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Xunlei Ltd

Xunlei LtdXNETEarnings & Financial Report

Nasdaq · Information Technology · Internet industry

Xunlei Limited is a Chinese multinational technology company and an online service provider founded in 2003. The subsidiary of Xunlei Limited, Shenzhen Xunlei Networking Technologies, Co., Ltd. was formerly known as Sandai Technologies (Shenzhen) Inc. and changed its name to Shenzhen Xunlei Networking Technologies, Co., Ltd. in May 2005. Its headquarters are in Nanshan District, Shenzhen.

What changed in Xunlei Ltd's 20-F — 2022 vs 2023

Top changes in Xunlei Ltd's 2023 20-F

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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If the PRC government deems that our contractual arrangements with the variable interest entity do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
If the PRC government deems that our contractual arrangements with the variable interest entity do not comply with PRC regulatory restrictions on foreign investment in relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” Permissions Required from the PRC Authorities for Our Operations We conduct our business primarily through our subsidiaries, variable interest entity and its subsidiaries in China. Our operations in China are governed by PRC laws and regulations.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” Permissions Required from the PRC Authorities for Our Operations We conduct our business primarily through our PRC subsidiaries, the variable interest entity and its subsidiaries in China. Our operations in China are governed by PRC laws and regulations.
Our business model currently is undergoing significant innovation and continued transition. We have launched several new services and products in recent years, such as cloud computing products and products based on blockchain technology. The evolving business model and expansion into the new services involve new risks and challenges.
Our business model is currently undergoing significant innovation and continued transition. We have launched several new services and products in recent years, such as cloud computing products and products based on blockchain technology. The evolving business model and expansion into the new services involve new risks and challenges.
Our international operations and expansion efforts have resulted and may continue to result in increased costs and are subject to a variety of risks, including difficulties in obtaining licenses, approvals or other applicable government authorizations, content controls imposed by local authorities, uncertain enforcement of our intellectual property rights, potential claims for intellectual property infringements and the complexity of compliance with foreign laws and regulations.
Our international operations and expansion efforts have resulted in and may continue to result in increased costs and are subject to a variety of risks, including difficulties in obtaining licenses, approvals or other applicable government authorizations, content controls imposed by local authorities, uncertain enforcement of our intellectual property rights, potential claims for intellectual property infringements and the complexity of compliance with foreign laws and regulations.
However, if we are not able to perfect our new technologies or to achieve the intended results or if our innovations cannot respond to the needs of our users or if our users are not attracted to our upgraded or new products and services, we may not be able to maintain or expand our user base, and our business, results of operations and prospects may be materially and adversely affected.
However, if we are not able to perfect our new technologies or to achieve the intended results, if our innovations cannot respond to the needs of our users, or if our users are not attracted to our upgraded or new products and services, we may not be able to maintain or expand our user base, and our business, results of operations and prospects may be materially and adversely affected.
We may fail to offer attractive content for our live streaming services, or attract and retain talented and popular broadcasters, which may materially adversely affect the operation of our live streaming services and its results of operations. We offer live streaming content. Our content library is constantly evolving and growing to meet users’ evolving interests.
We may fail to offer attractive content for our live streaming services or to attract and retain talented and popular broadcasters, which may materially adversely affect the operation of our live streaming services and its results of operations. We offer live streaming content. Our content library is constantly evolving and growing to meet users’ evolving interests.
A platform provider may also change its fee structure, add fees associated with access to and use of its platform, alter how we are able to advertise or distribute on the platform, or change how the personal information of its users is made available to application developers on the platform.
A platform provider may also change its fee structure, add fees associated with access to and use of its platform, alter how we are able to advertise or distribute on the platform, or change how personal information of its users is made available to application developers on the platform.
In addition to the above, if the PRC government promulgates new laws and regulations that require additional licenses or imposes additional restrictions on the operation of any part of our business, it has the power to, among other things, levy fines, confiscate our income, revoke our business licenses, and require us to discontinue our business or impose restrictions on the affected portion of our business.
In addition to the above, if the PRC government promulgates new laws and regulations that require additional licenses or imposes additional restrictions on the operation of any part of our business, it has the power to, among other things, levy fines, confiscate our income, revoke our business licenses, require us to discontinue our business or impose restrictions on the affected portion of our business.
For example, we submitted the security assessment report regarding Hiya Voice on the National Internet Security Service Platform in June 2022 pursuant to the Provisions for the Security Assessment of Internet Information Services Having Public Opinion Properties or Social Mobilization Capacity , or the Provisions, and received the approval after the onsite inspection conducted by the competent authority.
For example, we submitted the security assessment report regarding Hiya Voice on the National Internet Security Service Platform in June 2022 pursuant to the Provisions for the Security Assessment of Internet Information Services Having Public Opinion Properties or Social Mobilization Capacity and received the approval after the onsite inspection conducted by the competent authority.
Based on recent PRC court judgments, the courts have typically held online game operators liable for losses of virtual assets by game players, and ordered online game operators to return the lost virtual items to game players or pay damages and losses, as well as required the game operators to provide well-developed security systems to protect such virtual assets owned by game players.
