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LightInTheBox Holding Co., Ltd.

LightInTheBox Holding Co., Ltd.LITBEarnings & Financial Report

NYSE · Consumer Discretionary

LightInTheBox Holding Co., Ltd. is an online clothing sales company which specialises in cheap men's and women's clothes, and other goods that they describe as "lifestyle products". The company is headquartered in Singapore and has additional offices in California, Shanghai, and Beijing.

What changed in LightInTheBox Holding Co., Ltd.'s 20-F — 2022 vs 2023

Top changes in LightInTheBox Holding Co., Ltd.'s 2023 20-F

263 paragraphs added · 298 removed · 223 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

63 edited+26 added−30 removed231 unchanged
Below please find a summary of the principal risks we face. ​ ● Any catastrophe, including outbreaks of health pandemics and other extraordinary events, could severely disrupt our business operations. ● Changes in international trade policies and international barriers to trade, or the emergence of a trade war, may have an adverse effect on our business and expansion plans. ● The online retail industry is intensely competitive and we may not compete successfully against new and existing competitors, which may materially and adversely affect our results of operations. ● We face a number of challenges in the operation and expansion of our business. ● Any failure to manage our growth or execute our strategies effectively may materially and adversely affect our business and prospects. ● Our failure to quickly identify and adapt to changing industry conditions may have a material and adverse effect on our business, financial condition and results of operations. ● We may have difficulties managing our marketing efforts and may face increased competition in our marketing efforts, which could materially and adversely affect our business and growth prospects. ● Products manufactured by our suppliers may be defective in quality or infringe on the intellectual property rights of others, which may materially and adversely affect our business and our reputation. ● We use third-party couriers to deliver products and their failure to provide high quality delivery services or our failure to effectively manage our partnership with them may materially and adversely affect our business, financial condition and results of operations. ● We are subject to payment-related risks which may materially and adversely affect our business, financial condition and results of operations. ● We may not be able to successfully adopt new technologies or adapt our websites, mobile applications and systems to customer requirements or emerging industry standards, which may materially and adversely affect our business, financial condition and results of operations. ● The proper functioning of our information infrastructure or those of third-party service providers we reply upon is essential to our business and any failure to maintain the satisfactory performance, security and integrity of our information infrastructure may materially and adversely affect our business, reputation, financial condition and results of operations. ● We have incurred net losses and experienced net current liabilities and negative cash flow from operating activities in the past.
Below please find a summary of the principal risks we face. ​ ● Any catastrophe, including outbreaks of health pandemics and other extraordinary events, could severely disrupt our business operations. ● Changes in international trade policies and international barriers to trade, or the emergence of a trade war, may have an adverse effect on our business and expansion plans. ● The online retail industry is intensely competitive and we may not compete successfully against new and existing competitors, which may materially and adversely affect our results of operations. ● We face a number of challenges in the operation and expansion of our business. ● Any failure to manage our growth or execute our strategies effectively may materially and adversely affect our business and prospects. ● Our failure to quickly identify and adapt to changing industry conditions may have a material and adverse effect on our business, financial condition and results of operations. ● We may have difficulties managing our marketing efforts and may face increased competition in our marketing efforts, which could materially and adversely affect our business and growth prospects. ● Products manufactured by our suppliers may be defective in quality or infringe on the intellectual property rights of others, which may materially and adversely affect our business and our reputation. ● We use third-party couriers to deliver products and their failure to provide high quality delivery services or our failure to effectively manage our partnership with them may materially and adversely affect our business, financial condition and results of operations. ● We are subject to payment-related risks which may materially and adversely affect our business, financial condition and results of operations. ● We may not be able to successfully adopt new technologies or adapt our websites, mobile applications and systems to customer requirements or emerging industry standards, which may materially and adversely affect our business, financial condition and results of operations. ● The proper functioning of our information infrastructure or those of third-party service providers we rely upon is essential to our business and any failure to maintain the satisfactory performance, security and integrity of our information infrastructure may materially and adversely affect our business, reputation, financial condition and results of operations. ● We have incurred net losses and experienced net current liabilities and negative cash flow from operating activities in the past.
Taxation—Material United States Federal Income Tax Considerations—Passive Foreign Investment Company.” Our United States counsel expresses no opinion with respect to our PFIC status. ​ Our fourth amended and restated memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares and ADSs. ​ Our fourth amended and restated memorandum and articles of association contains provisions limiting the ability of others to acquire control of our company or cause us to engage in change-of-control transactions and provisions that could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. ​ Furthermore, our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares, in the form of ADSs or otherwise.
Taxation—Material United States Federal Income Tax Considerations—Passive Foreign Investment Company.” Our United States counsel expresses no opinion with respect to our PFIC status. ​ Our fifth amended and restated memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares and ADSs. ​ Our fifth amended and restated memorandum and articles of association contains provisions limiting the ability of others to acquire control of our company or cause us to engage in change-of-control transactions and provisions that could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. ​ Furthermore, our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares, in the form of ADSs or otherwise.
However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control, including positions taken by authorities of the PRC.
However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our current auditor’s, control, including positions taken by authorities of the PRC.
Our ADS price subsequently increased to and remained at a level that was in compliance with Section 802.01C of the NYSE Listed Company Manual. ​ In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following: ​ ● variations in our revenues, net earnings and cash flow; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures; ● announcements of new product and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● additions or departures of key personnel; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● potential litigation or regulatory investigations; and 24 Table of Contents ● detrimental negative publicity about us and our industry. ​ Any of these factors may result in large and sudden changes in the volume and price at which our ADSs will trade. ​ We may need additional capital, and the sale of additional ADSs or other equity securities or incurrence of additional indebtedness could result in additional dilution to our shareholders or increase our debt service obligations. ​ Historically, we relied principally on the issuance of our preferred shares, convertible notes and ADRs to fund our operations and capital expansion needs.
Our ADS price subsequently increased to and remained at a level that was in compliance with Section 802.01C of the NYSE Listed Company Manual. ​ In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following: ​ ● variations in our revenues, net earnings and cash flow; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures; ● announcements of new product and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● additions or departures of key personnel; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● potential litigation or regulatory investigations; and ● detrimental negative publicity about us and our industry. ​ Any of these factors may result in large and sudden changes in the volume and price at which our ADSs will trade. ​ We may need additional capital, and the sale of additional ADSs or other equity securities or incurrence of additional indebtedness could result in additional dilution to our shareholders or increase our debt service obligations. ​ Historically, we relied principally on the issuance of our preferred shares, convertible notes and ADRs to fund our operations and capital expansion needs.
If we are unable to adapt to changing market conditions or customer requirements in a cost-effective and timely manner, whether for technical, financial or other reasons, our business prospects, financial condition and results of operations may be materially adversely affected. ​ 12 Table of Contents The proper functioning of our information infrastructure or those of third-party service providers we reply upon is essential to our business and any failure to maintain the satisfactory performance, security and integrity of our information infrastructure may materially and adversely affect our business, reputation, financial condition and results of operations. ​ Our revenues from product sales depend on the number of visitors who purchase products on our websites and mobile applications and the volume of orders we fulfill.
If we are unable to adapt to changing market conditions or customer requirements in a cost-effective and timely manner, whether for technical, financial or other reasons, our business prospects, financial condition and results of operations may be materially adversely affected. ​ 12 Table of Contents The proper functioning of our information infrastructure or those of third-party service providers we rely upon is essential to our business and any failure to maintain the satisfactory performance, security and integrity of our information infrastructure may materially and adversely affect our business, reputation, financial condition and results of operations. ​ Our revenues from product sales depend on the number of visitors who purchase products on our websites and mobile applications and the volume of orders we fulfill.
We cannot assure you that future claims will not have a material impact on your business and financial condition. ​ Irrespective of the validity of such allegations or claims, we may experience lost product sales or incur significant costs and efforts in defending against or settling such allegations or claims.
Therefore, we cannot assure you that future claims will not have a material impact on your business and financial condition. ​ Irrespective of the validity of such allegations or claims, we may experience lost product sales or incur significant costs and efforts in defending against or settling such allegations or claims.
If we become subject to regulatory inspection and/or review by the CSRC, the CAC or other PRC authorities, or are required by them to take any specific actions, it could cause suspension or termination of the future offering of our securities, disruptions to our operations, result in negative publicity regarding our company, and divert our managerial and financial resources. ​ 19 Table of Contents Our subsidiaries or the holding company may be required to obtain approval in the future and may be denied permission from Chinese authorities to list on U.S. exchanges, we may not be able to continue listing on U.S. exchange, which could have a material adverse effect on our business, financial condition and results of operations as well as the trading price of the ADSs. ​ The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC persons or entities to obtain the approval of the China Securities Regulatory Commission, or the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
If we become subject to regulatory inspection and/or review by the CSRC, the CAC or other PRC authorities, or are required by them to take any specific actions, it could cause suspension or termination of the future offering of our securities, disruptions to our operations, result in negative publicity regarding our company, and divert our managerial and financial resources. ​ Our subsidiaries or the holding company may be required to obtain approval in the future and may be denied permission from Chinese authorities to list on U.S. exchanges, we may not be able to continue listing on U.S. exchange, which could have a material adverse effect on our business, financial condition and results of operations as well as the trading price of the ADSs. ​ The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC persons or entities to obtain the approval of the China Securities Regulatory Commission, or the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
Furthermore, the Determination Report identified the specific registered public accounting firms which are subject to these determinations (“PCAOB Identified Firms”). ​ The Company’s current auditor, Marcum Asia CPAs LLP, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
Furthermore, the 2021 Determinations identified the specific registered public accounting firms which are subject to these determinations (“PCAOB Identified Firms”). ​ The Company’s current auditor, Marcum Asia CPAs LLP, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
Furthermore, as search engine marketing is based on a bidding system, other online advertisers may outbid us on our chosen advertising keywords, which may cause us to increase our marketing expenses and adversely affect our results of operations. ​ We rely on third-party suppliers for our products and any change and deterioration in such partnership may materially and adversely affect our business, financial condition and results of operations. ​ As of December 31, 2022, we sourced our products from around 1,000 selected active suppliers.
Furthermore, as search engine marketing is based on a bidding system, other online advertisers may outbid us on our chosen advertising keywords, which may cause us to increase our marketing expenses and adversely affect our results of operations. ​ We rely on third-party suppliers for our products and any change and deterioration in such partnership may materially and adversely affect our business, financial condition and results of operations. ​ As of December 31, 2023, we sourced our products from around 1,000 selected active suppliers.
Therefore, you should not reply on an investment in our ADSs as a source for any future dividend income. ​ Any future determination to pay dividends will be made at the sole discretion of our board of directors and may be based on a number of factors, including our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.
Therefore, you should not rely on an investment in our ADSs as a source for any future dividend income. ​ Any future determination to pay dividends will be made at the sole discretion of our board of directors and may be based on a number of factors, including our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.
As a result, your ability to protect your interests if you are harmed in a manner that would otherwise enable you to sue in a United States federal court may be limited to direct shareholder lawsuits. 26 Table of Contents ​ As a result of all of the above, our public shareholders may have more difficulties in protecting their interests through actions against our management, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. ​ We are subject to increased costs as a public company, and our compliance costs may continue to increase in the future. ​ As a public company, we have incurred significant legal, accounting and other expenses that we did not have as a private company prior to our initial public offering.
As a result, your ability to protect your interests if you are harmed in a manner that would otherwise enable you to sue in a United States federal court may be limited to direct shareholder lawsuits. ​ As a result of all of the above, our public shareholders may have more difficulties in protecting their interests through actions against our management, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. ​ We are subject to increased costs as a public company, and our compliance costs may continue to increase in the future. ​ As a public company, we have incurred significant legal, accounting and other expenses that we did not have as a private company prior to our initial public offering.
The PCAOB is required under the HFCAA to make its determination on an annual basis with regards to its ability to inspect and investigate completely accounting firms based in the mainland China and Hong Kong. The possibility of being a “Commission-Identified Issuer” and risk of delisting could continue to adversely affect the trading price of our securities.
The PCAOB is required under the HFCAA to make its determination on an annual basis with regard to its ability to inspect and investigate completely accounting firms based in mainland China and Hong Kong. The possibility of being a “Commission-Identified Issuer” and the risk of delisting could continue to adversely affect the trading price of our securities.
If we are considered a resident enterprise and earn income other than dividends from our PRC subsidiary, a 25% enterprise income tax on our global income could significantly increase our tax burden and materially and adversely affect our cash flow and profitability. ​ 22 Table of Contents As uncertainties remain regarding the interpretation and implementation of the New EIT Law and its implementation rules, we cannot assure you that if we are regarded as a PRC resident enterprise, any dividends to be distributed by us to our non-resident enterprise shareholders and ADS holders would not be subject to any PRC withholding tax at a rate of up to 10%.
If we are considered a resident enterprise and earn income other than dividends from our PRC subsidiary, a 25% enterprise income tax on our global income could significantly increase our tax burden and materially and adversely affect our cash flow and profitability. ​ As uncertainties remain regarding the interpretation and implementation of the New EIT Law and its implementation rules, we cannot assure you that if we are regarded as a PRC resident enterprise, any dividends to be distributed by us to our non-resident enterprise shareholders and ADS holders would not be subject to any PRC withholding tax at a rate of up to 10%.
Finally, disputes between us and our employees may arise from time to time and if we are not able to properly handle our relationship with our employees, our business, financial condition and results of operations may be adversely affected. ​ Increases in labor costs or restrictions in the supply of labor may materially and adversely affect our business, financial condition and results of operations. ​ Labor is a significant portion of our cost structure and is subject to many external factors, including unemployment levels, prevailing wage rates, minimum wage laws and changes in employment and labor legislation or other workplace regulation.
Finally, disputes between us and our employees may arise from time to time and if we are not able to properly handle our relationship with our employees, our business, financial condition and results of operations may be adversely affected. ​ Increases in labor costs or restrictions in the supply of labor may materially and adversely affect our business, financial condition and results of operations and cause our ADSs to be worthless. ​ Labor is a significant portion of our cost structure and is subject to many external factors, including unemployment levels, prevailing wage rates, minimum wage laws and changes in employment and labor legislation or other workplace regulation.
The HFCA Act states that if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
The HFCAA states that if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
We also hold certain other private information about our customers, such as their names, addresses, phone numbers and browsing and purchasing records ， except for the credit card information. ​ 16 Table of Contents We may not be able to prevent third parties, such as hackers or criminal organizations, from stealing information provided by our customers to us through our websites and mobile applications.
We also hold certain other private information about our customers, such as their names, addresses, phone numbers and browsing and purchasing records, e xcept for the credit card information. ​ 16 Table of Contents We may not be able to prevent third parties, such as hackers or criminal organizations, from stealing information provided by our customers to us through our websites and mobile applications.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting and concluded that our internal control over financial reporting was effective as of December 31, 2022, but we cannot assure you that in the future we will not identify material weaknesses in our internal control over financial reporting.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting and concluded that our internal control over financial reporting was effective as of December 31, 2023, but we cannot assure you that in the future we will not identify material weaknesses in our internal control over financial reporting.
Business Overview— Regulation—Labor Laws.” The laws and regulations may increase our operating expenses, in particular our human resources costs and our administrative expenses. 17 Table of Contents ​ In addition, as the interpretation and implementation of these regulations are still evolving, we cannot assure you that our employment practices will at all times be deemed to be in full compliance with the law.
Business Overview— Regulation—Labor Laws.” The laws and regulations may increase our operating expenses, in particular our human resources costs and our administrative expenses. ​ In addition, as the interpretation and implementation of these regulations are still evolving, we cannot assure you that our employment practices will at all times be deemed to be in full compliance with the law.
Sales of these registered shares in the public market could cause the price of the ADSs to decline. ​ You may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise your right to vote. ​ Except as described in the deposit agreement, holders of the ADSs are not able to exercise voting rights attaching to the shares evidenced by the ADSs.
Sales of these registered shares in the public market could cause the price of the ADSs to decline. ​ 24 Table of Contents You may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise your right to vote. ​ Except as described in the deposit agreement, holders of the ADSs are not able to exercise voting rights attaching to the shares evidenced by the ADSs.
Preventing any unauthorized use of our intellectual property is difficult and costly and the steps we have taken may be inadequate to prevent the misappropriation of our technologies. ​ We are exempted from certain corporate governance requirements of the New York Stock Exchange. ​ We are exempted from certain corporate governance requirements of the New York Stock Exchange by virtue of being a foreign private issuer.
Preventing any unauthorized use of our intellectual property is difficult and costly and the steps we have taken may be inadequate to prevent the misappropriation of our technologies. ​ 19 Table of Contents We are exempted from certain corporate governance requirements of the New York Stock Exchange. ​ We are exempted from certain corporate governance requirements of the New York Stock Exchange by virtue of being a foreign private issuer.
In particular, we have received letters from the NYSE in 2022, indicating that our Company is “below criteria” due to the average closing price of our ADSs being less than $1.00 over a consecutive 30-trading-day period pursuant to Section 802.01C of the NYSE Listed Company Manual.
In particular, we have received letters from the NYSE in March 2024, indicating that our Company is “below criteria” due to the average closing price of our ADSs being less than $1.00 over a consecutive 30-trading-day period pursuant to Section 802.01C of the NYSE Listed Company Manual.
Taxation—Material United States Federal Income Tax Considerations.” We cannot assure you that we were not a PFIC for 2021 or that we will not be a PFIC for 2022 or any future taxable year.
Taxation—Material United States Federal Income Tax Considerations.” We cannot assure you that we were not a PFIC for 2022 or that we will not be a PFIC for 2023 or any future taxable year.
If we are required under PRC law to withhold PRC income tax on our dividends payable to our non-PRC shareholders and ADS holders, or the PRC authorities tax gain recognized by such non-PRC shareholders or ADS holders, such investors’ investment in our ordinary shares or ADSs may be materially and adversely affected. ​ Risks Related to the ADSs ​ Our ADSs may be delisted under the HFCAA if the PCAOB is unable to adequately inspect audit documentation located in China.
If we are required under PRC law to withhold PRC income tax on our dividends payable to our non-PRC shareholders and ADS holders, or the PRC authorities tax gain recognized by such non-PRC shareholders or ADS holders, such investors’ investment in our ordinary shares or ADSs may be materially and adversely affected. ​ 22 Table of Contents Risks Related to the ADSs ​ Our ADSs may be delisted under the HFCAA if the PCAOB is unable to adequately inspect audit documentation located in China.
If it is determined that we do not own the stock for United States federal income tax purposes, we may be treated as a PFIC. ​ 27 Table of Contents If we are a PFIC for any taxable year during which you hold the ADSs or ordinary shares, such characterization could result in adverse United States federal income tax consequences to you if you are a United States Holder, as defined under “Item 10.
If it is determined that we do not own the stock for United States federal income tax purposes, we may be treated as a PFIC. ​ If we are a PFIC for any taxable year during which you hold the ADSs or ordinary shares, such characterization could result in adverse United States federal income tax consequences to you if you are a United States Holder, as defined under “Item 10.
EU data privacy law, the GDPR, also imposes strict rules on commercial use of personal data, data storage, data profiling and transfer personal data to countries outside the EU, including the U.S., and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.
EU data privacy law, such as the General Data Protection Regulation (GDPR), also imposes strict rules on commercial use of personal data, data storage, data profiling and transfer personal data to countries outside the EU, including the U.S., and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.
Accordingly, holders of the ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result. ​ 25 Table of Contents You may be subject to limitations on transfer of your ADSs. ​ Your ADSs are transferable on the books of the depositary.
Accordingly, holders of the ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result. ​ You may be subject to limitations on transfer of your ADSs. ​ Your ADSs are transferable on the books of the depositary.
You may not realize a return on your investment in our ADSs and you may even lose your entire investment in our ADSs. ​ We may become a passive foreign investment company, or PFIC, which could result in adverse United States tax consequences to United States investors. ​ Based on the composition of our income and assets, and the valuation of our assets, including goodwill, we do not believe that we were a passive foreign investment company (a “PFIC”) for 2022.
You may not realize a return on your investment in our ADSs and you may even lose your entire investment in our ADSs. ​ 26 Table of Contents We may become a passive foreign investment company, or PFIC, which could result in adverse United States tax consequences to United States investors. ​ Based on the composition of our income and assets, and the valuation of our assets, including goodwill, we do not believe that we were a passive foreign investment company (a “PFIC”) for 2023.
Fluctuations in foreign currency exchange rates could significantly impact our financial results, which may result in an impact on our share price. ​ 18 Table of Contents Our costs and expenses are settled in various currencies including U.S. dollars, Euros, Great Britain Pounds, Renminbi, Singapore dollars, etc.
Fluctuations in foreign currency exchange rates could significantly impact our financial results, which may result in an impact on our share price. ​ Our costs and expenses are settled in various currencies including U.S. dollars, Euros, Great Britain Pounds, Renminbi, Singapore dollars, etc.
The PCAOB issued a Determination Report on December 16, 2021 (the “Determination Report”) which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong.
The PCAOB issued the 2021 Determinations on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong.
If the PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, or the PCAOB re-evaluates its determination as a result of any obstruction with the implementation of the Statement of Protocol, then such lack of inspection or re-evaluation could cause trading in the Company’s securities to be prohibited under the HFCA Act, and ultimately result in a determination by a securities exchange to delist the Company’s securities.
