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51Talk Online Education Group

51Talk Online Education GroupCOEEarnings & Financial Report

NYSE

51Talk Online Education Group is a leading online English education service provider headquartered in China, primarily catering to K-12 students and adult learners across the domestic market. It offers live one-on-one and small-group tutoring sessions taught by certified native English-speaking instructors, with tailored courses covering conversational English, exam preparation and academic English to meet diverse learning demands.

What changed in 51Talk Online Education Group's 20-F — 2023 vs 2024

Top changes in 51Talk Online Education Group's 2024 20-F

463 paragraphs added · 396 removed · 318 edited across 6 sections

Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 4 ITEM 3. KEY INFORMATION 4 ITEM 4. INFORMATION ON THE COMPANY 52 ITEM 4.A. UNRESOLVED STAFF COMMENTS 81 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 81 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 95 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 106 ITEM 8. FINANCIAL INFORMATION 107 ITEM 9.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 4 ITEM 3. KEY INFORMATION 4 ITEM 4. INFORMATION ON THE COMPANY 50 ITEM 4.A. UNRESOLVED STAFF COMMENTS 81 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 81 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 95 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 106 ITEM 8. FINANCIAL INFORMATION 107 ITEM 9.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Risk Factors—Risks Related to Our Global Operations—The approval of and filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings and capital raising activities under the laws of mainland China if the CSRC or other PRC government authorities determine that their regulatory regimes for offshore offerings and capital raising activities apply to us.
Risk Factors—Risks Related to Our Global Operations—The approval of and filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings and capital raising activities under the laws of mainland China if the CSRC or other PRC government authorities determine that their regulatory regimes for offshore offerings and capital raising activities apply to us.
As of the date of this annual report, there is no equivalent or similar restriction or limitation in Hong Kong on cash or other assets transfers in, or out of, our Hong Kong entities, except for the transfer of funds involving money laundering and criminal activities.
As of the date of this annual report, there is no equivalent or similar restriction or limitation in Hong Kong on cash or other assets transfers in, or out of, our Hong Kong entities, except for the transfer of funds involving money laundering and criminal activities.
Since the second half of 2021, we have developed and transitioned into new business models and service offerings providing one-on-one English lessons taught by foreign tutors to students in countries and regions outside mainland China.
Since the second half of 2021, we have developed and transitioned into new business models and service offerings of providing one-on-one English lessons taught by foreign tutors to students in countries and regions outside mainland China.
The Cybersecurity Review Measures further stipulates that network platform operators that hold personal information of over one million users shall apply with the Cybersecurity Review Office for a cybersecurity review before any initial public offering at a foreign stock exchange. All of our servers and routers, including backup servers, are currently hosted by third-party service providers in Singapore.
The Cybersecurity Review Measures further stipulates that network platform operators that hold personal information of over one million users shall apply with the Cybersecurity Review Office for a cybersecurity review before any initial public offering at a foreign stock exchange. All of our servers and routers, including backup servers, are currently hosted by third-party service providers in Singapore.
As of the date of this annual report, we and our mainland China subsidiaries have not been asked to go through cybersecurity review by any PRC government authority.
As of the date of this annual report, we and our mainland China subsidiaries have not been asked to go through cybersecurity review by any PRC government authority.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely our current auditor, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely our current auditor, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
As of the date of this annual report, there is no equivalent or similar restriction or limitation in Hong Kong on cash or other assets transfers in, or out of, our Hong Kong entities, except for the transfer of funds involving money laundering and criminal activities.
As of the date of this annual report, there is no equivalent or similar restriction or limitation in Hong Kong on cash or other assets transfers in, or out of, our Hong Kong entities, except for the transfer of funds involving money laundering and criminal activities.
However, if restrictions or limitations were to become applicable to cash or other assets transfers in and out of Hong Kong entities in the future, the funds or other assets in our Hong Kong entities may not be available to fund operations or for other use outside of Hong Kong.
However, if restrictions or limitations were to become applicable to cash or other assets transfers in and out of Hong Kong entities in the future, the funds or other assets in our Hong Kong entities may not be available to fund operations or for other use outside of Hong Kong.
Non-compliance with the laws and regulations regarding our operations in Hong Kong may materially and adversely affect our reputation, business operations and prospects.” ​ 5 Table of Contents The following diagram illustrates our current corporate structure, which includes our significant subsidiaries and consolidated affiliated entities as of the date of this annual report: Notes: ⁎ The holding company in which the investors hold their interests † Our operating subsidiaries ​ 6 Table of Contents (1) Jack Jiajia Huang and Ting Shu through their holding vehicles, which are wholly owned by TB Family Trust established for the benefits of Mr.
Non-compliance with the laws and regulations regarding our operations in Hong Kong may materially and adversely affect our reputation, business operations and prospects.” ​ 5 Table of Contents The following diagram illustrates our current corporate structure, which includes our significant subsidiaries and consolidated affiliated entities as of the date of this annual report: Notes: ⁎ The holding company in which the investors hold their interests † Our operating subsidiaries (1) Jack Jiajia Huang and Ting Shu through their holding vehicles, which are wholly owned by TB Family Trust established for the benefits of Mr.
For purposes of illustration, the following discussion reflects the hypothetical taxes that might be required to be paid in mainland China and Hong Kong, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future. ​ ​ ​ ​ ​ Tax calculation (1) Hypothetical pre-tax earnings 100 % Tax on earnings at statutory rate of 25% (2) ​ (25) % Net earnings available for distribution 75 % Withholding tax at standard rate of 10% (3) ​ (7.5) % Net distribution to Parent/Shareholders 67.5 % (1) For purposes of this example, the tax calculation has been simplified.
For purposes of illustration, the following discussion reflects the hypothetical taxes that might be required to be paid in mainland China and Hong Kong, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future. ​ ​ ​ ​ ​ Tax calculation (1) Hypothetical pre-tax earnings 100 % Tax on earnings at statutory rate of 25% (2) ​ (25) % Net earnings available for distribution 75 % Withholding tax at standard rate of 10% (3) ​ (7.5) % Net distribution to Parent/Shareholders 67.5 % Notes: (1) For purposes of this example, the tax calculation has been simplified.
The market price and trading volume for our ADSs may be volatile and subject to wide fluctuations in response to factors including, but not limited to, the following: ● the financial projections that we may choose to provide to the public, any changes in those projections or our failure for any reason to meet those projections; ● variations in our net revenues, net loss/income and cash flow; ● changes in the economic performance or market valuation of other education companies; ● announcements of new investments, acquisitions by us or our competitors, strategic partnerships, joint ventures or capital commitments; ● announcements of new services and expansions by us or our competitors; ● detrimental negative publicity about us, our competitors or our industry; ● changes in financial estimates by securities analysts; ● additions or departures of key personnel; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● potential litigation or regulatory investigations and other actions; ● substantial sales or perception of sales of our ADSs in the public market; ● fluctuations in market prices for our products; ​ 46 Table of Contents ● any share repurchase program; ● outbreaks of health epidemics, natural disasters, and other extraordinary events; and ● general economic, regulatory or political conditions in the international markets in which we operate and mainland China.
The market price and trading volume for our ADSs may be volatile and subject to wide fluctuations in response to factors including, but not limited to, the following: ● the financial projections that we may choose to provide to the public, any changes in those projections or our failure for any reason to meet those projections; ● variations in our net revenues, net loss/income and cash flow; ● changes in the economic performance or market valuation of other education companies; ● announcements of new investments, acquisitions by us or our competitors, strategic partnerships, joint ventures or capital commitments; ● announcements of new services and expansions by us or our competitors; ● detrimental negative publicity about us, our competitors or our industry; ● changes in financial estimates by securities analysts; 44 Table of Contents ● additions or departures of key personnel; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● potential litigation or regulatory investigations and other actions; ● substantial sales or perception of sales of our ADSs in the public market; ● fluctuations in market prices for our products; ● any share repurchase program; ● outbreaks of health epidemics, natural disasters, and other extraordinary events; and ● general economic, regulatory or political conditions in the international markets in which we operate and mainland China.
As of the date of this annual report, based on the current status of our company and mainland China subsidiaries, it is the opinion of our PRC legal counsel, Shihui Partners that (i) our future offshore offering or listing in an overseas market are not subject to the filing requirements of the CSRC, including our follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities, and (ii) we are also not subject to the requirements of filing a report to the CSRC after the occurrence and public disclosure of certain material corporate events, including but not limited to, change of control and voluntary or mandatory delisting. ​ 42 Table of Contents However, there can be no assurance that the CSRC and other PRC government agencies would reach the same conclusion with our PRC legal counsel.
As of the date of this annual report, based on the current status of our company and mainland China subsidiaries, it is the opinion of our PRC legal counsel, Shihui Partners that (i) our future offshore offering or listing in an overseas market are not subject to the filing requirements of the CSRC, including our follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities, and (ii) we are also not subject to the requirements of filing a report to the CSRC after the occurrence and public disclosure of certain material corporate events, including but not limited to, change of control and voluntary or mandatory delisting. 41 Table of Contents However, there can be no assurance that the CSRC and other PRC government agencies would reach the same conclusion with our PRC legal counsel.
For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2022 and do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2023.
For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20- F for the fiscal year ended December 31, 2022 and 2023, and do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2024.
Furthermore, as a Cayman Islands company listed on the NYSE American, we are permitted to elect to rely, and have relied, on the home country exemptions afforded to foreign private issuers under NYSE American Company Guide, including: ● an exemption from having a board of directors that is composed of a majority of independent directors; ● an exemption from having an audit committee comprised of at least three members; ​ 50 Table of Contents ● an exemption from having a compensation committee that is composed entirely of independent directors; ● an exemption from having a nominating and governance committee that is composed entirely of independent directors; and ● an exemption from holding an annual general meeting.
Furthermore, as a Cayman Islands company listed on the NYSE American, we are permitted to elect to rely, and have relied, on the home country exemptions afforded to foreign private issuers under NYSE American Company Guide, including: ● an exemption from having a board of directors that is composed of a majority of independent directors; ● an exemption from having an audit committee comprised of at least three members; ​ 48 Table of Contents ● an exemption from having a compensation committee that is composed entirely of independent directors; ● an exemption from having a nominating and governance committee that is composed entirely of independent directors; and ● an exemption from holding an annual general meeting.
(6) In August 2018, HelloWorld Online Education Group (HK) limited, or HelloWorld Online HK, was incorporated as a wholly owned subsidiary of HelloWorld Online. (7) In April 2022, 51TALK TRAINING SDN. BHD, or 51TALK TRAINING MAS, was incorporated as a wholly owned subsidiary of HelloWorld Online Singapore.
(6) In August 2018, HelloWorld Online Education Group (HK) limited, or HelloWorld Online HK, was incorporated as a wholly owned subsidiary of HelloWorld Online Cayman. (7) In April 2022, 51TALK TRAINING SDN. BHD, or 51TALK TRAINING MAS, was incorporated as a wholly owned subsidiary of HelloWorld Online Singapore.
Rising geopolitical tension between the countries and regions where we operate our business may disrupt the economy and business environment the countries and regions where we operate our business, which may negatively impact our business operations in these countries and regions. Certain countries and regions where we operate our business have geopolitical tension with one another.
Rising geopolitical tension between the countries and regions where we operate our business may disrupt the economy and business environment of the countries and regions where we operate our business, which may negatively impact our business operations in these countries and regions. Certain countries and regions where we operate our business have geopolitical tension with one another.
Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of mainland China may render you unable to enforce a judgment against our assets or the assets of our directors and officers. ​ 49 Table of Contents The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to vote your Class A ordinary shares.
Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of mainland China may render you unable to enforce a judgment against our assets or the assets of our directors and officers. ​ 47 Table of Contents The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to vote your Class A ordinary shares.
For this reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F for the fiscal year ended December 31, 2023. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
For this reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F for the fiscal year ended December 31, 2024. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
We incurred net loss from continuing operations for 2021, 2022 and 2023 we cannot assure you that we will be able to generate net profits or positive cash flow from operating activities in the future, especially as we divested the China Mainland Business and transitioned into new international markets, the financial prospects of which are largely uncertain.
We incurred net loss from continuing operations for 2022, 2023 and 2024. We cannot assure you that we will be able to generate net profits or positive cash flow from operating activities in the future, especially as we divested the China Mainland Business and transitioned into new international markets, the financial prospects of which are largely uncertain.
Sales of these registered shares in the public market, or the perception that such sales could occur, could cause the price of our ADSs to decline. ​ 48 Table of Contents 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.
Sales of these registered shares in the public market, or the perception that such sales could occur, could cause the price of our ADSs to decline. ​ 46 Table of Contents 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.
The depositary may refuse to deliver, transfer or register transfers of our ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason. ​ 51 Table of Contents
The depositary may refuse to deliver, transfer or register transfers of our ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason. ​ 49 Table of Contents
Risk Factors—Risks Related to Our ADSs—If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our ADSs, the market price for our ADSs and trading volume could decline.” ​ 16 Table of Contents ● Our dual class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.
Risk Factors—Risks Related to Our ADSs—If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our ADSs, the market price for our ADSs and trading volume could decline.” ● Our dual class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.
As of the date of this annual report, it is the opinion of our PRC legal counsel, Shihui Partners, that our mainland China subsidiaries (i) have obtained the requisite approvals and permissions from the PRC government authorities that are necessary for our business operations, namely, (a) the business license of HelloWorld Online issued by the Administration for Market Regulation of Shijingshan District, Beijing Municipality, (b) the housing fund deposit registration of HelloWorld Online with the Beijing Housing Fund Management Center, and (c) the business license of Nanjing HelloWorld Online issued by the Administration for Market Regulation of Lishui District, Nanjing Municipality, and (ii) have not been denied of such approvals and permissions.
As of the date of this annual report, it is the opinion of our PRC legal counsel, Shihui Partners, that our mainland China subsidiaries (i) have obtained the requisite approvals and permissions from the PRC government authorities that are necessary for their respective business operations, namely, (a) the business license of HelloWorld Online issued by the Administration for Market Regulation of Shijingshan District, Beijing Municipality, (b) the housing fund deposit registration of HelloWorld Online with the Beijing Housing Fund Management Center, (c) the business license of Nanjing HelloWorld Online issued by the Administration for Market Regulation of Lishui District, Nanjing Municipality, and (d) the housing fund deposit registration of Nanjing HelloWorld Online with the Nanjing Housing Fund Management Center, and (ii) have not been denied of such approvals and permissions.
As a result, we may be forced to scale back our operations and even unable to operate in Hong Kong and our business operations and prospects may be adversely and materially affected. ​ 43 Table of Contents Information regarding our course offerings to customers are regulated by a series of laws and regulations, including consumer protection laws in Hong Kong.
As a result, we may be forced to scale back our operations and even unable to operate in Hong Kong and our business operations and prospects may be adversely and materially affected. 42 Table of Contents Information regarding our course offerings to customers are regulated by a series of laws and regulations, including consumer protection laws in Hong Kong.
We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. Accordingly, for the years ended December 31, 2021, 2022 and 2023, no dividends or distributions were paid or made to U.S. investors.
We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. Accordingly, for the years ended December 31, 2022, 2023 and 2024, no dividends or distributions were paid or made to U.S. investors.
In addition, after a domestic company has offered and listed securities in an overseas markets, it is required to file a report to the CSRC after the occurrence and public disclosure of certain material corporate events, including but not limited to, change of control and voluntary or mandatory delisting.
In addition, after a domestic company has offered and listed securities in an overseas market, it is required to file a report to the CSRC after the occurrence and public disclosure of certain material corporate events, including but not limited to, change of control and voluntary or mandatory delisting.
Neither our subsidiaries nor the former mainland China consolidated VIEs made cash dividends or other distributions to 51Talk Online Education Group, the holding company, or its offshore subsidiaries, in the years ended December 31, 2021, 2022 and 2023.
Neither our subsidiaries nor the former mainland China consolidated VIEs made cash dividends or other distributions to 51Talk Online Education Group, the holding company, or its offshore subsidiaries, in the years ended December 31, 2022, 2023 and 2024.
As a result of grants under the 2013 Plan, the 2014 Plan and the 2016 Plan and potential future grants under the 2014 Plan and the 2016 Plan, we have incurred and will continue to incur share-based compensation expenses. We have recognized share-based compensation expense in the amount of US$0.9 million in 2023.
As a result of grants under the 2013 Plan, the 2014 Plan and the 2016 Plan and potential future grants under the 2016 Plan, we have incurred and will continue to incur share-based compensation expenses. We have recognized share-based compensation expense in the amount of US$0.9 million in 2024.
Risk Factors—Risks Related to Our Global Operations—Rising geopolitical tension between the countries and regions where we operate our business may disrupt the economy and business environment the countries and regions where we operate our business, which may negatively impact our business operations in these countries and regions.” ​ 15 Table of Contents ● Changes in mainland China’s economic, political or social conditions or government policies could have a material and adverse effect on our business and results of operations.
Risk Factors—Risks Related to Our Global Operations—Rising geopolitical tension between the countries and regions where we operate our business may disrupt the economy and business environment of the countries and regions where we operate our business, which may negatively impact our business operations in these countries and regions.” ● Changes in mainland China’s economic, political or social conditions or government policies could have a material and adverse effect on our business and results of operations.
If any of the third-party online payment platforms breaches the contracts and fails to transfer any payments to us, it may have a material adverse effect on our business and financial condition. If our senior management is unable to work together effectively or efficiently or if we lose their services, our business may be severely disrupted.
If any of the third-party online payment platforms breaches the contracts and fails to transfer any payments to us, it may have a material adverse effect on our business and financial condition. 29 Table of Contents If our senior management is unable to work together effectively or efficiently or if we lose their services, our business may be severely disrupted.
Risk Factors—Risks Related to Our Global Operations—Our mainland China subsidiaries are subject to restrictions on paying dividends or making other payments to us, which may restrict our ability to satisfy our liquidity requirements.” Prior to the termination of the variable interest entity structure, 51Talk Online Education Group and its offshore subsidiaries may provide funding to the former mainland China consolidated VIEs through loans, and the former mainland China consolidated VIEs may transfer cash to our mainland China subsidiaries by paying service fees under the contractual arrangements.
Risk Factors—Risks Related to Our Global Operations—Our mainland China subsidiaries are subject to restrictions on paying dividends or making other payments to us, which may restrict our ability to satisfy our liquidity requirements.” Prior to the termination of the VIE structure, 51Talk Online Education Group and its offshore subsidiaries may provide funding to the former mainland China consolidated VIEs through loans, and the former mainland China consolidated VIEs may transfer cash to our mainland China subsidiaries by paying service fees under the contractual arrangements.
In addition, we may not be able to locate desirable alternative sites for our facilities as our business continues to grow and failure in relocating our affected operations could adversely affect our business and operations. ​ 29 Table of Contents The wide variety of payment methods that we accept subjects us to third-party payment processing-related risks.
In addition, we may not be able to locate desirable alternative sites for our facilities as our business continues to grow and failure in relocating our affected operations could adversely affect our business and operations. The wide variety of payment methods that we accept subjects us to third-party payment processing-related risks.
Our industry generally experiences seasonality, reflecting a combination of traditional education industry patterns and new patterns associated with the online platform in particular. Seasonal fluctuations affected our business when we focused on lessons for Chinese K-12 students and lessons for students from the international markets, and may continue to affect our business as we shift to new business models.
Our industry generally experiences seasonality, reflecting a combination of traditional education industry patterns and new patterns associated with the online platform in particular. Seasonal fluctuations affected our business when we focused on lessons for Chinese K-12 students, and may continue to affect our business as we shift to new business models.
Our operations and investments in Asia are subject to various risks related to the economic, political and social conditions of the countries and regions that we operate in, including risks related to the following: ● inconsistent and evolving regulations, licensing and legal requirements may increase our operational risks and cost of operations among the countries and regions in Asia in which we operate; ● currencies may be devalued or may depreciate or currency restrictions or other restraints on transfer of funds may be imposed; ● the effects of inflation within Asia generally and/or within any specific country in which we operate may increase our cost of operations; ● governments or regulators may impose new or more burdensome regulations, taxes or tariffs; ● political changes may lead to changes in the business, legal and regulatory environments in which we operate; ● economic downturns, political instability, civil disturbances, war, military conflict, religious or ethnic strife, terrorism and general security concerns may negatively affect our operations; ● enactment or any increase in the enforcement of regulations, including, but not limited to, those related to personal data protection and localization and cybersecurity, and especially on the cross-border acquisition and use of personal data by our company, may incur compliance costs; ● health epidemics, pandemics or disease outbreaks may affect our operations and demand for our offerings; and ● natural disasters like volcanic eruptions, floods, typhoons and earthquakes may impact our operations severely. ​ 33 Table of Contents For example, volatile political situations in certain Asian countries and regions could impact our business.