Based on recent PRC court judgments, the courts have typically held online game operators liable for losses of virtual assets by game players, ordered online game operators to return the lost virtual items to game players or pay damages and losses, as well as required the game operators to provide well-developed security systems to protect such virtual assets owned by game players.
This notice provides that the total amount of virtual currency issued by an operator and the amount of purchased by individual users should be strictly limited, with a strict and clear division between virtual transactions and real transactions carried out by way of electronic commerce. This notice also provides that virtual currency should only be used to purchase virtual items.
This notice provides that the total amount of virtual currency issued by an operator and the amount purchased by individual users should be strictly limited, with a strict and clear division between virtual transactions and real transactions carried out by way of electronic commerce. This notice also provides that virtual currency should only be used to purchase virtual items.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security, or public interest.
In addition, according to the PRC Civil Procedures Law, PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, national security or public interest.
Our currently effective memorandum and articles of association contains certain provisions that could limit the ability of others to acquire control of our company, including a provision that grants authority to our board directors to establish from time to time one or more series of preferred shares without action by our shareholders.
Our currently effective memorandum and articles of association contains certain provisions that could limit the ability of others to acquire control of our company, including a provision that grants authority to our board of directors to establish from time to time one or more series of preferred shares without action by our shareholders.
Risk Factors—Risks Related to Doing Business in China—The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings (if any) under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval.” Cash and Asset Flows through Our Organization Under PRC laws, Xunlei Limited may provide funding to our PRC subsidiaries only through capital contributions or loans, and to our PRC consolidated variable interest entity only through loans, subject to satisfaction of applicable registration and approval requirements from the PRC government.
Risk Factors—Risks Related to Doing Business in China—The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings (if any) under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval.” Cash and Asset Flows through Our Organization Under PRC laws, Xunlei Limited may provide funding to our PRC subsidiaries only through capital contributions or loans, and to the variable interest entity only through loans, subject to satisfaction of applicable registration and approval requirements from the PRC government.
Our network systems are vulnerable to damage from computer viruses, fires, floods, earthquakes, power losses, telecommunication failures, computer hacking, security breach, and similar events despite our implementation of security measures, which may cause interruptions to the services we provide, degrade the user experience, disclosure of our data or user data, such as personal information, names, accounts, user IDs and passwords, and payment or transaction related information, or cause users to lose confidence in our products.
Despite the implementation of our security measures, our network systems are vulnerable to damage from computer viruses, fires, floods, earthquakes, power losses, telecommunication failures, computer hacking, security breach and similar events, which may result in interruptions to the services we provide, degrade of user experience, disclosure of our data or user data, such as personal information, names, accounts, user IDs and passwords, and payment or transaction related information, or cause users to lose confidence in our products and services.
See “—Risks Related to Doing Business in China—Regulation and censorship of information disseminated over the internet in China have adversely affected our business and may continue to adversely affect our business, and we may be liable for the digital media content on our platform.” In the long term, even without taking into account the abovementioned government restrictions, we cannot assure you that we would be able to retain our large user or subscriber base.
See “—Risks Related to Doing Business in China—Regulation and censorship of information disseminated over the internet in China have adversely affected our business and may continue to adversely affect our business, and we may be liable for the digital media content on our platform.” In the long term, even without taking into account the abovementioned restrictions, we cannot assure you that we would be able to retain our large user or subscriber base.
As a result, we may be required to expend valuable resources to comply with these rules and notices or to request the relevant transferors from whom we purchase taxable assets to comply, or to establish that our Cayman Islands holding company and other non-resident enterprises in our company should not be taxed under these rules and notices, which may have a material adverse effect on our financial condition and results of operations.
As a result, we may be required to expend valuable resources to comply with these rules and notices or to request the transferors from whom we purchase taxable assets to comply, or to establish that our Cayman Islands holding company and other non-resident enterprises in our company should not be taxed under these rules and notices, which may have a material adverse effect on our financial condition and results of operations.
Even if we complete the desired acquisitions or investment, such acquisitions and investment may expose us to new operational, regulatory, market and geographic risks and challenges, including: ● our inability to maintain the key business relationships and the reputation of the businesses we acquire or invest in; ● our inability to retain key personnel of the acquired or invested company; ● uncertainty of entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions; ● failure to comply with laws and regulations as well as industry or technical standards of the markets into which we expand; ● our dependence on unfamiliar affiliates and partners of the companies we acquire or invest in; ● unsatisfactory performance of the businesses we acquire or invest in; 39 Table of Contents ● our responsibility for the liabilities associated with the businesses we acquire, including those that we may not anticipate; ● goodwill impairment risks associated with the businesses that we acquire; ● our inability to integrate acquired technology into our business and operations; ● our inability to develop and maintain a successful business model and to monetize and generate revenues from the businesses we acquire; and ● our inability to maintain internal standards, controls, procedures and policies.