If the PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, or the PCAOB re-evaluates its determination as a result of any obstruction with the implementation of the SOP, then such lack of inspection or re-evaluation could cause trading in the Company’s securities to be prohibited under the HFCAA, and ultimately result in a determination by a securities exchange to delist the Company’s securities.
Recent developments with respect to audits of China-based companies may still also create uncertainty about the ability of our current auditor to fully cooperate with the PCAOB’s inspection requests without the approval of the relevant PRC authorities.
Recent developments with respect to audits of China-based companies may still also create uncertainty about the ability of our current auditor, Marcum Asia CPAs LLP, to fully cooperate with the PCAOB’s inspection requests without the approval of the relevant PRC authorities.
Any occurrence of pandemic diseases or other adverse public health developments could severely disrupt our staffing or the staffing of our suppliers and couriers and otherwise reduce the activity levels of our work force and the work force of our suppliers and couriers, causing a material and adverse effect on our business operations. ​ In particular, in recent years, the global outbreak of COVID-19 created a negative impact on global economy and our business in certain areas, such as causing certain delay in the delivery schedule of products purchased through our online platform, and disruption to our customers, supply chains and staff, and further to our global operations.
Any occurrence of pandemic diseases or other adverse public health developments could severely disrupt our staffing or the staffing of our suppliers and couriers and otherwise reduce the activity levels of our work force and the work force of our suppliers and couriers, causing a material and adverse effect on our business operations. ​ In particular, in recent years, global outbreaks of infectious diseases, including COVID-19, influenza and other infectious diseases, have had a negative impact on the global economy and our business in certain areas, such as causing certain delay in the delivery schedule of products purchased through our online platform, and disruption to our customers, supply chains and staff, and further to our global operations.
Marcum Asia, whose audit report is included in this annual report, is headquartered in New York and, as of the date of this annual report, was not included in the list of PCAOB Identified Firms in the Determination Report. ​ On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the “Protocol”) with the China Securities Regulatory Commission (the “CSRC”) and the Ministry of Finance (“MOF”) of the People’s Republic of China, governing inspections and investigations of audit firms based in mainland China and Hong Kong.
Marcum Asia CPAs LLP, whose audit report is included in this annual report, is headquartered in New York and, as of the date of this annual report, was not included in the list of PCAOB Identified Firms in the 2021 Determinations. ​ On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the “SOP”) with the China Securities Regulatory Commission (the “CSRC”) and the Ministry of Finance (“MOF”) of the People’s Republic of China, governing inspections and investigations of audit firms based in mainland China and Hong Kong.
Pursuant to the Protocol, the PCAOB conducted inspections on select registered public accounting firms subject to the Determination Report in Hong Kong between September and November 2022. ​ On December 15, 2022, the PCAOB board announced that it has completed the inspections, determined that it had complete access to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, and voted to vacate the Determination Report. ​ 23 Table of Contents Notwithstanding the foregoing, the Company’s ability to retain an auditor subject to the PCAOB inspection and investigation, including but not limited to inspection of the audit working papers related to us, may depend on the relevant positions of U.S. and Chinese regulators.
Pursuant to the SOP, the PCAOB conducted inspections on select registered public accounting firms subject to the 2021 Determinations in Hong Kong between September and November 2022. ​ On December 15, 2022, the PCAOB board announced that it has completed the inspections, determined that it had complete access to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, and voted to vacate the 2021 Determinations. ​ Notwithstanding the foregoing, the Company’s ability to retain an auditor subject to the PCAOB inspection and investigation, including but not limited to inspection of the audit working papers related to us, may depend on the relevant positions of U.S. and Chinese regulators.
As we offer new payment options to our customers, we may be subject to additional regulations, compliance requirements and fraud. ​ We rely on third parties, such as PayPal, Global Collect, Checkout and Stripe, to provide certain payment processing services, including the processing of credit card and debit card transactions.
As we offer new payment options to our customers, we may be subject to additional regulations, compliance requirements and fraud. ​ We rely on third parties, such as PayPal, Checkout, Stripe, Klarna and Apple Pay to provide certain payment processing services, including the processing of credit card and debit card transactions.
As a result, the risks mentioned above have been heightened. ​ If our ADSs are subject to a trading prohibition under the HFCA Act or the AHFCA Act, the price of our ADSs may be adversely affected, and the threat of such a trading prohibition would also adversely affect their price.
As a result, the risks mentioned above have been heightened. ​ If our ADSs are subject to a trading prohibition under the HFCAA or the AHFCAA, the price of our ADSs may be adversely affected, and the threat of such a trading prohibition would also adversely affect their price.
As of December 31, 2022, we had approximately $94.6 million in cash and cash equivalents and restricted cash. We expect that our existing cash and cash equivalents and restricted cash will be sufficient to fund our capital requirements for at least the next 12 months. However, we may need to raise additional capital to fund our continued operations.
As of December 31, 2023, we had approximately $71.7 million in cash and cash equivalents and restricted cash. We expect that our existing cash and cash equivalents and restricted cash will be sufficient to fund our capital requirements for at least the next 12 months. However, we may need to raise additional capital to fund our continued operations.
We generated net cash inflow of $29.3 million from operating activities in 2020, net cash outflow of $1.8 million from operating activities in 2021 and net cash inflow of $35.8 from operating activities in 2022, respectively, and we may experience negative cash flows in the future. ​ We expect our costs and expenses, especially our selling and marketing expenses, to increase as we expand our operations.
We generated net cash outflow of $1.8 million from operating activities in 2021, net cash inflow of $35.8 million from operating activities in 2022, and net cash outflow of $20.7 million from operating activities in 2023, respectively, and we may experience negative cash flows in the future. ​ We expect our costs and expenses, especially our selling and marketing expenses, to increase as we expand our operations.
The delisting of our ADSs, or the threat of their being delisted, may have a material adverse impact on our listing and trading in the U.S. and the trading prices of our ADSs. ​ Pursuant to the Holding Foreign Companies Accountable Act (the “HFCA Act”), if the Public Company Accounting Oversight Board (the “PCAOB”), is unable to inspect an issuer’s auditors for two consecutive years, the issuer’s securities are prohibited to trade on a U.S. stock exchange.
The delisting of our ADSs, or the threat of their being delisted, may have a material adverse impact on our listing and trading in the U.S. and the trading prices of our ADSs. ​ Pursuant to the HFCAA, if the Public Company Accounting Oversight Board (the “PCAOB”), is unable to inspect an issuer’s auditors for two consecutive years, the issuer’s securities are prohibited to trade on a U.S. stock exchange.
On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022.
On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022 and vacated the 2021 Determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong.
On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, and our predecessor auditor is subject to this determination (the “2021 Determinations”).
On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, and our predecessor auditor, Ernst & Young Hua Ming LLP, was subject to this determination (the “2021 Determinations”).
We may incur net losses and experience net current liabilities and negative cash flow from operating activities and, as a result, we may need to obtain additional capital in the future. ​ We incurred income from operations of $3.9 million in 2020, loss from operations of $16.1 million and $14.2 million in 2021 and in 2022, respectively, and we may incur losses in the future.
We may incur net losses and experience net current liabilities and negative cash flow from operating activities and, as a result, we may need to obtain additional capital in the future. ​ We incurred loss from operations of $16.1 million, $14.2 million and $10.4 million in 2021, 2022 and 2023, respectively, and we may incur losses in the future.
Accordingly, the HFCA Act calls for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. ​ On December 29, 2022, the Accelerating Holding Foreign Companies Accountable Act, or the AHFCA Act, was signed into law, which reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two.
Accordingly, the HFCAA calls for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. ​ On December 29, 2022, the AHFCAA, was signed into law, which reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two.
Since our ADSs became listed on the New York Stock Exchange (“ NYSE ”) on June 6, 2013, the trading price of our ADSs have ranged from US$0.58 to US$23.38 per ADS and the last reported trading price on March 29, 2023 was US$1.45 per ADS.
Since our ADSs became listed on the New York Stock Exchange (“ NYSE ”) on June 6, 2013, the trading price of our ADSs have ranged from US$0.58 to US$23.38 per ADS and the last reported trading price on February 29, 2024 was US$0.90 per ADS.
We experienced net current liabilities of $26.0 million and $38.1 million as of December 31, 2021 and 2022, respectively, and we may continue to experience net current liabilities in the future.
We experienced net current liabilities of $38.1 million and $47.5 million as of December 31, 2022 and 2023, respectively, and we may continue to experience net current liabilities in the future.
As of the date of the annual report, our auditor is not included in the report. As a result, we do not expect to be identified as a “Commission-Identified Issuer” under the HFCAA for the fiscal year ended December 31, 2022 after we file our annual report on Form 20-F for such fiscal year.
As such, we do not expect to be identified as a “Commission-Identified Issuer” under the HFCAA for the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2022.
Should COVID-19 have a continued adverse effect on global economy, our operation and transaction volume, our business, financial condition and results of operations may be materially and adversely affected. ​ In addition, our operations are vulnerable to interruption and damage from natural and other types of catastrophes, including earthquakes, fire, floods, hail, windstorms, severe winter weather (including snow, freezing water, ice storms and blizzards), environmental accidents, power loss, communications failures, explosions, man-made events such as terrorist attacks and similar events.
If such infectious diseases have a sustained adverse impact on the global economy, our operations and trading volumes, our business, financial condition and results of operations could be materially adversely affected. ​ In addition, our operations are vulnerable to interruption and damage from natural and other types of catastrophes, including earthquakes, fire, floods, hail, windstorms, severe winter weather (including snow, freezing water, ice storms and blizzards), environmental accidents, power loss, communications failures, explosions, man-made events such as terrorist attacks and similar events.
For details, see “Risk Factors—Risks Related to the ADSs—Our ADSs may be delisted under the HFCAA if the PCAOB is unable to adequately inspect audit documentation located in China”, which is included elsewhere in this annual report.
For details, see “Risk Factors—Risks Related to the ADSs—Our ADSs may be delisted under the HFCAA if the PCAOB is unable to adequately inspect audit documentation located in China.
As the Revised Confidentiality Provisions were recently promulgated and has not taken effect, their interpretation and implementation remain substantially uncertain. ​ As of the date of this annual report, we have not received any inquiry, notice, warning, or sanctions from the PRC government authorities in connection with the Opinions.
As the Revised Confidentiality Provisions has not been enacted for a long time, the interpretation and implementation remain substantially uncertain. ​ As of the date of this annual report, we have not received any inquiry, notice, warning, or sanctions from the PRC government authorities in connection with the Opinions.
There is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (c) is final, (d) is not in respect of taxes, a fine or a penalty, and (e) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests. 25 Table of Contents There is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (c) is final, (d) is not in respect of taxes, a fine or a penalty, and (e) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
As of December 31, 2022, we had 226,569,381 ordinary shares outstanding, including 113,284,691 ordinary shares represented by ADSs. All our ordinary shares represented by ADSs were freely transferable by persons other than our “affiliates” without restriction or additional registration under the Securities Act of 1933, as amended, or Securities Act.
As of December 31, 2023, we had 223,250,577 ordinary shares outstanding, including 92,566,784 ordinary shares represented by ADSs. All our ordinary shares represented by ADSs were freely transferable by persons other than our “affiliates” without restriction or additional registration under the Securities Act of 1933, as amended, or Securities Act.
Business Overview—Regulation— Regulations on Employee Stock Option Plans.” ​ We may be deemed a PRC resident enterprise under the New EIT Law and be subject to PRC taxation on our income. ​ Under the Enterprise Income Tax Law of the PRC, or the New EIT Law, which was issued in 2007 and amended in 2017 and 2018, and its implementation rules which were issued in 2007, an enterprise established outside of the PRC with “de facto management bodies” within the PRC is considered a resident enterprise and will be subject to the enterprise income tax at the rate of 25% on its global income.
Any uncertainties and/or negative publicity regarding such approval requirement could have a material adverse effect on the trading price of the ADSs. ​ 21 Table of Contents We may be deemed a PRC resident enterprise under the New EIT Law and be subject to PRC taxation on our income. ​ Under the Enterprise Income Tax Law of the PRC, or the New EIT Law, which was issued in 2007 and amended in 2017 and 2018, and its implementation rules which were issued in 2007, an enterprise established outside of the PRC with “de facto management bodies” within the PRC is considered a resident enterprise and will be subject to the enterprise income tax at the rate of 25% on its global income.
Furthermore, if we are able to maintain a listing of our ordinary shares on a non-U.S. exchange, investors owning our ADSs may have to take additional steps to engage in transactions on that exchange, including converting ADSs into ordinary shares and establishing non-U.S. brokerage accounts. ​ The HFCA Act also imposes additional certification and disclosure requirements for Commission Identified Issuers, and these requirements apply to issuers in the year following their listing as Commission Identified Issuers.
Furthermore, if we are able to maintain a listing of our ordinary shares on a non-U.S. exchange, investors owning our ADSs may have to take additional steps to engage in transactions on that exchange, including converting ADSs into ordinary shares and establishing non-U.S. brokerage accounts. ​ 23 Table of Contents The market price for the ADSs has fluctuated and may be volatile. ​ The market price for our ADSs has fluctuated since we listed our ADSs.
In the event that we decide to significantly modify our employment or labor policy or practice, or reduce the number of our sales professionals, the labor contract law may limit our ability to effectuate the modifications or changes in the manner that we believe to be most cost-efficient or otherwise desirable, which could materially and adversely affect our business, financial condition and results of operations. ​ Furthermore, companies operating in the PRC are generally required to contribute to the mandatory social insurance and housing funds.
In the event that we decide to significantly modify our employment or labor policy or practice, or reduce the number of our sales professionals, the labor contract law may limit our ability to effectuate the modifications or changes in the manner that we believe to be most cost-efficient or otherwise desirable, which could materially and adversely affect our business, financial condition and results of operations. 18 Table of Contents Taxation risks could materially and adversely affect our business and financial condition. ​ The imposition of indirect taxes, such as sales and use tax, value-added tax, goods and services tax, and business tax is a complex and evolving issue.
During an economic downturn, particularly since 2020 and up to the date of this annual report due to COVID-19, customers may be less willing to purchase products that we offer. 6 Table of Contents ​ Challenging macroeconomic conditions also impact our customers’ ability to obtain consumer credit.
Consequently, our results of operations tend to be sensitive to changes in macroeconomic conditions that impact consumer discretionary spending. During an economic downturn, customers may be less willing to purchase products that we offer. 6 Table of Contents Challenging macroeconomic conditions also impact our customers’ ability to obtain consumer credit.
Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained by us, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations. ​ Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the Opinions, which was made available to the public on July 6, 2021.
Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained by us, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations. ​ 20 Table of Contents On February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023.
We might still be unable to accurately and comprehensively forecast the potential impact of the COVID-19 outbreak in the future.
We may still be unable to accurately and comprehensively predict the potential impact of future outbreaks of various infectious diseases.
If we determine that products posted on our websites and mobile applications are infringing on intellectual property rights, we will remove them from our websites and mobile applications. We are also involved in several intellectual property rights claims related to certain products posted on our website and mobile applications.
If we determine that products posted on our websites and mobile applications are infringing on intellectual property rights, we will remove them from our websites and mobile applications. ​ We may be accused in legal disputes from time to time, including copyright, trademark and patent infringement, product quality complaints, breach of contract, and other matters.
The Cyber Security Law also requires network operators that provide network access or domain name registration services, landline or mobile phone network access, or that provide users with information publication or instant messaging services, to require users to provide a real identity when they sign up. ​ Increasing focus with respect to environmental, social and governance matters may impose additional costs on us or expose us to additional risks. ​ Governments and public advocacy groups have been increasingly focused on environment, social and governance (“ESG”) issues in recent years, making our business more sensitive to ESG issues and changes in governmental policies and laws and regulations associated with environment protection and other ESG-related matters.
Complying with applicable laws and regulations relating to data security and personal information protection may be costly and result in additional expenses to us, and any material failure to do so may subject us to negative publicity, harm our reputation and business operations, limit our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline. ​ Increasing focus with respect to environmental, social and governance matters may impose additional costs on us or expose us to additional risks. ​ Governments and public advocacy groups have been increasingly focused on environment, social and governance (“ESG”) issues in recent years, making our business more sensitive to ESG issues and changes in governmental policies and laws and regulations associated with environment protection and other ESG-related matters.
Any compromise of our security or third-party service providers’ security could materially and adversely affect our reputation, business, prospects, financial condition and results of operations. ​ Substantial uncertainties exist with respect to the interpretation and implementation of Cyber Security Law in the PRC as well as any impact it may have on our business operations. ​ On July 1, 2015, the Standing Committee of the National People’s Congress issued the National Security Law, which came into effect on the same day.
Any compromise of our security or third-party service providers’ security could materially and adversely affect our reputation, business, prospects, financial condition and results of operations. ​ Substantial uncertainties exist with respect to the changes in laws or regulations relating to privacy, cybersecurity or data protectionin the juridisctions our business is subject to, as well as any impact it may have on our business operations. ​ As we sell our products to more than 140 countries, we are subject to cybersecurity laws and regulations in various jurisdictions, that are continuously evolving and developing.
According to the Overseas Listing Trial Measures, if we were deemed as an indirect overseas listed Chinese domestic company but fail to complete the filing procedures with the CSRC for any of our follow-on offerings or follow any other reporting requirements required thereunder, we may be subject to penalties, sanctions and fines imposed by the CSRC and relevant departments of the State Council. ​ 20 Table of Contents On February 24, 2023, the CSRC and other PRC governmental authorities jointly issued the revised Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (the “Revised Confidentiality Provisions”), which will come into effect on March 31, 2023.
Given the current PRC regulatory environment, it is uncertain whether we or our PRC subsidiaries will be required to obtain approvals from the PRC government to offer securities to foreign investors in the future, and whether we would be able to obtain such approvals. ​ On February 24, 2023, the CSRC and other PRC governmental authorities jointly issued the revised Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (the “Revised Confidentiality Provisions”), which came into effect on March 31, 2023.
Corporate Structure.” As a result, the contractual arrangements between our wholly-owned entities and the relevant VIEs were terminated and as of the date of this Annual Report, we conduct our operations exclusively through our wholly-owned subsidiaries. ​ 1 Table of Contents The Holding Foreign Companies Accountable Act The Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted on December 18, 2020.
We generate our revenue from countries outside the PRC. ​ 1 Table of Contents The Holding Foreign Companies Accountable Act The Holding Foreign Companies Accountable Act, or the HFCAA, was enacted on December 18, 2020.
The National Security Law provides that the state shall safeguard its sovereignty, security and cybersecurity development interests, and that the government shall establish a national security review and supervision system to review, among other things, foreign investment, key technologies, internet and information technology products and services, and other important activities that are likely to impact the national security of China. ​ On November 7, 2016, the Standing Committee of the National People’s Congress issued the Cyber Security Law, which came into effect on June 1, 2017.
On July 1, 2015, the Standing Committee of the National People’s Congress issued the National Security Law, which came into effect on the same day. On November 7, 2016, the Standing Committee of the National People’s Congress issued the Cyber Security Law, which came into effect on June 1, 2017.
Removed
We generate our revenue from countries outside the PRC. ​ Unwound the VIE arrangements in the PRC Historically, we conducted certain operations in the PRC through contractual arrangements with certain variable interest entities, or VIEs, that were incorporated in the PRC.
Added
As a result, we were conclusively identified by the SEC as a “Commission-Identified Issuer” on June 1, 2022, following the filing with the SEC on May 2, 2022 of our annual report on Form 20-F for the fiscal year ended December 31, 2021, which contains an audit report issued by Ernst & Young Hua Ming LLP.
Removed
To mitigate the uncertainties in our corporate structure and exert full control on our operating entities, we transferred operations in the VIEs to our wholly-owned entities and unwound the VIEs arrangements that were intended to support the operations of our PRC subsidiaries, which were no longer in operation.
Added
The delisting of our ADSs, or the threat of their being delisted, may have a material adverse impact on our listing and trading in the U.S. and the trading prices of our ADSs.”, which is included elsewhere in this prospectus.
Removed
In 2022, we liquidated the two remaining VIE entities in the PRC, namely, Chongqing Ruizhihe E-Commerce Co., Limited (“Chongqing Ruizhihe”) and Beijing Lanting Gaochuang Technologies Co., Limited (“Lanting Gaochuang”). See “Item 4. Information on the Company - C.
Added
For example, in July 2023, a complaint was filed against us in the U.S. federal court alleging trademark infringement, and it was settled and dismissed from the court in January 2024. Also in July 2023, another complaint was filed against us in the U.S. federal court alleging trademark infringement and breach of contract, the proceeding is ongoing now.
Removed
On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. An identified issuer will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC.
Added
Countries where we have significant business operations, including the U.S., EU and PRC, have implemented laws and regulations in privacy, cybersecurity and data protection, including but not limited to the GDPR, the CCPA, the HIPAA, national privacy laws of EU member states and other laws relating to privacy, data protection, and cloud computing.
Removed
The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong.
Added
These laws are evolving rapidly, as exemplified by the recent adoption by the European Commission of the new cybersecurity regulation laying down measures for a high common level of cybersecurity at the institutions, bodies, offices and agencies of the European Union entered into force on January 7, 2024 (the “Regulation”). ​ The Regulation lays down measures for the establishment of an internal cybersecurity risk management, governance and control framework for each EU entity, and sets up a new Interinstitutional Cybersecurity Board (IICB) to monitor and support its implementation by EU entities.
Removed
Consequently, our results of operations tend to be sensitive to changes in macroeconomic conditions that impact consumer discretionary spending.
Added
The Regulation establishes a framework for ensuring common cybersecurity rules and measures among the EU institutions, bodies and agencies, aiming to support detection and awareness of significant or large-scale cybersecurity threats and incidents.
Removed
This is the first Chinese law that focuses exclusively on cyber security.
Added
Following the timeline defined in the Regulation, the EU entities will establish internal cybersecurity governance processes and will progressively put in place specific cybersecurity risk management measures foreseen by the Regulation.
Removed
The Cyber Security Law provides that network operators must set up internal security management systems that meets the requirements of a classified protection system for cybersecurity, including appointing dedicated cybersecurity personnel, taking technical measures to prevent computer viruses, network attacks and intrusions, taking technical measures to monitor and record network operation status and cybersecurity incidents, and taking data security measures such as data classification, backups and encryption.
Added
The IICB will be set up and will become operational as soon as possible, with the objective to ensure the strategic steering to Cybersecurity Service for the EU institutions, bodies, offices and agencies (CERT-EU) under its extended mandate, provide guidance and support to the EU entities and monitor the implementation of the Regulation.
Removed
The Cyber Security Law also imposes a relatively vague but broad obligation to provide technical support and assistance to the public and state security authorities in connection with criminal investigations or for reasons of national security.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

