UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

For the fiscal year ended December 31, 2025

OR

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

OR

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

For the transition period from            to          

Commission file number: 001-42505

Huachen AI Parking Management Technology Holding Co., Ltd

(Exact name of Registrant as specified in its charter)

Cayman Islands

(Jurisdiction of incorporation or organization)

Room 201, 2nd Floor,

No. 6395 Hutai Road, Baoshan District,

Shanghai, China.

(Address of principal executive offices)

Bin Lu

+852 9579 1074
Room 201, 2nd Floor,

No. 6395 Hutai Road, Baoshan District,

Shanghai, China.

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

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

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 629,942 Class A Ordinary Shares and 533,334 Class B Ordinary Shares issued and outstanding as of December 31, 2025 (giving retroactive effect to the 30 for 1 share split effected on April 13, 2026).

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐ Yes ☒ No

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☒ Yes  ☐ No

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

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

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

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

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

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

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐ Item 17  ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

☐ Yes ☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

☐ Yes  ☐ No

Table of Contents

INTRODUCTION

Throughout this annual report, unless the context indicates otherwise, references to “we,” “us,” “our,” “Huachen Cayman,” “our Company,” and the “Company” are to Huachen AI Parking Management Technology Holding Co., Ltd, a Cayman Islands exempted company, and when describing Huachen Cayman’s consolidated financial information for the fiscal years December 31, 2025, 2024 and 2023, also include Huachen Cayman’s subsidiaries. References to “PRC subsidiaries” are to Huachen Cayman’s subsidiaries established under the laws of the PRC. References to “Operating Subsidiaries” are to YHC HK, CYH Shanghai, Hangzhou ZHC and Jiaxing XC.

Huachen Cayman is a Cayman holding company. Our business is conducted by our Operating Subsidiaries, in China using RMB. Our consolidated financial statements are presented in U.S. dollars. In this annual report, we refer to assets, obligations, commitments, and liabilities in our consolidated financial statements in U.S. dollars. These dollar references are based on the exchange rate of RMB to U.S. dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of U.S. dollars which may result in an increase or decrease in the amount of our obligations (expressed in dollars) and the value of our assets, including accounts receivable (expressed in dollars). This annual report contains translations of certain RMB amounts into U.S. dollar amounts at specified rates solely for the convenience of the reader. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:

We have relied on statistics provided by a variety of publicly available sources regarding China’s expectations of growth. We did not directly or indirectly sponsor or participate in the publication of such materials, and these materials are not incorporated in this annual report other than to the extent specifically cited in this annual report. We have sought to provide current information in this annual report and believe that the statistics provided in this annual report remain up-to-date and reliable, and these materials are not incorporated in this annual report other than to the extent specifically cited in this annual report.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that reflect our current expectations and views of future events, all of which are subject to risks and uncertainties. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or other similar expressions in this annual report. These statements are likely to address our growth strategy, financial results and product and development programs. You must carefully consider any such statements and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this annual report, whether as a result of new information, future events, changes in assumptions, or otherwise.

PART I

Item 1. Identity of Directors, Senior Management and Advisers

Not applicable for annual reports on Form 20-F.

Item 2. Offer Statistics and Expected Timetable

Not applicable for annual reports on Form 20-F.

Item 3. Key Information

Overview

Our Corporate Structure and Operations in China

Huachen Cayman is a holding company with no material operation. The Operating Subsidiaries conduct operations in China. Investors in our Class A Ordinary Shares should be aware that they will not directly hold equity interests in our PRC Subsidiaries, but rather only in Huachen Cayman, the holding company.

Huachen Cayman may rely on dividends to be paid by the PRC subsidiaries to fund its cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt it may incur and to pay its operating expenses. If the PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to Huachen Cayman.

See “Item 8. Financial Information – A. Consolidated Statements and Other Financial Information – Dividend Policy” and “Item 3. Key Information — 3.D. Risk Factors — Risks Related to our Corporate Structure – “Huachen Cayman is a holding company and will rely on dividends paid by the subsidiaries for its cash needs. Any limitation on the ability of the subsidiaries to make dividend payments to Huachen Cayman, or any tax implications of making dividend payments to Huachen Cayman, could limit its ability to pay its expenses or pay dividends to holders of our Class A Ordinary Shares,” and “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Doing Business in China — To the extent cash or assets in the business are in the PRC or Hong Kong or a PRC or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash or assets.”

Enforceability of Civil Liabilities

We are incorporated under the laws of the Cayman Islands as an exempted company with limited liability. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands exempted company, such as:

However, certain disadvantages accompany incorporation in the Cayman Islands. These disadvantages include:

Our constituent documents do not contain provisions requiring that disputes, including those arising under the securities laws of the United States, between us, our officers, directors and shareholders, be arbitrated.

All of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for a shareholder to effect service of process within the United States upon these persons, or to enforce against them or against us, judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

We have appointed Cogency Global Inc. as our agent upon whom process may be served in any action brought against us in the United States District Court for the Southern District of New York under the federal securities laws of the United States or of any State of the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.

Shanghai Xiading Law Firm, our counsel as to Chinese law, has advised us that the recognition and enforcement of foreign judgments are provided for under the Chinese Civil Procedure Law. Chinese courts may recognize and enforce foreign judgments in accordance with the requirements of the Chinese Civil Procedure Law based either on treaties between China and the country where the judgment is made or in reciprocity between jurisdictions. China does not have any treaties or other agreements with the Cayman Islands or the United States that provide for the reciprocal recognition and enforcement of foreign judgments. As a result, it is uncertain whether a Chinese court would enforce a judgment rendered by a court in either of these two jurisdictions.

According to the Civil Procedure Law of the PRC (amended in 2017), if a legally effective judgment or ruling made by a foreign court requires recognition and enforcement by a people’s court of the PRC, the party concerned may directly apply to an intermediate people’s court with jurisdiction over for recognition and enforcement, or the foreign court may request recognition and enforcement by a people’s court in accordance with the provisions of an international treaty concluded or acceded to by the country and the PRC, or in accordance with the principle of reciprocity.

If the people’s courts are of the opinion that the legally effective judgment or ruling made by the foreign court applying for or requesting recognition and enforcement does not violate the basic principles of the laws of the PRC or the sovereignty, security and public interests of the country after the people’s court reviews the legally effective judgment or ruling made by the foreign court applying for or requesting recognition and enforcement in accordance with the international treaties concluded or acceded to by the PRC or in accordance with the principle of reciprocity, then the people’s court shall issue a ruling that recognizes its validity and, if enforcement is necessary, issues an enforcement order, which order shall be implemented in accordance with the relevant laws. A judgment or ruling that violates the basic principles of the laws of the PRC or the sovereignty, security and public interests of the country will not be recognized and implemented.

If an award made by a foreign arbitration institution requires recognition and enforcement by the people’s court of the PRC, the party concerned shall directly apply to the intermediate people’s court in the place where the person subjected to enforcement has his domicile or where his property is located. The people’s court shall handle the matter in accordance with international treaties concluded or acceded to by the PRC or in accordance with the principle of reciprocity.

Mourant Ozannes (Cayman) LLP, our counsel as to the laws of the Cayman Islands, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (1) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers that are predicated upon the civil liability provisions of federal securities laws of the United States or the securities laws of any state in the United States, or (2) entertain original actions brought in the Cayman Islands against us or our directors or officers that are predicated upon the federal securities laws of the United States or the securities laws of any state in the United States.

Mourant Ozannes (Cayman) LLP has informed us that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment in personam obtained in such jurisdiction may be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a competent foreign court with jurisdiction to give the judgment, (b) imposes a specific positive obligation on the judgment debtor (such as an obligation to pay a liquidated sum or perform a specified obligation), (c) is final and conclusive, (d) is not in respect of taxes, a fine or a penalty; (e) has not been obtained by fraud; and (f) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or public policy of the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the U.S. courts under civil liability provisions of the U.S. federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liability judgments from U.S. courts would be enforceable in the Cayman Islands. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

We believe that there is uncertainty as to whether the courts of Hong Kong would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in Hong Kong against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States. A judgment of a court in the United States predicated upon U.S. federal or state securities laws may be enforced in Hong Kong at common law by bringing an action in a Hong Kong court on that judgment for the amount due thereunder, and then seeking summary judgment on the strength of the foreign judgment, provided that the foreign judgment, among other things, is (1) for a debt or a definite sum of money (not being taxes or similar charges to a foreign government taxing authority or a fine or other penalty) and (2) final and conclusive on the merits of the claim, but not otherwise. Such a judgment may not, in any event, be so enforced in Hong Kong if (a) it was obtained by fraud; (b) the proceedings in which the judgment was obtained were opposed to natural justice; (c) its enforcement or recognition would be contrary to the public policy of Hong Kong; (d) the court of the United States was not jurisdictionally competent; or (e) the judgment was in conflict with a prior Hong Kong judgment. Hong Kong has no arrangement for the reciprocal enforcement of judgments with the United States. As a result, there is uncertainty as to the enforceability in Hong Kong, in original actions or in actions for enforcement, of judgments of United States courts of civil liabilities predicated solely upon the federal securities laws of the United States or the securities laws of any State or territory within the United States.

Implication of the Holding Foreign Companies Accountable Act (the “HFCA Act”)

The HFCA Act was enacted on December 18, 2020. The HFCA Act states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit the company’s shares from being traded on a national securities exchange or in the over the counter trading market in the United States.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements described above.

On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading.

On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act, which took effect on January 10, 2022. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

On December 16, 2021, PCAOB announced the PCAOB HFCA Act determinations (the “PCAOB determinations”) relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or Hong Kong.

On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the “SOP”) with the China Securities Regulatory Commission and the Ministry of Finance of China. The SOP, together with two protocol agreements governing inspections and investigations (together, the “SOP Agreement”), establishes a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. The SOP Agreement remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the SOP Agreement disclosed by the SEC, the PCAOB shall have sole discretion to select any audit firms for inspection or investigation and the PCAOB inspectors and investigators shall have a right to see all audit documentation without redaction. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.

Audit Alliance LLP, the independent registered public accounting firm that issues the audit report for the fiscal year ended December 31, 2025, 2024 and 2023 included in this annual report, is currently subject to PCAOB inspections and the PCAOB is thus able to inspect Audit Alliance LLP. Audit Alliance LLP is headquartered in Singapore and has been inspected by the PCAOB. In the future, if there is any regulatory change or step taken by PRC regulators or the SEC or Nasdaq applies additional and more stringent criteria, and if PCAOB determines that it is not able to inspect Audit Alliance LLP at such future time, Nasdaq may delist our Class A Ordinary Shares and the value of our Class A Ordinary Shares may significantly decline or become worthless.

Recent Regulatory Development in the PRC

We are aware that, recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.

For example, on June 10, 2021, the Standing Committee of the National People’s Congress enacted the PRC Data Security Law, which took effect on September 1, 2021. The law requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.

On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.

On August 20, 2021, the 30th meeting of the Standing Committee of the 13th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s Republic of China”, or “PRC Personal Information Protection Law”, which became effective on November 1, 2021. The PRC Personal Information Protection Law applies to the processing of personal information of natural persons within the territory of China that is carried out outside of China where (1) such processing is for the purpose of providing products or services for natural persons within China, (2) such processing is to analyze or evaluate the behavior of natural persons within China, or (3) there are any other circumstances stipulated by related laws and administrative regulations.

On December 28, 2021, the CAC jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022 and replace the former Measures for Cybersecurity Review (2020) issued on July 10, 2021. Measures for Cybersecurity Review (2021) stipulates that operators of critical information infrastructure purchasing network products and services, and online platform operator (together with the operators of critical information infrastructure, the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, any online platform operator who controls more than one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country.

On February 17, 2023, the China Securities Regulatory Commission (“CSRC”) promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the “Trial Measures,” and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application. If a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.

In connection with our issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, except for the filing procedures with the CSRC and reporting of relevant information according to the Overseas Listing Trial Measures, we believe that the Company and its subsidiaries are currently not required to obtain any other approval from the CSRC to list on U.S exchanges or issue securities to foreign investors, given that: (i) our PRC subsidiary was incorporated as a wholly foreign-owned enterprise by means of direct investment rather than by merger or acquisition of equity interest or assets of a PRC domestic company owned by PRC companies or individuals as defined under the M&A Rule that are our beneficial owners; (ii) the Chinese regulatory authority currently has not issued any definitive rule or interpretation concerning whether offerings like ours under this annual report are subject to the M&A Rule; and (iii) no provision in the M&A Rule clearly classifies contractual arrangements as a type of transaction subject to the M&A Rule.

However, there remains some uncertainty as to how the M&A Rule will be interpreted or implemented in the context of an overseas offering and the opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rule. We cannot assure you that relevant PRC government agencies, would reach the same conclusion as our PRC counsel, Shanghai Xiading Law Firm, does, and hence we may face regulatory actions or other sanctions from the PRC regulatory agencies. These regulatory agencies may impose fines and penalties on the operations in China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our continued offering into China, restrict or prohibit the payments or remittance of dividends by our PRC subsidiaries or take other actions that could have a material adverse effect on the business, financial condition, results of operations, reputation and prospects, as well as the trading price of the shares. It is uncertain when and whether the Company will be required to obtain permission from the China regulatory authority to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded.

The China regulatory authority may legally restricted or influence the operations at any time, which could result in a material change in the operations. Recently, the China regulatory authority initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As confirmed by our PRC counsel, Shanghai Xiading Law Firm, we currently are not subject to cybersecurity review with the CAC, to conduct business operations in China, given that: (i) the Operating Subsidiaries do not possess a large amount of personal information in the business operations; and (ii) data processed in the business does not have a bearing on national security and thus may not be classified as core or important data by the authorities. In addition, as confirmed by our PRC counsel, Shanghai Xiading Law Firm, we are not subject to merger control review by China’s anti-monopoly enforcement agency due to the level of our revenues which were provided by us and audited by our auditor Audit Alliance LLP, and the fact that we currently do not expect to propose or implement any acquisition of control of, or decisive influence over, any company with revenues within China of more than RMB 400 million. See “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Doing Business in China — Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may also be implemented quickly with little advance notice. Therefore, our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain.”

Transfers of Cash between Our Company and Our Subsidiaries

Our management monitors the cash position of each entity within our organization regularly and prepare budgets on a monthly basis to ensure each entity has the necessary funds to fulfill its obligation for the foreseeable future and to ensure adequate liquidity. In the event that there is a need for cash or a potential liquidity issue, it will be reported to our Chief Financial Officer and subject to approval by our board of directors, we will enter into an intercompany loan for the subsidiary.

Huachen Cayman currently has not maintained any cash management policies that dictate the purpose, amount and procedure of cash transfers between the Company, our subsidiaries, or investors. Rather, the funds can be transferred in accordance with the applicable PRC laws and regulations. To the extent cash or assets in the business is in the PRC or Hong Kong or a PRC or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash or assets.

Under existing PRC foreign exchange regulations, payment of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange, by complying with certain procedural requirements. Therefore, our PRC subsidiaries are able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulations, such as the overseas investment registrations by our shareholders or the ultimate shareholders of our corporate shareholders who are PRC residents. Approval from, or registration with, appropriate government authorities is, however, required where the RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. Current PRC regulations permit our PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. As of the date of this annual report, there are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into and out of Hong Kong (including funds from Hong Kong to the PRC), except for transfer of funds involving money laundering and criminal activities. Cayman Islands law prescribes that a company may only pay dividends out of its profits or share premium, and that a company may only pay dividends if, immediately following the date on which the dividend is paid, the company remains able to pay its debts as they fall due in the ordinary course of business. Other than that, there is no restrictions on Huachen Cayman’s ability to transfer cash to investors.

As a holding company, Huachen Cayman may rely on dividends and other distributions on equity paid by our subsidiaries, including those based in the PRC, for its cash and financing requirements. If any of the PRC subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends to Huachen Cayman. Huachen Cayman is permitted under the laws of the Cayman Islands to provide funding to the subsidiary incorporated in Hong Kong through loans or capital contributions without restrictions on the amount of the funds. The subsidiaries are permitted under the respective laws of Hong Kong to provide funding to Huachen Cayman through dividend distribution without restrictions on the amount of the funds. There are no restrictions on dividends transfers from HK to the Cayman Islands. Current PRC regulations permit our WFOE to pay dividends to the Company only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations.

The PRC has currency and capital transfer regulations that require us to comply with certain requirements for the movement of capital. The Company is able to transfer cash (US Dollars) to its PRC subsidiaries through an investment (by increasing the Company’s registered capital in a PRC subsidiary). The Company’s subsidiaries within China can transfer funds to each other when necessary, through the way of current lending. The transfer of funds among companies are subject to the Provisions on Private Lending Cases, which was implemented on August 20, 2020 to regulate the financing activities between natural persons, legal persons and unincorporated organizations. As advised by our PRC counsel, Shanghai Xiading Law Firm, the Provisions on Private Lending Cases does not prohibit using cash generated from one subsidiary to fund another subsidiary’s operations. We have not been notified of any other restriction which could limit our PRC subsidiaries’ ability to transfer cash between PRC subsidiaries. The Company’s subsidiaries in the PRC have not transferred any earnings or cash to the Company to date. As of the date of this annual report, there has not been any assets or cash transfer between the holding company and its subsidiaries. As of the date of this annual report, there has not been any assets or cash transfer between the holding company and its subsidiaries. As of the date of this annual report, there has not been any dividends or distributions made to US investors. The Company’s business is conducted through its subsidiaries. The Company is a holding company and its material assets consist solely of the ownership interests held in its PRC subsidiaries. The Company relies on dividends paid by its subsidiaries for its working capital and cash needs, including the funds necessary: (i) to pay dividends or cash distributions to its shareholders, (ii) to service any debt obligations and (iii) to pay operating expenses. As a result of PRC laws and regulations (noted below) that require annual appropriations of 10% of after-tax income to be set aside in a general reserve fund prior to payment of dividends, the Company’s PRC subsidiaries are restricted in that respect, as well as in other respects noted below, in their ability to transfer a portion of their net assets to the Company as a dividend.

With respect to transferring cash from the Company to its subsidiaries, increasing the Company’s registered capital in a PRC subsidiary requires the filing of the local commerce department, while a shareholder loan requires a filing with the SAFE or its local bureau. Aside from the declaration to the SAFE, there is no restriction or limitations on such cash transfer or earnings distribution.

With respect to the payment of dividends, we note the following:

If, for the reasons noted above, our subsidiaries are unable to pay shareholder dividends and/or make other cash payments to the Company when needed, the Company’s ability to conduct operations, make investments, engage in acquisitions, or undertake other activities requiring working capital may be materially and adversely affected. However, the operations and business, including investment and/or acquisitions by our subsidiaries within China, will not be affected as long as the capital is not transferred in or out of the PRC.

As of the date of this annual report, no dividends, distributions or transfers have been made between Huachen Cayman and any of its subsidiaries and no dividends, distributions or transfers have been made by Huachen Cayman to its shareholders. For the foreseeable future, the Company intends to use the earnings for research and development, to develop new products and to expand its production capacity. As a result, we do not expect to pay any cash dividends in the foreseeable future. Also, as of the date of this annual report, no cash generated from one subsidiary is used to fund another subsidiary’s operations and we do not anticipate any difficulties or limitations on our ability to transfer cash between subsidiaries.

Corporate Structure

The following diagram illustrates the corporate structure of Huachen Cayman and its subsidiaries as of the date of this annual report.

Our Subsidiaries and Business Functions

Huachen Cayman was incorporated on September 30, 2021, under the laws of the Cayman Islands. Huachen Cayman is a holding company and is currently not actively engaging in any business.

Yu He Chuang Co., Ltd (“YHC HK”) was incorporated on April 1, 2025, under the laws of the under the laws of Hong Kong. YHC HK is a wholly-owned subsidiary of the Company. It is a holding company and is not actively engaging in any business.

Chuang Yu He (Shanghai) Industrial Co., Ltd. (“CYH Shanghai”) was incorporated on June 12, 2025 under the laws of the PRC. CYH Shanghai is a wholly-owned subsidiary of YHC HK and currently has no operations.

Hangzhou Zhihuichong Technology Co., Ltd. (“Hangzhou ZHC”) was incorporated on November 20, 2025 under the laws of the PRC. Hangzhou ZHC is a wholly-owned subsidiary of CYH Shanghai and its primary business consists of the development and operation of charging infrastructure and operating platforms for new-energy two-wheeled vehicles and electric vehicles.

Jiaxing Xuchen Technology Co., Ltd. (“Jiaxing XC”) was incorporated on September 9, 2025 under the laws of the PRC. Jiaxing XC is a wholly-owned subsidiary of CYH Shanghai and currently engages in the sale of equipment structures and metal products.

3.A. [Reserved]

3.B. Capitalization and Indebtedness

Not applicable for annual reports on Form 20-F.

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

Not applicable for annual reports on Form 20-F.

3.D. Risk Factors

Risk Factor Summary

You should carefully consider all of the information in this annual report before making an investment in our Class A Ordinary Shares. Below please find a summary of the principal risks and uncertainties we face, organized under relevant headings. In particular, as we are a PRC-based company incorporated in the Cayman Islands, you should pay special attention to subsections headed “Item 3. Key Information—3.D. Risk Factors—Risks Related to Our Corporate Structure.” and “Item 3. Key Information—3.D. Risk Factors—Risks Related to Doing Business in the Jurisdictions in which the Operating Subsidiaries Operate”.

