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What changed in MicroCloud Hologram Inc.'s 20-F — 2024 vs 2025

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Paragraph-level year-over-year comparison of MicroCloud Hologram Inc.'s 2024 and 2025 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+257 added−279 removedSource: 20-F (2026-03-27) vs 20-F (2025-03-21)

Top changes in MicroCloud Hologram Inc.'s 2025 20-F

257 paragraphs added · 279 removed · 197 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

79 edited+21 added−32 removed459 unchanged
Biggest changeOn March 27, 2023, MOF and SAT further jointly issued Cai Shui 2023 No. 6,This clarified that from January 1, 2023 to December 31, 2024, eligible small enterprises whose RMB 1,000,000 of annual taxable income is shall be included in the taxable income amount at a reduced rate of 25%, and the enterprise income tax shall be paid at a tax rate of 20% (i.e., effective rate is 5%).From January 1, 2022 to December 31, 2024, and the income between RMB 1,000,000 and RMB 3,000,000 is shall be included in the taxable income amount at a reduced rate of 25%, and the enterprise income tax shall be paid at a tax rate of 20% (i.e., effective rate is 5%).For the years ended December 31, 2022, 2023 and 2024, Shenzhen Yushian, Yichang Ji Yue and BeiJing Ji Yue were eligible to employ this policy.
Biggest changeOn March 27, 2023, MOF and SAT further jointly issued Cai Shui 2023 No. 6,This clarified that from January 1, 2023 to December 31, 2027, eligible small enterprises whose RMB 1,000,000 of annual taxable income is shall be included in the taxable income amount at a reduced rate of 25%, and the enterprise income tax shall be paid at a tax rate of 20% (i.e., effective rate is 5%).
Many of our customers outside of the automotive industry are still in the testing and development phases and we cannot be certain that they will commercialize products or systems with our LiDAR products or at all. We cannot be certain that LiDAR will be sold into these markets, or any market outside of automotive market, at scale.
Many of our customers outside of the automotive industry are still in the testing and development phases, and we cannot be certain that they will commercialize products or systems with our LiDAR products or at all. We cannot be certain that LiDAR will be sold into these markets, or any market outside of the automotive market, at scale.
The rates we are able to charge for services and solutions are affected by a number of factors, including: ● general economic and political conditions; ● the competitive environment in our industry; ● market price of our service and products provided; ● our bargaining power when entering into contract with customers; ● our customers’ preferences and desire to reduce their costs; and ● our ability to accurately estimate, monitor and manage our contract revenues, costs of sales, profit margins and cash flows over the full contract period.
The rates we are able to charge for services and solutions are affected by a number of factors, including: ● general economic and political conditions; ● the competitive environment in our industry; ● market price of our service and products provided; ● our bargaining power when entering into a contract with customers; ● our customers’ preferences and desire to reduce their costs; and ● our ability to accurately estimate, monitor and manage our contract revenues, costs of sales, profit margins and cash flows over the full contract period.
Under PRC laws, Shanghai Mengyun Shenzhen Mengyun and Shenzhen Bowei shall satisfy all the conditions stipulated under the Administrative Measures for Recognition of High and New Technology Enterprises and relevant guidance, including relevant financial, research and development thresholds, manufacturing and otherwise requirements during the three-year period.
Under PRC laws, Shanghai Mengyun and Shenzhen Bowei shall satisfy all the conditions stipulated under the Administrative Measures for Recognition of High and New Technology Enterprises and relevant guidance, including relevant financial, research and development thresholds, manufacturing and otherwise requirements during the three-year period.
We cannot assure that Shanghai Mengyun Shenzhen Mengyun and Shenzhen Bowei may maintain the High and New Technology Enterprise Certification during the next three-year period and such preferential income tax treatment could be revoked if Shanghai Mengyun Shenzhen Mengyun and Shenzhen Bowei are deemed unqualified to receive such tax benefits.
We cannot assure that Shanghai Mengyun and Shenzhen Bowei may maintain the High and New Technology Enterprise Certification during the next three-year period and such preferential income tax treatment could be revoked if Shanghai Mengyun and Shenzhen Bowei are deemed unqualified to receive such tax benefits.
There is also no guarantee that Shanghai Mengyun Shenzhen Mengyun and Shenzhen Bowei will receive a new High and New Technology Enterprise Certification upon expiration of the three-year preferential treatment period. Accordingly, our financial condition and operation may be adversely affected due to such changes.
There is also no guarantee that Shanghai Mengyun and Shenzhen Bowei will receive a new High and New Technology Enterprise Certification upon expiration of the three-year preferential treatment period. Accordingly, our financial condition and operation may be adversely affected due to such changes.
In addition, most of our senior executive officers reside within China for a significant portion of the time and most are PRC nationals. Substantially all of the assets of these persons are located outside the United States.
Most of our assets are located in China, and substantially all of our assets are located outside of the United States. In addition, most of our senior executive officers reside within China for a significant portion of the time and most are PRC nationals. Substantially all of the assets of these persons are located outside the United States.
Our Ordinary shares and Public Warrants are listed on the Nasdaq Stock Market LLC (“NASDAQ”) under the trading symbols “HOLO” and “HOLOW” respectively. MicroCloud is not an operating company, but a holding company incorporated in the Cayman Islands. MicroCloud operates its business through its subsidiaries in the PRC in which it owns equity interests.
Our Class A Ordinary shares and Public Warrants are listed on the Nasdaq Stock Market LLC (“NASDAQ”) under the trading symbols “HOLO” and “HOLOW” respectively. MicroCloud is not an operating company, but a holding company incorporated in the Cayman Islands. MicroCloud operates its business through its subsidiaries in the PRC in which it owns equity interests.
We believe that the protection of trade secrets, patents, trademarks and domain names is key to our success. In particular, we must maintain, protect, and strengthen our intellectual property rights related to our holographic technical services. Its intellectual property is essential to expanding the population of individuals and corporate users as well as increasing their trust in our services.
We believe that the protection of trade secrets, patents, trademarks and domain names is key to our success. In particular, we must maintain, protect, and strengthen our intellectual property rights related to our holographic technical services. Our intellectual property is essential to expanding the population of individuals and corporate users as well as increasing their trust in our services.
If we fail to win a large number of models from one or more automotive OEMs or their suppliers, our business will be materially adversely affected. We have material customer concentration, with a limited number of customers accounting for a material portion of our revenues for the years ended December 31, 2023 and 2024.
If we fail to win a large number of models from one or more automotive OEMs or their suppliers, our business will be materially adversely affected. We have material customer concentration, with a limited number of customers accounting for a material portion of our revenues for the years ended December 31, 2024 and 2025.
In the course of auditing our consolidated financial statements for the years ended December 31, 2023 and 2024, we had identified certain 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 (“PCAOB”). As defined in the standards established by the U.S.
In the course of auditing our consolidated financial statements for the years ended December 31, 2024 and 2025, we had identified certain 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 (“PCAOB”). As defined in the standards established by the U.S.
Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the promulgation of new rules and explanations and interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties. 20 Table of Contents In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general.
Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the promulgation of new rules and explanations and interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties. 20 Table of Contents In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general.
The following diagram illustrates our corporate structure as of December 31, 2024, including our major subsidiaries. 1 Table of Contents Permission Required from the PRC Authorities for Our Operations We conduct our business primarily through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations.
The following diagram illustrates our corporate structure as of December 31, 2025, including our major subsidiaries. 1 Table of Contents Permission Required from the PRC Authorities for Our Operations We conduct our business primarily through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations.
For fiscal year ended December 31, 2024, we are exempted from such requirement since we qualify as an “emerging growth company” pursuant to the JOBS Act and are eligible to take advantage of certain exemptions, including the aforementioned one.
For fiscal year ended December 31, 2025, we are exempted from such requirement since we qualify as an “emerging growth company” pursuant to the JOBS Act and are eligible to take advantage of certain exemptions, including the aforementioned one.
Our current auditor, Assentsure PAC, as an auditor of companies that is a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
Our current auditor, Assentsure PAC, as an auditor of the company that is a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
As a result, the tax laws in the countries in which we and our affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely affect us and our affiliates. 26 Table of Contents We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.
As a result, the tax laws in the countries in which we and our affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely affect us and our affiliates. We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.
Therefore, our historical results are not predictive of our future financial performance. 9 Table of Contents If we fail to attract, retain and engage appropriately-skilled personnel, including senior management and technology professionals, our business may be harmed. Our future success depends on the retention of highly skilled executives and employees. Competition for well-qualified and skilled employees is intense.
Therefore, our historical results are not predictive of our future financial performance. If we fail to attract, retain and engage appropriately-skilled personnel, including senior management and technology professionals, our business may be harmed. Our future success depends on the retention of highly skilled executives and employees. Competition for well-qualified and skilled employees is intense.
(formerly known as Golden Path Acquisition Corporation) (“Golden Path” or “the Company”), a Cayman Islands exempted company, entered into the Merger Agreement dated September 10, 2021 (as amended on August 5, 2022 and August 10, 2022), by and among Golden Path, Golden Path Merger Sub, a Cayman Islands exempted company incorporated for the purpose of effectuating the business combination, and MC, a Cayman Islands exempted company.
(formerly known as Golden Path Acquisition Corporation) (“Golden Path” or “the Company”), a Cayman Islands exempted company, entered into the Merger Agreement dated September 10, 2021 (as amended on August 5, 2022 and August 10, 2022), by and among Golden Path, Golden Path Merger Sub, a Cayman Islands exempted company incorporated for the purpose of effectuating the business combination, and MC Hologram Inc.(“MC”), a Cayman Islands exempted company.
According to SAT Bulletin 7, “PRC taxable assets” include assets attributed to an establishment in China, immovable properties located in China, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being a non-PRC resident enterprise, would be subject to PRC enterprise income taxes.
According to SAT Bulletin 7, “PRC taxable assets” include assets attributed to an establishment in China, 26 Table of Contents immovable properties located in China, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being a non-PRC resident enterprise, would be subject to PRC enterprise income taxes.
Production of these complex components may require extremely high cost, which may reduce our profit margins or increase our losses. We may need to raise additional capital in the future in order to execute our business plan, which may not be available on terms acceptable to us, or at all.
Production of these complex components may require extremely high cost, which may reduce our profit margins or increase our losses. 7 Table of Contents We may need to raise additional capital in the future in order to execute our business plan, which may not be available on terms acceptable to us, or at all.
Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. 13 Table of Contents We may be materially and adversely affected by the complexity, uncertainties and changes in the PRC laws and regulations governing Internet-related industries and companies.
Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. We may be materially and adversely affected by the complexity, uncertainties and changes in the PRC laws and regulations governing Internet-related industries and companies.
Although the direct impact of the current international trade tension, and any further escalation, on the holographic technology industry in China remains uncertain, the negative impact on general economic, political, and social conditions may still adversely affect our business, financial condition, and results of operations. 18 Table of Contents Furthermore, as part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular China ’ s, significant developments have occurred regarding the Holding Foreign Companies Accountable Act (HFCA Act).On December 18, 2020, the former U.S.
Although the direct impact of the current international trade tension, and any further escalation, on the holographic technology industry in China remains uncertain, the negative impact on general economic, political, and social conditions may still adversely affect our business, financial condition, and results of operations. 18 Table of Contents Furthermore, as part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular China’s, significant developments have occurred regarding the Holding Foreign Companies Accountable Act (HFCA Act).
If we are unable to generate sufficient production cost savings in the future to offset price reductions, our profitability would be adversely affected. We have a limited operating history, and we may not be able to sustain rapid growth, effectively manage growth or implement business strategies. We have a limited operating history.
If we are unable to generate sufficient production cost savings in the future to offset price reductions, our profitability would be adversely affected. 9 Table of Contents We have a limited operating history, and we may not be able to sustain rapid growth, effectively manage growth or implement business strategies. We have a limited operating history.
Failure to protect our intellectual property rights may have a significant adverse impact on our business, financial position and operating performance. 10 Table of Contents We may be vulnerable to intellectual property infringement charges filed by other companies.
Failure to protect our intellectual property rights may have a significant adverse impact on our business, financial position and operating performance. We may be vulnerable to intellectual property infringement charges filed by other companies.
It required the SEC to propose rules within 90 days after its enactment to prohibit securities of any registrant from being listed on any of the U.S. securities exchanges or traded “ over the counter ” if the auditor of the registrant ’ s financial statements is not subject to the PCAOB inspection for three consecutive years after the law becomes effective.
It required the SEC to propose rules within 90 days after its enactment to prohibit securities of any registrant from being listed on any of the U.S. securities exchanges or traded “over the counter” if the auditor of the registrant’s financial statements is not subject to the PCAOB inspection for three consecutive years after the law becomes effective.
Public Company Accounting Oversight Board, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
Public Company Accounting Oversight Board, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. We did not maintain an effective control environment.
In addition, according to H.R.2610, an emerging growth company is required to submit profit and loss statements from the previous 2 years, rather than the previous 3 years as under current law, when submitting registration statements to the SEC.
In addition, according to the JOBS Act, an emerging growth company is required to submit profit and loss statements from the previous 2 years, rather than the previous 3 years as under current law, when submitting registration statements to the SEC.
Pursuant to the Merger Agreement, MC merged with the Golden Path Merger Sub and survive the merger and continue as the surviving company and a wholly owned subsidiary of Golden Path and continue its business operations (the “ Merger ” , and, collectively with the other transactions described in the Merger Agreement, the “ Business Combination ” ).
Pursuant to the Merger Agreement, MC merged with the Golden Path Merger Sub and survive the merger and continue as the surviving company and a wholly owned subsidiary of Golden Path and continue its business operations (the “Merger”, and, collectively with the other transactions described in the Merger Agreement, the “Business Combination”).
We and our subsidiaries, also conduct business with a limited number of vendors. For the years ended December 31, 2023 and 2024, 62.6% and 32.0% of our total purchases were from three and two vendors, respectively.
We and our subsidiaries also conduct business with a limited number of vendors. For the years ended December 31, 2024 and 2025, 32.0% and 52.0% of our total purchases were from two and three vendors, respectively.
Shenzhen Bowei obtained the “high-tech enterprise” tax status in December 2021, which reduced its statutory income tax rate to 15% from January 2021 and further renewed in December 2024, which reduced its statutory income tax rate to 15% from January 2021to December 2026.
Shanghai Mengyun obtained the “high-tech enterprise” tax status in October 2017 and further renewed in December 2023, which reduced its statutory income tax rate to 15% from January 2017 to December 2026.Shenzhen Bowei obtained the “high-tech enterprise” tax status in December 2021, which reduced its statutory income tax rate to 15% from January 2021 and further renewed in December 2024, which reduced its statutory income tax rate to 15% from January 2021to December 2026.
Any uninsured business disruption, litigation or legal proceedings or natural disasters, such as epidemics, pandemics or earthquakes, or other events beyond our control could result in substantial costs and the diversion of our management’s attention.
Any uninsured or underinsured business disruption, litigation, legal proceedings, or natural disasters such as epidemics, pandemics, or earthquakes could result in substantial costs and the diversion of our management’s attention.