71 edited+7 added−32 removed122 unchanged
Customers have many product choices online and offline offered by global, regional and local retailers. Our current or potential competitors include online retailers such as other global online retail companies, retail chains, specialty retailers and sellers on online marketplaces. Each of our competitors has unique strengths that depend on their demographic, product and geographic focus.
Customers have many product choices online and offline offered by global, regional and local sellers. Our current or potential competitors include online retailers and marketplaces such as other global online retail companies and marketplaces, retail chains and specialty retailers. Each of our competitors has unique strengths that depend on their demographic, product and geographic focus.
Regulations on Tax Value Added Tax / Sales tax / Goods and Services Tax In European Union, new VAT rules on cross-border business-to-consumer (B2C) e-commerce activities have come into effect since July 1, 2021. Online sellers, including online marketplaces/platforms can register the Import One-Stop Shop (IOSS) in one EU Member State.
Regulations on Tax Value Added Tax / Sales and use tax / Goods and Services Tax In European Union, new VAT rules on cross-border business-to-consumer (B2C) e-commerce activities have come into effect since July 1, 2021. Online sellers, including online marketplaces/platforms can register the Import One-Stop Shop (IOSS) in one EU Member State.
We offer customers a convenient way to shop for a wide selection of products at attractive prices through www.lightinthebox.com , www.miniinthebox.com, www.ezbuy.sg and our other websites as well as mobile applications, which are available in over 20 major languages and over 140 countries and regions.
We offer customers a convenient way to shop for a wide selection of products at attractive prices through www.lightinthebox.com , www.ezbuy.sg and our other websites as well as mobile applications, which are available in over 20 major languages and over 140 countries and regions.
The following table sets forth a summary of our leased properties as of the date of this annual report: ​ ​ ​ ​ ​ ​ ​ Size ​ Location ​ (in square meters) ​ Usage of Property Singapore 19,513 Sales and operation, customer service and warehouse the United States 1,154 Warehouse Shanghai, PRC 3,414 Research and development, sales and operation, customer service and administrative functions Beijing, PRC 1,200 Sales and operation, research and development, administrative functions Shenzhen, PRC 881 Sales and operation, and administrative functions Chengdu, PRC 785 Research and development Dongguan, PRC 32,676 Warehouse Jiaxing, PRC 17,666 Warehouse ​ We believe that our existing facilities are adequate for our current business operations and we will be able to enter into lease arrangements on commercially reasonable terms for future expansion. ​ ITEM 4A.
The following table sets forth a summary of our leased properties as of the date of this annual report: ​ ​ ​ ​ ​ ​ ​ Size ​ Location ​ (in square meters) ​ Usage of Property Singapore 19,513 Sales and operation, customer service and warehouse the United States 1,154 Warehouse and marketing Shanghai, PRC 3,414 Research and development, sales and operation, customer service and administrative functions Beijing, PRC 1,200 Sales and operation, research and development, administrative functions Shenzhen, PRC 881 Sales and operation Chengdu, PRC 785 Research and development Dongguan, PRC 32,676 Warehouse Guangzhou, PRC ​ 367 ​ Sales and operation Jiaxing, PRC 17,666 Warehouse ​ We believe that our existing facilities are adequate for our current business operations and we will be able to enter into lease arrangements on commercially reasonable terms for future expansion. ​ ITEM 4A.
As of the date of this Annual Report we conduct our operations exclusively through wholly-owned subsidiaries. ​ 45 Table of Contents D. Property, Plant and Equipment ​ We currently lease all properties for our operations. Our corporate headquarters are located in Singapore. We have established sourcing offices in Singapore and the PRC.
As of the date of this annual report we conduct our operations exclusively through wholly-owned subsidiaries. 43 Table of Contents D. Property, Plant and Equipment ​ We currently lease all properties for our operations. Our corporate headquarters are located in Singapore. We have established sourcing offices in Singapore and the PRC.
Therefore, we emphasize quality control and, as of December 31, 2022, we had built a quality control department with approximately 16 employees. ​ As we source a majority of our products from suppliers, we have implemented a series of quality control measures to ensure that the products they provide meet our specifications and standards.
Therefore, we emphasize quality control and, as of December 31, 2023, we had built a quality control department with approximately 16 employees. ​ As we source a majority of our products from suppliers, we have implemented a series of quality control measures to ensure that the products they provide meet our specifications and standards.
Subsequently, from December 2019 to March 2020, we issued a total of 50,699,442 ordinary shares and 19,091,837 ADSs (representing 38,183,674 ordinary shares) in exchange of the Notes held by Ezbuy’s shareholders. 28 Table of Contents ​ Ezbuy is a Singapore-based cross-border e-commerce company. Founded in 2010, Ezbuy serves more than three million customers in Singapore, Malaysia, Indonesia, Thailand and Pakistan.
Subsequently, from December 2019 to March 2020, we issued a total of 50,699,442 ordinary shares and 19,091,837 ADSs (representing 38,183,674 ordinary shares) in exchange of the Notes held by Ezbuy’s shareholders. ​ Ezbuy is a Singapore-based cross-border e-commerce company. Founded in 2010, Ezbuy serves more than three million customers in Singapore, Malaysia, Indonesia, Thailand and Pakistan.
In March 2008, we incorporated LightInTheBox Holding Co., Ltd., an exempted company incorporated under the laws of the Cayman Islands, which, through a corporate restructuring, became our ultimate holding company. ​ Initial Public Offering ​ In June 2013, we completed our initial public offering, in which we offered and sold 19,090,000 ordinary shares in the form of ADSs, raising $75.0 million in proceeds before expenses to us.
In March 2008, we incorporated LightInTheBox Holding Co., Ltd., an exempted company incorporated under the laws of the Cayman Islands, which, through a corporate restructuring, became our ultimate holding company. ​ 27 Table of Contents Initial Public Offering ​ In June 2013, we completed our initial public offering, in which we offered and sold 19,090,000 ordinary shares in the form of ADSs, raising $75.0 million in proceeds before expenses to us.
Industry legislation is primarily used to regulate privacy protections for specific industries or specific categories of data, such as the Health Insurance Portability and Accountability Act (HIPPA), the Financial Services Modernization Act (GLBA), and the Children’s Online Privacy Protection Act (COPPA).
Industry legislation is primarily used to regulate privacy protections for specific industries or specific categories of data, such as the Health Insurance Portability and Accountability Act (HIPAA), the Financial Services Modernization Act (GLBA), and the Children’s Online Privacy Protection Act (COPPA).
New legislations or regulations, the application of laws and regulations from jurisdictions whose laws do not currently apply to our business or the application of existing laws and regulations to the Internet and commercial online services could result in significant additional taxes or regulatory restrictions on our business. ​ Many states in the United States have passed laws requiring notification to subscribers when there is a security breach of personal data.
New legislations or regulations, the application of laws and regulations from jurisdictions whose laws do not currently apply to our business or the application of existing laws and regulations to the Internet and commercial online services could result in significant additional taxes or regulatory restrictions on our business. ​ 34 Table of Contents Many states in the United States have passed laws requiring notification to subscribers when there is a security breach of personal data.
We select our suppliers based on a range of factors, including product quality, price, reliability, financial strength, reputation, ability to meet our delivery timeline and production capacity, ability to increase their production capacity along with the growth in our business and historical partnership. 30 Table of Contents ​ While we do not have manufacturing operations ourselves, we have in-house manufacturing experts who work closely with our suppliers.
We select our suppliers based on a range of factors, including product quality, price, reliability, financial strength, reputation, ability to meet our delivery timeline and production capacity, ability to increase their production capacity along with the growth in our business and historical partnership. ​ While we do not have manufacturing operations ourselves, we have in-house manufacturing experts who work closely with our suppliers.
As we perform extensive data analysis on our product presentation and customer purchasing decisions, we believe that we can effectively conduct targeted promotional activities, identify optimal pricing points for each product and generate strong product sales and gross-margin performance. ​ Payment and Order Fulfillment ​ Payment ​ Our customers may choose from a wide range of payment methods.
As we perform extensive data analysis on our product presentation and customer purchasing decisions, we believe that we can effectively conduct targeted promotional activities, identify optimal pricing points for each product and generate strong product sales and gross-margin performance. ​ 30 Table of Contents Payment and Order Fulfillment ​ Payment ​ Our customers may choose from a wide range of payment methods.
Our systems are integrated to allow a seamless communication of data regarding our customers, their orders, product availability information and logistics information. 33 Table of Contents ​ Our open application programming interface approach allows us to integrate and work with third-party websites including social network sites, electronic payment platforms, other online distribution outlets and analytic systems.
Our systems are integrated to allow a seamless communication of data regarding our customers, their orders, product availability information and logistics information. ​ Our open application programming interface approach allows us to integrate and work with third-party websites including social network sites, electronic payment platforms, other online distribution outlets and analytic systems.
Risk Factors—Risks Related to Our Business and Industry—Products manufactured by our suppliers may be defective or inferior in quality or infringe on the intellectual property rights of others, which may materially and adversely affect our business.” ​ 34 Table of Contents Seasonality ​ We experience seasonality in our business, reflecting seasonal fluctuations in online and offline retail patterns in general and for our products.
Risk Factors—Risks Related to Our Business and Industry—Products manufactured by our suppliers may be defective or inferior in quality or infringe on the intellectual property rights of others, which may materially and adversely affect our business.” ​ Seasonality ​ We experience seasonality in our business, reflecting seasonal fluctuations in online and offline retail patterns in general and for our products.
We employ a combination of our own proprietary technology and advanced third-party infrastructure to manage and optimize our cost-per-click advertising and to discover long-tail multilingual keywords that are most likely to offer a positive return on investment. ​ We display contextual advertising through major search engines’ advertising networks on a cost-per-click basis.
We employ a combination of our own proprietary technology and advanced third-party infrastructure to manage and optimize our cost-per-click advertising and to discover long-tail multilingual keywords that are most likely to offer a positive return on investment. ​ 31 Table of Contents We display contextual advertising through major search engines’ advertising networks on a cost-per-click basis.
Compliance with the GDPR is a rigorous and time-intensive process that may increase the cost of our business operations or requires us to change our business practice. US There is no uniform privacy protection legislation in the United States; instead, privacy is primarily protected through industry legislation and state legislation.
Compliance with the GDPR is a rigorous and time-intensive process that may increase the cost of our business operations or requires us to change our business practice. 35 Table of Contents US There is no uniform privacy protection legislation in the United States; instead, privacy is primarily protected through industry legislation and state legislation.
For proprietors claiming ownership of unregistered trademarks, they may have a right of action by way of common law rights relating to the tort of passing off. 40 Table of Contents EU An EU trademark have a unitary character. It has equal effect throughout the Union. An EU trademark shall be obtained by registration.
For proprietors claiming ownership of unregistered trademarks, they may have a right of action by way of common law rights relating to the tort of passing off. EU An EU trademark have a unitary character. It has equal effect throughout the Union. An EU trademark shall be obtained by registration.
In addition, we conduct offline marketing in certain countries to maximize the overall coverage of our marketing campaigns. ​ 32 Table of Contents We also focused on providing our customers with a rich shopping experience, which drives customer recommendations, foster customer sharing and encourages repeat customer visits.
In addition, we conduct offline marketing in certain countries to maximize the overall coverage of our marketing campaigns. ​ We also focused on providing our customers with a rich shopping experience, which drives customer recommendations, foster customer sharing and encourages repeat customer visits.
Our front-end modules support the operation of our user-interface, including PC websites, mobile websites and APPS, functions including user account management, website homepages, search functions, category browsing, product display pages, online shopping carts, payment and order management functions. ​ ● Back-end Modules .
Our front-end modules support the operation of our user-interface, including PC websites, mobile websites and Apps, functions including user account management, website homepages, search functions, category browsing, product display pages, online shopping carts, payment and order management functions. ​ 32 Table of Contents ● Back-end Modules .
Securities Act, and other subsidiaries and variable interest entities that are representative of our major businesses, which we collectively refer to as our major subsidiaries: ​ ​ As of the date of this Annual Report, we have no VIEs in the PRC.
Securities Act, and other subsidiaries and variable interest entities that are representative of our major businesses, which we collectively refer to as our major subsidiaries, as of the date of this annual report: ​ 42 Table of Contents ​ As of the date of this annual report, we have no VIEs in the PRC.
Income Tax Our subsidiaries incorporated in Hong Kong are subject to Hong Kong profits tax at a rate of 16.5% with respect to the profit generated from Hongkong. Our subsidiaries incorporated in Singapore are subject to the Singapore corporate tax of 17% with respect to the profit generated from Singapore.
Income Tax Our subsidiaries incorporated in Hong Kong are subject to Hong Kong profits tax at a rate of 16.5% with respect to the profit generated from Hongkong.
For example, the California government passed the California Consumer Protection Act (hereinafter referred to as CCPA) on June 28, which took effect on January 1, 2020 which is designed to strengthen consumer privacy and data security protections and is considered to be the most stringent consumer data privacy protection legislation in the United States.
For example, the California government passed the California Consumer Protection Act (hereinafter referred to as CCPA) on June 28, which took effect on January 1, 2020 which is designed to strengthen consumer privacy and data security protections and is considered to be the most stringent consumer data privacy protection legislation in the United States. We are subject to these legislations.
Sales and use tax rates vary from state to state. Most states also allow a ‘local option’ that permits local jurisdictions, such as cities and counties, to impose an additional percentage on top of the state-level tax and to keep the related revenues.
Most states also allow a ‘local option’ that permits local jurisdictions, such as cities and counties, to impose an additional percentage on top of the state-level tax and to keep the related revenues.
Our subsidiaries incorporated in the PRC are subject to the general corporate tax of 25%, except for Shanghai Lanting, which is subject to 15% of corporate tax rate from 2022 to 2024, according to the new EIT Law and its implementation rules that permit certain High and New Technologies Enterprises, or HNTEs, to enjoy a reduced 15% enterprise income tax rate if they meet certain criteria and are officially acknowledged.
Our subsidiaries incorporated in Singapore are subject to the Singapore corporate tax of 17% with respect to the profit generated from Singapore. 41 Table of Contents Our subsidiaries incorporated in the PRC are subject to the general corporate tax of 25%, except for Shanghai Lanting, which is subject to 15% of corporate tax rate from 2022 to 2024, according to the new EIT Law and its implementation rules that permit certain High and New Technologies Enterprises, or HNTEs, to enjoy a reduced 15% enterprise income tax rate if they meet certain criteria and are officially acknowledged.
Such co-location inventory products are delivered to our warehouses by our suppliers at their own costs, and we do not record these products as our inventory until all liabilities and rights of ownership of these products are passed on to us upon the confirmation of orders by our customers.
Such co-location inventory products are delivered to our warehouses by our suppliers at their own costs, and we do not record these products as our inventory until all liabilities and rights of ownership of these products are passed on to us upon the confirmation of orders by our customers. ​ Pricing ​ In general, we aim to set our products at competitive prices.
We are subject to these legislations. 36 Table of Contents Regulations Relating to Consumer Protection Singapore Doing business in Singapore requires compliance with the Consumer Protection (Consumer Goods Safety Requirements) Regulations (CGSR), which are designed to protect consumers from unsafe general consumer goods such as toys, children’s products, clothing, sports and recreational products, furniture, mattresses and bedding, and DIY tools.
Regulations Relating to Consumer Protection Singapore Doing business in Singapore requires compliance with the Consumer Protection (Consumer Goods Safety Requirements) Regulations (CGSR), which are designed to protect consumers from unsafe general consumer goods such as toys, children’s products, clothing, sports and recreational products, furniture, mattresses and bedding, and DIY tools.
US A work first published in the United States is copyrighted in the United States. Works published outside the United States are copyrighted under agreements between their countries and the United States or under international treaties to which they are parties, and also protected by U.S. law.
Works published outside the United States are copyrighted under agreements between their countries and the United States or under international treaties to which they are parties, and also protected by U.S. law.
Each Member State is required to take measures to ensure that right holders can claim damages and/or apply for a temporary injunction against infringement and may request the confiscation of the infringing material and equipment, products or parts related to the technical measures in question, as appropriate.
Each Member State is required to take measures to ensure that right holders can claim damages and/or apply for a temporary injunction against infringement and may request the confiscation of the infringing material and equipment, products or parts related to the technical measures in question, as appropriate. 38 Table of Contents US A work first published in the United States is copyrighted in the United States.
Historically, we conducted certain operations in the PRC through contractual arrangements with certain VIEs, that were incorporated in the PRC.
Historically, we conducted certain operations in the PRC through contractual arrangements with certain variable interest entities, or VIEs, that were incorporated in the PRC.
We accept payments through all major credit cards and electronic payment platforms, such as PayPal, Stripe, Checkout, Klarna and Global Collect, and we deliver our goods through different international couriers, including DHL, UPS, FEDEX, EMS and other international couriers. ​ Our Websites and Mobile Applications ​ We operate our business primarily through www.lightinthebox.com, www.miniinthebox.com and www.ezbuy.sg , offering apparel and other general products.
We accept payments through all major credit cards and electronic payment platforms, such as Visa, MasterCard, American Express, PayPal, Klarna and Apple Pay and we deliver our goods through different international couriers, including DHL, UPS, FEDEX, EMS and other international couriers. ​ Our Websites and Mobile Applications ​ We operate our business primarily through www.lightinthebox.com, and www.ezbuy.sg , offering apparel and other general products.
The Employment of Foreign Manpower Act sets out the rules and regulations for the employment of foreign workers in Singapore. If our Singapore subsidiaries wish to employ foreign workers, they are required to apply for work permits or employment passes for them, and there are quotas and levies that apply to the employment of foreign workers.
If our Singapore subsidiaries wish to employ foreign workers, they are required to apply for work permits or employment passes for them, and there are quotas and levies that apply to the employment of foreign workers.
We have two registered patents in the United States and two registered patents in China. ​ In addition to the protection of our intellectual property, we also focused on ensuring that our product offerings do not infringe the intellectual property of others.
We also have in total 60 registered computer software copyrights in China and the United States, and two registered patents in the United States and two registered patents in China. ​ 33 Table of Contents In addition to the protection of our intellectual property, we also focused on ensuring that our product offerings do not infringe the intellectual property of others.
Generally, if products are returned for quality issues, damage during shipping, failure to conform to specifications, allergic reactions, we will provide refund upon return policy. Customized apparel return requests are subject to additional restrictions due to the personalized nature of such products.
Refund and Exchange ​ We have implemented refund and exchange policies specific to each of our product categories. Generally, if products are returned for quality issues, damage during shipping, failure to conform to specifications, allergic reactions, we will provide refund upon return policy. Customized apparel return requests are subject to additional restrictions due to the personalized nature of such products.
It may only be granted, transferred or declared invalid for the whole of the Community. The aim of creating a Community patent is to give inventors the option of obtaining a single patent which is legally valid throughout the European Union.
EU The Community patent is unitary and autonomous, i.e. it has equal effect throughout the Community. It may only be granted, transferred or declared invalid for the whole of the Community. The aim of creating a Community patent is to give inventors the option of obtaining a single patent which is legally valid throughout the European Union.
LTD., our wholly owned subsidiaries incorporated under the laws of Singapore, that primarily focus on the marketing and customer service, warehouse management services and local delivery in Southeast Asia; ​ ● Light In The Box Limited, LightInTheBox International Logistic Co., Limited, Lanting International Holding Limited and Ezbuy Holding Limited, our wholly owned subsidiaries incorporated in Hong Kong, that primarily engage in product sourcing, marketing and the operation of our websites and mobile applications and global distribution network; ​ ● LITB Netherlands B.V., our wholly owned subsidiary incorporated in the Netherlands that primarily engages in marketing in Europe; ​ ● LITB, Inc., our wholly owned subsidiary incorporated under the laws of the State of Delaware, that primarily engages in marketing and technology support; and ​ ● PRC subsidiaries, that primarily engage in providing supplier chain management, research and development, customer service, marketing services, warehousing and fulfillment services to overseas consolidated affiliates. ​ Our principal executive offices are located at 51 Tai Seng Avenue #05-02B/C, Pixel Red Singapore (533941).
LTD., our wholly owned subsidiaries incorporated under the laws of Singapore, that primarily focus on the marketing and customer service, warehouse management services and local delivery in Southeast Asia; ​ ● Light In The Box Limited, LightInTheBox International Logistic Co., Limited, Lanting International Holding Limited and Ezbuy Holding Limited, our wholly owned subsidiaries incorporated in Hong Kong, that primarily engage in product sourcing, marketing and the operation of our websites and mobile applications and global distribution network; ​ ● LITB Netherlands B.V., our wholly owned subsidiary incorporated in the Netherlands that primarily engages in marketing in Europe; ​ ● Ador E-commerce Inc, our wholly owned subsidiary incorporated under the laws of the State of Oregon, the United States that primarily engages in marketing and technology support; and ​ ● PRC subsidiaries, that primarily engage in providing supplier chain management, research and development, customer service, marketing services, warehousing and fulfillment services to overseas consolidated affiliates. ​ Our principal executive offices are located at 4 Pandan Crescent #03-03 Logos eHub, Singapore (128475).
We have registered domain names for all of our websites, including www.lightinthebox.com, www.miniinthebox.com, www.ezbuy.sg. We have in total 286 trademarks and service marks registered in China, the United States, European Union, Hong Kong, etc. Our trademarks include Lightinthebox, MiniInTheBox and ezbuy etc. We also have 58 registered computer software copyrights in China and one registered copyright in the United States.