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

Risks Related to Our Corporate Structure

Risks Related to Doing Business in China

Risks Related to our Class A Ordinary Shares

Risks Related to Our Business and Industry

Risks Related to Our Corporate Structure

Huachen Cayman is a holding company and will rely on dividends paid by the subsidiaries for its cash needs. Any limitation on the ability of the subsidiaries to make dividend payments to Huachen Cayman, or any tax implications of making dividend payments to Huachen Cayman, could limit its ability to pay its expenses or pay dividends to holders of our Class A Ordinary Shares.

Huachen Cayman is a holding company with no material operation. The Operating Subsidiaries conduct operations in China. Huachen Cayman may rely on dividends to be paid by the PRC subsidiaries to fund its cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt it may incur and to pay its operating expenses. If the PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to Huachen Cayman.

Under PRC laws and regulations, our PRC subsidiaries may pay dividends only out of accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, a wholly foreign-owned enterprise is required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital.

Our PRC subsidiaries generate all of their revenue in Renminbi, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of our PRC subsidiaries to use the Renminbi revenues to pay dividends to us. The China regulatory authority may continue to strengthen its capital controls in accordance with the requirements of laws and regulations, and more restrictions and substantial vetting processes may be put forward by the SAFE for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability of our PRC subsidiaries to pay dividends or make other kinds of payments to us could materially and limit our ability to grow, make investments or acquisitions that could be beneficial to the business, pay dividends, or otherwise fund and conduct the business.

In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are incorporated. Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to the business, pay dividends, or otherwise fund and conduct the business.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.

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

Certain judgments obtained against us by our shareholders may not be enforceable.

We are a Cayman Islands exempted company and all of our assets are located outside of the United States. In addition, a majority of our current directors and officers are nationals and/or residents of countries other than the United States. All or a substantial portion of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the PRC may render you unable to enforce a judgment against our assets or the assets of our directors and officers. For more information regarding the relevant laws of the Cayman Islands and the PRC, see “Enforceability of Civil Liabilities.”

Shareholder claims, including securities law class actions and fraud claims, are common in the United States and are generally difficult to pursue as a matter of law or practicability in China. For example, in China, there are significant legal and other barriers to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the local authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such regulatory cooperation with the securities regulatory authorities in the United States have not been efficient in the absence of a mutual and practical cooperation mechanism. According to Article 177 of the PRC Securities Law, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. Accordingly, without the consent of the competent PRC securities regulators or other relevant authorities, no entity or individual may provide any documents and materials relating to securities business activities to foreign entities or government agencies.

Risks Related to Doing Business in China

The Chinese government exerts substantial influence over the manner in which we must conduct our business activities, which could result in a material change in our operations and/or the value of our Class A Ordinary Shares. The Chinese government may intervene or influence our operations at any time, which could result in a material change in our operations and the value of our Class A Ordinary Shares.

The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof and could require us to divest ourselves of any interest we then hold in Chinese properties.

For example, the Chinese cybersecurity regulator announced on July 2, 2021 that it had begun an investigation of Didi Global Inc. (NYSE: DIDI) and two days later ordered that the company’s app be removed from smartphone app stores.

As such, the Operating Subsidiaries may be subject to various government and regulatory interference in the provinces in which they operate. The Operating Subsidiaries could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. The Operating Subsidiaries may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. The Chinese government may intervene or influence our operations at any time with little advance notice, which could result in a material change in our operations and the value of our Class A Ordinary Shares. Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may also be implemented quickly with little advance notice. Therefore, our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain.

Huachen Cayman is a holding company incorporated under the laws of the Cayman Islands and is not a Chinese operating company. As a holding company with no material operations of its own, it conducts all of its operations and operates its business in China through the Operating Subsidiaries. All of the clients of the PRC subsidiaries are PRC persons. Because of our corporate structure as a Cayman Islands holding company with operations conducted by our PRC subsidiaries, the PRC government may choose to exercise significant oversight and discretion, and the regulations to which our Operating Subsidiaries are subject may change rapidly and with little notice to us and our Operating Subsidiaries or our shareholders. As a result, the application, interpretation, and enforcement of new and existing laws and regulations in the PRC are often uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or authorities, and inconsistently with our and our Operating Subsidiaries’ current policies and practices. New laws, regulations, and other government directives in the PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions may:

We are aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in the PRC with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.

Since these statements and regulatory actions are new, it is highly uncertain how soon the PRC legislative or administrative regulation making bodies will respond or what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, or what the potential impact that any such modified or new laws and regulations would have on our operating subsidiaries’ daily business operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange.

There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations, along with the risk that the Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers could result in a material change in our operations, financial performance and/or the value of our Class A Ordinary Shares or impair our ability to raise money.

All of the Operating Subsidiaries’ operations are conducted in the PRC, and are governed by PRC laws, rules and regulations. The operating entity is subject to laws, rules and regulations applicable to foreign investment in China. The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value.

In 1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in general. The overall effect of legislation over the past four decades has significantly enhanced the protections afforded to various forms of foreign investment in China. However, China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations may not sufficiently cover all aspects of economic activities in China or may be subject to significant degrees of interpretation by PRC regulatory agencies. In particular, because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the nonbinding nature of such decisions, and because the laws, rules and regulations often give the relevant regulator significant discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable. In addition, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of the operating entity’s violation of these policies and rules until after the violation.

Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection the operating entity enjoys than in more developed legal systems. These uncertainties may impede the operating entity’s ability to enforce the contracts it has entered into and could materially and adversely affect its business, financial condition and results of operations.

The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Illegal Securities Opinions, which were made available to the public on July 6, 2021. The Illegal Securities Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems, will be taken to address with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. The Illegal Securities Opinions remain unclear on how the law will be interpreted, amended and implemented by the relevant PRC governmental authorities, but the Illegal Securities Opinions and any related implementing rules to be enacted may subject the operating entity to compliance requirements in the future.

On July 10, 2021, the CAC issued a revised draft of the Measures for Cybersecurity Review for public comments, which required that, among others, in addition to a CIIO,” any “data processor” controlling personal information of no less than one million users which seeks to list in a foreign stock exchange should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities.

On November 14, 2021, the CAC released the Regulations on Network Data Security (draft for public comments) and accepted public comments until December 13, 2021. The draft Regulations on Network Data Security provide that data processors refer to individuals or organizations that autonomously determine the purpose and the manner of processing data. If a data processor that processes personal data of more than one million users intends to list overseas, it shall apply for a cybersecurity review. In addition, data processors that process important data or are listed overseas shall carry out an annual data security assessment on their own or by engaging a data security services institution, and the data security assessment report for the prior year should be submitted to the local cyberspace affairs administration department before January 31 of each year. On December 28, 2021, the Measures for Cybersecurity Review (2021 version) was promulgated and took effect on February 15, 2022, which iterates that any “online platform operators” controlling personal information of more than one million users which seeks to list in a foreign stock exchange should also be subject to cybersecurity review. As advised by our PRC counsel, Shanghai Xiading Law Firm, the operating entity does not process users’ personal information and it is not deemed to be a CIIO nor is it an online platform operator with personal information of more than one million users.

We are a comprehensive electric vehicle charging provider, and neither the Company nor its subsidiaries engage in data activities as defined under the Personal Information Protection Law of the PRC (the “Personal Information Protection Law”), which includes, without limitation, collection, storage, use, processing, transmission, provision, publication and deletion of data. In addition, neither the Company nor its subsidiaries are operators of any “critical information infrastructure” as defined under the PRC Cybersecurity Law and the Security Protection Measures on Critical Information Infrastructure. However, the Measures for Cybersecurity Review (2021 version) was recently adopted, and the Network Internet Data Protection Draft Regulations (draft for comments) is in the process of being formulated and the Illegal Securities Opinions remain unclear on how such measures will be interpreted, amended and implemented by the relevant PRC governmental authorities.

Effective January 1, 2025, China’s Network Data Security Management Regulations introduce enhanced requirements for data security and privacy, particularly concerning personal information protection, data localization, and cross-border data transfers. These regulations impose stricter compliance obligations on data handlers, including requirements to conduct regular data security risk assessments, implement classified data protection measures, and obtain governmental approval for certain cross-border data transfers. Additionally, companies processing large volumes of “important data” or “national core data” may face heightened scrutiny and stricter regulatory oversight. Failure to comply with these regulations could result in significant financial penalties, operational disruptions, revocation of business licenses, or restrictions on cross-border operations. As a result, we may be required to adjust our data handling practices, enhance internal compliance measures, and allocate additional resources to meet evolving regulatory requirements in China.

Since the Network Data Security Management Regulations are now effective, our PRC subsidiaries likely will be required to perform annual data security assessment either by itself or retaining a third-party data security service provider and submit such data security assessment report to the local agency every year. Neither the CAC nor any other PRC regulatory agency or administration has contacted the Company in connection with the PRC subsidiaries. Neither the Company nor the PRC subsidiaries are currently required to obtain regulatory approval from the CAC nor any other PRC authorities. However, there remains uncertainty as to how the Measures for Cybersecurity Review (2021) will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Measures for Cybersecurity Review (2021). We cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply with such laws. Our PRC subsidiaries currently have obtained all material permissions and approvals required for our operations in compliance with the relevant PRC laws and regulations in the PRC, including the business license. In the event that the applicable laws, regulations or interpretations change such that we are subject to any mandatory cybersecurity review and other specific actions required by the CAC, we cannot guarantee whether we can complete the registration process in a timely manner, or at all. If we inadvertently conclude that such approval is not required, fail to obtain and maintain such approvals, licenses or permits required for our business or respond to changes in the regulatory environment, we could be subject to liabilities, penalties and operational disruption, which may materially and adversely affect our business, operating, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

On February 17, 2023, the CSRC released the Trial Measures, which came into effect on March 31, 2023, and five supporting guidelines. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure to the CSRC. On the same day, the CSRC held a press conference for the release of the Trial Measures and issued the Notice of the Arrangements for the Recordation-Based Administration of Overseas Offering and Listing by Domestic Enterprises.

We are required to make filings with the CSRC and should complete the filing before our listing on the Nasdaq. According to Article 16 of the Trial Measures, an issuer conducting overseas initial public offering or listing shall undergo the recordation formalities with the CSRC within three working days after the application documents for offering and listing are submitted overseas. On February 5, 2024, we received approval from the CSRC regarding our completion of the required filing procedures for our initial public offering, which was closed on February 6, 2025. In addition, if we do not maintain the approvals, or applicable laws, regulations, or interpretations change such that we are required to obtain other permission and approval in the future, we may be subject to investigations by competent regulators, fines or penalties, ordered to suspend the relevant operations and rectify any non-compliance, prohibited from engaging in relevant business or conducting any offering, and these risks could result in a material adverse change in the operations, limit our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

Furthermore, the PRC government authorities may strengthen oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers like us. Such actions taken by the PRC government authorities may intervene or influence our operations at any time, which are beyond our control. Therefore, any such action may adversely affect our operations and significantly limit or hinder our ability to offer or continue to offer securities to you and reduce the value of such securities.

Uncertainties regarding the enforcement of laws and the fact that rules and regulations in China can change quickly with little advance notice, along with the risk that the Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers could result in a material change in our operations, financial performance and/or the value of our Class A Ordinary Shares or impair our ability to raise money.

To the extent cash or assets in the business are in the PRC or Hong Kong or a PRC or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash or assets.

The transfer of funds and assets between Huachen Cayman and its Hong Kong and PRC subsidiaries is subject to restrictions. The PRC government imposes controls on the conversion of the RMB into foreign currencies and the remittance of currencies out of the PRC. See “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Doing Business in China — Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.” In addition, the PRC Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC central government and the governments of other countries or regions where the non-PRC resident enterprises are tax resident. See “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Doing Business in China — Huachen Cayman is a holding company and will rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our Class A Ordinary Shares.”

As of the date of this annual report, there are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into and out of Hong Kong (including funds from Hong Kong to the PRC), except for the transfer of funds involving money laundering and criminal activities. However, there is no guarantee that the Hong Kong government will not promulgate new laws or regulations that may impose such restrictions in the future.

As a result of the above, to the extent cash or assets in the business are in the PRC or Hong Kong or a PRC or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash or assets.

Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.

The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive all of our revenues in RMB. Under our current corporate structure, our Cayman Islands holding company may rely on dividend payments from the PRC operating entities to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE, by complying with certain procedural requirements. Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of PRC operating entities may be used to pay dividends to our Company. However, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use the cash generated from the operations of the PRC operating entities to pay off their respective debt in a currency other than RMB owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than RMB.

In light of the flood of capital outflows of China in 2016 due to the weakening RMB, the PRC government has imposed more restrictive foreign exchange policies and stepped up scrutiny of major outbound capital movements including overseas direct investment. More restrictions and substantial vetting processes are put in place by SAFE to regulate cross-border transactions falling under the capital account. If any of our shareholders regulated by such policies fails to satisfy the applicable overseas direct investment filing or approval requirement timely or at all, it may be subject to penalties from the relevant PRC authorities. The PRC government may at its discretion further restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our Class A Ordinary Shares.

The recent joint statement by the SEC and PCAOB, Nasdaq’s proposed rule changes and the HFCAA all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.

The HFCAA was enacted on December 18, 2020. The HFCAA states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC will prohibit the company’s shares from being traded on a national securities exchange and in over-the-counter markets in the U.S.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above. On December 2, 2021, the SEC adopted final amendments implementing the disclosure and submission requirements of the HFCAA.

On June 22, 2021, the Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would decrease the number of non-inspection years from three years to two years, and thus, would reduce the time before our securities may be prohibited from trading or delisted.

The SEC adopted rules to implement the HFCAA and, pursuant to the HFCAA, the PCAOB issued its report on December 16, 2021, notifying SEC of its determination that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China or Hong Kong because of a position taken by one or more authorities in China or in Hong Kong, respectively. The rules apply to foreign issuers whose registered public accounting firm is located in a foreign jurisdiction that does not permit the PCAOB to inspect or investigate (“Commission-Identified Issuers”). The rules further provide notice regarding the procedures the SEC has established to identify issuers and to impose trading prohibitions on the securities of certain Commission-Identified Issuers, as required by the HFCAA. Our auditor, Audit Alliance LLP, is an independent registered public accounting firm that issues the audit report included elsewhere in this annual report. As an auditor of publicly traded companies in the United States and a firm registered with the PCAOB, it is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The most recent inspection was conducted in December 2023. However, we cannot assure you whether U.S. regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements.

On August 26, 2022, the PCAOB signed the SOP Agreements with the CSRC and China’s Ministry of Finance. The SOP Agreements established a specific, accountable framework. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should China regulatory authorities fail to agree to the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. Notwithstanding the foregoing, in the event it is later determined that the PCAOB is unable to inspect or investigate completely our auditor, then such lack of inspection could cause our securities to be delisted from the stock exchange. On June 22, 2021, the U.S. Senate passed Accelerating Holding Foreign Companies Accountable Act and on December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and amended the Holding Foreign Companies Accountable Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before our Class A Ordinary Shares may be prohibited from trading or delisted.

Uncertainties of the ability of auditors to comply with the requirements of the HFCAA, as well as further rulemakings by U.S., regulators with respect to their work in China, could cause the market price of our Class A Ordinary Shares to fall. If the PCAOB determines that it cannot inspect the audits of our PRC operating subsidiaries, the trading of our securities may be prohibited under the HFCAA and, as a result, the Nasdaq may delist our securities. The delisting of our Class A Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.

In light of recent events indicating further development by the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange, we may be subject to a variety of PRC laws and other obligations regarding data protection and any other rules, and any failure to comply with applicable laws and obligations could have a material and adverse effect on the business and the Offering.

The operations of the PRC subsidiaries are located in China and the clients are PRC persons. As such the PRC subsidiaries are subject to PRC laws relating to the collection, use, sharing, retention, security, and transfer of confidential and private information, such as personal information and other data. These laws apply not only to third-party transactions, but also other parties with which we have commercial relations. These laws continue to develop, and the China regulatory authority may adopt other rules and restrictions in the future. Non-compliance could result in penalties or other significant legal liabilities.

The PRC regulatory requirements regarding cybersecurity are evolving. For instance, various regulatory bodies in the PRC, including the CAC, the Ministry of Public Security, and the SAMR, have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations. The Cybersecurity Law, which was adopted by the National People’s Congress on November 7, 2016, and the Cybersecurity Review Measures, which were promulgated on April 13, 2020, provide that personal information and important data collected and generated by an operator of critical information infrastructure in the course of its operations in China must be stored in China, and if an operator of critical information infrastructure purchases internet products and services that affect or may affect national security, it will be subject to cybersecurity review by the CAC. On June 10, 2021, the Standing Committee of the National People’s Congress promulgated the Data Security Law, which took effect on September 1, 2021. The Data Security Law requires that data shall not be collected by theft or other illegal means, and also provides for a data classification and hierarchical protection system. The data classification and hierarchical protection system puts data into different groups according to its importance in economic and social development, and the damages it may cause to national security, public interests, or the legitimate rights and interests of individuals and organizations in case the data is falsified, damaged, disclosed, illegally obtained or illegally used. If any of our data processing activities conducted after the Data Security Law became effective were found to be not in compliance with this law, we could be ordered to make corrections, and under certain serious circumstances, such as severe data divulgence, we could be subject to penalties, including the revocation of the business licenses or other permits. Furthermore, the recently issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law require (i) speeding up the revision of the provisions on strengthening the confidentiality and archives management relating to overseas issuance and listing of securities and (ii) improving the laws and regulations relating to data security, cross-border data flow, and management of confidential information. As there remain uncertainties regarding the further interpretation and implementation of those laws and regulations, we cannot assure you that we will be compliant such new regulations in all respects, and we may be ordered to rectify and terminate any actions that are deemed illegal by the regulatory authorities and become subject to fines and other sanctions.

According to the New Measures, if an operator of critical information infrastructure who purchase network products or services that affects or may affect national security or a network platform operator who possesses the personal information of more than one million users and intends to list in a foreign country shall declare to the Office of Cybersecurity Review for cybersecurity review. The New Measures further elaborates the factors to be considered when assessing the national security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or exited the country; and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments after listing abroad. As of the date of this annual report, the Company and its PRC Subsidiaries have possessed substantially less than one million users of personal information in their business operations and neither the Company nor any of its subsidiaries is recognized as an “operator of critical information infrastructure” by any authentic authority. Therefore, as advised by our PRC counsel, Shanghai Xiading Law Firm, neither the Company nor any of its subsidiaries shall be deemed to be an “operator of critical information infrastructure” or “network platform operator” controlling personal information of no less than one million users. We are required to collect and retain some basic information furnished by the clients, suppliers and employees in accordance with prevailing business practices, but we do not handle a large amount of personal and confidential data in the ordinary course of business. As of the date of this annual report, we have not been involved in any investigations on cybersecurity or data security initiated by related governmental regulatory authorities, and we have not received any inquiry, notice, warning, or sanction in such respect. Our PRC subsidiaries have received all necessary permissions required to obtain from PRC authorities to operate its current business in China, including Business Licenses.

However, given the recent events indicating greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, it remains uncertain as to how the New Measures will be interpreted or implemented. There remains uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to current and future applicable laws, overseas securities offerings and other capital markets activities. PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the New Measures. They may also take actions requiring us, or making it advisable for us, to suspend or adjust our capital markets activities. If any such new laws, regulations, rules, or implementation and interpretation come into effect, we expect to take all reasonable measures and actions to comply therewith. In the event of a failure to comply, we may be required to suspend our relevant businesses and become subject to fines and other penalties. If the CAC or other PRC regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals for any follow-on offering in the future, we may be unable to obtain such approvals, which could limit our ability to continue to offer securities to our investors.

You may experience difficulties in effecting service of process, enforcing foreign judgments or bringing actions in China against us or our management named in this annual report based on foreign laws.

Huachen Cayman is a holding company incorporated under the laws of the Cayman Islands without material operation. All of the operations are conducted by the Operating Subsidiaries in China. In addition, all of our assets are held by the PRC subsidiaries and are located in China and most of our senior executive officers and directors reside within China for a significant portion of the time. As a result, it may be difficult or impossible for investors to effect service of process on us inside China. It may also be difficult for you to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors. Moreover, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us, or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state.

The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of written arrangement with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States or in the Cayman Islands. In addition, it will be difficult for U.S. shareholders to originate actions against us in China in accordance with PRC laws because we are incorporated under the laws of the Cayman Islands and it will be difficult for U.S. shareholders, by virtue only of holding our Class A Ordinary Shares, to establish a connection to the PRC for a PRC court to have jurisdiction as required under the PRC Civil Procedures Law.

Our results of operation may be materially and adversely affected by a downturn in China or the global economy.

All of the operations and assets are currently located in China, and all of our revenue was generated in China for the fiscal years ended December 31, 2025, 2024 and 2023. Accordingly, the business, prospects, financial condition and results of operations may be influenced to a significant degree by the economic and social conditions in China generally and by the continued economic growth in China as a whole. While the Chinese economy has experienced significant growth over the past decades, growth has been different, both geographically and among various sectors of the economy. The China regulatory authority has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy but may have a negative effect on us. Prolonged slowdown in the global or the Chinese economy may affect potential customers’ confidence in the financial market as a whole and have a negative impact on our financial condition. Further, recent global economic conditions including inflationary pressures, have not materially affected the operations in the PRC. However, continued pressure from global economic conditions may the PRC markets in the future and in turn, may affect the operations. Turbulence in the international markets may also adversely affect our ability to access the capital markets to meet liquidity needs. We cannot assure the future changes in the world and PRC economies that could impact the industries in which we operate, which could in turn diminish the demand for the services.