We face risks inherent in handling and protecting large volume of data. including: ● protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees; ● addressing concerns related to privacy and sharing, safety, security and other factors; and ● complying with applicable laws, rules and regulations relating to the collection, use, storage, transfer, disclosure and security of personal information, including any requests from regulatory and government authorities relating to this data. 14 Table of Contents Governments around the world, including the PRC government, have enacted or are considering legislation related to online businesses.
We face risks inherent in handling and protecting large volume of data. including: ● protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees; ● addressing concerns related to privacy and sharing, safety, security and other factors; and ● complying with applicable laws, rules and regulations relating to the collection, use, storage, transfer, disclosure and security of personal information, including any requests from regulatory and government authorities relating to this data.
If we are deemed a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. holder of our Ordinary shares, rights or warrants, the U.S. holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception.
If we are deemed a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. holder of our ordinary shares, rights or warrants, the U.S. holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements.
We use third-party services and technologies in connection with our business, and any disruption to the provision of these services and technologies to us could result in adverse publicity and a slowdown in the growth of our users, which could materially and adversely affect our business, financial condition and results of operations.
Such deceleration may adversely affect our ability to continue to expand our user base. 12 Table of Contents We use third-party services and technologies in connection with our business, and any disruption to the provision of these services and technologies to us could result in adverse publicity and a slowdown in the growth of our users, which could materially and adversely affect our business, financial condition and results of operations.
Also, given recent statements by the PRC government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China- based issuers, that any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. 34 Table of Contents Risk Factors Relating to an Investment in our Ordinary shares We are a Cayman Islands company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than under U.S. law, you may have less protection for your shareholder rights than you would under U.S. law.
Also, given recent statements by the PRC government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China- based issuers, that any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. 34 Table of Contents Risk Factors Relating to an Investment in our Ordinary shares 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.
For the year ended December 31, 2024, our five largest customers in aggregate accounted for approximately 41.6% of our revenues, and our largest customer accounted for approximately 13.4% of our revenues. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers.
For the year ended December 31, 2025, our five largest customers in aggregate accounted for approximately 48.9% of our revenues, and our largest customer accounted for approximately 17.1% of our revenues. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers.
The first material weakness was that we did not maintain an effective control environment. Specifically, We lacked sufficient resources regarding financial reporting and accounting personnel with an understanding of U.S. GAAP, in particular, to address complex U.S. GAAP technical accounting issues, related disclosures in accordance with U.S. GAAP, and financial reporting requirements set forth by the SEC.
Specifically, We lacked sufficient resources regarding financial reporting and accounting personnel with an understanding of U.S. GAAP, in particular, to address complex U.S. GAAP technical accounting issues, related disclosures in accordance with U.S. GAAP, and financial reporting requirements set forth by the SEC.
Long development cycles and product cancellations or postponements may adversely affect our business, results of operations and financial condition. 8 Table of Contents The complexity of our products could result in unforeseen delays or expenses from undetected defects, errors or bugs in hardware or software which could reduce the market adoption of our new products, damage our reputation with current or prospective customers, result in product returns or expose us to product liability and other claims and adversely affect our operating costs.
The complexity of our products could result in unforeseen delays or expenses from undetected defects, errors or bugs in hardware or software which could reduce the market adoption of our new products, damage our reputation with current or prospective customers, result in product returns or expose us to product liability and other claims and adversely affect our operating costs.
Moreover, the Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress, which became effective in 2008, requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the Ministry of Commerce before they can be completed.
Moreover, the Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress, which became effective in 2008 and was sdignificanly amended effective Augst 2022, requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the State Administration for Market Regulation (SAMR) before they can be completed.
The competitive environment in the holographic technology service industry and related industries in the PRC affects our ability to obtain favorable pricing in a number of ways, any of which could have a material negative impact on our results of operations.
The competitive environment in the holographic technology services industry and related industries in the PRC affects our ability to obtain favorable pricing in a number of ways, any of which could materially and adversely affect our results of operations.
They also had to provide certain additional disclosures in their annual reports.Notably, on December 15, 2022, the PCAOB announced it received “ complete access to inspect and investigate ” audit firms in China and Hong Kong. This development was a significant step as it potentially averted the delisting of hundreds of Chinese public companies from U.S. exchanges.
Notably, on December 15, 2022, the PCAOB announced it received “complete access to inspect and investigate” audit firms in China and Hong Kong. This development was a significant step as it potentially averted the delisting of hundreds of Chinese public companies from U.S. exchanges.
The OEMs and their suppliers have been developing applications in the autonomous driving and ADAS industries over the years. These OEMs manufacturers and suppliers perform extensive testing or identification processes before ordering a large number of LiDAR products, as such products would function as part of a larger system or platform and must comply with certain other specifications.
These OEMs manufacturers and suppliers perform extensive testing or identification processes before ordering a large number of LiDAR products, as such products would function as part of a larger system or platform and must comply with certain other specifications.
U.S. holders are urged to consult their own tax advisors regarding the possible application of the PFIC rules to holders of our Ordinary shares, rights and warrants. For a more detailed explanation of the tax consequences of PFIC classification to U.S. holders.
U.S. holders are urged to consult their own tax advisors regarding the possible application of the PFIC rules to holders of our Ordinary shares, rights and warrants. 40 Table of Contents
Third parties may register trademarks or domain names or purchase internet search engine keywords that are similar to our trademarks, brand or websites, or misappropriate our data and copy our platform, all of which could cause confusion to our users, divert online customers away from our products and services or harm our reputation.
It may then become easier for third parties to compete with us by copying functionality, which could adversely affect our results of operations. 11 Table of Contents Third parties may register trademarks or domain names or purchase internet search engine keywords that are similar to our trademarks, brand or websites, or misappropriate our data and copy our platform, all of which could cause confusion to our users, divert online customers away from our products and services or harm our reputation.
Even if we initially meet the listing requirements and other applicable rules of Nasdaq, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy Nasdaq criteria for maintaining our listing, our securities could be subject to delisting.
Even if we initially meet the listing requirements and other applicable rules of Nasdaq, we may not be able to continue to satisfy these requirements and applicable rules.
If we were to be held liable for uninsured losses or amounts and claims for insured losses exceeding the limits of our insurance coverage, then our business, financial condition, and results of operations may be materially and adversely affected as a result. 12 Table of Contents We may be subject to claims, disputes or legal proceedings in the ordinary course of our business.
If we are held liable for uninsured losses, or if claims exceed the limits of any insurance coverage we might possess, our business, financial condition, and results of operations may be materially and adversely affected. We may be subject to claims, disputes or legal proceedings in the ordinary course of our business.
Commission - identified issuers were required to submit documentation to the SEC establishing that, if true, it is not owned or controlled by a governmental entity in the public accounting firm ’ s foreign jurisdiction.
Commission - identified issuers were required to submit documentation to the SEC establishing that, if true, it is not owned or controlled by a governmental entity in the public accounting firm’s foreign jurisdiction. They also had to provide certain additional disclosures in their annual reports.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as shareholders of a U.S. public company. Certain judgments obtained against us by our shareholders may not be enforceable.
As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, users of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.
Also, for companies that have carried out a reverse stock split (i.e., share consolidation) in the past year and still fail to meet the minimum trading stock price requirement, they will no longer be entitled to any compliance period, and Nasdaq will immediately issue a delisting decision. 37 Table of Contents If Nasdaq does not list our securities, or subsequently delists our securities from trading, we could face significant consequences, including: ● a limited availability for market quotations for our securities; ● reduced liquidity with respect to our securities; ● a determination that our Ordinary shares is a “penny stock,” which will require brokers trading in our Ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary shares; ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
If Nasdaq does not list our securities, or subsequently delists our securities from trading, we could face significant consequences, including: ● a limited availability for market quotations for our securities; ● reduced liquidity with respect to our securities; ● a determination that our Ordinary shares is a “penny stock,” which will require brokers trading in our Ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary shares; ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
These problems may also result in claims against us by our customers or others. our reputation or brand may be damaged as a result of these problems, and customers may be reluctant to buy our products, which could adversely affect our ability to retain existing customers and attract new customers.
Our reputation or brand may be damaged as a result of these problems, and customers may be reluctant to buy our products, which could adversely affect our ability to retain existing customers and attract new customers. Failure in cost control may negatively impact the market adoption and profitability of our products.
The period of time from a “design win” to implementation is long, and we are subject to the risks of cancellation or postponement of the contract or unsuccessful implementation Prospective customers, including those in the automotive industry, generally must make significant commitments of resources to test and validate our products and confirm that they can integrate with other technologies before including them in any particular system, product or model.
In addition, we cannot assure you that performance by third-party vendors will be satisfactory, and if they under-perform, it will have a material adverse effect on the cash flows or profitability of our business. 8 Table of Contents The period of time from a “design win” to implementation is long, and we are subject to the risks of cancellation or postponement of the contract or unsuccessful implementation Prospective customers, including those in the automotive industry, generally must make significant commitments of resources to test and validate our products and confirm that they can integrate with other technologies before including them in any particular system, product or model.
Further, our revenue could be less than forecasted if the system, product or vehicle model that includes our LiDAR products is unsuccessful, including for reasons unrelated to our technology.
Further, our revenue could be less than forecasted if the system, product or vehicle model that includes our LiDAR products is unsuccessful, including for reasons unrelated to our technology. Long development cycles and product cancellations or postponements may adversely affect our business, results of operations and financial condition.
We are a company incorporated under the laws of the Cayman Islands. We conduct most of our operations in China and substantially all of our operations outside of the United States. Most of our assets are located in China, and substantially all of our assets are located outside of the United States.
Certain judgments obtained against us by our shareholders may not be enforceable. We are a company incorporated under the laws of the Cayman Islands. We conduct most of our operations in China and substantially all of our operations outside of the United States.
Negative publicity concerning could be related to a wide variety of matters, including: ● alleged misconduct or other improper activities committed by our shareholders, affiliates, directors, officers and other employees; ● false or malicious allegations or rumors about us or our shareholders, affiliates, directors, officers, and other employees; ● user complaints about the quality of our products and services; ● copyright or patent infringements involving us and contents offered on our platforms; and ● governmental and regulatory investigations or penalties resulting from our failure to comply with applicable laws and regulations.
Negative publicity concerning our company could be related to a wide variety of matters, including: ● alleged misconduct or other improper activities committed by our shareholders, affiliates, directors, officers and other employees; ● false or malicious allegations or rumors about us or our shareholders, affiliates, directors, officers, and other employees; ● user complaints about the quality of our products and services; ● copyright or patent infringements involving us and contents offered on our platforms; and ● governmental and regulatory investigations or penalties resulting from our failure to comply with applicable laws and regulations. 10 Table of Contents In addition to traditional media, there has been an increasing use of social media platforms and similar devices in China, including instant messaging applications, social media websites and other forms of internet-based communications that provide individuals with access to a broad audience of users and other interested persons.
Furthermore, we could also experience higher levels of product returns in such cases, which could adversely affect our financial results.
Furthermore, we could also experience higher levels of product returns in such cases, which could adversely affect our financial results. These problems may also result in claims against us by our customers or others.
There may be an increase in legislation and regulation related to the collection and use of anonymous internet user data and unique device identifiers, such as IP address or mobile unique device identifiers, and other data protection and privacy regulation. The PRC regulatory and enforcement regime with regard to data security and data protection is evolving.
Governments around the world, including the PRC government, have enacted or are considering legislation related to online businesses. There may be an increase in legislation and regulation related to the collection and use of anonymous internet user data and unique device identifiers, such as IP address or mobile unique device identifiers, and other data protection and privacy regulation.
GAAP relevant experience and necessary expertise to strengthen our financial reporting function and to design and implement necessary controls to remediate the material weakness; (ii) designed and implemented controls to ensure completeness and accuracy of data relevant to the accounting and financial reporting of complex transactions; The second material weakness was that we lacked sufficient resources regarding financial reporting and accounting personnel with understanding of U.S.
GAAP relevant experience and necessary expertise to strengthen our financial reporting function and to design and implement necessary controls to remediate the material weakness; (ii) designed and implemented controls to ensure completeness and accuracy of data relevant to the accounting and financial reporting of complex transactions; We kept devoting significant effort and resources to the remediation and improvement of the weakness as aforementioned.
All these laws and regulations may result in additional expenses and any non-compliance may subject us to negative publicity which could harm our reputation and negatively affect the trading price of our Ordinary shares. There are also uncertainties with respect to how these laws will be implemented in practice.
The PRC regulatory and enforcement regime with regard to data security and data protection is evolving. All these laws and regulations may result in additional expenses and any non-compliance may subject us to negative publicity which could harm our reputation and negatively affect the trading price of our Ordinary shares.
In addition, the security review rules issued by the Ministry of Commerce and became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the Ministry of Commerce, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. 28 Table of Contents In the future, we may pursue potential strategic acquisitions that are complementary to our business and operations.
The rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. 28 Table of Contents In the future, we may pursue potential strategic acquisitions that are complementary to our business and operations.
Almost all access to the Internet in China is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the Ministry of Industry and Information Technology, or the MIIT.
Our operations depend on the performance of the Internet infrastructure and fixed telecommunications networks in China, which may experience unexpected system failure, interruption, inadequacy or security breaches. Almost all access to the Internet in China is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the Ministry of Industry and Information Technology, or the MIIT.
Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year.
Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year.
President Donald J. Trump signed the HFCA Act into law.
On December 18, 2020, the former U.S. President Donald J. Trump signed the HFCA Act into law.
If it failed to regain compliance within this period, it might be granted an additional 180 - day compliance period (the “second compliance period”). If still not compliant, it could appeal to the Nasdaq Hearing Panel, and during the appeal, the stock could still be traded on the main board.
If still not compliant, it could appeal to the Nasdaq Hearing Panel, and during the appeal, the stock could still be traded on the main board.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile. 38 Table of Contents Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
Failure in cost control may negatively impact the market adoption and profitability of our products. Our production output depends on our ability to produce and/or procure certain key components and raw materials at an acceptable price.
Our production output depends on our ability to produce and/or procure certain key components and raw materials at an acceptable price. If we fail to reduce or control costs to be incurred thereof, we might not be able to price our products competitively, which in turn may reduce the market adoption rate of our products.
As the number of our end-users increases and more user data are generated on our platform, we may be required to expand and adjust technology and infrastructure to continue to reliably store and process content. 11 Table of Contents Our operations depend on the performance of the Internet infrastructure and fixed telecommunications networks in China, which may experience unexpected system failure, interruption, inadequacy or security breaches.
As the number of our end-users increases and more user data are generated on our platform, we may be required to expand and adjust technology and infrastructure to continue to reliably store and process content.
As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, users of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. 38 Table of Contents We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
The interpretation and application of existing PRC laws, regulations and policies and possible new laws, regulations or policies relating to the Internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities of, Internet businesses in China, including our business.
If our operations do not comply with these new regulations after they become effective, or if we fail to obtain any licenses required under these new laws and regulations, we could be subject to penalties, and our business could be disrupted. 14 Table of Contents The interpretation and application of existing PRC laws, regulations and policies and possible new laws, regulations or policies relating to the Internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities of, Internet businesses in China, including our business.