We have registered domain names for all of our websites, including www.lightinthebox.com and www.ezbuy.sg . We have in total 304 trademarks and service marks registered in China, the United States, European Union, Hong Kong, etc. Our trademarks include Lightinthebox and ezbuy etc.
We target products that can offer our customers better choices and savings, such as fast fashion and other general merchandise product category. 29 Table of Contents ​ We serve customers globally without incurring the costs and complexities associated with establishing a traditional multinational retail infrastructure.
We target products that can offer our customers better choices and savings, such as apparels for all occasions and lifestyles, and other general merchandise product category. ​ We serve customers globally without incurring the costs and complexities associated with establishing a traditional multinational retail infrastructure.
In 2022, we liquidated the two remaining VIEs, namely, Lanting Gaochuang and Chongqing Ruizhihe. As a result, the contractual arrangements between our wholly-owned entities and the relevant VIEs were terminated, which includes Exclusive and Technical Support and Consulting Service Agreements, Powers of Attorney, Exclusive Option Agreements, Loan Agreements, Share Pledge Agreements and Spousal Consent Letters.
As a result, the contractual arrangements between our wholly-owned entities and the relevant VIEs were terminated, which includes Exclusive and Technical Support and Consulting Service Agreements, Powers of Attorney, Exclusive Option Agreements, Loan Agreements, Share Pledge Agreements and Spousal Consent Letters.
We have also established online communities to foster customer peer sharing. ​ Our Product Offerings ​ We offer customers products through our websites and mobile applications. Our product offerings include: ​ ● Apparel . This category includes fast fashion and customized, special occasion apparel. ​ ● Other general merchandise.
We have also established online communities to foster customer peer sharing. ​ Our Product Offerings ​ We offer customers products through our websites and mobile applications. Our product offerings include: ​ ● Apparel . This category includes apparels for all occasions and lifestyles, and ​ ● Other general merchandise.
Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business. ​ The following sets forth a summary of the major rules and regulations that affect our business activities. ​ Regulations Relating to Data Privacy Protection ​ As we further expand our operations into international markets, we will be subject to additional laws in other jurisdictions where we operate and where our consumers, users, merchants, customers and other participants are located. 35 Table of Contents Singapore Our Singapore subsidiaries are subject to the Personal Data Protection Act 2012 (the “PDPA”), which is administered and enforced by the Personal Data Protection Commission (the “PDPC”), and governs the collection, use and disclosure of the personal data of individuals by organizations.
Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business. ​ The following sets forth a summary of the major rules and regulations that affect our business activities. ​ Regulations Relating to Data Privacy Protection ​ As we further expand our operations into international markets, we will be subject to additional laws in other jurisdictions where we operate and where our consumers, users, merchants, customers and other participants are located.
On the other hand, employers by default own the copyright in all content created by their employees in the course of the employees’ employment, unless otherwise agreed by contract. 39 Table of Contents EU Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC lays down rules which aim to harmonize further Union law applicable to copyright and related rights in the framework of the internal market, taking into account, in particular, digital and cross-border uses of protected content.
EU Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC lays down rules which aim to harmonize further Union law applicable to copyright and related rights in the framework of the internal market, taking into account, in particular, digital and cross-border uses of protected content.
Our supply chain management system has been efficient in managing inventory while also reducing production waste for our suppliers, which we believe increases the desire for suppliers to work with us. ​ We have entered into arrangements with certain suppliers under which the suppliers store their products in our warehouses.
Our supply chain management system has been efficient in managing inventory while also reducing production waste for our suppliers. ​ We have entered into arrangements with certain suppliers under which the suppliers store their products in our warehouses. Such products are referred to in this annual report as co-location inventory.
In infringement proceedings, the proprietor of an EU trade mark shall not be entitled to prohibit the use of a later registered national trade mark where that later registered national trade mark would not be declared invalid pursuant to Article 8 or Article 9(1) or (2), or Article 46(3) of Directive (EU) 2015/2436 of the European Parliament and of the Council (1).Where the proprietor of an EU trade mark is not entitled to prohibit the use of a later registered trade mark, the proprietor of that later registered trade mark shall not be entitled to prohibit the use of that earlier EU trade mark in infringement proceedings.
In infringement proceedings, the proprietor of an EU trade mark shall not be entitled to prohibit the use of a later registered national trade mark where that later registered national trade mark would not be declared invalid pursuant to Article 8 or Article 9(1) or (2), or Article 46(3) of Directive (EU) 2015/2436 of the European Parliament and of the Council (1).Where the proprietor of an EU trade mark is not entitled to prohibit the use of a later registered trade mark, the proprietor of that later registered trade mark shall not be entitled to prohibit the use of that earlier EU trade mark in infringement proceedings. 39 Table of Contents US A registrant of a mark registered in the Patent and Trademark Office, may give notice that his mark is registered by displaying with the mark the words “Registered in U.S.
Civil proceedings may be brought in the court by the proprietor of a patent in respect of any act alleged to infringe the patent, the court shall not, in respect of the same infringement, both award the proprietor of a patent damages and order that he shall be given an account of the profits. 38 Table of Contents EU The Community patent is unitary and autonomous, i.e. it has equal effect throughout the Community.
Civil proceedings may be brought in the court by the proprietor of a patent in respect of any act alleged to infringe the patent, the court shall not, in respect of the same infringement, both award the proprietor of a patent damages and order that he shall be given an account of the profits.
Foreign exchange transactions related to direct investment, loans and investment in securities outside China are still subject to limitations and require approval from the SAFE. On March 30, 2015, SAFE issued the SAFE Circular 19, which became effective on June 1, 2015.
Foreign exchange transactions related to direct investment, loans and investment in securities outside China are still subject to limitations and require approval from the SAFE.
Regulations Relating to Foreign Exchange Foreign Exchange Relating to Export Businesses Foreign exchange activities relating to import and export trading in China are primarily governed by the following regulations: ● the Foreign Exchange Administration Rules (2008), or the Exchange Rules; ● the Administration Rules for the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules; and ● the Guidance on Foreign Exchange Business under the Current Account (2020). 41 Table of Contents These foreign exchange regulations, along with certain other ancillary notices issued by the SAFE, lay out the legal framework for the administration of foreign exchange for the export of commodities and services in international trade.
Regulations Relating to Foreign Exchange Foreign Exchange Relating to Export Businesses Foreign exchange activities relating to import and export trading in China are primarily governed by the following regulations: ● the Foreign Exchange Administration Rules (2008), or the Exchange Rules; ● the Administration Rules for the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules; and ● the Guidance on Foreign Exchange Business under the Current Account (2020).
Meanwhile, there are other non-EU European countries that still charge VAT at the border when the goods are imported. 42 Table of Contents In United States, most states have enacted laws or adopted formal positions that apply an economic nexus standard and require remote sellers with no in-state physical presence to register for sales and use tax purposes, collecting and remitting tax on sales directed to customers in the state.
In United States, most states have enacted laws or adopted formal positions that apply an economic nexus standard and require remote sellers with no in-state physical presence to register for sales and use tax purposes, collecting and remitting tax on sales directed to customers in the state. Sales and use tax rates vary from state to state.
Our design teams also assist us with our product selection and product presentation to maximize the appeal of our product offerings. ​ Revenues from apparel sales accounted for 41.3%, 61.4% and 79.3% of our total revenues in 2020, 2021 and 2022, respectively. ​ Our Partnership with Suppliers ​ We have a comprehensive supplier qualification system and have around 1,000 selected active suppliers accordingly.
Our design teams also assist us with our product selection and product presentation to maximize the appeal of our product offerings. ​ Revenues from apparel sales accounted for 61.4%, 79.3% and 82.3% of our total revenues in 2021, 2022 and 2023, respectively.
Foreign Exchange Relating to FIEs Under current Chinese regulations, Renminbi are freely convertible for trade and service-related transactions denominated in foreign currency, but not for direct investment, loans or investments in securities outside China without the prior approval of the SAFE or its local branches.
Payments to the suppliers and service providers in the PRC are made after the approval by local SAFE, with the provision of relevant exporting documents including customer order details, payment records, shipping, delivery tracking and related service agreements. 40 Table of Contents Foreign Exchange Relating to FIEs Under current Chinese regulations, Renminbi are freely convertible for trade and service-related transactions denominated in foreign currency, but not for direct investment, loans or investments in securities outside China without the prior approval of the SAFE or its local branches.
This category includes small accessories and gadgets, home garden, toys and hobbies, electronics and communication devices and other products. ​ We have established dedicated retail management teams with strong expertise in their individual categories. We focus on products with strong market demand and large market size, supply chain feasibility and efficiency, online marketing efficiency, logistical feasibility and cost saving potentials.
This category includes small accessories and gadgets, home garden, toys and hobbies, electronics and communication devices and other products. ​ 29 Table of Contents We have established dedicated retail management teams with strong expertise in their individual categories.
Available payment options include online payment through all major credit and debit cards, including Visa, MasterCard and American Express, and electronic payment platforms such as PayPal, Global Collect, Stripe, Klarna, and money transfer through Western Union and wire transfer.
Available payment options include online payment through all major credit and debit cards, including Visa, MasterCard and American Express, and electronic payment platforms such as PayPal, Klarna, Apple Pay and money transfer through Western Union and wire transfer. However, available payment options may differ depending on the country or region in which the customers are based.
Such internal design expertise allows us to create distinctive product designs and provide design feedback to suppliers as to the latest fashions and trends.
This allows us to quickly adjust and improve our products and product presentation. For apparel, we have established our own design teams. Such internal design expertise allows us to create distinctive product designs and provide design feedback to suppliers as to the latest fashions and trends.
Our annual report and some of the other information submitted by us to the SEC may be accessed through this website. Our investor relations website is http://ir.lightinthebox.com . The information contained on our websites is not a part of this annual report. ​ B.
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Our annual report and some of the other information submitted by us to the SEC may be accessed through this website. Our investor relations website is http://ir.lightinthebox.com .
The Employment Act is the main employment law in Singapore, which sets out the basic terms and conditions of employment for most employees, including working hours, rest days, overtime pay, and other benefits. The Employment Act covers most employees in Singapore, except for seafarers, domestic workers, and some managers and executives.
Labor Laws In Singapore, employment is regulated by the Ministry of Manpower (MOM), which sets out rules and regulations to protect both employers and employees. The Employment Act is the main employment law in Singapore, which sets out the basic terms and conditions of employment for most employees, including working hours, rest days, overtime pay, and other benefits.
US There are three ways to apply for a patent in the U.S.: (1) applying directly, (2) applying through the Paris Convention; (3) applying through the Patent Cooperation Treaty (PCT).
The rights conferred by the Community patent may be invoked against a licensee who breaches any restriction in the licensing contract. 37 Table of Contents US There are three ways to apply for a patent in the U.S.: (1) applying directly, (2) applying through the Paris Convention; (3) applying through the Patent Cooperation Treaty (PCT).
The Community patent may be licensed in whole or in part for all or part of the Community. These licenses may be exclusive or non-exclusive. The rights conferred by the Community patent may be invoked against a licensee who breaches any restriction in the licensing contract.
The Community patent may be licensed in whole or in part for all or part of the Community. These licenses may be exclusive or non-exclusive.
The PPPA requires products to be designed to prevent children under the age of 5 from opening the product for a certain period of time, but also facilitate for normal adult opening. Because the elderly and disabled may also have difficulty to open the packaging of such products.
Poison Prevention Packaging Act (PPPA) which was implemented in 1970, requires some household appliances to have child-proof packaging to prevent children from being harmed. The PPPA requires products to be designed to prevent children under the age of 5 from opening the product for a certain period of time, but also facilitate for normal adult opening.
If there is no applicable appropriate standard which is able to reduce or eliminate the risk of injury to consumers, the CPSC preferably prohibits the product from being marketed and recalls certain hazardous products.
If there is no applicable appropriate standard which is able to reduce or eliminate the risk of injury to consumers, the CPSC preferably prohibits the product from being marketed and recalls certain hazardous products. 36 Table of Contents Under the Federal Hazardous Substances Act (FHSA), household products present hazards should have warning notices on their labels to alert consumers and instruct them on how to protect themselves if these hazards present.
Products are then delivered from our suppliers to our warehouses for quality inspection before being shipped out to our customers by third-party couriers. We regularly monitor our order fulfillment process and solicit customer feedback to ensure fulfillment accuracy. ​ We offer different delivery options to our customers, including expedited express, priority lines and international postal services.
We regularly monitor our order fulfillment process and solicit customer feedback to ensure fulfillment accuracy. ​ We offer different delivery options to our customers, including expedited express, priority lines and international postal services. We partner with third party carriers in all regions except for in Singapore, where we manage the local delivery by our employees.
The Work Injury Compensation Act provides for compensation to employees who are injured, disabled, or killed in a work-related accident or due to an occupational disease. Our subsidiaries incorporate in Singapore are required to purchase work injury compensation insurance for employees, and the insurance policy should cover the compensation that employees are entitled to under the Act.
The Employment Act covers most employees in Singapore, except for seafarers, domestic workers, and some managers and executives. The Work Injury Compensation Act provides for compensation to employees who are injured, disabled, or killed in a work-related accident or due to an occupational disease.
This act allows the product to sell in a non-standard size package with a warning sign indicating that the product cannot be easily accessed by children in the house. Statutory prescription drugs may be dispensed with child-protective packaging when prescribed by a physician or specifically requested by the patient.
Because the elderly and disabled may also have difficulty to open the packaging of such products. This act allows the product to sell in a non-standard size package with a warning sign indicating that the product cannot be easily accessed by children in the house.
US A registrant of a mark registered in the Patent and Trademark Office, may give notice that his mark is registered by displaying with the mark the words “Registered in U.S. Patent and Trademark Office” or “Reg. U.S. Pat. & Tm. Off.” or the letter R enclosed within a circle, thus ®.
Patent and Trademark Office” or “Reg. U.S. Pat. & Tm. Off.” or the letter R enclosed within a circle, thus ®.
Organizational Structure ​ The chart below summarizes our corporate structure and identifies our significant subsidiaries, as that term is defined under Section 1-02 of Regulation S-X under the U.S.
In addition, employers in China are obliged to provide employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance and housing funds. C. Organizational Structure ​ The chart below summarizes our corporate structure and identifies our significant subsidiaries, as that term is defined under Section 1-02 of Regulation S-X under the U.S.
However, available payment options may differ depending on the country or region in which the customers are based. ​ Order Fulfillment ​ We have established warehouses in Singapore, the PRC and the United States. Currently, our warehouses have the capacity to handle over 50,000 orders per day.
Order Fulfillment ​ We have established warehouses in Singapore, the PRC and the United States. Currently, our warehouses have the capacity to handle over 50,000 orders per day. As we grow our business, we build incremental capacity to reduce our capital expenditures.
As a result of our unique supply network, we have generally maintained a low inventory level and, in many cases, do not keep many products in stock. Rather, we transmit orders to our suppliers for fulfillment only when such orders are received from our customers or on a daily basis in small batches.
Our warehouses are currently leased. ​ Generally, orders placed by our customers are transmitted via our information technology system to one of our warehouses. As a result of our unique supply network, we have generally maintained a low inventory level and, in many cases, do not keep many products in stock.
For commissioned works, the copyright will be owned by the author by default, unless otherwise agreed by contract.
For commissioned works, the copyright will be owned by the author by default, unless otherwise agreed by contract. On the other hand, employers by default own the copyright in all content created by their employees in the course of the employees’ employment, unless otherwise agreed by contract.
Business Overview ​ Overview ​ We are an online retailer that delivers products directly to consumers around the world.
The information contained on our websites is not a part of this annual report. ​ 28 Table of Contents B. Business Overview ​ Overview ​ We are an online retailer that delivers products directly to consumers around the world.
Under the Federal Hazardous Substances Act (FHSA), household products present hazards should have warning notices on their labels to alert consumers and instruct them on how to protect themselves if these hazards present. Any products that is toxic, corrosive, flammable, and capable of producing electrical currents through decay, heat, or other causes needs to be warned out on the label.
Any products that is toxic, corrosive, flammable, and capable of producing electrical currents through decay, heat, or other causes needs to be warned out on the label. If the product may cause personal injury and illness during normal use and when touched by children, it should also be noted on the label.
After products are selected, we conduct frequent real-time customer behavior analysis and seek customer feedback through surveys to improve and tailor our offerings. This allows us to quickly adjust and improve our products and product presentation. For apparel, we have established our own design teams.
We focus on products with strong market demand and large market size, supply chain feasibility and efficiency, online marketing efficiency, logistical feasibility and cost saving potentials. After products are selected, we conduct frequent real-time customer behavior analysis and seek customer feedback through surveys to improve and tailor our offerings.
Pursuant to the Double Taxation Avoidance Arrangement, dividends that Light In The Box Limited receives from our PRC subsidiaries may be subject to withholding tax at a rate of 5%, provided that the conditions and requirements under the Double Taxation Avoidance Arrangement have been satisfied, and subject to the assessment and approval of our relevant local tax authority. 43 Table of Contents Regulations on Employee Stock Option Plans Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, or Circular 7, issued by SAFE, a person, who is PRC citizen or a non-PRC citizen who has been resident in China for at least one year and is part of a stock incentive plan of an overseas publicly listed company, is required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and to follow certain other procedures, subject to a few exceptions.
Pursuant to the Double Taxation Avoidance Arrangement, dividends that Light In The Box Limited receives from our PRC subsidiaries may be subject to withholding tax at a rate of 5%, provided that the conditions and requirements under the Double Taxation Avoidance Arrangement have been satisfied, and subject to the assessment and approval of our relevant local tax authority.
Foreign investors are not allowed to invest in industries in the prohibited category. ​ Regulations on Intellectual Property Rights We are subject to legislations governing intellectual property rights, including trademarks, patents and copyrights.
Statutory prescription drugs may be dispensed with child-protective packaging when prescribed by a physician or specifically requested by the patient. Regulations on Intellectual Property Rights We are subject to legislations governing intellectual property rights, including trademarks, patents and copyrights.
Removed
The address of our agent for service of process in the United States is 5912 NE 112TH Ave Portland, OR. ​ The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Added
Our Partnership with Suppliers ​ We have a comprehensive supplier qualification system and have around 1,000 selected active suppliers accordingly.
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Such products are referred to in this annual report as co-location inventory.
Added
Rather, we transmit orders to our suppliers for fulfillment only when such orders are received from our customers or on a daily basis in small batches. Products are then delivered from our suppliers to our warehouses for quality inspection before being shipped out to our customers by third-party couriers.
Removed
We have the right to ask the suppliers to remove the co-location inventory from our warehouses at any time, generally at the suppliers’ own costs. However, we may from time to time pay the transportation cost associated with returning such products to suppliers.
Added
Singapore Our Singapore subsidiaries are subject to the Personal Data Protection Act 2012 (PDPA), which is administered and enforced by the Personal Data Protection Commission (PDPC), and governs the collection, use and disclosure of the personal data of individuals by organizations.
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In addition, certain agreements with our suppliers require them to remove unsold co-location inventory within 90 days after these products are delivered. The costs and expenses incurred related to the storage of co-location inventory in our warehouses, such as rentals, are generally paid by us. ​ Pricing ​ In general, we aim to set our products at competitive prices.
Added
These foreign exchange regulations, along with certain other ancillary notices issued by the SAFE, lay out the legal framework for the administration of foreign exchange for the export of commodities and services in international trade.
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As we grow our business, we build incremental capacity to reduce our capital expenditures. Our warehouses are currently leased. ​ 31 Table of Contents Generally, orders placed by our customers are transmitted via our information technology system to one of our warehouses.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Pursuant to the Double Taxation Avoidance Arrangement, dividends that Light in The Box Limited receives from our PRC subsidiaries may be subject to withholding tax at a rate of 5%, provided that the conditions and requirements under the Double Taxation Avoidance Arrangement have been satisfied. ​ International Value Added Tax / Sales tax / Goods and Services Tax ​ The European Union value-added tax (or EU VAT) is a value added tax on goods and services within the European Union (EU).
Pursuant to the Double Taxation Avoidance Arrangement, dividends that Light in The Box Limited receives from our PRC subsidiaries may be subject to withholding tax at a rate of 5%, provided that the conditions and requirements under the Double Taxation Avoidance Arrangement have been satisfied. ​ International Value Added Tax / Sales and use tax / Goods and Services Tax ​ The European Union value-added tax (or EU VAT) is a value added tax on goods and services within the European Union (EU).
