConsumer Protection Law, was promulgated by the SCNPC on March 15, 2024, taking effect as of July 1, 2024. The Implementation\nRegulations of Consumer Protection Law has refined the obligations of e-commerce operators, including ensuring the personal and property\nsafety of consumers, prohibiting false advertising, clear pricing, the use of standard terms, fulfilling quality warranty responsibilities,\nand protecting consumer personal information. In addition, the regulations related to online sales have also been perfected and detailed,\nsuch as explicitly stipulating that operators are not allowed to use technical means to force or indirectly force consumers to purchase\ngoods or accept services, and are not allowed to set different prices or charging standards for the same goods or services without the\nconsumer’s knowledge.\n\n*Regulations Relating\nto Advertisement*\n\nThe Advertising Law of the\nPeople’s Republic of China, or the Advertising Law, which was promulgated by the SCNPC on October 27, 1994 and was last amended\non April 29, 2021, taking effect effective on the same day, requires advertisers, advertising operators and advertising distributors\nto ensure that the content of the advertisements they produce or distribute are true and in full compliance with applicable laws and regulations.\nIn addition, where a special government censorship is required for certain industrial categories (e.g., medical treatment, pharmaceuticals,\nmedical devices, agricultural pesticides, veterinary medicines and healthcare food) of advertisements before publishing, the advertisers,\nadvertising operators and advertising distributors are obligated to confirm that such censorship has been duly exercised and that the\ngovernmental clearance has been obtained. No entity or individual may distribute advertisements to the residence, vehicle and etc. of\na person or distribute advertisements to such person by electronic means without his/her consent or request.\n\nOn February 25, the State\nAdministration for Market Regulation, or SAMR, promulgated the Measures on Internet Advertisement, or the Internet Advertisement Measures,\ntaking effect on May 1, 2023. The Internet Advertisement Measures regulate any advertisement published on the Internet, including\nbut not limited to, through websites, webpage and apps, in the form of word, picture, audio and video and provide more detailed guidelines\nto the advertisers, advertising operators and advertising distributors. In addition, the Internet Advertisement Measures explicitly require\nthat the Advertising Law and the provisions of the Internet Advertisement Measures apply to the internet information service providers.\nAiming to provide more user protection and responsibilities on advertisers, advertising operators, advertising distributors and internet\nplatforms in China, the Internet Advertisement Measures cover various forms of online advertisements, including pop-up advertisements,\nopen-screen advertisements, livestreaming advertisement, “soft text advertisements”, internet advertisements containing\nlinks, auction ranked advertisements, algorithm-recommended advertisements, internet live broadcast advertisements, and covert advertisements.\nInternet platform operators are required to take measures to prevent and stop illegal advertisements, including recording and storing\nthe real identity information of users who publish advertisements for at least three (3) years, monitoring and investigating the\ncontent of advertisements, and employing measures to stop illegal advertisements. Such platform operators must also establish effective\ncomplaint and reporting mechanisms, cooperate with market regulatory authorities in investigating illegal conduct, and use measures such\nas warnings, suspending or terminating services for users who publish illegal advertisements.\n\n83\n\nOn August 22, 2024, the\nSAMR issued the Internet Advertising Recognizability Law Enforcement Guide, formulated based on the Advertising Law and the Internet Advertisement\nMeasures and other relevant laws and regulations, and aiming at regulating the recognizability of internet advertising and providing reference\nfor market supervision authorities across various regions. The guide is designed to help consumers distinguish between internet advertising\nand non-advertising information, thereby protecting their legal rights and interests. This guide is formulated based on the Advertising\nLaw and the Internet Advertisement Measures and other relevant laws and regulations, providing a reference for the work of market supervision\ndepartments.\n\n*Regulations Relating\nto Online Trading and E-commerce*\n\nThe\nMeasures for the Supervision and Administration of Online Trading\n\nThe Measures for the Supervision\nand Administration of Online Transactions, or the Online Transaction Measures, was promulgated by SAMR on March 15, 2021, taking\neffect from May 1, 2021, and was amended on March 18, 2025, taking effect on May 1, 2025. The Online Transaction Measures,\naiming to strengthen consumer rights protection and personal information protection, impose new obligations on the e-commerce platform\noperators, such as verifying and registering the identity of trading parties on the platform either that are required to registered with\nSAMR or that are exempted from such registration, regularly reporting of prescribed information of trading parties on the platform to\nthe relevant branch of SAMR and establishing a system of inspection and monitoring of information on the goods sold or services provided\non the platform.\n\nThe E-commerce Law\n\nOn August 31, 2018, the\nSCNPC promulgated the E-commerce Law of the PRC, or the E-commerce Law, which came into effect on January 1, 2019. The\nE-commerce Law imposes a series of requirements on e-commerce operators including e-commerce platform operators, merchants\noperating on the platform and the individuals and entities carrying out business online. According to the E-commerce Law, e-commerce operators\nwho provide search results based on consumers’ characteristics such as hobbies and consumption habits shall also provide consumers\nwith options that are not targeted at their personal characteristics at the same time, respect and fairly protect the legitimate interests\nof the consumers. The E-commerce Law requires the e-commerce platform operators to: (i) require business operators that\napply to sell commodities or provide services on its platform to submit truthful information, including the identity, address, contact\nand administrative license, verify and register such information, establish registration archives, and have them verified and updated\nregularly; (ii) submit information on the identification of operators on its platform to the market regulatory authorities, warn\noperators that have not registered themselves as market subjects about handling such registration; (iii) pursuant to laws and administrative\nregulations concerning the administration of tax collection, submit to the tax authorities information on the identification of operators\non its platform and other information relating to tax payment; (iv) record and save information released on its platform about commodities\nand services and deals concluded, and keep them for no less than three (3) years from the date on which deals are completed; (v) always\nmake public information about the platform’s service agreement and transaction rules or the link to such information, in a prominent\nposition on the platform’s homepage, and ensure that business operators and consumers are able to read and download such agreement\nand rules in full conveniently; (vi) distinguish its own business with noticeable labels from that of other operators on its platform\nif an e-commerce platform has its own business on its platform, and shall not mislead consumers; (vii) create and improve its\ncredit rating system, formulate public credit rating rules, and provide avenues to consumers to make comments on commodities sold or services\nprovided on its platform, and shall not delete any comment made by consumers on any commodity sold or service provided on its platform;\nand (viii) establish rules on the protection of intellectual property rights and strengthen its cooperation with intellectual property\nright owners, so as to protect intellectual property rights in accordance with law.\n\nAccording to the E-commerce Law,\ne-commerce platform operators are required to assume joint liabilities with the merchants and may be subject to warnings and fines\nup to RMB2,000,000 where (i) they fail to take necessary actions when they know or should have known that the products or services\nprovided by the merchants on the platform do not meet personal and property security requirements, or otherwise infringe upon consumers’\nlegitimate rights; or (ii) they fail to take necessary actions, such as deleting and blocking information, disconnecting, terminating\ntransactions and services, when they know or should have known that the merchants on the platform infringe upon the intellectual property\nrights of others. With respect to products or services affecting consumers’ health and safety, e-commerce platform operators\nwill be held liable if they neglect to examine the qualifications of merchants or fail to safeguard the interests of consumers, and may\nbe subject to warnings and fines up to RMB2,000,000.\n\n84\n\n*The Measures for the Supervision\nand Administration of Online Trading Platform Rules*\n\n* *\n\nFurthermore, the Measures\nfor the Supervision and Administration of Online Trading Platform Rules (promulgated by SAMR and CAC, effective February 1, 2026) impose\nsystematic compliance requirements on the formulation, revision and implementation of platform rules. These new rules prohibit platforms\nfrom using platform rules to force merchants to accept “refund-only” policies, to subscribe to non-essential value-added services\nsuch as shipping insurance, to participate in promotional activities against their will, or to operate exclusively on a single platform.\n\nRegulations Relating\nto Anti-Unfair Competition\n\nOn April 23, 2019, the\nSCNPC promulgated the Anti-Unfair Competition Law of the PRC, or the Anti-Unfair Law, which came into effect on the same day\nand was amended on June 27, 2025, taking effect on October 15, 2025. On May 6, 2024, the SAMR promulgated the Interim Provisions\non Anti-Unfair Competition in the Internet Sector, or the Internet Anti-Unfair Competition Provisions, which came into effect\non September 1, 2024, aiming to prevent and stop the acts of unfair competition in the internet sector. The Internet Anti-Unfair Competition\nProvisions, (i) comprehensively list acts of unfair competition online, clarify the criteria for identification, including new manifestations\nof traditional unfair competition in the online environment such as imitation and confusion, false advertising, and new types of unfair\ncompetition facilitated by technological means (such as reverse brushing, illegal data acquisition, discriminatory treatment, etc.), and\nestablish catch-all provisions to provide a regulatory basis for potential new issues and behaviors; (ii) enhance the responsibilities\nof platform operators, who are required to strengthen the regulation of competitive behaviors within the platform, and if the platform\noperators discover that operators within the platform engage in unfair competitive practices, sell goods or provide services illegally,\nor infringe upon the legitimate rights and interests of consumers, they must take timely measures, preserve relevant records, and report\nto the market supervision authorities at the county level or above where the platform operator is located; otherwise, the platform will\nface certain administrative penalties; (iii) raise the compliance requirements for platforms, for example, platform operators are\nnot allowed to use service agreements, transaction rules, or other means by the operators within the platform to impose unreasonable restrictions\nor attach unreasonable 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.\n\n*Regulations Relating\nto Mobile Internet Applications*\n\nOn June 28, 2016, the\nCAC promulgated the Administrative Provisions on Mobile Internet Application Information Services, or the Mobile Application Administrative\nProvisions, which took effect on August 1, 2016 and was amended on June 14, 2022, taking effect on August 1, 2022. The\nMobile Application Administrative Provisions raise certain requirements on the Mobile Internet Application (APP) information service providers.\nThe CAC and its local counterparts are delegated the power to supervise and administer nationwide and local APP information respectively.