Accordingly, we expect to be subject to substantial continuing pressure from automotive OEMs and their suppliers to reduce the price of our products. It is possible that pricing pressures could intensify beyond our expectations as automotive OEMs pursue restructuring, consolidation and cost-cutting initiatives.
It is possible that pricing pressures could intensify beyond our expectations as automotive OEMs pursue restructuring, consolidation and cost-cutting initiatives.
These actions may expose us to negative publicity, substantial monetary damages and legal defense costs, injunctive relief, and criminal and civil fines and penalties, including but not limited to suspension or revocation of our licenses to conduct business.
These actions may expose us to negative publicity, substantial monetary damages and legal defense costs, injunctive relief, and criminal and civil fines and penalties, including but not limited to suspension or revocation of our licenses to conduct business. 13 Table of Contents Our management has limited experience in operating a public company and the requirements of being a public company may strain our resources, divert management’s attention and affect the ability to attract and retain qualified board members and officers.
PRC regulators have been increasingly focused on regulation in the areas of data security and data protection.
There are also uncertainties with respect to how these laws will be implemented in practice. PRC regulators have been increasingly focused on regulation in the areas of data security and data protection.
PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us or otherwise expose us to liability and penalties under PRC law.
Such events could significantly hinder our ability to raise capital and could have a material and adverse effect on our business, financial condition, results of operations, and the trading price of our Ordinary shares. 29 Table of Contents PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us or otherwise expose us to liability and penalties under PRC law.
Furthermore, on January 17, 2025, the SEC officially approved the proposed amendments to Nasdaq's Rule 5810 and 5815. These amendments have significantly revised the compliance period regulations. Under the previous rules, if a company's stock price was continuously below $1 for 30 trading days, it would be given an automatic 180 - day compliance period (the “first compliance period”).
Under the previous rules, if a company’s stock price was continuously below $1 for 30 trading days, it would be given an automatic 180 - day compliance period (the “first compliance period”). If it failed to regain compliance within this period, it might be granted an additional 180 - day compliance period (the “second compliance period”).
Our insurance policies may not provide adequate coverage for all claims associated with our business operations. We maintain various insurance policies, such as group personal accident insurance and corporate employee benefits insurance. However, our insurance coverage is still limited in terms of amount, scope and benefit. Insurance companies in China offer limited business insurance products.
For example, we do not carry, or may not carry, general business liability, product liability, or business disruption insurance for our operations in China. To the extent we do maintain any policies, such as standard employee benefits or personal accident insurance, such coverage is strictly limited in terms of amount, scope, and benefit.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. 7 Table of Contents Market share of our holographic LiDAR products will be materially adversely affected if such products are not adopted by the automotive original equipment manufacturers (OEMs) or their supplier for ADAS applications.
Market share of our holographic LiDAR products will be materially adversely affected if such products are not adopted by the automotive original equipment manufacturers (OEMs) or their supplier for ADAS applications. The OEMs and their suppliers have been developing applications in the autonomous driving and ADAS industries over the years.
As such, our results of operations and financial position will be adversely affected. Continued pricing pressures may result in low profitability, or even losses to us. Automotive OEMs possess significant leverage over their suppliers, including us, because the automotive component supply industry is highly competitive and has a high fixed cost base.
Automotive OEMs possess significant leverage over their suppliers, including us, because the automotive component supply industry is highly competitive and has a high fixed cost base. Accordingly, we expect to be subject to substantial continuing pressure from automotive OEMs and their suppliers to reduce the price of our products.
The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to halt this offering before the settlement and delivery of the Ordinary Share that we are offering.
The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to halt our offerings, limiting our operating privileges in the PRC, or restricting the repatriation of the proceeds from future offerings into the PRC.
If these new laws, regulations or policies are promulgated, additional licenses may be required for our operations. If our operations do not comply with these new regulations after they become effective, or if we fail to obtain any licenses required under these new laws and regulations, we could be subject to penalties, and our business could be disrupted.
If these new laws, regulations or policies are promulgated, additional licenses may be required for our operations.
Three of our subsidiaries, Shanghai Mengyun Shenzhen Mengyun and Shenzhen Bowei have received the High and New Technology Enterprise Certification. Shanghai Mengyun obtained the “high-tech enterprise” tax status in October 2017 and further renewed in December 2023, which reduced its statutory income tax rate to 15% from January 2017 to December 2025.
Two of our subsidiaries, Shanghai Mengyun and Shenzhen Bowei have received the High and New Technology Enterprise Certification.
Removed
In addition, we cannot assure you that performance by third-party vendors will be satisfactory, and if they under-perform, it will have a material adverse effect on the cash flows or profitability of our business.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

44 edited+10 added−4 removed235 unchanged
Biggest changeAs of December 31, 2024, we owned: ● Trademarks: 6 registered trademarks in the PRC; ● Patents: 182 patents in the PRC, mainly involving virtual vision imaging, motion capture, image acquisition and other related technologies; ● Layout design of integrated circuit: 22 items in the PRC; ● Software copyrights related to holography: 458 works of software copyrights related to holography in the PRC, which mainly involve holographic digital light field, panoramic display, virtual reality social simulation model application system, virtual reality human body model dynamic demonstration system, naked-eye 3D dynamic imaging control system, virtual reality standardization system, etc.; ● Software copyrights related to virtual digital products: 1,695 items of virtual digital products and thousands of ultra-high-definition holographic models that have been established and are still increasing; and In addition to the foregoing protections, we generally control access to and use of our proprietary and other confidential information through the use of internal and external controls.
Biggest changeAs of December 31, 2025, we owned: ● Trademarks: 6 registered trademarks in the PRC; ● Patents: 133 patents in the PRC, mainly involving virtual vision imaging, motion capture, image acquisition and other related technologies; ● Layout design of integrated circuit: 22 items in the PRC; ● Software copyrights: 412 works of software copyrights in the PRC; In addition to the foregoing protections, we generally control access to and use of our proprietary and other confidential information through the use of internal and external controls.
It also stipulates that advertisers, advertising operators, and advertisement publishers shall abide by the Advertising Law and other laws and regulations, be honest and trustworthy, and compete in a fair manner in advertising business.
It also stipulates that advertisers, advertising operators, and advertisement publishers shall abide by the Advertising Law and other laws and regulations, be honest and trustworthy, and compete in a fair manner in the advertising business.
According to these provisions, with respect to a sino-foreign equity join venture, the registered capital shall be (i) no less than seven-tenths of its total investment, if the total investment is US$3 million or under US$3 million; (ii) no less than one-half of its total investment, if the total investment is ranging from US$3 million to US$10 million (including US$10 million), provided that the registered capital shall not be less than US$2.1 million if the total investment is less than US$4.2 million; (iii) no less than two-fifths of its total investment, if the total investment is ranging from US$10 million to US$30 million (including US$30 million), provided that the registered capital shall not be less than US$5 million if the total investment is less than US$12.5 million; and (iv) no less than one-third of its total investment, if the total investment exceeds US$30 million, provided that the registered capital shall not be less than US$12 million if the total investment is less than US$36 million. 60 Table of Contents The Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing, or PBOC Notice No. 9, issued by the PBOC on January 12, 2017, provides that within a transition period of one year from January 12, 2017, the foreign invested enterprises may adopt the currently valid foreign debt management mechanism, or Current Foreign Debt Mechanism, or the mechanism as provided in PBOC Notice No. 9, or Notice No. 9 Foreign Debt Mechanism, at their own discretion.
According to these provisions, with respect to a sino-foreign equity join venture, the registered capital shall be (i) no less than seven-tenths of its total investment, if the total investment is US$3 million or under US$3 million; (ii) no less than one-half of its total investment, if the total investment is ranging from US$3 million to US$10 million (including US$10 million), provided that the registered capital shall not be less than US$2.1 million if the total investment is less than US$4.2 million; (iii) no less than two-fifths of its total investment, if the total investment is ranging from US$10 million to US$30 million (including US$30 million), provided that the registered capital shall not be less than US$5 million if the total investment is less than US$12.5 million; and (iv) no less than one-third of its total investment, if the total investment exceeds US$30 million, provided that the registered capital shall not be less than US$12 million if the total investment is less than US$36 million. 61 Table of Contents The Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing, or PBOC Notice No. 9, issued by the PBOC on January 12, 2017, provides that within a transition period of one year from January 12, 2017, the foreign invested enterprises may adopt the currently valid foreign debt management mechanism, or Current Foreign Debt Mechanism, or the mechanism as provided in PBOC Notice No. 9, or Notice No. 9 Foreign Debt Mechanism, at their own discretion.
Customers We have provided holographic technology services for thousands of customers and has accumulated rich customer resources and diverse customer base in the industry. We work closely with government agencies, automotive electronics manufacturers, and software/content developers, etc. At present, we have a relatively well-established and comprehensive holographic technology service chain.
Customers We have provided holographic technology services for thousands of customers and have accumulated rich customer resources and diverse customer base in the industry. We work closely with government agencies, automotive electronics manufacturers, and software/content developers, etc. At present, we have a relatively well-established and comprehensive holographic technology service chain.
We believe that we maintain a good working relationship with our employees with no labor disputes. None of our employees are represented by labor unions. Facilities Our headquarters are located Room 302, Building A, Zhong Ke Na Neng Building, Yue Xing Sixth Road, Nanshan District, Shenzhen, People’s Republic of China 518000.
We believe that we maintain a good working relationship with our employees with no labor disputes. None of our employees are represented by labor unions. Facilities Our headquarters are located in Room 302, Building A, Zhong Ke Na Neng Building, Yue Xing Sixth Road, Nanshan District, Shenzhen, People’s Republic of China 518000.
According to the Circular on Comprehensively Promoting the Pilot Program of the Collection of VAT in Lieu of Business Tax, which took effect on May 1, 2016, the pilot practice of levying VAT in lieu of business tax was extended nationwide to the sale of services, intangible assets or property. 56 Table of Contents According to the Circular of the Ministry of Finance (the “MOF” ) and SAT on Adjusting Value-added Tax Rates which took effect on May 1, 2018, where a taxpayer engages in a taxable sales activity for the VAT purpose or imports goods, the previous applicable 17% and 11% tax rates are adjusted to be 16% and 10% respectively, and are further adjusted to be 13% and 9% respectively in accordance with the Announcement of the MOF, the SAT and the General Administration of Customs on Deepening the Policies Related to Value-Added Tax Reform which took effect on April 1, 2019.
According to the Circular on Comprehensively Promoting the Pilot Program of the Collection of VAT in Lieu of Business Tax, which took effect on May 1, 2016, the pilot practice of levying VAT in lieu of business tax was extended nationwide to the sale of services, intangible assets or property. 57 Table of Contents According to the Circular of the Ministry of Finance (the “MOF” ) and SAT on Adjusting Value-added Tax Rates which took effect on May 1, 2018, where a taxpayer engages in a taxable sales activity for the VAT purpose or imports goods, the previous applicable 17% and 11% tax rates are adjusted to be 16% and 10% respectively, and are further adjusted to be 13% and 9% respectively in accordance with the Announcement of the MOF, the SAT and the General Administration of Customs on Deepening the Policies Related to Value-Added Tax Reform which took effect on April 1, 2019.
Regulation on Foreign Exchange In accordance with the Foreign Exchange Administrative Regulations of the PRC which was last amended on August 5, 2008, Renminbi is generally freely convertible for payments of current account items, such as trade and service-related foreign exchange transactions and dividend payments, but are not freely convertible for capital account items, such as capital transfer, direct investment, investment in securities, derivative products or loans unless prior approval/registration of the SAFE is obtained. 57 Table of Contents In accordance with the Administration Rule on the Settlement and Sale of and Payment in Foreign Exchange, which took effect on July 1, 1996, a foreign invested enterprise is allowed to process the settlement and sale of and payment in foreign exchange for capital account items after submitting valid commercial documents and getting approval from the SAFE.
Regulation on Foreign Exchange In accordance with the Foreign Exchange Administrative Regulations of the PRC which was last amended on August 5, 2008, Renminbi is generally freely convertible for payments of current account items, such as trade and service-related foreign exchange transactions and dividend payments, but are not freely convertible for capital account items, such as capital transfer, direct investment, investment in securities, derivative products or loans unless prior approval/registration of the SAFE is obtained. 58 Table of Contents In accordance with the Administration Rule on the Settlement and Sale of and Payment in Foreign Exchange, which took effect on July 1, 1996, a foreign invested enterprise is allowed to process the settlement and sale of and payment in foreign exchange for capital account items after submitting valid commercial documents and getting approval from the SAFE.
In addition, employee wages shall be no lower than local standards on minimum wages and shall be paid to employees timely. 54 Table of Contents Social Insurance and Housing Fund As required under the Regulation of Insurance for Labor Injury implemented on January 1, 2004 and amended in 2010, the Provisional Measures for Maternity Insurance of Employees of Corporations implemented on January 1, 1995, the Decisions on the Establishment of a Unified Program for Old-Aged Pension Insurance of the State Council issued on July 16, 1997, the Decisions on the Establishment of the Medical Insurance Program for Urban Workers of the State Council promulgated on December 14, 1998, the Unemployment Insurance Measures promulgated on January 22, 1999 and the Social Insurance Law of the PRC implemented on July 1, 2011, employers are required to provide their employees in the PRC with welfare benefits covering pension insurance, unemployment insurance, maternity insurance, labor injury insurance and medical insurance.
In addition, employee wages shall be no lower than local standards on minimum wages and shall be paid to employees timely. 55 Table of Contents Social Insurance and Housing Fund As required under the Regulation of Insurance for Labor Injury implemented on January 1, 2004 and amended in 2010, the Provisional Measures for Maternity Insurance of Employees of Corporations implemented on January 1, 1995, the Decisions on the Establishment of a Unified Program for Old-Aged Pension Insurance of the State Council issued on July 16, 1997, the Decisions on the Establishment of the Medical Insurance Program for Urban Workers of the State Council promulgated on December 14, 1998, the Unemployment Insurance Measures promulgated on January 22, 1999 and the Social Insurance Law of the PRC implemented on July 1, 2011, employers are required to provide their employees in the PRC with welfare benefits covering pension insurance, unemployment insurance, maternity insurance, labor injury insurance and medical insurance.
For a non-resident enterprise having no office or establishment inside China, or for a non-resident enterprise whose incomes have no actual connection to its institution or establishment inside China, a withholding tax of 10% will be levied for the income derived from China. 55 Table of Contents The Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies promulgated by the SAT and last amended on December 29, 2017 sets out the standards and procedures for determining whether the “de facto management body” of an enterprise registered outside of the PRC and controlled by PRC enterprises or PRC enterprise groups is located within the PRC.
For a non-resident enterprise having no office or establishment inside China, or for a non-resident enterprise whose incomes have no actual connection to its institution or establishment inside China, a withholding tax of 10% will be levied for the income derived from China. 56 Table of Contents The Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies promulgated by the SAT and last amended on December 29, 2017 sets out the standards and procedures for determining whether the “de facto management body” of an enterprise registered outside of the PRC and controlled by PRC enterprises or PRC enterprise groups is located within the PRC.