We offer customers a convenient way to shop for a wide selection of products at attractive prices through www.lightinthebox.com , www.miniinthebox.com, www.ezbuy. sg and our other websites as well as mobile applications, which are available in over 20 major languages and over 140 countries and regions.
We offer customers a convenient way to shop for a wide selection of products at attractive prices through www.lightinthebox.com , www.ezbuy.sg and our other websites as well as mobile applications, which are available in over 20 major languages and over 140 countries and regions.
In addition, our PRC subsidiaries are exempted from VAT on revenue from provision of professional services to its overseas affiliates. 51 Table of Contents ​ In addition to the above countries, other regions or countries also have developed and introduced their own VAT or GST regulations. ​ Results of Operations ​ The following table sets forth a summary of our consolidated results of operations for the years indicated.
In addition, our PRC subsidiaries are exempted from VAT on revenue from provision of professional services to its overseas affiliates. ​ In addition to the above countries, other regions or countries also have developed and introduced their own VAT or GST regulations. ​ 49 Table of Contents Results of Operations ​ The following table sets forth a summary of our consolidated results of operations for the years indicated.
There are no exchange control regulations or currency restrictions in the Cayman Islands. ​ Payments of dividends and capital in respect of our ordinary shares or our ADSs will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares or our ADSs, nor will gains derived from the disposal of our ordinary shares or our ADSs be subject to Cayman Islands income or corporation tax. ​ No stamp duty is payable in respect of the issue of our ordinary shares or on an instrument of transfer in respect of our ordinary shares. ​ 50 Table of Contents Singapore Taxation ​ Our subsidiaries incorporated in Singapore are subject to the Singapore corporate tax of 17% with respect to the profit generated from Singapore.
There are no exchange control regulations or currency restrictions in the Cayman Islands. ​ Payments of dividends and capital in respect of our ordinary shares or our ADSs will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares or our ADSs, nor will gains derived from the disposal of our ordinary shares or our ADSs be subject to Cayman Islands income or corporation tax. ​ No stamp duty is payable in respect of the issue of our ordinary shares or on an instrument of transfer in respect of our ordinary shares. ​ Singapore Taxation ​ Our subsidiaries incorporated in Singapore are subject to the Singapore corporate tax of 17% with respect to the profit generated from Singapore.
The IOSS allows suppliers and electronic interfaces selling imported goods of EUR150 or less to buyers in the EU to collect, declare and pay the VAT to the tax authorities. ​ For non-EU European countries, such as United Kingdom, Norway and Switzerland also have issued new VAT policies on foreign suppliers (businesses and marketplaces) of low-value goods to domestic individual consumers, where foreign suppliers are obliged to register and collect VAT on their B2C sales.
The IOSS allows suppliers and electronic interfaces selling imported goods of EUR150 or less to buyers in the EU to collect, declare and pay the VAT to the tax authorities. ​ 48 Table of Contents For non-EU European countries, such as United Kingdom, Norway and Switzerland also have issued new VAT policies on foreign suppliers (businesses and marketplaces) of low-value goods to domestic individual consumers, where foreign suppliers are obliged to register and collect VAT on their B2C sales.
For information regarding share options and restricted shares granted to our officers and directors, see “—Share Incentive Plan.” ​ Taxation ​ Cayman Islands Taxation ​ The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty.
For information regarding share options and restricted shares granted to our officers and directors, see “—Share Incentive Plan.” ​ 47 Table of Contents Taxation ​ Cayman Islands Taxation ​ The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty.
By offering a wide variety of products at affordable prices, we hope to create a better lifestyle for people living in these countries and regions. ​ We target products that can offer our customers better choices and savings, such as fast fashion including men’s clothing, women’s clothing, baby and kids clothing, shoes and bags, wedding and event dresses, we also offer general merchandises including home garden products, lights, electronics and communication devices etc. ​ We serve customers globally without incurring the costs and complexities associated with establishing a traditional multinational retail infrastructure.
By offering a wide variety of products at affordable prices, we hope to create a better lifestyle for people living in these countries and regions. ​ We target products that can offer our customers better choices and savings, such as apparels including men’s clothing, women’s clothing, baby and kids’ clothing, shoes and bags, wedding and event dresses, we also offer general merchandises including home garden products, lights, electronics and communication devices etc. ​ We serve customers globally without incurring the costs and complexities associated with establishing a traditional multinational retail infrastructure.
Our cost of product sales as percentage of our total revenues during a specific period is affected by the composition of the type of products sold during that period. ​ Our cost of services consists primarily of shipping charges and to a lesser extent, packaging supplies in connection with the provision of such services to our customers.
Our cost of product sales as percentage of our total revenues during a specific period is affected by the composition of the type of products sold during that period. ​ 46 Table of Contents Our cost of services consists primarily of shipping charges and to a lesser extent, packaging supplies in connection with the provision of such services to our customers.
We will also refuse to work with or terminate our partnership with suppliers in the event of intellectual property right violations. In addition, we have also engaged third-party advisors to assist us in ensuring compliance with third-party intellectual property rights. ​ D.
We will also refuse to work with or terminate our partnership with suppliers in the event of intellectual property right violations. In addition, we have also engaged third-party advisors to assist us in ensuring compliance with third-party intellectual property rights. ​ 55 Table of Contents D.
We expect that as our business continues to grow and as we achieve economies of scale, our fulfillment cost as a percentage of our total revenues will decrease in the future. ​ 49 Table of Contents Selling and Marketing Expenses . Selling and marketing expenses include marketing program expenses and marketing personnel expenses.
We expect that as our business continues to grow and as we achieve economies of scale, our fulfillment cost as a percentage of our total revenues will decrease in the future. ​ Selling and Marketing Expenses . Selling and marketing expenses include marketing program expenses and marketing personnel expenses.
Such factors include: ​ ● the growth of the global economy and of our targeted geographic markets, including the breakout of the pandemic that has an adverse impact on global economy; ● per capita disposable income and consumer spending; ● growth of global Internet penetration and online retail; ● government policies and initiatives in our targeted geographic markets that affect online retail and, in particular, the import of products into their respective countries or regions; and ● overall global consumer perception of consumer goods exported from China. ​ Unfavorable changes in any of these general industry conditions could materially and adversely affect demand for our products and our results of operations.
Such factors include: ​ ● the growth of the global economy and of our targeted geographic markets, including the breakout of the pandemic that has an adverse impact on global economy; ● per capita disposable income and consumer spending; ● growth of global Internet penetration and online retail; and ● government policies and initiatives in our targeted geographic markets that affect online retail and, in particular, the import of products into their respective countries or regions. ​ Unfavorable changes in any of these general industry conditions could materially and adversely affect demand for our products and our results of operations.
We have two registered patents in the United States and two registered patents in China. ​ 57 Table of Contents In addition to the protection of our intellectual property, we are also focused on ensuring that our product offerings do not infringe the intellectual property of others.
We have two registered patents in the United States and two registered patents in China. ​ In addition to the protection of our intellectual property, we are also focused on ensuring that our product offerings do not infringe the intellectual property of others.
Revenues from apparel sales accounted for 41.3%, 61.4% and 79.3% of our total revenues in 2020, 2021 and 2022, respectively. ​ Product sales ​ The increase in our revenues from product sales from $435.2 million in 2021 to $491.9 million in 2022 was primarily contributed by our wide selection of value-for-money products, our quality customer base, which consists of a vital generation, middle class consumers 40-year-old and older who have higher disposal income, and our on-going R&D efforts to improve our efficiency to target customers.
Revenues from apparel sales accounted for 61.4%, 79.3% and 82.3% of our total revenues in 2021, 2022 and 2023, respectively. ​ Product sales ​ The increase in our revenues from product sales from $435.2 million in 2021 to $491.9 million in 2022 was primarily contributed by our wide selection of value-for-money products, our quality customer base, which consists of a vital generation, middle class consumers 40-year-old and older who have higher disposal income, and our on-going R&D efforts to improve our efficiency to target customers and increase customers’ shopping experience.
Other income, net mainly included the change in fair value of our equity investment, which was $13.5 million, $38.8 million and $0.8 million in 2020, 2021 and 2022, respectively. ​ Impairment loss on investment ​ The impairment loss on investment in 2020, 2021 and 2022 was $nil, $nil and $56.1 million, respectively.
Other income, net mainly included the change in fair value of our equity investment, which was $38.8 million, $0.8 million and $nil in 2021, 2022 and 2023, respectively. ​ Impairment loss on investment ​ The impairment loss on investment in 2021, 2022 and 2023 was $nil, $56.1 million and $nil, respectively.
Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) leases; (iii) income taxes; and (iv) long-term investment. See Note 2—Summary of Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies.
Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) leases; and (iii) income taxes. See Note 2—Summary of Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies. ​ ​
Impairment loss was made as the operations of Shenzhen Maikailai Technologies Co., Ltd (“Maikailai”) unexpectedly and suddenly materially deteriorated in the fourth quarter of 2022 due to adverse change of market conditions and are not expected to recover. ​ Income Tax Expense / Benefit ​ Our income tax expense was $3.4 million in 2020 and $9.8 million in 2021, and our income tax benefit was $12.7 million in 2022.
The impairment loss in 2022 was made as the operations of Shenzhen Maikailai Technologies Co., Ltd (“Maikailai”) unexpectedly and suddenly materially deteriorated in the fourth quarter of 2022 due to adverse change of market conditions and are not expected to recover. ​ Income Tax Expense / Benefit ​ Our income tax expense was $9.8 million in 2021, our income tax benefit was $12.7 million in 2022 and our income tax expense was $40 thousand in 2023.
In addition, our operating results are affected by the following company-specific factors: ​ ● our ability to acquire new customers and increase repeat purchases by customers at reasonable cost; ● our ability to control product sourcing costs, fulfillment and other operating expenses; ● our product selection and pricing; ● our ability to introduce new product offerings and categories; ● our ability to expand into new geographic markets; ● our ability to enhance our brand; and ● our ability to compete effectively. ​ Revenues ​ Since 2016, we have reported our operating results in two operating segments: ​ ● Product sales.
In addition, our operating results are affected by the following company-specific factors: ​ ● our ability to acquire new customers and increase repeat purchases by customers at reasonable cost; ● our ability to control product sourcing costs, fulfillment and other operating expenses; ● our product selection and pricing; ● our ability to introduce new product offerings and categories; ● our ability to expand into new geographic markets; ● our ability to enhance our brand; and ● our ability to compete effectively. ​ Revenues ​ Since 2016, we generate revenue from two revenue streams: ​ ● Product sales.
We expect our general and administrative expenses as a percentage of our total revenues to decrease in the future as we achieve economies of scale. ​ Share-based Compensation Expenses ​ The table below shows the effect of the share-based compensation expenses on our operating expense line items for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2021 2022 ​ ​ ​ ​ % of Total ​ ​ ​ % of Total ​ ​ ​ % of Total ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ (U.S. dollar in thousands, except for percentage) Fulfillment ​ $ 15 0.0 ​ $ 15 0.0 ​ $ 12 0.0 Selling and marketing ​ 82 0.0 ​ 142 0.0 ​ 99 0.0 General and administrative ​ 3,509 0.9 ​ 1,225 0.3 ​ 229 0.0 Total share-based compensation expenses ​ 3,606 0.9 ​ 1,382 0.3 ​ 340 0.0 ​ We expect to continue to grant share options, restricted shares and other share-based awards under our share incentive plan and incur further share-based compensation expenses in future periods.
We expect our general and administrative expenses as a percentage of our total revenues to decrease in the future as we achieve economies of scale. ​ Share-based Compensation Expenses ​ The table below shows the effect of the share-based compensation expenses on our operating expense line items for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2021 2022 2023 ​ ​ ​ ​ % of Total ​ ​ ​ % of Total ​ ​ ​ % of Total ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ (U.S. dollar in thousands, except for percentage) Fulfillment ​ $ 15 0.0 ​ $ 12 0.0 ​ $ — — Selling and marketing ​ 142 0.0 ​ 99 0.0 ​ 34 0.0 General and administrative ​ 1,225 0.3 ​ 229 0.0 ​ 381 0.0 Total share-based compensation expenses ​ $ 1,382 0.3 ​ $ 340 0.0 ​ $ 415 0.0 ​ We expect to continue to grant share options, restricted shares and other share-based awards under our share incentive plan and incur further share-based compensation expenses in future periods.
As of December 31, 2022, we had approximately $94.6 million in cash and cash equivalents and restricted cash. ​ We believe that our current cash and cash equivalents will be sufficient to meet the expenses and other expenditures required for our business operations for the 12 months from the issuance of this annual report.
As of December 31, 2023, we had approximately $71.7 million in cash and cash equivalents and restricted cash. ​ We believe that our current cash and cash equivalents will be sufficient to meet the expenses and other expenditures required for our business operations for the 12 months from the issuance of this annual report.
R&D expenses included in general and administrative expenses in 2020, 2021 and 2022 were $15.2 million, $20.3 million and $19.4 million, respectively. ​ Income / (loss) from Operations ​ As a result of the foregoing, our income from operations in 2020 was $3.9 million, and our loss from operation in 2021 and 2022 was $16.1 million and $14.2 million, respectively. ​ Other income, net Other income, net in 2020, 2021 and 2022 was $12.9 million, $39.3 million and $1.0 million, respectively.
R&D expenses included in general and administrative expenses in 2021, 2022 and 2023 were $20.3 million, $19.4 million and $19.1 million, respectively. ​ Loss from Operations ​ As a result of the foregoing, our loss from operation in 2021, 2022 and 2023 was $16.1 million, $14.2 million and $10.4 million, respectively. ​ Other income, net Other income, net in 2021, 2022 and 2023 was $39.3 million, $1.0 million and $0.5 million, respectively.
Income tax expense in 2020 and 2021 was primarily attributable to deferred income tax expense from change in fair value on our equity investment and the income tax benefit in 2022 was mainly due to the reversal of the unrecognized tax benefits. ​ Net Income / Loss ​ As a result of the foregoing, our net income in 2020 and 2021 were $13.3 million and $13.5 million, and net loss in 2022 was $56.6 million. ​ 54 Table of Contents B.
Income tax expense in 2021 was primarily attributable to deferred income tax expense from change in fair value on our equity investment, the income tax benefit in 2022 was mainly due to the reversal of the unrecognized tax benefits. ​ Net Income / Loss ​ As a result of the foregoing, our net income in 2021 was $13.5 million, and net loss in 2022 and 2023 was $56.6 million and $9.6 million, respectively. ​ 52 Table of Contents B.
We have registered domain names for all of our websites, including www.lightinthebox.com, www.miniinthebox.com, www.ezbuy.sg. We have in total 286 trademarks and service marks registered in China, the United States, European Union, Hong Kong, etc. Our trademarks include Lightinthebox, MiniInTheBox and ezbuy etc. We also have 58 registered computer software copyrights in China and one registered copyright in the United States.
We have registered domain names for all of our websites, including www.lightinthebox.com and www.ezbuy.sg . We have in total 304 trademarks and service marks registered in China, the United States, European Union, Hong Kong, etc. Our trademarks include Lightinthebox and ezbuy etc. We also have 60 registered computer software copyrights in China and in the United States.
The continuous increase in our selling and marketing expenses as a percentage of our total revenues from 2020 to 2022 was primarily due to the intensive competition for online retailers when we drove our revenue growth. ​ General and Administrative Expenses ​ Our general and administrative expenses in 2020, 2021 and 2022 were $33.2 million, $39.7 million and $36.3 million, respectively, reflecting an increase of 19.8 % from 2020 to 2021 and a decrease of 8.7% from 2021 to 2022. ​ General and administrative expenses as a percentage of our total revenues in 2020, 2021 and 2022 were 8.3%, 8.9% and 7.2%, respectively.
The continuous increase in our selling and marketing expenses as a percentage of our total revenues from 2021 to 2023 was primarily due to the intensive competition for online retailers when we drove our revenue growth. ​ General and Administrative Expenses ​ Our general and administrative expenses in 2021, 2022 and 2023 were $39.7 million, $36.3 million and $34.1 million, respectively, reflecting a decrease of 8.7% from 2021 to 2022 and a decrease of 6.1% from 2022 to 2023. ​ General and administrative expenses as a percentage of our total revenues in 2021, 2022 and 2023 were 8.9%, 7.2% and 5.4%, respectively.
In the near term, we expect to focus our selling and marketing efforts on growing our customer base, but we expect our selling and marketing expenses as a percentage of our total revenues to decrease in the long term as we achieve economies of scale and utilize our selling and marketing channels more efficiently. ​ General and Administrative Expenses .
In the near term, we expect to focus our selling and marketing efforts on growing our customer base, but we expect our selling and marketing expenses as a percentage of our total revenues to decrease in the long term as we achieve economies of scale, utilize our selling and marketing channels more efficiently, enchance customer’ shopping experience and accordingly increase repeat purchase. ​ General and Administrative Expenses .
Cash provided by operating activities was $29.3 million in 2020, and cash used in operating activities was $1.8 million in 2021 and cash provided by operating activities was $35.8 million in 2022, respectively. 46 Table of Contents Factors Affecting Our Results of Operations ​ Our business and results of operations are affected by general factors affecting online retail markets around the world.
Cash used in operating activities was $1.8 million in 2021, and cash provided by operating activities was $35.8 million and cash used in operating activities was $20.7 million in 2022 and 2023, respectively. 44 Table of Contents ​ Factors Affecting Our Results of Operations ​ Our business and results of operations are affected by general factors affecting online retail markets around the world.
We recorded net income of $13.3 million, $13.5 million and net loss of $56.6 million in 2020, 2021 and 2022, respectively.
We recorded net income of $13.5 million, net loss of $56.6 million and net loss of $9.6 million in 2021, 2022 and 2023, respectively.
Fulfillment expenses as a percentage of our total revenues in 2020, 2021 and 2022 were 7.0%, 6.6 % and 6.1%, respectively. 53 Table of Contents ​ The continuous decrease in our fulfillment expenses as a percentage of our total revenues from 2020 to 2022 was due to improved efficiency in our warehouse management. ​ Selling and Marketing Expenses ​ Our selling and marketing expenses in 2020, 2021 and 2022 were 112.1 million, $154.2 million and $222.6 million, respectively. ​ Selling and marketing expenses as a percentage of our total revenues were 28.2%, 34.6% and 44.2% in 2020, 2021 and 2022, respectively.
Fulfillment expenses as a percentage of our total revenues in 2021, 2022 and 2023 were 6.6 %, 6.1% and 5.5%, respectively. ​ The continuous decrease in our fulfillment expenses as a percentage of our total revenues from 2021 to 2023 was due to improved efficiency in our warehouse management. ​ 51 Table of Contents Selling and Marketing Expenses ​ Our selling and marketing expenses in 2021, 2022 and 2023 were $154.2 million, $222.6 million and $302.7 million, respectively. ​ Selling and marketing expenses as a percentage of our total revenues were 34.6%, 44.2% and 48.1% in 2021, 2022 and 2023, respectively.
The increase in gross margin was the result of the increased apparel sales which have higher margins. ​ Services and others ​ The gross profits of our services and others segment in 2020, 2021 and 2022 were $5.5 million, $6.8 million and $6.5 million, respectively, reflecting an increase of 23.0% from 2020 to 2021 and a decrease of 3.9% from 2021 to 2022.
The increase in gross margin was the result of the increased apparel sales with higher margins. ​ Services and others ​ The gross profits of our services and others segment in 2021, 2022 and 2023 were $6.8 million, $6.5 million and $8.7 million, respectively, reflecting a decrease of 3.9% from 2021 to 2022 and an increase of 32.9% from 2022 to 2023.
The gross margins of our services segment in 2020, 2021 and 2022 were 34.3%, 62.0% and 56.0%, respectively. ​ Fulfillment Expenses ​ Our fulfillment expenses in 2020, 2021 and 2022 were $28.0 million, $29.6 million and $30.6 million, respectively.
The gross margins of our services segment in 2021, 2022 and 2023 were 62.0%, 56.0% and 71.0%, respectively. ​ Fulfillment Expenses ​ Our fulfillment expenses in 2021, 2022 and 2023 were $29.6 million, $30.6 million and $34.9 million, respectively.
In addition, we had net working capital deficit of $38.1 million as of December 31, 2022, and we may continue to experience net current liabilities in the future.
In addition, we had net working capital deficit of $47.5 million as of December 31, 2023, and we may continue to experience net current liabilities in the future.
The gross margins of our product sales segment in 2020, 2021 and 2022 were 44.7%, 45.9 % and 54.6%, respectively.
The gross margins of our product sales segment in 2021, 2022 and 2023 were 45.9 %, 54.6% and 56.9%, respectively.
Marketing program expenses are comprised of targeted online marketing expenses, such as search engine marketing, display advertising and affiliate marketing program expenses. Marketing personnel expenses are comprised of payroll and related expenses for personnel engaged in selling, marketing and business development, including the execution of search engine optimization and social viral marketing activities.
Marketing program expenses are comprised of targeted online marketing expenses, such as search engine marketing, display advertising and affiliate marketing program expenses. Marketing personnel expenses are comprised of payroll and related expenses for personnel engaged in selling, marketing and business development.
Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. ​ 56 Table of Contents Contractual Obligations ​ The following table sets forth our contractual obligations as of December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment due by period ​ Total Less than 1 year 1-3 years More than 3 years ​ ​ (U.S. dollars in thousands) Operating Lease Obligations 12,169 5,379 6,790 — Finance Leases 82 48 34 — Capital expenditures ​ — ​ — ​ — ​ — Total 12,251 5,427 6,824 — ​ Holding Company Structure ​ We are a Cayman Islands holding company with no material operations of our own.
Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. ​ Contractual Obligations ​ The following table sets forth our contractual obligations as of December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment due by period ​ ​ Total Less than 1 year 1-3 years 3-5 years More than 5 years ​ ​ ​ (U.S. dollars in thousands) Operating Lease Obligations ​ $ 7,247 ​ $ 5,321 $ 1,926 ​ $ — $ — Finance Leases ​ 34 ​ 34 ​ — ​ ​ — ​ — Total $ 7,281 $ 5,355 $ 1,926 ​ $ — $ — ​ 54 Table of Contents Holding Company Structure ​ We are a Cayman Islands holding company with no material operations of our own.
Our gross margins in 2020, 2021 and 2022 were 44.2%, 46.3% and 54.6%, respectively. ​ Product sales ​ The gross profits of our product sales segment in 2020, 2021 and 2022 were $170.6 million, $199.9 million and $268.6 million, respectively, reflecting an increase of 17.2% from 2020 to 2021 and an increase 34.3% from 2021 to 2022.
Our gross margins in 2021, 2022 and 2023 were 46.3%, 54.6% and 57.2%, respectively. ​ Product sales ​ The gross profits of our product sales segment in 2021, 2022 and 2023 were $199.9 million, $268.6 million and $351.3 million respectively, reflecting an increase 34.3% from 2021 to 2022 and an increase of 30.8% from 2022 to 2023.