It may be difficult for overseas shareholders and/or regulators to conduct cross-border investigations in China.

Shareholder claims or regulatory investigations that are common in the U.S. are typically difficult to pursue as a matter of law or practicality in China. There are significant legal obstacles to providing information needed for regulatory investigations or litigation initiated outside China. Chinese authorities may establish a regulatory cooperation agreement with the securities regulatory authorities of another jurisdiction to implement cross-border supervision and administration which may be difficult to achieve in the absence of mutual and practical cooperation.

We are required to complete the record filing requirement with PRC authorities to list on overseas stock exchanges and may not be able to complete the record filing because the filing materials are incomplete or do not meet the requirements of the CSRC.

On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises, or the Trial Measures, which became effective on March 31, 2023. On the same date of the issuance of the Trial Measures, the CSRC circulated No.1 to No.5 Supporting Guidance Rules, the Notes on the Trial Measures, the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and the relevant CSRC Answers to Reporter Questions on the official website of the CSRC, or collectively, the Guidance Rules and Notice. Under the Trial Measures and the Guidance Rules and Notice, domestic companies conducting overseas securities offering and listing activities, either in direct or indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application.

Our PRC counsel, Shanghai Xiading Law Firm, has advised us that, based on its understanding of the current PRC laws and regulations, our offering will be identified as an indirect overseas issuance and listing by CSRC. According to Article 16 of the Trial Measures, an issuer conducting overseas initial public offering or listing shall undergo the recordation formalities with the CSRC within three working days after the application documents for offering and listing are submitted overseas. On February 5, 2024, we received approval from the CSRC regarding our completion of the required filing procedures for our initial public offering, which was closed on February 6, 2025. In addition, if we do not maintain the approvals, or applicable laws, regulations, or interpretations change such that we are required to obtain other permission and approval in the future, we may be subject to investigations by competent regulators, fines or penalties, ordered to suspend the relevant operations and rectify any non-compliance, prohibited from engaging in relevant business or conducting any offering, and these risks could result in a material adverse change in the operations, limit our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

On February 24, 2023, the CSRC, together with the Ministry of Finance, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing, which were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the “Provisions.” The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies,” and came into effect on March 31, 2023 together with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities companies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. On or after March 31, 2023, any failure or perceived failure by our Company and our subsidiaries, to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may influence growth in China.

International trade disputes, and other business interruptions could harm or disrupt international commerce and the global economy and could have a material adverse effect on us and the customers, contract manufacturers, raw material vendors, and other partners. International trade disputes could result in tariffs and other protectionist measures which may materially and adversely affect the business.

There have also been concerns about the relationship between the PRC and other countries, including the surrounding Asian countries, which may potentially have economic effects. In particular, there is significant uncertainty about the future relationship between the United States and the PRC with respect to trade policies, treaties, government regulations and tariffs. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and policies and the expected or perceived overall economic growth rate in China.

In February and March 2025, the United States administration imposed an additional 20 percent duty on Chinese imports. Subsequently, authorities in China announced tariffs over selected United States products and regulatory investigation against United States companies in response to the tariff imposed by the United States. Furthermore, on April 2, 2025, President Trump announced that the United States would impose a 10% tariff on all countries, effective on April 5, 2025, and an individualized reciprocal higher tariff on countries with which the United States has the largest trade deficits, including a 34% additional reciprocal tariff on goods imported from China that brings the total tariff rate to 54%. On April 4, 2025, the Foreign Ministry of China announced that China would impose a retaliatory 34% tariff on goods imported from the United States. On April 8, 2025, President Trump announced to impose an additional 50% tariff on Chinese imports. The Trump administration proceeded to implement a 104% tariff on goods imported from China on April 9, 2025. Subsequently, on April 10, 2025, President Trump announced a temporary suspension of reciprocal tariff measures targeting most U.S. trading partners for a 90-day period, while concurrently escalating tariffs on Chinese goods to 125%. These additional tariffs may increase our operating costs and create disruptions in our supply chain. Additionally, the U.S. government continues to signal that it may alter trade agreements and terms between China and the United States, including limiting trade with China, and may impose additional tariffs on imports from China and other countries from which we import goods.

Uncertainty surrounding international trade disputes and the potential of the escalation to trade war and global recession could have a negative effect on customer confidence. We may have also access to fewer business opportunities, and the operations may be negatively impacted as a result. In addition, the current and future actions or escalations by either the United States or the PRC that affect trade relations may cause global economic turmoil and potentially have a negative impact on our markets, the business, or our results of operations, as well as the financial condition of the clients, and we cannot provide any assurances as to whether such actions will occur or the form that they may take.

Fluctuations in currency exchange rates could have a material and adverse effect on the value of your investment.

Our revenue and expenses have been and are expected to continue to be primarily denominated in RMB, and we are exposed to the risks associated with the fluctuation in the currency exchange rate of RMB. Should RMB appreciate against other currencies, the value of the proceeds from any future financings, which are to be converted from US dollar or other currencies into RMB, would be reduced and might accordingly hinder the business development due to the lessened amount of funds raised. On the other hand, in the event of the devaluation of RMB, the dividend payments of our Company, which are to be paid in US dollars after the conversion of the distributable profit denominated in RMB, would be reduced. Hence, substantial fluctuation in the currency exchange rate of RMB may have a material adverse effect on the business, operations and financial position and the value of your investment in the Class A Ordinary Shares.

We may be subject to civil complaints and regulatory actions under certain laws and regulations relating to labor, social insurance and housing provident fund.

In accordance with the PRC Social Insurance Law and the Regulations on the Administration of Housing Fund and other relevant laws and regulations, the PRC has established a social insurance system and other employee benefits, including basic pension insurance, basic medical insurance, work-related injury insurance, unemployment insurance, maternity insurance, housing fund, and a handicapped employment security fund, or collectively the “Employee Benefits.” An employer is required to pay the Employee Benefits for its employees in accordance with the rates provided under relevant regulations and to withhold the social insurance and other Employee Benefits that should be assumed by the employees. An employer that has not made social insurance contributions at a rate and based on an amount prescribed by the law, or at all, may be ordered to rectify the non-compliance and pay the required contributions within a stipulated deadline and be subject to a late fee of up to 0.05% or 0.2% per day, as the case may be. If the employer still fails to rectify the failure to make social insurance contributions within the stipulated deadline, it may be subject to a fine ranging from 1 to 3 times of the amount overdue.

Although we have not received any order or notice from the local authorities nor any claims or complaints from our current and former employees regarding our non-compliance in this regard, we cannot assure you that we will not be subject to any order to rectify non-compliance in the future, nor can we assure you that there are no, or will not be any, employee complaints regarding social insurance payment or housing provident fund contributions against us, or that we will not receive any claims in respect of social insurance payment or housing provident fund contributions under the PRC laws and regulation.

There are withholding tax liabilities of our PRC subsidiaries under the PRC Enterprise Income Tax Law, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not enjoy certain treaty benefits.

Our Operating Subsidiaries in the PRC generate all of our profits through their business operations. Under the PRC Enterprise Income Tax Law and its implementation rules, the profits of a foreign-invested enterprise generated through operations, which are distributed to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to a special arrangement between Hong Kong and the PRC, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity interest in China company. Our current Operating Subsidiaries are majority-owned by our Hong Kong subsidiary, Hua Chen HK, through the intermediate holding company, Hua Chen WOFE. Accordingly, Hua Chen HK may qualify for a 5% tax rate in respect of distributions from the PRC subsidiaries. Under the Notice of the State Administration of Taxation on Issues regarding the Administration of the Dividend Provision in Tax Treaties promulgated in 2009, the taxpayer needs to satisfy certain conditions to enjoy the benefits under a tax treaty. These conditions include: (i) the taxpayer must be the beneficial owner of the relevant dividends, and (ii) the corporate shareholder to receive dividends from the PRC subsidiary must have met the direct ownership thresholds during the 12 consecutive months preceding the receipt of the dividends. Further, the State Administration of Taxation (“SAT”) promulgated the Notice on How to Understand and Recognize the “Beneficial Owner” in Tax Treaties in 2009, which limits the “beneficial owner” to individuals, enterprises or other organizations normally engaged in substantive operations, and sets forth certain detailed factors in determining “beneficial owner” status.

Entitlement to a lower tax rate on dividends according to tax treaties or arrangements between the PRC central government and governments of other countries or regions is subject to the Administrative Measures for Non-Resident Taxpayers to Enjoy Treatments under Tax Treaties, which provides that non-resident enterprises are not required to obtain pre-approval from the relevant tax authority to enjoy the reduced withholding tax. Instead, non-resident enterprises and their withholding agents may, by self-assessment and on confirmation that the prescribed criteria to enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms and supporting documents when performing tax filings, which will be subject to post-tax filing examinations by the relevant tax authorities. As a result, we cannot assure you that we will be entitled to any preferential withholding tax rate under treaties for dividends received from our PRC subsidiaries.

You may be subject to PRC income tax on dividends from us or on any gain realized on the sale or other disposition of our shares under PRC law.

Under the Enterprise Income Tax (“EIT”) Law subject to any applicable tax treaty or similar arrangement between China and your jurisdiction of residence that provides for a different income tax arrangement, PRC withholding tax at the rate of 10% is normally applicable to dividends from sources within China payable to investors that are non-PRC resident enterprises, which do not have an establishment or place of business in China, or which have such establishment or place of business if the relevant income is not effectively connected with the establishment or place of business. Any gain realized on the transfer of shares by such investors is subject to 10% PRC income tax if such gain is regarded as income derived from sources within China unless a treaty or similar arrangement otherwise provides. Under the PRC Individual Income Tax Law and its implementation rules, dividends from sources within China paid to foreign individual investors who are not PRC residents are generally subject to a PRC withholding tax at a rate of 20%, and gains from PRC sources realized by such investors on the transfer of shares are generally subject to 20% PRC income tax, in each case, subject to any reduction or exemption set forth in applicable tax treaties and PRC laws.

As all of our business operations are in China, it is unclear whether dividends we pay with respect to our shares, or the gain realized from the transfer of our shares, would be treated as income derived from sources within China and as a result be subject to PRC income tax if we are considered a PRC resident enterprise. If PRC income tax is imposed on gains realized from the transfer of our Shares or on dividends paid to our non-PRC resident investors, the value of our investors’ investment in our Shares may be materially and adversely affected. Furthermore, our shareholders whose jurisdictions of residence have tax treaties or arrangements with China may not qualify for benefits under such tax treaties or arrangements.

The heightened scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on our business operations, our acquisition or restructuring strategy or the value of your investment in us.

Pursuant to the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises (“SAT Circular 698”) issued by the SAT in December 2009 with retroactive effect from January 1, 2008, where a nonresident enterprise transfers the equity interests of a PRC resident enterprise indirectly by disposition of the equity interests of an overseas non-public holding company (an “Indirect Transfer”), and such overseas holding company is located in a tax jurisdiction that (i) has an effective tax rate of less than 12.5% or (ii) does not impose income tax on foreign income of its residents, the non-resident enterprise, being the transferor, must report to the competent tax authority of the PRC resident enterprise this Indirect Transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax.

On March 28, 2011, the SAT released the SAT Public Notice (2011) No. 24 (“SAT Public Notice 24”), which became effective on April 1, 2011, to clarify several issues related to Circular 698. According to SAT Public Notice 24, the term “effective tax” refers to the effective tax on the gain derived from disposition of the equity interests of an overseas holding company; and the term “does not impose income tax” refers to the cases where the gain derived from disposition of the equity interests of an overseas holding company is not subject to income tax in the jurisdiction where the overseas holding company is a resident.

On February 3, 2015, the SAT issued (“SAT Circular 7”), which abolished certain provisions in SAT Circular 698, as well as certain other rules providing clarification on SAT Circular 698. SAT Circular 7 provided comprehensive guidelines relating to, and also heightened the PRC tax authorities’ scrutiny over, indirect transfers by a nonresident enterprise of PRC taxable assets. Under SAT Circular 7, the PRC tax authorities are entitled to reclassify the nature of an indirect transfer of PRC taxable assets, when a non-resident enterprise transfers PRC taxable assets indirectly by disposing of equity interests in an overseas holding company directly or indirectly holding such PRC taxable assets, by disregarding the existence of such overseas holding company and considering the transaction to be a direct transfer of PRC enterprise income taxes and without any other reasonable commercial purpose. However, SAT Circular 7 contains certain exemptions, including (i) where a non-resident enterprise derives income from the indirect transfer of PRC taxable assets by acquiring and selling shares of an overseas listed holding company which holds such PRC taxable assets on a public market; and (ii) where there is an indirect transfer of PRC taxable assets, but if the non-resident enterprise had directly held and disposed of such PRC taxable assets, the income from the transfer would have been exempted from enterprise income tax in the PRC under an applicable tax treaty or arrangement.

On October 17, 2017, the STA promulgated the Announcement on Matters Concerning Withholding and Payment of Income Tax of Non-resident Enterprises from Source (the “STA Circular 37”), which came into force and replaced the STA Circular 698 and certain other regulations on December 1, 2017 and partly amended on June 15, 2018. The STA Circular 37 does, among other things, simplify procedures of withholding and payment of income tax levied on non-resident enterprises.

We have conducted and may conduct acquisitions involving changes in corporate structures, and historically our shares were transferred by certain then shareholders to our current shareholders. We cannot assure you that the PRC tax authorities will not, at their discretion, adjust any capital gains and impose tax return filing obligations on us or require us to provide assistance for the investigation of PRC tax authorities with respect thereto. Any PRC tax imposed on a transfer of our Shares or any adjustment of such gains would cause us to incur additional costs and may have a negative impact on the value of your investment in us.

PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental management of currency conversion may delay us from remitting the proceeds of our future offerings into China through loans or additional capital contributions to our PRC subsidiaries, thereby reducing our ability to fund and expand the business.

Any funds we transfer to our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with relevant governmental authorities in China regardless of the amount of the transfer. According to the relevant PRC regulations on foreign investment entities (“FIEs”) in China, capital contributions to our PRC subsidiaries are subject to the filing with the Ministry of Commerce of the PRC (“MOFCOM”) or their respective local branches and registration with a local bank authorized by SAFE. In addition, (i) any foreign loan procured by our PRC subsidiaries is required to be registered with SAFE or their respective local branches and (ii) our PRC subsidiaries may not procure loans which exceed the difference between their respective total project investment amount and registered capital or twice of their net worth. We may not be able to complete such registrations or obtain necessary approvals on a timely basis with respect to future capital contributions or foreign loans by us to our PRC subsidiaries. If we fail to complete such registrations, our ability to use the proceeds of our continued offering, and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand the business.

The process for sending the proceeds from our future offerings back to China may take as long as six months after the closing of our future offerings. In utilizing the proceeds of our future offerings, we may make additional capital contributions or loans to Hua Chen WFOE and our PRC subsidiaries. Any loans to Hua Chen WFOE or the PRC subsidiaries are subject to PRC regulations. For example, loans by us to our subsidiaries in China, which are foreign-invested enterprises, to finance their activities cannot exceed statutory limits and must be registered with SAFE.

To remit the proceeds of any future offerings, we must take the following steps:

We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions must be approved by MOFCOM or its local counterpart. We cannot assure you that we will be able to obtain these government approvals on a timely basis, if at all, with respect to future capital contributions by us to our subsidiaries. If we fail to receive such approvals, our ability to use the proceeds of our future offerings and to capitalize our Chinese operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand the business. If we fail to receive such approvals, our ability to use the proceeds of our future offerings and to capitalize our Chinese operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand the business.

On March 30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises, (“SAFE Circular 19”), which took effect as of June 1, 2015. SAFE Circular 19 launched a nationwide reform of the administration of the settlement of the foreign exchange capitals of FIEs and allows FIEs to settle their foreign exchange capital at their discretion but continues to prohibit FIEs from using the RMB fund converted from their foreign exchange capital for expenditure beyond their business scopes, providing entrusted loans or repaying loans between nonfinancial enterprises. The SAFE issued the Circular on Reforming and Regulating Policies on the Supervision over Foreign Exchange Settlement of Capital Accounts, (“SAFE Circular 16”), effective in June 2016. Pursuant to SAFE Circular 16, enterprises registered in China may also convert their foreign debts from foreign currency to RMB on a self-discretionary basis. SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis which applies to all enterprises registered in China. SAFE Circular 16 reiterates the principle that RMB converted from foreign currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations, while such converted RMB will not be provided as loans to its non-affiliated entities. As Circular 16 is relatively new, there remains uncertainty as to its interpretation and application and any other future foreign exchange related rules. Violations of these circulars could result in severe monetary or other penalties. SAFE Circular 19 and SAFE Circular 16 may supervise our ability to use Renminbi converted from the net proceeds of our future offerings and our concurrent private placement, to invest in or acquire any other PRC companies through our PRC subsidiaries.

Acquisitions of Chinese companies by foreign investors may need a series of procedures, which could make it rather difficult for us to pursue growth through acquisitions in China.

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rule, adopted by six PRC regulatory agencies in August 2006 and amended in 2009, and some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex, including requirements in some instances that the MOC be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise. For example, the M&A Rule require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand. Moreover, the Anti-Monopoly Law promulgated by the SCNPC effective in 2008 requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds (i.e., during the previous fiscal year, (i) the total global turnover of all operators participating in the transaction exceeds RMB10 billion and at least two of these operators each had a turnover of more than RMB400 million within China, or (ii) the total turnover within China of all the operators participating in the concentration exceeded RMB 2 billion, and at least two of these operators each had a turnover of more than RMB 400 million within China) must be cleared by MOFCOM before they can be completed.

Moreover, the Anti-Monopoly Law requires that the MOC shall be notified in advance of any concentration of undertaking if certain thresholds are triggered. In addition, the security review rules issued by the MOC that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the MOC, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. In the future, we may grow the business by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time consuming, and any required approval processes, including obtaining approval from the MOC or its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to expand the business or maintain our market share.

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

Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with its “de facto management body” within the PRC is considered a “resident enterprise” and will be subject to the enterprise income tax on its global income at the rate of 25%. The implementation rules define the term “de facto management body” as the body that exercises full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise. In 2009, the SAT issued a circular, known as SAT Circular 82, partially abolished on December 29, 2017, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular applies only to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT’s general position on how the “de facto management body” text should be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China, and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in China; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in China; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions are located or maintained in China; and (iv) at least 50% of voting board members or senior executives habitually reside in China.

We believe that, as a Cayman Islands exempted company, Huachen Cayman is not a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.” If the PRC tax authorities determine that our company is a PRC resident enterprise for enterprise income tax purposes, we would be subject to PRC enterprise income on our worldwide income at the rate of 25%. Furthermore, we would be required to withhold a 10% tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of our Class A Ordinary Shares. In addition, non-resident enterprise shareholders may be subject to PRC tax on gains realized on the sale or other disposition of the Class A Ordinary Shares, if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders and any gain realized on the transfer of the Class A Ordinary Shares by such shareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us). These rates may be reduced by an applicable tax treaty, but it is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in our Class A Ordinary Shares.

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

On February 3, 2015, the SAT issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or SAT Bulletin 7. SAT Bulletin 7 extends its tax jurisdiction to transactions involving the transfer of taxable assets through offshore transfer of a foreign intermediate holding company. In addition, SAT Bulletin 7 has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. SAT Bulletin 7 also brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets, as such persons need to determine whether their transactions are subject to these rules and whether any withholding obligation applies.

On October 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Bulletin 37, which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax.

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

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

Increase in labor costs in PRC may affect the business and operations.

The current Labor Law of the PRC was first adopted on July 5, 1994 and subsequently amended on August 27, 2009 and December 29, 2018. The Labor Law of the PRC provides the restrictions on and increase of costs for dismissal of employees and establishes a system of guaranteed minimum wage. Over the past decade, as the Chinese economy has rapidly grown, the minimum wage standards have been increased. To the extent that we require some labor, higher labor costs could prevent us from being able to provide services efficiently and economically, which could have a negative impact on the operations. In addition, Chinese regulatory authorities have stepped up their enforcement and oversight of labor and social security, and if we are in breach of the rules, it will result in increased operating expenses.

We expect the labor costs, including wages and benefits, to continue to increase. Unless we are able to pass along these increased labor costs to our buyers by raising the prices of the products and services, our financial condition and results of operations will be materially adversely affected.

We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.

In connection with our future offerings, we will become subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We are also subject to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials. We have operations agreements with third parties, and make sales in China, which may experience corruption.

Although we believe, to date, we have complied in all material respects with the provisions of the FCPA and Chinese anti-corruption law, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, or distributors may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption law may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect the business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

Risks Related to the Business and Operations

We may not successfully implement our strategic transition from smart parking solutions and equipment structural parts to electric vehicle charging infrastructure.

We have historically operated as a smart parking solutions and equipment structural parts provider in China, with business activities including smart cubic parking garage design, manufacturing, sales, installation and maintenance, as well as the sale of equipment structural parts. We are currently undertaking a significant strategic transition away from our historical smart parking business and toward the development and operation of charging infrastructure and operating platforms for new-energy two-wheeled vehicles and electric vehicles.