Guided by such values, we have successfully built up strong and long-term relationships with our customers and continuously optimized our talent pool and the comprehensive quality of our team members, all of which have contributed to our sustainable and rapid development. 42 Table of Contents Our Growth Strategies We plan to implement the following strategies to achieve our mission and further grow our market position: We will continue to expend significant resources in the research and development of holographic technology Research and development of in-demand technology combined with sustained output and continuous innovation sets the foundation of our market competitiveness.
Guided by such values, we have successfully built up strong and long-term relationships with our customers and continuously optimized our talent pool and the comprehensive quality of our team members, all of which have contributed to our sustainable and rapid development. 43 Table of Contents Our Growth Strategies We plan to implement the following strategies to achieve our mission and further grow our market position: We will continue to expend significant resources in the research and development of holographic technology Research and development of in-demand technology combined with sustained output and continuous innovation sets the foundation of our market competitiveness.
Moreover, pursuant to SAFE Circular 3, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions, contracts and other proof when completing the registration procedures in connection with an outbound investment. 58 Table of Contents Regulation on Foreign Exchange Registration of Offshore Investment by PRC Residents On July 4, 2014, SAFE issued the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, and its implementation guidelines.
Moreover, pursuant to SAFE Circular 3, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions, contracts and other proof when completing the registration procedures in connection with an outbound investment. 59 Table of Contents Regulation on Foreign Exchange Registration of Offshore Investment by PRC Residents On July 4, 2014, SAFE issued the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, and its implementation guidelines.
The Interim Measures on Internet Advertising also require internet advertisement publishers and advertising operators to verify related supporting documents, check the contents of the advertisement and prohibits them from designing, producing, providing services or publishing any advertisement if the content and supporting documents do not match each other or the documentary evidence thereof are insufficient. 52 Table of Contents Regulations on Information Security and Privacy Protection Internet content in the PRC is regulated and restricted from a state security standpoint.
The Interim Measures on Internet Advertising also require internet advertisement publishers and advertising operators to verify related supporting documents, check the contents of the advertisement and prohibits them from designing, producing, providing services or publishing any advertisement if the content and supporting documents do not match each other or the documentary evidence thereof are insufficient. 53 Table of Contents Regulations on Information Security and Privacy Protection Internet content in the PRC is regulated and restricted from a state security standpoint.
Any commercial bribery committed by an employee of a given business operator will be deemed conduct of such business operator unless evidence shows that such act is not related to such business operator’s efforts in seeking a transaction opportunity or competitive advantage. 61 Table of Contents Regulations related to business registration in Hong Kong Turning to the regulations in Hong Kong, our Hong Kong subsidiary, which is an investment holding company, is subject to regulations related to business registration in Hong Kong.
Any commercial bribery committed by an employee of a given business operator will be deemed conduct of such business operator unless evidence shows that such act is not related to such business operator’s efforts in seeking a transaction opportunity or competitive advantage. 62 Table of Contents Regulations related to business registration in Hong Kong Turning to the regulations in Hong Kong, our Hong Kong subsidiary, which is an investment holding company, is subject to regulations related to business registration in Hong Kong.
If the gains or losses are difficult to determine, the court may render a judgment awarding damages of no more than RMB 3 million. 51 Table of Contents Software Copyright Law On September 7, 1990, Standing Committee of the National People’s Congress promulgated The Copyright Law of the PRC or the Copyright Law, which was amended on October 27, 2001 and April 1, 2010.
If the gains or losses are difficult to determine, the court may render a judgment awarding damages of no more than RMB 3 million. 52 Table of Contents Software Copyright Law On September 7, 1990, Standing Committee of the National People’s Congress promulgated The Copyright Law of the PRC or the Copyright Law, which was amended on October 27, 2001 and April 1, 2010.
Our holographic LiDAR solutions allow the automotive industry to break free from bulky mechanical rotating scanning systems and traditional sensors to solid-state LiDAR sensor with more components and smaller dimensions that can meet the demanding performance, safety, and cost requirements of our customers. Our holographic ADAS provide a rich and safe set of autonomous control programs for vehicles.
Our holographic LiDAR solutions allow the automotive industry to break free from bulky mechanical rotating scanning systems and traditional sensors to solid-state LiDAR sensor with more components and smaller dimensions that can meet the demanding performance, safety, and cost requirements of our customers. Our holographic ADAS provides a rich and safe set of autonomous control programs for vehicles.
With the continuous expansion of the application field of holographic digital technology, we believe that in the future, holographic digital technology will become an irreplaceable part of society. 44 Table of Contents Holographic LiDAR Technology LiDAR is a combination of laser, global positioning system (“GPS”) and inertial navigation system (“INS”) technology and is used to obtain point cloud data and generate accurate digital three-dimensional model.
With the continuous expansion of the application field of holographic digital technology, we believe that in the future, holographic digital technology will become an irreplaceable part of society. 45 Table of Contents Holographic LiDAR Technology LiDAR is a combination of laser, global positioning system (“GPS”) and inertial navigation system (“INS”) technology and is used to obtain point cloud data and generate accurate digital three-dimensional model.
We believe that our continuous attraction to and ability to retain large and medium-sized enterprise customers depend on our ability to meet their disparate needs as well as complex in-house deployment and integration needs. We also leverage our comprehensive business portfolio to serve small and medium enterprises, aiming to improve customer satisfaction and expand cross selling and up selling opportunities.
We believe that our continuous attraction to and ability to retain large and medium-sized enterprise customers depends on our ability to meet their disparate needs as well as complex in-house deployment and integration needs. We also leverage our comprehensive business portfolio to serve small and medium enterprises, aiming to improve customer satisfaction and expand cross selling and up selling opportunities.
We compete in an emerging and competitive industry for the following factors: ● quality of the basic holographic technology; ● richness and compatibility of high-quality holographic content; ● strength and reputation of brand; 47 Table of Contents ● ability to enhance existing services to meet user preferences and needs; ● capability to continuously expand customer base; and ● ability to compete effectively with competitors.
We compete in an emerging and competitive industry for the following factors: ● quality of the basic holographic technology; ● richness and compatibility of high-quality holographic content; ● strength and reputation of brand; 48 Table of Contents ● ability to enhance existing services to meet user preferences and needs; ● capability to continuously expand customer base; and ● ability to compete effectively with competitors.
Our agent for service of process in the United States is Puglisi & Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19715. 40 Table of Contents We are subject to the periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.
Our agent for service of process in the United States is Puglisi & Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19715. 41 Table of Contents We are subject to the periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.
These are promulgated and periodically updated by the Ministry of Commerce (MOFCOM) and the National Development and Reform Commission (NDRC), in harmony with the Foreign Investment Law and its implementation rules and ancillary regulations. 49 Table of Contents The Encouraging Catalog, designed to stimulate and channel foreign investment, has undergone several revisions.
These are promulgated and periodically updated by the Ministry of Commerce (MOFCOM) and the National Development and Reform Commission (NDRC), in harmony with the Foreign Investment Law and its implementation rules and ancillary regulations. 50 Table of Contents The Encouraging Catalog, designed to stimulate and channel foreign investment, has undergone several revisions.
Risk-weighted outstanding cross-border financing = © outstanding amount of RMB and foreign currency denominated cross-border financing x maturity risk conversion factor x type risk conversion factor + © outstanding foreign currency denominated cross-border financing x exchange rate risk conversion factor.
Risk-weighted outstanding cross-border financing = (c) outstanding amount of RMB and foreign currency denominated cross-border financing x maturity risk conversion factor x type risk conversion factor + © outstanding foreign currency denominated cross-border financing x exchange rate risk conversion factor.
We also provide customized holographic digital twin technology integration services for enterprise customers with unique commercial demands. 41 Table of Contents With each technological advancement and product iteration, we continue to lay a solid foundation for increased competitiveness and long-term strategic development.
We also provide customized holographic digital twin technology integration services for enterprise customers with unique commercial demands. 42 Table of Contents With each technological advancement and product iteration, we continue to lay a solid foundation for increased competitiveness and long-term strategic development.
The purchase of network products and services that may affect national security shall be subject to national cyber security review. The Measures for 53 Table of Contents Cybersecurity Review, which took effect on June 1, 2020, provide for more detailed rules regarding cyber security review requirements.
The purchase of network products and services that may affect national security shall be subject to national cyber security review. The Measures for 54 Table of Contents Cybersecurity Review, which took effect on June 1, 2020, provide for more detailed rules regarding cyber security review requirements.
We have focused on and will continue to focus on investment in our technology system. 46 Table of Contents We are committed to continuously strengthening and updating our information technology infrastructure and compatible hardware according to our annual development plan and based upon our assessment of market demand.
We have focused on and will continue to focus on investment in our technology system. 47 Table of Contents We are committed to continuously strengthening and updating our information technology infrastructure and compatible hardware according to our annual development plan and based upon our assessment of market demand.
Technology We have developed powerful, cutting-edge holographic technologies. 43 Table of Contents Holographic Digital Technology Holography refers to the expression of all information of things. The advantage of holography lies in the expression of holographic space. It is another carrier of information in society.
Technology We have developed powerful, cutting-edge holographic technologies. 44 Table of Contents Holographic Digital Technology Holography refers to the expression of all information of things. The advantage of holography lies in the expression of holographic space. It is another carrier of information in society.
Existing patents can become 50 Table of Contents narrowed, invalid or unenforceable due to a variety of grounds, including lack of novelty, creativity, and deficiencies in patent application. In China, a patent must have novelty, creativity and practical applicability.
Existing patents can become 51 Table of Contents narrowed, invalid or unenforceable due to a variety of grounds, including lack of novelty, creativity, and deficiencies in patent application. In China, a patent must have novelty, creativity and practical applicability.
(formerly known as Golden Path Acquisition Corporation), incorporated in Cayman Island on May 9, 2018. , it entered into the Merger Agreement dated September 10, 2021 (as amended on August 5, 2022 and August 10, 2022), by and among Golden Path, Golden Path Merger Sub, a Cayman Islands exempted company incorporated for the purpose of effectuating the business combination, and MC, a Cayman Islands exempted company.
(formerly known as Golden Path Acquisition Corporation), incorporated in Cayman Island on May 9, 2018, it entered into the Merger Agreement dated September 10, 2021 (as amended on August 5, 2022 and August 10, 2022), by and among Golden Path, Golden Path Merger Sub, a Cayman Islands exempted company incorporated for the purpose of effectuating the business combination, and MC Hologram Inc.(“MC”), a Cayman Islands exempted company.
Holographic intelligent vision technology used in holographic technology service includes holographic face recognition, holographic object, and scene recognition. 45 Table of Contents Holographic SDK Technology Holographic SDK technology can collect holographic data through tactile feedback information, force feedback information and the movement of the observed object.
Holographic intelligent vision technology used in holographic technology service includes holographic face recognition, holographic object, and scene recognition. 46 Table of Contents Holographic SDK Technology Holographic SDK technology can collect holographic data through tactile feedback information, force feedback information and the movement of the observed object.
The share structure changed FROM US$500,000 divided into 500,000,000 shares of a nominal or par value of US$0.001 each TO US$500,000 divided into 25,000,000 shares of a nominal or par value of US$0.02 each (the “ Consolidated Ordinary Shares”).
The share structure changed FROM US$500,000 divided into 500,000,000 shares of a nominal or par value of US$0.001 each TO US$500,000 divided into 25,000,000 shares of a nominal or par value of US$0.02 each (the “Consolidated Ordinary Shares”).
We believe that our existing facilities are adequate for our current requirements and that additional space can be obtained on commercially reasonable terms to meet our future needs. Insurance We do not maintain insurance policies covering damages to our Information Technology systems.
We believe that our existing facilities are adequate for our current requirements and that additional space can be obtained on commercially reasonable terms to meet our future needs. Insurance We do not maintain insurance policies that cover damage to our Information Technology systems.
ORGANIZATIONAL STRUCTURE The following diagram illustrates our corporate structure as of December 31, 2024. 62 Table of Contents Reverse Stock Split MicroCloud Hologram Inc., listed on NASDAQ under ticker “ HOLO”, faced a minimum bid - price requirement and executed its first reverse stock split.
ORGANIZATIONAL STRUCTURE The following diagram illustrates our corporate structure as of December 31, 2025. 63 Table of Contents Reverse Stock Split MicroCloud Hologram Inc., listed on NASDAQ under ticker “ HOLO”, faced a minimum bid - price requirement and executed its reverse stock split.
We strategically conduct business with our top suppliers in order to optimize our scale advantages, but we also have the flexibility to source the majority of our purchase from a number of alternate suppliers when necessary. 48 Table of Contents Employees As of December 31, 2024, we had 64 full-time employees and we did not have part-time employees.
We strategically conduct business with our top suppliers in order to optimize our scale advantages, but we also have the flexibility to source the majority of our purchase from a number of alternate suppliers when necessary. 49 Table of Contents Employees As of December 31, 2025, we had 74 full-time employees, and we did not have part-time employees.
For instance, in 2022, an updated version was released, expanding opportunities in sectors like advanced manufacturing, modern services, and high - tech.
For instance, in 2022, an updated version was released, expanding opportunities in sectors such as advanced manufacturing, modern services, and high-tech.
The Exercise Price adjustment was made pursuant to section 4.3.1 of the Warrant Agreement. 63 Table of Contents D. PROPERTY, PLANT AND EQUIPMENT Our headquarters is located in Shenzhen, China. We currently lease approximately 1337.28 square meters of office space in the aggregate.
The Exercise Price adjustment was made pursuant to section 4.3.1 of the Warrant Agreement. 64 Table of Contents D. PROPERTY, PLANT AND EQUIPMENT Our headquarters is located in Shenzhen, China. We currently lease approximately 1328.31 square meters of office space in the aggregate.
The following table sets forth the number of our employees as of December 31, 2024: Function full-time employees Research and Development 33 Business and Marketing 22 Administrative, Human Resources and Finance 9 Total 64 Under the PRC law, we participate in various employee social security plans organized by municipal and provincial government for our PRC-based full-time employees, including pension unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance, and housing fund.
The following table sets forth the number of our employees as of December 31, 2025: Function full-time employees Research and Development 37 Business and Marketing 25 Administrative, Human Resources, and Finance 12 Total 74 Under the PRC law, we participate in various employee social security plans organized by municipal and provincial government for our PRC-based full-time employees, including pension unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance, and housing fund.
We maintain a diverse customer base, for the years ended 31 December 2023 and 31 December 2024, 25.0% and 25.9% of our total revenue came from one and two customers, respectively.
We maintain a diverse customer base, for the years ended 31 December 2024 and 31 December 2025, 25.9% and 32.3% of our total revenue came from two and two customers, respectively.
(“Haiyun Xingchen”) under the law of PRC. On March 1, 2024, Haiyun Xingchen acquired Yichang Ji Yue Technology Ltd. (“Yichang Ji Yue”), which engaged in advertising service. In May 2024 ， Horgos Weiyi Software Technology Co., Ltd and Horgos BroadVision Technology Co., Ltd. dissolved.
(“Haiyun Xingchen”) under the law of PRC. On March 1, 2024, Haiyun Xingchen acquired Yichang Ji Yue Technology Ltd. (“Yichang Ji Yue”), which engaged in advertising service. In May 2024 , Horgos Weiyi Software Technology Co., Ltd and Horgos BroadVision Technology Co., Ltd. dissolved. On March 18, 2025, MC established a fully owned subsidiary HaiYun Group Investment Ltd.