\nThe APP information service providers shall satisfy relevant qualifications required by laws and regulations, establish a sound information\ncontent review and management mechanism and fulfill their obligations in various aspects relating to real-name system, protection\nof users’ information, examination and management of information content, including but not limited to: (i) conducting real\nidentity information authentication based on mobile phone numbers, identity document numbers or unified social credit codes for users\nwho apply for registration when they provide users with services such as information release and instant messaging; (ii) processing\npersonal information under the principle of legality, legitimacy, necessity and good faith, disclosing processing rules, regulating personal\ninformation processing activities and taking necessary measures to ensure personal information security; (iii) establishing a sound\ninformation content review and management mechanism, establishing and improving management measures for user registration, account management,\ninformation review, routine inspections and emergency response; (iv) refraining from inducing users to download APPs by means of\nfalse advertisement, bundled downloads, machine or manual click farming and comment control, or using illegal and harmful information;\n(v) complying with the mandatory requirements of relevant national standards, promptly taking remedial measures and notifying users\nand reporting to the competent authorities when discovering that an APP has risks such as security defects and vulnerabilities; and (vi) formulating\nand disclosing management rules, and signing service agreements with registered users to clarify the rights and obligations of both parties.\n\n85\n\nOn December 16, 2016,\nthe MIIT promulgated the Interim Measures on the Administration of Pre-Installation and Distribution of Applications for Mobile Smart\nTerminals, or the Mobile Application Interim Measures, which took effect on July 1, 2017. The Mobile Application Interim Measures\nrequires, among others, that the internet information service providers shall display the information of the mobile smart terminal application\nsoftware provided and ensure that other than the basic functional software, the mobile smart terminal application software, as well as\nits ancillary resource files, configuration files and user data can be uninstalled by users on a convenient basis.\n\nOn July 21, 2023, the\nMIIT promulgated the Circular of the Ministry of Industry and Information Technology on Launching the Record-filing of Mobile Internet\nApplications, or the Mobile Application Filing Circular, which took effect on the same day. The Mobile Application Filing Circular\nrequires that the mobile application sponsors who engage in the internet-based information services within the territory of the PRC\nshall carry out record-filing procedures in accordance with the Anti-Telecom and Online Fraud Law of the PRC, the Internet Information\nMeasures and other provisions, and shall not engage in the mobile application internet-based information services if they fail to\ncomply with the record-filing requirements.\n\n*Regulations Relating to\nCybersecurity, Information Security Protection*\n\nOn December 28, 2000,\nthe SCNPC enacted the Decisions on the Maintenance of Internet Security, which was last amended on January 8, 2011, taking effect\non the same day, may subject violators to criminal punishment in the PRC where the following behaviors constitute crimes: (i) behaviors\nimpacting internet security such as gaining improper access to a computer or system of strategic importance; (ii) behaviors that\nmay cause harm to national security and social instability such as disseminating politically disruptive information and leaking state\nsecrets; (iii) behaviors disrupting the nation’s order of socialist market economy or order of social administration such as\nspreading false commercial information and infringing others’ intellectual property rights and (iv) behaviors impairing the\npersonal, property and other legitimate rights of individuals, legal persons and other organizations such as using the internet to insult\nothers or fabricate facts to defame others or using the internet to commit theft, fraud or extortion. Where the behaviors do not constitute\ncrimes, the violators shall be subject to administrative sanctions imposed by the competent public security authority and other relevant\ngovernment authorities and shall bear civil liabilities toward those whose legitimate rights and interest are infringed upon. The Ministry\nof Public Security, or MPS, has promulgated measures that prohibit use of the internet in ways which, among other things, result in a\nleakage of state secrets or a spread of socially destabilizing content. If an information service provider violates these measures, the\nMPS and the local security bureaus may revoke its operating licenses and shut down its websites.\n\nOn June 22, 2007, the\nMPS, the National Administration of State Secrets Protection, the State Cryptography Administration and the Information Office of the\nState Council jointly issued the Administrative Regulations for the Classified Protection of Information Security, which became effective\non the same day. Entities operating and using information systems shall determine the security protection grade of the information\nsystem and carry out the graded protection work in accordance with relevant guidelines. Entities operating and using information systems\nof grade two or above shall file their security protection grade with the MPS or its bureaus at or above the municipal level with subordinate\ndistricts within the specified date.\n\nOn November 7, 2016,\nthe SCNPC promulgated the Cyber Security Law of the PRC, or the Cyber Security Law, which took effect on June 1, 2017 and was amended\non October 28, 2025, taking effect on January 1, 2026, pursuant to which, network operators shall comply with laws and regulations and\nfulfill their obligations to safeguard security of the network when conducting business and providing services. Those who provide services\nthrough networks shall take technical measures and other necessary measures pursuant to laws, regulations and compulsory national requirements\nto safeguard the safe and stable operation of the networks, respond to network security incidents effectively, prevent illegal and criminal\nactivities, and maintain the integrity, confidentiality and usability of network data, and the network operators shall not collect the\npersonal information irrelevant to the services they provide or collect or use the personal information in violation of the provisions\nof laws or agreements between both parties, and network operators of key information infrastructure shall store within the territory of\nthe PRC all the personal information and important data collected and produced within the territory of the PRC. In the event of any\nunauthorized disclosure, damage or loss of collected personal information, network operators must take immediate remedial measures, notify\nthe affected users and report the incidents to the authorities in a timely manner.\n\n86\n\nOn September 15, 2018,\nthe MPS promulgated the Provisions on Internet Security Supervision and Inspection by Public Security Agencies, taking effect on November 1,\n2018, pursuant to which, the public security authorities are authorized to carry out internet security supervision and inspection of the\ninternet service providers in the following aspects, including: (i) whether the service providers have completed the recordation\nformalities for online entities, and filed the basic information (including the changes thereof) of the accessing entities and users;\n(ii) whether they have established and implemented the cybersecurity management system and protocols, and appointed the persons responsible\nfor cybersecurity; (iii) whether the technical measures for recording and retaining users’ registration information and weblog\ndata are in place in accordance with law; (iv) whether they have taken technical measures to prevent computer viruses, network attacks\nand network intrusion; (v) whether they have adopted preventive measures to tackle the information that is prohibited to be issued\nor transmitted by laws and administrative regulations in the public information services; (vi) whether they provide technical support\nand assistance as required by law to public security authorities to safeguard national security and prevent and investigate on terrorist\nactivities and criminal activities; and (vii) whether they have fulfilled the obligations of the grade-based cybersecurity protection\nand other obligations prescribed by laws and administrative regulations. In particular, the public security authorities shall also carry\nout supervision and inspection on whether an internet service provider has taken required measures to manage information published by\nusers, adopted proper measures to handle the published or transmitted information that is prohibited to be published or transmitted, and\nkept the records.\n\nOn December 15, 2019,\nthe CAC promulgated the Provisions on Ecological Governance of Network Information Content, or the CAC Order No.5, taking effect on March 1,\n2020, to provide guidance for the management of network information content. According to CAC Order No.5, each network information content\nservice platform is required, among others (a) not to disseminate the information prohibited by laws and regulations; (b) to\nstrengthen the examination and inspection of the advertising space set on the platform and the advertising content displayed on the platform;\n(c) to promulgate management rules and platform conventions, improve user agreements, clarify the rights and obligations of users,\nand perform management duties required by law and contracts; (d) establish convenient channels for filing complaints and reports;\nand (e) to prepare annual work report regarding its ecological governance of network information content.\n\nOn June 10, 2021, the\nSCNPC promulgated the PRC Data Security Law, which took effect on September 1, 2021. The PRC Data Security Law provides that the\nstate shall establish a data security review system, under which data processing activities that affect or may affect national security\nshall be reviewed for national security purposes. A decision on security review made in accordance with law shall be final and binding\nupon the concerned parties.\n\nThe Regulations on Network\nData Security Management was promulgated by the State Council on September 24, 2024, taking effect on January 1, 2025, pursuant\nto which the network data processors that handle personal information of more than 10 million people must comply with the provisions\nfor processors of important data, who are required to fulfill cybersecurity protection responsibilities, including the development and\nimplementation of network data security management systems, operational procedures, and emergency response plans for network data security\nincidents; regularly organizing activities such as network data security risk monitoring, risk assessment, emergency drills, and publicity\nand training education to promptly address network data security risks and incidents. In the event of mergers, divisions, dissolutions,\nbankruptcies, or other circumstances that may affect the security of important data, processors of important data must take measures to\nensure the security of network data and report to the authorities of provincial level or above on the data disposal plan, the name and\ncontact information of the recipient.\n\nOn December 28, 2021,\nthe CAC, together with certain other mainland China government authorities, promulgated the Cybersecurity Review Measures, which replaced\nthe previous version and took effect from February 15, 2022. Pursuant to the Cybersecurity Review Measures, network platform operators\nwho possess personal information of over 1,000,000 individual users shall be subject to cybersecurity review before listing abroad. The\ncompetent government authorities may also initiate a cybersecurity review against the operators if the authorities believe that the network\nproduct or service or data processing activities of such operators affect or may affect national security. If the Cybersecurity Review\nOffice deems it necessary to conduct a cybersecurity review, it shall complete a preliminary review within thirty (30) business days\n(or forty-five (45) business days for complicated cases) from the issuance of a written notice to the operator. Upon the completion\nof a preliminary review, the Cybersecurity Review Office shall reach a review conclusion suggestion and send the review conclusion suggestion\nto the members for the cybersecurity review system and relevant authorities for their comments. These authorities shall issue a written\nreply within fifteen (15) business days from the receipt of the review conclusion suggestion. If the Cybersecurity Review Office\nand these authorities reach a consensus, then the Cybersecurity Review Office shall inform the operator in writing, otherwise, the case\nwill go through a special review procedure. The special review procedure shall be completed within ninety (90) business days, or\nlonger for complicated cases. The Cybersecurity Review Measures provides that the violators shall be subject to legal consequences in\naccordance with the Cyber Security Law and the PRC Data Security Law.