Even if we complete the desired acquisitions or investment, such acquisitions and investment may expose us to new operational, regulatory, market and geographic risks and challenges, including: ● our inability to maintain the key business relationships and the reputation of the businesses we acquire or invest in; ● our inability to retain key personnel of the acquired or invested company; ● uncertainty of entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions; 35 Table of Contents ● failure to comply with laws and regulations as well as industry or technical standards of the markets into which we expand; ● our dependence on unfamiliar affiliates and partners of the companies we acquire or invest in; ● unsatisfactory performance of the businesses we acquire or invest in; ● our responsibility for the liabilities associated with the businesses we acquire, including those that we may not anticipate; ● goodwill impairment risks associated with the businesses that we acquire; ● our inability to integrate acquired technology into our business and operations; ● our inability to develop and maintain a successful business model and to monetize and generate revenues from the businesses we acquire; and ● our inability to maintain internal standards, controls, procedures and policies.
Any limitation on the ability of Giganology Shenzhen and Xunlei Computer to pay dividends to us could have a material adverse effect on our ability to conduct our business.” 7 Table of Contents Under PRC laws and regulations, our PRC subsidiaries and consolidated variable interest entity are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to us.
Any limitation on the ability of Giganology Shenzhen and Xunlei Computer to pay dividends to us could have a material adverse effect on our ability to conduct our business.” 7 Table of Contents Under PRC laws and regulations, our PRC subsidiaries and the variable interest entity are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to us.
In addition, if users’ spending habits change and they choose to only access our content for free without additional purchases, we may not be able to continue to successfully implement the virtual items-based revenue model for live streaming, in which case we may have to provide other value-added services or products to monetize our user base.
In addition, if users’ spending habits change and they choose to only access our content for free without additional purchases, we may not be able to continue to successfully implement the virtual items-based revenue model for our live streaming business, in which case we may have to provide other value-added services or products to monetize our user base.
In addition, the PRC tax authorities may require us to adjust our taxable income under the contractual arrangements, Giganology Shenzhen currently has in place with Shenzhen Xunlei, the variable interest entity, as well as the intellectual property framework agreement between Xunlei Computer and Shenzhen Xunlei, in a manner that would materially and adversely affect its ability to pay dividends and other distributions to us.
In addition, the PRC tax authorities may require us to adjust our taxable income under the contractual arrangements which Giganology Shenzhen currently has in place with the variable interest entity, as well as the intellectual property framework agreement between Xunlei Computer and Shenzhen Xunlei, in a manner that would materially and adversely affect its ability to pay dividends and other distributions to us.
We may face competition from leading Chinese internet companies if they start to allocate resources and focus on the development in this business sector or from startups who may develop similar or alternative products. With more entrants into the cloud acceleration business, aggressive price cutting by competitors may result in the loss of our existing subscribers.
We may face competition from leading Chinese internet companies if they start to allocate resources and focus on the development in this business sector or from startups who may develop similar or alternative products. With more entrants into the cloud acceleration business, aggressive price cutting by competitors may result in a loss of our existing subscribers.
The market price for our ADSs is likely to be highly volatile and subject to wide fluctuations in response to factors including the following: ● regulatory developments affecting us, our advertisers or our industry; ● announcements of studies and reports relating to our services or those of our competitors; 65 Table of Contents ● changes in the economic performance or market valuations of other internet companies in China; ● actual or anticipated fluctuations in our quarterly results of operations and changes of our expected results; ● changes in financial estimates by securities research analysts; ● conditions in the internet or online advertising industry in China; ● announcements by us or our competitors of new services, acquisitions, strategic relationships, joint ventures or capital commitments; ● additions to or departures of our senior management; ● fluctuations of exchange rates between the Renminbi and the U.S. dollar; ● release or expiry of lock-up or other transfer restrictions on our outstanding shares or ADSs; and ● sales or perceived potential sales of additional shares or ADSs.
The market price for our ADSs is likely to be highly volatile and subject to wide fluctuations in response to factors including the following: ● regulatory developments affecting us, our advertisers or our industry; ● announcements of studies and reports relating to our services or those of our competitors; ● changes in the economic performance or market valuations of other internet companies in China; ● actual or anticipated fluctuations in our quarterly results of operations and changes of our expected results; ● changes in financial estimates by securities research analysts; ● conditions in the internet or online advertising industry in China; ● announcements by us or our competitors of new services, acquisitions, strategic relationships, joint ventures or capital commitments; 58 Table of Contents ● additions to or departures of our senior management; ● fluctuations of exchange rates between the Renminbi and the U.S. dollar; ● release or expiry of lock-up or other transfer restrictions on our outstanding shares or ADSs; and ● sales or perceived potential sales of additional shares or ADSs.
In addition, the Data Security Law , which took effect on September 1, 2021, establishes a classified and tiered system for data protection based on the level of importance of the data in terms of economic and social development, as well as the level of danger of the data for national security, public interests, or the legal interests of individuals and organizations in the event of data manipulation, destruction, leakage, illegal acquisition or illegal usage.
In addition, the PRC Data Security Law, which took effect on September 1, 2021, establishes a classified and tiered system for data protection based on the level of importance of the data in terms of economic and social development, as well as the level of danger of the data for national security, public interests, or the legal interests of individuals and organizations in the event of data manipulation, destruction, leakage, illegal acquisition or illegal usage.
