Lixiang Education Holding Co. Ltd.

There are substantial uncertainties regarding the interpretation and application of the Decision, the current Promotion Law, the Education Fees Opinions and the 2021 Implementation Rules, which affect or may affect Lishui International School, the Vocational Education Services Providers, or our industry as a whole. Such uncertainties include, among others: Uncertainties with respect to liquidation According to the Decision, upon liquidation of for-profit private schools, school sponsors can obtain the schools’ remaining assets after the settlement of the schools’ indebtedness. The Decision also states that, a private school established before the promulgation of this Decision registered as non-profit, shall give appropriate compensation out of the remains to the sponsors after its property is liquidated, at its termination, based on their applications and by taking into full account of the circumstances. After that, the remaining assets shall be used for the operation of other non-profit private schools. The Decision is silent on how or by whom the aforesaid rest of the remaining assets of a liquidated non-profit private school shall be dominated or disposed of. Accordingly, we may not be able to transfer all or part of the remaining assets and residual interests of our school to Liandu WFOE upon their liquidation. As a result, our and the VIEs’ business, our financial position and the market price of our shares may be materially and adversely affected.