\n\n87\n\nOn December 31, 2021,\nthe CAC, MIIT, MPS and SAMR promulgated the Administrative Provisions on Algorithms Recommendation in Internet-based Information\nServices, or the Algorithms Recommendation Administrative Provisions, which took effect on March 1, 2022. Pursuant to the Algorithms\nRecommendation Administrative Provisions, internet-based information service providers who apply algorithm-based recommendation\ntechnologies in such service within the territory of the PRC shall comply with the requirements regarding information services and user\nrights and interests protection. Algorithm-based recommendation service providers with public opinion attributes or social mobilization\ncapabilities shall fill in certain information through the internet-based information service algorithm record-filing system,\nperform the record-filing procedures and conduct security assessment in accordance with relevant provisions.\n\nOn July 7, 2022, the\nCAC promulgated the Security Assessment Measures for Outbound Data Transfers, which came into effect on September 1, 2022. The Security\nAssessment Measures for Outbound Data Transfers provides four circumstances, under any of which data processors shall, through the local\ncyberspace administration at the provincial level, apply to the national cyberspace administration for security assessment of cross-border data\ntransfer. These circumstances include: (i) where a data processor transfers important data to overseas recipients; (ii) where\na critical information infrastructure operator, or a data processor processing the personal information of more than 1,000,000 individuals,\nwho, in either case, transfers personal information to overseas recipients; (iii) where a data processor who has transferred the\npersonal information of more than 100,000 individuals, or the sensitive personal information of more than 10,000 individuals to overseas\nrecipients, since January 1 of the preceding year cumulatively; or (iv) other circumstances under which security assessment\nof data cross-border transfer is required as prescribed by the national cyberspace administration. Since there might be newly issued\nexplanations or implementation rules, we will continually monitor our compliance status in accordance with the latest changes in applicable\nregulatory requirements.\n\nOn March 22, 2024, the\nCAC promulgated the Regulations on Promoting and Regulating Cross-Border Data Flow, which specifies the standards for the declaration\nof critical data export security assessments and stipulated circumstances exempted from declaring data export security assessments. For\ninstance, data collected in international trade and cross-border transportation activities that does not contain personal information\nor critical data are exempted. Additionally, free trade pilot zones are allowed to establish negative lists, and data exports not included\nthe negative list are exempted from the declaration of data export security assessments.\n\nAs a network platform operator\nwho possesses personal information of more than one million users for purposes of the Cybersecurity Review Measures, we have applied for\nand completed a cybersecurity review with respect to our initial public offering pursuant to the Cybersecurity Review Measures.\n\n*Regulations Relating\nto Privacy and Data Protection*\n\nOn December 29, 2011,\nthe MIIT issued the Provisions on Regulating the Market Order of Internet Information Services, taking effect on March 15, 2012,\npursuant to which, internet information service provider may not collect any user personal information or provide such information to\nthird parties without the consent of such user, unless it is otherwise provided by laws or administrative regulations. An internet information\nservice provider shall expressly inform the users of the method, content and purpose for the collection and processing of such users’\npersonal information and may only collect such information necessary for the provision of its services. On December 28, 2012, the\nSCNPC promulgated the Decision on Strengthening Network Information Protection, which provides that electronic information that can identity\ncitizens’ personal privacy and involves citizens’ personal privacy is protected, and no person or organization shall steal,\nillegally obtain, sell or illegally provide to others any personal information of citizens.\n\n88\n\nOn July 16, 2013, the\nMIIT issued the Provisions on Protection of Personal Information of Telecommunication and Internet Users, taking effect on September 1,\n2013, pursuant to which “personal information” is defined as information that identifies a citizen, the time or location for\nhis/her use of telecommunication and internet services or involves privacy of any citizen such as his/her birth date, ID card number,\nand address. Any collection and use of user personal information must be subject to the consent of the user, abide by the principles of\nlegality, rationality and necessity and be within the specified purposes, methods and scopes. An internet information service provider\nmust also keep information collected strictly confidential, and is further prohibited from divulging, tampering or destroying of any such\ninformation, or selling or providing such information to other parties. Any violation of the above decision or order may subject the internet\ninformation service provider to order to rectify, warnings, fines or even criminal liabilities.\n\nAccording to the Ninth Amendment\nto the Criminal Law of the PRC issued by the SCNPC on August 29, 2015, taking effect on November 1, 2015, any internet service\nprovider that fails to fulfill the obligations related to internet information security as required by applicable laws and refuses to\nrectify upon orders, will be subject to criminal liability for causing (a) any dissemination of illegal information in large scale;\n(b) any leakage of the users’ information that leads to serious consequences; (c) any serious loss of evidence for criminal\nactivities; or (d) any other severe situations. In addition, any individual or entity that (a) sells or provides personal information\nto others unlawfully, or (b) steals or illegally obtains any personal information, will be subject to criminal liability in severe\nsituations. Pursuant to the Notice of the Supreme People’s Court, the Supreme People’s Procuratorate and the MPS on Legally\nPunishing Criminal Activities Infringing upon the Personal Information of Citizens, issued on April 23, 2013 and taking effect on\nthe same day, and the Interpretations of the Supreme People’s Court and Supreme People’s Procuratorate on Several Issues\nConcerning the Application of Law in Handling of Criminal Cases Involving Infringement of Citizen’s Personal Information, issued\non May 8, 2017 and taking effect as of June 1, 2017, the following activities may constitute the crime of infringing upon a\ncitizen’s personal information: (i) providing a citizen’s personal information to specified persons or releasing a citizen’s\npersonal information online or through other methods in violation of relevant national provisions; (ii) providing legitimately collected\ninformation relating to a citizen to others without such citizen’s consent (unless the information is processed, not traceable to\na specific person and not recoverable); (iii) collecting a citizen’s personal information in violation of applicable rules\nand regulations when performing a duty or providing services; or (iv) collecting a citizen’s personal information by purchasing,\naccepting or exchanging such information in violation of applicable rules and regulations.\n\nOn January 23, 2019,\nthe Office of the Central Cyberspace Affairs Commission, the MIIT, the MPS, and SAMR jointly issued the Announcement of Launching Special\nRectifications against Illegal Collection and Use of Personal Information by Apps to implement special rectifications against mobile apps\nthat collect and use personal information in violation of applicable laws and regulations, including among others, collecting personal\ninformation irrelevant to their services, or forcing users to give authorization in a disguised manner. On November 28, 2019, the\nCAC, the MIIT, the MPS and SAMR promulgated the Identification Method of Illegal Collection and Use of Personal Information Through App,\nwhich provides guidance for the regulatory authorities to identify the illegal collection and use of personal information through mobile\napps, and for the app operators to conduct self-examination and self-correction and for other participants to voluntarily monitor\ncompliance thereof.\n\nOn May 28, 2020, the\nNPC approved the Civil Code of the PRC, or the Civil Code, which has come into effect on 1 January 2021. Pursuant to the Civil Code,\nthe personal information of a natural person shall be protected by law. Any organization or individual that need to obtain personal information\nof others shall obtain such information legally and ensure the security of such information, and shall not illegally collect, use, process\nor transmit personal information of others, or illegally purchase, sell, provide or make public personal information of others.\n\nOn August 20, 2021, the\nSCNPC promulgated the Law of Personal Information Protection of PRC, or the Personal Information Protection Law, which integrates the\nscattered rules with respect to personal information rights and privacy protection and became effective on November 1, 2021. Pursuant\nto the Personal Information Protection Law, personal information, refers to information related to identified or identifiable natural\npersons and is recorded by electronic or other means but excluding the anonymized information. Personal information processing includes,\nbut is not limited to, the collection, storage, use, processing, transmission, provision, disclosure, and deletion of personal information.\nPersonal information shall be processed under the principles of lawfulness, legitimacy, necessity and good faith, and shall not be processed\nin a way that is misleading, fraudulent or coercive. Personal information handlers shall bear responsibility for their personal information\nhandling activities, and adopt the necessary measures to safeguard the security of the personal information they handle. Otherwise, the\npersonal information handlers will be ordered to correct or suspend or terminate the provision of services, confiscation of illegal income,\nfines or other penalties.\n\n89\n\nFurthermore, the National\nInternet Information Office issued the Measures for the Administration of Personal Information Protection Compliance Audits, which took\neffect on May 1, 2025. Under these measures, personal information processors processing the personal information of more than 10 million\nindividuals are required to conduct personal information protection compliance audits at least once every two years. Other personal information\nprocessors are required to conduct such audits periodically based on their specific circumstances. In the area of cross-border data transfers,\nthe Measures for Certification of Personal Information Export, jointly issued by the CAC and the State Administration for Market Regulation\non October 17, 2025, took effect on January 1, 2026. This measure establishes the certification pathway for personal information export,\ncompleting the full framework of China’s cross-border data transfer regulatory system, which now includes security assessment, standard\ncontract, and certification as the three primary compliance pathways.\n\n*Regulations Relating\nto Outbound Investment*\n\nTo regulate outbound investments,\nthe MOFCOM promulgated the Administrative Measures on Outbound Investments (2009 Edition) on March 16, 2009, taking effect as of\nMay 1, 2009, which was repealed by the Administrative Measures on Outbound Investments (2014 Edition), or the MOFCOM Outbound Investments\nMeasures, promulgated by MOFCOM on September 6, 2014, taking effect as of October 6, 2014, under which the MOFCOM’s approval\ndelegation was modified by the Decision of the State Council to Cancel a Group of Administrative Licensing Items and Other Items (2018) on\nJuly 28, 2018. According to the MOFCOM Outbound Investments Measures, outbound investments of enterprises involving sensitive countries\nand regions or sensitive industries shall be subject to examination and approval by the MOFCOM or its local counterparts at provincial\nlevel and other outbound investments of enterprises shall be subject to filing with the same authorities. The MOFCOM and its provincial\nlocal counterparts shall conduct filing and approval administration through the “outbound investment administration system”,\nand issue the Certificate of Outbound Investment by Enterprises for enterprises which have obtained such filing or approval.