China Internet Nationwide Financial's Special Committee Responds to Muddy Waters

The Report made allegations against the Company and below is a summary of the major findings of the investigation generally keyed to those allegations:

1.   

. Gross revenue in the Company's books and records showed no material inconsistency with the gross revenue reported in its Registration Statement on Form F-1 filed with the Securities and Exchange Commission ("SEC ") on April 17, 2017. It was determined that the Company had underreported its revenue to the PRC's State Administration of Industry & Commerce ("SAIC").

2.   

.  The loans to Beijing Ailirui Trading Co., Ltd, Xiamen Jingsu Trading Co. Ltd, Fujian Jin Xin Import Export Trading Co. Ltd and Cai Long Ge (the "borrowers") were in fact made and were repaid with appropriate interest. The borrowers were not "sham" parties.

3

.  The transactions with Xiamen Beiruichen Trading Co. Ltd and Xiamen Luye Trading Co. Ltd have been verified and the Company reported the relevant revenue in its SEC filings.

4.   

.  The Company asked Beijing Tianhuang Tongda Technology Co. Ltd to acquire the "big data" company Anytrust and then, for an additional fee, sell it to the Company because the Company did not want to reveal its identity to the seller of Anytrust for fear that the latter would demand a higher selling price for Anytrust if it knew that it was negotiating with a public company.

5.   

.   Although Kashgar SYX was only incorporated on December 29, 2016, its reported revenue was significant because customers of its parent, Sheng Ying Xin (Beijing) Management Consulting Co., Ltd ("SYX") in the latter half of 2016, replaced their contracts entered with SYX with Kashgar SYX once Kashgar SYX was incorporated to benefit from certain preferential tax treatments. The revenue from these customers was then booked under Kashgar SYX.

6.   

.  In order to establish whether the Company's 2016 profit margins were plausible, the Special Committee compared the Company's net profit margin to the net profit margin of two PRC financial services companies listed on the NASDAQ – one had higher margin and the other, lower.

7.   

.  The Company's former wealth products services business, described in the Report as a "P2P business," was sold to a third party approximately 2 years prior to the Company's IPO. Accordingly, the Company did not mislead its investors by not disclosing its prior sold business.

8.   

.  The Company's ICP license has been verified and its use of the VIE structure is consistent with its strategy to pursue a line of business where foreign ownership is restricted by China's Ministry of Commerce.

The Special Committee recognizes that its investigation was tailored to investigate the allegations made in the Report, and was not designed to be the equivalent of an audit conducted by the Company's independent auditors. As a result of its investigation, the Special Committee, on behalf of the Company, has adopted, and the management will in the near future implement, a series of measures intended to improve the Company's operations, compliance and internal controls. These measures include, among other things, enhanced corporate policies and practices governing the management of acquisitions and requiring the reconciliation of reports filed with the SAIC and reports filed with the SEC.