This transition involves substantial changes to our business model, operating structure, technology requirements, capital needs, customer base, regulatory exposure and competitive environment. Our historical experience in smart parking and equipment structural parts may not translate into the capabilities required to develop, operate and scale an electric vehicle charging business. The electric vehicle charging business may require us to develop new expertise in site selection, charging equipment procurement, installation, electricity supply, grid connection, fire and electrical safety, charging platform operation, user acquisition, payment systems, data management, maintenance and regulatory compliance.

If we are unable to successfully execute this transition, develop the necessary operational and technical capabilities, attract users, secure suitable locations, achieve sufficient utilization of charging infrastructure, or manage the costs and risks associated with the electric vehicle charging business, our business, financial condition and results of operations could be materially and adversely affected.

Changes in the availability, quality and cost of key raw materials and other necessary supplies or services could have a material adverse effect on our business, financial condition and results of operations.

We are exposed to fluctuations in the prices of raw materials, transportation, and other necessary supplies or services due to factors beyond our control, such as policies, inflation, fluctuations in currency exchange rates, changes in weather, or changes in the supply and demand for such relevant raw materials, as a trade and agency entity, our margins are sensitive to volatility in global steel and specialized metal prices. Therefore, it could result in higher costs for our principal business if prices of our key raw materials increase in the future. We may not be able to offset the price increases by increasing our product prices, in which case our margins would decline, and our financial condition and results of operations could be materially and adversely affected. In addition, if we significantly increase the prices of our products, we may lose our competitive advantage. This in turn could result in a loss of sales and customers. In either case, our business, financial condition, and results of operations could be materially and adversely affected.

Our transition into electric vehicle charging infrastructure is at an early stage, and we may not generate sufficient revenue to offset the decline or disposition of our historical smart parking business.

Our electric vehicle charging business is newly commenced and has a limited operating history. We have not yet demonstrated that we can generate meaningful revenue, cash flow or profitability from the development and operation of charging infrastructure and operating platforms. Our historical financial results were primarily derived from smart parking solutions, equipment structural parts and related maintenance services, and may not be indicative of our future results as we transition into electric vehicle charging infrastructure.

As we shift away from our historical businesses, we may experience a decline in revenue from smart parking solutions, maintenance services and equipment structural parts before our electric vehicle charging business generates sufficient revenue to replace such decline. Our transition may also require substantial upfront investment in charging equipment, site development, platform development, personnel, maintenance, compliance and marketing. If our electric vehicle charging business does not develop as expected, or if it takes longer than anticipated to achieve commercial scale, our revenue, profitability, liquidity and growth prospects could be materially and adversely affected.

We may depend on third-party manufacturers, suppliers, contractors, platform vendors and service providers in our electric vehicle charging business and remaining equipment structural parts and metal products business.

As we transition away from our historical smart parking business and toward electric vehicle charging infrastructure, we may increasingly depend on third-party manufacturers, suppliers, contractors, platform vendors and service providers to support both our new charging business and our remaining equipment structural parts and metal products business. These third parties may provide charging equipment, electrical components, equipment structures, metal products, installation services, grid connection services, software development, payment processing, network connectivity, maintenance, customer support, fire safety compliance and other services necessary to our operations.

Following our transition to a more asset-light business model, we may rely heavily on third-party manufacturers and suppliers to fulfill orders and support project deployment. Any operational disruptions, financial instability, labor shortages, capacity constraints, raw material shortages, quality control failures, equipment defects, delivery delays or compliance issues at these third-party facilities could lead to project delays, increased costs, customer dissatisfaction, safety incidents, regulatory scrutiny or reputational damage.

We may not be able to promptly replace such manufacturers, suppliers, contractors or service providers on commercially reasonable terms, or at all. In addition, if third-party charging equipment, electrical components, platform systems or installation services fail to meet applicable quality, safety or performance standards, we may be required to incur additional costs to repair, replace or upgrade equipment, suspend operations at affected sites, compensate customers or site partners, or respond to regulatory inquiries or claims. Any such event could materially and adversely affect our business, financial condition and results of operations.

We are exposed to risks associated with the transportation of the products we sell.

We load products from our warehouses and provide transportation service until our products are delivered to our customers. However, in the event of such an accident resulting in damage to the products we sell in transit, our ability to supply the products could be adversely affected. We may need rework and repair our products. The occurrence of any such event could also require us to make significant capital expenditures beyond those anticipated and delay product deliveries which may lead to customer claims. The sales we may lose or the increased costs we may incur as a result of such operational disruptions and delays in delivery may not be recoverable under existing policies, and long-term business interruptions may result in the loss of end customers. If any one or more of these risks were to occur, our business, financial condition, results of operations and prospects could be materially and adversely affected.

Any quality problems associated with our products may result in loss of customers and sales, and we may face product liability claims if the problems are related to our products.

The success of our business depends on the continued delivery of quality and reliable products. We cannot assure you that our quality controls will be effective at all times, and we may face returns or cancellation of orders and customer complaints if the quality of any of our products deteriorates for any reason, or if consumers believe that our products do not deliver the claimed results.

In addition, if our products are defective or adversely affect the overall cause of consumer property damage or personal injury, we may be subject to product liability claims or product recalls that could cause financial and reputational harm. Even if we ultimately prevail, we may be required to incur substantial costs in defending such legal claims. In addition, consumers’ perception of our products and their willingness to purchase them may be adversely affected, regardless of whether the quality problems are related to us. Accordingly, any actual or known quality problems associated with our products could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Our business is subject to risks generally associated with the electric vehicle charging industry, and we may not successfully monetize value-added services in this new business line.

As part of our strategic transition away from our historical smart parking business, we have begun to enter the electric vehicle charging industry, including the development and operation of charging infrastructure and related operating platforms for new-energy two-wheeled vehicles and electric vehicles. Our strategic focus in this business includes accelerating profit growth and identifying opportunities for value-added service monetization, including through charging services, platform-based services, user traffic, data-driven services, advertising and other commercial applications. However, our electric vehicle charging business is newly commenced, and there can be no assurance that we will be able to successfully develop, operate or monetize these services.

The success of our electric vehicle charging business will depend significantly on the development and health of the electric vehicle charging industry. We are therefore exposed to industry-related risks, including changes in electric vehicle adoption rates, user charging habits, demand for new-energy two-wheeled vehicle charging, availability of competing charging or battery-swapping solutions, charging station utilization rates, electricity prices, site availability, technological changes, equipment reliability, platform stability, customer preferences, safety requirements and government policies or regulations. Many of these factors are difficult to predict and beyond our control.

In addition, because we are transitioning from smart parking solutions and equipment structural parts to electric vehicle charging infrastructure, we may face execution risks that are more significant than those faced by companies with a longer operating history in the charging industry. We may not be able to attract sufficient users, secure suitable sites, maintain reliable charging infrastructure, price our services competitively, or generate meaningful revenue from value-added services. If utilization of our charging infrastructure or user engagement with our operating platforms is lower than expected, our ability to recover our upfront investment and generate profit from this business may be materially limited.

Our electric vehicle charging business may also be affected by general economic and market conditions, including inflation, slower economic growth, unemployment levels, interest rates, energy prices, reduced consumer confidence, reduced discretionary spending, disruptions in the property and mobility sectors, and geopolitical or other macroeconomic uncertainty. These conditions could reduce demand for electric vehicles, charging services, platform-based services or advertising and other value-added services. Any adverse developments in the electric vehicle charging industry or broader economic environment could materially and adversely affect our business, financial condition and results of operations.

We may be exposed to counterparty credit risks and long payment cycles during and after our business transition.

Our historical businesses have involved significant contract values and customer payment cycles, and our new electric vehicle charging business may involve receivables from users, commercial customers, site partners, property owners, platform participants, equipment purchasers or other counterparties. If counterparties delay payment, dispute invoices, experience liquidity issues or default on their obligations, our cash flow and working capital could be adversely affected.

We may be required to record allowances for credit losses, write off receivables, or incur additional costs to collect amounts owed to us. Payment delays or defaults may be particularly harmful during our transition period because we may need to fund upfront costs for our charging infrastructure business while revenue from historical business lines declines. Any material payment delays, defaults or disputes could materially and adversely affect our financial condition and results of operations.

We may not achieve sufficient utilization of our electric vehicle charging infrastructure.

The success of our electric vehicle charging business will depend in part on the utilization rates of our charging infrastructure. Utilization may be affected by EV adoption rates, adoption of new-energy two-wheeled vehicles, user charging habits, location quality, charging speed, charging prices, equipment reliability, payment convenience, competition, access to home or workplace charging, availability of battery-swapping services, local traffic patterns, electricity prices and user confidence in the safety and reliability of charging facilities.

If utilization of our charging infrastructure is lower than expected, we may be unable to recover our investment in charging equipment, installation, platform development, maintenance, site access, marketing and operations. Low utilization could also make it more difficult to secure additional sites, attract financing, negotiate favorable commercial arrangements or expand our platform. Any failure to achieve sufficient utilization could materially and adversely affect our business, financial condition and results of operations.

We may be unable to secure suitable sites, venue resources, electrical capacity or approvals for electric vehicle charging infrastructure.

The development and operation of electric vehicle charging infrastructure requires access to suitable locations with sufficient user demand, available parking or stopping space, electrical capacity, grid access, safety conditions and commercially acceptable terms. We may need to coordinate with property owners, parking lot operators, landlords, property managers, utility providers, local communities, government authorities and other third parties to obtain site access, electrical upgrades, grid connections, construction approvals, fire safety clearances and other permits or consents.

We may not be able to secure suitable sites on commercially reasonable terms or at all. Certain sites may require electrical upgrades, grid modifications or construction work that is costly, time-consuming or technically difficult. We may also face delays or restrictions due to landlord objections, property management rules, local government approvals, grid capacity limitations, fire safety requirements or changes in applicable laws and policies. If we are unable to secure or retain suitable sites or obtain required approvals in a timely and cost-effective manner, our ability to expand our electric vehicle charging business could be materially and adversely affected.

We may incur substantial costs before our electric vehicle charging business generates meaningful revenue or cash flow.

The electric vehicle charging business may require substantial upfront investment in charging equipment, electrical infrastructure, site preparation, installation, operating platforms, software systems, maintenance, personnel, insurance, marketing, regulatory compliance and customer support. These costs may be incurred before the relevant charging infrastructure generates meaningful utilization, revenue or cash flow.

Our costs may exceed our expectations due to inflation, equipment shortages, supply chain disruptions, labor shortages, site-specific installation challenges, electricity infrastructure requirements, changes in technical standards, regulatory requirements, maintenance needs or higher electricity costs. We may not be able to recover these costs through charging fees, platform service fees, revenue-sharing arrangements or other income. If our costs are higher than expected or revenue develops more slowly than anticipated, our liquidity, financial condition and results of operations could be materially and adversely affected.

Our electric vehicle charging operating platforms may experience outages, defects, cybersecurity incidents, payment failures or data compliance issues.

Our electric vehicle charging business is expected to involve the development and operation of charging infrastructure and related operating platforms. These platforms may include user interfaces, remote monitoring, payment processing, pricing functions, data analytics, customer accounts, maintenance management and other digital tools. Any software defect, system outage, network interruption, payment processing failure, cybersecurity incident, data loss or platform instability could disrupt charging services and negatively affect customer experience.

In addition, the operation of charging platforms may involve the collection, storage, processing and analysis of user, vehicle, payment, location, charging behavior and electricity consumption data. We may be subject to cybersecurity, data privacy, consumer protection and related regulatory requirements in the PRC and other jurisdictions in which we may operate. If we fail to protect user data, comply with applicable cybersecurity and data protection laws, or maintain reliable platform operations, we may face regulatory investigations, penalties, litigation, reputational harm and increased compliance costs.

We may be subject to fire safety, electrical safety, product liability, personal injury and property damage risks in connection with our electric vehicle charging business.

Electric vehicle charging infrastructure involves inherent electrical and fire safety risks, particularly where charging facilities are installed in residential communities, commercial properties, parking lots, garages, public areas or other high-density locations. Safety incidents may arise from equipment defects, improper installation, inadequate maintenance, electrical faults, grid instability, user misuse, battery defects, weather conditions, vandalism or third-party actions.

Any actual or alleged safety incident, even if not caused by us, could result in personal injury, property damage, regulatory investigations, lawsuits, customer claims, insurance claims, equipment recalls, site shutdowns, increased insurance premiums, loss of site partners, reputational harm or reduced customer confidence. We may also be required to incur significant costs to inspect, repair, replace or upgrade charging equipment. Any such incident could materially and adversely affect our business, financial condition and results of operations.

If the Operating Subsidiaries fail to improve our services to keep up with the rapidly changing demands, preferences, electric vehicle charging trends, or technologies in the electric vehicle charging industry, our revenue and growth could be adversely affected.

We consider the electric vehicle charging industry to be dynamic, as the Operating Subsidiaries face (i) constant changes in customers’ interests, preferences, and receptiveness over different electric vehicle charging designs, (ii) evolution of the needs of electric vehicle charging in response to shifts in their business needs and marketing strategies, and (iii) innovations in technologies developed in this industry. As a result, the Operating Subsidiaries’ success depends not only on their ability to offer creative of electric vehicle charging designs, deliver high-quality electric vehicle charging equipment, and provide efficient maintenance services, but also on their abilities to adapt to rapidly changing electric vehicle charging trends and technologies to enhance the quality of existing products and services and to develop and introduce advanced electric vehicle charging technologies and solutions to address customers’ changing demands.

Additionally, the markets for electric vehicle charging infrastructure, new-energy two-wheeled vehicle charging and charging operating platforms are highly competitive and rapidly evolving. We may compete with charging network operators, battery-swapping operators, utilities, energy companies, property management technology companies, parking operators, EV manufacturers, software platform providers and other smart city infrastructure providers. Some of our competitors may have greater financial resources, more advanced technology, stronger operating experience, better access to sites, stronger relationships with local governments or property owners, larger user bases, lower electricity procurement costs or more established brands. Competitive pressures may require us to reduce service fees, offer more favorable commercial terms to site partners, increase capital investment, subsidize users, accelerate network deployment, or incur higher marketing and technology costs. If we are unable to compete effectively, differentiate our charging infrastructure and operating platforms, maintain competitive pricing, or respond to technological and market changes, our business, financial condition and results of operations could be materially and adversely affected.

Changes in electricity prices, electricity supply, utility policies or energy regulations may adversely affect our electric vehicle charging business.

Electricity costs are expected to be a significant component of the operating costs of our electric vehicle charging business. Our ability to generate profits may depend on the difference between electricity procurement costs and the fees charged to users. Electricity prices, demand charges, grid connection costs, peak-hour pricing, utility tariffs, taxes, subsidies and local energy policies may change from time to time.

If electricity prices or grid connection costs increase, or if applicable regulations restrict the pricing, operation or profitability of charging services, we may not be able to pass these increased costs on to users without reducing demand. In addition, limited grid capacity, power outages, energy rationing, local permitting constraints or changes in utility policies may delay or limit our ability to deploy or operate charging infrastructure. Any of these factors could materially and adversely affect our margins and results of operations.

The efforts and investments in technology development may not always produce the expected results.

The Operating Subsidiaries are continually developing and seeking to develop technologies that are closely related to virtual technology that will be used in the services. As of the date of this annual report, the core research and development team consisted of a total of 3 employees. The research and development (“R&D”) team has been working on developing proprietary communication protocols for charging equipment and charging platform. However, we cannot assure you that the future efforts to develop related technologies will be successful, in which case the products may lose their competitive edge.

In addition, we cannot assure you that the technologies the Operating Subsidiaries develop will be well accepted by customers, in which case the business, financial condition, results of operations and prospects may be materially and adversely affected.

The success of our business depends on the continuing efforts of the senior management and key employees of the Operating Subsidiaries.

The future success of our business is significantly dependent upon the continued service of the senior management and other key employees of the Operating Subsidiaries. If we lose their service, the Operating Subsidiaries may not be able to locate suitable or qualified replacements and may incur additional expenses to recruit and train new staff, which could severely disrupt the business and growth. The founder, Chief Executive Officer, Director and Chairman of the Board of the Company, Mr. Bin Lu, and other management members are critical to our vision, strategic direction, culture and overall business success. If there is any internal organizational structure change or change in responsibilities for the management or key personnel, or if one or more of the senior management members are unable or unwilling to continue in their present positions, the operation of the business and the business prospects may be adversely affected. The employees, including members of the management, may choose to pursue other opportunities. If the Operating Subsidiaries are unable to motivate or retain key employees, the business may be severely disrupted, and the prospects could suffer. In addition, although the Operating Subsidiaries have entered into confidentiality and non-competition agreements with our management, there is no assurance that the management members would not join the competitors or form a competing business. Suppose any dispute arises between the current or former officers and the Operating Subsidiaries. In that case, the Operating Subsidiaries may have to incur substantial costs and expenses in order to enforce such agreements in China or the Operating Subsidiaries may not be able to enforce them at all.

The Operating Subsidiaries are expanding fast. If the Operating Subsidiaries are unable to recruit, train and retain talents, the business may be materially and adversely affected.

The Operating Subsidiaries are expanding fast. Although the Operating Subsidiaries have adopted assembly line, the Operating Subsidiaries still face the risk of losing key talents in the future. We believe the future success depends on our continued ability to attract, develop, motivate, and retain qualified and skilled employees. Competition for personnel with expertise in virtual technology, digital marketing, and digital asset development is extremely intense in China. The Operating Subsidiaries may not be able to hire and retain these personnel at compensation levels consistent with the existing compensation and salary structure. Some of the companies with which the Operating Subsidiaries compete for experienced employees have greater resources than the Operating Subsidiaries have and may be able to offer more attractive terms of employment. In addition, the Operating Subsidiaries invest significant time and resources in training the employees, which increases their value to competitors who may seek to recruit them. If the Operating Subsidiaries fail to retain our employees, the Operating Subsidiaries could incur significant expenses in hiring and training new employees, and the ability to serve users and business partners could diminish, resulting in a material adverse effect on the business.

We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors with respect to our results of operations, our share price and the value of your investment could decline.

Our results of operations have fluctuated in the past and are expected to fluctuate in the future due to a variety of factors, many of which are outside of our control. As a result, our past results may not be indicative of our future performance. In addition to the other risks described herein, factors that may affect our results of operations include the following:

Any of these and other factors, or the cumulative effect of some of these factors, may cause our results of operations to vary significantly. If our results of operations fall below the expectations of investors and securities analysts who follow our securities, the price of our Class A Ordinary Shares could decline substantially, and we could face costly lawsuits, including securities class action suits.

The business is highly dependent on the brand strength and reputation, and if the Operating Subsidiaries fail to maintain and enhance the brand and reputation, consumer recognition of and trust in the services could be materially and adversely affected.

The brand recognition and reputation of our “Huachen” brand and the successful maintenance and enhancement of the brand and reputation have contributed and will continue to contribute significantly to our success and growth.

The Operating Subsidiaries rely heavily on our brand strength and reputation in the promotion and sale of the services. We believe that consumers recognize the corporate brand and the product brands for the product quality and reliability. However, customer complaints and accidents in relation to the quality of services, including inappropriate behavior, intellectual property infringement or negative publicity, or media coverage, may damage the brand and reputation. Any negative claims against the Operating Subsidiaries, even if unethical or unsuccessful, could distract our management’s attention and other resources from our day-to-day business operations, adversely affecting the business, operations results, and financial condition. Negative media coverage and resulting negative publicity of the services could result in a material adverse effect on customers’ acceptance of and trust in the Operating Subsidiaries and the services.

Further, the competitors may fabricate complaints or negative publicity about the brand for the purpose of vicious competition. With the increased use of social networks, adverse publicity can be disseminated quickly and broadly, making it increasingly difficult for the Operating Subsidiaries to respond and mitigate effectively. In addition, adverse publicity regarding any regulatory or legal action against the Operating Subsidiaries could damage the reputation and brand image, undermine customers’ confidence and reduce long-term demand for the services, even if such regulatory or legal action is unfounded or insignificant to the business.

Regulatory actions, legal proceedings and customer complaints against us could harm our reputation and have a material adverse effect on our business, results of operations, financial condition and prospects. Our directors, management, shareholders and employees may also from time to time be subject to legal proceedings, which could adversely affect our reputation and results of operations.

Along with growth and expansion of our business, we may be involved in litigation, regulatory proceedings and other disputes arising in or outside the ordinary course of our business. In general, such litigation and disputes may result in claims for actual damages, freezing of our assets, diversion of our management’s attention and reputational damage to us and our management, and the probability and amount of liability, if any, may remain unknown for long periods of time. Given the uncertainty, complexity and scope of many of these litigation matters, their outcome generally cannot be predicted with any reasonable degree of certainty. Moreover, even if we eventually prevail in these matters, we could incur significant legal fees or suffer significant reputational harm, which may negatively affect our operating results if changes to our business operations are required. There may also be negative publicity associated with litigation that could decrease consumer acceptance of our product offerings, regardless of whether the allegations are valid or whether we are ultimately found liable. In addition, our directors, management, shareholders and employees may from time to time be subject to litigation, regulatory investigations, proceedings and/or negative publicity or otherwise face potential liability and expense in relation to commercial, labor, employment, securities or other matters, which could adversely affect our reputation and results of operations. As a result, litigation may adversely affect our business, financial condition, results of operations or liquidity.

