Valor Energy Inc

We also lease a parking lot for automobiles in Changsha, with an area of 900 square meters and the monthly rent for the parking lot is approximately $700, with a lease term started from May 1, 2026 to October 31, 2026.

We consider our current facilities adequate for our current operations.

• We are exposed to credit risk in our Auto Businesses. Our current risk management system may not be able to accurately assess and mitigate all risks to which we are exposed, including credit risk.
• We are required to obtain licenses and permits related to financing and lending in China for our business operations, and we may not be able to obtain or maintain such licenses or permits.
• Our failure to lease cars that we purchased from dealers or leased from other automobile rental companies with a satisfied utilization may have a material and adverse effect on our business, financial condition and results of operations.
• If data provided by automobile lessees and other third-party sources or collected by us are inaccurate, incomplete or fraudulent, the accuracy of our credit assessment could be compromised, customer trust in us could decline, and our business, financial position and results of operations would be harmed.
• We may be subject to product liability claims if people or property are harmed by vehicles purchased or rented through us.
• We may be considered as conducting payment services as a non-financial institution without a Payment Business Permit.
• Any significant disruption in our IT systems, including service on our online ride-hailing platform, malfunctions of our technology systems, errors and quality issues in our software, hardware and systems, or human errors in operating these systems, could materially and adversely affect our business, results of operation and financial condition.
• If we fail to obtain and maintain the requisite licenses and approvals required for our business, or if we are required to take compliance actions that are time-consuming or costly, our business, results of operations and financial condition may be materially and adversely affected.
• We rely primarily on a third-party insurance policy to insure our auto-related risks relating to our automobile operating leasing. If our insurance coverage is insufficient for the needs of our business or our insurance providers are unable to meet their obligations, we may not be able to mitigate the risks facing our business, which could adversely affect our business, results of operations and financial condition.
• Government policies on automobile purchases and usage in the online ride-hailing industry may materially affect our results of operations.
• We have incurred net losses and may continue to incur net losses in the future.
• Our operations depend on the performance of the internet infrastructure and fixed telecommunications networks in China.
• We have identified material weaknesses in our internal control over financial reporting. If we fail to develop and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.
• We have limited business insurance coverage.
• Our common stock will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCA Act, in the future if the PCAOB is unable to inspect or investigate completely our auditors. The delisting of our common stock, or the threat of their being delisted, may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections of our auditors would deprive our investors of the benefits of such inspections.
• We face risks related to natural disasters, health epidemics and other outbreaks, such as COVID-19, which could significantly disrupt our operations.
• Our operations are entirely concentrated in a single city in China, which exposes us to heightened geographic risk that could have a company-wide adverse effect on our business, results of operations and financial condition.
• We are subject to a mandatory new energy vehicle requirement for newly added vehicles in Changsha beginning in 2027, which may require significant capital expenditure and expose us to supply, operational and transition risks that could adversely affect our business.
• Our entire continuing business depends on a single PRC operating subsidiary, and any adverse regulatory, legal or operational development affecting Hunan Ruixi specifically would have a total impact on our revenue and business.
• 1. Corporate Structure
• Our current corporate structure and business operations may be affected by the Foreign Investment Law. If the PRC government deems that our business falls within certain relevant industries that are subject to restriction or limitation, or if these regulations or the interpretation of existing regulations change in the future, we may have to adjust our corporate structure, switch our business focus, or even be forced to relinquish our interests in those operations.
• Our Previous Contractual arrangements in relation to Sichuan Senmiao may be subject to scrutiny by the PRC tax authorities and they may determine that we or Sichuan Senmiao owe additional taxes, which could negatively affect our financial condition and the value of your investment.
• If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC stockholders.
• Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.
• 2. Other Risks
• We are required to obtain a value-added telecommunication business certificate and be subject to foreign investment restrictions.
• Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.
• Adverse regulatory developments in China may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like us with significant China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements. In addition, uncertainties with respect to the PRC legal system could adversely affect us.
• Compliance with China’s new Data Security Law, Measures on Cybersecurity Review, Personal Information Protection Law, regulations and guidelines relating to the multi-level protection scheme and any other future laws and regulations may entail significant expenses and could materially affect our business.
• Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering.
• We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.
• PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of from our public offerings to make loans to or make additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
• We rely on dividends and other distributions on equity paid by our PRC subsidiary to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business.
• Fluctuations in exchange rates could have a material adverse effect on our results of operations and the value of your investment.
• Governmental control of currency conversion may limit our ability to utilize our net revenues effectively and affect the value of your investment.
• Failure to make adequate contributions to various employee benefit plans as required by PRC regulations may subject us to penalties.
• The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of PRC companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
• If the chops of our PRC subsidiary are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised.
• Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
• PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiary’s ability to increase their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.
• Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock.
• The market price for our common stock may be volatile.
• We have a significant number of outstanding warrants, some of which contain full-ratchet anti-dilution protection and reset provisions, which may cause significant dilution to our stockholders, have a material adverse impact on the market price of our common stock and make it more difficult for us to raise funds through future equity offerings.
• Certain judgments obtained against us by our stockholders may not be enforceable.
• Our articles of incorporation and by-laws could deter a change of our management, which could discourage or delay offers to acquire us.
• Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our common stock for return on your investment.
• We may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on terms acceptable to us, or at all.
• Fluctuations in interest rates could negatively affect our results of operations.
• Our operating results may fluctuate significantly and may not fully reflect the underlying performance of our business.
• If we fail to promote and maintain our brands in an effective and cost-efficient way, our business and results of operations may be harmed.
• Any harm to our brands or reputation or any damage to the reputation of our business partners or other third parties, or the automobile financing or ride-hailing industries in China may materially and adversely affect our business and results of operations.
• Our reputation may be harmed if information supplied by customers is inaccurate, misleading or incomplete.
• Misconduct, errors and failure to function by our employees and third-party service providers could harm our business and reputation.
• A severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and financial condition.
• Our ability to protect the confidential information of our customers may be adversely affected by cyber-attacks, computer viruses, physical or electronic break-ins or similar disruptions.
• We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
• We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.
• Some aspects of our digital operations include open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business.
• From time to time, we may evaluate and potentially consummate strategic investments or acquisitions, which could require significant management attention, disrupt our business and adversely affect our financial results.
• Our business depends on the continued efforts of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business may be severely disrupted.
• Competition for employees is intense, and we may not be able to attract and retain the qualified and skilled employees needed to support our business.
• Increases in labor costs in the PRC may adversely affect our business and results of operations.
• If we cannot maintain our corporate culture as we grow, we could lose the innovation, collaboration and focus that contribute to our business.
• Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies.
• We will incur increased costs as a result of operating as a smaller reporting public company after we no longer qualify to be an emerging growth company, and our management will be required to devote substantial time to new compliance initiatives.
• If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our common stock and trading volume could decline.
• Escalating tensions between the United States and China, including tariff measures, export controls, and US legislative actions targeting Chinese-linked public companies, could adversely affect our Nasdaq listing, our ability to access US capital markets, and investor sentiment toward our common stock.