Company ’ s Warrant to Purchase Ordinary Shares Company’s Warrant to Purchase Ordinary Shares Following each Reverse Share Split, the number of Class A Ordinary Shares issuable upon exercise of each outstanding public warrant was decreased proportionally to reflect the reduction in issued and outstanding Class A Ordinary Shares.
Company’s Warrant to Purchase Ordinary Shares Following each Reverse Share Split, the number of Class A Ordinary Shares issuable upon exercise of each outstanding public warrant was decreased proportionally to reflect the reduction in issued and outstanding Class A Ordinary Shares. The exercise price of the warrants was adjusted (rounded to the nearest cent).
Our largest single supplier represented 16.6% of expenditures in fiscal 2024, and our top ten suppliers represented 68.7% of total product expenditures during the same period.
Our largest single supplier represented 20.7% of expenditures in fiscal 2025, and our top ten suppliers represented 78.1% of total product expenditures during the same period.
The exercise price of the warrants was adjusted (rounded to the nearest cent). The adjustment is made by multiplying the exercise price immediately prior to the adjustment by a fraction.
The adjustment is made by multiplying the exercise price immediately prior to the adjustment by a fraction.
Information contained on, or that can be accessed through, our website does not constitute a part of this report and is not incorporated by reference herein.
Our registered office address in the Cayman Islands is located at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Information contained on, or that can be accessed through, our website (ir.mcholo.com) does not constitute a part of this report and is not incorporated by reference herein.
Our principal executive office is located at Room 302, Building A, Zhong Ke Na Neng Building, Yue Xing Sixth Road, Nanshan District, Shenzhen, People’s Republic of China. Our registered office address in the Cayman Islands is located at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
On September 30, 2025, we disposed of all our equity interests in Yichang Ji Yue and BeiJing Ji Yue. Our principal executive office is located at Room 302, Building A, Zhong Ke Na Neng Building, Yue Xing Sixth Road, Nanshan District, Shenzhen, People’s Republic of China.
However, there can be no assurance that the relevant PRC government agencies, including the CSRC, would reach the same conclusion. 59 Table of Contents On December 19, 2020, the NDRC and the Ministry of Commerce jointly promulgated the Measures for the Security Review for Foreign Investment, effective on January 18, 2021, setting forth provisions concerning the security review mechanism on foreign investment, including the types of investments subject to review, scopes of review and procedures, among others.
If a domestic company fails to complete the filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company will be subject to administrative penalties such as warnings, fines, suspension of relevant business or operations, and revocation of licenses and permits, and its controlling shareholders, actual controllers, directors, supervisors, and senior executives may also be subject to administrative penalties. 60 Table of Contents On December 19, 2020, the NDRC and the Ministry of Commerce jointly promulgated the Measures for the Security Review for Foreign Investment, effective on January 18, 2021, setting forth provisions concerning the security review mechanism on foreign investment, including the types of investments subject to review, scopes of review and procedures, among others.
If the business operators fail to make a declaration, the relevant authority will conduct an investigation according to law.
If the business operators fail to make a declaration, the relevant authority will conduct an investigation according to law. Furthermore, in January 2024, the State Council promulgated the Provisions on the Thresholds for Declaring Concentration of Business Operators, which significantly raised the global and domestic turnover thresholds that trigger a mandatory pre-closing merger control filing with SAMR.
Removed
Regulation on Overseas Listings On August 8, 2006, six PRC regulatory agencies, namely, the Ministry of Commerce, the State Assets Supervision and Administration Commission, SAT, SAIC, China Securities Regulatory Commission, or the CSRC, and SAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006 and were amended on June 22, 2009.
Added
(“HaiYun Group”) in British Virgin Islands. On May 7, 2025, HaiYun Group established a fully owned subsidiary HaiCloud Technology Inc.(“HaiCloud Inc”) in Cayman Islands. On August 11, 2025, HaiYun Group owned 65% equity of HaiCloud Inc as the result of the equity structure adjustment of HaiCloud Inc.
Removed
The M&A Rules purport, among other things, to require that offshore special purpose vehicles, or SPVs, that are controlled by PRC companies or individuals and that have been formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals, to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange.
Added
On May 27, 2025, HaiCloud Inc established a fully owned subsidiary HaiCloud Technology Limited. (“HaiCloud Ltd”) in Hong Kong. On June 27, 2025, HaiCloud Ltd established a wholly-owned subsidiary ShenZhen HaiYun Zhichuang Technology Ltd. (“HaiYun Zhichuang”). On July 3, 2025, Haiyun Xingchen acquired 100% equity of Shanghai Kuosou Technology Ltd (“Shanghai Kuosou”).
Removed
On September 21, 2006, the CSRC published a notice on its official website specifying documents and materials required to be submitted to it by SPVs seeking CSRC approval of their overseas listings.
Added
Regulation on Overseas Listings On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and five supporting guidelines, which took effect on March 31, 2023. The Trial Measures established a comprehensive filing-based regulatory regime for both direct and indirect overseas offerings and listings by PRC domestic companies.
Removed
In our case, the CSRC approval was considered not required under the M&A Rules for the listing and trading of our ADSs on the Nasdaq Global Market given that (i) our PRC subsidiary was directly established by us as wholly foreign-owned enterprises, and we have not acquired any equity interest or assets of a PRC domestic company owned by PRC companies or individuals as defined under the M&A Rules that are our beneficial owners after the effective date of the M&A Rules, and (ii) no provision in the M&A Rules clearly classifies the contractual arrangements as a type of transaction subject to the M&A Rules.
Added
Under the Trial Measures, an overseas offering and listing by a company that operates its business primarily in China through its PRC subsidiaries, such as our company, is deemed an “indirect overseas offering” and is subject to the filing requirements with the CSRC.
Added
Because our securities were already listed on Nasdaq prior to the effective date of the Trial Measures, we were not required to retroactively file with the CSRC for our initial listing.
Added
However, the Trial Measures explicitly mandate that an overseas-listed company must submit a filing to the CSRC with respect to any future offshore securities offerings, including follow-on offerings, secondary equity offerings, and the issuance of convertible corporate bonds or exchangeable bonds.
Added
We will be required to submit the requisite filing materials to the CSRC within three working days after the completion of any such future offering.
Added
On March 24, 2025, in an Extraordinary General Meeting of the Shareholders, Company shareholders approved the proposed 1-for-40 reverse share split and increase of authorized share capital.
Added
April 21, 2025 is the effective date for the 1-for-40 reverse share split, As the result of the 1-for-40 reverse share split, the authorized share capital of the Company changed from US$10,000,000 divided into 500,000,000 shares comprising (i) 400,000,000 Class A Shares, and (ii) 100,000,000 Class B Shares to US$10,000,000 divided into 12,500,000 shares comprising (i) 10,000,000 Consolidated Class A Shares, and (ii) 2,500,000 Consolidated Class B Shares.
Added
Following the Share Consolidation, the authorized share capital of the Company increased from US$10,000,000 divided into 12,500,000 shares comprising (i) 10,000,000 Consolidated Class A Shares, and (ii) 2,500,000 Consolidated Class B Shares to US$400,000,000 divided into 500,000,000 shares comprising (i) 400,000,000 Consolidated Class A Shares by the creation of an additional 390,000,000 Consolidated Class A Shares, and (ii) 100,000,000 Consolidated Class B Shares by the creation of an additional 97,500,000 Consolidated Class B Shares.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

51 edited+26 added−44 removed28 unchanged
Biggest changeThis expansion in service activities directly contributed to the rise in our cost of revenues, as more resources were required to support the increased volume of work, such as higher costs for creating and delivering holographic ads, and enhanced marketing efforts to promote these services in the market. 69 Table of Contents 2022 2023 2024 RMB RMB RMB Amount Percentage Amount Percentage Amount Percentage Operating expenses: Selling expenses 8,824,405 2 % 6,692,316 4 % 3,526,803 2 % General and administrative expenses 22,936,520 6 % 65,354,201 43 % 23,252,517 11 % Research and development expenses 331,274,831 92 % 78,655,572 52 % 174,394,747 86 % Allowance for expected credit loss 2,976,474 1 % 857,713 1 % 2,492,478 1 % Change in fair value of warrant liabilities (4,415,328 ) (1 )% (372,961 ) 0 % (62,543 ) 0 % Total operating expenses 361,596,902 100 % 151,186,841 100 % 203,604,002 100 % Selling Expenses Selling expenses were RMB 3.5 million (USD 0.5 million) for 2024, compared to RMB 6.7 million and RMB 8.8 million, respectively, for 2023 and 2022.
Biggest changeYear ended December 31, 2023 2024 2025 RMB RMB RMB Amount Percentage Amount Percentage Amount Percentage Operating expenses: Selling expenses 6,692,316 4 % 3,526,803 2 % 2,694,728 3 % General and administrative expenses 65,354,201 43 % 23,252,517 11 % 19,238,109 23 % Research and development expenses 78,655,572 52 % 174,394,747 86 % 56,960,830 69 % Allowance for expected credit losses 857,713 1 % 2,492,478 1 % 4,378,701 5 % Change in fair value of warrant liabilities (372,961 ) - % (62,543 ) - % - - % Total operating expenses 151,186,841 100 % 203,604,002 100 % 83,272,368 100 % 70 Table of Contents Selling Expenses Selling expenses were RMB 2.7 million (USD 0.4 million) for 2025, compared to RMB 3.5 million and RMB 6.7million, respectively, for 2024 and 2023.
The difference between our net loss of RMB 64.2 million and the net cash used in operating activities was primarily due to (i) an adjustment of RMB 33.1 million in non-cash items, which mainly consisted of gain from short-term investments of RMB 42.3 million, deferred tax expense of RMB 2.9 million, allowance for expected credit loss of RMB 2.5 million and stock compensation expense of RMB 1.0 million (ii) an increase of accounts receivable of RMB 16.1 million, and (iii) an decrease of prepayments and other current assets of RMB5.2 million, and was partially offset by an increase of accounts payable of RMB 12.1 million and other payables and accrued liabilities of RMB 1.4 million.
The difference between our net loss of RMB 64.2 million and the net cash used in operating activities was primarily due to (i) an adjustment of RMB 33.1 million in non-cash items, which mainly consisted of gain from short-term investments of RMB 42.3 million, deferred tax expense of RMB 2.9 million, allowance for expected credit losses of RMB 2.5 million and stock compensation expense of RMB 1.0 million (ii) an increase of accounts receivable of RMB 16.1 million, and (iii) an decrease of prepayments and other current assets of RMB5.2 million, and was partially offset by an increase of accounts payable of RMB 12.1 million and other payables and accrued liabilities of RMB 1.4 million.
E. CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any.
CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any.
In accordance with ASC No. 450-20, “Loss Contingencies”, we will record accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. 73 Table of Contents Holding Company Structure MicroCloud is a holding company with no material operations of its own.
In accordance with ASC No. 450-20, “Loss Contingencies”, we will record accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Holding Company Structure MicroCloud is a holding company with no material operations of its own.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. 74 Table of Contents Off-Balance Sheet Arrangements We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.
We generate revenues primarily through (i) sales of product related to holographic solutions services, which include LiDAR and other holographic technology hardware products, licensing and content products, and technology development service, and (ii) services related to holographic technology services, which include holographic technology advertising, software development kit (“SDK”) service, and promotion services.
Operating Results Overview We generate revenues primarily through (i) sales of product related to holographic solutions services, which include LiDAR and other holographic technology hardware products, licensing and content products, and technology development service, and (ii) services related to holographic technology services, which include holographic technology advertising, software development kit (“SDK”) service, and promotion services.
TREND INFORMATION Other than as disclosed in the foregoing disclosures and 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 adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that would cause our disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
TREND INFORMATION Other than as disclosed in the foregoing disclosures and elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2025 that are reasonably likely to have a material adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that would cause our disclosed financial information to be not necessarily indicative of future operating results or financial conditions. 75 Table of Contents E.
Results for the years ended December 31, 2022, 2023 and 2024 are presented under Topic 606.
Results for the years ended December 31, 2023, 2024 and 2025 are presented under Topic 606.
We recorded net cash used in operating activities of RMB 98.6 million (USD 13.8 million) for the year ended December 31, 2024.
We recorded net cash used in operating activities of RMB 98.6 million for the year ended December 31, 2024.
The difference between our net loss of RMB 81.6 million and the net cash used in operating activities was primarily due to (i) an adjustment of RMB 57.8 million in non-cash items, which mainly consisted of depreciation and amortization of RMB 7.2 million, deferred tax benefits of RMB 4.0 million and Stock compensation expense of RMB 32.2 million, impairment loss for goodwill of RMB 21.2 million (ii) an decrease of accounts receivable of RMB 70.8 million, and (iii) an increase of prepayments and other current assets of RMB 8.7 million, and was partially offset by an decrease of accounts payable of RMB 59.9 million and other payables and accrued liabilities of RMB 4.5 million. 72 Table of Contents We recorded net cash used in operating activities of RMB 134.7 million for the year ended December 31, 2022.
The difference between our net loss of RMB 81.6 million and the net cash used in operating activities was primarily due to (i) an adjustment of RMB 57.8 million in non-cash items, which mainly consisted of depreciation and amortization of RMB 7.2 million, deferred tax benefits of RMB 4.0 million and Stock compensation expense of RMB 32.2 million, impairment loss for goodwill of RMB 21.2 million (ii) an decrease of accounts receivable of RMB 70.8 million, and (iii) an increase of prepayments and other current assets of RMB 8.7 million, and was partially offset by an decrease of accounts payable of RMB 59.9 million and other payables and accrued liabilities of RMB 4.5 million.
Our research and development expenses were approximately RMB 331.3 million, RMB 78.7 million and RMB 174.4 million (USD 24.5 million) for the years ended December 31, 2022, 2023 and 2024, respectively. Our ability to pursue strategic opportunities for growth We intend to continually pursue strategic acquisitions and investments in selective technologies and businesses to enhance our technology capabilities.
Our research and development expenses were approximately RMB 78.7 million, RMB 174.4 million and RMB 57.0 million (USD 8.0 million) for the years ended December 31, 2023, 2024 and 2025, respectively. Our ability to pursue strategic opportunities for growth We intend to continually pursue strategic acquisitions and investments in selective technologies and businesses to enhance our technology capabilities.
Our ability to increase our revenues and enhance our profitability will depend on our ability to continue to increase our customer base and revenue per customer for our Holographic technology services.
Our ability to increase the number of customers and average revenue for Holographic technology services Our ability to increase our revenues and enhance our profitability will depend on our ability to continue to increase our customer base and revenue per customer for our Holographic technology services.
Contractual Obligations As of December 31, 2024, the future minimum payments under certain of our contractual obligations were as follows: Payments Due In Total Less than 1 year 1 – 2 years 2 – 3 years Thereafter RMB Contractual obligations - - - - - Operating leases obligations 2,633,974 1,569,786 1,064,188 - - Total 2,633,974 1,569,786 1,064,188 - - Inflation Inflation does not materially affect our business or the results of our operations.