Such logistics services include product collection, packaging and labeling, shipment and delivery of products from our warehouses to locations designated by our customers. ​ 48 Table of Contents Cost of Revenues and Operating Expenses ​ The following table sets forth our cost of revenues and operating expenses, both in absolute amounts and as percentages of total revenues for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2021 2022 ​ ​ (U.S. dollar in thousands, except for percentage) ​ ​ ​ ​ % of Total ​ ​ ​ % of Total ​ ​ ​ % of Total ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues Cost of revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of product sales ​ $ 211,430 53.1 ​ $ 235,237 52.7 ​ $ 223,383 44.4 Cost of services and others ​ 10,567 2.7 ​ 4,156 0.9 ​ 5,107 1.0 Total cost of revenues ​ 221,997 55.8 ​ 239,393 53.6 ​ 228,490 45.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fulfillment ​ 27,967 7.0 ​ 29,588 6.6 ​ 30,617 6.1 Selling and marketing ​ 112,146 28.2 ​ 154,176 34.6 ​ 222,629 44.2 General and administrative ​ 33,160 8.3 ​ 39,733 8.9 ​ 36,295 7.2 Other operating income ​ (974) (0.2) ​ (675) (0.2) ​ (223) (0.0) Total operating expenses ​ 172,299 43.3 ​ 222,822 49.9 ​ 289,318 57.5 ​ Cost of revenues ​ Our cost of revenues is comprised of cost of product sales and cost of services. ​ Our cost of product sales consists primarily of cost of consumer products sold by us and shipping charges, and to a much lesser degree, packaging supplies and inventory write-downs.
Such logistics services include product collection, packaging and labeling, shipment and delivery of products from our warehouses to locations designated by our customers. ​ Cost of Revenues and Operating Expenses ​ The following table sets forth our cost of revenues and operating expenses, both in absolute amounts and as percentages of total revenues for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2021 2022 2023 ​ ​ (U.S. dollar in thousands, except for percentage) ​ ​ ​ ​ % of Total ​ ​ ​ % of Total ​ ​ ​ % of Total ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues Cost of revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of product sales ​ $ 235,237 52.7 ​ $ 223,383 44.4 ​ $ 265,964 42.3 Cost of services and others ​ 4,156 0.9 ​ 5,107 1.0 ​ 3,532 0.5 Total cost of revenues ​ ​ 239,393 53.6 ​ $ 228,490 45.4 ​ $ 269,496 42.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fulfillment ​ $ 29,588 6.6 ​ $ 30,617 6.1 ​ $ 34,916 5.5 Selling and marketing ​ 154,176 34.6 ​ 222,629 44.2 ​ 302,694 48.1 General and administrative ​ 39,733 8.9 ​ 36,295 7.2 ​ 34,078 5.4 Other operating income ​ (675) (0.2) ​ (223) (0.0) ​ (1,361) (0.2) Total operating expenses ​ $ 222,822 49.9 ​ $ 289,318 57.5 ​ $ 370,327 58.8 ​ Cost of revenues ​ Our cost of revenues is comprised of cost of product sales and cost of services. ​ Our cost of product sales consists primarily of cost of consumer products sold by us and shipping charges, and to a much lesser degree, packaging supplies and inventory write-downs.
We use global online marketing platforms such as Google and Facebook to reach our customers, we accept payments through all major credit cards and electronic payment platforms such as PayPal, Stripe, Klarna and Global Collect and we deliver our goods through major international couriers, including DHL, UPS and EMS. ​ Our total revenues were $398.2 million, $446.1 million and $503.6 million in 2020, 2021 and 2022, respectively.
We use global online marketing platforms such as Google and Facebook to reach our customers, we accept payments through all major credit cards and electronic payment platforms such as Visa, MasterCard, American Express, PayPal, Klarna and Apple Pay and we deliver our goods through major international couriers, including DHL, UPS, FEDEX, EMS and other international couriers. ​ Our total revenues were $446.1 million, $503.6 million and $629.4 million in 2021, 2022 and 2023, respectively.
The following table sets forth information of our total revenues by segment and product category in absolute amounts and as percentages of total revenues for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ (U.S. dollars in thousands, except for percentage) ​ Revenues % of Total Revenues % of Total Revenues % of Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ ​ ​ Apparel ​ $ 157,943 39.7 ​ $ 274,212 61.4 ​ $ 399,518 79.3 Other general merchandise (1) ​ 224,132 56.3 ​ 160,958 36.1 ​ 92,431 18.4 Total product sales ​ 382,075 96.0 ​ 435,170 97.5 ​ 491,949 97.7 Services and others ​ 16,076 4.0 ​ 10,933 2.5 ​ 11,619 2.3 Total revenues ​ 398,151 100.0 ​ 446,103 100.0 ​ 503,568 100.0 (1) Includes products such as small accessories and gadgets, home garden, electronics and communication devices, and others. ​ Product sales ​ We have primarily focused on selling apparel and other general merchandise.
The following table sets forth information of our total revenues by segment and product category in absolute amounts and as percentages of total revenues for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ (U.S. dollars in thousands, except for percentage) ​ Revenues % of Total Revenues % of Total Revenues % of Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ ​ ​ Apparel ​ $ 274,212 61.4 ​ $ 399,518 79.3 ​ $ 518,272 82.3 Other general merchandise (1) ​ 160,958 36.1 ​ 92,431 18.4 ​ 98,968 15.8 Total product sales ​ 435,170 97.5 ​ 491,949 97.7 ​ 617,240 98.1 Services and others ​ 10,933 2.5 ​ 11,619 2.3 ​ 12,188 1.9 Total revenues ​ $ 446,103 100.0 ​ $ 503,568 100.0 ​ $ 629,428 100.0 (1) Includes products such as small accessories and gadgets, home garden, electronics and communication devices, and others. ​ 45 Table of Contents Product sales ​ We have primarily focused on selling apparel and other general merchandise.
The results of operations in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2021 2022 ​ ​ (U.S. dollar in thousands, except for percentage) ​ ​ ​ ​ % of ​ ​ ​ % of ​ ​ ​ % of ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues Revenue ​ ​ ​ Product sales ​ $ 382,075 96.0 ​ $ 435,170 97.5 ​ $ 491,949 97.7 Services and others ​ 16,076 4.0 ​ 10,933 2.5 ​ 11,619 2.3 Total revenue ​ 398,151 100.0 ​ 446,103 100.0 ​ 503,568 100.0 Cost of revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ 211,430 53.1 ​ 235,237 52.7 ​ 223,383 44.4 Services and others ​ 10,567 2.7 ​ 4,156 1.0 ​ 5,107 1.0 Total cost of revenues ​ 221,997 55.8 ​ 239,393 53.7 ​ 228,490 45.4 Gross profit ​ 176,154 44.2 ​ 206,710 46.3 ​ 275,078 54.6 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fulfillment ​ 27,967 7.0 ​ 29,588 6.6 ​ 30,617 6.1 Selling and marketing ​ 112,146 28.2 ​ 154,176 34.6 ​ 222,629 44.2 General and administrative ​ 33,160 8.3 ​ 39,733 8.9 ​ 36,295 7.2 Other operating income ​ (974) (0.2) ​ (675) (0.2) ​ (223) (0.1) Total operating expenses ​ 172,299 43.3 ​ 222,822 49.9 ​ 289,318 57.4 Income / (loss) from operations ​ 3,855 1.0 ​ (16,112) (3.6) ​ (14,240) (2.8) Interest income ​ 103 0.0 ​ 59 0.0 ​ 57 0.0 Interest expense ​ (92) (0.0) ​ (13) (0.0) ​ (5) (0.0) Other income, net ​ 12,898 3.2 ​ 39,322 8.8 ​ 982 0.2 Impairment loss on investment ​ — — ​ — — ​ (56,083) (11.1) Income / (loss) before tax ​ 16,764 4.2 ​ 23,256 5.2 ​ (69,289) (13.7) Income tax (expense) / benefit ​ (3,418) (0.9) ​ (9,802) (2.2) ​ 12,707 2.5 Net income / (loss) ​ 13,346 3.4 ​ 13,454 3.0 ​ (56,582) (11.2) ​ Comparison of the Years Ended December 31, 2020, 2021 and 2022 ​ Revenues ​ Our total revenues in 2020, 2021 and 2022 were $398.2 million, $446.1 million and $503.6 million, respectively, reflecting an increase of 12.0% from 2020 to 2021 and an increase of 12.9% from 2021 to 2022.
The results of operations in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2021 2022 2023 ​ ​ (U.S. dollar in thousands, except for percentage) ​ ​ ​ ​ % of ​ ​ ​ % of ​ ​ ​ % of ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues Revenue ​ ​ ​ Product sales ​ $ 435,170 97.5 ​ $ 491,949 97.7 ​ $ 617,240 98.1 Services and others ​ 10,933 2.5 ​ 11,619 2.3 ​ 12,188 1.9 Total revenue ​ 446,103 100.0 ​ 503,568 100.0 ​ 629,428 100.0 Cost of revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ 235,237 52.7 ​ 223,383 44.4 ​ 265,964 42.3 Services and others ​ 4,156 1.0 ​ 5,107 1.0 ​ 3,532 0.5 Total cost of revenues ​ 239,393 53.7 ​ 228,490 45.4 ​ 269,496 42.8 Gross profit ​ 206,710 46.3 ​ 275,078 54.6 ​ 359,932 57.2 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fulfillment ​ 29,588 6.6 ​ 30,617 6.1 ​ 34,916 5.5 Selling and marketing ​ 154,176 34.6 ​ 222,629 44.2 ​ 302,694 48.1 General and administrative ​ 39,733 8.9 ​ 36,295 7.2 ​ 34,078 5.4 Other operating income ​ (675) (0.2) ​ (223) (0.1) ​ (1,361) (0.2) Total operating expenses ​ 222,822 49.9 ​ 289,318 57.4 ​ 370,327 58.8 Loss from operations ​ (16,112) (3.6) ​ (14,240) (2.8) ​ (10,395) (1.6) Interest income ​ 59 0.0 ​ 57 0.0 ​ 350 0.0 Interest expense ​ (13) (0.0) ​ (5) (0.0) ​ (4) (0.0) Other income, net ​ 39,322 8.8 ​ 982 0.2 ​ 499 0.1 Impairment loss on investment ​ — — ​ (56,083) (11.1) ​ — — Income / (loss) before tax ​ 23,256 5.2 ​ (69,289) (13.7) ​ (9,550) (1.5) Income tax (expense) / benefit ​ (9,802) (2.2) ​ 12,707 2.5 ​ (40) — Net income / (loss) ​ $ 13,454 3.0 ​ $ (56,582) (11.2) ​ $ (9,590) (1.5) ​ Comparison of the Years Ended December 31, 2021, 2022 and 2023 ​ Revenues ​ Our total revenues in 2021, 2022 and 2023 were $446.1 million, $503.6 million and $629.4 million, respectively, reflecting an increase of 12.9% from 2021 to 2022 and an increase of 25.0% from 2022 to 2023.
Additionally, there can be no assurance that, if needed, we will be able to secure additional debt or equity financing on terms acceptable to us or at all, especially in light of the market volatility. ​ The following table sets forth a summary of our cash flows for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2021 2022 ​ ​ (U.S. dollars in thousands) Net cash provided by / (used in) operating activities ​ 29,314 (1,771) 35,826 Net cash (used in) / provided by investing activities ​ (1,836) (1,743) 2,051 Net cash used in financing activities ​ (3,686) (1,320) (43) Net increase / (decrease) in cash and cash equivalents and restricted cash ​ 23,792 (4,834) 37,834 Effect of exchange rate changes on cash and cash equivalents and restricted cash ​ 1,292 (1,093) (2,868) Cash and cash equivalents and restricted cash at beginning of the year ​ 40,445 65,529 59,602 Cash and cash equivalents and restricted cash at end of the year ​ 65,529 59,602 94,568 ​ Operating Activities ​ We generated positive cash flow of $35.8 million for operating activities in 2022, primarily attributable to our net loss of $56.6 million, adjusted by the reconciliation of certain non-cash items of $48.8 million, which mainly included impairment loss on equity investment of $56.1 million, depreciation and amortization of $3.4 million, unrealized foreign exchange loss of $2.4 million and reversal of unrecognized tax benefit of $12.3 million.
Additionally, there can be no assurance that, if needed, we will be able to secure additional debt or equity financing on terms acceptable to us or at all, especially in light of the market volatility. ​ The following table sets forth a summary of our cash flows for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2021 2022 2023 ​ ​ ​ (U.S. dollars in thousands) Net cash (used in) / provided by operating activities ​ $ (1,771) $ 35,826 $ (20,715) Net cash (used in) / provided by investing activities ​ ​ (1,743) ​ 2,051 ​ (1,078) Net cash used in financing activities ​ ​ (1,320) ​ (43) ​ (2,295) Net (decrease) / increase in cash and cash equivalents and restricted cash ​ ​ (4,834) ​ 37,834 ​ (24,088) Effect of exchange rate changes on cash and cash equivalents and restricted cash ​ ​ (1,093) ​ (2,868) ​ 1,224 Cash and cash equivalents and restricted cash at beginning of the year ​ ​ 65,529 ​ 59,602 ​ 94,568 Cash and cash equivalents and restricted cash at end of the year ​ $ 59,602 $ 94,568 $ 71,704 ​ Operating Activities ​ We incurred negative cash flow of $20.7 million from operating activities in 2023, primarily attributable to our net loss of $9.6 million, adjusted by the reconciliation of certain non-cash items of $2.5 million, which mainly included depreciation and amortization of $3.2 million, unrealized foreign exchange gain of $1.1 million and share-based compensation of $0.4 million.
Some of our accounting policies require a higher degree of judgment than others in their application. ​ When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions.
The management determined there were no critical accounting estimates. ​ When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions.
Our product sales segment is comprised of sales of our products through our websites and mobile applications and other supplemental online platforms. Revenues from our product sales and other consumer products are recorded less value added tax, sales and use tax, goods and services tax, discounts and allowances; and ​ ● Services and others .
Revenues from our product sales and other consumer products are recorded less value added tax, sales and use tax, goods and services tax, discounts and allowances; and ​ ● Services and others .
The increase in our cost of services and others from $4.2 million in 2021 to $5.1 million in 2022 was primarily because of the increase in costs as a result of the increase in our revenues from services and others. ​ Gross profit ​ As a result of the foregoing, our gross profits in 2020, 2021 and 2022 were $176.2 million, $206.7 million and $275.1 million, respectively, reflecting an increase of 17.3% from 2020 to 2021 and an increase of 33.1% from 2021 to 2022.
The decrease in our cost of services and others from $5.1 million in 2022 to $3.5 million in 2023 was primarily due to the decrease of service revenue with lower margin. ​ Gross profit ​ As a result of the foregoing, our gross profits in 2021, 2022 and 2023 were $206.7 million, $275.1 million and $359.9 million, respectively, reflecting an increase of 33.1% from 2021 to 2022 and an increase of 30.8% from 2022 to 2023.
Investing Activities ​ Net cash generated in investment activities was approximately $2.1 million in 2022, primarily due to the proceeds received from disposal of long-term investment of $2.7 million and proceed from disposal of property and equipment of $0.1 million, net off by the purchase of property and equipment of $0.8 million. ​ Net cash used in investing activities was $1.7 million in 2021, primarily due to the purchase of property and equipment of $1.0 million and the capitalized internal use software of $0.8 million. ​ Net cash used in investing activities was approximately $1.8 million in 2020, primarily due to purchase of property and equipment of $2.2 million, capitalized internal use software of $1.6 million, proceeds from disposal of property and equipment of $0.6 million, and proceeds from disposal of long-term investment of $1.4 million. ​ Financing Activities ​ Net cash used in financing activities was $43 thousand in 2022, which was primarily due to the principal repayment of finance leases of $43 thousand. ​ Net cash used in financing activities was $1.3 million in 2021, which was primarily due to the payment for acquisition of non-controlling interest of $1.5 million. ​ Net cash used in financing activities was $3.7 million in 2020, which was primarily due to the repurchase of our ADSs of $2.7 million, and the principal repayment of finance leases of $1.0 million. ​ Capital Expenditures ​ Our capital expenditures amounted to $4.2 million, $1.9 million and $0.8 million in 2020, 2021 and 2022, respectively.
Cash used in operating activities was also attributable to an increase of $6.6 million in accounts payable, a decrease of $8.5 million in advance from customers, contributed by the sales decrease in 2021Q4, and an increase of $15.8 million in accrued expenses and other current liabilities, mainly related to the increase of marketing expenses and VAT payable, offset by the increase of $7.0 million in accounts receivable, inventories, long-term rental deposits, prepaid expenses and other current assets. 53 Table of Contents Investing Activities ​ Net cash used in investing activities was $1.1 million in 2023, primarily due to the purchase of property and equipment of $1.1 million. ​ Net cash generated in investment activities was approximately $2.1 million in 2022, primarily due to the proceeds received from disposal of long-term investment of $2.7 million and proceed from disposal of property and equipment of $0.1 million, net off by the purchase of property and equipment of $0.8 million. ​ Net cash used in investing activities was $1.7 million in 2021, primarily due to the purchase of property and equipment of $1.0 million and the capitalized internal use software of $0.8 million. ​ Financing Activities ​ Net cash used in financing activities was $2.3 million in 2023, which was primarily due to the repurchase of ordinary shares of $2.3 million. ​ Net cash used in financing activities was $43 thousand in 2022, which was primarily due to the principal repayment of finance leases of $43 thousand. ​ Net cash used in financing activities was $1.3 million in 2021, which was primarily due to the payment for acquisition of non-controlling interest of $1.5 million. ​ Capital Expenditures ​ Our capital expenditures amounted to $1.9 million, $0.8 million and $1.1 million in 2021, 2022 and 2023, respectively.
Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates.
Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.
The general and administrative expenses as a percentage of total revenues increased by 0.6% from 2020 to 2021 was due to increased salary expense of our R&D employees, and decreased by 1.7% from 2021 to 2022 was due to our continuous efforts on optimization on operation efficiency.
The general and administrative expenses as a percentage of total revenues decreased by 1.7% from 2021 to 2022 and 1.8% from 2022 to 2023 was due to our continuous efforts on optimization on operation efficiency. Share-based compensation expenses included in general and administrative expenses in 2021, 2022 and 2023 were $1.2 million, $0.2 million and $0.4 million, respectively.
Product sales represented 96.0% and 97.5% of total revenues in 2020 and 2021. ​ Services and others ​ The increase in our revenues from services and others from $10.9 million in 2021 to $11.6 million in 2022 was primarily contributed by the increased orders from our corporate customers. ​ The decrease in our revenues from services and others from $16.1 million in 2020 to $10.9 million in 2021 was primarily due to the decrease of logistic services. ​ Cost of revenues ​ Our cost of revenues in 2020, 2021 and 2022 were $222.0 million, $239.4 million and $228.5 million, respectively, representing an increase of 7.8 % from 2020 to 2021 and a decrease of 4.6% from 2021 to 2022. ​ Cost of product sales ​ The increase in our cost of product sales from $211.4 million in 2020 to $235.2 million in 2021 was primarily due to the increase of our revenues.
Product sales represented 97.7% and 98.1% of total revenues in 2022 and 2023, respectively. ​ 50 Table of Contents Services and other ​ The increase in our revenues from services and others from $10.9 million in 2021 to $11.6 million in 2022 was primarily contributed by the increased orders from our corporate customers. ​ The revenues from services and others in 2023 was $12.2 million, which was relatively stable as compared to $11.6 million in 2022. ​ Cost of revenues ​ Our cost of revenues in 2021, 2022 and 2023 were $239.4 million, $228.5 million and $269.5 million, respectively, representing a decrease of 4.6% from 2021 to 2022 and an increase of 17.9% from 2022 to 2023. ​ Cost of product sales ​ The decrease in our cost of product sales from $235.2 million in 2021 to $223.4 million in 2022 was primarily due to the improvement of our product mix to higher percentage of apparel sales and our continuous optimization on supply chain management.
The decrease in our cost of product sales from $235.2 million in 2021 to $223.4 million in 2022 was primarily due to the improvement of our product mix to higher percentage of apparel sales and our continuous optimization on supply chain management. ​ Cost of services and others ​ The decrease in our cost of services and others from $10.6 million in 2020 to $4.2 million in 2021 was primarily because of the decrease in costs as a result of the decrease in our revenues from services and others.
The increase in our cost of product sales from $223.4 million in 2022 to $266.0 million in 2023 was primarily due to the increase of product sales. ​ Cost of services and others ​ The increase in our cost of services and others from $4.2 million in 2021 to $5.1 million in 2022 was primarily because of the increase in costs as a result of the increase in our revenues from services and others.
Cash used in operating activities was also attributable to an increase of $6.6 million in accounts payable, a decrease of $8.5 million in advance from customers, contributed by the sales decrease in 2021Q4, and an increase of $15.8 million in accrued expenses and other current liabilities, mainly related to the increase of marketing expenses and VAT payable, offset by the increase of $7.0 million in accounts receivable, inventories, long-term rental deposits, prepaid expenses and other current assets. ​ 55 Table of Contents We generated positive cash flow of $29.3 million from operating activities in 2020, primarily attributable to our net income of $13.3 million, adjusted by the reconciliation of certain non-cash items of $(9.7) million, which mainly included share-based compensation of $3.6 million, depreciation and amortization of $2.4 million, unrealized foreign exchange gain of $(1.4) million, allowance for credit losses of $(0.7) million and fair value change of equity investment without readily determinable fair values under the measurement alternative of $(13.5) million.
Cash used in operating activities was also attributable to a decrease of $10.7 million in accounts payable and a decrease of $15.2 million in advance from customers, contributed by the sales decrease in 2023Q4, partially offset by the decrease of $8.5 million in inventories and the increase of $4.3 million in accrued expenses and other current liabilities. ​ We generated positive cash flow of $35.8 million for operating activities in 2022, primarily attributable to our net loss of $56.6 million, adjusted by the reconciliation of certain non-cash items of $48.8 million, which mainly included impairment loss on equity investment of $56.1 million, depreciation and amortization of $3.4 million, unrealized foreign exchange loss of $2.4 million and reversal of unrecognized tax benefit of $12.3 million.
Product sales represented 97.5% and 97.7% of total revenues in 2021 and 2022, respectively. ​ 52 Table of Contents The increase in our revenues from product sales from $382.1 million in 2020 to $435.2 million in 2021 was primarily contributed by our continuous efforts to optimize our supply chain and our continuous efforts to fulfill our customers’ needs and improve their shopping experience.
Product sales represented 97.5% and 97.7% of total revenues in 2021 and 2022, respectively. ​ The increase in our revenues from product sales from $491.9 million in 2022 to $617.2 million in 2023 was primarily due to our continuous efforts dedicated to offering high value-for-money products along with a pleasant and convenient online shopping experience.
Removed
Our services and others segment comprised of provision of logistic services to companies and individual customers globally. ​ This presentation reflects (i) how we manage our business to maximize efficiency in allocating resources and (ii) the expansion of our service business as the revenue contribution from such business account for a large portion of our total revenues.
Added
Our product sales segment is comprised of sales of our products to customers through our websites and mobile applications, other supplemental online platforms, and to third-party sellers that sell through our platforms utilizing our supply chain.
Removed
We present the segment information after elimination of inter-company transactions. In general, revenues, and cost of revenues are directly attributable, and are allocated, to each segment. ​ 47 Table of Contents In 2020, 2021 and 2022, we generated total revenues of $398.2 million, $446.1 million and $503.6 million, respectively.
Added
Our services and others segment comprised of provision of logistic services to companies and individual customers globally. ​ In 2021, 2022 and 2023, we generated total revenues of $446.1 million, $503.6 million and $629.4 million, respectively.
Removed
Share-based compensation expenses included in general and administrative expenses in 2020, 2021 and 2022 were $3.5 million, $1.2 million and $0.2 million, respectively.
Removed
Cash provided by operating activities was also attributable to an increase of $11.5 million in advance from customers, contributed by the increase of our orders, and an increase of $14.4 million in accrued expenses and other current liabilities, mainly related to the increase of marketing expenses, and an increase of $3.4 million in deferred income tax related to the fair value gain on our equity investment, offset by the increase of $4.5 million in inventories, prepaid expenses and other current assets.
Removed
We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements. ​ The fair value of equity investment without readily determinable fair value ​ For equity securities without readily determinable fair value and do not qualify for the net asset value practical expedient of the investment, we elected to use the measurement alternative to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any.
Removed
Significant judgments are required to determine (i) whether observable price changes are orderly transactions and identical or similar to an investment held by us, and (ii) the selection of appropriate valuation methodologies and underlying assumptions, including expected volatility and the probability of exit events as it relates to liquidation and redemption features used to measure the price adjustments for the difference in rights and obligations between instruments.
Removed
Equity securities with readily determinable fair values are measured at fair value, and any changes in fair value are recognized in “Other income, net” in the consolidated statements of operations.
Removed
For the years ended December 31, 2020, 2021 and 2022, the fair value change gain was $13.5 million, $38.8 million and $0.8 million, respectively. ​ 58 Table of Contents Impairment of equity investment without readily determinable fair value ​ For equity investments that we elect to use the measurement alternative, we make a qualitative assessment considering impairment indicators to evaluate whether investments are impaired at each reporting date.
Removed
Impairment indicators considered include, but are not limited to, a significant deterioration in the earnings performance or business prospects of the investee, including factors that raise significant concerns about the investee’s ability to continue as a going concern, a significant adverse change in the regulatory, economic, or technologic environment of the investee and a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates.
Removed
If a qualitative assessment indicates that the investment is impaired, we estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, we recognize an impairment loss in earnings equal to the difference between the carrying value and fair value.
Removed
For the years ended December 31, 2020, 2021 and 2022, the impairment loss was $nil, $nil and $56.1 million, respectively. ​ ​