\n\nOn December 26, 2017,\nthe NDRC, promulgated the Administrative Measures on the Outbound Investments of Enterprises, or the NDRC Outbound Investment Measures,\nwhich became effective from March 1, 2018. Pursuant to the NDRC Enterprise Outbound Investment Measures, outbound investment refers\nto the investment activities conducted by an enterprise located within the territory of the PRC either directly or via an overseas enterprise\nunder its control. Such control of an overseas enterprise can be obtained through investing assets and equities, providing financing or\na guarantee, or any other means, to obtain overseas ownership, control rights, business management rights and other related rights and\ninterests. To make outbound investment, investors shall go through the formalities to have a proposed overseas investment project approved\nor filed for record, report relevant information, and cooperate in supervision and inspection. Projects subject to approval administration\nare sensitive projects in one of the sensitive industries listed in the Outbound Investment Sensitive Industry Catalogue (2018 Edition),\nwhich was promulgated by the NDRC on January 31, 2018 and came into effect on March 1, 2018, to be carried out by investors\neither directly or through overseas enterprises under their control and the approval authority is the NDRC. Projects subject to record-filing administration\nare non-sensitive projects to be carried out directly by investors and the record-filing authorities are the NDRC and its provincial\nlocal counterparts. In addition, where natural persons within the territory of China make investments abroad through overseas enterprises\nunder their control or through enterprises located in Hong Kong, Macao or Taiwan region, the Enterprise Outbound Investment Measures\nshall apply mutatis mutandis.\n\n*Regulations Relating\nto Tax*\n\nEnterprise\nIncome Tax\n\nOn March 16, 2007, the\nSCNPC promulgated the PRC Enterprise Income Tax Law, which was amended on February 24, 2017 and December 29, 2018 respectively.\nOn December 6, 2007, the State Council promulgated the Regulations for the Implementation of the Law of the PRC on Enterprise Income\nTax, which came into effect on January 1, 2008 and was last amended on December 6, 2024, or collectively, the EIT Law. Pursuant\nto the EIT Law, taxpayers consist of resident enterprises and non-resident enterprises. Resident enterprises are defined as enterprises\nthat are established in the PRC in accordance with laws of mainland China, or that are established in accordance with the laws of foreign\ncountries but whose actual or de facto control is administered from within the PRC territory. Non-resident enterprises are defined\nas enterprises that are set up in accordance with the laws of foreign countries and whose actual administration is conducted outside the\nPRC territory, but have established institutions or premises in the PRC, or have no such established institutions or premises but have\nincome generated from inside the PRC territory. Under the EIT Law, a uniform enterprise income tax rate of 25% is applicable. However,\nif non-resident enterprises have not formed permanent establishments or premises in the PRC, or if they have formed permanent establishment\ninstitutions or premises in the PRC but there is no actual relationship between the income derived in the PRC territory and the established\ninstitutions or premises set up by them, the enterprise income tax is, in that case, set at the rate of 10% for their income sourced from\ninside the PRC territory.\n\n90\n\nPursuant to the EIT Law, the\nEIT tax rate of a high and new technology enterprise is 15%. Pursuant to the Administrative Measures for the Recognition of High and New\nTechnology Enterprises, promulgated on April 14, 2008 and last amended on January 29, 2016, the certificate of a high and new\ntechnology enterprise is valid for three (3) years and may be renewed after the inspection of the State Administration of Taxation,\nor the SAT, and other authorities.\n\nThe Notice of the SAT Regarding\nthe Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto\nManagement Bodies, or the SAT Circular 82, which was promulgated by the SAT on April 22, 2009 and last amended on December 29,\n2017, sets out the standards and procedures for determining whether or not the “de facto management body” of an enterprise\nregistered outside of the PRC territory and controlled by PRC enterprises or PRC enterprise groups is located within the PRC territory.\nPursuant to the SAT Circular 82, offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be\nregarded as a PRC tax resident by virtue of having its “de facto management body” in China, and shall be subject to PRC enterprise\nincome tax on its global income only if all of the following conditions are met: (i) the senior management and core management departments\nin charge of its daily operations function have their presence mainly in mainland China; (ii) its financial and human resources decisions\nare subject to determination or approval by persons or bodies in mainland China; (iii) its major assets, accounting books, company\nseals, and minutes and files of its board and shareholders’ meetings are located or kept in mainland China; and (iv) not less\nthan half of the enterprise’s directors or senior management with voting rights habitually reside in mainland China. Further to\nSAT 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. Pursuant to the Arrangement between the Mainland of China and the Hong Kong Special Administrative\nRegion for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, or the Double Tax Avoidance\nArrangement, promulgated by the SAT on August 21, 2006, taking effect on the same day, and other applicable laws of mainland\nChina, if a Hong Kong resident enterprise is identified by the competent PRC tax authorities as having satisfied the conditions and\nprovisions of the Double Tax Avoidance Arrangement and other applicable laws, the applicable withholding tax rate for dividends received\nby a Hong Kong resident enterprise from a PRC resident enterprise may be reduced from 10% to 5% if such Hong Kong resident directly\nholds at least 25% of the equity interest of the PRC resident enterprise. Pursuant to the Notice on Certain Issues with Respect to the\nEnforcement of Dividend Provisions in Tax Treaties promulgated on February 20, 2009 by the SAT, a Hong Kong resident enterprise\nmust meet the following conditions, among others, in order to apply the reduced withholding tax rate: (i) its corporate form must\nbe a company; (ii) it must directly own the required percentage of equity interests and voting rights in the PRC resident enterprise;\nand (iii) it must have directly owned such required percentage in the PRC resident enterprise throughout the twelve (12) months\nprior to receiving the dividends.\n\nThe Public Notice Regarding\nCertain Enterprise Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or the SAT Bulletin 7,\npromulgated by the SAT on February 3, 2015 and partially repealed by the Public Notice on Issues Relating to Withholding at Source\nof Income Tax of Non-resident Enterprises promulgated by the SAT on October 17, 2017 and the Decision of the SAT on Promulgation\nof the Catalog of Invalid or Repealed Departmental Rules and Regulatory Documents of Tax Authorities promulgated by the SAT on December 29,\n2017, extends its tax jurisdiction to transactions involving the transfer of taxable assets through offshore transfer of a foreign intermediate\nholding company. Pursuant to SAT Bulletin 7, where a non-resident enterprise indirectly transfers properties such as equity\nin PRC resident enterprises without any justifiable business purposes and aiming to avoid the payment of enterprise income tax, such indirect\ntransfer must be deemed and reclassified as a direct transfer of equity in PRC resident enterprise. To assess whether an indirect transfer\nof PRC taxable properties has reasonable commercial purposes, all arrangements related to the indirect transfer must be considered comprehensively\nand factors set forth in SAT Bulletin 7 must be comprehensively analyzed in light of the actual circumstances. In addition, SAT Bulletin\n7 has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market.\n\n91\n\nOn October 17, 2017,\nthe SAT promulgated the Public Notice on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises, or the\nSAT Bulletin 37, which became effective on December 1, 2017 and was amended on June 15, 2018. SAT Bulletin 37 requires\nthat with regard to equity investment earnings such as dividends and bonuses, interest, rental income, use of franchise income, property\ntransfer income, and other kinds of taxable income earned by non-resident enterprises from sources in the PRC, source-based withholding\nshall be implemented; as such, the withholding obligors are the entities or individuals that have the direct obligation to make payment\nof relevant funds to the non-resident enterprises according to law or relevant contracts. Where the withholding obligor fails to\nwithhold taxes according to law or is unable to carry out its withholding obligation, the non-resident enterprise shall declare the\nenterprise income tax to the competent taxation authority in the locality where the tax was accrued.\n\nValue-added Tax\n\nPursuant to the Regulations\nof the PRC on Value-added Tax, or the VAT Regulations, which was promulgated by SCNPC on December 25, 2024, and came into effect\non January 1, 2026, and the Implementing Rules of the Provisional Regulations of the PRC on Value-added Tax, which was promulgated\nby the Ministry of Financing of the PRC, or the MOF on December 25, 1993 and amended in December 15, 2008 and October 28,\n2011 respectively, tax payers engaging in sale of goods, provision of processing services, repairs and replacement services, sales of\nservices, intangible assets or real property, or importation of goods within the territory of the PRC shall pay value-added tax,\nor the VAT. The currently applicable tax rates of VAT vary a lot from 0% through 13% for different kinds of goods sold or service\nprovided and different business models and transaction types, subject to adjustments that may be made by the SAT from time to time.\n\n*Regulations Relating\nto Intellectual Property*\n\nCopyright\n\nThe Copyright Law of the PRC\npromulgated by the SCNPC on September 7, 1990 and last revised on November 11, 2020 taking effect as of June 1, 2021, or\nthe Copyright Law, and the Implementing Regulations of the Copyright Law of the PRC promulgated by the State Council on May 30, 1991\nand last amended on January 30, 2013 taking effect as of March 1, 2013, are the principal laws and regulations governing copyright\nrelated matters. The Copyright Law provides that Chinese citizens, legal persons or unincorporated organizations shall, whether published\nor not, be entitled to copyright of their works. The Copyright Law extends copyright protection to writings, oral works, photographic\nworks, audio-visual works, and software products. Authors and other copyright owners may register their works with the registration\nagency recognized by the competent national copyright authority. Under the Copyright Law, the term of protection for copyrighted software\nof a legal person or institution is fifty (50) years since such software is first published in China. In addition, there is a voluntary\nregistration system administered by the China Copyright Protection Center. To address the problem of copyright infringement related to\nthe content posted or transmitted over the internet, the National Copyright Administration, or the NCAC, and the MIIT jointly promulgated\nthe Measures for Administrative Protection of Copyright Related to Internet on April 29, 2005, which became effective on May 30,\n2005.\n\nOn May 18, 2006, the\nState Council promulgated the Regulations on Protection of Information Network Transmission Right or the Transmission Right Regulations,\nwhich took effect on July 1, 2006 and was amended on January 30, 2013 taking effect as of March 1, 2013. According to the\nTransmission Right Regulations, an internet information service provider may be held liable under various situations, including if it\nknows or should reasonably have known a copyright infringement through the internet and fails to take measures to remove or block or disconnect\nlinks to the content, or, although not aware of the infringement, the internet information service provider fails to take such measures\nupon receipt of the copyright holder’s notice of infringement. The internet information service provider may be exempted from indemnification\nliabilities under certain circumstances.\n\nAccording to Provisions of\nthe Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes over\nInfringement of Information Network Transmission Rights, which took effect on January 1, 2013 and was amended on December 29,\n2020 taking effect from January 1, 2021, web players or web service providers who, without authorization, provide via information\nnetwork works, performances or audio-video products for which others have the right of information network transmission shall be\ndeemed to have infringed upon the information network transmission right, unless otherwise provided by laws and administrative regulations.\nFurthermore, where an internet service provider knows or should have known that network users are infringing on the right of information\ntransmission through network services, and fails to take necessary measures such as deleting, shielding, disconnecting links, or providing\ntechnical support, such behavior/omission shall constitute an act of assisting infringement.