The Operating Subsidiaries may fail to make necessary or desirable strategic alliances, acquisitions, or investments, and we may not be able to achieve the benefits we expect from the alliances, acquisitions, or investments we make.

The Operating Subsidiaries may pursue selected strategic alliances and potential strategic acquisitions that are supplemental to the business and operations, including opportunities that can help further expand the product and service offerings and improve the technology system. However, strategic alliances with third parties could subject us to a number of risks, including risks associated with sharing proprietary information, non-performance or default by counterparties, and increased expenses in establishing these new alliances, any of which may materially and adversely affect the business. In addition, the Operating Subsidiaries may have limited ability to control or monitor the actions of the strategic partners. To the extent a strategic partner suffers any negative publicity due to its business operations, the reputation of the Operating Subsidiaries may be negatively affected by the association with such a party.

The costs of identifying and consummating strategic acquisitions may be significant and subsequent integrations of newly acquired companies, businesses, assets, and technologies would require significant managerial and financial resources and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our growth and business operations. In addition, investments and acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, and exposure to potential unknown liabilities of the acquired business. The acquired businesses or assets may not generate the financial results we expect and may incur losses. The cost and duration of integrating newly acquired businesses could also materially exceed our expectations. If our portfolio does not perform as we expect, our results of operation and profitability may be adversely affected.

We may not be able to raise additional capital when desired, on favorable terms, or at all.

We need to make continued investments in facilities, hardware, software, technological systems and to retain talents to remain competitive. Due to the unpredictable nature of the capital markets and our industry, there can be no assurance that we will be able to raise additional capital on terms favorable to us, if and when required, especially if we experience disappointing operating results. If adequate capital is not available to us as required, our ability to fund the operations, take advantage of unanticipated opportunities, develop, or enhance our infrastructure or respond to competitive pressures could be significantly limited. If we do raise additional funds through the issuance of equity or convertible debt securities, the ownership interests of our shareholders could be significantly diluted. These newly issued securities may have rights, preferences, or privileges on par with or senior to those of existing shareholders.

If we fail to implement and maintain an effective system of internal controls to remediate our material weaknesses over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations, or prevent fraud.

Prior to our initial public offering, we had been a private company with limited accounting personnel and other resources with which to address our internal control over financial reporting. In connection with the audits of our consolidated financial statements included in this annual report, we and our independent registered public accounting firm identified two material weaknesses in our internal control over financial reporting. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified relate to (i) our lack of sufficient financial reporting and accounting personnel with appropriate knowledge of the U.S. GAAP and the SEC reporting requirements to properly address complex U.S. GAAP accounting issues and to prepare and review consolidated financial statements and related disclosures to fulfill U.S. GAAP and SEC financial reporting requirements and (ii) our lack of comprehensive accounting policies and procedures manual in accordance with U.S. GAAP. Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal control for purposes of identifying and reporting material weaknesses and other deficiencies in our internal control over financial reporting. Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional deficiencies may have been identified.

Following the identification of the material weaknesses and control deficiencies, we have taken the following remedial measures: (i)  engaging an external consulting firm to assist us with assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal control; and (ii) adopting directors’ resolutions to appoint independent directors, establish an audit committee, and strengthen corporate governance.

We plan to take additional remedial measures, including (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; and (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel.

However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting. Our failure to correct the material weaknesses or our failure to discover and address any other material weaknesses or control deficiencies could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our Class A Ordinary Shares, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud.

We are subject to the reporting requirements of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) as well as rules and regulations of the Nasdaq Stock Exchange. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls over financial reporting. We are required by Section 404 of the Sarbanes-Oxley Act to perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting in our Form 20-F beginning with our annual report in our second annual report after becoming a public company. We may experience difficulty in meeting these reporting requirements in a timely manner.

Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue an adverse report if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.

If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to produce timely and accurate financial statements and may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. If that were to happen, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which could lead to a decline in the market price of our Class A Ordinary Shares, and we could be subject to sanctions or investigations by SEC or other regulatory authorities. We may also be required to restate our financial statements for prior periods.

We may incur losses or experience disruption of the operations as a result of act of God, unforeseen or catastrophic events, including pandemics, terrorist attacks, or natural disasters.

The business could be materially and adversely affected by catastrophic events or other business continuity problems, such as natural or man-made disasters, pandemics such as COVID-19, fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, political unrest, terrorist attacks or similar events may give rise to server interruptions, breakdowns, system failures, technology platform failures or Internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to operate, including communicating with customers and the relevant listing authorities. For example, epidemics threaten people’s lives and may adversely affect their livelihood as well as their living and consumption patterns. The occurrence of an epidemic is beyond our control, and we cannot assure you that the outbreak of coronavirus (including COVID-19), severe acute respiratory syndrome, the H5N1 strain of avian influenza, the H1N1 strain of swine flu, the Zika virus or any other epidemics or pandemics will not happen.

Any epidemic or pandemic occurring, such as the most recent outbreak of COVID-19, in the PRC, Hong Kong, Taiwan and Macau, or even in areas outside of the PRC, Hong Kong, Taiwan and Macau, may severely affect and restrict the level of economic activity as the government may impose regulatory administrative measures quarantining affected areas or other measures to control the outbreak of the disease, which in turn may adversely affect the business, financial condition and results of operations. Mainly due to the impact of the COVID-19 pandemic, the Operating Subsidiaries had no new cubic parking garage projects in 2022 and needed sufficient funds to maintain their daily operation. By the second half of 2022, the negative impact of the COVID-19 pandemic was waning. While the Company had no new projects in 2022, previously postponed projects were all accepted, and revenue was recognized in the second half of 2022. As a result, our revenue for the fiscal year 2022 increased by approximately 147.8% compared to the previous year, and we got a net profit of nearly $5.51 million. By 2023, the COVID-19 pandemic has had essentially no impact on the Company. By the first half of 2024, the Company got a net profit of nearly $2.5 million, compared to the first half of 2023, the net profit increased by approximately 157%. Compared to the first half of 2023, the Company’s revenue in 2024 increased by 184%. However, we cannot assure you that our business will not be affected by an outbreak of COVID-19 in the future.

The headquarters of the Operating Subsidiaries are in the PRC, where most of our directors and management and all of our employees currently reside. Consequently, the Operating Subsidiaries are highly susceptible to factors adversely affecting China. A disaster or a disruption in the infrastructure that supports the businesses, a disruption involving electronic communications or other services used by us or third parties with whom the Operating Subsidiaries conduct business, or a disruption that directly affects our headquarter, could have a material adverse impact on the ability to continue to operate the business without interruption. The business could also be adversely affected if the employees are affected by pandemics. In addition, our results of operations could be adversely affected to the extent that any pandemic harms the Chinese economy in general. The incidence and severity of disasters or other business continuity problems are unpredictable, and the inability to timely and successfully recover could materially disrupt the businesses and cause material financial loss, regulatory actions, reputational harm, or legal liability.

Furthermore, the ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle East and the United States. The hostilities and sanctions resulting from those hostilities have adversely affected and could continue to adversely affect global financial markets and thus could affect our client’s business and our business, even though we do not have any direct exposure to Russia, Israel, or the adjoining geographic regions. However, we cannot predict the progress or outcome of the situation in Ukraine, or Israel, as the conflict and governmental reactions are rapidly developing and beyond their control. Prolonged unrest, intensified military activities, or more extensive sanctions impacting the region could have a material adverse effect on the global economy, and such effect could in turn, have a material adverse effect on the operations, results of operations, financial condition, liquidity and business outlook of our business.

Additionally, continued turbulence in the international financial markets may adversely affect our ability to access the capital markets to meet liquidity needs. Financial markets and economic conditions could be negatively impacted by many factors, both economically and politically, beyond our control, such as the inability to access capital markets, control of the foreign exchange, changes in exchange rates, rising interest rates or inflation, slowing or negative growth rate, government involvement in the allocation of resources, inability to meet financial commitments in a timely manner, terrorism, pandemics such as the COVID-19 pandemic, political uncertainty, Russo — Ukraine war, the outcome of the Sino — US trade dispute, Israel — Hamas conflict, civil unrest, fiscal or other economic policy of the PRC or other governments, and the timing and nature of any regulatory reform.

The Operating Subsidiaries’ businesses are geographically concentrated, which subjects it to greater risks from changes in local or regional conditions.

All of the Operating Subsidiaries’ current operations are located in China. Due to this geographic concentration, our financial condition and operating results are subject to greater risks from changes in general economic and other conditions in China, than the operations of more geographically diversified competitors. These risks include:

As a result of the geographic concentration of the Operating Subsidiaries’ businesses, we face a greater risk of a negative impact on our business, financial condition, results of operations, and prospects in the event that China is more severely impacted by any such adverse condition, as compared to other countries.

We have limited insurance coverage, and any claims beyond our insurance coverage may result in our incurring substantial costs and a diversion of resources.

We maintain insurance policies that are required under applicable laws and regulations as well as insurance based on our assessment of our operational needs and industry practice. However, our insurance coverage may be insufficient to cover any claim for product liability, damage to our fixed assets or employee injuries. Any liability or damage to, or caused by, our facilities or our personnel beyond our insurance coverage may result in our incurring substantial costs and a diversion of resources.

We also expect that operating as a public company will make it more expensive for us to obtain director and officer liability insurance, since we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people to serve on our Board of Directors, our board committees or as our executive officers. We do not know, however, if we will be able to maintain existing insurance with adequate levels of coverage. Any significant uninsured liability may result in a substantial amount of payments, which would adversely affect our cash position and results of operations.

We may not be able to ensure the successful implementation of our future plans and strategies, resulting in reduced financial performance.

Previously, we also used to provide customized smart parking solutions to optimize efficiency in limited parking spaces, covering smart cubic parking garage design, cubic parking equipment manufacturing, sales, installation, and maintenance. In 2024, the decelerating economic growth in China, overbuilding and overborrowing by property developers, and increased government regulations on borrowing caused challenging market conditions in the real estate and construction sectors, resulting in a contraction in real estate investment, new constructions by property developers, and construction project completion rate. Therefore, the demand for cubic parking garages in new real estate projects weakened, reducing the number of high-quality projects available for us to undertake. The Company decided to scale down the cubic parking garage business and expand the production and sales of equipment structural parts. Following a strategic realignment of our core business objectives, we have successfully transitioned into a specialized seller of equipment structural components and a comprehensive provider of electric vehicle (“EV”) charging solutions.

There is no assurance that any future plan can be successfully implemented as the successful execution could depend on several factors, including the availability of our operating funds, market demand, and regulatory changes, some of which are not within our control. Failure to successfully implement our future plans or to effectively manage costs may lead to a material adverse change in our operation or affect our ability to respond to market or industry changes, resulting in reduced financial performance. If the economic growth in China continue to decelerate and the contraction in real estate investment continues, we may not be able to expand our EV charging business, which would adversely affect our cash position and results of operations.

Heightened tensions in international relations, particularly between the United States and China, may adversely impact our business, financial condition, and results of operations.

Recently there have been heightened tensions in international relations, particularly between the United States and China, but also as a result of the war in Ukraine and sanctions on Russia. These tensions have affected both diplomatic and economic ties among countries. Heightened tensions could reduce levels of trade, investments, technological exchanges, and other economic activities between the major economies. The existing tensions and any further deterioration in the relationship between the United States and China may have a negative impact on the general, economic, political, and social conditions in both countries and, given our reliance on the Chinese market, adversely impact our business, financial condition, and results of operations.

On August 9, 2023, the Biden administration released an executive order and an advanced notice of proposed rule-making (the “ANPRM”) providing a conceptual framework for outbound investment controls focused on China. Further to this ANPRM, on June 21, 2024, the U.S. Department of the Treasury (the “Treasury”) issued a proposed rule on outbound U.S. investments involving China that generally follows the ANPRM. On October 28, 2024, the Treasury issued a Final Rule to implement the executive order of August 9, 2023. The Final Rule became effective on January 2, 2025. The Final Rule targets investments involving persons and entities associated with “countries of concern,” including China, and it imposes investment prohibition and notification requirements on a wide range of investments in companies engaged in activities relating to three sectors: (1) advanced microchips and microelectronics, (2) quantum computing, and (3) artificial intelligence systems, with persons from countries of concern engaged in these technologies defined as “Covered Foreign Persons.” Investments by U.S. persons subject to the Final Rule, which are defined as “covered transactions,” include acquisitions of equity interests, certain debt financing, joint ventures, and certain investments as a limited partner in a non-U.S. person pooled investment fund. The Final Rule excludes some investments from the scope of covered transactions, including those in publicly traded securities listed on a national stock exchange. The Final Rule is aimed at exerting greater U.S. government oversight over U.S. direct and indirect investments involving China, and may introduce new hurdles and uncertainties for cross-border collaborations, investments, and funding opportunities of China-based issuers including us. We do not believe we are a Covered Foreign Person under the Final Rule. However, to the extent that we are deemed a Covered Foreign Person engaged in the development of specified artificial intelligence technologies and services, the Final Rule could limit our ability to raise capital from U.S. investors generally, in which case our ability to raise such capital may be significantly and negatively affected, which could be detrimental to our capital raising capacity and our business, financial condition and prospects.

Risks Related to Our Public Offering and Ownership of Our Class A Ordinary Shares

Our CEO has control over key decision making as a result of his control of a majority of our voting shares.

Our Chief Executive Officer, Director and Chairman of the Board, Mr. Bin Lu, together with his wife, Ms. Liping Zhu, has voting rights with respect to an aggregate of 5,951,000 Class A Ordinary Shares and 16,000,000 Class B Ordinary Shares, representing 96.17% of the voting power of our issued and outstanding Ordinary Shares as of the date of this annual report. As a result, Mr. Lu has the ability to control the outcome of matters submitted to our shareholders for approval, including the election of directors and any sale of all or substantially all of our assets. In addition, Mr. Lu has the ability to control the management and affairs of our Company due to his position as our CEO and his ability to control the election of our directors. Additionally, in the event that Mr. Lu controls our Company at the time of his death, control may be transferred to a person or entity that he designates as his successor. As a board member and officer, Mr. Lu owes a fiduciary duty to our Company and must act in good faith in a manner he reasonably believes to be in the best interests of our Company. Mr. Lu must also exercise his powers for a proper purpose. As a beneficial shareholder, even a controlling beneficial shareholder, Mr. Lu is entitled to vote his shares, and shares over which he has voting control as a result of voting agreements, in his own interests, which may not always be in the interests of our shareholders generally.

As a “controlled company” under the rules of the Nasdaq Capital Market, we may choose to exempt our Company from certain corporate governance requirements that could have an adverse effect on our public shareholders.

Our directors and officers beneficially own a majority of the voting power of our issued and outstanding Ordinary Shares. Under the Rule 4350(c) of the Nasdaq Capital Market, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that a majority of our directors be independent, as defined in the Nasdaq Capital Market Rules, and the requirement that our compensation and nominating and corporate governance committees consist entirely of independent directors. Although we do not intend to rely on the “controlled company” exemption under the Nasdaq listing rules, we could elect to rely on this exemption in the future. If we elect to rely on the “controlled company” exemption, a majority of the members of our Board of Directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, during any time while we remain a controlled company relying on the exemption and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq Capital Market corporate governance requirements. Our status as a controlled company could cause our Class A Ordinary Shares to look less attractive to certain investors or otherwise harm our trading price.

We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Class A Ordinary Shares less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years, although we could lose that status sooner if our revenues exceed $1.235 billion, if we issue more than $1 billion in non-convertible debt in a three-year period, or if the market value of our Class A Ordinary Shares held by non-affiliates exceeds $700 million before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict if investors will find our Class A Ordinary Shares less attractive because we may rely on these exemptions. If some investors find our Class A Ordinary Shares less attractive as a result, there may be a less active trading market for our Class A Ordinary Shares and our stock price may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to avail our company of this exemption from new or revised accounting standards and, therefore, will be subject to accounting standards that are available to emerging growth companies.

We are a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.

Huachen Cayman is a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we are subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We are not required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime. As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.

Because we are a foreign private issuer and are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing rules, you will have less protection than you would have if we were a domestic issuer.

Nasdaq Listing Rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of certain requirements regarding corporate governance, or we may choose to comply with such requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our Board of Directors to consist of independent directors. Thus, although a director must act in the best interests of the Company, it is possible that fewer board members will be exercising independent judgment and the level of board oversight on the management of our company may decrease as a result. In addition, the Nasdaq Listing Rules also require U.S. domestic issuers to have a compensation committee, a nominating/corporate governance committee composed entirely of independent directors, and an audit committee with a minimum of three members. We, as a foreign private issuer, are not subject to these requirements. The Nasdaq Listing Rules also require shareholder approval for U.S. domestic issuers in connection with: (i) the acquisition of the stock or assets of another company; (ii) equity-based compensation of officers, directors, employees or consultants; (iii) a change of control; and (iv) issuance of 20% or more of our outstanding ordinary shares in transactions other than public offerings.  We have elected to follow home country practice in Cayman Islands in lieu of Nasdaq Capital Market Listing Rule 5600 with the exception of those rules which are required to be followed pursuant to the provisions of Listing Rule 5615(a)(3). See “Item 16G. Corporate Governance.” Following our home country governance practices as opposed to the requirements that would otherwise apply to a U.S. company listed on the Nasdaq Capital Market may provide less protection to you than what is accorded to investors under the applicable rules of the Nasdaq Capital Market applicable to domestic U.S. issuers.

Nasdaq may apply additional and more stringent criteria for our initial and continued listing because we plan to have a small public offering and insiders will hold a large portion of the company’s listed securities.

Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities in Nasdaq and Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny initial or continued listing or to apply additional and more stringent criteria in the instances, including but not limited to: (i) where the company engaged an auditor that has not been subject to an inspection by the PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company’s listed securities. Nasdaq was concerned that the Offering size was insufficient to establish the company’s initial valuation, and there would not be sufficient liquidity to support a public market for the company; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the Board of Directors or management. Our public offering will be relatively small and the insiders of our Company will hold a large portion of the company’s listed securities. Nasdaq might apply the additional and more stringent criteria for our initial and continued listing, which might cause delay or even denial of our listing application.

If we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of Nasdaq Capital Market, although we exempt from certain corporate governance standards applicable to US issuers as a Foreign Private Issuer, our securities may not be listed or may be delisted, which could negatively impact the price of our securities and your ability to sell them.

In order to maintain our listing on the Nasdaq Capital Market, we are required to comply with certain rules of the Nasdaq Capital Market, including those regarding minimum shareholders’ equity, minimum share price and certain corporate governance requirements. We may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our Class A Ordinary Shares could be subject to delisting.

If the Nasdaq Capital Market delists our securities from trading, we could face significant consequences, including:

The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price.

The public offering price for our Class A Ordinary Shares will be determined through negotiations between the underwriter and us and may vary from the market price of our Class A Ordinary Shares following our public offering. If you purchase our Class A Ordinary Shares in our public offering, you may not be able to resell those shares at or above the public offering price. Further, an inactive trading market for our Class A Ordinary Shares may also impair our ability to raise capital by selling our Class A Ordinary Shares or enter into strategic partnerships and transactions by issuing our Class A Ordinary Shares as consideration. If an active trading market for our Class A Ordinary Shares does not develop, or is not sustained, you may not be able to sell your shares quickly or at the market price, or at all, and it may be difficult for you to sell your shares without depressing the market price for our Class A Ordinary Shares. The market price of our Class A Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, shareholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from the business, and adversely affect the business.

We may experience extreme stock price volatility, including any stock-run up, unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class A Ordinary Shares.

In addition to the risks addressed above in “— The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price,” our Class A Ordinary Shares may be subject to extreme volatility that is seemingly unrelated to the underlying performance of the business. In particular, our Class A Ordinary Shares may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices, given that we will have relatively small public floats. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance, financial condition or prospects.

Holders of our Class A Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Class A Ordinary Shares. As a result of this volatility, investors may experience losses on their investment in our Class A Ordinary Shares. Furthermore, the potential extreme volatility may confuse the public investors of the value of our stock, distort the market perception of our stock price and our company’s financial performance and public image, negatively affect the long-term liquidity of our Class A Ordinary Shares, regardless of our actual or expected operating performance. If we encounter such volatility, including any rapid stock price increases and declines seemingly unrelated to our actual or expected operating performance and financial condition or prospects, it will likely make it difficult and confusing for prospective investors to assess the rapidly changing value of our Class A Ordinary Shares and understand the value thereof.

We have broad discretion in the use of the net proceeds from our public offering and may not use them effectively.

To the extent (i) we raise more money than required for the purposes explained in the section titled “Use of Proceeds” or (ii) we determine that the proposed uses set forth in that section are no longer in the best interests of our Company, we cannot specify with any certainty the particular uses of such net proceeds that we will receive from our public offering. Our management will have broad discretion in the application of such net proceeds, including working capital, possible acquisitions, and other general corporate purposes, and we may spend or invest these proceeds in a way with which our shareholders disagree. The failure by our management to apply these funds effectively could harm the business and financial condition. Pending their use, we may invest the net proceeds from our public offering in a manner that does not produce income or that loses value.

We do not intend to pay dividends for the foreseeable future.

We currently intend to retain any future earnings to finance the operation and expansion of the business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Class A Ordinary Shares if the market price of our Class A Ordinary Shares increases.