Item 6. [Reserved]

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

26 edited+1 added−0 removed51 unchanged
Yu is also a director of Chengdu Kanghua Biological Products Co., Ltd and Zhongjie Resources Investment Co., Ltd., and an executive director and general manager of Ningbo Aokang Zhongou Investment Management Co., Ltd., Hangzhou Guanze Investment Management Co., Ltd., and executive director and general manager of Yongjia Aoxin Enterprise Management Co., Ltd. Mr.
Yu is also a director of Chengdu Kanghua Biological Products Co., Ltd and Zhongjie Resources Investment Co., Ltd., and an executive director and general manager of Ningbo Aokang Zhongou Investment Management Co., Ltd., Hangzhou Guanze Investment Management Co., Ltd., and an executive director and general manager of Yongjia Aoxin Enterprise Management Co., Ltd. Mr.
For purposes of these agreements, the term cause means: (a) the executive officer commits willful misconduct or gross negligence in performance of his duties hereunder, or malfeasance, and fails to correct such malfeasance within a reasonable period specified by us after we have sent the executive officer a written notice demanding correction within such a period; (b) the executive officer has committed malfeasance and has caused serious losses and damages to us; (c) the executive officer seriously violates our internal rules and fails to correct such violation within a reasonable period specified by us after we have sent the executive officer a written notice demanding correction within such a period; (d) the executive officer has seriously violated the internal rules of and has caused serious losses and damages to us; (e) the executive officer is convicted by a court or has pleaded guilty of theft, fraud or other criminal offense; or (f) the executive officer seriously breaches his/her duty of loyalty to us or our affiliate under the laws of the Cayman Islands, the PRC or other relevant jurisdictions.
For purposes of these agreements, the term cause means: (a) the executive officer commits willful misconduct or gross negligence in performance of his duties hereunder, or malfeasance, and fails to correct such malfeasance within a reasonable period specified by us after we have sent the executive officer a written notice demanding correction within such a period; (b) the executive officer has committed malfeasance and has caused serious losses and damages to us; (c) the executive officer seriously violates our internal rules and fails to correct such violation within a reasonable period specified by us after we have sent the executive officer a written notice demanding correction within such a period; (d) the executive officer has seriously violated the internal rules of and has caused serious losses and damages to us; (e) the executive officer is convicted by a court or has pleaded guilty of theft, fraud or other criminal offense; or (f) the executive officer seriously breaches his/her duty of loyalty to us or our affiliate under the laws of the Cayman Islands, Singapore, the PRC or other relevant jurisdictions.
The compensation committee is responsible for, among other things: ​ ● approving and overseeing the compensation package for our chief executive officer and chief financial officer; ● reviewing and making recommendations to the board of directors with respect to the compensation of our directors; 64 Table of Contents ● reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer and chief financial officer, evaluating the performance of our chief executive officer and chief financial officer in light of those goals and objectives, and setting the compensation level of our chief executive officer and chief financial officer based on such evaluation; and ● reviewing periodically and making recommendations to the board regarding any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans. ​ Corporate Governance and Nominating Committee ​ Our corporate governance and nominating committee consist of Dr.
The compensation committee is responsible for, among other things: ​ ● approving and overseeing the compensation package for our chief executive officer and chief financial officer; 61 Table of Contents ● reviewing and making recommendations to the board of directors with respect to the compensation of our directors; ● reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer and chief financial officer, evaluating the performance of our chief executive officer and chief financial officer in light of those goals and objectives, and setting the compensation level of our chief executive officer and chief financial officer based on such evaluation; and ● reviewing periodically and making recommendations to the board regarding any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans. ​ Corporate Governance and Nominating Committee ​ Our corporate governance and nominating committee consist of Dr.
The directors may exercise all the powers of our company to borrow money and to mortgage or charge its undertaking, property and uncalled capital, and to issue debentures or other securities whether outright or as security for any debt obligations of our company or of any third parties. ​ 65 Table of Contents Qualification ​ There is no requirement for our directors to own any shares in our company in order for them to qualify as a director. ​ Terms of Directors and Executive Officers ​ Our officers are elected by and serve at the discretion of our board of directors.
The directors may exercise all the powers of our company to borrow money and to mortgage or charge its undertaking, property and uncalled capital, and to issue debentures or other securities whether outright or as security for any debt obligations of our company or of any third parties. 62 Table of Contents Qualification ​ There is no requirement for our directors to own any shares in our company in order for them to qualify as a director. ​ Terms of Directors and Executive Officers ​ Our officers are elected by and serve at the discretion of our board of directors.
She received her master’s degree in Regional and Urban Planning Studies from the London School of Economics and Political Science. Ms. Yan is currently pursuing her Doctor of Philosophy in Population Medicine at Peking Union Medical College. ​ Wei Yu has served as our director since March 2023. Mr.
She received her master’s degree in Regional and Urban Planning Studies from the London School of Economics and Political Science. Ms. Yan is currently pursuing her Doctor of Philosophy in Population Medicine at Peking Union Medical College. ​ 57 Table of Contents Wei Yu has served as our director since March 2023. Mr.
Deng serves as an independent director in various listed companies including Shenzhen Huaqiang Industrial Co., Ltd., China Nanshan Development Group Co., Ltd. and Han’s Laser Technology Industry Group Co., Ltd.. Dr. Deng is also a consultant for Shenzhen Stock Exchange, providing advisory and legal services to governments and enterprises on corporate governance and capital market regulations. Dr.
Deng serves as an independent director in various listed companies including Shenzhen Huaqiang Industrial Co., Ltd., and Han’s Laser Technology Industry Group Co., Ltd.. Dr. Deng is also a consultant for Shenzhen Stock Exchange, providing advisory and legal services to governments and enterprises on corporate governance and capital market regulations. Dr.
Qi obtained his bachelor’s degree in corporate management from Shenzhen University and has completed an EMBA program at the China Europe International Business School. 59 Table of Contents ​ Zhentao Wang has been our director since July 2015. Mr. Wang is the founder and chairman of the board of directors of AoKang.
Qi obtained his bachelor’s degree in corporate management from Shenzhen University and has completed an EMBA program at the China Europe International Business School. ​ Zhentao Wang has been our director since July 2015. Mr. Wang is the founder and chairman of the board of directors of AoKang.
Wu worked at South China University of Technology and Cambridge University. ​ 60 Table of Contents Lei Deng has served as our independent director since April 2020. Dr. Deng is currently an equity partner in Zhong Lun Law Firm since January 2020. Before joining Zhong Lun Law Firm, Dr.
Wu worked at South China University of Technology and Cambridge University. ​ Lei Deng has served as our independent director since April 2020. Dr. Deng is currently an equity partner in Zhong Lun Law Firm since January 2020. Before joining Zhong Lun Law Firm, Dr.
We do not separately set aside any amounts for pensions, retirement or other benefits for our executive officers, other than pursuant to relevant statutory requirements. ​ 61 Table of Contents Employment Agreements ​ We have entered into employment agreements with each of our executive officers. We may terminate their employment for cause.
We do not separately set aside any amounts for pensions, retirement or other benefits for our executive officers, other than pursuant to relevant statutory requirements. ​ Employment Agreements ​ We have entered into employment agreements with each of our executive officers. We may terminate their employment for cause.
Our board of directors may at any time by resolutions amend, suspend or terminate the Plans, subject to certain exceptions. The 2008 Plan terminated on October 26, 2018. Unless earlier terminated by the board of directors, the 2019 Plan will terminate on January 20, 2029. 63 Table of Contents C.
Our board of directors may at any time by resolutions amend, suspend or terminate the Plans, subject to certain exceptions. The 2008 Plan terminated on October 26, 2018. Unless earlier terminated by the board of directors, the 2019 Plan will terminate on January 20, 2029. C.
The administrator of the Plans may upon or in anticipation of a corporate transaction, accelerate awards or modify the terms of the awards. ​ Vesting Schedule . The administrator of the Plans may determine the vesting schedule and may provide additional vesting conditions in the award agreement to each optionee. ​ Amendment and Termination .
The administrator of the Plans may upon or in anticipation of a corporate transaction, accelerate awards or modify the terms of the awards. ​ Vesting Schedule . The administrator of the Plans may determine the vesting schedule and may provide additional vesting conditions in the award agreement to each optionee. ​ 60 Table of Contents Amendment and Termination .
Share Ownership ​ For information regarding the share ownership of our directors and officers, see “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders.” For information as to stock options granted to our directors, executive officers and other employees, see “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans.” ​ 66 Table of Contents
Share Ownership ​ For information regarding the share ownership of our directors and officers, see “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders.” For information as to stock options granted to our directors, executive officers and other employees, see “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans.” ​ F.
Yu has also been a director of Zhejiang Aokang Shoes Co., Ltd. since January 2014, and was previously the finance in charge and secretary to the board of directors of Aokang Shoes Co., Ltd from September 2007 to September 2009, and served as the secretary to the board of directors of Aokang Shoes Co., Ltd from October 2009 to December 2013.
Yu has also been a director of Zhejiang Aokang Shoes Co., Ltd. since June 2012, and was previously the finance in charge and secretary to the board of directors of Aokang Shoes Co., Ltd from September 2007 to September 2009, and served as the secretary to the board of directors of Aokang Shoes Co., Ltd from October 2009 to December 2013.
The 2019 Plan is intended to promote our success and to increase shareholders’ value by providing an additional means to attract, motivate, retain and reward selected directors, officers, employees and other eligible persons. An aggregate of 2,867,382 ordinary shares were reserved for issuance under the Plan.
The 2008 Plan and 2019 Plan are collectively referred to as the Plans. The 2019 Plan is intended to promote our success and to increase shareholders’ value by providing an additional means to attract, motivate, retain and reward selected directors, officers, employees and other eligible persons. An aggregate of 2,867,382 ordinary shares were reserved for issuance under the 2019 Plan.
Ye has worked in various companies and public accounting firm including Alibaba (NYSE: BABA), Trunkbow International Holdings Ltd. (NASDAQ: TBOW) and Deloitte Touche Tohmatsu. Ms. Ye obtained her bachelor’s degree from Guangdong University of Foreign Studies in Accounting. Ms.
Prior to joining the Company, Ms. Ye has worked in various companies and public accounting firm including Alibaba (NYSE: BABA), Trunkbow International Holdings Ltd. (NASDAQ: TBOW) and Deloitte Touche Tohmatsu. Ms. Ye obtained her bachelor’s degree from Guangdong University of Foreign Studies in Accounting. Ms.
We do not have service contracts with any of our directors that would provide our directors with benefits upon their termination. ​ D. Employees ​ Employees ​ As of December 31, 2020, 2021 and 2022, we had 1,008, 971 and 816 full-time employees, respectively. Our employees are mainly based in Singapore, the PRC, Malaysia, the United Kingdom and Netherlands.
We do not have service contracts with any of our directors that would provide our directors with benefits upon their termination. ​ D. Employees ​ Employees ​ As of December 31, 2021, 2022 and 2023, we had 971, 816 and 667 full-time employees, respectively. Our employees are mainly based in Singapore, the PRC, Malaysia, the United States and Netherlands.
Liu obtained her bachelor’s degree from Nanyang Technological University in 2009 and her master’s degree from the National University of Singapore in 2011. ​ Yuanjun Ye has served as Finance Vice President since August 2019 and was promoted to Chief Finance Officer in August 2020. Ms. Ye has approximately 20-year experience in financial management. Prior to joining the Company, Ms.
Liu obtained her bachelor’s degree from Nanyang Technological University in 2009 and her master’s degree from the National University of Singapore in 2011. ​ Yuanjun Ye has served as Finance Vice President since August 2019 and was promoted to Chief Finance Officer in August 2020. Ms. Ye has over 20 years experience in financial management.
The total amounts of contributions we made to employee benefit plans in 2020, 2021 and 2022 were $3.1 million, $7.1 million and $5.9 million, respectively. ​ We believe that we have a good working relationship with our employees and we have not experienced any significant labor disputes. E.
The total amounts of contributions we made to employee benefit plans in 2021, 2022 and 2023 were $7.1 million, $6.6 million and $6.8 million, respectively. ​ We believe that we have a good working relationship with our employees and we have not experienced any significant labor disputes. E.
The following table sets forth the number of our employees by function as of December 31, 2022: ​ ​ ​ ​ ​ Number of Employees Fulfillment 193 Selling and Marketing 271 Technology, Research and Development 242 General and Administrative 110 Total 816 ​ We believe that we offer our employees competitive compensation packages and, as a result, we have generally been able to attract and retain qualified personnel and maintain a stable management team. ​ We generally enter into standard employment contracts with our employees, which contain non-compete provisions.
The following table sets forth the number of our employees by function as of December 31, 2023: ​ ​ ​ ​ ​ Number of Employees Fulfillment 171 Selling and Marketing 213 Technology, Research and Development 203 General and Administrative 80 Total 667 ​ We believe that we offer our employees competitive compensation packages and, as a result, we have generally been able to attract and retain qualified personnel and maintain a stable management team. ​ We generally enter into standard employment contracts with our employees, which contain non-compete provisions.
In addition, notwithstanding any provision to the contrary in our employment agreements, we may still be required to make severance payments upon termination without cause to comply with the PRC Labor Law, the labor contract law and other relevant PRC regulations, which entitle employees to severance payments in case of early termination of “de facto employment relationships” by PRC entities without statutory cause regardless of whether there exists a written employment agreement with such entities. ​ Share Incentive Plans ​ We adopted our Amended and Reinstated 2008 Share Incentive Plan, or the 2008 Plan, on October 27, 2008.
In addition, notwithstanding any provision to the contrary in our employment agreements, we may still be required to make severance payments upon termination without cause to comply with the PRC Labor Law, the labor contract law and other relevant PRC regulations, which entitle employees to severance payments in case of early termination of “de facto employment relationships” by PRC entities without statutory cause regardless of whether there exists a written employment agreement with such entities.
On June 9, 2014, the 2008 Plan was amended to increase the maximum aggregate number of ordinary shares reserved for issuance under the 2008 Plan to 11,344,444. ​ We adopted our 2019 Share Incentive Plan, or the 2019 Plan, on January 20, 2019. The 2008 Plan and 2019 Plan are collectively referred to as the Plans.
An aggregate of 4,444,444 ordinary shares were reserved for issuance under the 2008 Plan. On June 9, 2014, the 2008 Plan was amended to increase the maximum aggregate number of ordinary shares reserved for issuance under the 2008 Plan to 11,344,444. ​ We adopted our 2019 Share Incentive Plan, or the 2019 Plan, on January 20, 2019.
The business address of each of our directors and executive officers is LightInTheBox Holding Co., Ltd., 51 Tai Seng Avenue #05-02B/C, Pixel Red Singapore (533941). ​ ​ ​ ​ ​ ​ Name (1) Age Position/Title Jian He 42 Chairman of the Board, Chief Executive Officer and Director Zhiping Qi 50 Vice Chairman of the Board Zhentao Wang 57 Director Xiongping Yu 47 Director Meng Lian 43 Director Ge Yan 25 Director Wei Yu 40 Director Hanhua Wang 59 Independent Director Peng Wu 40 Independent Director Lei Deng 44 Independent Director Bin Shi 44 Chief Technology Officer Wenyu Liu 38 Chief Growth Officer Yuanjun Ye 43 Chief Financial Officer ​ Biographical Information ​ Jian He has served as our chairman of the board of directors since March 2023 and our chief executive officer and director since November 2018.
The business address of each of our directors and executive officers is LightInTheBox Holding Co., Ltd., 4 Pandan Crescent #03-03 Logos eHub, Singapore (128475). ​ ​ ​ ​ ​ ​ Name Age Position/Title Jian He 43 Chairman of the Board, Chief Executive Officer and Director Zhiping Qi 51 Vice Chairman of the Board Zhentao Wang 58 Director Xiongping Yu 48 Director Meng Lian 44 Director Ge Yan 26 Director Wei Yu 41 Director Hanhua Wang 60 Independent Director Peng Wu 41 Independent Director Lei Deng 45 Independent Director Bin Shi 45 Chief Technology Officer Wenyu Liu 39 Chief Growth Officer Yuanjun Ye 44 Chief Financial Officer ​ 56 Table of Contents Biographical Information ​ Jian He has served as our chairman of the board of directors since March 2023 and our chief executive officer and director since November 2018.
As of March 29, 2023, we had 10,000 unvested restricted shares and 4,423,900 unexercised share options outstanding under the Plans. ​ 62 Table of Contents The following table summarizes the share options and restricted shares granted to our employees under the Plans that were outstanding as of March 29, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Ordinary ​ ​ ​ ​ ​ ​ ​ Shares Underlying Exercise ​ ​ ​ ​ ​ ​ Outstanding Options ​ Price ​ ​ ​ ​ Name and restricted shares ($/Share) Grant Date Expiration Date Our Employees 1,800 4.75 ​ May 22, 2013 The earlier of (1) the tenth ​ 22,700 2.50 ​ June 20, 2014 anniversary of the date of grant ​ 19,400 2.25 ​ June 2, 2015 or (2) the fifth anniversary of the ​ 3,000,000 0.04 ​ October 2, 2020 completion date of our ​ 80,000 0.04 ​ December 29, 2021 initial public ​ 1,300,000 0.25 ​ October 24, 2022 offering ​ 20,000 — ​ September 15, 2022 NA ​ We have historically determined the exercise price of shares granted under the Plans based on a number of factors, such as the type of awards, the length of time in which such employees were with our company, the function of such employees and the price of our preferred share issuances.
As of February 29, 2024, we had 179,000 unvested restricted shares and 5,734,080 unexercised share options outstanding under the Plans. ​ 59 Table of Contents The following table summarizes the share options and restricted shares granted to our employees under the Plans that were outstanding as of February 29, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Ordinary ​ ​ ​ ​ ​ ​ ​ Shares Underlying Exercise ​ ​ ​ ​ ​ ​ Outstanding Options ​ Price ​ ​ ​ ​ Name and restricted shares ($/Share) Grant Date Expiration Date Our Employees 22,700 2.50 ​ June 20, 2014 Ten years from the grant date ​ 9,900 2.25 ​ June 2, 2015 Ten years from the grant date ​ 3,000,000 0.04 ​ October 2, 2020 Ten years from the grant date ​ 80,000 0.04 ​ December 29, 2021 Ten years from the grant date ​ 1,300,000 0.25 ​ October 24, 2022 Ten years from the grant date ​ 44,444 0.01 ​ December 28, 2023 Ten years from the grant date ​ 77,036 0.81 ​ December 28, 2023 Ten years from the grant date ​ 1,200,000 0.30 ​ December 28, 2023 Ten years from the grant date ​ 10,000 — ​ September 15, 2022 NA ​ 40,000 — ​ March 27, 2023 NA ​ 40,000 — ​ March 31, 2023 NA ​ 40,000 — ​ June 19, 2023 NA ​ 14,000 — ​ July 1, 2023 NA ​ ​ 6,000 ​ — ​ July 6, 2023 ​ NA ​ 29,000 — ​ January 1, 2024 ​ NA ​ We have historically determined the exercise price of shares granted under the Plans based on a number of factors, such as the type of awards, the length of time in which such employees were with our company, the function of such employees and the price of our preferred share issuances.
Compensation of Directors and Executive Officers ​ In 2022, we and our subsidiaries paid an aggregate cash compensation and benefits (excluding equity-based grants) of approximately $1.3 million to our directors and executive officers as a group and granted RSUs, options and rights to acquire an aggregate of 700,000 ordinary shares (equivalent to 350,000 ADSs) to our directors and executive officers.
Compensation of Directors and Executive Officers ​ In 2023, we and our subsidiaries paid an aggregate cash compensation and benefits (excluding equity-based grants) of approximately $1.7 million to our directors and executive officers as a group and did not grant RSUs, options or rights to our directors and executive officers.
The 2008 Plan is intended to promote our success and to increase shareholder value by providing an additional means to attract, motivate, retain and reward selected directors, officers, employees and other eligible persons. An aggregate of 4,444,444 ordinary shares were reserved for issuance under the 2008 Plan.
Share Incentive Plans ​ We adopted our Amended and Reinstated 2008 Share Incentive Plan, or the 2008 Plan, on October 27, 2008. The 2008 Plan is intended to promote our success and to increase shareholder value by providing an additional means to attract, motivate, retain and reward selected directors, officers, employees and other eligible persons.
Ye is a certified public accountant in the State of Washington and is a member of the American Institution of Certified Public Accountants. ​ B.
Ye is a Certified Public Accountant in the United States. ​ 58 Table of Contents B.
Added
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation ​ Not applicable. ​ 63 Table of Contents