Our operations and investments in Asia are subject to various risks related to the economic, political and social conditions of the countries and regions that we operate in, including risks related to the following: ● inconsistent and evolving regulations, licensing and legal requirements may increase our operational risks and cost of operations among the countries and regions in Asia in which we operate; ● currencies may be devalued or may depreciate or currency restrictions or other restraints on transfer of funds may be imposed; ● the effects of inflation within Asia generally and/or within any specific country in which we operate may increase our cost of operations; ● governments or regulators may impose new or more burdensome regulations, taxes or tariffs; ● political changes may lead to changes in the business, legal and regulatory environments in which we operate; ● economic downturns, political instability, civil disturbances, war, military conflict, religious or ethnic strife, terrorism and general security concerns may negatively affect our operations; ● enactment or any increase in the enforcement of regulations, including, but not limited to, those related to personal data protection and localization and cybersecurity, and especially on the cross-border acquisition and use of personal data by our company, may incur compliance costs; ● health epidemics, pandemics or disease outbreaks may affect our operations and demand for our offerings; and ● natural disasters like volcanic eruptions, floods, typhoons and earthquakes may impact our operations severely.
Risk Factors—Risks Related to Our Business and Industry—The PCAOB had historically been unable to inspect our former auditor in relation to its audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our former auditor in the past has deprived our investors with the benefits of such inspections” and “Item 3. Key Information—D.
Risk Factors— Risks Related to Our Business and Industry—The PCAOB had historically been unable to inspect our former auditor in relation to its audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our former auditor in the past has deprived our investors with the benefits of such inspections” and “Item 3.
If required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” The PRC government has promulgated a series of cybersecurity and data privacy laws and regulations in China, including the Cybersecurity Review Measures.
If required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” 8 Table of Contents The PRC government has promulgated a series of cybersecurity and data privacy laws and regulations in China, including the Cybersecurity Review Measures.
In addition, we are required to file a report to the CSRC after the occurrence and public disclosure of certain material corporate events, including but not limited to, change of control and voluntary or mandatory delisting. For more detailed information, see “Item 3. Key Information—D.
In addition, we might be required to file a report to the CSRC after the occurrence and public disclosure of certain material corporate events, including but not limited to, change of control and voluntary or mandatory delisting. For more detailed information, see “Item 3. Key Information—D.
We incurred US$3.4 million, US$13.3 million and US$23.6 million in sales and marketing expenses for international business in 2021, 2022, and 2023, respectively. We have ceased branding and marketing services in mainland China since the release of the Alleviating Burden Opinion, and we are conducting branding and marketing activities in our international markets.
We incurred US$13.3 million, US$23.6 million and US$33.4 million in sales and marketing expenses for international business in 2022, 2023, and 2024, respectively. We have ceased branding and marketing services in mainland China since the release of the Alleviating Burden Opinion, and we are conducting branding and marketing activities in our international markets.
The Alleviating Burden Opinion and its subsequently adopted implementation measures prohibited our historically offered online tutoring services taught mainly by independently contracted foreign tutors to K-12 students in mainland China. ​ 38 Table of Contents In response to the regulatory developments in the private education sector in mainland China since mid-2021, we have divested our China Mainland Business and are completely focused on international markets.
The Alleviating Burden Opinion and its subsequently adopted implementation measures prohibited our historically offered online tutoring services taught mainly by independently contracted foreign tutors to K-12 students in mainland China. In response to the regulatory developments in the private education sector in mainland China since mid-2021, we have divested our China Mainland Business and are completely focused on international markets.
Holders of our ADSs or ordinary shares to significant adverse U.S. federal income tax consequences. ● If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our ADSs, the market price for our ADSs and trading volume could decline. See “Item 3. Key Information—D.
Holders of our ADSs or ordinary shares to significant adverse U.S. federal income tax consequences.” 16 Table of Contents ● If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our ADSs, the market price for our ADSs and trading volume could decline. See “Item 3. Key Information—D.
However, since these laws and regulations are relatively new and the legal system of mainland China continues to evolve, the interpretations and enforcement of these laws, regulations and rules are subject to change. The timeline for amending or promulgating a law or regulation may vary widely.
However, since these laws and regulations are relatively new and the legal system of mainland China continues to evolve, the interpretations and enforcement of these laws, regulations and rules are subject to change. 33 Table of Contents The timeline for amending or promulgating a law or regulation may vary widely.
Risk Factors—Risks Related to Our Business and Industry—Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely our current auditor.
Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely our current auditor.
In June 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021, which included an audit report issued by our former auditor PricewaterhouseCoopers Zhong Tian LLP.
In June 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021, which included an audit report issued by our former auditor.
Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting as of December 31, 2023.
Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting as of December 31, 2024.
Taxation—United States Federal Income Taxation—Passive Foreign Investment Company Rules.” ​ 47 Table of Contents If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our ADSs, the market price for our ADSs and trading volume could decline.
Taxation—United States Federal Income Taxation—Passive Foreign Investment Company Rules.” If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our ADSs, the market price for our ADSs and trading volume could decline.
Currency fluctuations in the currencies of the countries and regions where we operate could create economic instability that may increase our expenses and harm our business operations. ​ 30 Table of Contents Currency fluctuations in the exchange rates among the various currencies that we use could create economic instability that may increase our expenses and harm our business operations.
Currency fluctuations in the currencies of the countries and regions where we operate could create economic instability that may increase our expenses and harm our business operations. Currency fluctuations in the exchange rates among the various currencies that we use could create economic instability that may increase our expenses and harm our business operations.
Our ability to expand our operations in mainland China through future acquisitions would as such be materially and adversely affected. We could face uncertain tax liabilities in various countries and regions in which we operate, which could adversely impact our operating results.
Our ability to expand our operations in mainland China through future acquisitions would as such be materially and adversely affected. 36 Table of Contents We could face uncertain tax liabilities in various countries and regions in which we operate, which could adversely impact our operating results.
Mr. Jack Jiajia Huang and Ms. Ting Shu, who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being mainland China residents have completed the initial foreign exchange registrations, amended their registrations to reflect our corporate restructuring in November 2014.
Ting Shu, who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being mainland China residents have completed the initial foreign exchange registrations, amended their registrations to reflect our corporate restructuring in November 2014.
We accept payments using a variety of methods, including bank transfers and payment through third-party online payment platforms such as Airwallex, Stripe, Paypal, Atome, Payermax, Checkout and Ipay88. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower our profit margins.
We accept payments using a variety of methods, including bank transfers and payment through third-party online payment platforms such as Airwallex, Stripe, Tabby, Tamara, Payermax, Checkout and 2C2P. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower our profit margins.
(8) In November 2022, Helloworld Education Online (Thailand) Co., Ltd., or Helloworld Thailand, was incorporated as a subsidiary of our company to operate our business in Thailand. Helloworld Online Singapore, Ms. Suphaphon Thapmichai and Mr. Chularak Aramruansakul hold 49%, 26% and 25% of the equity interest in Helloworld Thailand, respectively.
(8) In November 2022, Helloworld Education Online (Thailand) Co., Ltd., or Helloworld Education Thailand, was incorporated as a subsidiary of our company to operate our business in Thailand. Helloworld Online Singapore, Ms. Piyanuch Thiensri and Ms. Chularak Aramruansakul hold 49%, 26% and 25% of the equity interest in Helloworld Education Thailand, respectively.
Furthermore, with respect to our operations in Hong Kong, our Hong Kong subsidiaries have obtained the requisite approvals and permissions from competent Hong Kong regulatory authorities that are necessary for our business operations, namely, the business registration license of HelloWorld Online HK and the business registration license of COE HK Co II, both issued by the Commissioner of Inland Revenue in Hong Kong.
Furthermore, with respect to our operations in Hong Kong, our Hong Kong subsidiaries have obtained the requisite approvals and permissions from competent Hong Kong regulatory authorities that are necessary for our business operations, namely, the business registration license of HelloWorld Online HK and the business registration license of 51 Talk English International Limited, or COE HK Co II, both issued by the Commissioner of Inland Revenue in Hong Kong.
Sequoia Capital China Investment Funds, including SCC Venture V Holdco I, Ltd. and SCC Growth I Holdco A, Ltd., beneficially owned 11.6% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024, which represents 3.1% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024.
Sequoia Capital China Investment Funds, including SCC Venture V Holdco I, Ltd. and SCC Growth I Holdco A, Ltd., beneficially owned 11.4% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025, which represents 3.1% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025.
The following is a summary of cash transfers that have occurred through our organization (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Transfer ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 (5) ​ ​ US$ ​ US$ ​ US$ Cash paid by the former mainland China consolidated VIEs to our mainland China subsidiaries under service agreements (1) 57,163 10,263 — Cash received by the former mainland China consolidated VIEs from our mainland China subsidiaries under service agreements (1) 2,417 955 — Cash paid by the former mainland China consolidated VIEs to our mainland China subsidiaries for intra-group financing (2) 22,803 1,294 — Cash received by the former mainland China consolidated VIEs from our mainland China subsidiaries for intra-group financing (2) 522 431 — Cash paid by the former mainland China consolidated VIEs to our offshore subsidiaries under service agreements (3) 83,237 — — Cash received by offshore subsidiaries from parent company (4) 503 20,855 4,167 Cash received by parent company from offshore subsidiaries (4) 6,063 4,078 773 Notes: (1) It mainly represented service fees paid and received among the former mainland China consolidated VIEs and our mainland China subsidiaries for information and technology services; ​ 11 Table of Contents (2) It represented temporary cash support transferred among the former mainland China consolidated VIEs and our mainland China subsidiaries for intra-group financing; (3) It represented operating cash transferred from onshore subsidiaries to offshore subsidiaries for salary payment to Philippine teachers; (4) It represented temporary cash support transferred among the parent company and offshore subsidiaries, accounted for as advances and payables between the entities; and (5) The VIE structure in mainland China was terminated in 2022.
The following is a summary of cash transfers that have occurred through our organization: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Transfer ​ ​ For the year ended December 31, ​ ​ 2022 2023 2024 (5) ​ US$ in thousands Cash paid by the former mainland China consolidated VIEs to our mainland China subsidiaries under service agreements (1) 10,263 — — Cash received by the former mainland China consolidated VIEs from our mainland China subsidiaries under service agreements (1) 955 — — Cash paid by the former mainland China consolidated VIEs to our mainland China subsidiaries for intra-group financing (2) 1,294 — — Cash received by the former mainland China consolidated VIEs from our mainland China subsidiaries for intra-group financing (2) 431 — — Cash paid by the former mainland China consolidated VIEs to our offshore subsidiaries under service agreements (3) — — — Cash received by offshore subsidiaries from parent company (4) 20,855 4,167 2,833 Cash received by parent company from offshore subsidiaries (4) 4,078 773 900 Notes: (1) It mainly represented service fees paid and received among the former mainland China consolidated VIEs and our mainland China subsidiaries for information and technology services; ​ 11 Table of Contents (2) It represented temporary cash support transferred among the former mainland China consolidated VIEs and our mainland China subsidiaries for intra-group financing; (3) It represented operating cash transferred from onshore subsidiaries to offshore subsidiaries for salary payment to Philippine teachers; (4) It represented temporary cash support transferred among the parent company and offshore subsidiaries, accounted for as advances and payables between the entities; and (5) The VIE structure in mainland China was terminated in 2022.
Golien Ltd beneficially owned 5.5% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024, which represents 1.5% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024.
Golien Ltd beneficially owned 5.4% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025, which represents 1.5% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025.
The 2013 Plan expired in September 2023 and additional grants may not be made thereunder. In May 2016, we adopted the 2016 share incentive plan, or the 2016 Plan, pursuant to which a maximum of 4,600,000 Class A ordinary shares may be issued pursuant to all awards granted thereunder.
In December 2024, the 2014 Plan expired and additional grants may not be made thereunder. In May 2016, we adopted the 2016 share incentive plan, or the 2016 Plan, pursuant to which a maximum of 4,600,000 Class A ordinary shares may be issued pursuant to all awards granted thereunder.
Helloworld Online Singapore holds ordinary shares, and each ordinary share is entitled to one vote. Ms. Suphaphon Thapmichai and Mr. Chularak Aramruansakul hold preference shares, and ten preference shares is entitled to one vote. As a result, we, through Helloworld Online Singapore, hold 90.6% of the voting power of Helloworld Thailand.
Helloworld Online Singapore holds ordinary shares, and each ordinary share is entitled to one vote. Ms. Piyanuch Thiensri and Ms. Chularak Aramruansakul hold preference shares, and ten preference shares is entitled to one vote. As a result, we, through Helloworld Online Singapore, hold 90.6% of the voting power of Helloworld Education Thailand.
The Holding Foreign Companies Accountable Act Pursuant to the Holding Foreign Companies Accountable Act, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023 signed into law on December 29, 2022, or the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the Public Company Accounting Oversight Board, or the PCAOB, for two consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
As of December 31, 2024, 51Talk Online Education Group did not have any VIE in mainland China. 9 Table of Contents The Holding Foreign Companies Accountable Act Pursuant to the Holding Foreign Companies Accountable Act, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023 signed into law on December 29, 2022, or the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the Public Company Accounting Oversight Board, or the PCAOB, for two consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the- counter trading market in the United States.
In December 2015, we began outsourcing part of our marketing and sales functions to independent third-party suppliers who provide management and business outsourcing services. We had 682 sales and marketing staff for international business, including 222 full-time employees and 460 outsourced personnel as of December 31, 2023.
In December 2015, we began outsourcing part of our marketing and sales functions to independent third- party suppliers who provide management and business outsourcing services. We had 852 sales and marketing staff for international business, including 360 full-time employees and 492 outsourced personnel as of December 31, 2024.
However, in auditing our consolidated financial statements for the fiscal year ended December 31, 2023, our management and our independent registered public accounting firm identified two material weaknesses in our internal control over financial reporting in accordance with the standards established by the Public Company Accounting Oversight Board of the United States, or the PCAOB.
However, in the course of preparing our consolidated financial statements as of and for the year ended December 31, 2024 and in the course of auditing our consolidated financial statements as of and for the year ended December 31, 2024, we and our independent registered public accounting firm identified two material weaknesses in our internal control over financial reporting as of December 31, 2024, in accordance with the standards established by the Public Company Accounting Oversight Board of the United States (PCAOB).
DCM Funds, including DCM Hybrid RMB Fund, L.P., DCM Ventures China Turbo Fund, L.P. and DCM Ventures China Turbo Affiliates Fund, L.P., beneficially owned 19.8% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024, which represents 46.0% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024.
DCM Funds, including DCM Hybrid RMB Fund, L.P., DCM Ventures China Turbo Fund, L.P. and DCM Ventures China Turbo Affiliates Fund, L.P., beneficially owned 19.4% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025, which represents 45.7% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025.
We incurred net loss from continuing operations of US$4.2 million, US$12.8 million and US$15.0 million in 2021, 2022 and 2023, respectively. We had accumulated deficit of US$346.4 million as of December 31, 2023. As of December 31, 2023, we had a total shareholders’ equity of negative US$8.3 million and our current liabilities exceeded the current assets by US$9.3 million.
We incurred net loss from continuing operations of US$12.8 million, US$15.0 million and US$7.3 million in 2022, 2023 and 2024, respectively. We had accumulated deficit of US$353.6 million as of December 31, 2024. As of December 31, 2024, we had a total shareholders’ equity of negative US$15.0 million and our current liabilities exceeded the current assets by US$16.8 million.
No assurances can be given with regard to our PFIC status for the taxable year ended December 31, 2023, or the current or any future taxable year because the determination of whether we will be or become a PFIC is a factual determination made annually that will depend, in part, upon the characterization and composition of our income, assets and liabilities.
Although we do not believe that we were a PFIC for the taxable year ended December 31, 2024, no assurances can be given that we will not be a PFIC for the current or any future taxable year because the determination of whether we will be or become a PFIC is a factual determination made annually that will depend, in part, upon the characterization and composition of our income, assets and liabilities.
Any such circumstance could subject us to penalties, including fines, suspension of business and revocation of required licenses, significantly limit or completely hinder our ability to continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. ​ 9 Table of Contents If we fail to complete such filing procedures for any future offshore offering or listing, including our follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities, we may face sanctions by the CSRC or other mainland China regulatory authorities, which may include fines and penalties on our operations in mainland China, limitations on our operating privileges in mainland China, restrictions on or delays to our future financing transactions offshore, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
If we fail to complete such filing procedures for any future offshore offering or listing, including our follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities, we may face sanctions by the CSRC or other mainland China regulatory authorities, which may include fines and penalties on our operations in mainland China, limitations on our operating privileges in mainland China, restrictions on or delays to our future financing transactions offshore, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
Shu and their family members, beneficially owned 24.7% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024, which represents 39.0% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024.
Shu and their family members, beneficially owned 24.6% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025, which represents 38.9% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025.
SAFE Circular 19 continues to prohibit a foreign-invested enterprise from, among other things, using RMB funds converted from its foreign exchange capitals for expenditure beyond its authorized business scope, providing entrusted loans or repaying loans between non-financial enterprises.
SAFE Circular 19 came into force and replaced both SAFE Circular 142 and SAFE Circular 36 on June 1, 2015. SAFE Circular 19 continues to prohibit a foreign-invested enterprise from, among other things, using RMB funds converted from its foreign exchange capitals for expenditure beyond its authorized business scope, providing entrusted loans or repaying loans between non-financial enterprises.
In addition, our operations in the Middle East may be subject us to additional compliance costs to comply with sanctions related regulations issued by the United States, which have established a SDN list of corporations and people with which engaging in business by a person subject to the jurisdiction of such government authority is prohibited without a license.
These events have caused significant disruption to the economies of the affected countries, and may materially impact our operations and financial position. 43 Table of Contents In addition, our operations in the Middle East may be subject us to additional compliance costs to comply with sanctions related regulations issued by the United States, which have established an SDN list of corporations and people with which engaging in business by a person subject to the jurisdiction of such government authority is prohibited without a license.
The hypothetical book pre-tax earnings amount, not considering timing differences, is assumed to equal taxable income in China. (2) Certain of our subsidiaries enjoy tax holiday of two-year enterprise income tax exemption and subsequently three-year 12.5% preferential tax rate in China. However, such rate may not be available in a future period when distributions are paid.
The hypothetical book pre-tax earnings amount, not considering timing differences, is assumed to equal taxable income in China. (2) Certain of our subsidiaries enjoys a 5% preferential tax rate under the tax holiday for small and low-profit enterprises in China. However, such rate may not be available in a future period when distributions are paid.
However, there can be no assurance that the PRC government agencies, including the CSRC, would reach the same conclusion with our PRC legal counsel. 8 Table of Contents Under applicable laws of mainland China, we and our mainland China subsidiaries are subject to an annual assessment to determine whether we and our mainland China subsidiaries are required to complete certain filing procedures with the CSRC, in connection with future offering and listing in an overseas market, including our follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities.
Under applicable laws of mainland China, we and our mainland China subsidiaries are subject to an annual assessment to determine whether we and our mainland China subsidiaries are required to complete certain filing procedures with the CSRC, in connection with future offering and listing in an overseas market, including our follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities.
Any such impact from these disputes could adversely affect the Philippine economy, and materially and adversely affect our business, financial position and financial performance. ​ 34 Table of Contents Furthermore, as majority of our independently contracted tutors are from the Philippines any significant deterioration in China’s political relations with the Philippines could make it more difficult for us to attract independently contracted tutors or hire employees in the Philippines, and discourage some of our students from purchasing our course packages or our independently contracted tutors from offering lessons.
Furthermore, as majority of our independently contracted tutors are from the Philippines any significant deterioration in China’s political relations with the Philippines could make it more difficult for us to attract independently contracted tutors or hire employees in the Philippines, and discourage some of our students from purchasing our course packages or our independently contracted tutors from offering lessons.
Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval is obtained by us, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in mainland China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations.
Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval is obtained by us, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in mainland China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations. 40 Table of Contents The new rules for the filing-based administration of overseas securities offerings and listings by Chinese domestic companies released on February 17, 2023, or New Filing Rules, establish a new filing-based regime to regulate overseas offerings and listings by domestic companies.
In addition, to the extent cash or other assets in the business is in mainland China or a mainland China entity, the funds or other assets may not be available to fund operations or for other use outside of mainland China due to the imposition of restrictions and limitations on the ability of 51Talk Online Education Group or its subsidiaries to transfer cash or other assets.