Under PRC law, each of our subsidiaries and the variable interest entity in China is required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see “Item 5.
Under PRC law, each of our PRC subsidiaries and the variable interest entity is required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see “Item 5.
In particular, if any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, especially, if the U.S. government takes retaliatory trade actions due to the recent U.S.-China trade and political tension, such changes could have an adverse effect on our business, financial condition and results of operations.
In particular, if any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, especially, if the U.S. government takes retaliatory trade actions due to the U.S.-China trade and political tension, such changes could have an adverse effect on our business, financial condition and results of operations.
We cannot assure you that our technologies, business methods and services, including those relating to our resource discovery network, will be free from claims of patent infringements, and that holders of patents would not seek to enforce such patents against us in China, the United States or any other jurisdictions.
In addition, we cannot assure you that our technologies, business methods and services, including those relating to our resource discovery network, will be free from claims of patent infringements, and that patent holders would not seek to enforce such patents against us in China, the United States or any other jurisdictions.
However, we cannot assure you that these third-party services providers maintain or are able to obtain in a timely manner or at all the required licenses. If our third-party service providers fail to obtain or maintain relevant approvals, licenses or permits required for operating such businesses, our third-party service providers could be subject to liabilities, penalties and operational disruptions.
However, we cannot assure you that these third-party services providers maintain or are able to obtain all the required licenses in a timely manner, or at all. If our third-party service providers fail to obtain or maintain approvals, licenses or permits required for operating such businesses, our third-party service providers could be subject to liabilities, penalties and operational disruptions.
Thus, we will continue to incur substantial capital expenditures on an ongoing basis, and it may become difficult for us to meet such capital requirements. To date, we have financed our operations and the building of Xunlei Tower, our new headquarters, primarily by using our existing internal cash reserves and borrowing bank loans.
Thus, we will continue to incur substantial capital expenditures on an ongoing basis, and it may become difficult for us to meet such capital requirements. We have financed our operations and the building of Xunlei Tower, our new headquarters, primarily by using our existing internal cash reserves and borrowing bank loans.
Key Information—Risk Factors—Risks Related to Doing Business in China.” PRC government’s significant authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.
Key Information—Risk Factors—Risks Related to Doing Business in China.” The PRC government’s significant authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.
In circumstances involving serious violations, the State Administration for Market Regulation, or the SAMR, or its local branches may revoke violators’ licenses or permits for their advertising business operations. To fulfill these monitoring functions specified by the PRC laws and regulations set forth above, we have taken several measures.
In circumstances involving serious violations, the State Administration for Market Regulation or its local branches may revoke violators’ licenses or permits for their advertising business operations. We have taken several measures to fulfill these monitoring functions specified by the PRC laws and regulations set forth above.
As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations. The continuing and collaborative efforts of our senior management and key employees are crucial to our success, and our business may be harmed if we were to lose their services.
As a result, our expenses associated with share-based compensation may continue to increase, which may have an adverse effect on our results of operations. The continuing and collaborative efforts of our senior management and key employees are crucial to our success, and our business may be harmed if we were to lose their services.
We may also incur significant expenses in obtaining necessary approvals from relevant government authorities in China and elsewhere in the world. In addition, investments and acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities and exposure to potential unknown liabilities or legal risks of the acquired business.
We may also incur significant expenses in obtaining necessary approvals from government authorities in China and elsewhere in the world. In addition, investments and acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities and exposure to potential unknown liabilities or legal risks of the acquired business.
Holder will generally be subject to reporting requirements and may incur significantly increased United States federal income tax on gain recognized on the sale or other disposition of the ADSs or common shares and on the receipt of distributions on the ADSs or common shares to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules.
Holder will generally be subject to burdensome reporting requirements and may incur significantly increased United States federal income tax on gain recognized on the sale or other disposition of the ADSs or common shares and on the receipt of distributions on the ADSs or common shares to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules.
Risk Factors—Risks Related to Doing Business in China—The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.” Risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our ADSs.
Risk Factors—Risks Related to Doing Business in China—The PRC government’s oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.” Risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our ADSs.
If we are found to be in violation of applicable PRC advertising laws and regulations in the future, we may be subject to penalties and our reputation may be harmed, which may have a material and adverse effect on our business, financial condition and results of operations. We face risks relating to third parties’ billing and payment systems.
If we are found to be in violation of PRC advertising laws and regulations in the future, we may be subject to penalties and our reputation may be harmed, which may have a material and adverse effect on our business, financial condition and results of operations. We face risks relating to third parties’ billing and payment systems.
Current PRC laws and regulations place certain restrictions on foreign ownership of companies that engage in internet businesses, including the provision of online game and online advertising services. For example, foreign investors’ equity interests in value-added telecommunication service providers, other than e-commerce service providers, may not exceed 50%.
PRC laws and regulations place certain restrictions on foreign ownership of companies that engage in internet businesses, including the provision of online game and online advertising services. For example, foreign investors’ equity interests in value-added telecommunication service providers, other than e-commerce service providers, may not exceed 50%.