\n\n92\n\nSoftware Registration\n\nOn December 20, 2001,\nthe State Council promulgated the Computer Software Protection Regulations, or the Computer Software Protection Regulations, which came\ninto effect on October 1, 1991 and was last amended on January 30, 2013 taking effect as of March 1, 2013. The Computer\nSoftware Protection Regulations are formulated for protecting the rights and interests of computer software copyright owners, encouraging\nthe development and application of computer software and promoting the development of software industry. In order to further implement\nthe Computer Software Protection Regulations, the NCAC promulgated the Computer Software Copyright Registration Measures on February 20,\n2002, as amended on May 19, 2004, which regulates registrations of software copyright, exclusive licensing contracts for software\ncopyright and transfer contracts. The NCAC shall be the competent authority for the nationwide administration of software copyright registration\nand the Copyright Protection Center of China, or the CPCC, is designated as the software registration authority. The CPCC shall grant\nregistration certificates to the computer software copyright applicants.\n\nTrademarks\n\nPursuant to the Trademark\nLaw of the PRC, or the PRC Trademark Law, which was promulgated by the SCNPC on August 23, 1982 and last amended on April 23,\n2019, and the Implementation Regulation of the PRC Trademark Law, which was adopted by the State Council on August 3, 2002 and last\namended on April 29, 2014, registered trademarks include commodity trademarks, service trademarks, collective trademarks and certification\ntrademarks.\n\nThe Trademark Office of China\nNational Intellectual Property Administration (or CNIPA) is in charge of trademark registrations nationwide and grants a protection term\nof ten (10) years to registered trademarks which may be renewed for consecutive ten-year periods upon request by the trademark\nowner. The PRC Trademark Law has adopted a “first-to-file” principle with respect to trademark registration. Where a trademark\nfor which a registration has been made is identical or similar to another trademark which has already been registered or been subject\nto a preliminary examination and approval for use on the same kind of or similar commodities or services, the application for registration\nof such trademark may be rejected. Any person applying for the registration of a trademark may not prejudice the existing right first\nobtained by others, nor may any person register in advance a trademark that has already been used by another party and has already gained\na “sufficient degree of reputation” through such party’s use. An application for registration of a malicious trademark\nnot for use will be rejected and those who apply for trademark registration maliciously will be given administrative penalties of warnings\nor fines according to the circumstances; those who file trademark lawsuits maliciously will be punished by the people’s court according\nto law.\n\nDomain\nNames\n\nThe Administrative Measures\non Internet Domain Names, or the Domain Name Measures, was promulgated by the MIIT on August 24, 2017 and became effective as of\nNovember 1, 2017. According to the Domain Name Measures, applicants who apply for domain name root servers and setup of operating\nentities of domain name root servers or registration and management entities of domain names within the territory of China, shall obtain\nauthorization for this purpose from the MIIT or the local communications administration bureaus at the provisional level. The registration\nof domain names is generally on a “first-apply-first-registration” basis and a domain name applicant will become the domain\nname holder upon the completion of the application procedure. On November 27, 2017, the MIIT promulgated the Circular of the Ministry\nof Industry and Information Technology on Regulating the Use of Domain Names for Internet Information Services, which became effective\non January 1, 2018, pursuant to which, where the internet information service provider is an entity, it shall use a domain name that\nis registered and owned by itself or the person in charge of it or its senior executive in accordance with laws and regulations, while\noffering internet information services.\n\n93\n\nPatent\n\nThe Patent Law of the PRC\npromulgated by the SCNPC on March 12, 1984 and last amended on October 17, 2020, being effective as of June 1, 2021, and\nthe Implementing Rules of the Patent Law of the PRC promulgated by the State Council on December 21, 1992 and last amended on December 11,\n2023, taking effect as of December 11, 2023, are the principal laws and regulations governing patent related matters. The Patent\nOffice of CNIPA is in charge of the administration of patent-related work nationwide, including accepting and examining patent applications\nin a uniform way and granting patent rights in accordance with law. An invention or utility model for which a patent right is to be granted\nshall meet three conditions, namely novelty, inventiveness and practical applicability. Patents cannot be granted for scientific discoveries,\nrules and methods for intellectual activities, methods used to diagnose or treat diseases, animal and plant breeds, substances obtained\nby means of nuclear transformation, or designs that are used principally to identify the pattern, color or a combination thereof, of plane\npresswork. Except under certain specific circumstances provided by law, any third-party user must obtain consent or a proper license\nfrom the patent owner before using the patent, otherwise the use will constitute an infringement of the rights of the patent holder.\n\nTrade\nSecrets\n\nAccording to the PRC Anti-Unfair Competition\nLaw, or Anti-Unfair Competition Law, promulgated by the SCNPC on September 2, 1993, as amended on November 4, 2017, April 23,\n2019 and June 27, 2025 respectively, the term “trade secrets” refers to technical and business information that is unknown\nto the public, has utility, may create business interests or profits for its legitimate right holders, and is maintained as a secret by\nits legitimate right holders. Under the Anti-Unfair Competition Law, business operators are prohibited from infringing others’\ntrade secrets by: (i) acquiring trade secrets from the legitimate right holders by theft, bribery, fraud, coercion, electronic intrusion\nor any other illicit means; (ii) disclosing, using or permitting others to use trade secrets of the legitimate right holders acquired\nby any means specified in item (i) above; (iii) disclosing, using or permitting others to use trade secrets in their possession,\nin violation of their confidentiality obligations or any requirements of the legitimate right holders to keep such trade secrets confidential;\nor (iv) abetting, tempting or aiding a person into acquiring, disclosing, using, or permitting others to use the trade secrets, in\nviolation of his/her confidentiality obligations or any requirements of the legitimate right holders to keep such trade secrets confidential.\nPursuant to the Civil Code, no matter whether a contract is lawfully formed or not, the parties may not disclose or improperly use the\ntrade secrets or other confidential information they have come to know in the course of concluding such contract, and if a party divulges\nor improperly uses such trade secret or information, thereby causing losses to the other party(ies), such party shall be liable for compensating\nthe other party(ies).\n\n*Regulations Relating\nto Anti-monopoly*\n\nOn August 30, August 2007,\nthe SCNPC promulgated the Anti-Monopoly Law of the PRC, or the Anti-Monopoly Law, which was last amended on June 24, 2022,\ntaking effect as of August 1, 2022, which prohibits monopolistic conduct such as entering into monopoly agreements, abuse of dominant\nmarket position and concentration of undertakings that have the effect of eliminating or restricting competition.\n\nPursuant to the Anti-Monopoly Law,\ncompeting business operators may not enter into monopoly agreements that eliminate or restrict competition, such as by boycotting transactions,\nfixing or changing the price of commodities, limiting the output of commodities, or fixing the price of commodities for resale to third\nparties, among other actions, unless the agreement will satisfy the exemptions under the Anti-monopoly Law, such as improving technologies,\nincreasing the efficiency and competitiveness of small and medium-sized undertakings, or safeguarding legitimate interests in cross-border trade\nand economic cooperation with foreign counterparts. Sanctions for violations include an order to cease the activities, and confiscation\nof illegal gains and fines (ranging from 1% to 10% of sales revenues from the preceding year, or a fine of not more than RMB5 million\nif there was no sales for the preceding year; or a fine of not more than RMB3 million if the monopoly agreement reached has not been\nperformed.\n\nBusiness operators are forbidden\nto use data, algorithms, technologies, capital advantages and platform rules to engage in monopolistic acts prohibited by the Anti-Monopoly Law,\nand in particular, business operators with a dominant market position are forbidden to use data, algorithms, technologies and platform\nrules to abuse their dominant market position as specified in the Anti-Monopoly Law such as selling commodities at unfairly high\nprices or buying commodities at unfairly low prices, selling products at prices below cost without any justifiable cause, and refusing\nto trade with a trading party without any justifiable cause.\n\n94\n\nOn February 7, 2021,\nthe Anti-Monopoly Committee of the State Council promulgated the Anti-Monopoly Guidelines for the Internet Platform Economy\nSector, or the Anti-Monopoly Guidelines, aiming to provide guidelines for supervising and prohibiting monopolistic conduct in connection\nwith the internet platform business operations and further elaborate on the factors for recognizing such monopolistic conduct in the internet\nplatform industry. Pursuant to the Anti-Monopoly Guidelines, the methods of an internet platform collecting or using the privacy\ninformation of internet users may also be one of the factors to be considered for analyzing and recognizing monopolistic conducts in the\ninternet platform industry. For example, whether the business operator compulsorily collects unnecessary user information may be considered\nto analyze whether there is a bundled sale or additional unreasonable trading condition, which is one of the behaviors constituting abuse\nof dominant market position. In addition, factors including, among others, providing differentiated transaction prices or other transaction\nconditions for consumers with different payment ability based on consumption references and usage habits analyzed using big data and algorithms\nis also one of the behaviors constituting abuse of dominant market position. Furthermore, whether the business operators are required\nto “choose one” among the internet platform and its competitive platforms maybe considered to analyze whether such internet\nplatform operator with dominant market position abuses its dominant market position and excludes or restricts market competition. Subsequently,\non November 15, 2025, the State Administration for Market Regulation (SAMR) issued the draft of the Anti-Monopoly Compliance Guidelines\nfor Internet Platforms for public consultation, which listed eight types of monopoly risks: algorithmic collusion among platforms, organizing\nor assisting merchants to reach monopoly agreements, unfairly high pricing by platforms, below-cost sales, blocking and shielding, “choose-one-of-two”\npractices, “nationwide lowest price” requirements, and differential treatment by platforms. On February 13, 2026, SAMR formally\nissued the Anti-Monopoly Compliance Guidelines for Internet Platforms, which took effect on the date of issuance and provides systematic\nrules on risk identification, risk management and compliance assurance mechanisms for internet platforms.\n\nOn March 10, 2023, SAMR\nissued the Provisions on the Prohibitions of Monopoly Agreements, which took effect on April 15, 2023 and was amended on December\n9, 2025, taking effect on February 1, 2026, which superseded the previously-issued interim provisions promulgated in 2019 and clarified\ncertain practical issues, e.g., how to define the scope of commodity markets related to the platform economy.\n\nOn March 10, 2023, SAMR\nissued the Provisions on the Prohibitions of Acts of Abuse of Dominant Market Positions, taking effect on April 15, 2023, which superseded\nthe previously-issued interim provisions promulgated in 2019 and clarified certain practical issues, e.g., how to determine whether\na platform economy operator has gained a dominant market position.\n\nOn April 25, 2024, the\nAnti-Monopoly Committee of the State Council promulgated the Anti-Monopoly Compliance Guidelines of Business Operators to guide\nand support the business operators in establishing and improving anti-monopoly compliance management systems.\n\n*Regulations Relating\nto Employment and Social Welfare*\n\nEmployment\n\nPursuant to the PRC Labor\nLaw, effective as of January 1, 1995 and last amended on December 29, 2018 and the PRC Labor Contract Law, effective as of January 1,\n2008 and amended on December 28, 2012, a written labor contract shall be executed by an employer and an employee when the employment\nrelationship is established, and an employer is under an obligation to sign an unlimited-term labor contract with any employee who\nhas worked for the employer for ten (10) consecutive years. Furthermore, if an employee requests or agrees to renew a fixed-term labor\ncontract that has already been entered into twice consecutively, the resulting contract must have an unlimited term, with certain exceptions.