There may not be an active, liquid trading market for our Class A Ordinary Shares.

You may not be able to sell your shares at the market price, if at all, if trading in our shares is not active. The public offering price was determined by negotiations between us and the underwriter based upon a number of factors. The public offering price may not be indicative of prices that will prevail in the trading market.

We will incur additional costs for being a public company, which could negatively impact our net income and liquidity.

We are a public company in the United States. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, Sarbanes-Oxley and rules and regulations implemented by the SEC and the Nasdaq Capital Market require significantly heightened corporate governance practices for public companies. We expect that these rules and regulations will increase our legal, accounting and financial compliance costs and will make many corporate activities more time-consuming and costly. We do not expect to incur materially greater costs as a result of becoming a public company than those incurred by similarly sized U.S. public companies. If we fail to comply with these rules and regulations, we could become the subject of a governmental enforcement action, investors may lose confidence in us, and the market price of our Class A Ordinary Shares could decline.

Exercise of the share options or restricted shares granted will increase the number of Class A Ordinary Shares in circulation, which may adversely affect the market price of our Class A Ordinary Shares.

On August 12, 2024, Huachen Cayman adopted the 2024 Equity Incentive Plan, or the 2024 Plan, for the purpose of granting share based compensation awards to current or prospective employees, directors, officers, advisors or consultants of the Company or its affiliates and align their interests with ours. The maximum aggregate number of Class A Ordinary Shares which may be issued pursuant to all awards under the 2024 Plan was 3,000,000 Class A Ordinary Shares.

On March 28, 2025, Huachen Cayman’s board of directors and compensation committee approved and adopted an amended and restated 2024 Equity Incentive Plan, pursuant to which the maximum aggregate number of Class A Ordinary Shares authorized for issuance under the 2024 Plan was increased from 3,000,000 to 3,172,500 Class A Ordinary Shares. As of the date of this annual report, all 3,172,500 Class A Ordinary Shares have been granted under the 2024 Plan. We may adopt other share incentive plans in the future that permits granting of share-based compensation awards to employees and directors, which will result in significant share-based compensation expenses to us.

Competition for highly skilled personnel is often intense and we may incur significant costs or not be successful in attracting, integrating, or retaining qualified personnel to fulfill our current or future needs. We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. Our ability to attract or retain highly skilled employees may be adversely affected by declines in the perceived value of our equity or equity awards. Furthermore, there are no assurances that the number of shares reserved for issuance under our share incentive plans are sufficient to grant equity awards adequate to recruit new employees and to compensate existing employees.

Item 4. Information on the Company

4.A. History and Development of the Company

Corporate Structure

The following diagram illustrates the corporate structure of Huachen Cayman and its subsidiaries as of the date of this annual report:

Our Subsidiaries and Business Functions

Huachen Cayman was incorporated on September 30, 2021, under the laws of the Cayman Islands. Huachen Cayman is a holding company and is currently not actively engaging in any business.

Yu He Chuang Co., Ltd (“YHC HK”) was incorporated on April 1, 2025, under the laws of the under the laws of Hong Kong. YHC HK is a wholly-owned subsidiary of the Company. It is a holding company and is not actively engaging in any business.

Chuang Yu He (Shanghai) Industrial Co., Ltd. (“CYH Shanghai”) was incorporated on June 12, 2025 under the laws of the PRC. CYH Shanghai is a wholly-owned subsidiary of YHC HK and currently has no operations.

Hangzhou Zhihuichong Technology Co., Ltd. (“Hangzhou ZHC”) was incorporated on November 20, 2025 under the laws of the PRC. Hangzhou ZHC is a wholly-owned subsidiary of CYH Shanghai and its primary business consists of the development and operation of charging infrastructure and operating platforms for new-energy two-wheeled vehicles and electric vehicles.

Jiaxing Xuchen Technology Co., Ltd. (“Jiaxing XC”) was incorporated on September 9, 2025 under the laws of the PRC. Jiaxing XC is a wholly-owned subsidiary of CYH Shanghai and currently engages in the sale of equipment structures and metal products.

Corporate History

Huachen Cayman was incorporated on September 30, 2021, under the laws of the Cayman Islands. Huachen Cayman is a holding company and is currently not actively engaging in any business.

Huachen HK was incorporated on December 22, 2021, under the laws of the under the laws of Hong Kong. Huachen HK is a wholly-owned subsidiary of Huachen Cayman. It is a holding company and is not actively engaging in any business.

Hua Chen WFOE was incorporated on October 18, 2022 under the laws of the PRC. Hua Chen WFOE is a wholly-owned subsidiary of Huachen HK and currently has no operations.

Zhejiang Hua Chen Tech, previously known as Shanghai Hua Chen Steel Structure Installation Engineering Co., was incorporated on June 14, 2005 under the laws of the PRC. Zhejiang Hua Chen Tech is a majority-owned subsidiary of Hua Chen WFOE and currently engaged in the business of structural steel components purchasing and sales.

Shanghai TD Manufacturing was incorporated on February 11, 2004 under the laws of the PRC. Shanghai TD Manufacturing is a majority-owned subsidiary of Zhejiang Hua Chen Tech and currently engaged in cubic parking equipment project bidding, purchasing, production and sales.

Zhejiang TD Parking was incorporated on November 7, 2017 under the laws of the PRC. Zhejiang TD Parking is a wholly-owned subsidiary of Shanghai TD Manufacturing and currently engaged in the cubic parking equipment production and assembling and structural steel components production.

Shanghai TD Parking was incorporated on July 27, 2012 under the laws of the PRC. Zhejiang TD Parking is a wholly-owned subsidiary of Shanghai TD Manufacturing and currently engaged in the business of parking operation management.

Shanghai Yufeng was incorporated on November 16, 2016 under the laws of the PRC. Zhejiang TD Parking is a wholly-owned subsidiary of Shanghai TD Manufacturing and currently engaged in the research and development of parking equipment supporting software.

Shanghai TP Parking was incorporated on April 1, 2015 under the laws of the PRC. Zhejiang TD Parking is a wholly-owned subsidiary of Shanghai TD Parking and currently engaged in the business of parking operation management.

Shanghai TD Installation was incorporated on March 18, 2008 under the laws of the PRC. Zhejiang TD Parking is a wholly-owned subsidiary of Shanghai TD Parking and currently engaged in cubic parking equipment installation, repair and maintenance services.

Zhejiang Xinfeng was incorporated on February 7, 2024 under the laws of the PRC. Zhejiang Xinfeng is a wholly-owned subsidiary of Zhejiang Hua Chen Tech and currently engaged in the cubic parking equipment and structural steel components sales.

On August 12, 2024, the Company effected a 1-for-800 forward split of our Ordinary Shares, cancelled certain authorized but unissued Ordinary Shares and diminished the Company’s authorized share capital. As a result, the authorized share capital of the Company upon the completion of such the forward split was $250 divided into 200,000,000 shares of a par value of $0.00000125.

Immediately upon the completion of the forward split, cancellation of authorized but unissued Ordinary Shares and diminution of authorized share capital, the board of directors of the Company approved the surrender of a total of 10,000,000 Ordinary Shares for no consideration to the Company for cancellation, among which (i) 6,317,000 Ordinary Shares were surrendered by Huahao (BVI) Limited, (ii) 1,000,000 Ordinary Shares were surrendered by Huayue (BVI) Holding Limited, (iii) 846,000 Ordinary Shares were surrendered by Huajing (BVI) Limited, (iv) 884,000 Ordinary Shares were surrendered by Huamao (BVI) Limited, (v) 953,000 Ordinary Shares were surrendered by Huaxuan (BVI) Limited. As a result, the total number of Ordinary Shares issued and outstanding became 30,000,000 Ordinary Shares and each of Huahao (BVI) Limited, Huayue (BVI) Holding Limited, Huajing (BVI) Limited, Huamao (BVI) Limited and Huaxuan (BVI) Limited owns 18,951,000 Ordinary Shares, 3,000,000 Ordinary Shares, 2,538,000 Ordinary Shares, 2,652,000 Ordinary Shares, and 2,859,000 Ordinary Shares, respectively.

Yu He Chuang Co., Ltd (“YHC HK”) was incorporated on April 1, 2025, under the laws of the under the laws of Hong Kong. YHC HK is a wholly-owned subsidiary of the Company. It is a holding company and is not actively engaging in any business.

On May 20, 2025, Huachen Cayman effected a share capital increase, implemented a dual-class share capital structure, and approved the repurchase and issuance of shares. As a result, the Company’s authorized share capital increased from $250 divided into 200,000,000 shares of a par value of $0.00000125 each to $500 divided into 350,000,000 Class A Ordinary Shares and 50,000,000 Class B Ordinary Shares of a par value of $0.00000125 each.

As a result of the repurchase and issuance of shares, 16,000,000 Ordinary Shares held by Huahao (BVI) Limited were redesignated to 16,000,000 Class A Ordinary Shares, and Huahao (BVI) Limited was issued 16,000,000 Class B Ordinary Shares.

Chuang Yu He (Shanghai) Industrial Co., Ltd. (“CYH Shanghai”) was incorporated on June 12, 2025 under the laws of the PRC. CYH Shanghai is a wholly-owned subsidiary of YHC HK and currently has no operations.

On June 30, 2025, Huachen Cayman entered into a non-binding cooperative agreement with Hangzhou Qianhui Electric Technology Co., Ltd (“Hangzhou Qianhui”), a company that is involved in the two-wheeled e-charging business. Under the non-binding cooperative agreement, Huachen Cayman would provide financial support to Hangzhou Qianhui, in exchange for Hangzhou Qianhui executing the business operations, encompassing the procurement and self-construction of e-charging stations, as well as managing the charging platform.

Hangzhou Zhihuichong Technology Co., Ltd. (“Hangzhou ZHC”) was incorporated on November 20, 2025 under the laws of the PRC. Hangzhou ZHC is a wholly-owned subsidiary of CYH Shanghai and its primary business consists of the development and operation of charging infrastructure and operating platforms for new-energy two-wheeled vehicles and electric vehicles.

Jiaxing Xuchen Technology Co., Ltd. (“Jiaxing XC”) was incorporated on September 9, 2025 under the laws of the PRC. Jiaxing XC is a wholly-owned subsidiary of CYH Shanghai and currently engages in the sale of equipment structures and metal products.

On December 8, 2025, Huachen Cayman effected a share capital increase, as well as authorized the Board of Huachen Cayman to approve a share combination of the Class A Ordinary Shares and Class B Ordinary Shares, at a ratio of not less than 1-for-2 and not more than 1-for-250, with the final ratio to be determined by the Board of Huachen Cayman in its sole discretion at any time after approval by the shareholders, and implementation of the share combination occurring at the Board’s discretion any time prior to one year from December 8, 2025. As a result, the Company’s authorized share capital increased from US$500 divided into 350,000,000 Class A Ordinary Shares of par value of US$0.00000125 each and 50,000,000 Class B Ordinary Shares of par value of US$0.00000125 each to US$78,125 divided into 50,000,000,000 Class A Ordinary Shares of par value of US$0.00000125 each and 12,500,000,000 Class B Ordinary Shares of par value of US$0.00000125 each, by the creation of 49,650,000,000 new Class A Ordinary Shares and 12,450,000,000 Class B Ordinary Shares.

On December 22, 2025, the Company and Huachen HK a company formed under the laws of Hong Kong and a subsidiary of the Company (the “Target”) entered into a share purchase agreement (the “Agreement”) with a buyer (the “Buyer”). Pursuant to the Agreement, the Company agreed to sell and the Buyer agreed to purchase all the issued and outstanding shares of the Target at a purchase price of $50,000, which sale includes the sale of the Target’s subsidiaries, including Huachen AI Technology (Zhejiang) Co., Ltd., Zhejiang Huachen Technology Co., Ltd., Shanghai Tiandidaochuan Parking Equipment Manufacturing Co., Ltd., Zhejiang Tiandidaochuan Parking Equipment Co., Ltd., Shanghai Tiandiricheng Parking Lots Management Co., Ltd., Shanghai Yufeng Information Technology Co., Ltd., Shanghai Tiandi Puji Parking Management Co., Ltd. Shanghai Tiandidaochuan Parking Equipment Installation Co., Ltd., and Zhejiang Xinfeng Trade Co., Ltd.

On March 24, 2026, the Board of Directors of the Company approved a reverse split of all of the Company’s authorized and issued Class A Ordinary Shares and Class B Ordinary Shares at a ratio of one-for-thirty (1-for-30), reducing the number of outstanding Class A Ordinary Shares of the Company from approximately 18,897,500 shares to approximately 629,942 shares and the number of outstanding Class B Ordinary Shares of the Company from approximately 16,000,000 shares to approximately 533,334 shares. As a result of the reverse split, which became effective on April 13, 2026, the par value of the Class A Ordinary Shares and Class B Ordinary Shares was be increased to $0.0000375 per share and the number of authorized ordinary shares was reduced to 2,083,333,334 Ordinary Shares, comprising of 1,666,666,667 Class A Ordinary Shares and 416,666,667 Class B Ordinary Shares.

Corporate Information

Our principal executive office is located at Room 201, 2nd Floor, No. 6395 Hutai Road, Baoshan District, Shanghai, China. The telephone number of our principal executive offices is +852 9579 1074. We maintain a corporate website at Osiris International Cayman Limited. Our registered office in Cayman Islands is at Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, PO Box 32311, Grand Cayman KY1-1209, Cayman Islands. We maintain a corporate website at www.hctdparking.com. Our registered agent in the United States is Cogency Global Inc., located at 122 ^E 42nd Street 18th Floor, New York, NY 10168.

Investors should contact us for any inquiries through the address and telephone number of our principal executive offices. Our website is www.hctdparking.com. The information contained on our website is not a part of this annual report.

Implication of the Holding Foreign Companies Accountable Act (the “HFCA Act”)

The HFCA Act was enacted on December 18, 2020. The HFCA Act states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit the company’s shares from being traded on a national securities exchange or in the over the counter trading market in the United States.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements described above.

On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by President Biden, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the prohibition on trading.

On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act, which took effect on January 10, 2022. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

On December 16, 2021, PCAOB announced the PCAOB HFCA Act determinations (the “PCAOB determinations”) relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or Hong Kong.

On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the “SOP”) with the China Securities Regulatory Commission and the Ministry of Finance of China. The SOP, together with two protocol agreements governing inspections and investigations (together, the “SOP Agreement”), establishes a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. The SOP Agreement remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the SOP Agreement disclosed by the SEC, the PCAOB shall have sole discretion to select any audit firms for inspection or investigation and the PCAOB inspectors and investigators shall have a right to see all audit documentation without redaction. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.

Our auditor, Audit Alliance LLP, headquartered in Singapore, is an independent registered public accounting firm that issues the audit report included in annual report. As an auditor of publicly traded companies in the United States and a firm registered with the PCAOB, Audit Alliance LLP is subject to U.S. laws under which the PCAOB conducts regular inspections to assess compliance with applicable professional standards with the last inspection on September 27, 2024. Therefore, we believe that, as of the date of this annual report, our auditor is not subject to the determinations as to the inability to inspect or investigate registered firms completely announced by the PCAOB on December 16, 2021.

Permission Required from the Hong Kong Authorities

Neither we nor any of our subsidiaries are required to obtain any permission or approval from Hong Kong authorities to offer the securities of Huachen Cayman to foreign investors.

Recent Regulatory Development in the PRC

We are aware that, recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.

For example, on June 10, 2021, the Standing Committee of the National People’s Congress enacted the PRC Data Security Law, which took effect on September 1, 2021. The law requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.

On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.

On August 20, 2021, the 30th meeting of the Standing Committee of the 13th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s Republic of China”, or “PRC Personal Information Protection Law”, which became effective on November 1, 2021. The PRC Personal Information Protection Law applies to the processing of personal information of natural persons within the territory of China that is carried out outside of China where (1) such processing is for the purpose of providing products or services for natural persons within China, (2) such processing is to analyze or evaluate the behavior of natural persons within China, or (3) there are any other circumstances stipulated by related laws and administrative regulations.

On December 28, 2021, the CAC jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022 and replace the former Measures for Cybersecurity Review (2020) issued on July 10, 2021. Measures for Cybersecurity Review (2021) stipulates that operators of critical information infrastructure purchasing network products and services, and online platform operator (together with the operators of critical information infrastructure, the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, any online platform operator who controls more than one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country.

On February 17, 2023, the China Securities Regulatory Commission (“CSRC”) promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the “Trial Measures,” and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application. If a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.

In connection with our issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, except for the filing procedures with the CSRC and reporting of relevant information according to the Overseas Listing Trial Measures, we believe that the Company and its subsidiaries are currently not required to obtain any other approval from the CSRC to list on U.S exchanges or issue securities to foreign investors, given that: (i) our PRC subsidiary was incorporated as a wholly foreign-owned enterprise by means of direct investment rather than by merger or acquisition of equity interest or assets of a PRC domestic company owned by PRC companies or individuals as defined under the M&A Rule that are our beneficial owners; (ii) the Chinese regulatory authority currently has not issued any definitive rule or interpretation concerning whether offerings like ours under this annual report are subject to the M&A Rule; and (iii) no provision in the M&A Rule clearly classifies contractual arrangements as a type of transaction subject to the M&A Rule.

However, there remains some uncertainty as to how the M&A Rule will be interpreted or implemented in the context of an overseas offering and the opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rule. We cannot assure you that relevant PRC government agencies, would reach the same conclusion as our PRC counsel, Shanghai Xiading Law Firm, does, and hence we may face regulatory actions or other sanctions from the PRC regulatory agencies. These regulatory agencies may impose fines and penalties on the operations in China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our future offerings into China, restrict or prohibit the payments or remittance of dividends by our PRC subsidiaries or take other actions that could have a material adverse effect on the business, financial condition, results of operations, reputation and prospects, as well as the trading price of the shares. It is uncertain when and whether the Company will be required to obtain permission from the China regulatory authority to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded.

The China regulatory authority may legally restricted or influence the operations at any time, which could result in a material change in the operations. Recently, the China regulatory authority initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As confirmed by our PRC counsel, Shanghai Xiading Law Firm, we currently are not subject to cybersecurity review with the CAC, to conduct business operations in China, given that: (i) the Operating Subsidiaries do not possess a large amount of personal information in the business operations; and (ii) data processed in the business does not have a bearing on national security and thus may not be classified as core or important data by the authorities. In addition, as confirmed by our PRC counsel, Shanghai Xiading Law Firm, we are not subject to merger control review by China’s anti-monopoly enforcement agency due to the level of our revenues which were provided by us and audited by our auditor Audit Alliance LLP, and the fact that we currently do not expect to propose or implement any acquisition of control of, or decisive influence over, any company with revenues within China of more than RMB 400 million. See “Risk Factors — Risks Related to Doing Business in China — Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may also be implemented quickly with little advance notice. Therefore, our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain.”

4.B. Business Overview

Mission

The Operating Subsidiaries are committed to developing comprehensive electric vehicle charging solutions and providing equipment structural parts by leveraging the expertise of machinery, electricity, and instrumentation and understanding of various industries such as transportation, property management, and urban planning.

Overview

We are a comprehensive electric vehicle charging solutions and equipment structural parts provider and conduct all our operations through our Operating Subsidiaries in China.

Previously, we also used to provide customized smart parking solutions to optimize efficiency in limited parking spaces, covering smart cubic parking garage design, cubic parking equipment manufacturing, sales, installation, and maintenance. To cater the customers’ different parking needs, we manufacture and offer various cubic parking garage products by employing various working principles, such as lifting and shifting, convenient lifting, vertical circulation, vertical lifting, plane moving, alley stacking, multi-layer cycle, horizontal cycle, and car lift. Moreover, the Operating Subsidiaries offer design, repair, and maintenance services to ensure the continued functionality of our parking solutions. Customers for comprehensive parking solutions are government departments, hospitals, property management companies, real estate companies, institutions, residential communities, and other businesses with parking lots or garages. With the production qualification and market presence, the Operating Subsidiaries’ smart parking system addresses parking challenges in urban areas in China experiencing rapid development.

Growth in the smart parking sector has slowed as a result of the downturn in China’s real estate market. As part of its strategic realignment, the Company continues to focus on its equipment structural parts business, which is conducted through Jiaxing XC, and, in the second half of 2025, commenced its electric vehicle charging business, including the development and operation of charging infrastructure and operating platforms for new-energy two-wheeled vehicles and electric vehicles, which is conducted through Hangzhou ZHC.

The Operating Subsidiaries offer equipment structural parts, including (i) Prefabricated Steel Plate Structures for Modular Construction , (ii) Retaining Pile Structures for Foundation Pits. Customers of equipment structural parts, including are industrial manufacturing companies, such as producers of mining haulers, industrial conveyors, railroad tracks, and other products.

Growth Strategies

Accelerate Asset-Light Transformation and Supply Chain Integration

We are committed to completing our strategic pivot toward an asset-light operational model within the steel structure segment. By decoupling our high-value engineering expertise from capital-intensive manufacturing, we intend to focus on technical design, quality assurance, and trade agency services:

Implementation: We will leverage our 20-year database of proprietary designs for prefabricated modular structures and foundation pit shoring systems to provide high-margin consultancy.

Competitive Edge: This shift allows us to dynamically scale production through a certified network of third-party OEMs, significantly reducing fixed-asset depreciation and enabling us to respond more rapidly to fluctuations in global construction demand.