Contractual Obligations As of December 31, 2025, the future minimum payments under certain of our contractual obligations were as follows: Payments Due In Total Less than 1 year 1 – 2 years 2 – 3 years Thereafter RMB RMB RMB RMB RMB Contractual obligations - - - - - Operating leases obligations 1,180,653 1,180,653 - - - Total 1,180,653 1,180,653 - - - Inflation Inflation does not materially affect our business or the results of our operations.
Net cash provided by financing activities for the year ended December 31, 2024 was RMB 1,506.9 million (USD 209.6 million), primarily due to the cash received from convertible promissory note of RMB 1,504.5 million.
Net cash provided by financing activities for the year ended December 31, 2024 was RMB 1,506.9 million, primarily due to the cash received from convertible promissory note of RMB 1,504.5 million. Net cash provided by financing activities for the year ended December 31, 2023 was RMB 2.2 million, primarily due to proceeds of third-party loan of RMB 9.9 million.
Our total revenues were RMB 487.9 million, RMB 203.5 million and RMB 290.3 million (USD 40.8 million) for the year ended December 31, 2022, 2023 and 2024, respectively. We recorded a net loss of RMB 136.5 million, RMB 81.6 million and RMB 64.2 million (USD 9.0 million) for the years ended December 31, 2022, 2023 and 2024 respectively.
Our total revenues were RMB 203.5 million, RMB 290.3 million and RMB 403.7 million (USD 56.5 million) for the year ended December 31, 2023, 2024 and 2025, respectively. We recorded a net loss of RMB 81.6 million, RMB 64.2 million and RMB 50.2 million (USD 7.0 million) for the years ended December 31, 2023, 2024 and 2025 respectively.
Net cash used in investing activities was RMB 683.0 million (USD 95.0 million) for the year ended December 31, 2024, primarily due to purchase approximately RMB 683.0 million of wealth management product.
Net cash used in investing activities was RMB 683.0 million for the year ended December 31, 2024, primarily due to purchase approximately RMB 683.0 million of short-term investments.
Financing activities Net cash provided by financing activities was approximately RMB 1,506.9 million (USD 209.6 million) for the year ended December 31, 2024, approximately RMB 2.2 million for the year ended December 31, 2023, and approximately RMB 223.9 million for the year ended December 31, 2022.
Financing activities Net cash provided by financing activities was approximately RMB 1,239.9 million (USD 176.4 million) for the year ended December 31, 2025, approximately RMB 1,506.9 million for the year ended December 31, 2024, and approximately RMB 2.2 million for the year ended December 31, 2023.
Net loss As a result of the combination of factors discussed above, we had a net loss of RMB 64.2 million (USD 9.0 million) for 2024, compared to RMB 81.6 million and RMB 136.5 million, respectively, for 2023 and 2022. 71 Table of Contents B.
Net loss As a result of the combination of factors discussed above, we had a net loss of RMB 50.2 million (USD 7.0 million) for 2025, compared to RMB 64.2 million and RMB 81.6 million, respectively, for 2024 and 2023. B.
Failure to generate sufficient revenues, achieve planned gross margins and operating profitability, control operating costs, or secure additional funding may require us to modify, delay, or abandon some of our planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on our business, operating results, financial condition, and ability to achieve our intended business objectives.
Failure to generate sufficient revenues, achieve planned gross margins and operating profitability, control operating costs, or secure additional funding may require us to modify, delay, or abandon some of our planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on our business, operating results, financial condition, and ability to achieve our intended business objectives. 72 Table of Contents The following table summarizes the key components of our cash flows for the years ended December 31, 2023, 2024, and 2025.
Our actual results and timing of events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3.D. Risk Factors” and elsewhere in this annual report. A. Operating Results Overview We are committed to providing leading holographic technology services to our customers worldwide.
Our actual results and timing of events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3.D. Risk Factors” and elsewhere in this annual report. A.
Income tax credit (expense) Income tax expense was RMB 2.5 million (USD 0.4 million) for 2024, compared to income tax credit of RMB 4.1 million and RMB 0.8 million, respectively, for 2023 and 2022.
Other Income, net Other income was RMB 0.9 million (USD 0.1 million) for 2025, compared to RMB 5.0 million and RMB 3.1 million, respectively, for 2024 and 2023. Income tax credit (expense) Income tax expense was nil for 2025, compared to RMB 2.5 million and income tax credit of RMB 4.1 million, respectively, for 2024 and 2023.
Our research and development expenses were approximately RMB 331.3 million, RMB 78.7 million and RMB 174.4 million (USD 24.5 million) for the years ended December 31, 2022, 2023 and 2024, respectively.
Our research and development expenses were approximately RMB 78.7 million, RMB 174.4 million and RMB 57.0 million (USD 8.0 million) for the years ended December 31, 2023, 2024 and 2025, respectively.
The amount dropped from approximately RMB 65.4 million in the year ended December 31, 2023, to roughly RMB 23.3 million (USD 3.3 million) in the year ended December 31, 2024. The reason for the reduction is that the company implemented employee equity incentive plan in 2023.
The amount dropped from approximately RMB 65.4 million in the year ended December 31, 2023, to roughly RMB 23.3 million in the year ended December 31, 2024. The reason for the reduction is that the company implemented employee equity incentive plan in 2023. General and administrative expenses decreased by approximately RMB 4.0 million, reflecting a substantial 17.3% decline.
In addition, our wholly foreign-owned subsidiaries in China may allocate a portion of their after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at their discretion, and our variable interest entities may allocate a portion of their after-tax profits based on PRC accounting standards to a discretionary surplus fund at their discretion.
In addition, our wholly foreign-owned subsidiaries in China may allocate a portion of their after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
As a result, our research and development progress slowed down. 70 Table of Contents Research and development expenses increased from RMB 78.7million for the year ended December 31, 2023 to approximately RMB 174.4 million (USD 24.5 million) for the year ended December 31, 2024, an increase of approximately RMB 95.7 million, or approximately 121.7%.
Research and development expenses increased from RMB 78.7million for the year ended December 31, 2023 to approximately RMB 174.4 million for the year ended December 31, 2024, an increase of approximately RMB 95.7 million, or approximately 121.7%.
Research and development expenses Research and development expenses were RMB 174.4 million (USD 24.5 million) for 2024, compared to RMB 78.7 million and RMB 331.3 million, respectively, for 2023 and 2022.
Research and development expenses Research and development expenses were RMB 57.0 million (USD 8.0 million) for 2025, compared to RMB 174.4 million and RMB 78.7 million, respectively, for 2024 and 2023.
The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE.
Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE.
Allowance for expected credit loss Allowance for expected credit loss were RMB 2.5 million (USD 0.3 million) for 2024, compared to RMB 0.9 million and RMB 3.0 million, respectively, for 2023 and 2022.
Allowance for expected credit losses Allowance for expected credit losses was RMB 4.4 million (USD 0.6 million) for 2025, compared to RMB 2.5 million and RMB 0.9 million, respectively, for 2024 and 2023.
Our cost of revenues for services was approximately RMB 161.5 million for the year ended December 31, 2022 compared to approximately RMB 111.0 million for the year ended December 31, 2023. Our cost of revenues for services increased by approximately RMB 107.3 million, representing a 96.7% growth.
Our cost of revenues for services was approximately RMB 69.7 million for the year ended December 31, 2023 compared to approximately RMB 118.2 million for the year ended December 31, 2024. Our cost of revenues for services increased by approximately RMB 39.2 million, representing a 33.2% growth.
Finance income, net Finance income was RMB 23.3 million (USD 3.3 million) for 2024, compared to RMB 3.4 million and RMB 1.7 million, respectively, for 2023 and 2022 which consisted primarily of interest earned from our cash and cash equivalents.
Finance income, net Finance income was RMB 44.4 million (USD 6.2 million) for 2025, compared to RMB 23.3 million and RMB 3.4million, respectively, for 2024 and 2023 which consisted primarily of interest earned from our cash and cash equivalents. 71 Table of Contents Investment gain/(loss) Investment loss was RMB 98.4 million (USD 13.8 million) for 2025, compared to investment gain of RMB 42.3 million and nil, respectively, for 2024 and 2023.
Net cash provided by financing activities for the year ended December 31, 2023 was RMB 2.2 million, primarily due to proceeds of third-party loan of RMB 9.9 million. Cash inflow was offset by the repayments of third-party loan of RMB 7.4 million and repayments to related parties of RMB 0.4 million.
Cash inflow was offset by the repayments of third-party loan of RMB 7.4 million and repayments to related parties of RMB 0.4 million.
The amount grew from approximately RMB 111.0 million for the year ended December 31, 2023, to approximately RMB 218.3 million (USD 30.7 million) for the year ended December 31, 2024. This significant increase was mainly attributable to the business combination of Beijing Ji Yue and Yichang Ji Yue in 2024.
The amount grew from approximately RMB 118.2 million for the year ended December 31, 2024, to approximately RMB 157.4 million (USD 22.0 million) for the year ended December 31, 2025. This significant increase was mainly attributable to the business combination of Shanghai Kuo Sou in 2025.
Although the pandemic was fully lifted in China by early 2023, its impact on our economy continues. The selling expenses decreased by approximately RMB 3.2 million, representing a decline of 47.3%, from around RMB 6.7 million for the year ended December 31, 2023, to approximately RMB 3.5 million (USD 0.5 million) for the year ended December 31, 2024.
The selling expenses decreased by approximately RMB 3.2 million, representing a decline of 47.3%, from around RMB 6.7 million for the year ended December 31, 2023, to approximately RMB 3.5 million for the year ended December 31, 2024. The reason for the reduction is that the company cut down on advertising and promotion expenses in 2024.
For the Years Ended December 31, 2022 2023 2024 2024 RMB RMB RMB USD Net cash used in operating activities (134,658,768 ) (27,738,609 ) (98,619,387) (13,847,731 ) Net cash provided by (used in) investing activities 11,507,523 (1,374,615 ) (682,981,811 ) (95,011,675) Net cash provided by financing activities 223,882,640 2,204,176 1,506,897,224 209,632,098 Effect of exchange rate change on cash and cash equivalents 2,381,611 1,826,601 136,872 (117,198 ) Net change in cash and cash equivalents 103,113,006 (25,082,447 ) 725,432,898 100,655,494 Cash and cash equivalents, beginning of year 48,006,979 151,119,985 126,037,538 17,795,126 Cash and cash equivalents, end of year 151,119,985 126,037,538 851,470,436 118,450,620 Operating activities Net cash used in operating activities was approximately RMB 98.6 million (USD 13.8 million) for the year ended December 31, 2024, as compared to net cash used in operating activities of approximately RMB 27.7 million for the year ended December 31, 2023 and RMB 134.7 million for the year ended December 31, 2022.
For the Years Ended December 31, 2023 2024 2025 2025 RMB RMB RMB USD Net cash (used in) provided by operating activities (27,738,609 ) (98,619,387 ) 56,371,190 7,891,917 Net cash used in investing activities (1,374,615 ) (682,981,811 ) (285,557,644 ) (40,653,353 ) Net cash provided by financing activities 2,204,176 1,506,897,224 1,239,925,789 176,410,199 Effect of exchange rate change on cash and cash equivalents 1,826,601 136,872 (18,820,901 ) 162,862 Net change in cash and cash equivalents (25,082,447 ) 725,432,898 991,918,434 143,811,625 Cash and cash equivalents, beginning of year 151,119,985 126,037,538 851,470,436 118,450,620 Cash and cash equivalents, end of year 126,037,538 851,470,436 1,843,388,870 262,262,245 Operating activities Net cash provided by operating activities was approximately RMB 56.4 million (USD 7.9 million) for the year ended December 31, 2025, as compared to net cash used in operating activities of approximately RMB 98.6 million for the year ended December 31, 2024 and RMB 27.7 million for the year ended December 31, 2023.
Investing activities Net cash used in investing activities were approximately RMB 683.0 million (USD 95.0 million) for the year ended December 31, 2024, as compared to net cash used in investing activities approximately RMB 1.4 million for the year ended December 31, 2023 and net cash provided by investing activities of approximately RMB 11.5 million for the year ended December 31, 2022.
Investing activities Net cash used in investing activities were approximately RMB 285.6 million (USD 40.7 million) for the year ended December 31, 2025, as compared to net cash used in investing activities approximately RMB 683.0 million for the year ended December 31, 2024 and approximately RMB 1.4 million for the year ended December 31, 2023. 73 Table of Contents Net cash used in investing activities was approximately RMB 285.6 million (USD 40.7 million) for the year ended December 31, 2025, primarily due to the purchases of short-term investments of approximately RMB 5,855.0 million (USD 833.0 million) and redemption of short-term investments of approximately RMB 5,557.7 million (USD 790.7 million).
The decrease was mainly due to market changes affecting the demand for our products and the reduced demand for holographic solutions from our customers.
The increase was mainly due to the impact of market changes on the demand for our services, as well as the increased demand from customers for holographic solutions.
Our services revenue decreased by approximately RMB 182.2 million, or 50.1%, from approximately RMB 363.3 million for the year ended December 31, 2022, to approximately RMB 181.1 million for the year ended December 31, 2023. This decrease was mainly attributed to the overall market environment for Internet advertising, with lower customer demand and fewer customers.
Our holographic technology services revenue increased by approximately RMB 26.2 million, or 19.4%, from approximately RMB 135.2 million for the year ended December 31, 2023, to approximately RMB 161.4 million for the year ended December 31, 2024. This increase was mainly attributed to the overall market environment of internet advertising, namely the increase in customer demand.
Our services revenue increased by approximately RMB 101.2 million, or 55.9%, from approximately RMB 181.1 million for the year ended December 31, 2023, to approximately RMB 282.4 million (USD 39.7 million) for the year ended December 31, 2024.
Our holographic technology services revenue increased by approximately RMB 43.0 million, or 26.7%, from approximately RMB161.4 million for the year ended December 31, 2024, to approximately RMB204.4million (USD 28.6 million) for the year ended December 31, 2025.
Profit or loss on disposal of subsidiaries Profit on disposal of subsidiaries was RMB 5.9 million (USD 0.8 million) for 2024, compared to loss on disposal of subsidiaries of RMB 15.3 million and nil, respectively, for 2023 and 2022.
The decrease is from loss recognized from the fair value change in short-term investments in 2025. (Loss) gain on disposal of subsidiaries Gain on disposal of subsidiaries was RMB 0.3 million (USD 43,591) for 2025, compared to RMB 5.9 million and loss on disposal of subsidiaries of RMB 15.3 million, respectively, for 2024 and 2023.
The revenue of our products, which decreased by approximately RMB 14.5 million, decrease of 64.7%, from approximately RMB 22.4 million for the year ended December 31, 2023, compared to approximately RMB 7.9 million (USD 1.1 million) for the year ended December 31, 2024. The decline is due to the reduced demand for holographic solutions from our customers.
The revenues of our holographic solutions, which increased by approximately RMB 70.4million, increase of 54.6%, from approximately RMB 128.9 million for the year ended December 31, 2024, compared to approximately RMB 199.3million (USD 27.9 million) for the year ended December 31, 2025. The reason for the increase in revenue is the expanded demand from customers for holographic solutions.