Mr. Sean Shenglong Zou, our co-founder and director, Mr. Hao Cheng, our co- founder, Mr. Jianming Shi, Guangzhou Shulian Information Investment Co., Ltd. and Ms. Fang Wang own 76.0%, 8.3%, 8.3%, 6.7% and 0.7% of Shenzhen Xunlei’s equity interests, respectively. (2) The remaining 30% of the equity interest is owned by Mr.
Mr. Sean Shenglong Zou, our co-founder, Mr. Hao Cheng, our co- founder, Mr. Jianming Shi, Guangzhou Shulian Information Investment Co., Ltd. and Ms. Fang Wang own 76.0%, 8.3%, 8.3%, 6.7% and 0.7% of Shenzhen Xunlei’s equity interests, respectively. (2) The remaining 30% of the equity interest is owned by Mr. Hao Cheng.
We are subject to the standard policies and terms of service of third-party platforms, which govern the distribution of our mobile application on the platform. Each platform provider has broad discretion to change and interpret its terms of service and other policies with respect to us and other users, and those changes and interpretation may be unfavorable to us.
We are subject to the standard policies and terms of service of third-party platforms, which govern the distribution of our mobile application on such platforms. Each platform provider has broad discretion to change and interpret its terms of service and other policies with respect to us and other users, and those changes and interpretation may be unfavorable to us.
Any such circumstance could result in administrative penalties, such as warnings, rectification, confiscation of illegal gains, suspension of business, revocation of relevant license or fines on us, significantly limit or completely hinder our ability to continue to offer securities to investors or cause the value of such securities to significantly decline or be worthless.
Any such circumstance could result in administrative penalties, such as warnings, rectification, confiscation of illegal gains, suspension of business, revocation of license or fines on us, significantly limit or completely hinder our ability to continue to offer securities to investors or cause the value of such securities to significantly decline or be worthless.
Laws and regulations in China regulating digital assets, such as Circular on Further Preventing and Disposing of Risks in Virtual Currency Trading and Speculation , prohibit all fungible tokens trading activities, including but not limited to, initial coin offerings, information intermediary and pricing services, and derivative transactions.
Laws and regulations on digital assets in China, such as Circular on Further Preventing and Disposing of Risks in Virtual Currency Trading and Speculation , prohibit all fungible tokens trading activities, including, but not limited to, initial coin offerings, information intermediary and pricing services and derivative transactions.
After completing the filing procedure, the blockchain information service provider should display the filing number in a conspicuous position on the service provider’s websites and applications through which it provides services. Our subsidiaries providing blockchain information services have completed these filing procedures with relevant regulatory authorities and obtained the filing numbers.
After completing the filing procedure, the blockchain information service provider should display the filing number in a conspicuous position on the service provider’s websites and applications through which it provides services. Our subsidiaries providing blockchain information services have completed these filing procedures with the regulatory authorities and obtained the filing numbers.
The Civil Code, the Cyber Security Law, the Data Security Law and the Personal Information Protection Law protect individual privacy and personal data security by requiring internet service providers to collect data in compliance with the laws and regulations and obtain the prior consents from internet users prior to the collection, use or disclosure of internet users’ personal data.
The PRC Civil Code, the PRC Cyber Security Law, the PRC Data Security Law and the PRC Personal Information Protection Law protect individual privacy and personal data security by requiring internet service providers to collect data in compliance with the laws and regulations and obtain the prior consents from internet users prior to the collection, use or disclosure of internet users’ personal data.
Discontinuation or reduction of any of the preferential tax treatments or other government incentives available to us in the PRC, or imposition of any additional PRC taxes could adversely affect our financial condition and results of operations. Under the PRC Enterprise Income Tax Law , or the EIT Law, the statutory enterprise income tax rate is 25%.
Discontinuation or reduction of any of the preferential tax treatments or other government incentives available to us in the PRC, or imposition of any additional PRC taxes could adversely affect our financial condition and results of operations. Under the PRC Enterprise Income Tax Law, the statutory enterprise income tax rate is 25%.
Any misconduct by our current or former employees uncovered from such compliance procedures, whether the misconduct relates to the employees’ work with us, would potentially have material adverse impacts on our reputation, results of operations, financial performance or future prospects.
Any misconduct by our current or former employees uncovered from such compliance procedures, whether the misconduct relates to the employees’ work with us or not, would potentially have material adverse impacts on our reputation, results of operations, financial performance or future prospects.
We created virtual currency “Golden Coins” for the operation of our live streaming services. Users can purchase “Golden Coins” from us so that they can purchase virtual gifts on our live streaming platforms to reward broadcasters they like. “Golden Coins” can also be used to purchase other value-added services on our live streaming platforms.
We created virtual currency “Golden Coins” for the operation of our live streaming services. Users can purchase “Golden Coins” from us so that they can purchase virtual gifts on our live streaming platforms to reward broadcasters they like. “Golden Coins” can also be used to purchase other value-added services on our live streaming platform.
You will not be able to directly exercise your right to vote with respect to the underlying common shares represented by your ADSs unless you convert your ADSs into the underlying common shares and become the registered holder of such common shares prior to the record date for the general meeting.