Item 7. Management's Discussion & Analysis

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

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The address of the principal office of Zall Entities is Suite 2101, 21 Floor, Two Exchange Square, Central, Hong Kong. ​ (4) Represents 20,260,082 ordinary shares and 2,146,864 ADSs representing 4,293,728 ordinary shares held by AOGANG International.
The address of the principal office of Zall Entities is Suite 2101, 21 Floor, Two Exchange Square, Central, Hong Kong. ​ (7) Represents 20,260,082 ordinary shares and 2,146,864 ADSs representing 4,293,728 ordinary shares held by AOGANG International.
Major Shareholders ​ The following table sets forth information with respect to beneficial ownership of our ordinary shares as of March 31, 2023 by: ​ ● each of our directors and executive officers; and ​ ● each person known to us to beneficially own 5% and more of our ordinary shares. ​ Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Major Shareholders ​ The following table sets forth information with respect to beneficial ownership of our ordinary shares as of February 29, 2024 by: ​ ● each of our directors and executive officers; and ​ ● each person known to us to beneficially own 5% and more of our ordinary shares. ​ Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Box 116, Road Town, Tortola, British Virgin Islands. ​ (6) Represents (i) 10,787,626 ordinary shares held by IDG China Venture Capital Fund IV L.P., a limited partnership organized under the laws of the Cayman Islands, and (ii) 1,381,154 ordinary shares held by IDG China IV Investors L.P., a limited partnership organized under the laws of the Cayman Islands.
(4) Represents (i) 10,787,626 ordinary shares held by IDG China Venture Capital Fund IV L.P., a limited partnership organized under the laws of the Cayman Islands, and (ii) 1,381,154 ordinary shares held by IDG China IV Investors L.P..
Based on a review of our register of members, we believe that as of March 29, 2023, 116,910,604 ordinary shares, representing approximately 51.58% of our total outstanding shares, were held by three record shareholders, which includes 116,910,604 ordinary shares held of record by The Bank of New York Mellon, the depositary of our ADS program.
Based on a review of our register of members, we believe that as of February 29, 2024, 91,652,392 ordinary shares, representing approximately 41.2% of our total outstanding shares, were held by three record shareholders, which includes 91,652,392 ordinary shares held of record by The Bank of New York Mellon, the depositary of our ADS program.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ The calculations in the table below is based on 226,670,037 ordinary shares outstanding as of March 29, 2023, being the total ordinary shares issued and outstanding based on our register of members maintained by our Cayman Islands share registrar, excluding (1) ordinary shares represented by the ADSs repurchased by the Company; (2) ordinary shares issued to the depositary that are issuable upon the exercise of share options outstanding and vesting of restricted shares issued to employees, or reserved for future award grants under our Plans; and (3) ordinary shares underlying restricted shares issued to the grantees under the Plan that are in the process of being cancelled. ​ ​ ​ ​ ​ ​ ​ Name Number Percent Directors and Executive Officers: ​ Jian He (1) 34,449,112 15.20 % Zhentao Wang (2) 24,553,810 10.83 % Wenyu Liu 5,389,848 2.38 % Bin Shi * * ​ Yuanjun Ye * * ​ All directors and executive officers as a group 65,004,537 28.68 % ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ Zall Entities (3) 51,040,000 22.52 % AOGANG International (Hong Kong) Corporation Limited (4) 24,553,810 10.83 % Conner Growth Holding Limited (5) 32,589,110 14.38 % IDG Entities (6) 12,168,780 5.37 % ​ Notes: ​ * Less than 1% of our total outstanding shares. ​ (1) Represents (a) 19,976,378 ordinary shares and 3,525,857 ADSs, representing 7,051,714 ordinary shares held by Conner Growth Holding Limited (“Conner”), (b) 3,706,620 ordinary shares and 347,313 ADSs, representing 694,626 ordinary shares held by Ezbuy Talents Holding Limited (“Ezbuy Talents”), (c) 579,886 ADSs, representing 1,159,772 ordinary shares held by Itelite Holding Limited (“Itelite”), and (d) 930,001 ADSs, representing 1,860,002 ordinary shares held by He Jian.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ The calculations in the table below is based on 222,336,185 ordinary shares outstanding as of February 29, 2024, being the total ordinary shares issued and outstanding based on our register of members maintained by our Cayman Islands share registrar, excluding (1) ordinary shares represented by the ADSs repurchased by the Company; (2) ordinary shares issued to the depositary that are issuable upon the exercise of share options outstanding and vesting of restricted shares issued to employees, or reserved for future award grants under our Plans; and (3) ordinary shares underlying restricted shares issued to the grantees under the Plan that are in the process of being cancelled. ​ ​ ​ ​ ​ ​ ​ Name Number Percent Directors and Executive Officers: ​ Jian He (1) 55,485,472 25.0 % Wei Yu (2) ​ 50,305,270 ​ 22.6 % Zhentao Wang (3) 24,553,810 11.0 % Meng Lian (4) ​ 12,168,780 ​ 5.5 % Wenyu Liu 5,149,848 2.3 % Bin Shi * * ​ Yuanjun Ye * * ​ All directors and executive officers as a group 149,286,714 67.1 % ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ ​ ​ Conner Growth Holding Limited (5) ​ 53,505,470 ​ 24.1 % Zall Entities (6) 50,305,270 22.6 % AOGANG International (Hong Kong) Corporation Limited (7) 24,553,810 11.0 % IDG Entities (8) 12,168,780 5.5 % Notes: ​ * Less than 1% of our total outstanding shares. 64 Table of Contents (1) Represents (a) 40,890,738 ordinary shares and 3,526,857 ADSs, representing 7,053,714 ordinary shares held by Conner Growth Holding Limited (“Conner”), (b) 3,706,620 ordinary shares and 347,313 ADSs, representing 694,626 ordinary shares held by Ezbuy Talents Holding Limited (“Ezbuy Talents”), (c) 579,886 ADSs, representing 1,159,772 ordinary shares held by Itelite Holding Limited (“Itelite”), and (d) 990,001 ADSs, representing 1,980,002 ordinary shares held by Jian He.
Zhentao Wang and the president and a director of AoKang) directly holds 4.98%. The registered address of AOGANG International is Rm 216, 2/F, 343 King’s Road, North Point, Hong Kong. The address of the principal office of AoKang is Aokang Industrial Park, Dongou Industrial District, Oubei Town, Yongjia County, Zhejiang Province, People’s Republic of China.
Zhentao Wang and the president and a director of AoKang) directly holds 4.98%. The registered address of AOGANG International is Rm 216, 2/F, 343 King’s Road, North Point, Hong Kong.
(5) Represents (a) 19,976,378 ordinary shares and 3,525,857 ADSs, representing 7,051,714 ordinary shares held by Conner, (b) 3,706,620 ordinary shares and 347,313 ADSs, representing 694,626 ordinary shares held by Ezbuy Talents, and (c) 579,886 ADSs, representing 1,159,772 ordinary shares held by Itelite. Conner is the sole beneficiary owner of Ezbuy Talents and Itelite. Mr.
(5) Represents (a) 40,890,738 ordinary shares and 3,526,857 ADSs, representing 7,053,714 ordinary shares held by Conner, (b) 3,706,620 ordinary shares and 347,313 ADSs, representing 694,626 ordinary shares held by Ezbuy Talents, and (c) 579,886 ADSs, representing 1,159,772 ordinary shares held by Itelite. Itelite, Ezbuy Talents and Conner were incorporated in the British Virgin Islands.
For a description of the beneficial ownership of our ordinary shares by AOGANG International, see Note 4 below. Mr.
For a description of the beneficial ownership of our ordinary shares by AOGANG International, see Note 7 below. Mr. Wang disclaims beneficial ownership of our ordinary shares held by AOGANG International, except to the extent of his pecuniary interest in these shares.
However, in matters related to change of control, pursuant to our amended and restated memorandum and articles of association, Wincore Holdings Limited, Clinet Investments Limited and Vitz Holdings Limited were entitled to three votes per share for each ordinary share registered in their names in the register of members of the Company, and each other holder is entitled to one vote per share.
LTD and Beathena Holding Limited were entitled to three votes per share for each ordinary share registered in their names in the register of members of the Company, and each other holder is entitled to one vote per share.
Jian He, chairman of the board of directors and a director of the Company, is the sole beneficial owner and the sole director of Conner. The registered address of Conner Growth Holding Limited is Sea Meadow House, P.O.
Itelite is directly and wholly owned by Ezbuy Talents and Ezbuy Talents is directly and wholly owned by Conner. Mr. Jian He, chairman of the board of directors, CEO and a director of the Company, is the sole beneficial owner and the sole director of Conner. The registered address of Conner, Ezbuy Talents and Itelite is Intershore Chambers, P.O.
And Wincore Holdings Limited converted the shares with entitlement to three votes per share in such matters. ​ 68 Table of Contents As of March 29, 2023, 226,670,037 of our ordinary shares were issued and outstanding, being the total ordinary shares issued and outstanding based on our register of members maintained by our Cayman Islands share registrar, excluding (1) ordinary shares represented by the ADSs repurchased by the Company; (2) ordinary shares issued to the depositary that are issuable upon the exercise of share options outstanding and vesting of restricted shares issued to employees, or reserved for future award grants under our 2008 Plan and 2019 Plan; and (3) ordinary shares underlying restricted shares issued to the grantees under the Plans that are in the process of being cancelled.
Such change of control events include: (a) a merger, amalgamation, consolidation or similar transaction involving our company, (b) the filing of a petition for a scheme of arrangement involving our company, or the giving of consent to such a filing or the co-operation by our company in the making of such filing, and (c) a sale, transfer or other disposition of all or substantially all of the assets of our company. ​ As of February 29, 2024, 222,336,185 of our ordinary shares were issued and outstanding, being the total ordinary shares issued and outstanding based on our register of members maintained by our Cayman Islands share registrar, excluding (1) ordinary shares represented by the ADSs repurchased by the Company; (2) ordinary shares issued to the depositary that are issuable upon the exercise of share options outstanding and vesting of restricted shares issued to employees, or reserved for future award grants under our 2008 Plan and 2019 Plan; and (3) ordinary shares underlying restricted shares issued to the grantees under the Plans that are in the process of being cancelled.
Mr. Jian He, chairman of the board of directors and a director of the Company, is the sole beneficial owner and the sole director of Conner, Ezbuy Talents, Itelite. ​ (2) Represents 20,260,082 ordinary shares and 2,146,864 ADSs representing 4,293,728 ordinary shares held by AOGANG International.
For a description of the beneficial ownership of our ordinary shares by Zall Development Investment and Zall Development HK, see Note 6 below. Mr. Yu is a director designated by Zall entities. (3) Represents 20,260,082 ordinary shares and 2,146,864 ADSs representing 4,293,728 ordinary shares held by AOGANG International.
Wang disclaims beneficial ownership of our ordinary shares held by AOGANG International, except to the extent of his pecuniary interest in these shares. ​ (3) Represents 42,500,000 ordinary shares and 3,750,000 ADSs representing 7,500,000 ordinary shares held by Zall Development Investment Company Limited, or Zall Development Investment, and 520,000 ADSs representing 1,040,000 ordinary shares held by 67 Table of Contents Zall Development (HK) Holding Company Limited, or Zall Development HK.
(2) Represents 42,500,000 ordinary shares and 3,750,000 ADSs representing 7,500,000 ordinary shares held by Zall Development Investment Company Limited, or Zall Development Investment, and 152,635 ADSs representing 305,270 ordinary shares held by Zall Development (HK) Holding Company Limited, or Zall Development HK.
Subsequently on December 31, 2020, Vitz Holdings Limited gave up the three votes per share and is now entitled to one vote per share in matters related to change of control, pursuant to our amended and restated memorandum and articles of association.
However, in matters related to change of control, pursuant to our amended and restated memorandum and articles of association, Conner Growth Holding Limited, Binlight PTE.
Removed
Such change of control events include: (a) a merger, amalgamation, consolidation or similar transaction involving our company, (b) the filing of a petition for a scheme of arrangement involving our company, or the giving of consent to such a filing or the co-operation by our company in the making of such filing, and (c) a sale, transfer or other disposition of all or substantially all of the assets of our company.
Added
For a description of the beneficial ownership of our ordinary shares by Mr. He, see Note 5 below. Mr. He, chairman of the board of directors and a director of the Company, is the sole beneficial owner and the sole director of Conner, Ezbuy Talents, Itelite.
Removed
Client Investments Limited sold all the shares with entitlement to three votes per share in such matters related to a change of control.
Added
For a description of the beneficial ownership of our ordinary shares by IDG China Venture Capital Fund IV L.P. and IDG China IV Investors L.P., see Note 8 below. Mr. Lian is a director designated by IDG entities.
Added
Box 4342, Road Town, Tortola, British Virgin Islands. (6) Represents 42,500,000 ordinary shares and 3,750,000 ADSs representing 7,500,000 ordinary shares held by Zall Development Investment Company Limited, or Zall Development Investment, and 152,635 ADSs representing 305,270 ordinary shares held by Zall Development (HK) Holding Company Limited, or Zall Development HK.
Added
The address of the principal office of AoKang is Aokang Industrial Park, Dongou Industrial District, Oubei Town, Yongjia County, Zhejiang Province, People’s Republic of China. 65 Table of Contents (8) Represents (i) 10,787,626 ordinary shares held by IDG China Venture Capital Fund IV L.P., a limited partnership organized under the laws of the Cayman Islands, and (ii) 1,381,154 ordinary shares held by IDG China IV Investors L.P., a limited partnership organized under the laws of the Cayman Islands.

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