Therefore, investors of our company face potential uncertainty from actions taken by the PRC government affecting our operations in mainland China. 37 Table of Contents In addition, to the extent cash or other assets in the business is in mainland China or a mainland China entity, the funds or other assets may not be available to fund operations or for other use outside of mainland China due to the imposition of restrictions and limitations on the ability of 51Talk Online Education Group or its subsidiaries to transfer cash or other assets.
As of February 29, 2024, our Class B ordinary shares represent 30.0% of our total outstanding ordinary shares on an as-converted basis and entitle their holders to 81.1% of our total voting power.
As of February 28, 2025, our Class B ordinary shares represent 29.5% of our total outstanding ordinary shares on an as-converted basis and entitle their holders to 80.7% of our total voting power.
The 2014 Plan was amended in February 2016. Under the 2013 Plan and the 2014 Plan, we are authorized to grant options or share purchase rights to purchase up to an aggregate of 36,229,922 Class A ordinary shares as of the date of this annual report.
The 2014 Plan was amended in February 2016. Under the 2013 Plan and the 2014 Plan, we are authorized to grant options or share purchase rights to purchase up to an aggregate of 36,229,922 Class A ordinary shares. In September 2023, the 2013 Plan expired and additional grants may not be made thereunder.
If we fail to complete the necessary registration, our ability to make loans or equity contributions to our mainland China subsidiaries may be negatively affected, which could adversely affect our mainland China subsidiaries’ liquidity and its ability to fund its working capital and expansion projects and meet its obligations and commitments. ​ 40 Table of Contents SAFE Circular 19 came into force and replaced both SAFE Circular 142 and SAFE Circular 36 on June 1, 2015.
If we fail to complete the necessary registration, our ability to make loans or equity contributions to our mainland China subsidiaries may be negatively affected, which could adversely affect our mainland China subsidiaries’ liquidity and its ability to fund its working capital and expansion projects and meet its obligations and commitments.
Past presidential elections in the Philippines have led to uncertainty, impacting markets and leading to unrest. Any disruptions in our business activities or volatility or uncertainty in the economic, political or regulatory conditions in the markets we operate in could adversely affect our business, financial condition, results of operations and prospects.
Any disruptions in our business activities or volatility or uncertainty in the economic, political or regulatory conditions in the markets we operate in could adversely affect our business, financial condition, results of operations and prospects. Any of the foregoing risks may adversely affect our business, financial condition, results of operations and prospects.
For instance, we use standard form contracts with our Malaysian customers, and we face certain risks as to the enforceability of contractual provisions within our contracts used in Malaysia, including, but not limited to, the choice of law, liquidate damages and refunds, and gift courses provisions.
For instance, we use standard form contracts with our customers in certain countries or regions, which may expose us to risks as to the enforceability of contractual provisions within our contracts under different local laws or directives, including, but not limited to, the choice of law, liquidate damages and refunds, and gift courses provisions.
We face risks as to the validity of certain contractual provisions within contracts between us and our Malaysian customers, as a result of which we may be unable to enforce such contractual provisions with customers in Malaysia.
We face risks as to the validity of certain contractual provisions within contracts between us and our customers, which may prevent us from enforcing such contractual provisions with customers.
Given the nature of our business, we are also exposed to the general changes in digital taxation policy that are happening globally. ​ 37 Table of Contents From time to time, we establish provisions to account for uncertainties as well as timing and accounting differences in respect of income tax and indirect taxes, including, but not limited to, in relation to businesses that are acquired by us.
From time to time, we establish provisions to account for uncertainties as well as timing and accounting differences in respect of income tax and indirect taxes, including, but not limited to, in relation to businesses that are acquired by us.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. ​ 32 Table of Contents It may be difficult for international regulators to conduct investigation or collect evidence within the countries and regions where we operate.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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According to the CREATE law, those granted an income tax holiday prior to the effectivity of the law and are entitled to 5% tax on gross income earned shall be allowed to continue to avail of the five percent (5%) gross income earned incentive for ten (10) years while those availing of the five percent (5%) tax on gross income earned prior the effectivity of the law shall be allowed to continue availing the said incentive for ten (10) years.
According to the CREATE law, those granted an income tax holiday prior to the effectivity of the law and are entitled to 5% tax on gross income earned shall be allowed to continue to avail of the five percent (5%) tax on gross income earned incentive for ten (10) years while those availing of the five percent (5%) tax on gross income earned prior the effectivity of the law shall be allowed to continue availing the said incentive for ten (10) years.
The Copyright (Amendment) Ordinance 2022, which was introduced with a view to modernize the Hong Kong copyright regime under the Copyright Ordinance, came into effect on 1 May 2023.
The Copyright (Amendment) Ordinance 2022, which was introduced with a view to modernize the Hong Kong copyright regime under the Copyright Ordinance, came into effect on May 1, 2023.
The Archives Rules provide that, among other things, (i) in relation to the international offering and listing activities of domestic enterprises, the domestic enterprises are required to strictly comply with the requirements on confidentiality and archives management, establish a sound confidentiality and archives system, and take necessary measures to implement their confidentiality and archives management responsibilities; (ii) during the course of an international offering and listing, if a domestic enterprise needs to publicly disclose or provide to securities companies, accounting firms or other securities service providers and international regulators, any materials that contain relevant state secrets, work secrets of government agencies or that have a sensitive impact (i.e., be detrimental to national security or the public interest if divulged), the domestic enterprise should complete the approval/filing and other regulatory procedures; and (iii) working papers produced in mainland China by securities companies and securities service institutions, which provide domestic enterprises with securities services during their international issuance and listing, should be stored in mainland China, and the transmission of all such working papers to recipients outside of mainland China is required to be approved by competent authorities of mainland China. ​ 76 Table of Contents C.
The Archives Rules provide that, among other things, (i) in relation to the international offering and listing activities of domestic enterprises, the domestic enterprises are required to strictly comply with the requirements on confidentiality and archives management, establish a sound confidentiality and archives system, and take necessary measures to implement their confidentiality and archives management responsibilities; (ii) during the course of an international offering and listing, if a domestic enterprise needs to publicly disclose or provide to securities companies, accounting firms or other securities service providers and international regulators, any materials that contain relevant state secrets, work secrets of government agencies or that have a sensitive impact (i.e., be detrimental to national security or the public interest if divulged), the domestic enterprise should complete the approval/filing and other regulatory procedures; and (iii) working papers produced in mainland China by securities companies and securities service institutions, which provide domestic enterprises with securities services during their international issuance and listing, should be stored in mainland China, and the transmission of all such working papers to recipients outside of mainland China is required to be approved by competent authorities of mainland China. ​ 77 Table of Contents C.
On March 26, 2021, the Corporate Recovery and Tax Incentives for Enterprises was signed into law as Republic Act No. 11534 and took effect on 11 April 2021. Under this law, the corporate income tax rates for domestic and resident foreign corporations were reduced from 30% to 25%.
On March 26, 2021, the Corporate Recovery and Tax Incentives for Enterprises (CREATE law) was signed into law as Republic Act No. 11534 and took effect on April 11, 2021. Under this law, the corporate income tax rates for domestic and resident foreign corporations were reduced from 30% to 25%.
(6) In August 2018, HelloWorld Online Education Group (HK) limited, or HelloWorld Online HK, was incorporated as a wholly owned subsidiary of HelloWorld Online. (7) In April 2022, 51TALK TRAINING SDN. BHD, or 51TALK TRAINING MAS, was incorporated as a wholly owned subsidiary of HelloWorld Online Singapore.
(6) In August 2018, HelloWorld Online Education Group (HK) limited, or HelloWorld Online HK, was incorporated as a wholly owned subsidiary of HelloWorld Online Cayman. (7) In April 2022, 51TALK TRAINING SDN. BHD, or 51TALK TRAINING MAS, was incorporated as a wholly owned subsidiary of HelloWorld Online Singapore.
Risk Factors—Risks Related to Our Business and Industry—Our results of operations have been and may continue to be subject to seasonal fluctuations.” ​ 62 Table of Contents Insurance We do not maintain any liability insurance or property insurance policies covering students, equipment and facilities for injuries, death or losses due to fire, earthquake, flood or any other disaster, except for the liability insurance and property insurance policies for certain office in mainland China.
Risk Factors—Risks Related to Our Business and Industry—Our results of operations have been and may continue to be subject to seasonal fluctuations.” ​ 60 Table of Contents Insurance We do not maintain any liability insurance or property insurance policies covering students, equipment and facilities for injuries, death or losses due to fire, earthquake, flood or any other disaster, except for the liability insurance and property insurance policies for certain office in mainland China.
As part of our efforts to increase K-12 enrollment in countries and regions outside of mainland China, we also place advertisements on online parenting community portals and regional information flow in order to reach a broader audience of parents of prospective students there. ​ 60 Table of Contents Referrals We have historically generated a significant percentage of our sales leads through word-of-mouth referrals by our students and parents.
As part of our efforts to increase K-12 enrollment in countries and regions outside of mainland China, we also place advertisements on online parenting community portals and regional information flow in order to reach a broader audience of parents of prospective students there. ​ 58 Table of Contents Referrals We have historically generated a significant percentage of our sales leads through word-of-mouth referrals by our students and parents.
Uninsured injury or death to our staff, or damage to any of our equipment or buildings could have a material adverse effect on our results of operations. See “Item 3. Key Information—D.
Uninsured injury or death to our staff, or damage to any of our equipment or buildings could have a material adverse effect on our results of operations. “Item 3. Key Information—D.
Regulations on Cybersecurity BSP Circular No. 808, Series of 2013 provides for the guidelines on technology risk management applicable to all BSP-supervised institutions and requires BSP supervised institutions to establish a robust technology risk management system covering the following components: (1) technology governance, (2) risk identification and assessment, (3) technology control implementation, and (4) risk measurement and monitoring. ​ 63 Table of Contents Regulations on Competition Law The Philippine Competition Act is the primary competition policy of the Philippines.
Regulations on Cybersecurity BSP Circular No. 808, Series of 2013 provides for the guidelines on technology risk management applicable to all BSP-supervised institutions and requires BSP supervised institutions to establish a robust technology risk management system covering the following components: (1) technology governance, (2) risk identification and assessment, (3) technology control implementation, and (4) risk measurement and monitoring. ​ 61 Table of Contents Regulations on Competition Law The Philippine Competition Act is the primary competition policy of the Philippines.
(3) A “paying student” for a specified period refers to a student that purchased a course package during the period, excluding those students who only paid for live broadcasting lessons or trial lessons, and the total number of “paying students” for a specified period refers to the total number of paying students for such period minus the total number of students that obtained refunds during such period. ​ 55 Table of Contents Learning Process Our holistic learning process consists of four aspects: live lessons, effective practice, assessment and mentoring.
(3) A “paying student” for a specified period refers to a student that purchased a course package during the period, excluding those students who only paid for live broadcasting lessons or trial lessons, and the total number of “paying students” for a specified period refers to the total number of paying students for such period minus the total number of students that obtained refunds during such period. ​ 53 Table of Contents Learning Process Our holistic learning process consists of four aspects: live lessons, effective practice, assessment and mentoring.
Effective Practice Students are required to preview course materials through the AI-empowered knowledge preview. Pre-lesson learning is particularly important, as such process allows students to engage in more productive interactions with tutors or other students during live lessons. ​ 56 Table of Contents Our AI-empowered knowledge preview aims to develop students’ English speaking, listening, reading and writing skills.
Effective Practice Students are required to preview course materials through the AI-empowered knowledge preview. Pre-lesson learning is particularly important, as such process allows students to engage in more productive interactions with tutors or other students during live lessons. ​ 54 Table of Contents Our AI-empowered knowledge preview aims to develop students’ English speaking, listening, reading and writing skills.
The large pool of tutors not only allows us to accommodate and address students’ individual English proficiency level and learning behaviors and needs, but also ensures that we are able to afford students’ scheduling flexibility. ​ 54 Table of Contents We develop and tailor our proprietary curriculum specifically to our interactive lesson format and our goal of building an interactive and immersive English learning environment.
The large pool of tutors not only allows us to accommodate and address students’ individual English proficiency level and learning behaviors and needs, but also ensures that we are able to afford students’ scheduling flexibility. ​ 52 Table of Contents We develop and tailor our proprietary curriculum specifically to our interactive lesson format and our goal of building an interactive and immersive English learning environment.
We also operate a quality assurance team to monitor teacher performance, review recordings of lessons based on random samplings and handle student complaints. ​ 57 Table of Contents We plan to maintain this level of commitment to our tutors as we expand our platform and develop our tutors’ capabilities through partnerships with training and certification bodies in the future.
We also operate a quality assurance team to monitor teacher performance, review recordings of lessons based on random samplings and handle student complaints. ​ 55 Table of Contents We plan to maintain this level of commitment to our tutors as we expand our platform and develop our tutors’ capabilities through partnerships with training and certification bodies in the future.
All information we file with the SEC can be obtained over the internet at the SEC’s website at www.sec.gov . ​ 53 Table of Contents B. Business Overview We are a tutor-centric online education platform, with core expertise in language education. Our mission is to make quality education accessible and affordable.
All information we file with the SEC can be obtained over the internet at the SEC’s website at www.sec.gov . ​ 51 Table of Contents B. Business Overview We are a tutor-centric online education platform, with core expertise in language education. Our mission is to make quality education accessible and affordable.
BHD was incorporated as a wholly owned subsidiary of our company to operate the international business in Malaysia. ​ 52 Table of Contents In June 2022, we entered into a definitive share purchase agreement, dated June 24, 2022, with Dasheng Holding (HK) Limited, or Dasheng, an entity controlled by Mr.
BHD was incorporated as a wholly owned subsidiary of our company to operate the international business in Malaysia. ​ 50 Table of Contents In June 2022, we entered into a definitive share purchase agreement, dated June 24, 2022, with Dasheng Holding (HK) Limited, or Dasheng, an entity controlled by Mr.
We leverage the familiarity of our professionals in Beijing with the learning patterns of Chinese students to produce customized and high-quality course material for our students outside mainland China. ​ 58 Table of Contents Process Our Classic English Junior and Classic English course materials and content for substantially all of our popular specialty courses are developed in-house.
We leverage the familiarity of our professionals in Beijing with the learning patterns of Chinese students to produce customized and high-quality course material for our students outside mainland China. ​ 56 Table of Contents Process Our Classic English Junior and Classic English course materials and content for substantially all of our popular specialty courses are developed in-house.
However, for corporations with net taxable income of not more than five million Pesos and total assets not exceeding one hundred million Pesos, the tax rate shall be 20%. ​ 64 Table of Contents However, there are instances wherein corporations are not subject to the twenty-five (25%) corporate income tax rate for a certain amount of time.
However, for corporations with net taxable income of not more than five million Pesos and total assets not exceeding one hundred million Pesos, the tax rate shall be 20%. ​ 62 Table of Contents However, there are instances wherein corporations are not subject to the twenty-five (25%) corporate income tax rate for a certain amount of time.
Our key business offering under our international business is one-on-one English lessons taught by English tutors to students in countries and regions outside of mainland China. We started our international business in the second half of 2021 and currently provide English course offerings in Hong Kong, Malaysia, Thailand and certain other countries and regions.
Our key business offering under our international business is one-on-one English lessons taught by English tutors to students in countries and regions outside of mainland China. We started our international business in the second half of 2021 and currently provide English course offerings in Hong Kong, Malaysia, Thailand, the Middle East and certain other countries and regions.
In compliance with, and in order to take advantage of the above rules, as of December 31, 2023, we registered five software copyrights in mainland China. Patents The NPC Standing Committee adopted the Patent Law of the People’s Republic of China in 1984 and amended it in 1992, 2000, 2008 and 2020, respectively.
In compliance with, and in order to take advantage of the above rules, as of December 31, 2024, we registered five software copyrights in mainland China. Patents The NPC Standing Committee adopted the Patent Law of the People’s Republic of China in 1984 and amended it in 1992, 2000, 2008 and 2020, respectively.
A lesson is considered “booked” when it is taken or when the student to such lesson is confirmed absent. ​ 59 Table of Contents Student Services We employ a service-oriented approach and devote significant resources to developing course-related support and services for our students.
A lesson is considered “booked” when it is taken or when the student to such lesson is confirmed absent. ​ 57 Table of Contents Student Services We employ a service-oriented approach and devote significant resources to developing course-related support and services for our students.
Organizational Structure The following diagram illustrates our current corporate structure, which includes our significant subsidiaries and consolidated affiliated entities as of the date of this annual report: ​ Notes: ⁎ The holding company in which the investors hold their interests + Our operating subsidiaries 77 Table of Contents (1) Jack Jiajia Huang and Ting Shu through their holding vehicles, which are wholly owned by TB Family Trust established for the benefits of Mr.
Organizational Structure The following diagram illustrates our current corporate structure, which includes our significant subsidiaries and consolidated affiliated entities as of the date of this annual report: ​ Notes: ⁎ The holding company in which the investors hold their interests + Our operating subsidiaries (1) Jack Jiajia Huang and Ting Shu through their holding vehicles, which are wholly owned by TB Family Trust established for the benefits of Mr.
Course Content Development Team We have dedicated course content development teams mainly based in Beijing, employing a total of seven professionals as of December 31, 2024. Our content development team members focus exclusively on developing, updating and improving our curriculum and course materials.
Course Content Development Team We have dedicated course content development teams mainly based in Beijing, employing a total of six professionals as of December 31, 2024. Our content development team members focus exclusively on developing, updating and improving our curriculum and course materials.
Regulations on Data Privacy The Republic Act No. 10173, or the Data Privacy Act of 2012, its implementing rules and regulations, and the issuances of the National Privacy Commission govern the processing of all types of personal information.
Regulations on Data Privacy The Republic Act No. 10173, or the Data Privacy Act of 2012, its implementing rules and regulations, and the issuances of the National Privacy Commission (the “ NPC ”) govern the processing of all types of personal information.
The following table sets forth our key operating data of international business for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 2022 2023 Summary of Operating Data Gross billings (1) (in US$ millions) 3.5 28.7 39.9 Active students with general lesson consumption (2) (in thousands) 3.8 26.4 51.9 Paying students (3) (in thousands) 4.0 25.3 37.4 Average spending per paying student (in US$ thousands) 1.0 1.1 1.1 Notes: (1) “Gross billings” for a specific period refer to the total amount of cash received and receivable from third party payment platforms for the sale of course packages and services in such period, net of the total amount of refunds in such period.
The following table sets forth our key operating data of international business for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 2023 2024 Summary of Operating Data Gross billings (1) (in US$ millions) 28.7 39.9 69.6 Active students with general lesson consumption (2) (in thousands) 26.4 51.9 97.5 Paying students (3) (in thousands) 25.3 37.4 68.3 Average spending per paying student (in US$ thousands) 1.1 1.1 1.0 Notes: (1) “Gross billings” for a specific period refer to the total amount of cash received and receivable from third party payment platforms for the sale of course packages and services in such period, net of the total amount of refunds in such period.
The Personal Data Protection Standard 2015 further prescribes the minimum requirement for data security in processing personal data. Infringement of the Personal Data Protection act and Personal Data Protection Act 2013 may result in fines and imprisonment.
The Personal Data Protection Standard 2015 further prescribes the minimum requirement for data security in processing personal data. Infringement of the Personal Data Protection Act 2010 may result in fines and imprisonment.
We have entered into (i) contracts with Philippines Co II, and some of the shareholders of Philippines Co II, i.e., Huiru Yuan, Jennifer Que, Samuel Celestino, Xing Liu and Wei Li, which we refer to as the signing shareholders of Philippines Co II; and (ii) contracts with Philippines Co III and one shareholder of Philippines Co III, Frank Lin, which we refer to as the signing shareholder of Philippines Co III. 51Talk, Philippines Co II and the signing shareholders of Philippines Co II entered into exclusive option agreements on August 31, 2015.
We have entered into (i) contracts with Philippines Co II, and some of the shareholders of Philippines Co II, i.e., Huiru Yuan, Jennifer Que and Samuel Celestino, which we refer to as the signing shareholders of Philippines Co II; and (ii) contracts with Philippines Co III and one shareholder of Philippines Co III, Frank Lin, which we refer to as the signing shareholder of Philippines Co III. 51Talk, Philippines Co II and the signing shareholders of Philippines Co II entered into exclusive option agreements on August 31, 2015.
It also supports live lessons with features specifically designed for mobile devices. We continually upgrade and optimize our mobile app to improve our student experience. Approximately 99.4% of our active students accessed our mobile platform at least once in 2023. We offer our mobile app on both iOS and Android.
It also supports live lessons with features specifically designed for mobile devices. We continually upgrade and optimize our mobile app to improve our student experience. Approximately 99.6% of our active students accessed our mobile platform at least once in 2024. We offer our mobile app on both iOS and Android.