\nAll employers must pay remuneration to their employees equal to at least the local minimum wage standards. All employers are required\nto establish a system for labor safety and sanitation, strictly abide by state rules and standards and provide employees with appropriate\nworkplace safety training. In addition, the mainland China government has continued to introduce various new labor-related regulations\nafter the PRC Labor Contract Law. Amongst other things, new annual leave requirements mandate that annual leave ranging from five (5) to\nfifteen (15) days is available to nearly all employees and further require that the employer compensate an employee for any annual\nleave days the employee is unable to take in the amount of three times his daily salary, subject to certain exceptions. Moreover,\nall PRC enterprises are generally required to implement a standard working time system of eight (8) hours a day and forty(40) hours\na week, and if the implementation of such standard working time system is not appropriate due to the nature of the job or the characteristics\nof business operation, the enterprise may implement a flexible working time system or comprehensive working time system after obtaining\napprovals from the labor administration authorities.\n\n95\n\nLabor\nDispatch\n\nPursuant to the PRC Labor\nContract Law, the dispatched contract workers shall be entitled to equal pay for equal work as a fulltime employee of an employer, and\nthey shall only be engaged to perform temporary, ancillary or substitute job positions. A temporary job position refers to a position\nwith a term of less than six months; an ancillary job position refers to a non-main business position that serves main business\npositions; and a substitute job position refers to a position where the employee who cannot work for a given period of time due to full-time\nstudy, vocation or other reasons may be substituted by another worker. An employer shall strictly control the number of dispatched contract\nworkers, and such number shall not exceed certain percentage of total number of workers specified by the labor administrative department\nof the State Council.\n\nAccording to the Interim Provisions\non Labor Dispatch promulgated by the Ministry of Human Resources and Social Security on January 24, 2014 and effective as of March 1,\n2014, the number of dispatched contract workers hired by an employer shall not exceed 10% of the total number of its workers (including\nboth directly hired employees and dispatched contract workers).\n\nSocial\nInsurance and Housing Provident Fund\n\nThe PRC Social Insurance Law,\nwhich was promulgated on October 28, 2010 and amended on December 29, 2018, has established social insurance systems of basic\npension insurance, unemployment insurance, maternity insurance, work injury insurance and basic medical insurance, and has elaborated\nin detail the legal obligations and liabilities of employers who do not comply with relevant laws and regulations on social insurance.\n\nAccording to the Interim Regulations\non the Collection and Payment of Social Insurance Premiums, the Regulations on Work Injury Insurance, the Regulations on Unemployment\nInsurance and the Trial Measures on Employee Maternity Insurance of Enterprises, enterprises in the PRC shall provide benefit plans for\ntheir employees, which include basic pension insurance, unemployment insurance, maternity insurance, work injury insurance and basic medical\ninsurance. An enterprise must provide social insurance by going through social insurance registration with local social insurance authorities\nor agencies and shall pay or withhold relevant social insurance premiums for or on behalf of employees. On July 20, 2018, the General\nOffice of the CPC Central Committee and the General Office of the State Council issued the Plan for Reforming the State and Local Tax\nCollection and Administration Systems, which stipulated the power to collect social insurance premiums is solely delegated to the SAT\nand its local counterparts. According to the Administrative Measures on Housing Provident Fund, which was promulgated on April 3,\n1999 by the State Council and last amended on March 24, 2019, housing provident fund paid and deposited both by employees themselves\nand their unit employers shall be owned by the employees. Employers shall undertake the registration of payment and deposit of the housing\nprovident fund at the competent housing provident fund management center and upon the examination by such management center, employers\nshall complete procedures for opening an account at the commissioned bank for the deposit of employees’ housing provident funds.\nEnterprises are also required to pay and deposit housing provident fund contributions in full amount and in a timely manner.\n\n*Regulations Relating\nto Foreign Exchange*\n\nAccording to the Regulation\nof the PRC on Foreign Exchange Administration, or the Foreign Exchange Regulations, issued by the State Council on January 29, 1996\nand last amended on August 5, 2008 and the Administrative Regulations of Foreign Exchange Settlement and Sale and Payment of Foreign\nExchange, or the Foreign Exchange Settlement & Sale & Payment Regulations, promulgated by the People’s Bank of\nthe PRC on June 20, 1996, generally, (i) the foreign exchange income and expenditure and foreign exchange business operations\nof Chinese institutions and individuals and (ii) the foreign exchange income and expenditure and foreign exchange business operations\nconducted within the PRC territory by overseas institutions and individuals, shall be subject to foreign exchange administration by the\nState Administration of Foreign Exchange, or SAFE. Renminbi is freely convertible for payments of current account items such as trade\nand service-related foreign exchange transactions and there is no substantial control on dividend payments to abroad (upon the authenticity\nverification and completion of tax payment), but is not freely convertible for capital expenditure items such as direct investment, loans\nor investments in securities outside of the PRC unless the approval from SAFE or its local counterparts is obtained in advance.\n\n96\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 became effective on June 1, 2015 and was last amended on March 23, 2023. According to SAFE Circular 19,\nthe foreign exchange capital of foreign-invested enterprises (or FIEs) shall follow the principle of “discretionary foreign\nexchange settlement”, i.e., the foreign exchange capital in the capital account of an FIE, after its amount being confirmed by the\nlocal SAFE (or after its amount being recorded by the handling banks) can be settled at such banks based on the actual operational needs\nof the FIE. The proportion (upper limit) of “discretionary foreign exchange settlement” of an FIE is temporarily set\nat 100% of the amount of foreign exchange capital of such FIE. The Renminbi converted from the foreign exchange capital will be kept\nin a designated account and if an FIE needs to make further payment from such account, it still needs to provide supporting documents\nand proceed with the review process with the banks. Furthermore, SAFE Circular 19 stipulates that the use of capital by FIEs shall follow\nthe principles of authenticity and self use within the business scope of enterprises. Furthermore, the foreign exchange capital of an\nFIE and the Renminbi fund obtained by such FIE from foreign exchange settlement shall not be used for any of the following purposes: (i) directly\nor indirectly used for payments beyond the business scope of the enterprises or payments as prohibited by relevant laws and regulations;\n(ii) directly or indirectly used for investment in securities unless otherwise provided by the laws and regulations; (iii) directly\nor indirectly used for issuance of Renminbi entrusted loans except for those permitted by the business scope of such FIE, repayment of\ninterenterprise loans (including advances by third parties) or repayment of bank loans that have been transferred to a third party; or\n(iv) directly or indirectly used for expenses related to the purchase of real estate that is not for self use (except for the foreign-invested real\nestate enterprises).\n\nThe Circular on Reforming\nand Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, was promulgated\nby SAFE on June 9, 2016. Pursuant to SAFE Circular 16, enterprises registered in the PRC are also allowed to convert their foreign\ndebts from foreign currency to Renminbi on a discretionary basis. SAFE Circular 16 provides a unified standard for the conversion of foreign\nexchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a discretionary basis\nwhich applies to all enterprises registered in the PRC. SAFE Circular 16 reiterates the principle that Renminbi converted from foreign\ncurrency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited\nby PRC Laws, while such converted Renminbi shall not be provided as loans to its non-associated enterprises. On January 26,\n2017, SAFE promulgated the Notice on Improving the Check of Authenticity and Compliance to Further Promote Foreign Exchange Control which\nspecifies several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities,\nincluding (i) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the\noriginal version of tax filing records and audited financial statements; and (ii) domestic entities shall make up for losses incurred\nin previous years before remitting abroad any profit. Moreover, pursuant to the circular, domestic entities shall make detailed explanations\nof the sources and utilization scheme of their invested funds, and provide board resolutions, contracts and other supporting materials\nproving the authenticity when undergoing the registration and remittance procedures in connection with an outbound investment.\n\nOn October 23, 2019,\nSAFE promulgated 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, among other things, allows FIEs that do not have “equity investment” in their\napproved business scope to use their capital obtained from foreign exchange settlement to make domestic equity investments as long as\nsuch investments are real and in compliance with the foreign investment-related laws and regulations. On April 10, 2020, SAFE\npromulgated the Circular of SAFE on Optimizing Foreign Exchange Administration to Support the Development of Foreign-related Business\npursuant to which the facilitation of payments using offshore incomes under the capital accounts (including capital contribution, foreign\ndebts, proceeds from overseas listings and etc.) by qualified domestic enterprises shall be promoted nationwide.\n\nOn December 4, 2023,\nthe SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Deepening Reform and Promoting the Facilitation\nof Cross-border Trade and Investment, or the SAFE Circular 2023[28]. The SAFE Circular 2023[28] includes technology-based small\nand medium-sized enterprises (SMEs) in the pilot scope of cross-border financing facilitation, further supporting the scientific\nand technological innovation of SMEs. High-tech, “specialized, refined, and innovative”, and technology-based SMEs in\nspecific jurisdictions such as Beijing that meet the conditions can independently borrow foreign debts within a limit of up to US$10 million\nor equivalent, while those in other regions that meet the conditions can independently borrow foreign debts within a limit of up to US$5 million\nor equivalent. In addition, the SAFE Circular 2023[28] also stipulates measures to facilitate foreign direct investment enterprises in\ntheir payment for equity transfers under domestic reinvestment and use of proceeds raised from overseas listings.