Aggressive Expansion of Destination Charging Infrastructure

Our primary growth engine in the EV sector is the rapid deployment of hardware solutions tailored for destination charging scenarios, such as residential complexes, commercial office hubs, and public parking facilities.

Implementation: We plan to intensify our investment in the construction and sales of dual-mode charging piles (supporting both two-wheel and four-wheel vehicles). By forming long-term strategic alliances with real estate developers and property management firms, we aim to secure “first-mover” status in high-density urban locations.

Financial Goal: This expansion is designed to build a vast, captive user base that provides stable recurring cash flow through charging fees and serves as the entry point for our digital platform.

Maximizing Digital Monetization via R&D and Platform Innovation

We intend to transition our EV segment from a hardware-centric business to a data-driven service provider. Our R&D efforts are focused on the continuous iteration of our proprietary charging management platform.

Implementation: Our team of MCU and full-stack engineers is developing advanced communication protocols to improve grid-to-vehicle efficiency and user interaction. We are building sophisticated data analytics tools to understand user behavior, which will enable the rollout of value-added services such as targeted digital advertising, premium membership programs, and energy-saving consulting.

Strategic Shift: This strategy is aimed at diversifying our revenue streams and significantly expanding our gross margins beyond traditional hardware sales.

Products and Services

Overview

The Operating Subsidiaries entered the smart parking industry in 1990s, with a focus on the research and development, production, sales, and operation of cubic parking equipment. The Operating Subsidiaries specialize in the integration of machinery, electricity, and instrumentation to provide comprehensive parking solutions. Recently, we have strategically transitioned this segment toward an asset-light model, focusing on trade and agency of equipment structural parts. In parallel, we have expanded into the EV charging sector, providing an integrated ecosystem that combines high-performance hardware for destination charging with a sophisticated, data-driven management platform. This dual-segment approach allows us to bridge traditional infrastructure expertise with the growing demand for green energy technology.

Products

Equipment Structural Parts

1. Prefabricated Steel Plate Structures

The Operating Subsidiaries purchase the prefabricated steel plate structures from suppliers, and they sell these directly to the customers. Advanced modular structural components designed for rapid onsite assembly in industrial and commercial building projects.

Prefabricated Steel Plate Structures

2. Foundation Pit Shoring Pile Structures

The Operating Subsidiaries purchase the foundation pit shoring pile structures from suppliers, and they sell these directly to the customers. High-strength structural support systems, including specialized piling solutions, used for earth retention and safety in deep excavation and underground engineering.

Foundation Pit Shoring Pile Structures

3. Equipment & Machinery Structures:

The Operating Subsidiaries purchase the equipment and machinery structures from suppliers, and they sell these directly to the customers. Customized structural frameworks for heavy industrial equipment and construction machinery, manufactured to rigorous engineering specifications.

Equipment & Machinery Structures

4. Specialized Metal Materials

The Operating Subsidiaries purchase the specialized metal materials from suppliers, and they sell these directly to the customers. Procurement and supply of high-performance and exotic metal materials for specific industrial use cases.

For the fiscal year ended December 31, 2025, the revenue from continuing operations breakdown for our equipment structural parts is detailed in the table below. The percentages represent the proportion of total revenue derived from each category of our equipment structural parts.

For the fiscal year ended December 31, 2025, 44% of the revenue of equipment structural parts was generated from Prefabricated Steel Plate Structures, 26% was generated from Foundation Pit Shoring Pile Structures, 17% was generated from others, and 13% was generated from Machinery Structures.

Revenues for the first half of 2025, as well as for the fiscal years 2024 and 2023, were derived entirely from discontinued operations. Accordingly, detailed comparative data for these periods are not presented herein.

Electric Vehicle Charging

Services

Platform Operations

We operate a proprietary cloud-based management platform that provides real-time monitoring, remote diagnostics, and automated billing for charging station owners and operators.

 Value-Added Digital Services

We provide data-driven monetization solutions, including user-traffic analytics and platform-integrated marketing services, aimed at enhancing the profitability and user engagement of our charging network.

The aforementioned service offerings are currently in the research and development stage. We anticipate that these services will begin to generate revenue in the second half of fiscal year 2026.

Research and Development

Our research and development (“R&D”) activities are fundamental to our strategic transition into a technology-driven energy solutions provider. We are committed to developing a vertically integrated ecosystem that harmonizes high-performance charging hardware with a scalable, data-intelligent software architecture.

Core R&D Focus Areas

Proprietary Communication Protocols: We are dedicated to the design and optimization of advanced communication protocols for our charging equipment. These protocols are engineered to ensure seamless interoperability between our hardware and management platforms, enabling high-speed data transmission, remote diagnostics, and real-time power distribution management.

Advanced Charging Platform Development: Our R&D team is focused on building a robust, cloud-native charging management platform. This platform is designed to handle high-concurrency transactions and provide a secure, user-centric interface for both two-wheel and four-wheel vehicle owners.

Technical Talent and Expertise

Microcontroller (MCU) Engineers: These specialists focus on the firmware and embedded systems of our hardware, ensuring the stability, safety, and efficiency of our charging piles at the edge layer.

Software Engineering (Front-end and Back-end): Our full-stack software team is responsible for the architecture of our management platform. Back-end engineers focus on data processing, API integration, and security, while front-end engineers prioritize enhancing the user interface (“UI”) and user experience (“UX”) to drive platform engagement.

Future R&D Roadmap: Value-Added Service Monetization

Looking forward, our R&D strategy is shifting toward the enhancement of value-added service (“VAS”) monetization capacities. We believe that the long-term value of our EV segment lies in the digital interaction with our charging user base. Current and future development initiatives include:

Data Analytics for Monetization: Developing proprietary algorithms to analyze user charging patterns and behavior, enabling us to offer targeted digital services and localized marketing solutions.

Integrated Ecosystem Services: Researching the integration of additional digital functions, such as smart energy management and premium membership features, designed to diversify our revenue streams beyond traditional charging fees.

Suppliers

We procure equipment structures, construction machinery structures, and specialty metal materials from suppliers and sell them directly to our customers. The Operating Subsidiaries purchase these products from China.

Typically, the Operating Subsidiaries will evaluate the quality of their suppliers and maintains a list of approved suppliers by formulating related procurement policies and selecting suppliers based on many factors, such as product quality, price, and supply capabilities.

The business is substantially dependent on the collaboration with the major suppliers. We consider major suppliers in each period to be those suppliers that accounted for more than 10% of overall purchases in such period.

Below are the major supplier of continuing operations for the fiscal years ended December 31, 2025.

Purchases for the first half of fiscal year 2025, fiscal year 2024, and fiscal year 2023 are classified as discontinued operations; therefore, detailed disclosure and presentation of such data are not provided herein.

Customers

The Operating Subsidiaries have established stable business ties with priority customers in the industry and have maintained partnership with most of the customers for over 3 years. The Operating Subsidiaries adopts a business to business model. Our customers of equipment structural parts are industrial manufacturing companies, such as producers of mining haulers, industrial conveyors, railroad tracks, and other products.

The close ties with the following priority customers show our technology, service reputation, and product quality strengths.

We consider major customers in each period to be those customers that accounted for more than 10% of revenue in such period.

Below are the major customer of continuing operations for the fiscal years ended December 31, 2025.

Sales for the first half of fiscal year 2025, fiscal year 2024, and fiscal year 2023 are classified as discontinued operations; therefore, detailed disclosure and presentation of such data are not provided herein.

Sales and Marketing

Sales Channels

Customer referrals. The Operating Subsidiaries highly values word-of-mouth communication and referrals from the customers. Customers who are satisfied with the products or services often recommend the products and services to others. The Operating Subsidiaries strive to provide quality products and excellent customer service to earn customers’ trust and word-of-mouth referrals.

Agent program Channel. To navigate new regions and markets, the Operating Subsidiaries sometimes partner with reliable local agents to help build relationship with potential clients and to expand the market coverage and sales network. The Operating Subsidiaries collaborate closely with these agents, jointly developing sales strategies in such new markets. Once a client is secured, the Operating Subsidiaries contract directly with the clients, ensuring a seamless transition from initial contact to ongoing service. For each of the fiscal years ended December 31, 2025, 2024 and 2023, revenue generated through such agents accounted for less than 2% of our total revenue.

Industry association exhibitions: The Operating Subsidiaries actively participate in regular exhibitions and events organized by industry associations. These exhibitions present opportunities to meet potential customers, partners, and industry professionals face-to-face. The Operating Subsidiaries showcase products and solutions at the shows and use these opportunities to share best practices, learn about industry trends and build business contacts with industry leaders.

Direct Sales. For the equipment structural parts business, the Operating Subsidiaries adopt a direct sales model. The Operating Subsidiaries directly engage with customers to sign purchase and sales contracts, clearly outlining the product’s technical requirements, delivery deadlines, transportation methods, and payment terms. Shipment, inspection, and payment collection are organized according to the contract. Customers of equipment structural parts have long-term relationships with our Operating Subsidiaries. These relationships are built on years of collaboration. Some customers also conduct periodic evaluations of our subsidiary to ensure ongoing quality and performance.

By combining these sales approaches, the Operating Subsidiaries can reach a wide range of potential customers, expand our market share, and build strong relationships with key stakeholders in the industry. The Operating Subsidiaries will continue to uphold high-quality products and excellent customer service and explore new sales channels and opportunities to achieve sustainable business growth and meet customer needs.

Marketing Approach

The marketing approach is direct sales, where the Operating Subsidiaries establishes business partnerships and contracts directly with the clients. The Operating Subsidiaries have a dedicated sales department responsible for market expansion and product sales. The domestic operations focus on the East China region while extending our reach to provinces and cities nationwide. The primary clients are enterprises, institutions, and residential communities, which include real estate developers, property management companies, hospitals, schools, and other enterprises and institutions. The projects primarily involve new real estate developments.

Marketing Plan

The Operating Subsidiaries plan to solidify their presence in the East China market while strategically expanding operations in Central China and across the nation. The East China division focuses on local market penetration and specialized service optimization, enhancing cost-efficiency and business model innovation. The Central China division prioritizes collaborative business development, agent network cultivation, and the promotion of smart solution portfolios. The Southwest division aims to strengthen brand influence and market reach by promoting mid-to-low-end product lines. The Dalian division is dedicated to regional market expansion and cross-district application of technology-driven products. The Northwest division focuses on high-end project delivery and premium product categories. Meanwhile, the South China division serves as a strategic hub, leveraging a comprehensive industry chain to support growth in adjacent regional markets. The Operating Subsidiaries will continuously refine their marketing strategies in response to shifting market demands to ensure long-term sustainable development.

Quality Control

We believe that maintaining high standards of quality is critical to our reputation and business sustainability. As a specialized distributor of equipment structures, construction machinery components, and specialty metal materials, we have implemented a rigorous quality control (“QC”) system that spans the entire procurement and delivery cycle.

Our QC procedures primarily include:

Stringent Supplier Selection: We only source from reputable manufacturers who meet our internal evaluation criteria and possess necessary industry certifications (such as ISO standards). We conduct periodic on-site audits to assess their manufacturing capabilities, technical expertise, and quality management systems.

Technical Specification Review: For complex equipment and machinery structures, our technical team works closely with both customers and suppliers to ensure that all products meet the precise engineering specifications and material requirements requested by our clients.

Inspection and Testing: We employ a multi-layered inspection process. In addition to the mill test certificates provided by suppliers, we frequently engage qualified third-party inspection agencies to conduct independent testing on physical properties and chemical compositions of specialty metal materials before shipment.

Logistics and Storage Oversight: To maintain product integrity, we supervise the handling and transportation processes to prevent any structural damage or material degradation during transit.

By integrating these QC measures, we ensure that the products delivered to our customers comply with applicable industry standards and safety regulations, thereby mitigating operational risks and enhancing customer trust..

The Operating Subsidiaries also provide after-sales services once the products are delivered. As of the date of this annual report, the Operating Subsidiaries have not experienced any significant product returns, accidents, or product-related complaints, investigations, or litigations.

4.D. Property, Plant and Equipment

As of the date of this annual report, we do not own any real property or significant plant and equipment. We operate as a light-asset company and primarily lease our office spaces from third parties. We believe our existing leased properties are adequate for our current business operations.

As of the date of this annual report, Jiaxing XC leased the following property in China:

The leased property in Shanghai function as our office center, accommodating the Operating Subsidiaries’ sales, administration, and finance operations.

Intellectual Property

As of the date of this annual report, the Operating Subsidiaries have no intellectual property rights.

Item 4A. Unresolved Staff Comments

None.

Item 5. Operating and Financial Review and Prospects

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information — 3.D. Risk Factors” and elsewhere in this annual report.

Overview

Huachen Cayman was established under the laws of Cayman Islands as a holding company. Our main business operations are conducted through our Operating Subsidiaries in China.

We are an equipment structural parts provider and conduct all our operations through our Operating Subsidiaries in China. The Operating Subsidiaries offer equipment structural parts, including (i) product structural parts, (ii) garage structural parts, (iii) materials such as customized steel and load-bearing steel plates for cubic parking equipment, and (iv) railroad accessories. Customers of equipment structural parts, including are industrial manufacturing companies, such as producers of mining haulers, industrial conveyors, railroad tracks, and other products.

The Company entered into an agreement to sell its Hong Kong subsidiary, Hua Chen Intelligent Technology Co., Limited, and its eight PRC subsidiaries to an unrelated buyer for $50,000. The disposal aligns with the Company’s strategic exit from the smart parking business amid slowing growth in China’s real estate market. The Company will focus on its equipment structural parts business (Jiaxing XC) and electric vehicle charging operations (Hangzhou ZHC), launched in the second half of 2025.

For the years ended December 31, 2025, 2024 and 2023, our revenues from continuing operations were approximately $6.58 million, nil, and nil, respectively. For the years ended December 31, 2025, 2024 and 2023, our revenues from discontinued operations were approximately $8.32 million, $40.94 million, and $34.28 million. For the years ended December 31, 2025, 2024 and 2023, we had net loss of approximately $41.92 million, net income of approximately $1.51 million, and net income of approximately $2.02 million, respectively.

Reorganization

For the purpose of our initial public offering and listing on the Nasdaq Capital Market, a reorganization of our legal structure was completed. The reorganization involved the incorporation of the Company’s wholly-owned subsidiary - Hua Chen Intelligent Technology Co. Limited (“Huachen HK”) and Huachen HK’s wholly-owned subsidiary - Huachen AI Technology (Zhejiang) Co., Ltd. (“Hua Chen WFOE”). Zhejiang Huachen Technology Co., Ltd. (“Zhejiang Hua Chen Tech”) is owned by Hua Chen WFOE. Zhejiang Hua Chen Tech and its subsidiaries specialized in the design, manufacture, sales, installation and maintenance of smart cubic parking equipment in China.

Disposal of Subsidiaries

From April to November 2025, Huachen Cayman formed the following direct and indirect subsidiaries:

On December 22, 2025, Huachen Cayman and Hua Chen Intelligent Technology Co., Limited, a company formed under the laws of Hong Kong and a subsidiary of the Company (the “Target”) entered into a share purchase agreement (the “Agreement”) with a buyer (the “Buyer”). Pursuant to the Agreement, the Company agreed to sell and the Buyer agreed to purchase all the issued and outstanding shares of the Target at a purchase price of $50,000, which sale includes the sale of the Target’s subsidiaries, including Huachen AI Technology (Zhejiang) Co., Ltd., Zhejiang Huachen Technology Co., Ltd., Shanghai Tiandidaochuan Parking Equipment Manufacturing Co., Ltd., Zhejiang Tiandidaochuan Parking Equipment Co., Ltd., Shanghai Tiandiricheng Parking Lots Management Co., Ltd., Shanghai Yufeng Information Technology Co., Ltd., Shanghai Tiandi Puji Parking Management Co., Ltd. Shanghai Tiandidaochuan Parking Equipment Installation Co., Ltd., and Zhejiang Xinfeng Trade Co., Ltd.

Upon the completion of such disposition, the Company’s corporate structure is as follows:

Key Factors that Affect Operating Results

The growth and future success of the business depends on many factors. While each of these factors presents significant opportunities for the business, they also present challenges. We must meet these challenges to sustain our growth and improve our operating results.

Success of strategic transformation to an asset-light model

Our future profitability and operational efficiency are heavily dependent on the successful execution of our transition from traditional manufacturing to an asset-light trade and agency model within the equipment structural parts segment. While this shift is intended to reduce capital expenditures and depreciation costs, our margins will increasingly depend on our ability to manage a network of third-party manufacturers and maintain favorable terms in our agency agreements. Any inability to maintain quality control or supply chain stability during this transition could materially impact our results.

Market adoption and scaling of EV charging infrastructure

As we pivot toward the EV charging sector, our revenue growth is driven by the pace at which we can deploy hardware in high-traffic destination charging locations. This depends on our success in securing partnerships with property managers and commercial developers. Factors such as the overall adoption rate of electric vehicles, changes in government subsidies for green infrastructure, and the competitive landscape for charging pile installations will significantly influence our top-line growth and market share.

Ability to monetize value-added services via our digital platform

A critical factor for our long-term margin expansion is our ability to transition from hardware-based sales to data-driven monetization. Our operating results will be affected by the progress of our R&D initiatives—specifically the development of proprietary communication protocols and the rollout of value-added services (such as digital marketing and premium memberships). Our success depends on our ability to convert charging user traffic into recurring revenue streams, which is subject to user engagement levels and evolving data privacy regulations.

 Timing of R&D milestones and commercialization

As our current charging service offerings are in the research and development stage, the timing of their commercial launch—currently anticipated for the second half of 2026—will be a primary driver of our future financial performance. Delays in technical milestones, challenges in recruiting specialized MCU and software engineers, or higher-than-anticipated R&D expenditures could postpone revenue generation and affect our liquidity and short-term profitability.

Accounting for discontinued operations and structural realignment

Our historical financial results for the 2023 and 2024 fiscal years, as well as the first half of 2025, primarily reflect discontinued operations. Consequently, our future financial statements may not be directly comparable to our historical data. Our ability to manage the wind-down costs of legacy operations while simultaneously funding the growth of our new business segments will be a significant factor in our near-term financial stability.

Results of operations

For the fiscal years ended December 31, 2025 and 2024

For the fiscal years ended December 31, 2024 and 2023

Revenue

The following table presents a breakdown of our revenue for fiscal years 2025 and 2024.

The following table presents a breakdown of our revenue for fiscal years 2024 and 2023.

On December 22, 2025, Huachen Cayman divested Hua Chen Intelligent Technology Co., Limited and its subsidiaries and incorporated new subsidiaries dedicated to the equipment structural parts business, while also planning to expand into the electric vehicle charging business.

Total revenue for the year ended December 31, 2025, was approximately $14.9 million, representing a decrease of $26.0 million, or 64%, from $40.9 million for the year ended December 31, 2024. The decrease was primarily due to the fact that the Company’s parent entity, acting as a holding company, generated no revenue during fiscal year 2025, 2024, and 2023. Instead, the majority of the Company’s revenue was derived from the disposed subsidiaries and newly incorporated subsidiaries in 2025.

In FY2025, $6,575,095 of the revenue from the equipment structural parts, was derived from continuing operations Jiaxing XC, while $8,319,958 of the revenue was generated by the mainland China subsidiaries under Hua Chen Intelligent Technology Co., Limited, a disposed subsidiary. As the Company’s revenues for the years ended December 31, 2024 and 2023, $40,944,770 and $34,279,022, were also primarily generated by the disposed subsidiaries. Revenue from the disposed subsidiaries has been reclassified to net profit from discontinued operations.

Cost of Revenue

The following table presents a breakdown of our cost of revenue for fiscal years 2025 and 2024.

The following table presents a breakdown of our cost of revenue for fiscal years 2024 and 2023.

Costs of revenue from equipment structural parts primarily consist of steel materials cost, manufacturing expenses incurred in the production of structural parts, and other business and sales related taxes.

For the year ended December 31, 2025, the cost of revenue was $11.8 million, reflecting a decrease of $23.45 million, or 67%, from $35.23 million for the year ended December 31, 2024. The decrease was primarily due to the fact that the costs of revenue for the fiscal year 2025 were mainly generated by operations of the disposed subsidiaries, which have been reclassified to net profit from discontinued operations. For fiscal year 2024 and 2023, the Company’s cost of revenue, $35,226,302 and $28,072,748 were primarily derived from the disposed subsidiaries. In FY2025, $6,166,197 of the cost of revenue from the equipment structural parts, was derived from continuing operations Jiaxing XC, while $5,606,134 of the cost of revenue was generated by the disposed subsidiaries.

Gross Profit

For the years ended December 31, 2025, gross profit from continuing operations was $0.41 million and gross profit from discontinued operations was $2.7 million.

As the Company disposed of subsidiary Hua Chen Intelligent Technology Co., Limited, whose revenues for the years ended December 31, 2024 and 2023 were primarily generated by its mainland China subsidiaries, and such revenues have been reclassified to discontinued operations, there are no comparable data available for gross profit analysis.