As of the date of this annual report, we do not have any variable interest entity in mainland China nor maintain any contractual arrangement between our mainland China subsidiaries and our offshore subsidiaries or 51Talk Online Education Group that could affect the manner in which we operate or impact our ability to control our subsidiaries.
As of the date of this annual report, we do not have any VIE in mainland China nor maintain any contractual arrangement between our mainland China subsidiaries and our offshore subsidiaries or 51Talk Online Education Group that could affect the manner in which we operate or impact our ability to control our subsidiaries.
Our 51Talk mobile app, which serves as an integral part of our students’ overall learning experience, allows students to book and manage lessons, access pre-lesson preparation and review materials, and take lessons at locations of their choice. Approximately 99.4% of our active students utilized our mobile app in 2023.
Our 51Talk mobile app, which serves as an integral part of our students’ overall learning experience, allows students to book and manage lessons, access pre-lesson preparation and review materials, and take lessons at locations of their choice. Approximately 99.6% of our active students utilized our mobile app in 2024.
Property, Plants and Equipment We maintain offices in Pasig City, Philippines, Hong Kong, Kuala Lumpur, Malaysia and other places outside mainland China with an aggregate of 2,853 square meters. These facilities accommodate part of our sales and marketing and general and administrative activities.
Property, Plants and Equipment We maintain offices in Pasig City, Philippines, Hong Kong, Kuala Lumpur, Malaysia and other places outside mainland China with an aggregate of 3,958 square meters. These facilities accommodate part of our sales and marketing and general and administrative activities.
Students In 2021, 2022 and 2023, we had 3.8 thousand, 26.4 thousand and 51.9 thousand active students with general lesson consumption from international business, respectively. An “active student with general lesson consumption” for a specified period refers to a student who booked at least one paid lesson, excluding those students who only attended paid live broadcasting lessons or trial lessons.
Students In 2022, 2023 and 2024, we had 26.4 thousand, 51.9 thousand and 97.5 thousand active students with general lesson consumption from international business, respectively. An “active student with general lesson consumption” for a specified period refers to a student who booked at least one paid lesson, excluding those students who only attended paid live broadcasting lessons or trial lessons.
(8) In November 2022, Helloworld Education Online (Thailand) Co., Ltd., or Helloworld Thailand, was incorporated as a subsidiary of our company to operate our business in Thailand. Helloworld Online Singapore, Ms. Suphaphon Thapmichai and Mr. Chularak Aramruansakul hold 49%, 26% and 25% of the equity interest in Helloworld Thailand, respectively.
(8) In November 2022, Helloworld Education Online (Thailand) Co., Ltd., or Helloworld Education Thailand, was incorporated as a subsidiary of our company to operate our business in Thailand. Helloworld Online Singapore, Ms. Piyanuch Thiensri and Ms. Chularak Aramruansakul hold 49%, 26% and 25% of the equity interest in Helloworld Thailand, respectively.
Sequoia Capital China Investment Funds, including SCC Venture V Holdco I, Ltd. and SCC Growth I Holdco A, Ltd., beneficially owned 11.6% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024, which represents 3.1% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024.
Sequoia Capital China Investment Funds, including SCC Venture V Holdco I, Ltd. and SCC Growth I Holdco A, Ltd., beneficially owned 11.4% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025, which represents 3.1% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025.
Our tutors deliver lessons based on their individual availability, at appropriate locations of their choice, and are paid according to the number of lessons they teach. Tutors who deliver paid lessons are generally engaged by us as independent contractors. As of December 31, 2023, we had approximately 4.1 thousand foreign tutors qualified to deliver lessons on our platform.
Our tutors deliver lessons based on their individual availability, at appropriate locations of their choice, and are paid according to the number of lessons they teach. Tutors who deliver paid lessons are generally engaged by us as independent contractors. As of December 31, 2024, we had approximately 7.0 thousand foreign tutors qualified to deliver lessons on our platform.
In order to comply with the foregoing, there are seven individual shareholders of Philippines Co II and five individual shareholders of Philippines Co III, holding an aggregate of 0.000007% and 0.001% of the equity interest of Philippines Co II and Philippines Co III, respectively.
In order to comply with the foregoing, there are five individual shareholders in each of Philippines Co II and Philippines Co III, holding an aggregate of 0.000005% and 0.001% of the equity interest of Philippines Co II and Philippines Co III, respectively.
The Malaysian Communications and Multimedia Commission may also take legal action to require the company to remove the misleading or deceptive advertisement. ​ 69 Table of Contents PRC Regulations This section sets forth a summary of the most significant rules and regulations that affect our business activities in mainland China.
The Malaysian Communications and Multimedia Commission may also take legal action to require the company to remove the misleading or deceptive advertisement. ​ 67 Table of Contents Thailand Regulations This section sets forth a summary of the most significant rules and regulations that affect our business activities in Thailand.
We engage student service personnel from candidates with good communication skills and student service ethics and provide on-the-job training for our new staffs. We conduct ongoing evaluations of our student service staff and provide periodic training to improve their skills.
We engage student service personnel from candidates with good communication skills and student service ethics and provide on-the-job training for our new staffs. We conduct ongoing evaluations of our student service staff and provide periodic training to improve their skills. Furthermore, we have expanded our learner service capabilities.
Chularak Aramruansakul holds 25% of the equity interest in Helloworld Education Online (Thailand) Co., Ltd. Helloworld Online Education Pte. Ltd holds ordinary shares, and each ordinary share is entitled to one vote. Ms. Suphaphon Thapmichai and Mr. Chularak Aramruansakul hold preference shares, and ten preference shares is entitled to one vote.
Chularak Aramruansakul holds 25% of the equity interest in Helloworld Education Online (Thailand) Co., Ltd. Helloworld Online Education Pte. Ltd holds ordinary shares, and each ordinary share is entitled to one vote. Ms. Piyanuch Thiensri and Ms. Chularak Aramruansakul hold preference shares, and ten preference shares is entitled to one vote.
In November 2022, Helloworld Education Online (Thailand) Co., Ltd. was incorporated as a subsidiary of our company to operate our business in Thailand. Helloworld Online Education Pte. Ltd holds 49% of the equity interest in Helloworld Education Online (Thailand) Co., Ltd., Ms. Suphaphon Thapmichai holds 26% and Mr.
In November 2022, Helloworld Education Online (Thailand) Co., Ltd. was incorporated as a subsidiary of our company to operate our business in Thailand. Helloworld Online Education Pte. Ltd holds 49% of the equity interest in Helloworld Education Online (Thailand) Co., Ltd., Ms. Piyanuch Thiensri holds 26% and Ms.
Helloworld Online Singapore holds ordinary shares, and each ordinary share is entitled to one vote. Ms. Suphaphon Thapmichai and Mr. Chularak Aramruansakul hold preference shares, and ten preference shares is entitled to one vote. As a result, we, through Helloworld Online Singapore, hold 90.6% of the voting power of Helloworld Thailand.
Helloworld Online Singapore holds ordinary shares, and each ordinary share is entitled to one vote. Ms. Piyanuch Thiensri and Ms. Chularak Aramruansakul hold preference shares, and ten preference shares is entitled to one vote. As a result, we, through Helloworld Online Singapore, hold 90.6% of the voting power of Helloworld Education Thailand.
To offer our students more options and especially during promotional campaigns, we also offer different types of prepaid credit packages with various number of credits. ​ 61 Table of Contents We accept fee payments through bank transfer and major third-party online payment channels, including Airwallex, Stripe, Paypal, Atome, Payermax, Checkout and Ipay88.
To offer our students more options and especially during promotional campaigns, we also offer different types of prepaid credit packages with various number of credits. ​ 59 Table of Contents We accept fee payments through bank transfer and major third-party online payment channels, including Airwallex, Stripe, Tabby, Tamara, Payermax, Checkout and 2C2P.
Golien Ltd beneficially owned 5.5% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024, which represents 1.5% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024.
Golien Ltd beneficially owned 5.4% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025, which represents 1.6% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as- converted basis as of February 28, 2025.
To date, the Infocomm Media Development Authority has designated six OCSs as ROCS, and 51Talk has not been designated as a ROCS. ​ 66 Table of Contents Under the Online Criminal Harms Act 2023, parts of which came into force as of 1 February 2024, designated officers from various government agencies may issue directions in respect of online activity for criminal offenses under their agencies’ purview, if the designated officer reasonably suspects that an offense (specified in the first schedule of the Online Criminal Harms Act 2023) has been committed and that any online activity is in furtherance of the offense, or suspects or has reason to believe that any online activity is preparatory to, or in furtherance of the commission of a scam or malicious cyber activity offense.
Under the Online Criminal Harms Act 2023, parts of which came into force as of February 1, 2024, designated officers from various government agencies may issue directions in respect of online activity for criminal offenses under their agencies’ purview, if the designated officer reasonably suspects that an offense (specified in the first schedule of the Online Criminal Harms Act 2023) has been committed and that any online activity is in furtherance of the offense, or suspects or has reason to believe that any online activity is preparatory to, or in furtherance of the commission of a scam or malicious cyber activity offense.
In November 2022, we terminated the contractual arrangements with Dasheng HelloWorld, and since then we no longer have any consolidated VIE in mainland China.
In November 2022, we terminated the contractual arrangements with Beijing Dasheng Helloworld Technology Co., Ltd., or Dasheng HelloWorld, and since then we no longer have any consolidated VIE in mainland China.
Companies that provide courses or other educational services in Malaysia must also comply with the ministry’s regulations and requirements. Companies that offer courses or other educational services in Malaysia must obtain the necessary licenses and approvals from the Ministry of Education. Failure to obtain the necessary licenses can result in fines, legal action, or other penalties.
Companies that offer courses or other educational services in Malaysia must obtain the necessary licenses and approvals from the Ministry of Education. Failure to obtain the necessary licenses can result in fines, legal action, or other penalties.
As of December 31, 2023, we had a total of 198 account managers (including 34 full-time employees and 164 outsourced personnel). Our account manager team plays a critical role in increasing the course package upgrades and renewals among our students.
As of December 31, 2024, we had a total of 250 account managers (including 90 full-time employees and 160 outsourced personnel). Our account manager team plays a critical role in increasing the course package upgrades and renewals among our students.
In these markets, we mainly conduct one-on-one online live English courses, targeting children aged five to 12. In Hong Kong, we offer our packages with a wide range of prices from US$506 to US$2,274. In Thailand, we offer our packages with a wide range of prices from US$220 to US$2,235, catering to the varied spending power of users.
In these markets, we mainly conduct one-on-one online live English courses, targeting children aged five to twelve. In Hong Kong, we offer our packages with a wide range of prices from US$700 to US$2,350. In Thailand, we offer our packages with a wide range of prices from US$374 to US$2,369, catering to the varied spending power of users.
DCM Funds, including DCM Hybrid RMB Fund, L.P., DCM Ventures China Turbo Fund, L.P. and DCM Ventures China Turbo Affiliates Fund, L.P., beneficially owned 19.8% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024, which represents 46.0% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024.
DCM Funds, including DCM Hybrid RMB Fund, L.P., DCM Ventures China Turbo Fund, L.P. and DCM Ventures China Turbo Affiliates Fund, L.P., beneficially owned 19.4% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025, which represents 45.7% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025.
Thereafter, COE HK CO I and its subsidiaries, and the variable interest entities, which our Cayman Islands holding company was considered the primary beneficiary of for accounting purposes and consolidated as required by Accounting Standards Codification topic 810, Consolidation, such as Dasheng Zhixing and its subsidiaries and branches, Philippines Co I and Shenzhen Dasheng Zhiyun Technology Co., Ltd., were all divested from us.
Thereafter, China Online Education (HK) Limited, or COE HK CO I, and its subsidiaries, and the VIEs, which our Cayman Islands holding company was considered the primary beneficiary of for accounting purposes and consolidated as required by Accounting Standards Codification topic 810, Consolidation, such as Dasheng Zhixing and its subsidiaries and branches, 51 Talk English Philippines Corporation, or Philippines Co I and Shenzhen Dasheng Zhiyun Technology Co., Ltd., or Dasheng Zhiyun, were all divested from us.
We also face competition from other online and mobile platforms or internet companies that plan to expand their business into language education.
We face competition from other companies that provide online language education as well as from those that provide traditional offline language education abroad. We also face competition from other online and mobile platforms or internet companies that plan to expand their business into language education.
Our net revenues from international business increased from US$0.8 in 2021 to US$15.0 million in 2022, and further to US$27.1 million in 2023. Our gross billings from international business increased from US$3.5 in 2021 to US$28.7 million in 2022, and further to US$39.9 million in 2023.
Our net revenues from international business increased from US$15.0 million in 2022 to US$27.1 million in 2023, and further to US$50.7 million in 2024. Our gross billings from international business increased from US$28.7 million in 2022 to US$39.9 million in 2023, and further to US$69.6 million in 2024.
Our proprietary Classic English curriculum and course materials were developed under the guidance of the CEFR and are grouped into six general stages of English proficiency, splitting across a total of 16 levels.
Our proprietary Classic English curriculum and course materials were developed under the guidance of the Common European Framework of Reference for Languages, also known as the CEFR, and are grouped into six general stages of English proficiency, splitting across a total of 16 levels.
Except under certain specific circumstances provided by law, any third party user must obtain consent or a proper license from the patent owner to use the patent, or else the use will constitute an infringement of the rights of the patent holder. As of December 31, 2023, we held 6 patents in mainland China.
Except under certain specific circumstances provided by law, any third party user must obtain consent or a proper license from the patent owner to use the patent, or else the use will constitute an infringement of the rights of the patent holder.
Shu and their family members, beneficially owned 24.7% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024, which represents 39.0% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024.
Shu and their family members, beneficially owned 24.6% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025, which represents 38.9% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025.
The Philippine Competition Act prescribes administrative fines of up to PHP275 million and criminal penalties of imprisonment up to seven years for violations of its provisions.
The Philippine Competition Act prescribes administrative fines of up to PHP275 million and criminal penalties of imprisonment up to seven years for violations of its provisions. The Philippine Competition Commission (PCC) is able to review transactions motu proprio.
Other shareholders including certain principal shareholders, beneficially own 38.4% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024, which represents 10.4% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 29, 2024. ​ 78 Table of Contents (2) Each of Noel Lee, Huiru Yuan, Jennifer Que, Kenneth John Manlapaz, Samuel Celestino, Xing Liu and Wei Li holds 0.000001% of the equity interest in Philippines Co II.
Other shareholders including certain principal shareholders, beneficially own 33.3% of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025, which represents 9.1% of the aggregate voting power of our total issued and outstanding Class A and Class B ordinary shares on an as-converted basis as of February 28, 2025. 78 Table of Contents (2) Each of Noel Lee, Huiru Yuan, Jennifer Que, Arman James Manalang and Samuel Celestino holds 0.000001% of the equity interest in Philippines Co II.
We believe that the facilities that we currently lease are adequate to meet our needs for the foreseeable future, and we believe that we will be able to obtain adequate facilities, principally through leasing of additional properties, to accommodate our future expansion plans. ​ ITEM 4.A. UNRESOLVED STAFF COMMENTS Not Applicable. ​
We lease all of the facilities that we currently occupy from independent third parties. 80 Table of Contents We believe that the facilities that we currently lease are adequate to meet our needs for the foreseeable future, and we believe that we will be able to obtain adequate facilities, principally through leasing of additional properties, to accommodate our future expansion plans. ​ ITEM 4.A.
Regulations on Stock Incentive Plans Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, or SAFE Circular 7, issued by SAFE in February 2012, employees, directors, supervisors and other senior management participating in any stock incentive plan of an overseas publicly listed company who are mainland China citizens or who are non-mainland China citizens residing in mainland China for a continuous period of not less than one year, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be a mainland China subsidiaries of such overseas listed company, and complete certain other procedures.
Jack Jiajia Huang and Ting Shu, who directly or indirectly hold shares in our Cayman Islands holding company and who are mainland China residents have completed the initial foreign exchange registrations and amended their registrations to reflect our corporate restructuring in November 2014, but have not updated their registrations required in connection with our recent corporate restructuring. 75 Table of Contents Regulations on Stock Incentive Plans Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, or SAFE Circular 7, issued by SAFE in February 2012, employees, directors, supervisors and other senior management participating in any stock incentive plan of an overseas publicly listed company who are mainland China citizens or who are non-mainland China citizens residing in mainland China for a continuous period of not less than one year, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be a mainland China subsidiaries of such overseas listed company, and complete certain other procedures.
We entered into contractual arrangements with some of these individual shareholders which provide us an exclusive option to purchase all of these individual shareholders’ equity interests in Philippines Co II and the power to exercise their shareholder rights.
Each of Noel Lee, Huiru Yuan, Jennifer Que, Arman James Manalang, and Samuel Celestino is a director of Philippines Co II. We entered into contractual arrangements with some of these individual shareholders which provide us an exclusive option to purchase all of these individual shareholders’ equity interests in Philippines Co II and the power to exercise their shareholder rights.
The Education Act also sets out the qualification requirements for tutors who offer courses or other educational services in Malaysia, including having the necessary degrees and certifications to teach their respective subjects. The Ministry of Education oversees the education system in Malaysia and has the power to regulate and enforce educational standards.
Malaysia Regulations Regulations on Education The Education Act sets out the regulations surrounding education in Malaysia, including requirements for licensing and accreditation of educational institutions. The Education Act also sets out the qualification requirements for tutors who offer courses or other educational services in Malaysia, including having the necessary degrees and certifications to teach their respective subjects.
The pre-establishment national treatment refers to granting foreign investors and their investments, in the stage of investment access, the treatment no less favorable than that granted to domestic investors and their investments; the negative list refers to special administrative measures for access of foreign investments in certain fields and the national treatment will be given to the foreign investments that do not fall within any of the categories set out in the negative list.
The pre-establishment national treatment refers to granting foreign investors and their investments, in the stage of investment access, the treatment no less favorable than that granted to domestic investors and their investments; the negative list refers to special administrative measures for access of foreign investments in certain fields and the national treatment will be given to the foreign investments that do not fall within any of the categories set out in the negative list. 74 Table of Contents On September 6, 2024, the Ministry of Commerce and the National Development and Reform Commission jointly promulgated the Special Administrative Measures for Access of Foreign Investment (Negative List) (2024 version), which became effective on November 1, 2024.
The number of years an entity is entitled to the incentives is determined by the location of the entity and the type of business or activity it is engaged in. Philippine Economic Zone Authority The Philippine Economic Zone Authority, or the PEZA, is an attached agency to the Department of Trade and Industry.
The number of years an entity is entitled to the incentives is determined by the location of the entity and the type of business or activity it is engaged in.
Companies may also need to obtain licenses or approvals from the Education Bureau or other authorities before offering their services. Companies that violate the regulations may be subject to fines and other penalties.
Companies that offer online courses or other educational services are required that their offerings meet the standards set out in the Education Ordinance. Companies may also need to obtain licenses or approvals from the Education Bureau or other authorities before offering their services. Companies that violate the regulations may be subject to fines and other penalties.
They are available online and by phone between 9:00 a.m. and 9:00 p.m., seven days a week. Our dedicated general student service team had seven individuals (including two full-time employees and five outsourced personnel) as of December 31, 2023.
They are available online and by phone between 10:00 a.m. and 9:00 p.m., seven days a week on a rotation basis. Our dedicated general student service team had eight individuals, all of which are outsourced personnel as of December 31, 2024.
Based on this assessment and the data we had gathered from the student questionnaires, our course consultants recommend an appropriate starting level and provide advice as to the most appropriate course package and study plan for each prospective student.
Based on this assessment and the data we had gathered from student questionnaires, our course consultants recommend an appropriate starting level and provide advice as to the most appropriate course package and study plan for each prospective student. As of December 31, 2024, we had a total of 421 dedicated course consultants (including 156 full-time employees and 265 outsourced personnel).
Starting September 16, 2022, mergers and acquisitions that reach a size of party of PHP6.1 billion and a size of transaction of PHP2.5 billion will have to be notified to the PCC for mandatory merger review.
Starting March 1, 2024, mergers and acquisitions that reach a size of party of PHP7.8 BILLION and a size of transaction of PHP3.3 BILLION will have to be notified to the PCC for mandatory merger review.
A patent is valid for a twenty-year term for an invention, a ten-year term for a utility model and a fifteen-year term for design, starting from the application date.
The Patent Office under the National Intellectual Property Administration is responsible for receiving, examining and approving patent applications. A patent is valid for a twenty-year term for an invention, a ten-year term for a utility model and a fifteen-year term for design, starting from the application date.