\n\n97\n\nRegistration\nof Overseas Investment by the Domestic Residents\n\nOn July 4, 2014, SAFE\npromulgated the Circular on Relevant Issues Concerning Foreign Exchange Administration on Domestic Residents’ Offshore Investments\nand Financing and Roundtrip Investments through Special Purpose Vehicles, or SAFE Circular No. 37, which, for the purpose of simplifying\nthe approval process, loosening the regulation and promoting the cross-border investments, replaced the Circular of the Issues Concerning\nthe Foreign Exchange Administration on Domestic Residents’ Financing and Round-trip Investments through Overseas Special Purpose\nVehicles issued by SAFE on October 21, 2005, or the Circular No. 75. Pursuant to SAFE Circular No. 37, SAFE and its branches\nregulate the establishment of special purpose vehicles, or the SPV, by domestic residents. “Domestic residents” include domestic\ninstitutions and domestic individual residents, which include, Chinese citizens holding the ID cards of Chinese domestic residents, military\nID certificates or ID certificates for armed police force, and overseas individuals that do not hold any domestic legitimate ID certificates\nbut have habitual residences within the territory of the PRC due to relationships of economic interests. Prior to contributing domestic\nand overseas legitimate assets or interests to a SPV, a domestic resident shall apply to the competent SAFE for foreign exchange registration\nof overseas investment. In the event that the basic information of the registered overseas SPV is changed, such as the domestic individual\nresident shareholder, name, operating period, etc., or if there is a capital increase, capital reduction, equity transfer or swap, merge,\nspin-off or other substantial changes, the modification registration of foreign exchange for overseas investment shall be completed\nwith the competent SAFE. Where a non-listed SPV uses its own equity interests or options to grant equity incentives to the directors,\nsupervisors and senior management of a domestic enterprise under its direct or indirect control, as well as other employees in employment\nor labor relationships with the aforesaid company, relevant domestic individual residents may, before exercising their rights, apply to\nthe competent SAFE for foreign exchange registration of the SPV. Failure to comply with the registration procedures set forth in\nSAFE Circular No. 37 may result in penalties under the Foreign Exchange Regulations. In the meantime, SAFE has promulgated the Operating\nGuideline for the Issues Concerning Foreign Exchange Administration over Round-trip Investments with respect to the procedures for\nSAFE registration under SAFE Circular No. 37, which took effect on July 4, 2014 as an attachment to SAFE Circular No. 37.\n\nOn February 13, 2015,\nSAFE promulgated the Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Foreign Exchange\nAdministration Policies on Direct Investment, effective as of June 1, 2015 and amended on December 30, 2019, which cancels the\nadministrative approvals of foreign exchange registration of inbound direct investment and outbound direct investment. In addition, the\ncircular simplifies the foreign exchange registration procedures and investors can register with banks to have the registration of foreign\nexchange under the condition of inbound direct investment and outbound direct investment.\n\nOn July 13, 2009, SAFE\npromulgated the Circular of the State Administration of Foreign Exchange on Promulgating the Administrative Provisions on Foreign Exchange\nof the Outbound Direct Investments of Domestic Institutions. Pursuant to the circular, domestic institutions may make outbound direct\ninvestment with their own foreign exchange funds, domestic foreign exchange loans meeting relevant requirements, foreign exchange purchased\nwith Renminbi funds, tangible assets, intangible assets and other sources of foreign exchange assets approved by the foreign exchange\nauthorities. Domestic institutions may retain the profits made from outbound direct investment outside China for their outbound direct\ninvestment. In addition, a domestic institution shall, after obtaining the approval of its outbound direct investment from the competent\ngovernment authorities, handle the foreign exchange registration formalities for its overseas direct investment at the local foreign exchange\nauthority.\n\n*Regulations on Stock\nIncentive Plans*\n\nSAFE promulgated the Notices\non Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly\nListed Company, or the Stock Option Rules, on February 15, 2012, replacing the previous rules issued by SAFE in March 2007.\nUnder the Stock Option Rules and other rules and regulations, PRC citizens and non-PRC citizens who reside in China for a continuous\nperiod of not less than one (1) year who participate in any stock incentive plan of an overseas publicly listed company, subject\nto a few exceptions, are required to register with SAFE through a domestic qualified agent (including a PRC subsidiary of such overseas-listed company)\nand complete certain other procedures. The domestic qualified agent is required to amend SAFE registration with respect to the stock incentive\nplan if there is any material change to the stock incentive plan, the domestic qualified or other material changes. 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.\n\n*Regulations Relating\nto M&A Rules*\n\nOn August 8, 2006, six\nPRC regulatory agencies, including the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the\nSAT, SAMR, the China Securities Regulatory Commission, or the CSRC, and SAFE jointly issued the Rules on Merger & Acquisition\nof Domestic Enterprises by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006 and was amended on\nJune 22, 2009. The M&A Rules require in some instances that the parties to any change-of-control transaction in which a\nforeign investor will take control of a PRC domestic enterprise shall report the same to the MOFCOM, where any of the following situations\nexists: (i) the transaction involves an important industry in China, (ii) the transaction may affect national economic security,\nor (iii) the PRC domestic enterprise has a well-known trademark or historical Chinese trade name in China. The M&A Rules,\namong other things, also require that (i) the PRC entities or individuals obtain the MOFCOM approval before they establish or control\nan SPV overseas, provided that they intend to use the SPV to acquire their equity interests in a PRC company for a consideration paid\nby means of share swap (i.e., paid through newly issued shares of the SPV or existing shares of the SPV then held by such PRC entities\nor individuals), and list their equity interests in the PRC company overseas indirectly by listing the SPV in an overseas market, and\n(ii) such SPV obtain the MOFCOM’s approval before it acquires the equity interests held by such PRC entities or PRC individual\nin the PRC company by means of share swap; and (iii) the SPV obtain CSRC approval before it lists overseas.\n\n98\n\nMoreover, pursuant to the\nM&A Rules, the Anti-Monopoly Law and the Provisions on the Examination of Concentration of Undertakings issued by SAMR on March 10,\n2023, effective as of April 15, 2023, the participants to a change-of-control transaction in which a foreign investor will acquire\ncontrol of a PRC domestic enterprise or a foreign company with substantial PRC operations, if certain thresholds stipulated by the State\nCouncil are triggered.\n\nPursuant to the Notice of\nthe General Office of the State Council on the Establishment of the Security Review System for Mergers and Acquisitions of Domestic Enterprises\nby Foreign Investors and the Security Review Rules, or the Security Review Notice, issued by the General Office of the State Council on\nFebruary 3, 2011, taking effect on March 4, 2011, mergers and acquisitions by foreign investors that raise “national defense\nand 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 mainland China government authorities.\nPursuant to the Provisions on the National Security Review of Foreign Mergers and Acquisitions of Domestic Enterprises or the National\nSecurity Review Provisions, issued by the MOFCOM effective on September 1, 2011, when reviewing the acquisition of a domestic enterprise\nby a foreign enterprise, the MOFCOM will determine whether such a transaction should be subject to national security review by considering\nboth of its “the substance and actual influence”, and foreign investors may not avoid the national security review through\nmethods such as a nominee structure, trust arrangements, multilayer investments, exercising control through contractual arrangements or\noffshore transactions. On December 19, 2020, the NDRC and the MOFCOM issued the Measures for the Security Review of Foreign Investment,\nwhich provides that if a foreign investor’s merger or acquisition of a domestic enterprise falls within the scope of security review\nspecified in the Security Review Notice, the foreign investor shall file an application with the NDRC for security review.\n\n*Regulations Relating\nto Overseas Offering and Listing*\n\nOn February 17, 2023,\nthe CSRC promulgated the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies, or the Overseas\nListing Trial Measures, and relevant five guidelines, which became effective on March 31, 2023. According to the Overseas Listing\nTrial Measures, (1) domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall fulfill\nthe filing procedure and report relevant information to the CSRC; (2) if the issuer meets both of the following criteria, the overseas\noffering and listing shall be determined as an indirect overseas offering and listing by a domestic company (i) 50% or more of any\nof the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial\nstatements for the most recent fiscal year is accounted for by domestic companies; and (ii) the main parts of the issuer’s\nbusiness activities are conducted in mainland China, or its main place(s) of business are located in mainland China, or the majority\nof senior management staff in charge of its business operations and management are Chinese citizens or have their usual place(s) of\nresidence located in mainland China. Where an issuer submits an application for initial public offering to competent overseas regulators,\nsuch issuer must file with the CSRC within three business days after such application is submitted. The Overseas Listing Trial Measures\nalso require subsequent reports to be filed with the CSRC upon occurrence of certain material events, such as change of control or voluntary\nor forced delisting of the issuer(s) who have completed overseas offerings and listings.\n\nAccording to the Overseas\nListing Trial Measures, the domestic companies engaging in overseas offering and listing activities shall strictly comply with applicable\nlaws and regulations of mainland China. If a domestic company fails to complete the filing procedures or there are any false records,\nmisleading statements or material omissions in its filing documents, such domestic company may be subject to administrative penalties,\nsuch as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the persons directly in charge and other\ndirectly liable persons may also be subject to administrative penalties, such as warnings and fines.\n\nOn February 24, 2023,\nthe CSRC and other three PRC regulatory agencies published the Provisions on Strengthening the Confidentiality and Archives Management\nRelated to Overseas Issuance and Listing of Securities by Domestic Companies, or the Confidentiality and Archives Management Provisions,\neffective on March 31, 2023. Pursuant to the Confidentiality and Archives Management Provisions, PRC domestic companies that seek\nto offer and list securities in overseas markets shall establish confidentiality and archives system. The “domestic companies”\nunder the Confidentiality and Archives Management Provisions refer to domestic companies directly listed on a foreign stock exchange and\nthe domestic operating entities of an offshore company being indirectly listed on a foreign stock exchange. The PRC domestic companies\nshall obtain approval from the competent authorities who are delegated the power to grant such approval and file with the confidential\nadministration department at the same level when providing or publicly disclosing documents and materials related to state secrets (where\nit is uncertain as to whether any document or material constitutes state secrets or there is any dispute thereof, the PRC domestic companies\nshall report the same to the confidential administration department for determination) or secrets of the government authorities to the\nsecurities companies, securities service agencies or the offshore regulatory authorities or providing or publicly disclosing such documents\nand materials through its offshore listing entity, and shall complete corresponding procedures when providing or publicly disclosing documents\nand materials which may adversely influence national security and the public interest to the securities companies, securities service\nagencies or the offshore regulatory authorities or providing or publicly disclosing such documents and materials through its offshore\nlisting entity. The PRC domestic companies shall provide written statements on the implementation on the aforementioned rules to the securities\ncompanies and securities service agencies and the PRC domestic companies shall not provide accounting files to an overseas accounting\nfirm unless such firm complies with the corresponding procedures.\n\n99\n\nC.ORGANIZATIONAL STRUCTURE\n\nThe following diagram illustrates\nour corporate structure, including our principal subsidiary and the VIEs and their principal subsidiaries, as of December 31, 2025:\n\n****\n\nNote:\n\n(1)Beijing Douniu is 99% owned by Mr. Jinhong Deng, our founder, chairman and chief executive officer, and\n1% owned by Mr. Min Liu, our director and senior vice president. Both Mr. Deng and Mr. Liu are beneficial owners of our company.\n\n(2)Yimutian Xinnong is 88.53% owned by Mr. Jinhong Deng, our founder, chairman, chief executive officer,\n6.34% owned by Ms. Jiefang Ji, the founder of Wise Prime International Limited, a shareholder of our company, 0.85% owned by Mr. Yahui\nZhou, the founder of Keeneyes Future Holding Limited, a shareholder of our company, 0.85% owned by Mr. Zhijia Liu, our director, 0.85%\nowned by Mr. Bailin Song, a beneficial owner of shares of our company, 0.85% owned by Mr. Mi Zhou, our director, 0.85% owned by Mr. Min\nLiu, our director, senior vice president, and 0.85% owned by Mr. Haiyan Gao, a beneficial owner of shares of our company.