The selling expenses decreased by approximately RMB 2.1 million, representing a decline of 24.2%, from around RMB 8.8 million for the year ended December 31, 2022, to approximately RMB 6.7 million for the year ended December 31, 2023. This reduction primarily resulted from a decrease in salary and benefit expenditures related to our sales team.
The selling expenses decreased by approximately RMB 0.8 million, representing a decline of 23.6%, from around RMB 3.5 million for the year ended December 31, 2024, to approximately RMB 2.7 million (USD 0.4 million) for the year ended December 31, 2025. The reason for the reduction is that the company cut down on advertising and promotion expenses in 2025.
Our cost of revenues for product sales decreased by approximately RMB 11.7 million, representing a 63.9% decline. The figure dropped from approximately RMB 18.3 million in the year ended December 31, 2023, to approximately RMB 6.6 million (USD 0.9 million) in the year ended December 31, 2024.
Our cost of revenues for holographic solutions increased by approximately RMB 47.1 million, or 79.1%, from approximately RMB 59.6 million for the year ended December 31, 2023, to approximately RMB 106.7 million for the year ended December 31, 2024. Our cost of revenues for holographic solutions increased by approximately RMB 53.8 million, representing a 50.4% growth.
LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2024, we had cash and short-term investment of approximately RMB 1,577.1 million (USD 219.4 million). Our working capital was approximately RMB 1,580.2 million (USD 219.8 million) as of December 31, 2024. In assessing our liquidity, we monitor and analysis our cash on-hand and our operating and capital expenditure commitments.
LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2025, we had cash and short-term investments of approximately RMB 2,742.5 million (USD 390.2 million). Our working capital was approximately RMB 2,693.7 million (USD 383.2 million) as of December 31, 2025. In our opinion, our working capital is sufficient for our present requirements.
Research and Development Expenses Our research and development expenses include salaries and other compensation-related expenses to our research and product development personnel, outsourced subcontractors, as well as office rental, depreciation, and related expenses for our research and product development team. 67 Table of Contents Results of Operations Revenues We generate revenues primarily through (i) sales of product related to holographic solutions services, which include LiDAR and other holographic technology hardware products, licensing and content products, and technology development service, and (ii) services related to holographic technology services, which include holographic technology advertising, software development kit (“SDK”) service, and game promotion services.
Research and Development Expenses Our research and development expenses include salaries and other compensation-related expenses to our research and product development personnel, outsourced subcontractors, as well as office rental, depreciation, and related expenses for our research and product development team.
To date, we have financed our working capital requirements through cash flow generated from operations, debt and equity financings. Following the approval of the Business Combination, on September 16, 2022, we received net cash proceeds of $33.2 million from then closing of the Business Combination, net of certain transaction costs.
In assessing our liquidity, we monitor and analysis our cash on-hand and our operating and capital expenditure commitments. To date, we have financed our working capital requirements through cash flow generated from operations, debt and equity financings.
Net cash provided by investing activities was RMB 11.5 million for the year ended December 31, 2022, primarily due to the loan repayment from third parties of RMB 23.7 million, partially offset by the loan proceeds to third parties of RMB 10.3 million and purchase of property and equipment of RMB 1.8 million.
Net cash provided by financing activities was approximately RMB 1,239.9 million (USD 176.4 million) for the year ended December 31, 2025, which was primarily derived from proceeds of approximately RMB 1,241.6 million (USD 176.6 million) from convertible bonds, proceeds of approximately RMB 4.3 million (USD 0.6 million) from bank loans, partially net off by a repayment of bank loans of approximately RMB 5.9 million (USD 0.8 million).
General and administrative expenses increased from RMB 22.9 million for the year ended December 31, 2022 to approximately RMB 65.4 million for the year ended December 31, 2023, an increase of approximately RMB 42.5 million, or approximately 184.9%.
Our holographic solutions revenues increased by approximately RMB 60.5 million from approximately RMB 68.3 million for the year ended December 31, 2023 to approximately RMB 128.9million for the year ended December 31, 2024. an increase of 88.6%.
Services Revenues Our Services revenues was RMB 282.4 million (USD 39.7 million) for 2024, compared to RMB 181.1 million and RMB 363.3 million, respectively, for 2023 and 2022.
Holographic technology s ervices Revenues Our holographic technology services revenues was RMB 204.4 million (USD28.6 million) for 2025, compared to RMB 161.4million and RMB 135.2million, respectively, for 2024 and 2023.
We generate revenues primarily through (i) sales of product related to holographic solutions services, which include LiDAR and other holographic technology hardware products, licensing and content products, and technology development service, and (ii) services related to holographic technology services, which include holographic technology advertising, software development kit (“SDK”) service, and promotion services. 66 Table of Contents Our breakdown of revenues for the years ended December 31, 2022, 2023 and 2024, respectively, is summarized below: For the Years Ended December 31, 2022 2023 2024 2024 RMB RMB RMB USD Revenues Products 124,609,677 22,401,569 7,903,228 1,109,739 Services 363,329,187 181,146,436 282,394,756 39,652,717 Total revenue 487,938,864 203,548,005 290,297,984 40,762,456 Cost of Revenues Our cost of revenues primarily includes (i) the costs of hardware products sold and cost paid to outsourced content providers, cost of third-party software development, and compensation expenses paid to our professionals related to the product sales and (ii) the costs paid to channel distributors of advertising services and compensation expenses paid to our professionals related to our service revenues.
Results of Operations Revenues We generate revenues primarily through (i) sales of product related to holographic solutions services, which include LiDAR and other holographic technology hardware products, licensing and content products, and technology development service, and (ii) services related to holographic technology services, which include holographic technology advertising, software development kit (“SDK”) service, and promotion services. 67 Table of Contents Our breakdown of revenues for the years ended December 31, 2023, 2024, and 2025, respectively, is summarized below: Year ended December 31, 2023 2024 2025 RMB RMB RMB Amount Percentage Amount Percentage Amount Percentage Revenues: Holographic solutions 68,345,506 34 % 128,892,235 44 % 199,259,020 49 % Holographic technology service 135,202,499 66 % 161,405,749 56 % 204,427,203 51 % Total revenues 203,548,005 100 % 290,297,984 100 % 403,686,223 100 % Holographic solutions Revenues Our holographic solutions revenues were RMB 199.3 million (USD27.9 million) for 2025, compared to RMB128.9 million and RMB 68.3 million, respectively, for 2024 and 2023.
Our product revenue decreased by approximately RMB 102.2 million from approximately RMB 124.6 million for the year ended December 31, 2022 to approximately RMB 22.4 million for the year ended December 31, 2023. A decrease of 82.0%.
Research and development expenses decreased from RMB 174.4 million for the year ended December 31, 2024 to approximately RMB 57.0 million (USD 8.0 million) for the year ended December 31, 2025, a decrease of approximately RMB 117.4 million, or approximately 67.3%.
The reason for the reduction is that the company cut down on advertising and promotion expenses in 2024. General and administrative expenses General and administrative expenses were RMB 23.3 million (USD 3.3 million) for 2024, compared to RMB 65.4 million and RMB 22.9 million, respectively, for 2023 and 2022.
General and administrative expenses General and administrative expenses were RMB 19.2 million (USD 2.7 million) for 2025, compared to RMB 23.3 million and RMB 65.4 million, respectively, for 2024 and 2023. General and administrative expenses decreased by approximately RMB 42.1 million, reflecting a substantial 64.4% decline.
Removed
Our holographic technology services include high-precision holographic light detection and ranging (“LiDAR”) solutions, based on holographic technology, exclusive holographic LiDAR point cloud algorithms architecture design, breakthrough technical holographic imaging solutions, holographic LiDAR sensor chip design and holographic vehicle intelligent vision technology to service customers that provide reliable holographic advanced driver assistance systems (“ADAS”).
Added
Key Factors Affecting Results of Operations Our results of operations are affected by the factors discussed below.
Removed
We also provide holographic digital twin technology services for customers and have built a proprietary holographic digital twin technology resource library.
Added
We generate revenues primarily through (i) sales of product related to holographic solutions services, which include LiDAR and other holographic technology hardware products, licensing and content products, and technology development service, and (ii) services related to holographic technology services, which include holographic technology advertising, software development kit (“SDK”) service, and promotion services. 66 Table of Contents Our breakdown of revenues for the years ended December 31, 2023, 2024, and 2025, respectively, is summarized below: For the Years Ended December 31, 2023 2024 2025 2025 RMB RMB RMB USD Revenues Holographic solutions 68,345,506 128,892,235 199,259,020 27,896,095 Holographic technology service 135,202,499 161,405,749 204,427,203 28,619,637 Total revenue 203,548,005 290,297,984 403,686,223 56,515,732 Cost of Revenues Our breakdown of the cost of revenues for the years ended December 31, 2023, 2024, and 2025, respectively, is summarized below: For the Years Ended December 31, 2023 2024 2025 2025 RMB RMB RMB USD Cost of revenues Holographic solutions 59,562,014 106,682,488 160,434,849 22,460,744 Holographic technology service 69,734,292 118,169,173 157,374,663 22,032,321 Total cost of revenues 129,296,306 224,851,661 317,809,512 44,493,065 Selling expenses Our selling expenses consist primarily of (i) compensation for selling personnel and (ii) travel expenses for its sales representatives.
Removed
Our holographic digital twin technology resource library captures shapes and objects in 3D holographic form by utilizing a combination of our holographic digital twin software, digital content, spatial data-driven data science, holographic digital cloud algorithm, and holographic 3D capture technology.
Added
This increase was mainly attributed to the business merger of Shanghai Kuo Sou in 2025, which had led to an upward trend in revenue.
Removed
Our holographic digital twin technology and resource library have the potential to become the new norm for the digital twin augmented physical world in the near future. We are also a distributer of holographic hardware and generates revenue through resale. We provide a broad range of holographic technology services in the holographic industry.
Added
Ability to retain and attract customers The Company’s management team monitors the number of total customers, number of new customers, number of high paying customers, and customer retention rate as indicators of the growth and condition of the Company’s overall business. As to performance metrics, the number of high paying customers reflects the quality of the Company’s earnings.
Removed
Our holographic solutions and technology services are capable of meeting the complex and multi-faceted holographic technology needs of our customers. Our cutting-edge holographic LiDAR system is used in ADAS, allowing equipped automobiles and other vehicles to capture high-resolution 3D holograms and achieve ultra-long detection distance.
Added
The retention rate reflects the Company’s service quality, customer loyalty to our services, and the sustainability of the Company’s business growth. If the number of new customers, high paying customers, and retention rate fall, the Company may need to re-evaluate its business strategy or evaluate its service efficiency.
Removed
Our holographic LiDAR solutions allow the automotive industry to break free from bulky mechanical rotating scanning systems and traditional sensors to solid-state LiDAR sensor with more components and smaller dimensions that can meet the demanding performance, safety, and cost requirements of our customers. 64 Table of Contents Our holographic ADAS provide a rich and safe set of autonomous control programs for vehicles.
Added
The quantitative information in number of customers and retention rate provides investors with information to evaluate the Company revenue growth, revenue quality, and concentration risk on a periodic basis.
Removed
The point cloud algorithm for holographic LiDAR can detect and track obstacles, thereby avoiding and mitigating automotive collisions with both moving and static objects, including pedestrians and other vulnerable road obstacles and vehicles.
Added
This information also provides investors insights on how the Company measures and monitors its performance. 68 Table of Contents The Company’s total customers were 119 and 142, respectively for the years ended December 31, 2023 and 2024, representing a19.3% increase, of which 102 are new customers.
Removed
By predicting and monitoring collision, our holographic LiDAR system calculates effective collusion mitigation plans by comparing the trajectory of an object with the trajectory of the moving vehicle to identify and avoid emergency situations while providing optimal comfort and safety to the driver.
Added
The increase in the number of customers led to a grow in total revenue.Total customers were 142 and 128, respectively for the year ended December 31, 2024 and 2025, representing a 9.9% decrease, of which 70 are new customers.
Removed
Due to its effectiveness, our holographic ADAS are being deployed at an increasing rate in the automotive industry.
Added
Due to by vigorously tapping into the potential of existing customers and increasing the proportion of high-value customers, the total revenue has shown a trend of growth. The Company considers customers with or over RMB 0.5 million revenue as high paying customers.
Removed
As automakers and leading mobile and technology companies seek comprehensive digital perceptual solutions to accelerate and scale production for their autonomous driving programs, we believe that our holographic LiDAR can take advantage of this market trend to achieve excellent solutions for mass production of large-scale autonomous driving programs and vehicles.
Added
The numbers of high payment customers are 42 and 69, respectively for the years ended December 31, 2023 and 2024, representing 96.1% and 96.6% of total revenue for each period and a 43.4% increase.
Removed
Moreover, we are aligned to the rapid development of the Internet of Things, machine learning, and artificial intelligence (“AI”). Our holographic LiDAR solution is not only applicable to the field of intelligent vehicles but also applicable to robots, unmanned aerial vehicles (“UAVs”), advanced security systems, intelligent city development, industrial automation, environment, and mapping.
Added
The number of high-paying customers both are 69, for the year ended December 31, 2024 and 2025, representing 96.6% and 97.8% of total revenue for each period and a 40.7% increase. the Company’s overall customer retention rates are 24% and 34% respectively for the years ended December 31, 2023 and 2024.
Removed
Our holographic digital twin technology resource library is built upon extensive holographic data modelling, simulation and bionics technology, culminating in a comprehensive holographic digital twin resource library which holographic developers and designers count on.
Added
Retention rates of high paying customer are 29% and 43% respectively for the same period. Retention rates of the Company’s top 10 customers are 50% and 30% respectively for the years ended December 31, 2023, and 2024, respectively. Retention rates of the Company’s top 20 customers are 55% and 20% for the years ended December 31, 2023, and 2024, respectively.
Removed
Our digital twin resource library integrates holographic bionics and simulation digital models, as well as various holographic software technologies about holographic spatial positioning, dynamic capture, holographic image synthesis, which are open to all our users. We also provide customized holographic digital twin technology integration services for enterprise customers with unique commercial demands.
Added
The Company’s overall customer retention rates are 34% and 41% respectively for the year ended December 31, 2024 and 2025. Retention rates of high paying customer are 43% and 41% respectively for the same period. Retention rates of the Company’s top 10 customers both are 30% for the year ended December 31, 2024 and 2025.
Removed
With each technological advancement and product iteration, we continue to lay a solid foundation for increased competitiveness and long-term strategic development.
Added
Retention rates of the Company’s top 20 customers are 20% and 40% for the year ended December 31, 2024 and 2025, respectively. Retention rate is calculated by first counting the number of customers at the beginning of the period (denominator) and the number of old customers during measurement period (numerator), then dividing the numerator by the denominator.
Removed
We aim to continually provide customers with high-quality holographic technology services by dedicating significant resources to research and development in advanced holographic technology so as to achieve steady growth of revenue and improvement of market share for the benefit of shareholders.

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Item 6. [Reserved]

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

22 edited+3 added−2 removed40 unchanged
Biggest changeCommittees of Our Board of Directors Our board of directors has established an audit committee, a compensation committee, and a nominating committee. The composition and responsibilities of each of these committees of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors.