In addition, Do-Not-Call requirements require organizations to, among others, check “Do-Not-Call” registries prior to sending specified marketing messages addressed to Singapore telephone numbers, through voice calls, fax or text messages, unless clear and unambiguous consent to the sending of the message to their number was obtained from the individual. ​ 65 Table of Contents The Personal Data Protection Commission may impose sanctions in connection with the improper collection, use and disclosure of personal data and certain failures to comply with the Personal Data Protection Act 2012, including the DNC requirements.
Other obligations that organizations must comply with relate to accountability, protection, retention, and requirements around the international transfers of personal data. 63 Table of Contents In addition, Do-Not-Call requirements require organizations to, among others, check “Do-Not-Call” registries prior to sending specified marketing messages addressed to Singapore telephone numbers, through voice calls, fax or text messages, unless clear and unambiguous consent to the sending of the message to their number was obtained from the individual.
The PDPO came into effect in December 1996 and was later significantly amended in 2012 and 2021. The PDPO imposes a statutory duty on data users to comply with the requirements of the six data protection principles contained in Schedule 1 to the PDPO.
The PDPO imposes a statutory duty on data users to comply with the requirements of the six data protection principles contained in Schedule 1 to the PDPO.
We maintain personal accident insurance for all employees after six months of employment in mainland China, maintain commercial medical insurance for our management and employees in mainland China and Malaysia, provide government-mandated medical insurance to all of our employees in the Philippines, mainland China and Thailand, and provide supplementary medical insurance to certain of our employees in the Philippines and mainland China.
We do not maintain business interruption insurance, nor do we maintain key-man life insurance. We maintain personal accident insurance and supplementary medical insurance for all employees after six months of employment and management in mainland China, in addition to government-mandated medical insurance. For employees in Malaysia, Thailand and Saudi Arabia, we provide government-mandated medical and supplementary medical insurance.
(9) In September 2018, Beijing HelloWorld Online Technology Co., Ltd., or HelloWorld Online, was incorporated as a wholly owned subsidiary of HelloWorld Online HK. ​ 79 Table of Contents Historically, as we were the primary beneficiary of the former mainland China consolidated VIEs for accounting purposes, we conducted part of our business in mainland China through the former mainland China consolidated VIEs.
(12) In February 2024, Hawo Online Training L.L.C-FZ, or UAE Training, was incorporated as a wholly owned subsidiary of HelloWorld Online Singapore in United Arab Emirates. 79 Table of Contents Historically, as we were the primary beneficiary of the former mainland China consolidated VIEs for accounting purposes, we conducted part of our business in mainland China through the former mainland China consolidated VIEs.
SAFE Circular 37 further provides that option or share-based incentive tool holders of a non-listed SPV can exercise the options or share incentive tools to become a shareholder of such non-listed SPV, subject to registration with SAFE or its local branch. 73 Table of Contents Mainland China residents or entities who have contributed legitimate domestic or offshore interests or assets to SPVs but have yet to obtain SAFE registration before the implementation of the SAFE Circular 37 shall register their ownership interests or control in such SPVs with SAFE or its local branch.
Mainland China residents or entities who have contributed legitimate domestic or offshore interests or assets to SPVs but have yet to obtain SAFE registration before the implementation of the SAFE Circular 37 shall register their ownership interests or control in such SPVs with SAFE or its local branch.
Under the Online Safety (Miscellaneous Amendments) Act, which came into effect on 1 February 2023, the Online Communication Services, or the OCS, accessible by Singapore users are subject to regulation under part 10A of the Broadcasting Act 1994.
Companies that contravene the class license conditions or the Internet Code of Practice may face administrative sanctions such as suspension or cancelation of license, or fines. 64 Table of Contents Under the Online Safety (Miscellaneous Amendments) Act, which came into effect on February 1, 2023, the Online Communication Services, or the OCS, accessible by Singapore users are subject to regulation under part 10A of the Broadcasting Act 1994.
For example, the Education Bureau may impose fines on companies that are found to be operating without the necessary licenses or approvals, or that are in violation of the curriculum or assessment requirements set out in the Education Ordinance. ​ 67 Table of Contents Regulations on Data Privacy and Cybersecurity The Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong), or the PDPO, regulates the collection, storage, use, and disclosure of personal data in Hong Kong.
For example, the Education Bureau may impose fines on companies that are found to be operating without the necessary licenses or approvals, or that are in violation of the curriculum or assessment requirements set out in the Education Ordinance.
We believe that CSRC approval is not required in the context of our initial public offering as we are not a special purpose vehicle formed for listing purpose through acquisition of domestic companies that are controlled by our mainland China individual shareholders.
We believe that CSRC approval is not required in the context of our initial public offering as we are not a special purpose vehicle formed for listing purpose through acquisition of domestic companies that are controlled by our mainland China individual shareholders. 76 Table of Contents The new rules for the filing-based administration of overseas securities offerings and listings by Chinese domestic companies released on February 17, 2023, or New Filing Rules, establish a new filing-based regime to regulate overseas offerings and listings by domestic companies.
If the employees fail to pay or the mainland China subsidiaries fail to withhold their income taxes according to relevant laws and regulations, the mainland China subsidiaries may face sanctions imposed by the tax authorities or other mainland China government authorities. ​ 74 Table of Contents Regulations Relating to Employment and Social Insurance The PRC Labor Law effective as of January 1, 1995 (as latest amended on December 29, 2018), and the PRC Labor Contract Law effective as of January 1, 2008 (as amended on December 28, 2012), set forth a series of provisions governing the labor relationship between employees and employers.
Regulations Relating to Employment and Social Insurance The PRC Labor Law effective as of January 1, 1995 (as latest amended on December 29, 2018), and the PRC Labor Contract Law effective as of January 1, 2008 (as amended on December 28, 2012), set forth a series of provisions governing the labor relationship between employees and employers.
On June 18, 2019, the China Internet Network Information Center issued the Measures on Resolution of Disputes over National Top-level Domain Names.
On June 18, 2019, the China Internet Network Information Center issued the Measures on Resolution of Disputes over National Top-level Domain Names. Pursuant to these measures, the domain name disputes shall be accepted and solved by a domain name dispute resolution body as recognized by the center.
We face competition in general language proficiency education, as well as in K-12 and other specialized areas of language education, from existing online and offline companies. We face competition from other companies that provide online language education as well as from those that provide traditional offline language education abroad.
Competition The international online language education services market is generally fragmented, rapidly evolving and highly competitive. We face competition in general language proficiency education, as well as in K-12 and other specialized areas of language education, from existing online and offline companies.
Ting Shu, and 2.0000% owned by Mr. Caijian Jia. In December 2021, Helloworld Online Education Pte. Ltd. was incorporated as a wholly owned subsidiary of our company to operate the international business in Singapore. In April 2022, 51Talk Training SDN.
We received aggregate gross proceeds from the follow-on public offering of approximately US$6.2 million. In December 2021, Helloworld Online Education Pte. Ltd. was incorporated as a wholly owned subsidiary of our company to operate the international business in Singapore. In April 2022, 51Talk Training SDN.
Pursuant to the Measures for the Security Review of Foreign Investment, which was promulgated by the National Development and Reform Commission and the Ministry of Commerce on December 19, 2020, and became effective on January 18, 2021, the office of the working mechanism for the security review of foreign investments is set up under the National Development and Reform Commission, which is led by the National Development and Reform Commission and the Ministry of Commerce to undertake the routine work of the security review of foreign investments. ​ 72 Table of Contents The Foreign Investment Law of the PRC is considered to grant national treatment to foreign-invested enterprises, except that foreign-invested enterprises are subject to certain restrictions or prohibitions if they propose to operate in certain industries prescribed on the Special Administrative Measures for Access of Foreign Investment (Negative List) (2021 version).
Pursuant to the Measures for the Security Review of Foreign Investment, which was promulgated by the National Development and Reform Commission and the Ministry of Commerce on December 19, 2020, and became effective on January 18, 2021, the office of the working mechanism for the security review of foreign investments is set up under the National Development and Reform Commission, which is led by the National Development and Reform Commission and the Ministry of Commerce to undertake the routine work of the security review of foreign investments.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

64 edited+11 added−11 removed65 unchanged
The number of active students is the main driver for our revenue. We track the number of active students as a key indicator for our business growth and manage our course offerings and sales strategies accordingly.
The number of active students is the main driver for our revenue. We track the number of active students as a key indicator for our business growth and manage our course offerings and sales strategies accordingly.
Investing Activities Net cash provided by investing activities from our international business operations amounted to US$2.4 million in 2023, which was primarily attributable to withdrawal of time deposits.
Net cash provided by investing activities from our international business operations amounted to US$2.4 million in 2023, which was primarily attributable to withdrawal of time deposits.
Neither our subsidiaries nor the former mainland China consolidated VIEs made cash dividends or other distributions to 51Talk Online Education Group, the holding company, or its offshore subsidiaries, in the years ended December 31, 2021, 2022 and 2023. Going forward, our subsidiaries intend to retain most, if not all, of their available funds and any future earnings.
Neither our subsidiaries nor the former mainland China consolidated VIEs made cash dividends or other distributions to 51Talk Online Education Group, the holding company, or its offshore subsidiaries, in the years ended December 31, 2022, 2023 and 2024. Going forward, our subsidiaries intend to retain most, if not all, of their available funds and any future earnings.
Ltd., is subject to 17% Singapore corporate income tax on its taxable income generated from operations in Singapore for the year 2023. In 2023, HelloWorld Online Education Pte. Ltd. is in a loss position, hence no taxable profit was reported during such period. Malaysia Our subsidiary in Malaysia, 51TALK TRAINING SDN. BHD was incorporated in April 2022.
Ltd., is subject to 17% Singapore corporate income tax on its taxable income generated from operations in Singapore for the year 2024. In 2024, HelloWorld Online Education Pte. Ltd. was in a loss position, hence no taxable profit was reported during such period. Malaysia Our subsidiary in Malaysia, 51TALK TRAINING SDN. BHD was incorporated in April 2022.
We may make acquisitions of businesses and properties that complement our operations when suitable opportunities arise. ​ 91 Table of Contents Material Cash Requirements Other than the ordinary cash requirements for our operations, our material cash requirements as of December 31, 2023, and any subsequent interim period primarily include our operating lease obligations and purchase commitments.
We may make acquisitions of businesses and properties that complement our operations when suitable opportunities arise. ​ 91 Table of Contents Material Cash Requirements Other than the ordinary cash requirements for our operations, our material cash requirements as of December 31, 2024, and any subsequent interim period primarily include our operating lease obligations and purchase commitments.
Our gross margin decreased from 78.8% in 2022 to 76.7% in 2023. The decrease was mainly due to the increase in tutors-related cost to develop our international business. Operating Expenses Our operating expenses from our international business operations increased by 42.3% from US$24.2 million in 2022 to US$34.4 million in 2023.
Our gross margin decreased from 78.8% in 2022 to 76.7% in 2023. The decrease was mainly due to the increase in tutors - related cost to develop our international business. Operating Expenses Our operating expenses from our international business operations increased by 42.3% from US$24.2 million in 2022 to US$34.5 million in 2023.
The taxable income generated by the company should be subjected to 15% for the first MYR150 taxable income, 17% on the next MYR450, and 24% thereafter. Thailand Our subsidiary in Thailand, Helloworld Education Online (Thailand) Co., Ltd., was incorporated in 2023. The income is subject to Thailand tax laws.
The taxable income generated by the company should be subjected to 15% for the first MYR150 taxable income, 17% on the next MYR450, and 24% thereafter. Thailand Our subsidiary in Thailand, Helloworld Education Online (Thailand) Co., Ltd., was incorporated in 2023. The income is subject to Thailand tax laws. The income tax rate is 20% on taxable profits.
As of December 31, 2022 and 2023, we had only one reportable segment, namely the international business segment. Selected Income Statement Items Net Revenues In 2021, 2022 and 2023, we generated net revenues from continuing operations of US$0.8 million, US$15.0 million and US$27.1 million, respectively. We generally collect fees in advance, which we initially record as advances from students.
As of December 31, 2023 and 2024, we had only one reportable segment, namely the international business segment. Selected Income Statement Items Net Revenues In 2022, 2023 and 2024, we generated net revenues from continuing operations of US$15.0 million, US$27.1 million and US$50.7 million, respectively. We generally collect fees in advance, which we initially record as advances from students.
Specifically, net income of US$22.9 million in 2021 and net loss of US$29.7 million in 2022, have been excluded from our financial results from international business and have been separately reclassified to the divested China Mainland Business. ​ Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated, both in absolute amounts and as percentages of our net revenues.
Specifically, net loss of US$29.7 million in 2022 has been excluded from our financial results from international business and have been separately reclassified to the divested China Mainland Business. ​ Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated, both in absolute amounts and as percentages of our net revenues.
Prior to the termination of the variable interest entity structure, 51Talk Online Education Group and its offshore subsidiaries may provide funding to the former mainland China consolidated VIEs through loans, and the former mainland China consolidated VIEs may transfer cash to our mainland China subsidiaries by paying service fees under the relevant contractual arrangements.
Prior to the termination of the VIE structure, 51Talk Online Education Group and its offshore subsidiaries may provide funding to the former mainland China consolidated VIEs through loans, and the former mainland China consolidated VIEs may transfer cash to our mainland China subsidiaries by paying service fees under the relevant contractual arrangements.
The consolidated balance sheets as of December 31, 2022, consolidated financial statements of operations and consolidated financial statements of cash flows for the years ended December 31, 2021 and 2022 have been adjusted to reflect this change.
The consolidated balance sheets as of December 31, 2022, consolidated financial statements of operations and consolidated financial statements of cash flows for the year ended December 31, 2022 have been adjusted to reflect this change.
Our consolidated financial statements for 2023 had been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations. We incurred net losses of US$4.2 million, US$12.8 million and US$15.0 million from international business operations for the fiscal years ended December 31, 2021, 2022 and 2023, respectively.
Our consolidated financial statements for 2024 had been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations. We incurred net losses of US$12.8 million, US$15.0 million and US$7.3 million from international business operations for the fiscal years ended December 31, 2022, 2023 and 2024, respectively.
Technology Network infrastructure Building a reliable, scalable and secure technology infrastructure is crucial to our ability to support our lessons and the various services that we provide to our students on our online platforms. We manage our lesson delivery system mainly using our proprietary technology, and to a lesser extent, commercially available technology.
Research and Development, Patents and Licenses, etc. Technology Network infrastructure Building a reliable, scalable and secure technology infrastructure is crucial to our ability to support our lessons and the various services that we provide to our students on our online platforms. We manage our lesson delivery system mainly using our proprietary technology, and to a lesser extent, commercially available technology.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2024 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. ​ 93 Table of Contents E.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2024 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. ​ 93 Table of Contents E.
The income tax rate is 20% on taxable profits. ​ 83 Table of Contents Hong Kong Commencing from the year of assessment 2018/2019, the first HK$2 million of profits earned by our subsidiaries incorporated in Hong Kong (being our former wholly owned subsidiary COE HK Co I and our wholly owned subsidiary COE HK Co II and HelloWorld Online HK) have been taxed at half the current tax rate of 16.5% (i.e., 8.25)% while the remaining profits continue to be taxed at the existing 16.5% tax rate.
Hong Kong Commencing from the year of assessment 2018/2019, the first HK$2 million of profits earned by our subsidiaries incorporated in Hong Kong (being our former wholly owned subsidiary COE HK Co I and our wholly owned subsidiary COE HK Co II and HelloWorld Online HK) have been taxed at half the current tax rate of 16.5% (i.e., 8.25%) while the remaining profits continue to be taxed at the existing 16.5% tax rate.
We made provisions for income tax expense in Philippines Co III for the years ended December 31, 2021,2022 and 2023, as Philippines Co I and Philippines Co III reported taxable profit during such period.
We made provisions for income tax expense in Philippines Co II and Philippines Co III for the years ended December 31, 2022, 2023 and 2024, as Philippines Co II and Philippines Co III reported taxable profit during such period.
We assess our liquidity by our ability to generate cash from operating activities to fund our operations, attract investors and borrow funds on favorable economic terms. ​ 90 Table of Contents Operating Activities Net cash provided by operating activities from our international business operations in 2022 and 2023 was US$1.9 million and US$0.6 million, respectively.
We assess our liquidity by our ability to generate cash from operating activities to fund our operations, attract investors and borrow funds on favorable economic terms. ​ 90 Table of Contents Operating Activities Net cash provided by operating activities from our international business operations in 2023 and 2024 was US$0.6 million and US$5.8 million, respectively.
As of December 31, 2023, we held sixteen registered domain names relating to our business, five registered software copyrights and two trademarks in several jurisdictions. D.
As of December 31, 2024, we held sixteen registered domain names relating to our business, five registered software copyrights and four trademarks in several jurisdictions. D.
We mainly offer prepaid credit packages with minimum monthly consumption for our students to purchase. For prepaid credit packages, fees for lessons that have expired are automatically recognized as revenues. We had advances from students from international business of US$2.9 million, US$15.2 million and US$27.2 million as of December 31, 2021, 2022 and 2023, respectively.
We mainly offer prepaid credit packages with minimum monthly consumption for our students to purchase. For prepaid credit packages, fees for lessons that have expired are automatically recognized as revenues. We had advances from students from international business of US$27.2 million and US$45.1 million as of December 31, 2023 and 2024, respectively.
We recognize an impairment loss in profit or loss to the extent that the carrying amount of a contract cost asset exceeds: a. the amount of consideration that we have received but not yet provided the service, less b. the costs that relate directly to providing those goods or services and that have not been recognized as expenses The key assumptions underpinning the estimate include whether we can continue to provide lessons delivered by international tutors, the refund level subsequent to December 31, 2021, and whether any related considerations would be forfeited.
We recognize an impairment loss in profit or loss to the extent that the carrying amount of a contract cost asset exceeds: (a) the amount of consideration that we have received but not yet provided the service, less (b) the costs that relate directly to providing those goods or services and that have not been recognized as expenses The recoverability of contract cost assets depends on whether we can continue to provide lessons delivered by international tutors, the refund level subsequent to December 31, 2024 and whether any related considerations would be forfeited.
After the divesture, no impairment of contract cost assets of international business, i.e., continuing business, was recognized for the years ended December 31, 2022 and 2023.
No impairment of contract cost assets for our international business, i.e., continuing business, was recognized for the years ended December 31, 2022, 2023 and 2024.
Since Philippines Co I and Philippines Co III are not within any special economic zone territory, these corporations are subject to a corporate income tax of 25% of the taxable net income on all income derived during each taxable year from sources within and outside of the Philippines.
Since Philippines Co III are not within any special economic zone territory, Philippines Co III is subject to a corporate income tax of 20% of the taxable net income on all income derived during each taxable year from sources within and outside of the Philippines.
Net loss from continuing operations As a result of the foregoing, we incurred net loss from our international business operations of US$12.8 million and US$15.0 million in 2022 and 2023, respectively. Net loss from discontinued operations We recorded net loss from the discontinued operations, net of income tax of US$29.7 million and nil in 2022 and 2023, respectively.
Income Tax Expenses We recorded income tax expenses from our international business operations of US$0.1 million in 2022 and US$0.1 million in 2023, respectively. Net loss from continuing operations As a result of the foregoing, we incurred net loss from our international business operations of US$12.8 million and US$15.0 million in 2022 and 2023, respectively.
We recorded cost of revenues from continuing operations of US$0.1 million, US$3.2 million and US$6.3 million in 2021, 2022 and 2023, respectively. ​ 82 Table of Contents Operating Expenses Our operating expenses from continuing operations consist of sales and marketing expenses and general and administrative expenses, and to a lesser extent, product development expenses and goodwill and intangibles impairment.
We recorded cost of revenues from continuing operations of US$3.2 million, US$6.3 million and US$11.2 million in 2022, 2023 and 2024, respectively. ​ 82 Table of Contents Operating Expenses Our operating expenses from continuing operations consist of sales and marketing expenses and general and administrative expenses, and to a lesser extent, product development expenses.
(2) Purchase commitments mainly include minimum commitments for enterprise routine operations. We intend to fund our existing and future material cash requirements primarily with anticipated cash flows from operations, our existing cash balance and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support our business. C. Research and Development, Patents and Licenses, etc.
(2) Purchase commitments mainly include minimum commitments for enterprise routine operations and short-term lease payment. We intend to fund our existing and future material cash requirements primarily with anticipated cash flows from operations, our existing cash balance and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support our business. C.
This decrease was primarily due to the reduction in consulting and audit fees. Product Development Expenses Our product development expenses from our international business operations increased by 7.8% from US$2.9 million in 2022 to US$3.1 million in 2023. The increase was primarily due to an increase in the number of technology and course development-related personnel in the international business.