\n\n100\n\nContractual Arrangements\nand the VIEs\n\nYimutian Xinnong primarily\nengages in the operation of Yimutian App, an agricultural product B2B e-commerce platform, which involves the provision of internet\ninformation services. Beijing Douniu engages in the operation of Douniu App, an online agricultural product wholesale market circulation\nplatform. Laws and regulations of mainland China restrict foreign investment in companies that engage in value-added telecommunication\nservices. As such, we entered into a series of contractual arrangements with Yimutian Xinnong and Beijing Douniu and their respective\nshareholders. These contractual arrangements with the VIEs allow us to direct activities of the VIEs that most significantly affect the\neconomic performance of the VIEs, receive substantially all of the economic benefits of the VIEs to the extent that we have satisfied\nthe conditions for consolidation of the VIEs under U.S. GAAP, and have an exclusive option to purchase all or part of the equity\ninterests in the VIEs when and to the extent permitted by laws of mainland China. As a result of these contractual arrangements, we are\nconsidered to be the primary beneficiary of the VIEs for accounting purpose and consolidated their operating results in our financial\nstatements under U.S. GAAP, to the extent the conditions for consolidation of the VIEs under U.S. GAAP are satisfied.\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, to the extent the conditions for consolidation\nof the VIEs under U.S. GAAP are satisfied, this may be less effective than equity ownership, and we could face heightened risks and\ncosts in enforcing these contractual arrangements, because there are substantial uncertainties regarding the interpretation and application\nof current and future laws, regulations, and rules of mainland China relating to the legality and enforceability of these contractual\narrangements. For the risks related to the nominee shareholders of the VIEs, see “Item 3. Key Information—D. Risk Factors—Risks\nRelated to Our Corporate Structure—Yimutian Inc. is a Cayman Islands holding company with no operations of its own and we currently\nconduct our operations in mainland China through our subsidiaries and the VIEs. Investors in our ADSs should note that they are purchasing\nequity interests in a Cayman Islands holding company rather than equity interests in the VIEs in mainland China. Given that there are\nuncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the agreements\nthat establish the VIE structure for our operations in mainland China, including potential future actions by the mainland China government,\nif the mainland China government deems that our contractual arrangements with the VIEs do not comply with the laws of mainland China,\nor if regulations or interpretation of the existing regulations change in the future, we could be subject to penalties or be forced to\nrelinquish our interests in the VIEs.” and “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate\nStructure—Any failure by any of the VIEs or their shareholders to perform their respective obligations under our contractual arrangements\nwith them would have a material and adverse effect on our business.”\n\nAgreements that\nmake us the primary beneficiary of the VIEs\n\n* *\n\n*Powers of Attorney. *Pursuant\nto the powers of attorney executed by the shareholders of the VIEs, each of them irrevocably authorizes the WFOE, or any person designated\nby the WFOE, to act on their respective behalf as proxy attorney, to the extent permitted by law, to exercise all rights of shareholders\nconcerning all the equity interest held by each of them in the VIEs, including without limitation, the right to (i) propose, convene\nand attend shareholders’ meetings and sign relevant resolutions, (ii) exercise all shareholder’s rights under laws of\nmainland China and the articles of association of the VIEs, such as the voting right, nomination right and appointment right, (iii) receive\ndividends and sell, transfer, pledge or dispose of all the equity held in part or in whole in the VIEs. The powers of attorney remain\nirrevocably effective as long as such shareholders remain as the shareholders of the VIEs.\n\n*Equity Pledge Agreements. *Pursuant\nto the equity pledge agreements among the WFOE, the VIEs and their respective shareholders, the shareholders of the VIEs pledged all of\ntheir equity interests in the VIEs to the WFOE to guarantee the performance of the obligations by such shareholders and by the VIEs under\nthe exclusive option agreements, the exclusive business cooperation agreements and the powers of attorney. In the event of a breach by\nthe VIEs or any of their respective shareholders of the obligations under these contractual arrangements, the WFOE, as pledgee, will have\nthe right to enforce the pledge. The shareholders of the VIEs also covenant that, without the prior written consent of the WFOE, they\nwill not dispose of the pledged equity, create or allow any encumbrance on the pledged equity. The agreements will in general remain in\neffect until the fulfillment of all obligations under the other VIE agreements. As of the date of this annual report, we have completed\nthe registration of the equity pledge contemplated under the equity pledge agreements with the competent authorities in accordance with\nthe laws and regulations of mainland China.\n\n*Letters of Confirmation\nand Undertaking. *Pursuant to the letters of confirmation and undertaking executed by the shareholders of the\nVIEs, each of them, among other things, (i) confirms that his/her spouse does not have the right to claim any interests in the respective\nequity of the VIEs (together with any other interests therein) or exert influence on the day-to-day management and voting matters\nof the respective equity of the VIEs; undertakes that (ii) in the event of his/her divorce, he/she will take all actions that the\nWFOE deems necessary to safeguard the execution of the contractual arrangement; (iii) he/she will not participate in, engage in,\nor merge with any business that competes with the WFOE or hold any interest from such business; (iv) he/she will not cause any conflict\nof interest between the WFOE and the VIEs or himself/herself; and (v) in the event of such conflict of interest, he/she will act\nin accordance with the WFOE’s instruction to eliminate such conflict of interest. These letters are effective during the term of\nthe VIE agreements.\n\n101\n\n*Spousal Consent Letters. *Pursuant\nto the spousal consent letters executed by the spouses of the applicable individual shareholders of the VIEs, each of them unconditionally\nand irrevocably agreed that the equity in the WFOE held by and registered in the name of such shareholder be disposed of in accordance\nwith the exclusive business cooperation agreements, the exclusive option agreements, the equity pledge agreements, the powers of attorney,\nand the letters of confirmation and undertaking, and that such shareholder may perform, amend or terminate such agreements without his\nor her spouse’s consent. In addition, each of them agrees not to assert any rights over the equity interest in the VIEs held by\nhis or her respective spouses. In the event that any of them obtains any equity interest in our VIEs held by their respective spouses\nfor any reason, such spouses agree to be bound by similar obligations and agree to enter into similar contractual arrangements. These\nletters are effective during the term of the VIE agreements.\n\nAgreements that\nallow us to receive economic benefits from the VIEs\n\n* *\n\n*Exclusive Business Cooperation\nAgreements. *Pursuant to the exclusive business cooperation agreements, among the WFOE and the VIEs, the WFOE\nhas the exclusive right to provide the VIEs with comprehensive technological support and consulting services, including but not limited\nto software licensing, technology research and development, staff training and technology consultations. Without the WFOE’s prior\nwritten consent, the VIEs may not accept the same or similar service contemplated by the agreement provided by any third party during\nthe term of the agreement. The VIEs agreed to pay the WFOE service fees, the amount of which will be subject to adjustment by the WFOE. The\nexclusive business cooperation agreement remains effective indefinitely except agreed otherwise or terminated by the WFOE in writing.\nUnless terminated by the WFOE in writing or pursuant to certain other provisions in the agreements, the exclusive business cooperation\nagreements are effective for an indefinite term.\n\nAgreements that\nprovide us with the option to purchase the equity interest in the VIEs\n\n* *\n\n*Exclusive Option Agreements. *Pursuant\nto the exclusive option agreements entered among the WFOE, the VIEs and their respective shareholders, each of the shareholders of the\nVIEs has irrevocably granted the WFOE, or any person or persons designated by the WFOE, an exclusive option to purchase all or part of\nthe equity in the VIEs. The WFOE or person(s) designated by the WFOE may exercise such options to purchase equity in the VIEs at\nthe lowest price permitted under laws of mainland China. The VIEs and their respective shareholders covenant that, without the WFOE’s\nprior written consent, they will not, among other things, (i) amend the VIEs’ articles of association, (ii) increase or\ndecrease the VIEs’ registered capital or change its structure of registered capital, and (iii) sell, transfer, mortgage, or\ndispose of any assets of the VIEs’ that is more than US$50,000. The shareholders of the VIEs covenant that they will not create\nany pledge or encumbrance on their equity in the VIEs, other than those created under the equity pledge agreements as part of the contractual\narrangements. The exclusive option agreements will be terminated when the entire equity interests in the VIEs have been transferred to\nour company or its designee(s).\n\nIn the opinion of Global\nLaw Office, our PRC counsel:\n\n●the ownership structures of the 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\n\n●the contractual arrangements between the WFOE, the VIEs and the respective shareholders of the VIEs governed\nby laws of mainland China are not in violation of mandatory laws or regulations of mainland China currently in effect in all material\nrespects, and valid and binding upon each party to such arrangements in accordance with their terms.\n\nHowever, our PRC counsel has\nalso advised us that the interpretation and application of current and future laws, regulations and rules of mainland China are evolving,\nand thus the regulatory authorities of mainland China may take a view that is contrary to the opinion of our PRC counsel. If the mainland\nChina government finds that the contractual arrangements do not comply with the restrictions or prohibitions on foreign investment in\ncertain sectors, or if the mainland China government otherwise finds that Yimutian Inc. or the VIEs are in violation of laws or regulations\nof mainland China or lack the necessary permits or licenses to operate our business, the regulatory authorities of mainland China would\nhave discretion in dealing with such violations or failures. See “Item 3. Key Information—D. Risk Factors—Risks Related\nto Our Corporate Structure—Yimutian Inc. is a Cayman Islands holding company with no operations of its own and we currently conduct\nour operations in mainland China through our subsidiaries and the VIEs. Investors in our ADSs should note that they are purchasing equity\ninterests in a Cayman Islands holding company rather than equity interests in the VIEs in mainland China. Given that there are uncertainties\nregarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the agreements that establish\nthe VIE structure for our operations in mainland China, including potential future actions by the mainland China government, if the mainland\nChina government deems that our contractual arrangements with the VIEs do not comply with the laws of mainland China, or if regulations\nor interpretation of the existing regulations change in the future, we could be subject to penalties or be forced to relinquish our interests\nin the VIEs.” and “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Mainland China—We\nare subject to evolving laws and regulations of mainland China that could require us to modify our current business practices and incur\nincreased costs, 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\n102\n\nD.PROPERTY, PLANT AND EQUIPMENT\n\nOur corporate headquarters is\nlocated in Beijing, with an aggregate gross floor area of approximately 2,154.03 square meters as\nof December 31, 2025. We have also leased offices in other cities in mainland China. As of December 31, 2025, we leased properties\nin mainland China with an aggregate gross floor area of approximately 5,438.45 square meters, primarily\nfor office and business purposes. The terms of these leases are typically for one to three years, subject to renewal. We believe that\nour existing facilities are sufficient for our current needs, and we may need to obtain, usually by lease, adequate facilities to accommodate\nany future expansion plans as we further scale up our business operation."}