Biggest changeThe composition and responsibilities of each of these committees of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may have or establish other committees as it deems necessary or appropriate from time to time.
The Audit Committee is responsible for, among other things: ● establishing clear hiring policies for employees or former employees of the independent auditors; ● reviewing and recommending to our Board of Directors for approval, the appointment, re-appointment or removal of the independent auditor, after considering our annual performance evaluation of the independent auditor; ● approving the remuneration and terms of engagement of the independent auditor and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors at least annually; ● obtaining a written report from our independent auditor describing matters relating to our independence and quality control procedures; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● discussing with our independent auditor, among other things, the audits of the financial statements, including whether any material information should be disclosed, issues regarding accounting and auditing principles and practices; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● reviewing and recommending the financial statements for inclusion within our quarterly earnings releases and to our Board of Directors for inclusion in our annual reports; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; 78 Table of Contents ● reviewing policies with respect to risk assessment and risk management; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any special steps taken to monitor and control major financial risk exposures; ● periodically reviewing and reassessing the adequacy of the committee charter; ● approving annual audit plans, and undertaking an annual performance evaluation of the internal audit function; ● establishing and overseeing procedures for the handling of complaints and whistleblowing; ● meeting separately and periodically with management, the internal auditors and the independent registered public accounting firm; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; ● reporting periodically to our Board of Directors; and ● such other matters that are specifically delegated to our audit committee by our Board of Directors from time to time.
The Audit Committee is responsible for, among other things: ● establishing clear hiring policies for employees or former employees of the independent auditors; ● reviewing and recommending to our Board of Directors for approval, the appointment, re-appointment or removal of the independent auditor, after considering our annual performance evaluation of the independent auditor; ● approving the remuneration and terms of engagement of the independent auditor and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors at least annually; ● obtaining a written report from our independent auditor describing matters relating to our independence and quality control procedures; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● discussing with our independent auditor, among other things, the audits of the financial statements, including whether any material information should be disclosed, issues regarding accounting and auditing principles and practices; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● reviewing and recommending the financial statements for inclusion within our quarterly earnings releases and to our Board of Directors for inclusion in our annual reports; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing policies with respect to risk assessment and risk management; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any special steps taken to monitor and control major financial risk exposures; ● periodically reviewing and reassessing the adequacy of the committee charter; ● approving annual audit plans, and undertaking an annual performance evaluation of the internal audit function; 79 Table of Contents ● establishing and overseeing procedures for the handling of complaints and whistleblowing; ● meeting separately and periodically with management, the internal auditors and the independent registered public accounting firm; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; ● reporting periodically to our Board of Directors; and ● such other matters that are specifically delegated to our audit committee by our Board of Directors from time to time.
The principal functions of the compensation committee include: ● reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer’s based on such evaluation; 79 Table of Contents ● reviewing and approving the compensation of all of our other officers; ● reviewing our executive compensation policies and plans; ● implementing and administering our incentive compensation equity-based remuneration plans; ● assisting management in complying with our proxy statement and annual report disclosure requirements; ● approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; ● producing a report on executive compensation to be included in our annual proxy statement; and ● reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The principal functions of the compensation committee include: ● reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer’s based on such evaluation; 80 Table of Contents ● reviewing and approving the compensation of all of our other officers; ● reviewing our executive compensation policies and plans; ● implementing and administering our incentive compensation equity-based remuneration plans; ● assisting management in complying with our proxy statement and annual report disclosure requirements; ● approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; ● producing a report on executive compensation to be included in our annual proxy statement; and ● reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers for a specified time period providing that the agreements are terminable for cause at any time. The terms of these agreement are substantially similar to each other.
Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers for a specified time period providing that the agreements are terminable for cause at any time. The terms of these agreements are substantially similar to each other.
To our knowledge, based solely on our review of Forms 3, 4 and 5, and any amendments thereto, furnished to us or written representations that no Form 5 was required, we believe that during the fiscal year ended December 31, 2024, all filing requirements applicable to our executive officers and directors under the Exchange Act were met in a timely manner.
To our knowledge, based solely on our review of Forms 3, 4 and 5, and any amendments thereto, furnished to us or written representations that no Form 5 was required, we believe that during the fiscal year ended December 31, 2025, all filing requirements applicable to our executive officers and directors under the Exchange Act were met in a timely manner.
SHARE OWNERSHIP The table below sets forth information, as of December 31, 2024, with respect to the beneficial ownership of our Ordinary shares by: (a) each named executive officer, each of our directors and executive officers as a group; and (b) each person known to us to own beneficially more than 5% of our Ordinary shares (by number and by voting power).
SHARE OWNERSHIP The table below sets forth information, as of December 31, 2025, with respect to the beneficial ownership of our Ordinary shares by: (a) each named executive officer, each of our directors and executive officers as a group; and (b) each person known to us to own beneficially more than 5% of our Ordinary shares (by number and by voting power).
Wei Peng, as the sole director and sole shareholder of Best Road Holdings Limited, has voting and investment discretion over these shares and therefore may be deemed to beneficially own such shares. F. DISCLOSURE OF A REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION Not applicable. 81 Table of Contents
Wei Peng, as the sole director and sole shareholder of Best Road Holdings Limited, has voting and investment discretion over these shares and therefore may be deemed to beneficially own such shares. F. DISCLOSURE OF A REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION Not applicable.
Wang has over 16 years of experience in the financial services industry in Asia. Further, she has direct oversight on specific risk management functions such as financial and insurance product control, assets and liabilities management and customer risk management. Prior to joining our Company, Ms.
Ms. Wang has extensive experience in financial accounting, internal control and risk management. Ms. Wang has over 16 years of experience in the financial services industry in Asia. Further, she has direct oversight on specific risk management functions such as financial and insurance product control, assets and liabilities management and customer risk management. Prior to joining our Company, Ms.
From 2015 to 2021, she has been serving as supervisor for Lvxun Network Technology Co., Ltd. and has concurrently served as a director of Enwei Quantum Capital Investment Co., Ltd. since 2006 to 2015, she has also served as a director of Softcloud Digital Software Co., Ltd.. Ms.
Prior to joining MC. From 2015 to 2021, she has been serving as supervisor for Lvxun Network Technology Co., Ltd. and has concurrently served as a director of Enwei Quantum Capital Investment Co., Ltd. since 2006 to 2015, she has also served as a director of Softcloud Digital Software Co., Ltd. Ms.
Qin obtained a Doctor of Philosophy degree in industrial and manufacturing systems engineering from the University of Hong Kong in May 2014, a master’s degree in management science and engineering from the Wuhan University in June 2009, and a bachelor’s degree in engineering management in June 2005. B.
Qin obtained a Doctor of Philosophy degree in industrial and manufacturing systems engineering from the University of Hong Kong in May 2014, a master’s degree in management science and engineering from the Wuhan University in June 2009, and a bachelor’s degree in engineering management in June 2005. 77 Table of Contents B.
DIRECTORS AND SENIOR MANAGEMENT The following table sets forth certain information regarding our executive officers and members of the Company’s board of directors (the “Board of Directors”) as of the date of this Annual Report: Name Age Position Served From Wei Peng 41 Chairman of the Board of Directors September 2022 Guohui Kang 48 Director, Chief Executive Officer September 2022 Bei Zhen 36 Chief Financial Officer September 2022 Belief Bi (1)(2)(3) 39 Independent Director February 2023 Maggie Wang (1)(2)(3) 42 Independent Director February 2023 Han Qin (1)(2)(3) 41 Independent Director September 2022 Note: (1) Member of the compensation committee.
DIRECTORS AND SENIOR MANAGEMENT The following table sets forth certain information regarding our executive officers and members of the Company’s board of directors (the “Board of Directors”) as of the date of this Annual Report: Name Age Position Served From Wei Peng 42 Chairman of the Board of Directors September 2022 Guohui Kang 49 Director, Chief Executive Officer September 2022 Bei Zhen 37 Chief Financial Officer September 2022 Belief Bi (1)(2)(3) 40 Independent Director February 2023 Maggie Wang (1)(2)(3) 43 Independent Director February 2023 Han Qin (1)(2)(3) 42 Independent Director September 2022 Note: (1) Member of the compensation committee.
EMPLOYEES The following table sets forth the number of our employees as of December 31, 2024: Function Number of full-time employees Research and Development 33 Business and Marketing 22 Administrative, Human Resources and Finance 9 Total 64 80 Table of Contents Under PRC law, we participate in various employee social security plans that are organized by municipal and provincial governments for our PRC-based full-time employees, including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing fund.
EMPLOYEES The following table sets forth the number of our employees as of December 31, 2025: Function Number of full-time employees Research and Development 37 Business and Marketing 25 Administrative, Human Resources and Finance 12 Total 74 81 Table of Contents Under PRC law, we participate in various employee social security plans that are organized by municipal and provincial governments for our PRC-based full-time employees, including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing fund.
Our board of directors may exercise all of the powers of our company to borrow money, to mortgage or charge its undertaking, property and uncalled capital, or any part thereof, and to issue debentures, debenture stock or other securities whenever money is borrowed or as security for any debt, liability or obligation of our company or of any third party.
Our board of directors may exercise all of the powers of our company to borrow money, to mortgage or charge its undertaking, property and uncalled capital, or any part thereof, and to issue debentures, debenture stock or other securities whenever money is borrowed or as security for any debt, liability or obligation of our company or of any third party. 78 Table of Contents Committees of Our Board of Directors Our board of directors has established an audit committee, a compensation committee, and a nominating committee.
COMPENSATION Compensation In 2024, we paid an aggregate cash compensation of approximately RMB 702,552.48(USD 98,649.55) to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
COMPENSATION Compensation In 2025, we paid an aggregate cash compensation of approximately RMB702,858 (USD 98,400) to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
We have determined that each of them satisfies the “independence” requirements of Rule 5605(c)(2) of the Listing Rules of the Nasdaq and meet the independence standards under Rule 10A-3 under the Exchange Act, as amended. We have also determined that Ms. Maggie Wang qualifies as an “audit committee financial expert.” The chair of our Audit Committee is Ms. Maggie Wang.
Audit Committee Our Audit Committee consists of Mr. Belief Bi, Ms. Maggie Wang, and Ms. Han Qin. We have determined that each of them satisfies the “independence” requirements of Rule 5605(c)(2) of the Listing Rules of the Nasdaq and meet the independence standards under Rule 10A-3 under the Exchange Act, as amended. We have also determined that Ms.
Each director holds office for the term fixed by the resolution of the directors appointing such director. 77 Table of Contents A director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction with our company is required to declare the nature of his or her interest at a meeting of our directors.
A director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract or transaction with our company is required to declare the nature of his or her interest at a meeting of our directors.
Class A Ordinary shares Class B Ordinary shares Voting Power** Name and Address of Beneficial Owner Number %** Number %** (% Executive Officers and Directors - - Guohui Kang (1) 25,315 * - - * Bei Zhen - - - - - Wei Peng (2) 41,510 * - - * Belief Bi - - - - - Han Qin - - - - - Maggie Wang - - - - - All Executive Officers and Directors as a group 66,825 - - - - 5% Shareholders Tiger Initiative Investment Ltd 4,579,207 2.84 % 10,000,000 62.5 % 42.53 % Lucky Monkey Holding Limited 3,656,615 2.27 % 6,000,000 37.5 % 25.7 % Note: * Indicates beneficial ownership of less than 1%. ** 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 outstanding Class A Ordinary Shares and Class B Ordinary Shares voting together as a single class.
Class A Ordinary shares Class B Ordinary shares Voting Power** Name and Address of Beneficial Owner Number %** Number %** (% Executive Officers and Directors - - Guohui Kang (1) 632 * - - * Bei Zhen - - - - - Wei Peng (2) 1,037 * - - * Belief Bi - - - - - Han Qin - - - - - Maggie Wang - - - - - All Executive Officers and Directors as a group 1,669 - - - - 5% Shareholders Tiger Initiative Investment Ltd 114,479 * 250,000 62.5 % 16.76 % Lucky Monkey Holding Limited 91,415 * 150,000 37.5 % 10.13 % Note: * Indicates beneficial ownership of less than 1%. 82 Table of Contents ** 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 outstanding Class A Ordinary Shares and Class B Ordinary Shares voting together as a single class.
The calculations in the table below are based on 161,077,568 Class A ordinary shares and 16,000,000 Class B Ordinary Shares par value $0.02 per share, outstanding as of March 12, 2025.
The calculations in the table below are based on 22,512,360 Class A ordinary shares and 400,000 Class B Ordinary Shares par value $0.8 per share, outstanding as of December 31, 2025.
The Corporate Governance Rules of the Nasdaq generally require that a majority of an issuer’s board of directors must consist of independent directors.
The Corporate Governance Rules of the Nasdaq generally require that a majority of an issuer’s board of directors must consist of independent directors. Each director holds office for the term fixed by the resolution of the directors appointing such director.
Bi worked as an assistant president in Ninetowns Group (Nasdaq: NINE) from 2013 to 2015, where he was responsible for the agricultural e-commerce and real estate segments of the company. Mr.
Bi worked as an assistant president in Ninetowns Group (Nasdaq: NINE) from 2013 to 2015, where he was responsible for the agricultural e-commerce and real estate segments of the company. Mr. Bi received a bachelor of law degree from China University of Political Science and Law in 2010. Maggie Wang has been serving as our independent director since February 2023.
The Audit Committee oversees our accounting and financial reporting processes and the audits of our financial statements.
Maggie Wang qualifies as an “audit committee financial expert.” The chair of our Audit Committee is Ms. Maggie Wang. The Audit Committee oversees our accounting and financial reporting processes and the audits of our financial statements.
(2) Member of the nominating committee. (3) Member of the audit committee. Biographical Information Wei Peng has been serving as our Chairman of the Board of Directors since September 2022. From 2021, Ms. Peng has served as a director of MC. Prior to joining MC.
There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any of our directors or members of senior management were selected. 76 Table of Contents Biographical Information Wei Peng has been serving as our Chairman of the Board of Directors since September 2022. From 2021, Ms. Peng has served as a director of MC.
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Bi received a bachelor of law degree from China University of Political Science and Law in 2010. 76 Table of Contents Maggie Wang has been serving as our independent director since February 2023. Ms. Wang has extensive experience in financial accounting, internal control and risk management. Ms.
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(2) Member of the nominating committee. (3) Member of the audit committee.
Removed
Our board of directors may have or establish other committees as it deems necessary or appropriate from time to time. Audit Committee Our Audit Committee consists of Mr. Belief Bi, Ms. Maggie Wang, and Ms. Han Qin.
Added
During the fiscal year ended December 31, 2025, we were not required to prepare an accounting restatement that required recovery of erroneously awarded compensation pursuant to our compensation recovery policy.
Added
Furthermore, there was no outstanding balance as of the end of the last completed fiscal year of erroneously awarded compensation to be recovered from the application of the policy to a prior restatement.

Item 7. Management's Discussion & Analysis

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

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Biggest changeINTERESTS OF EXPERTS AND COUNSEL None. 82 Table of Contents
Biggest changeINTERESTS OF EXPERTS AND COUNSEL None. 83 Table of Contents

Other HOLO 10-K year-over-year comparisons