This decrease was primarily due to the reduction in consulting and audit fees. 87 Table of Contents Product Development Expenses Our product development expenses from our international business operations increased by 7.8% from US$2.9 million in 2022 to US$3.1 million in 2023.
The following table sets forth our contractual obligations as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 1–3 More than ​ ​ Total ​ 1 year ​ years ​ 3 years ​ ​ in US$ thousands Operating lease obligations (1) 688 644 44 — Purchase commitments (2) 614 ​ 612 2 — Notes: (1) Represents our non-cancelable leases for our offices and learning centers, which include all future cash outflows under ASC Topic 842, Leases and the operating leases that have not commenced or with lease terms of 12 months or less as of December 31, 2023.
The following table sets forth our contractual obligations as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 1–3 More than ​ ​ Total ​ 1 year ​ years ​ 3 years ​ ​ in US$ thousands Operating lease obligations (1) 2,813 1,519 1,294 — Purchase commitments (2) 747 ​ 745 2 — Notes: (1) Represents our non-cancelable leases for our offices and learning centers, which include all future cash outflows under ASC Topic 842, Leases and the operating leases that have not commenced as of December 31, 2024.
Our net losses from continuing operations in 2021 and 2022 was US$4.2 million and US$12.8 million, respectively and our net losses in 2023 was US$15.0 million.
Our net losses from continuing operations in 2022 was US$12.8 million, and our net losses in 2023 and 2024 was US$15.0 million and US$7.3 million, respectively.
Net income/(loss) from discontinued operations We recorded net income from discontinued operations, net of income tax of US$22.9 million and net loss from discontinued operations, net of income tax of US$29.7 million in 2021 and 2022, respectively.
Net loss from discontinued operations We recorded net loss from the discontinued operations, net of income tax of US$29.7 million and nil in 2022 and 2023, respectively.
Our net revenues increased from US$0.8 million in 2021 to US$15.0 million in 2022, and further to US$27.1 million in 2023. Our gross billings increased from US$3.5 million in 2021 to US$28.7 million in 2022, and further to US$39.9 million in 2023.
Our net revenues increased from US$15.0 million in 2022 to US$27.1 million in 2023, and further to US$50.7 million in 2024. Our gross billings increased from US$28.7 million in 2022 to US$39.9 million in 2023 and further to US$69.6 million in 2024.
The following table sets forth, for the years indicated, our operating expenses, in absolute amounts and as percentages of total net revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ ​ ​ 2022 ​ ​ ​ 2023 ​ ​ ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Operating expenses: ​ Sales and marketing 3,430 ​ 435.3 % 13,279 ​ 88.2 % 23,637 87.2 % General and administrative 1,685 ​ 213.8 % 8,068 ​ 53.6 % 7,727 28.5 % Product development 135 ​ 17.1 % 2,865 ​ 19.0 % 3,088 11.4 % Total operating expenses 5,250 666.2 % 24,212 ​ 160.8 % 34,452 127.1 % ​ Our sales and marketing expenses primarily consist of online and mobile marketing expenses, branding expenses, free trial lesson-related expenses.
The following table sets forth, for the years indicated, our operating expenses, in absolute amounts and as percentages of total net revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Operating expenses: ​ Sales and marketing 13,279 ​ 88.2 % 23,637 ​ 87.2 % 33,388 65.9 % General and administrative 8,068 ​ 53.6 % 7,727 ​ 28.5 % 10,615 20.9 % Product development 2,865 ​ 19.0 % 3,088 ​ 11.4 % 3,571 7.0 % Total operating expenses 24,212 160.8 % 34,452 ​ 127.1 % 47,574 93.8 % ​ Our sales and marketing expenses primarily consist of payroll and employee benefits to our sales and marketing personnel, online and mobile marketing expenses, branding expenses, free trial lesson - related expenses.
The increase was mainly due to the provision for interests and penalties of taxes. ​ 86 Table of Contents Income Tax Expenses We recorded income tax expenses from our international business operations of US$0.1 million in 2022 and US$0.1 million in 2023, respectively.
The fluctuation was primarily due to, in 2024, the reversal of the provision for interests and penalties of the taxes that were recognized in 2023. 86 Table of Contents Income Tax Expenses We recorded income tax expenses from our international business operations of US$0.1 million in 2023 and US$0.3 million in 2024, respectively.
The functional currency of our company and our subsidiaries incorporated in the Cayman Islands, Hong Kong and Singapore is United States dollars, the functional currency of the Philippines entities is Peso, the functional currency of the Thailand entity is Thai Baht, the functional currency of Japan is Yen and the functional currency of the Malaysia entities is Ringgit.
The functional currency of our company and our subsidiaries incorporated in the Cayman Islands, Hong Kong and Singapore is United States dollars, the functional currency of the Philippines entities is Peso, the functional currency of the Thailand entity is Thai Baht, the functional currency of Saudi is Saudi Riyal, the functional currency of the Malaysia entity is Ringgit, the functional currency of United Arab Emirates entities is Dirham and the functional currency of the mainland China entities in our company is RMB.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Net revenues 788 ​ 100.0 ​ 15,048 ​ 100.0 ​ 27,111 100.0 Cost of revenues (130) ​ 16.5 ​ (3,194) ​ 21.2 ​ (6,322) 23.3 Gross profit 658 ​ 83.5 ​ 11,854 ​ 78.8 ​ 20,789 76.7 Operating expenses and other income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales and marketing expenses (3,430) ​ 435.3 ​ (13,279) ​ 88.2 ​ (23,637) 87.2 Product development expenses (135) ​ 17.1 ​ (2,865) ​ 19.0 ​ (3,088) 11.4 General and administrative expenses (1,685) ​ 213.8 ​ (8,068) ​ 53.6 ​ (7,727) 28.5 Loss from operations (4,592) ​ 582.7 ​ (12,358) ​ 82.1 ​ (13,663) 50.4 Interest income 282 ​ 35.8 ​ 27 ​ 0.2 ​ 165 0.6 Other income/(expenses), net 219 ​ 27.8 ​ (453) ​ 3.0 ​ (1,416) 5.2 Loss before income tax (4,091) ​ 519.1 ​ (12,784) ​ 85.0 ​ (14,914) 55.0 Income tax expenses (100) ​ 12.7 ​ (60) ​ 0.4 ​ (118) 0.4 Net loss from continuing operations, net of income tax ​ (4,191) ​ 531.8 ​ (12,844) ​ 85.4 ​ (15,032) ​ 55.4 Net income/(loss) from discontinued operations, net of income tax ​ 22,929 ​ — ​ (29,712) ​ — ​ — ​ — Net income/(loss), all attributable to the Company’s ordinary shareholders 18,738 ​ — ​ (42,556) ​ — ​ (15,032) — ​ ​ 85 Table of Contents The Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Net Revenues Our net revenues from our international business operations increased by 80.2% from US$15.0 million in 2022 to US$27.1 million in 2023.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Net revenues 15,048 ​ 100.0 ​ 27,111 ​ 100.0 ​ 50,692 100.0 Cost of revenues (3,194) ​ 21.2 ​ (6,322) ​ 23.3 ​ (11,164) 22.0 Gross profit 11,854 ​ 78.8 ​ 20,789 ​ 76.7 ​ 39,528 78.0 Operating expenses and other income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales and marketing expenses (13,279) ​ 88.2 ​ (23,637) ​ 87.2 ​ (33,388) 65.9 Product development expenses (2,865) ​ 19.0 ​ (3,088) ​ 11.4 ​ (3,571) 7.0 General and administrative expenses (8,068) ​ 53.6 ​ (7,727) ​ 28.5 ​ (10,615) 20.9 Loss from operations (12,358) ​ 82.1 ​ (13,663) ​ 50.4 ​ (8,046) 15.9 Interest income 27 ​ 0.2 ​ 165 ​ 0.6 ​ 229 0.5 Other (expenses)/income, net (453) ​ 3.0 ​ (1,416) ​ 5.2 ​ 771 1.5 Loss before income tax (12,784) ​ 85.0 ​ (14,914) ​ 55.0 ​ (7,046) 13.9 Income tax expenses (60) ​ 0.4 ​ (118) ​ 0.4 ​ (276) 0.5 Net loss from continuing operations, net of income tax ​ (12,844) ​ 85.4 ​ (15,032) ​ 55.4 ​ (7,322) ​ 14.4 Net loss from discontinued operations, net of income tax ​ (29,712) ​ — ​ — ​ — ​ — ​ — Net loss ​ (42,556) ​ — ​ (15,032) ​ — ​ (7,322) ​ — Net loss attributable to noncontrolling interests ​ — ​ — ​ — ​ — ​ (87) ​ — Net loss, all attributable to the Company’s ordinary shareholders (42,556) ​ — ​ (15,032) ​ — ​ (7,235) — ​ ​ 85 Table of Contents The Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Net Revenues Our net revenues from our international business operations increased by 87% from US$27.1 million in 2023 to US$50.7 million in 2024.
As of December 31, 2023, we and our subsidiaries held cash, cash equivalents and time deposits in the amount of US$8.5 million, SGD3.5 million, MYR5.7 million, HKD15.0 million, RMB58.7 million and THB16.1 million in bank accounts in mainland China, the United States, Singapore, Malaysia, Hong Kong and Thailand, and our consolidated entities in mainland China held cash, cash equivalents in the amount of US$1.2 million in mainland China, which included cash reserved to settle payables to our mainland China subsidiaries.
As of December 31, 2024, we and our subsidiaries held cash, cash equivalents and time deposits in the amount of US$14.5 million, SAR19.4 million, SGD3.4 million, MYR5.6 million, HKD6.7 million, RMB16.1 million and THB57.2 million in bank accounts in mainland China, Saudi Arabia, Singapore, Malaysia, Hong Kong and Thailand, and our consolidated entities in mainland China held cash, cash equivalents in the amount of US$1.0 million in mainland China, which included cash reserved to settle payables to our mainland China subsidiaries.
After the divestiture, our company focuses on providing online English tutoring lessons taught by foreign tutors to K-12 and post-secondary students in countries and regions outside of mainland China, meanwhile, China Online Education (HK) limited and its subsidiaries ceased to be our subsidiaries and the variable interest entities in mainland China were divested along with such divestiture or subsequently dissolved. ​ 81 Table of Contents Effective January 1, 2022, we elected to change our reporting currency from RMB to USD.
After the divestiture, our company focuses on providing online English tutoring lessons taught by foreign tutors to K - 12 and post - secondary students in countries and regions outside of mainland China, meanwhile, China Online Education (HK) limited and its subsidiaries ceased to be our subsidiaries and the VIEs in mainland China were divested along with such divestiture or subsequently dissolved.
The increase was primarily due to the increase in headcount and personnel-related expenses and the increase in advertising and promotion fees for our international business. General and Administrative Expenses Our general and administrative expenses from continuing operations increased by 378.8% from US$1.7 million in 2021 to US$8.1 million in 2022.
The increase was primarily due to the increase in headcount and personnel - related expenses and the increase in advertising and promotion fees for our international business. General and Administrative Expenses Our general and administrative expenses from our international business operations increased by 37.4% from US$7.7 million in 2023 to US$10.6 million in 2024.
The year over year decrease from 2022 to 2023 was primarily due to the increase in our cash paid as prepaid expenses and other current assets. Net cash provided by operating activities from international business operations in 2022 was US$1.9 million. In 2021, net cash used in operating activities from continuing operations was US$5.0 million.
The year over year decrease from 2022 to 2023 was primarily due to the increase in our cash paid as prepaid expenses and other current assets. Investing Activities Net cash provided by investing activities from international business operations amounted to US$0.5 million in 2024, which was primarily attributable to withdrawal of time deposits.
The functional currency of the mainland China entities in our company is RMB. In the consolidated financial statements, the entities located in mainland China, the Philippines, Malaysia, Thailand and Japan have been translated into USD.
In the consolidated financial statements, the entities located in mainland China, the Philippines, Malaysia, Thailand and Saudi have been translated into USD.
As of the date of this annual report, we only derive revenues from business operations conducted through our offshore subsidiaries. As we primarily derive our revenue from our operations in countries and regions outside mainland China, we are more likely to rely on dividend payments or other distributions from our offshore subsidiaries, if our offshore subsidiaries decide to do so.
Risk Factors—Risks Related to Our Global Operations. As we primarily derive our revenue from our operations in countries and regions outside mainland China, we are more likely to rely on dividend payments or other distributions from our offshore subsidiaries, if our offshore subsidiaries decide to do so.
We received aggregate gross proceeds from the follow-on public offering of approximately US$6.2 million. As of December 31, 2023, we had US$23.4 million in cash, cash equivalents, and time deposits. Cash equivalents consist of cash held in accounts managed by certain third party online payment channels in connection with the collection of fees online.
As of December 31, 2024, we had US$29.2 million in cash, cash equivalents, and time deposits. Cash equivalents consist of cash held in accounts managed by certain third - party online payment channels in connection with the collection of fees online.
The Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 Net Revenues Our net revenues from continuing operations increased by 1,809.6% from US$0.8 million in 2021 to US$15.0 million in 2022.
The Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Net Revenues Our net revenues from our international business operations increased by 80.2% from US$15.0 million in 2022 to US$27.1 million in 2023.
Net (loss)/income As a result of the foregoing, we earned net income, all attributable to our company’s ordinary shareholders of US$18.7 million and net loss of all attributable to our company’s ordinary shareholders US$42.6 million in 2021 and 2022, respectively. ​ 88 Table of Contents Impact of Foreign Currency Fluctuation See “Item 3. Key Information—D.
Net loss As a result of the foregoing, we recorded net loss of US$42.6 million and US$15.0 million in 2022 and 2023, respectively. ​ 88 Table of Contents Impact of Foreign Currency Fluctuation See “Item 3. Key Information—D.
Our net revenues are presented net of value-added tax. Cost of Revenues Our cost of revenues primarily consists of service fees to our tutors who delivered paid lessons, the amortization cost of licenses, the cost of printing the textbook and, to a lesser extent, payment processing fees charged by third party payment channels.
Our net revenues are presented net of value - added tax. Cost of Revenues Our cost of revenues primarily consists of service fees to our tutors who delivered paid lessons, payment processing fees charged by third party payment channels, cost of server and bandwidth and compensation to personnel providing support for our services.
Our principal sources of liquidity have been proceeds from our initial public offering and the concurrent private placements and cash generated from operating activities. In June 2020, we completed a registered follow-on public offering, where we issued and sold 81,785 ADSs (including 6,785 ADSs sold from the exercise of over-allotment option) at a public offering price of US$76.00 per ADS.
In June 2020, we completed a registered follow - on public offering, where we issued and sold 81,785 ADSs (including 6,785 ADSs sold from the exercise of over - allotment option) at a public offering price of US$76.00 per ADS. We received aggregate gross proceeds from the follow - on public offering of approximately US$6.2 million.
The increase was primarily attributable to the increase in the number of paid lessons booked driven by the increase in the number of active students of our international business. The number of active students with general lesson consumption increased by 595.0% from 3.8 thousand in 2021 to 26.4 thousand in 2022.
The increase was primarily attributable to the increase in the number of paid lessons booked driven by the increase in the number of active students of our international business. The number of active students with general lesson consumption increased by 87.9% from 51.9 thousand in 2023 to 97.5 thousand in 2024.
The operating cash outflows from continuing operations were US$5.0 million for the year ended December 31, 2021, and the operating cash inflows from continuing operations were US$1.9 million and US$0.6 million for the years ended December 31, 2022 and 2023, respectively.
Accumulated deficits were US$353.6 million as of December 31, 2024. The net current liabilities of continuing operations were US$9.3 million and US$16.8 million as of December 31, 2023 and 2024, respectively. The operating cash inflows from continuing operations were US$1.9 million, US$0.6 million and US$5.8 million for the years ended December 31, 2022, 2023 and 2024, respectively.
Our new business offerings focus on one-on-one English lessons taught by foreign tutors to students in countries and regions outside of mainland China. Our historical operational and financial data is not indicative of future operational and financial performances, particularly due to the transition described above.
Our new business offerings focus on one-on-one English lessons taught by foreign tutors to students in countries and regions outside of mainland China.
Historically, a significant majority of our revenue was generated from our China Mainland Business, which was operated by the subsidiaries and variable interest entities controlled by China Online Education (HK) limited, which was in turn our wholly owned subsidiary before June 30, 2022.
Our historical operational and financial data is not indicative of future operational and financial performances, particularly due to the transition described above. 81 Table of Contents Historically, a significant majority of our revenue was generated from our China Mainland Business, which was operated by the subsidiaries and VIEs controlled by China Online Education (HK) limited, which was in turn our wholly owned subsidiary before June 30, 2022.
The increase was mainly due to the increases in sales and marketing expenses, general and administrative expenses, and product development expenses. ​ 87 Table of Contents Sales and Marketing Expenses Our sales and marketing expenses from continuing operations increased by 287.1% from US$3.4 million in 2021 to US$13.3 million in 2022.
The increase was mainly due to the increases in sales and marketing expenses, general and administrative expenses and product development expenses. Sales and Marketing Expenses Our sales and marketing expenses from our international business operations increased by 41.3% from US$23.6 million in 2023 to US$33.4 million in 2024.
The asset is amortized on the basis consistent with the pattern of the transfer of services to which the asset relates. We assess recoverability of contract cost assets periodically, or more frequently if events or circumstances indicate an impairment may exist.
We assess recoverability of contract cost assets periodically, or more frequently if events or circumstances indicate an impairment may exist.
The increase was primarily due to the increase in total service fees paid to tutors, which was mainly resulting from the delivery of an increased number of paid lessons. The total amount of service fees paid to tutors for delivering paid lessons increased by 2,150% from US$0.1 million in 2021 to US$2.8 million in 2022.
Cost of Revenues Our cost of revenues from our international business operations increased by 76.6% from US$6.3 million in 2023 to US$11.2 million in 2024. The increase was primarily due to the increase in total service fees paid to tutors, which was mainly resulting from the delivery of an increased number of paid lessons.
Impairment of Contract Cost Assets Nature of estimate: We capitalize incremental costs of obtaining contracts with customers as an asset if we expect to recover those costs. Incremental costs of obtaining a contract mainly include sales commissions to sales personnel and distribution agents, as well as certain cash incentives for customers who provide referrals service for us.
Incremental costs of obtaining a contract mainly include sales commissions to sales personnel and distribution agents, as well as certain cash incentives for customers who provide referrals service for us. The asset is amortized on the basis consistent with the pattern of the transfer of services to which the asset relates.
This increase was primarily due to the increase in headcount and personnel-related expenses and the service fees related to the divestiture of the China Mainland Business. Product Development Expenses. Our product development expenses from continuing operations increased by 2,022.2% from US$0.1 million in 2021 to US$2.9 million in 2022.
This decrease was primarily due to the increase in headcount and personnel - related expenses Product Development Expenses Our product development expenses from our international business operations increased by 15.6% from US$3.1 million in 2023 to US$3.6 million in 2024.
The increase was primarily due to an increase in the number of technology and course development-related personnel in the international business. Other income/(expenses) We had other income from continuing operations of US$0.2 million in 2021, compared with other expenses of US$0.5 million in 2022. The decrease was mainly due to the changes of foreign exchange gain and loss.
The increase was primarily due to an increase in the number of technology and course development - related personnel in the international business. Other income / (expenses), net We recorded other expenses, net from our international business operations of US$1.4 million in 2023 and other income, net of US$0.8 million in 2024.
We made provisions for Hong Kong profits tax for the year ended December 31, 2021 as COE HK Co I and COE HK Co II reported taxable profit during such period. For the years ended December 31, 2022 and 2023, there was no taxable profit for COE HK Co II.
For the years ended December 31, 2022, 2023 and 2024, there was no taxable profit for COE HK Co II. For the years ended December 31, 2022, 2023 and 2024, there was no taxable profit for HelloWorld Online HK.
Net loss As a result of the foregoing, we earned net loss, all attributable to our company’s ordinary shareholders of US$42.6 million and US$15.0 million in 2022 and 2023, respectively.
Net loss As a result of the foregoing, we incurred net loss from our international business operations of US$15.0 million and US$7.3 million in 2023 and 2024, respectively.
Net cash provided by investing activities from international business operations amounted to US$5.6 million in 2021, which was primarily attributable to in the withdrawal of time deposits and partially offset by placement of time deposits. Financing Activities Net cash used in financing activities from international business operations in 2023 and 2022 amounted to nil.
Financing Activities Net cash provided by financing activities from international business operations in 2024 amounted to US$0.2 million, which was mainly due to capital injection from noncontrolling interests. Net cash used in financing activities from international business operations in 2023 and 2022 amounted to nil.