Operating Expenses

The following table presents a breakdown of operating expenses for fiscal years 2025 and 2024:

The following table presents a breakdown of operating expenses for fiscal years 2024 and 2023:

Operating expenses primarily comprised of general and administrative expenses. Total operating expenses were $21.6 million for fiscal year 2025, a significant increase of $21.6 million, or 27,581%, from $78,136 in the same period of the prior year. The increase in expenses was primarily due to (i) the fact that the general and administrative expenses for the fiscal year 2024 were mainly generated by operations of the disposed subsidiaries, totaling $2.8 million, which have been reclassified to net profit from discontinued operations, and (ii) share-based compensation expenses incurred in fiscal year 2025.

In fiscal year 2025, the $21.6 million in general and administrative expenses was primarily comprised of non-cash expense of $20.9 million related to the issuance of common shares during fiscal year 2025 under the Company’s employee equity incentive plan to reward exceptional employees who had made significant contributions to the Company.

Other (expenses) income

Other (expenses) income, is used to record our non-operating income and expenses, interest income, and loss on disposal of subsidiaries.

For fiscal year 2025, the Company had total other expenses, net, of $22.1 million, representing an increase of $22.1 million or 1,053,375%, compared to other income, net of $21 for fiscal year 2024. The increase was mainly due to a disposal loss of $22.1 million recognized upon the disposal of Hua Chen Intelligent Technology Co., Limited and its subsidiaries for cash consideration of $50,000 on December 22, 2025. The consolidated net assets of Hua Chen Intelligent Technology Co., Limited and its subsidiaries were $22.2 million as of the disposal date, and the related accounts receivable from Hua Chen Intelligent Technology Co., Limited and its subsidiaries, which were deemed uncollectible, were also included in the disposal loss.

Income tax expenses

For fiscal year 2025, income tax expense was $2,844, the income tax expense mainly relates to income tax recognized on the net income generated by Jiaxing XC, a subsidiary newly consolidated in December 2025, from its operations in mainland China.

Income from discontinued operations(net of tax)

Discontinued operations represent our former PRC-based business, which was disposed of in 2025. These operations accounted for substantially all of our revenue in fiscal years 2024 and 2023, and continued to contribute significantly to our results in fiscal year 2025 prior to disposal.

Revenue from discontinued operations was approximately $8.3 million for the year ended December 31, 2025, compared to $40.9 million and $34.3 million for the years ended December 31, 2024 and 2023, respectively. The decrease in revenue was primarily attributable to the substantial cessation of operations of the disposed subsidiaries as of June 30, 2025.

Costs and expenses associated with discontinued operations were $6.9 million, $39.3 million, and $32.3 million for the years ended December 31, 2025, 2024, and 2023, respectively. The decrease in costs and expenses was primarily attributable to the decline in revenue, which resulted in a corresponding reduction in associated costs.

Income from discontinued operations was $1.4 million, $1.6 million, and $2.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. The decrease was primarily attributable to the factors discussed above.

Following the completion of the disposal, we no longer generate revenue from these operations, and they are not expected to contribute to our future results. Accordingly, our future financial performance will depend entirely on our continuing operations.

Net income(loss)

For fiscal year 2025, the Company generated net loss of $41.9 million, compared to net income of approximately $1.5 million for fiscal year 2024, the decrease was primarily driven by a disposal loss of $22.1 million recognized in connection with the disposal of Hua Chen Intelligent Technology Co., Limited and its subsidiaries, on December 22, 2025. $20.9 million in non-cash share-based compensation under the employee equity incentive plan also contributed to the decrease in profit.

B. Liquidity and Capital Resources

Cash flow

Operating activities

Net cash used in operating activities was $1,301,620 for the year ended December 31, 2025, comprised of net cash provided by operating activities from continuing operations $882,782 and net cash used in operating activities from discontinued operations of $418,839. Net cash used in operating activities from continuing operations mainly derived from a net loss continuing operations of $43,343,515 for the period, as primarily adjusted by the non-cash loss from disposal of subsidiaries of approximately $22.1 million and share-based compensation of $20.9 million, and net changes in our operating assets and liabilities, which mainly included an increase in accounts receivable balance of approximately $6.9 million mainly due to the business development of Jiaxing XC. As a result, the accounts receivable increased significantly in 2025. An increase in accounts payable of approximately $6.5 million which was primary due to deferred payments to suppliers of Jiaxing XC. A decrease in other payables of $208,992 also resulted in a slight reduction in cash flow.

Net cash provided by operating activities for the fiscal year ended December 31, 2024 was $1,506,390, comprised of net cash provided by operating activities from continuing operations $517 and net cash provided by operating activities from discontinued operations of $1,505,873. Net cash provided by operating activities from continuing operations mainly derived from a net loss from continuing operations of $78,115 for the period, and net changes in our operating assets and liabilities, which mainly included an increase in other payables of $77,171. Other payables of Huachen Cayman increased in 2024.

Net cash used in operating activities was $2,465,652 for the year ended December 31, 2023, comprised of net cash used in operating activities from continuing operations $nil and net cash used in operating activities from discontinued operations of $2,465,652. There is no operating activity from continuing operations for the years ended December 31, 2023.

Investing activities

There is no investing activities for the years ended December 31, 2025.

Net cash used in investing activities were approximately $2,183 and used in $0.92 million for the years ended December 31, 2024 and 2023, respectively. Both are from discontinued operations, there is no investing activities from continuing operations for the years ended December 31, 2024 and 2023.

Financing activities

Net cash provided by financing activities was approximately $0.7 million for the year ended December 31, 2025, comprised of net cash provided by financing activities from continuing operations $699,490 and net cash used in financing activities from discontinued operations of $428,732. Net cash provided by financing activities from continuing operations mainly derived from proceeds from issuance of common stock of approximately $5.4 million and payments of related party of approximately $4.7 million.

Net cash used in financing activities was approximately $2.4 million for the year ended December 31, 2024, which was net cash used in financing activities from discontinued operations of $2,393,686. Net cash provided by financing activities was approximately $1.95 million for the year ended December 31, 2023, all from discontinued operations.

Capital expenditures

There is no capital expenditures from continuing operations for the fiscal year ended December 31, 2025 and 2024, respectively. We made capital expenditures from discontinued operations of $2,183 and $902,263 for the fiscal year ended December 31, 2024 and 2023, respectively. Our capital expenditures have been used primarily to purchase fixed assets for business purposes. We estimate that our capital expenditures will increase moderately in the following two or three years to support the expected growth of our business. We anticipate funding our future capital expenditures primarily with net cash flows from operating activities and financing activities.

Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements for the years ended December 31, 2025, 2024 and 2023 that have or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.

5.C. Research and Development, Patent and Licenses, etc.

Please refer to “Item 4. Information on the Company – D. Property, Plant and Equipment – Intellectual Property.”

5.D. Trend Information.

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition or results of operations.

5.E. Critical Accounting Estimates.

Uses of estimates

In preparing the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the unaudited condensed consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable and inventories, useful lives of property, plant and equipment and land use right, the recoverability of long-lived assets, and realization of deferred tax assets. Actual results could differ from those estimates.

Cash and cash equivalents

We consider cash, bank deposit and all highly liquid investments with original maturities of three months or less when purchased to be cash and cash equivalents. Cash consists primarily of cash in accounts held at a financial institution.

Accounts receivable

Accounts receivable are presented net of allowance for credit losses.

Accounts receivable are recorded at the gross billing amount less an allowance for any uncollectible accounts due from the customers. Accounts receivable do not bear interest.

Since January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets.

The Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “General and administrative expenses” in the consolidated statements of comprehensive income(loss). The Company assesses collectability by reviewing accounts receivable on aging schedules because the accounts receivable were primarily consisted of receivables arising from sales of our products. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Delinquent account balances are written-off against the allowance for expected credit.

As of December 31, 2025 and 2024, there is no allowance for credit losses balances from continuing operations.

Revenue recognition

We generate our revenues primarily through sales of products. We early adopted Accounting Standards Codification (“ASC”) 606 using the modified retrospective approach. The adoption of this standard did not have a material impact on our unaudited condensed consolidated financial statements. Therefore, no adjustments to opening retained earnings were necessary.

ASC 606, “Revenue from Contracts with Customers,” establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way we record our revenue.

Income taxes

The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes have been incurred during the years ended December 31, 2025, 2024 and 2023. As of December 31, 2024, the tax years ended December 31, 2015 through December 31, 2024 for the Company’s PRC subsidiaries remain open for statutory examination by PRC tax authorities.

Recent Accounting Pronouncements

We consider the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

In December 2025, the FASB issued ASU 2025-11, which clarifies the scope and disclosure requirements for interim financial reporting under ASC 270. The amendments introduce a principle requiring disclosure of events and transactions occurring after the end of the most recent annual reporting period that have a material impact on the entity and consolidate certain interim disclosure requirements. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this ASU will have on its interim financial statement disclosures.

In November 2025, the FASB issued ASU 2025-08, Financial Instruments — Credit Losses (“Topic 326”): Purchased Loans (“ASU 2025-08”). The amendments expand the population of acquired loans subject to the gross-up approach, treating non-credit-deteriorated loans (excluding credit cards) as “seasoned” if purchased at least 90 days after origination or acquired in a business combination. ASU 2025-08 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this ASU will have on its interim financial statement disclosures.

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (“Topic 815”) and Revenue from Contracts with Customers (“Topic 606”): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (“ASU 2025-07”). ASU 2025-07, expands an existing scope exception under Topic 815 to exclude non-exchange-traded contracts where the underlying is based on the operations or activities specific to one of the contract parties. The Company is currently evaluating the impact of this ASU on its financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). The amendments in ASU 2025-05 provide entities with a practical expedient to simplify the estimation of expected credit losses on current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers (“ASC 606”) by allowing the assumption that current conditions as of the balance sheet date will not change during the remaining life of the asset. ASU 2025-05 is effective for the Company for its for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact ASU 2025-05 will have on its financial statements.

In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This ASU amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of Update 2024-03 is permitted. The Company plans to adopt this guidance effective January 1, 2025, and the adoption of this ASU is not expected to have a material impact on its financial statements.

Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material effect on our financial position, result of operations, or cash flows.

Off-Balance Sheet Arrangements

There was no off-balance sheet arrangements for the years ended December 31, 2025 and 2024 that have or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.

Disclosure pertaining to Russia’s invasion of Ukraine and the ongoing conflict in the Middle East

The ongoing war between Russia and Ukraine continues to affect international operations. In response to Russia’s invasion of Ukraine, the European Union, the U.K. and the U.S. introduced extensive sanctions on Russia and Belarus, including targeted restrictions on individuals and entities, export controls, restrictions on economic relations, trade and financial transactions. These sanctions have had and may continue to have a disruptive effect on global markets.

On February 28, 2026, the United States and Israel launched a joint military operation against Iran-codenamed “Operation Epic Fury”-targeting the country’s leadership, nuclear facilities, missile sites, and security forces, Iran launched hundreds of ballistic missiles and drones against Israel, United Arab Emirates, Qatar, and U.S. military bases in the region. Ongoing geopolitical tensions, including the potential for military escalation and broader regional conflict, may adversely affect economic conditions and create uncertainty that could negatively impact our business, financial condition and results of operations. In addition, the virtual closure of shipping through the Strait of Hormuz has raised concerns about broader disruptions to global supply chains, which could in turn contribute to elevated inflation and slower economic growth in major economies.

We do not have any direct or indirect exposure to Ukraine, Belarus, Russia or the Middle East, through our operations, employee base or any investments in any of these countries. In addition, our securities are not traded on any stock exchanges in these three countries. We do not believe that the sanctions levied against Russia or Belarus or individuals and entities associated with these two countries will have a material impact on our operations or business, if any.

We do not believe that we have any direct or indirect reliance on goods sourced from Russia, Ukraine, Belarus, the Middle East or countries that are supportive of Russia.

We provide customized parking solutions covering smart cubic parking garage design, cubic parking equipment manufacturing, sales, installation, and maintenance to customers in China. The cubic parking equipment operating devices are not connected to the internet, and we do not collect date from the internet in our ordinary business. As of the date of this annual report, we believe the Operating Subsidiaries are not subject to cybersecurity risks and we have not seen any risk of cybersecurity attacks emanating from Russia, Ukraine, Belarus, the Middle East or any other country.

The impact of the invasion by Russia of Ukraine, and the present uncertainty in the Middle East has increased volatility in trading prices and commodities throughout the world, to date, we have not seen a material impact on our operations, however, a prolonged conflict may impact on consumer spending, in general, which could have an adverse impact on our business.

Holding Company Structure

Huachen Cayman is a holding company with no material operation. The Operating Subsidiaries conduct operations in China. Huachen Cayman may rely on dividends to be paid by the PRC subsidiaries to fund its cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt it may incur and to pay its operating expenses. If the PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to Huachen Cayman.

Inflation

Inflation does not materially affect our business or the results of our operations.

Item 6. Directors, Senior Management and Employees

6.A. Directors and Senior Management

The following table provides information regarding our executive officers and directors as of the date hereof:

Bin Lu is our Chief Executive Officer, Director and Chairman of the Board. From October 2016 to October 2019, he served as Chairman at Shanghai Huachen Technology Co., Ltd. Preceding that role, he was the General Manager of Shanghai Huachen Steel Structure Installation Engineering Co., Ltd. from May 2005 to October 2016. From May 2000 to May 2005, he worked as the General Manager at Shanghai Huachen Industrial Co., Ltd., and prior to that, he was the General Manager of Shanghai Huaxian Industrial Co., Ltd. from September 1995 to May 2000. As of the date of this annual report, Mr. Lu is also the executive director of Shanghai TD Manufacturing, Zhejiang TD Parking, Shanghai Yufeng, Shanghai TP Parking, Shanghai TD Installation and Shanghai TD Parking. He obtained his bachelor’s degree of marine engineering management from Shanghai Maritime University in 1990.

Lei Shen is our Chief Financial Officer and Director. Since January 2017, he has been the Chief Financial Officer at Zhejiang Hua Chen Tech and the director of Shanghai TD Manufacturing. He has also served as a Director at Shanghai TD Manufacturing since November 2016. He was the Finance Manager at Shanghai Baotie Railway Bridge Building Materials Co., Ltd. from September 2000 to November 2016. From March 1997 to September 2000, he was the Financial Supervisor at Baosteel Group Shanghai Pudong Iron and Steel Co., Ltd. He obtained his associate degree from Shanghai University of Finance and Economics in 1999.

Dennis Tao Chen is an independent director and Chair of Audit Committee. Mr. Chen has 30 years of experience in finance. Since February 2014, Mr. Chen has been the Director of Financing Director at Happiness Color Culture Media (Shanghai) Co., Ltd. Mr. Chen held the position of CFO at Teeuwissen China Corporation Co., Ltd. from 2013 to 2014. From 2012 to 2013, Mr. Chen was the Finance Director at Gloria Department Store (Shanghai) Co., Ltd. Mr. Chen’s experience also includes a role as CFO at Sky Base International Holdings Limited (HK) from 2010 to 2012. Between 2007 and 2010, Mr. Chen worked as the Finance Director and Business Partner at Heji Jidian Co. Ltd. Earlier in his career, Mr. Chen was an Accountant at ITW (Illinois Tool Works, Inc. NYSE: ITW) from 2004 to 2007, a Senior Corporate Accountant at DFS Galleria/LVMH from 2000 to 2002, a Senior Accountant at Artisan Entertainment, Inc. from 1997 to 2000, and a Staff Accountant at AirportGroup International, Inc. from 1996 to 1997. Mr. Chen has a BA in Accounting from University of Southern California and an MBA from California State University - Los Angeles.

Jing Wang is an independent director and Chair of Compensation Committee. Ms. Wang has been engaged in securities and capital market legal services for over 16 years, primarily focusing on share restructuring, stock issuance and listing, equity investment and financing, mergers and acquisitions, and other corporate, securities, and financial legal services. Ms. Wang possesses extensive experience in capital markets, mergers and acquisitions, asset restructuring, and corporate business. Ms. Wang has been working at Shanghai Guangfa Law Firm since 2007. During this tenure, Ms. Wang held the positions of project supervisor, department supervisor and partner of the law firm. Ms. Wang was an Investment Consultant at Zhongmu (Shanghai) Investment Co., LTD. from 2006 to 2007. Ms. Wang has a BA in Law from Yantai University and a Master’s Degree in International Economic Law from Shanghai University of International Trade.

Chao Xu is an independent director and Chair of Nominating Committee. Mr. Xu served as the General Manger at Shanghai Electric in Hong Kong Company from 2014 to 2017. From October 2006 to 2014, Mr. Xu worked at the Shanghai Electric Group Corporation. During this tenure, Mr. Xu held the positions of Chief Financial Officer and Vice President at Shanghai Electric Asset Management Company. Concurrently, from 2010 to 2013, Mr. Xu served as the Chief Supervisor for Shanghai Jiyou Machinery Co., Ltd. In the years 2011 to 2013, Mr. Xu also held the role of the Chief Supervisor for both Shanghai Automation Instrument Co., Ltd. and Shanghai Haili Co., Ltd. Additionally, during 2011 to 2014, Mr. Xu was a Director at both Haitong Securities and Orient Securities. Mr. Xu has an EMBA from China Europe International Business School.

Family Relationships

None of the directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.

Election of Officers

Our executive officers are appointed by, and serve at the discretion of, our Board of Directors.

6.B. Compensation

Employment Agreements and Indemnification Agreements

We have entered into an employment agreement with each of our executive officers and employee directors. Each of them is employed for a specified time period. We may terminate employment for cause, at any time, without advance notice or remuneration, for certain acts of the executive officer. We may also terminate an executive officer’s employment without cause upon advance written notice. The executive officer and employee director may resign at any time with an advance written notice.

On August 1, 2024, Huachen Cayman entered into an employment agreement with Mr. Bin Lu, our Chief Executive Officer, Director and Chairman of the Board, for a term of three years. Mr. Bin Lu is entitled to an annual base salary of RMB120,000 (or approximately USD16,955).

On August 1, 2024 , Huachen Cayman entered into an employment agreement with Mr. Lei Shen, our Chief Financial Officer and Director, for a term of three years. Mr. Lei Shen is entitled to an annual base salary of RMB120,000 (or approximately USD16,955).

Compensation of Directors and Executive Officers

For the year ended December 31, 2025, we paid an aggregate of RMB528,000 (approximately US$73,461) to our executive officers and employee directors. For the year ended December 31, 2024, we paid an aggregate of RMB 1,760,000 (approximately US$244,590) to our executive officers and employee directors. For the fiscal year ended December 31, 2023, we paid an aggregate of RMB 480,000 (approximately US$67,820), which is the total amount of base salary plus bonus, in cash to our executive officers and employee directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.

Equity Incentive Plan

On August 12, 2024, Huachen Cayman adopted the 2024 Equity Incentive Plan, or the 2024 Plan, for the purpose of granting share based compensation awards to current or prospective employees, directors, officers, advisors or consultants of the Company or its affiliates and align their interests with ours. The maximum aggregate number of Ordinary Shares which may be issued pursuant to all awards under the 2024 Plan was 3,000,000 Class A Ordinary Shares.

On March 28, 2025, Huachen Cayman’s board of directors and compensation committee approved and adopted an amended and restated 2024 Equity Incentive Plan, pursuant to which the maximum aggregate number of Class A Ordinary Shares authorized for issuance under the 2024 Plan was increased from 3,000,000 to 3,172,500 Class A Ordinary Shares.

As of the date of this annual report, 3,172,500 Class A Ordinary Shares have been granted under the 2024 Plan.

The following paragraphs summarize the terms of the 2024 Plan.

Administration. The 2024 Plan is administered by the board of directors or committee or individuals authorized by the board of directors, and once the Compensation Committee is established, the Compensation Committee will administer the 2024 Plan (such committee that administers the 2024 Plan, the “Committee”). The Committee will have the authority to determine the terms and conditions of any agreements evidencing any awards granted under the 2024 Plan and to adopt, alter and repeal rules, guidelines and practices relating to the 2024 Plan. The Committee will have full discretion to administer and interpret the 2024 Plan and to adopt such rules, regulations and procedures as it deems necessary or advisable.

Eligibility. Current or prospective employees, directors, officers, advisors or consultants of the Company or its affiliates are eligible to participate in the 2024 Plan. The Committee has the sole and complete authority to determine who is granted an award under the 2024 Plan, however, it may delegate such authority to one or more officers of the Company under the circumstances set forth in the 2024 Plan.

Number of Shares Authorized. The 2024 Plan provides for an aggregate of 3,172,500 Class A Ordinary Shares to be available for awards. If an award is forfeited or if any option terminates, expires or lapses without being exercised, the Class A Ordinary Shares subject to such award will again be made available for future grant. Class A Ordinary Shares that are used to pay the exercise price of an option or that are withheld to satisfy the participant’s tax withholding obligation will not be available for re-grant under the 2024 Plan.

Each Class A Ordinary Share subject to an option or a stock appreciation right will reduce the number of Class A Ordinary Shares available for issuance by one share, and each Class A Ordinary Share underlying an award of restricted stock, restricted stock units, stock bonus awards and performance compensation awards will reduce the number of Class A Ordinary Shares available for issuance by one share.

If there is any change in the corporate capitalization, the Committee in its sole discretion may make substitutions or adjustments to the number of shares reserved for issuance under the 2024 Plan, the number of shares covered by awards then outstanding under the 2024 Plan, the limitations on awards under the 2024 Plan, the exercise price of outstanding options and such other equitable substitution or adjustments as it may determine appropriate.

Term of Plan. The 2024 Plan will have a term of ten years and no further awards may be granted under the 2024 Plan after that date.