You will not be able to directly exercise your right to vote with respect to the underlying common shares represented by your ADSs unless you convert your ADSs into the underlying common shares and become the registered holder of such common shares prior to the record date for a general meeting.
However, given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practices of relevant government authorities, we cannot assure you that we have obtained or will obtain all permits or licenses required for conducting our business in China.
However, given the uncertainties of interpretation and implementation of laws and regulations and the enforcement practices of government authorities, we cannot assure you that we have obtained or will obtain all permits or licenses required for conducting our business in China.
In our cooperation with Itui, we require Itui to comply with all relevant laws and regulations regarding advertising business. However, we have no control over Itui and we cannot assure you that Itui will be able to operate the advertising business and its advertising platform legally and successfully.
In our cooperation with Itui, we require Itui to comply with all laws and regulations regarding advertising. However, we have no control over Itui and we cannot assure you that Itui will be able to operate the advertising business and its advertising platform legally and successfully.
We cannot assure you that our cooperation with all third parties for our cloud computing business complies with all laws and regulations. For example, we cannot assure you that our third-party service providers have obtained or applied for all permits and licenses required for providing relevant services to us.
We cannot assure you that our cooperation with all third parties for our cloud computing business complies with all laws and regulations. For example, we cannot assure you that our third-party service providers have obtained or applied for all permits and licenses required for providing services to us.
If we had ownership of Shenzhen Xunlei we would be able to exercise our rights as a shareholder to effect changes in the board of directors of Shenzhen Xunlei, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations.
If we had equity ownership of Shenzhen Xunlei, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of Shenzhen Xunlei, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations.
We may (i) make additional capital contributions to our PRC subsidiaries, (ii) establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, (iii) make loans to our PRC subsidiaries or variable interest entity and its subsidiaries, or (iv) acquire offshore entities with business operations in China in an offshore transaction.
We may (i) make additional capital contributions to our PRC subsidiaries, (ii) establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, (iii) make loans to our PRC subsidiaries or the variable interest entity and its subsidiaries, or (iv) acquire offshore entities with business operations in China in an offshore transaction.
According to the PRC Anti-Unfair Competition Law , unfair competition, which refers to the production and operating activities where the operator disrupts the market competition order and damages the legitimate rights and interests of other operators or consumers in violation of the provisions of the PRC Anti-Unfair Competition Law , shall be prohibited.
According to the PRC Anti-unfair Competition Law, unfair competition, which refers to the production and operating activities where an operator disrupts the market competition order and damages the legitimate rights and interests of other operators or consumers in violation of the provisions of the PRC Anti-Unfair Competition Law, shall be prohibited.
Under the EIT Law and its implementation rules, an enterprise established outside of the PRC with a “de facto management body” 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.
Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with a “de facto management body” 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.
Under such agreement, Itui provides us with online traffic monetization services, including the operation and placement of advertisements, research and technology support with respect to advertising systems, business algorithm platform as well as content recommendation and other optimization services.
Under such agreement, Itui provides us with online traffic monetization services, including operation and placement of advertisements, research and technology support with respect to advertising systems, business algorithm platform as well as content recommendation and other optimization services.
If we instruct the depositary to ask for your instructions, then upon receipt of your voting instructions, the depositary will try, as far as is practicable, to vote the underlying common shares which are represented by your ADSs in accordance with your instructions.
If we instruct the depositary to ask for your instructions, then upon receipt of your voting instructions, the depositary will try, as far as practicable, to vote the underlying common shares which are represented by your ADSs in accordance with your instructions.
If the variable interest entity undergoes a voluntary or involuntary liquidation proceeding, the unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations. ​ 46 Table of Contents Uncertainties exist with respect to the interpretation and implementation of the enacted PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.
If the variable interest entity undergoes a voluntary or involuntary liquidation proceeding, the unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations. 42 Table of Contents Uncertainties exist with respect to the interpretation and implementation of the enacted PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.
Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
Our efforts to comply with changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
Based upon the nature and composition of our assets (in particular, the retention of substantial amounts of cash and investments), and the market price of our ADSs, we believe that we were a “passive foreign investment company” (a “PFIC”) for United States federal income tax purposes for our taxable year ended December 31, 2022, and we will very likely be a PFIC for our current taxable year ending December 31, 2023 unless the market price of our ADSs increases and/or we invest a substantial amount of the cash and other passive assets we hold in assets that produce or are held for the production of active income.
Based upon the nature and composition of our assets (in particular, the retention of substantial amounts of cash and investments), and the market price of our ADSs, we believe that we were a “passive foreign investment company” (a “PFIC”) for United States federal income tax purposes for our taxable year ended December 31, 2023, and we will very likely be a PFIC for our current taxable year ending December 31, 2024 unless the market price of our ADSs increases and/or we invest a substantial amount of the cash and other passive assets we hold in assets that produce or are held for the production of active income.