Other expenses, net Our other expenses from our international business operations increased from US$0.5 million in 2022 to US$1.4 million in 2023.
The increase was primarily due to an increase in the number of technology and course development - related personnel in the international business. Other expenses, net Our other expenses from our international business operations increased from US$0.5 million in 2022 to US$1.4 million in 2023. The increase was mainly due to the provision for interests and penalties of taxes.
The year over year increase was primarily due to the increase in our cash received as advances from students. The increase in advances from students was US$9.4 million and increase in accrued expenses and other current liabilities is US$6.8 million from 2021 to 2022.
The year over year increase from 2023 to 2024 was primarily due to the increase in advances from students. Net cash provided by operating activities from our international business operations in 2022 and 2023 was US$1.9 million and US$0.6 million, respectively.
Prior to the Ease of Paying Taxes Act (Republic Act No. 11976), which took effect on January 22, 2024, the VAT on services was based on gross receipts. The implementing rules and regulations and related issuances, however, have yet to be released.
In addition to the corporate income tax, these two companies are also subject to 12% of Value Added Tax on all income generated within the Philippines. Prior to the Ease of Paying Taxes Act (Republic Act No. 11976), which took effect on January 22, 2024, the VAT on services was based on gross receipts.
Our capital expenditures from our international business were US$0.1 million, US$0.01 million and US$0.3 million in the years ended December 31, 2021, 2022 and 2023, respectively. We intend to continue to utilize real estate leasing in order to allocate our capital resources cost-efficiently.
Capital Expenditures Our capital expenditures are incurred primarily in connection with leasehold improvements and investments in office furniture, computers and servers. Our capital expenditures from our international business were US$0.01 million, US$0.3 million and US$0.3 million in the years ended December 31, 2022, 2023 and 2024, respectively.
Gross Profit As a result of the foregoing, our gross profit from continuing operations was US$0.7 million in 2021 and US$11.9 million in 2022. Our gross margin decreased from 83.5% in 2021 to 78.8% in 2022. The decrease was mainly due to the increase in tutors-related cost to develop international business.
The total amount of service fees paid to tutors for delivering paid lessons increased by 70.5% from US$5.2 million in 2023 to US$8.9 million in 2024. Gross Profit As a result of the foregoing, our gross profit from our international business operations was US$20.8 million in 2023 and US$39.5 million in 2024.
Philippines Philippines Co II has been registered with the Philippine Economic Zone Authority, or PEZA, as an Ecozone IT Enterprise since December 19, 2014. As such, it is entitled to a special (5%) tax on gross income earned for the next 10 years. Thereafter, it will be subjected to 25% corporate income tax like any other Philippine corporation.
In addition, payments of dividends by our subsidiaries incorporated in Hong Kong to us are not subject to withholding tax in Hong Kong. Philippines Philippines Co II has been registered with the Philippine Economic Zone Authority, or PEZA, as an Ecozone IT Enterprise since December 19, 2014.
Removed
For the years ended December 31, 2021, 2022 and 2023, there was no taxable profit for HelloWorld Online HK. In addition, payments of dividends by our subsidiaries incorporated in Hong Kong to us are not subject to withholding tax in Hong Kong.
Added
Effective January 1, 2022, we elected to change our reporting currency from RMB to USD.
Removed
In addition to the 25% (if the 20% rate will not apply) corporate income tax, these two companies are also subject to 12% of Value Added Tax on all income generated within the Philippines.
Added
Saudi Arabia Our subsidiary in Saudi Arabia, Darb Al - Najah Training Company, was incorporated in 2023. The income is subject to Saudi tax laws. The income tax rate is 20% on taxable profits. 83 Table of Contents United Arab Emirates Our subsidiaries in United Arab Emirates, HAWO EDUCATION INVESTMENT-FZCO and Hawo Online Training L.L.C-FZ were incorporated in 2024.
Removed
We launched our international business since the second half of 2021, so such growth of our net revenues was also mainly derived from the growth of our international business since the second half of 2021. Cost of Revenues Our cost of revenues from continuing operations increased by 2,356.9% from US$0.1 million in 2021 to US$3.2 million in 2022.
Added
The income is subject to United Arab Emirates laws. The income tax rate is 9% on taxable profits.
Removed
Operating Expenses Our operating expenses from continuing operations increased by 361.2% from US$5.3 million in 2021 to US$24.2 million in 2022.
Added
As such, it is entitled to an income tax holiday, or 100% exemption from corporate income tax, for four years from its PEZA registration, the tax and duty free importation of raw materials, capital equipment, machineries and spare parts, VAT zero - rating for local purchases of goods and services, and exemption from payment of local government imposts, fees, licenses, and taxes, and exemption from expanded withholding tax under Philippines tax law.
Removed
Income Tax Expenses We recorded income tax expenses from continuing operations of US$0.1 million and US$0.1 million in 2021 and 2022, respectively. Net loss from continuing operations As a result of the foregoing, we incurred net loss from our continuing operations of US$4.2 million and US$12.8 million in 2021 and 2022, respectively.
Added
In February 2022, Philippine Co II left the PEZA offices in Alpha and Bacolod and the tax holiday ended. Thereafter, it will be subjected to 25% corporate income tax like any other Philippine corporation.
Removed
Net loss from continuing operations were US$4.6 million, US$2.8 million and US$2.0 million for the second quarter, the third quarter and the fourth quarter of 2022, respectively, which indicated the trend of quarterly narrowing losses of our continuing operations in 2022.
Added
Our gross margin increased from 76.7% in 2023 to 78.0% in 2024. The increase was mainly attributable to an increase in the price for prepaid credit packages. Operating Expenses Our operating expenses from our international business operations increased by 38.1% from US$34.5 million in 2023 to US$47.6 million in 2024.
Removed
Accumulated deficits were US$346.4 million as of December 31, 2023. The net current assets of continuing operations were US$6.1 million and negative US$9.3 million as of December 31, 2022 and 2023, respectively.
Added
As of the date of this annual report, we only derive revenues from business operations conducted through our offshore subsidiaries. However, there is a possibility that some students in mainland China may be able to bypass our geolocation setting and register for and attend our courses. For more details, see “Item 3. Key Information—D.
Removed
Net cash provided by financing activities from international business operations in 2021 amounted to US$23.6 million, which was mainly due to funding provided by the China Mainland Business. Capital Expenditures Our capital expenditures are incurred primarily in connection with leasehold improvements and investments in office furniture, computers and servers.
Added
Our principal sources of liquidity have been proceeds from our initial public offering and the concurrent private placements, follow - on public offering and cash generated from operating activities.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

42 edited+11 added−9 removed72 unchanged
In addition to our full-time employees, some of our subsidiaries, such as Beijing Helloworld Online Technology Co., Ltd. and HelloWorld Online Education PTE. LTD, entered into services outsource agreements with independent third party suppliers in 2023, through which they have outsourced part of their marketing and sales functions.
In addition to our full - time employees, some of our subsidiaries, such as Beijing Helloworld Online Technology Co., Ltd. and HelloWorld Online Education PTE. LTD, entered into services outsource agreements with independent third - party suppliers in 2023 and 2024, through which they have outsourced part of their marketing and sales functions.
(6) Consists of 18,967,560 Class A ordinary shares in the form of ADSs held by Golien Ltd, as reported in a Schedule 13G filed by Golien Ltd, on February 7, 2023. The registered address of Golien Ltd is Suite 1104-06, 11 F, Tower 2, The Gateway, Tsimshatsui, Kowloon, Hong Kong.
(7) Consists of 18,967,560 Class A ordinary shares in the form of ADSs held by Golien Ltd, as reported in a Schedule 13G filed by Golien Ltd, on February 7, 2023. The registered address of Golien Ltd is Suite 1104-06, 11 F, Tower 2, The Gateway, Tsimshatsui, Kowloon, Hong Kong.
(5) Consists of (i) 28,494,075 Class A ordinary shares held by SCC Venture V Holdco I, Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands; and (ii) 11,539,320 Class A ordinary shares held by SCC Growth I Holdco A, Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands, as reported in a Schedule 13D amendment jointly filed by, among others, SCC Venture V Holdco I, Ltd. and SCC Growth I Holdco A, Ltd, on May 9, 2022.
(6) Consists of (i) 28,494,075 Class A ordinary shares held by SCC Venture V Holdco I, Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands; and (ii) 11,539,320 Class A ordinary shares held by SCC Growth I Holdco A, Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands, as reported in a Schedule 13D amendment jointly filed by, among others, SCC Venture V Holdco I, Ltd. and SCC Growth I Holdco A, Ltd, on May 9, 2022.
(4) Consists of (i) 57,681,212 Class B ordinary shares held by DCM Hybrid RMB Fund, L.P., or Hybrid Fund; (ii) 10,017,832 Class A ordinary shares held by DCM Ventures China Turbo Fund, L.P., or Turbo Fund, and (iii) 589,278 Class A ordinary shares held by DCM Ventures China Turbo Affiliates Fund, L.P., or Turbo Affiliates Fund, as reported in a Schedule 13D amendment jointly filed by, among others, Hybrid Fund, Turbo Fund and Turbo Affiliates Fund, on January 26, 2023.
(5) Consists of (i) 57,681,212 Class B ordinary shares held by DCM Hybrid RMB Fund, L.P., or Hybrid Fund; (ii) 10,017,832 Class A ordinary shares held by DCM Ventures China Turbo Fund, L.P., or Turbo Fund, and (iii) 589,278 Class A ordinary shares held by DCM Ventures China Turbo Affiliates Fund, L.P., or Turbo Affiliates Fund, as reported in a Schedule 13D amendment jointly filed by, among others, Hybrid Fund, Turbo Fund and Turbo Affiliates Fund, on January 26, 2023.
Beginning in 2017, the number of shares reserved for future issuances under the 2016 Plan will be increased by a number equals to 1.5% of the total number of outstanding shares on the last day of the immediately preceding calendar year, or such lesser number of Class A ordinary shares as determined by our board of directors, during the term of the 2016 Plan.
Beginning in 2017, the number of shares reserved for future issuances under the 2016 Plan will be increased by a number equaling to 1.5% of the total number of outstanding shares on the last day of the immediately preceding calendar year, or such lesser number of Class A ordinary shares as determined by our board of directors, during the term of the 2016 Plan.
Unless terminated earlier, the 2016 Plan will terminate automatically in 2026. ​ 99 Table of Contents The following table summarizes, as of February 29, 2024, the outstanding restricted share units granted to our directors and executive officers under the 2016 Plan. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Name Restricted Share Units Date of Grant Vesting Schedule Jack Jiajia Huang ​ * ​ ​ June 30, 2023 Approximately three years from the date of grant.
Unless terminated earlier, the 2016 Plan will terminate automatically in 2026. ​ 99 Table of Contents The following table summarizes, as of February 28, 2025, the outstanding restricted share units granted to our directors and executive officers under the 2016 Plan. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Name Restricted Share Units Date of Grant Vesting Schedule Jack Jiajia Huang ​ * ​ ​ June 30, 2023 Approximately three years from the date of grant.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 29, 2024: ● each of our directors and executive officers; and ● each person known to us to own beneficially 5% or more of our ordinary shares.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2025: ● each of our directors and executive officers; and ● each person known to us to own beneficially 5% or more of our ordinary shares.
Our audit committee consists of Shengwen (Roy) Rong and Xiaoguang Wu and is chaired by Shengwen (Roy) Rong. We have determined that each of Shengwen (Roy) Rong and Xiaoguang Wu satisfies the “independence” requirements of Section 803 of the NYSE American Company Guide and meet the independence standards under Rule 10A-3 under the Securities Exchange Act of 1934, as amended.
Our audit committee consists of Jimmy Lai and Xiaoguang Wu and is chaired by Jimmy Lai. We have determined that each of Jimmy Lai and Xiaoguang Wu satisfies the “independence” requirements of Section 803 of the NYSE American Company Guide and meet the independence standards under Rule 10A - 3 under the Securities Exchange Act of 1934, as amended.
As of February 29, 2024, to our knowledge, 57,681,212 Class B ordinary shares are held by DCM Hybrid RMB Fund, L.P., or Hybrid Fund, which is registered in the Cayman Islands.
As of February 28, 2025, to our knowledge, 57,681,212 Class B ordinary shares are held by DCM Hybrid RMB Fund, L.P., or Hybrid Fund, which is registered in the Cayman Islands.
We enter into service contracts with such independently contracted tutors, and pay service fees to them based on the number of lessons they teach and their teaching performance. We had approximately 4.1 thousand independently contracted foreign tutors available to deliver lessons for our international business on our platform as of December 31, 2023.
We enter into service contracts with such independently contracted tutors, and pay service fees to them based on the number of lessons they teach and their teaching performance. We had approximately 7.0 thousand independently contracted foreign tutors available to deliver lessons for our international business on our platform as of December 31, 2024.
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of Jack Jiajia Huang, Shengwen (Roy) Rong and Xiaoguang Wu, and is chaired by Jack Jiajia Huang. We have determined that each of Shengwen (Roy) Rong and Xiaoguang Wu satisfies the “independence” requirements of Section 803 of the NYSE American Company Guide.
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of Jack Jiajia Huang, Jimmy Lai and Xiaoguang Wu, and is chaired by Jack Jiajia Huang. We have determined that each of Jimmy Lai and Xiaoguang Wu satisfies the “independence” requirements of Section 803 of the NYSE American Company Guide.
As of February 29, 2024, we are authorized to grant options or share purchase rights to purchase up to an aggregate of 36,229,922 Class A ordinary shares under the Pre-IPO Plans. The 2013 Plan expired in September 2023 and additional grants may not be made thereunder.
We are authorized to grant options or share purchase rights to purchase up to an aggregate of 36,229,922 Class A ordinary shares under the Pre - IPO Plans. The 2013 Plan expired in September 2023 and no additional grants may be made thereunder. The 2014 Plan expired in December 2024 and no additional grants may be made thereunder.
Compensation Committee . Our compensation committee consists of Frank Lin, Shengwen (Roy) Rong and Xiaoguang Wu, and is chaired by Frank Lin. We have determined that each of Shengwen (Roy) Rong and Xiaoguang Wu satisfies the “independence” requirements of Section 803 of the NYSE American Company Guide.
Compensation Committee . Our compensation committee consists of Frank Lin, Jimmy Lai and Xiaoguang Wu, and is chaired by Frank Lin. We have determined that each of Jimmy Lai and Xiaoguang Wu satisfies the “independence” requirements of Section 803 of the NYSE American Company Guide.
There were no outstanding options granted to our directors and executive officers under the 2013 Plan and 2014 Plan as of February 29, 2024.
There were no outstanding options granted to our directors and executive officers under the 2013 Plan and 2014 Plan as of February 28, 2025.
The registered office address of Dasheng Global Limited is Quastisky Building, P.O. Box 4389, Road Town, Tortola, British Virgin Islands. The registered office address of Dasheng Online Limited is c/o Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola. British Virgin Islands.
The registered office address of Dasheng Global Limited is Quastisky Building, P.O. Box 4389, Road Town, Tortola, British Virgin Islands. The registered office address of Dasheng Online Limited is c/o Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands. The registered office address of HH Talent Limited is Coastal Building, Wickham’s Cay II, P.O.
As of February 29, 2024, other current and former employees as a group held options to purchase 9,476,175 Class A ordinary shares under the 2014 Plan, with exercise prices ranging from US$0.0167 to US$0.904 per Class A ordinary share. ​ ​ 98 Table of Contents 2016 Plan We adopted the 2016 share incentive plan, or the 2016 Plan, in May 2016.
As of February 28, 2025, other current and former employees as a group held options to purchase 8,771,195 Class A ordinary shares under the 2014 Plan, with exercise prices ranging from US$0.0167 to US$0.904 per Class A ordinary share. ​ 98 Table of Contents 2016 Plan We adopted the 2016 share incentive plan, or the 2016 Plan, in May 2016.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. ​ 105 Table of Contents To our knowledge, as of February 29, 2024, 229,713,900 of our Class A ordinary shares are held by one record holder in the United States, which is the depositary of our ADS program, representing 95.1% of our total issued and outstanding Class A ordinary shares as of such date.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. ​ 105 Table of Contents To our knowledge, as of February 28, 2025, 236,042,100 of our Class A ordinary shares are held by one record holder in the United States, which is the depositary of our ADS program, representing 95.2% of our total issued and outstanding Class A ordinary shares as of such date.
Tang served as a senior financial analyst in Google’s Beijing office from 2007 to 2014. Previously, Ms. Tang served as a senior financial analyst with Novo Nordisk, a CSE-listed world leading pharmaceutical manufacturer, a finance manager with Beijing City International School, and a senior auditor with PricewaterhouseCoopers Zhong Tian LLP. Ms.
Tang served as a senior financial analyst with Novo Nordisk, a CSE-listed world leading pharmaceutical manufacturer, a finance manager with Beijing City International School, and a senior auditor with PricewaterhouseCoopers Zhong Tian LLP. Ms.
As of February 29, 2024, options to purchase an aggregate number of 9,476,175 Class A ordinary shares have been granted and are outstanding, and nil restricted share units have been granted and are outstanding. The terms of the Pre-IPO Plans are substantially similar. The following paragraphs summarize the terms of the Pre-IPO Plans. Types of Awards .
As of February 28, 2025, options to purchase an aggregate number of 8,771,195 Class A ordinary shares have been granted and are outstanding, and nil restricted share units have been granted and are outstanding. The terms of the Pre-IPO Plans are substantially similar. The following paragraphs summarize the terms of the Pre-IPO Plans. Types of Awards .
Lin was the chief operating officer of SINA Corporation, a Nasdaq-listed company. He co-founded SINA’s predecessor, SinaNet, in 1995 and later guided SINA through its listing on Nasdaq. Mr. Lin had also held various marketing, engineering and managerial positions at Octel Communication Inc. and NYNEX. Mr.
He co - founded SINA’s predecessor, SinaNet, in 1995 and later guided SINA through its listing on Nasdaq. Mr. Lin had also held various marketing, engineering and managerial positions at Octel Communication Inc. and NYNEX. Mr.
Jack Jiajia Huang is our founder and has served as the chairman of our board of directors and chief executive officer since our inception. Prior to founding our company, he served as an operations manager at Mitsubishi Corporation (China) Co., Ltd. from 2007 to 2010. Mr. Huang founded Talk China, an online Chinese-teaching platform targeting Japanese students, in 2007. Mr.
Jack Jiajia Huang is our founder and has served as the chairman of our board of directors and chief executive officer since our inception. Prior to founding our company, he served as an operations manager at Mitsubishi Corporation (China) Co., Ltd. from 2007 to 2010. Mr. Huang received his bachelor’s degree in Japanese language from Tsinghua University in 2007.
Each of Dasheng Global and Dasheng Online is wholly beneficially owned by Dasheng International Holdings Limited, or Dasheng Holdings, which is in turn, wholly owned by TB Family Trust, or the Trust, for which TMF (Cayman) Ltd. acts as the trustee, or the Trustee. S.B. Vanwall Ltd. is the sole director of Dasheng Holdings appointed by the Trustee.