The PRC Anti-Monopoly Law and the relevant implementing rules (i) require that where concentration of undertakings reaches the filing threshold stipulated by the State Council, a filing must be made with the anti­monopoly authority before the parties implement the concentration, (ii) prohibit a business operator with a dominant market position from abusing such position, such as by selling commodities at unfairly high prices or buying commodities at unfairly low prices, selling products at prices below cost without any justifiable cause, or refusing to trade with a trading party without any justifiable cause, and (iii) prohibit business operators from entering into monopoly agreements, which refer to agreements that eliminate or restrict competition with competing business operators or transaction counterparties, such as by boycotting transactions, fixing or changing the price of commodities, limiting the output of commodities or fixing the price of commodities for resale to third parties, unless the agreements satisfy certain exemptions under the PRC Anti-Monopoly Law .
The PRC Anti-Monopoly Law and its implementing rules (i) require that where concentration of undertakings reaches the filing threshold stipulated by the State Council, a filing must be made with the antimonopoly authority before the parties implement the concentration, (ii) prohibit a business operator with a dominant market position from abusing such position, such as by selling commodities at unfairly high prices or buying commodities at unfairly low prices, selling products at prices below cost without any justifiable cause, or refusing to trade with a trading party without any justifiable cause, and (iii) prohibit business operators from entering into monopoly agreements, which refer to agreements that eliminate or restrict competition with competing business operators or transaction counterparties, such as by boycotting transactions, fixing or changing the price of commodities, limiting the output of commodities or fixing the price of commodities for resale to third parties, unless the agreements satisfy certain exemptions under the PRC Anti-Monopoly Law.
Item 3. Key Information Our Holding Company Structure and Contractual Arrangements with the Variable Interest Entity Xunlei Limited is not a Chinese operating company but a Cayman Islands holding company with no equity ownership in its variable interest entity.
Item 3. Key Information Our Holding Company Structure and Contractual Arrangements with the Variable Interest Entity Xunlei Limited is not a Chinese operating company but a Cayman Islands holding company with no equity ownership in the variable interest entity.
On February 24, 2023, the CSRC together with other PRC governmental authorities issued the Provisions on Strengthening the Management of Confidentiality and Archives regarding Overseas Securities Offerings and Listings by Domestic Companies , or the Confidentiality and Archives Management Provisions, effective March 31, 2023, which require, among others, domestic companies involved in overseas offerings and listings to obtain approvals from the competent authority and file with the state secrets protection administration of the same level before providing or publicly disclosing any document or material that involves state secrets or secrets of state organizations.
On February 24, 2023, the CSRC together with other PRC governmental authorities issued the Provisions on Strengthening the Management of Confidentiality and Archives regarding Overseas Securities Offerings and Listings by Domestic Companies, effective March 31, 2023, which require domestic companies involved in overseas offerings and listings to obtain approvals from the competent authority and file with the state secrets protection administration of the same level before providing or publicly disclosing any document or material that involves state secrets or secrets of state organizations.
In particular, the Cyber Security Law , which took effect on June 1, 2017, requires network operators to strictly treat users’ personal information confidential and to establish and improve user information protection mechanism.
In particular, the PRC Cyber Security Law, which took effect on June 1, 2017, requires network operators to strictly treat users’ personal information confidential and to establish and improve user information protection mechanism.
Employees may be more likely to leave us after their initial incentive share grant fully vests, especially if the value of the incentive shares has significantly appreciated in value relative to the exercise price.
Employees may be more likely to leave us after their initial incentive share grant fully vests, especially if the value of such incentive shares has significantly appreciated in value relative to the exercise price.
The PRC government has significant oversight and discretion over the conduct of our business, and it may influence our operations, which could result in a material adverse change in our operation and the value of our common shares and ADSs.
The PRC government has oversight and discretion over the conduct of our business, and it may influence our operations, which could result in a material adverse change in our operation and the value of our common shares and ADSs.
If any content on our platforms is deemed illegal, obscene or incendiary, or if appropriate licenses and third-party consents have not been obtained, claims may also be brought against us for defamation, libel, negligence, copyright, patent or trademark infringement, other unlawful activities or other theories and claims based on the nature and content of the materials that are provided, uploaded, shared, published or otherwise accessed by users or us through our platforms.
If any content on our platform is deemed illegal, obscene or incendiary, or if appropriate licenses and third-party consents have not been obtained, claims may also be brought against us for defamation, libel, negligence, copyright, patent or trademark infringement, other unlawful activities or other theories and claims based on the nature and content of the materials that are provided, uploaded, shared, published or otherwise accessed by users or us through our platform.
According to the Social Insurance Law, employees must participate in pension insurance, work-related injury insurance, medical insurance, unemployment insurance and maternity insurance and the employers must, together with their employees or separately, pay the social insurance premiums for such employees.
According to the PRC Social Insurance Law, employees must participate in pension insurance, work-related injury insurance, medical insurance, unemployment insurance and maternity insurance and the employers must, together with their employees or separately, pay the social insurance premiums for such employees.
If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial condition and results of operations could be materially and adversely affected.
If we are deemed to have violated labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial condition and results of operations could be materially and adversely affected.
In addition, the foreign investors of the issuer shall not be involved in the company’s operation and management, and their shareholding percentages shall be subject, mutatis mutandis, to the relevant regulations on domestic securities investments by foreign investors.