HH Talent Limited is wholly beneficially owned by HH Talent Holdings Limited, which is in turn wholly owned by HH Talent Trust, for which the Trustee also acts as the trustee. S.B. Vanwall Ltd., appointed by the Trustee, is the sole director of Dasheng International Holdings Limited and HH Talent Holdings Limited. The settlors of TB Family Trust are Mr.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ ​ ​ % of total ​ ​ Class A Class B Total ordinary ordinary shares on % of ​ ordinary ordinary shares on an as- an as converted aggregate ​ ​ Shares ​ Shares ​ converted basis basis ​ voting power † Directors and Executive Officers: ​ ​ ​ ​ ​ Jack Jiajia Huang (1) 39,465,120 ​ 45,925,744 ​ 85,390,864 ​ 24.7 ​ 39.0 Ting Shu (1) 39,465,120 ​ 45,925,744 ​ 85,390,864 ​ 24.7 ​ 39.0 Frank Lin (2) * ​ — ​ * ​ * ​ * Cindy Chun Tang * ​ — ​ * ​ * ​ * Shengwen (Roy) Rong * ​ — ​ * ​ * ​ * Xiaoguang Wu (3) * ​ — ​ * ​ * ​ * All directors and executive officers as a group 42,560,593 ​ 45,925,744 ​ 88,486,337 ​ 25.6 ​ 39.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DCM Funds (4) 10,607,110 ​ 57,681,212 ​ 68,288,322 ​ 19.8 ​ 46.0 Dasheng International Holdings Limited (1) 39,465,120 ​ 45,925,744 ​ 85,390,864 ​ 24.7 ​ 39.0 Sequoia Capital China Investment Funds (5) 40,033,395 ​ — ​ 40,033,395 ​ 11.6 ​ 3.1 Golien Ltd (6) 18,967,560 ​ — ​ 18,967,560 ​ 5.5 ​ 1.5 Notes: * Less than 1% of total ordinary shares on an as-converted basis. † For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ ​ ​ ​ % of total ​ ​ ​ Class A Class B Total ordinary ordinary shares on % of ​ ​ ordinary ordinary shares on an as- an as converted aggregate ​ ​ ​ Shares ​ Shares ​ converted basis basis ​ voting power † ​ Directors and Executive Officers: ​ ​ ​ ​ ​ ​ Jack Jiajia Huang (1) 61,441,740 ​ 45,925,744 ​ 107,367,484 ​ 30.5 % 40.5 % Ting Shu (2) 40,764,900 ​ 45,925,744 ​ 86,690,644 ​ 24.6 % 38.9 % Cindy Chun Tang * ​ — ​ * ​ * ​ * ​ Frank Lin (3) * ​ — ​ * ​ * ​ * ​ Jimmy Lai * ​ — ​ * ​ * ​ * ​ Xiaoguang Wu (4) * ​ — ​ * ​ * ​ * ​ All directors and executive officers as a group 67,470,480 ​ 45,925,744 ​ 113,396,224 ​ 32.2 % 41.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DCM Funds (5) 10,607,110 ​ 57,681,212 ​ 68,288,322 ​ 19.4 % 45.7 % Dasheng International Holdings Limited (2) 40,764,900 ​ 45,925,744 ​ 86,690,644 ​ 24.6 % 38.9 % Sequoia Capital China Investment Funds (6) 40,033,395 ​ — ​ 40,033,395 ​ 11.4 % 3.1 % Golien Ltd (7) 18,967,560 ​ — ​ 18,967,560 ​ 5.4 % 1.5 % 103 Table of Contents Notes: * Less than 1% of total ordinary shares on an as-converted basis. † For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
We enter into employment contracts with our full-time employees. For our full-time employees in countries and regions outside mainland China, the employment contracts we have with them contain confidentiality and non-compete provisions. For our full-time employees in mainland China, we also enter into stand-alone confidentiality and non-compete agreements with them.
For our full-time employees in mainland China, we also enter into stand-alone confidentiality and non-compete agreements with them.
Directors and Executive Officers Age Position/Title Jack Jiajia Huang ​ 39 ​ Founder, Chairman, Chief Executive Officer Ting Shu ​ 38 ​ Co-Founder, Director Cindy Chun Tang ​ 48 ​ Chief Financial Officer Frank Lin ​ 59 ​ Director Shengwen (Roy) Rong ​ 55 ​ Independent Director Xiaoguang Wu ​ 48 ​ Independent Director ​ Mr.
Directors and Executive Officers Age Position/Title Jack Jiajia Huang ​ 40 ​ Founder, Chairman, Chief Executive Officer Ting Shu ​ 39 ​ Co-Founder, Director Cindy Chun Tang ​ 49 ​ Chief Financial Officer Frank Lin ​ 60 ​ Director Jimmy Lai ​ 69 ​ Independent Director Xiaoguang Wu ​ 49 ​ Independent Director ​ Mr.
Shu worked in the enterprise risk services department of Deloitte in China. Prior to that, Ms. Shu co-founded Talk China with Mr. Jack Jiajia Huang in 2007. Ms. Shu received her master’s degree in language science from the University of Tokyo in 2010 and her bachelor’s degree in Japanese language from Tsinghua University in 2007. Mr.
Shu co-founded Talk China with Mr. Jack Jiajia Huang in 2007. Ms. Shu received her master’s degree in language science from the University of Tokyo in 2010 and her bachelor’s degree in Japanese language from Tsinghua University in 2007. Mr. Jack Jiajia Huang and Ms. Ting Shu are husband and wife. Ms.
Jack Jiajia Huang and Ms. Ting Shu are husband and wife. Ms. Cindy Chun Tang has served as our chief financial officer since October 2022, and served in roles of the finance director, senior finance director and vice president of finance since she joined our company in 2014. Prior to joining 51Talk, Ms.
Cindy Chun Tang has served as our chief financial officer since October 2022, and served in roles of the finance director, senior finance director and vice president of finance since she joined our company in 2014. Prior to joining 51Talk, Ms. Tang served as a senior financial analyst in Google’s Beijing office from 2007 to 2014. Previously, Ms.
Huang received his bachelor’s degree in Japanese language from Tsinghua University in 2007. In 2015, Mr. Huang was named a leading entrepreneur under 30 by Cyzone, an entrepreneur service platform in China. Ms. Ting Shu is our co-founder and has served as our director since our inception. From 2010 to 2012, Ms.
In 2015, Mr. Huang was named a leading entrepreneur under 30 by Cyzone, an entrepreneur service platform in China. Ms. Ting Shu is our co-founder and has served as our director since our inception. From 2010 to 2012, Ms. Shu worked in the enterprise risk services department of Deloitte in China. Prior to that, Ms.
(3) The business address of Xiaoguang Wu is Suite 2501, Shenzhen Venture Capital Mansion, Nanshan District, Shenzhen, Guangdong Province, People’s Republic of China.
(3) The business address of Frank Lin is 2420 Sand Hill Road, Suite 200, Menlo Park, CA 94025, United States. (4) The business address of Xiaoguang Wu is Suite 2501, Shenzhen Venture Capital Mansion, Nanshan District, Shenzhen, Guangdong Province, People’s Republic of China.
(1) Consists of (i) 30,390,321 Class B ordinary shares and 38,814,120 Class A ordinary shares in the form of ADSs held by Dasheng Global Limited, a company incorporated in the British Virgin Islands, (ii) 186,180 Class A ordinary shares in the form of ADS held by Jack Jiajia Huang, (iii) 274,980 Class A ordinary shares issuable to Jack Jiajia Huang upon exercise of options and vested from restricted share units within 60 days after February 29, 2024, (iv) 122,460 Class A ordinary shares in the form of ADSs held by Ting Shu, (v) 67,380 Class A ordinary shares issuable to Ting Shu upon the vesting of restricted share units within 60 days after February 22, 2024, and (vi) 15,535,423 Class B ordinary shares held by Dasheng Online Limited, a company incorporated in the British Virgin Islands.
(1) Consists of Represents (i) 7,297,560 Class A ordinary shares in the form of ADSs held by Jack Jiajia Huang, (ii) 39,639,075 Class A ordinary shares in the form of ADSs held by Dasheng Global Limited, a company incorporated in the British Virgin Islands, (iii) 275,000 Class A ordinary shares issuable to Dasheng Global Limited upon the vesting of restricted share units within 60 days after February 28, 2025, (iv) 4,652,580 Class A ordinary shares in the form of ADSs purchased by HH Talent Limited, a company incorporated in the British Virgin Islands, (v) 277,200 Class A ordinary shares in the form of ADSs held by Ting Shu, (vi) 67,380 Class A ordinary shares issuable to Ting Shu upon the vesting of restricted share units within 60 days after February 28, 2025, (vii) 30,390,321 Class B ordinary shares held by Dasheng Global Limited, and (viii) 15,535,423 Class B ordinary shares held by Dasheng Online Limited, a company incorporated in the British Virgin Islands.
The calculations in the table below are based on 345,240,297 ordinary shares outstanding as of February 29, 2024, comprising of 241,633,317 Class A ordinary shares (excluding 4,408,575 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercising or vesting of awards granted under the issuer’s share incentive plan) and 103,606,980 Class B ordinary shares. ​ 103 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 351,568,497 ordinary shares outstanding as of February 28, 2025, comprising of 247,961,517 Class A ordinary shares (excluding 3,780,375 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercising or vesting of awards granted under the issuer’s share incentive plan) and 103,606,980 Class B ordinary shares.
Ting Shu ​ * ​ ​ June 30, 2023 Approximately two years from the date of grant. Frank Lin ​ * ​ ​ July 1, 2022 Approximately two years from the date of grant. Shengwen (Roy) Rong ​ * ​ ​ June 30, 2023 Approximately two years from the date of grant.
Ting Shu ​ * ​ ​ June 30, 2023 Approximately two years from the date of grant. Jimmy Lai ​ * ​ ​ June 1, 2024 Approximately two years from the date of grant. Xiaoguang Wu ​ ​ * ​ ​ July 1, 2024 ​ Approximately two years from the date of grant.
Wu has served as a senior management advisor for Tencent Inc. since June 2015. Mr. Wu has extensive experience in product research and development, product planning, product operation and marketing internet businesses. Mr. Wu received his EMBA from China Europe International Business School (CEIBS) in 2008 and his bachelor of science degree in weather dynamics from Nanjing University in 1996.
Wu has served as a senior management advisor for Tencent Inc. since June 2015. Mr. Wu has extensive experience in product research and development, product planning, product operation and marketing internet businesses. Mr.
Mr. Frank Lin has served as our director since June 2013. Mr. Lin is a general partner of DCM, a technology venture capital firm and a director of Kuaishou Technology, a leading content community and social platform in China listed on the Hong Kong Stock Exchange. Prior to joining DCM in 2006, Mr.
Mr. Frank Lin has served as our director since June 2013. Mr. Lin is a general partner of DCM, a technology venture capital firm. Prior to joining DCM in 2006, Mr. Lin was the chief operating officer of SINA Corporation, a Nasdaq - listed company.
Lin currently serves on the board of directors of various DCM portfolio companies, including Tuniu Corporation, GigaCloud Technology Inc. and Quantasing Group Limited, which are Nasdaq-listed companies, Vipshop Holdings Limited, an NYSE-listed company, and Kuaishou Technology and YSB Inc., which are Hong Kong Stock Exchange listed companies. Mr.
Lin currently serves on the board of directors of various DCM portfolio companies, including Tuniu Corporation and QuantaSing Group Limited, which are Nasdaq - listed companies, and Vipshop Holdings Limited, an NYSE - listed company. Mr. Lin received an MBA degree from Stanford University and a bachelor’s degree in engineering from Dartmouth College. ​ 95 Table of Contents Mr.
The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
We have determined that Jimmy Lai and Xiaoguang Wu qualify as “audit committee financial experts”. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Rong received his bachelor’s degree in international finance from Renmin University in 1991, master’s degree in accounting from West Virginia University in 1996, and MBA degree from University of Chicago Booth School of Business in 2000. Mr. Rong is a Certified Public Accountant in the United States. Mr. Xiaoguang Wu has served as our independent director since June 2016. Mr.
Lai received his MBA from the University of Texas at Dallas and his bachelor’s degree in statistics from the National Cheng Kung University in Taiwan. Mr. Lai is a certified public accountant licensed in the State of Texas. Mr. Xiaoguang Wu has served as our independent director since June 2016. Mr.
B. Compensation For the fiscal year ended December 31, 2023, we paid an aggregate of approximately US$413.0 thousand in cash to our executive officers and our non-executive directors.
Wu received his EMBA from China Europe International Business School (CEIBS) in 2008 and his bachelor of science degree in weather dynamics from Nanjing University in 1996. B. Compensation For the fiscal year ended December 31, 2024, we paid an aggregate of approximately US$387.1 thousand in cash to our executive officers and our non - executive directors.
On January 1, 2024, the maximum aggregate number of shares which may be issued pursuant to all awards under the 2016 Plan was increased to 42,997,818 Class A ordinary shares. As of February 29, 2024, 9,272,714 restricted share units have been granted and are outstanding. The following paragraphs summarize the terms of the 2016 Plan. Types of Awards .
As of February 28, 2025, options to purchase an aggregate number of 49,980 Class A ordinary shares have been granted and are outstanding, and 9,359,363 restricted share units have been granted and are outstanding. The following paragraphs summarize the terms of the 2016 Plan. Types of Awards .
We had a total of 616, 171 and 310 full-time employees as of December 31, 2021, 2022 and 2023, respectively. As of December 31, 2023, we had approximately 34 employees in research and development, 166 employees in sales and marketing, 54 employees in management and administration and 56 employees in free trial tutors and teaching support.
As of December 31, 2024, we had approximately 28 employees in research and development, 289 employees in sales and marketing, 140 employees in management and administration, 71 employees in free trial tutors and teaching support and 11 employees in learning partner.
Total ​ 3,845,160 ​ ​ ​ * The aggregate number of ordinary shares that will be vested from restricted share units is less than 1% of our total issued and outstanding ordinary shares. As of February 29, 2024, other current employees as a group held 5,427,554 restricted share units under the 2014 and the 2016 Plan. C.
Cindy Chun Tang ​ ​ * ​ ​ March 30, 2024 ​ Approximately two years from the date of grant. Total ​ 2,496,060 ​ ​ ​ * The aggregate number of ordinary shares that will be vested from restricted share units is less than 1% of our total issued and outstanding ordinary shares.
The settlors of the Trust are Mr. Huang and Ms. Shu. Mr. Huang, Ms. Shu and their family members are beneficiaries under the Trust. ​ 104 Table of Contents (2) The business address of Frank Lin is 2420 Sand Hill Road, Suite 200, Menlo Park, CA 94025, United States.
Huang and Ms. Shu. Mr. Huang, Ms. Shu and their family members are beneficiaries under TB Family Trust. The settlor of HH Talent Trust is Mr.
Removed
Lin received an MBA degree from Stanford University and a bachelor’s degree in engineering from Dartmouth College. ​ 95 Table of Contents Mr. Shengwen (Roy) Rong has served as our independent director since May 2021. Mr. Rong has over two decades of experience in the global financial industry.
Added
Jimmy Lai has served as our independent director since June 2024. Mr. Lai also serves as an independent director of several NYSE - listed companies, including Zepp Corporation (NYSE: ZEPP), FinVolution Group (NYSE: FINV) and Youdao, Inc (NYSE: DAO). Mr. Lai served as our chief financial officer from June 2015 to December 2018. Prior to joining us in 2015, Mr.
Removed
He currently also serves as an independent director of a number of companies, including Vision Deal HK Acquisition Corp. (SEHK: 7827), TCTM Kids IT Education Inc. (NASDAQ: TCTM), Cheche Group Inc. (NASDAQ: CCG), X Financial (NYSE: XYF), Qudian Inc. (NYSE: QD) and MOGU Inc. (NYSE: MOGU). From February 2017 to September 2018, Mr.
Added
Lai served as the chief financial officer for several companies, including Chukong Technologies Corp., a leading mobile entertainment platform company in China, from 2013 to 2015, Gamewave Corporation, a leading webgame company in China, from 2011 to 2013, Daqo New Energy Corp., an NYSE - listed company and a leading polysilicon manufacturer based in China, from 2009 to 2011, Linktone Ltd., a Nasdaq - listed company and a leading provider of wireless interactive entertainment services to consumers in China, from 2008 to 2009 and Palm Commerce Holdings, a leading information technology solution provider for the China lottery industry, from 2006 to 2008.
Removed
Rong served as the senior vice president and chief financial officer at Yixia Technology Co., Ltd.
Added
Prior to that, Mr. Lai served as an associate vice president of investor relations at Semiconductor Manufacturing International Corporation, a company listed on the NYSE and the Main Board of the Hong Kong Stock Exchange, from 2002 to 2006, and as a controller and director of financial planning at AMX Corporation from 1997 to 2001. Mr.
Removed
Prior to that, he served as the chief financial officer at Quixey, Inc. from 2015 to 2016, the chief financial officer at UCWeb from 2012 to 2014, and the chief financial officer at Country Style Cooking Restaurant Chain Co., Ltd, an NYSE-listed company, from 2010 to 2012. Mr.
Added
Wu currently serves on the board of directors of LexinFintech Holdings Ltd., a Nasdaq - listed company, and Hiaidilao International Holding Ltd., a Hong Kong Stock Exchange listed company and a Nasdaq - listed company. Mr.
Removed
Xiaoguang Wu ​ ​ * ​ ​ July 1, 2022 ​ Approximately two years from the date of grant. Cindy Chun Tang ​ ​ * ​ ​ June 30, 2020 ​ Approximately four years from the date of grant.
Added
On January 1, 2025, the maximum aggregate number of shares which may be issued pursuant to all awards under the 2016 Plan was increased to 48,259,734 Class A ordinary shares.
Removed
We have determined that Shengwen (Roy) Rong qualifies as an “audit committee financial expert.” Mr.
Added
As of February 28, 2025, other current as a group held options to purchase 49,980 Class A ordinary shares under the 2016 Plan, with exercise prices US$0.2610 per Class A ordinary share. As of February 28, 2025, other current employees as a group held 6,863,303 restricted share units under the 2016 Plan. C.
Removed
Shengwen (Roy) Rong currently also serves on the audit committees of a number of companies including Vision Deal HK Acquisition Corp, a HK-listed company, TCTM Kids IT Education Inc. a Nasdaq-listed company, Cheche Group Inc., a Nasdaq-listed company, X Financial, a NYSE-listed company, Qudian Inc., a NYSE-listed company, and MOGU Inc., a NYSE-listed company.
Added
We had a total of 171, 310 and 539 full - time employees as of December 31, 2022, 2023 and 2024, respectively.
Removed
Our board of directors has determined that the simultaneous service of Mr. Shengwen (Roy) Rong on the audit committees of these public companies would not impair the ability of Mr. Shengwen (Roy) Rong to effectively serve on the audit committee of our board of directors.
Added
As of December 31, 2024, we had 492 outsourced personnel mainly performing sales and marketing functions for us. We enter into employment contracts with our full-time employees. For our full-time employees in countries and regions outside mainland China, the employment contracts we have with them contain confidentiality and non-compete provisions.
Removed
As of December 31, 2023, we had 501 outsourced personnel mainly performing sales and marketing functions for us. The number of our employees changed significantly from 2021 to 2022, mainly attributable to the divestiture of the China Mainland Business, during which a significant number of our teaching staff and other staff ceased to be our employees.
Added
Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Added
Box 2221, Road Town, Tortola, British Virgin Islands. Each of Dasheng Global Limited and Dasheng Online Limited is wholly beneficially owned by Dasheng International Holdings Limited, which is in turn wholly owned by TB Family Trust, for which TMF (Cayman) Ltd. acts as the trustee (the “Trustee”).
Added
Huang. ​ 104 Table of Contents (2) Represents (i) 186,180 Class A ordinary shares in the form of ADSs held by Jack Jiajia Huang, (ii) 39,639,075 Class A ordinary shares in the form of ADSs held by Dasheng Global Limited, (iii) 275,000 Class A ordinary shares issuable to Dasheng Global Limited upon the vesting of restricted share units within 60 days after February 28, 2025, (iv) 277,200 Class A ordinary shares in the form of ADSs held by Ting Shu, (v) 67,380 Class A ordinary shares issuable to Ting Shu upon the vesting of restricted share units within 60 days after February 28, 2025, (vi) 30,390,321 Class B ordinary shares held by Dasheng Global Limited, and (vii) 15,535,423 Class B ordinary shares held by Dasheng Online Limited.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

3 edited+0 added−0 removed4 unchanged
Under the cooperation, 51Talk English International Limited provides agent services to Dasheng Holding (HK) Limited, its subsidiaries and the consolidated VIEs. In 2023, our company also entered into a series of service agreements, with Dasheng Holding (HK) Limited and its subsidiaries.
Under the cooperation, 51Talk English International Limited provides agent services to Dasheng Holding (HK) Limited, its subsidiaries and the consolidated VIEs. In 2023 and 2024, our company also entered into a series of service agreements, with Dasheng Holding (HK) Limited and its subsidiaries.
For the year ended December 31, 2023, the fair value of agent service provided by our company is estimated to be US$0.1 million, which are recognized as net revenues in the consolidated statement of comprehensive income/ (loss) of our company.
For the year ended December 31, 2024, the fair value of agent service provided by our company is estimated to be US$0.1 million, which are recognized as net revenues in the consolidated statement of comprehensive income/ (loss) of our company.
For the year ended December 31, 2023, the amount of product development labor service received from Dasheng Holding (HK) Limited and its subsidiaries is estimated to be US$0.9 million, and the amount of internet service received from Dasheng Holding (HK) Limited and its subsidiaries is estimated to be US$0.2 million. Employment Agreements and Indemnification Agreements See “Item 6.
For the year ended December 31, 2024, the amount of product development labor service received from Dasheng Holding (HK) Limited and its subsidiaries is estimated to be US$0.6 million, and the amount of internet service received from Dasheng Holding (HK) Limited and its subsidiaries is estimated to be US$0.3 million. Employment Agreements and Indemnification Agreements See “Item 6.

Other COE 10-K year-over-year comparisons