In addition, the foreign investors of the issuer shall not be involved in the company’s operation and management, and their shareholding percentages shall be subject, mutatis mutandis, to the regulations on domestic securities investments by foreign investors.
In May 2020, we entered into an advertising revenue sharing agreement with a subsidiary of Itui International Inc., our largest shareholder, and we renewed such agreement with the subsidiary of Itui International Inc. on a yearly basis.
In May 2020, we entered into an advertising revenue sharing agreement with a subsidiary of Itui International Inc., our largest shareholder, and we renewed such agreement on a yearly basis.
The interpretation further provides that where an internet service provider has directly obtained economic benefits from any content made available by an internet user, it has a higher duty of care with respect to internet users’ infringement of third-party copyrights. This interpretation may subject us and other internet service providers to significant administrative burdens and litigation risks. See “Item 4.
The interpretation further provides that where an internet service provider has directly obtained economic benefits from any content made available by an internet user, it has a higher duty of care with respect to internet users’ infringement of third-party copyrights. This interpretation may subject internet service providers, including us, to significant administrative burdens and litigation risks. See “Item 4.
If we fail to maintain any of these required licenses or approvals, we may be subject to various penalties, including fines and discontinuation of or restriction on our operations.
If we fail to obtain or maintain any of these required licenses or approvals, we may be subject to various penalties, including fines and discontinuation of or restriction on our operations.
If any of these economic or political risks materializes and we fail to anticipate and effectively manage them, we may suffer a material adverse effect on our business and results of operations. 22 Table of Contents If we fail to keep up with the technological development in the internet industry and users’ changing demand, our business, financial condition and results of operations may be materially and adversely affected.
If any of these economic or political risks materializes and we fail to anticipate and effectively manage them, we may suffer a material adverse effect on our business and results of operations. 20 Table of Contents If we fail to keep up with the technological development in the internet industry and users’ changing demand, our business, financial condition and results of operations may be materially and adversely affected.
For example, neither Shenzhen Wangwenhua, an entity that operates a live streaming business, nor Shenzhen Xunlei, an entity that provides video content display services, is a registered owner of the license for online transmission of audio-visual programs. As a result, it is possible that relevant PRC government authorities could determine that these businesses are operating without sufficient licenses.
For example, neither Shenzhen Wangwenhua, an entity that operates our live streaming business, nor Shenzhen Xunlei, an entity that provides video content display services, is a registered owner of the license for online transmission of audio-visual programs. As a result, it is possible that the PRC government authorities could determine that these businesses are operating without sufficient licenses.
As of the date of this annual report, there is no clear definition and scope of NFTs under these laws and regulations, which results in uncertainties on whether the digital collections provided on our platform will be recognized as NFTs, whether the services we provide will be subject to laws and regulations relating to fungible token trading activities and, if so, how our services will be regulated.
As of the date of this annual report, there is no clear definition and scope of NFTs under these laws and regulations, which results in uncertainties on whether the digital collections provided on our platform will be deemed to be NFTs, whether the services we provide will be subject to laws and regulations relating to fungible token trading activities and, if so, how our services will be regulated.
In April 2020, the independent third party terminated OneThing Cloud reward program, as a result of which users can no longer be rewarded with LinkTokens. Meanwhile, we launched our own reward program, which allows users to share idle uplink bandwidth capacities and external storage with us in exchange for a small amount of cash rewards.
In April 2020, the independent third party terminated the OneThing Cloud reward program and as a result, users could no longer be rewarded with LinkTokens. Meanwhile, we launched our own reward program, which allows users to share idle uplink bandwidth capacities and external storage with us in exchange for a small amount of cash rewards.
Further, the application and interpretation of China’s patent laws and the procedures and standards for granting patents in China are uncertain and still evolving, and we cannot assure you that PRC courts or regulatory authorities would agree with our analysis. Any patent infringement claims, regardless of their merits, could be time-consuming and costly to us.
Further, the application and interpretation of PRC patent laws and the procedures and standards for granting patents in China are still evolving, and we cannot assure you that PRC courts or regulatory authorities would agree with our analysis. Any patent infringement claims, regardless of their merits, could be time-consuming and costly to us.
Strategic alliances with third parties could subject us to a number of risks, including risks associated with sharing proprietary information, nonperformance by the counterparty, and an increase in expenses incurred in establishing new strategic alliances, any of which may materially and adversely affect our business. We may have little ability to control or monitor their actions.
Strategic alliances with third parties could subject us to a number of risks, including risks associated with sharing proprietary information, nonperformance by the counterparty, and an increase in expenses incurred in establishing new strategic alliances, any of which may materially and adversely affect our business. We may have limited ability to control or monitor their actions.
Any uninsured occurrence of business disruption may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our results of operations and financial condition. 41 Table of Contents We face risks related to natural disasters such as earthquakes and health epidemics and other outbreaks, which could significantly disrupt our operations.
Any uninsured occurrence of business disruption may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our results of operations and financial condition. 37 Table of Contents We face risks related to natural disasters such as earthquakes and health epidemics and other outbreaks, which could significantly disrupt our operations.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Xunlei Network HK primarily engages in the development of computer software. In November 2011, we established Xunlei Computer in China, which is the direct wholly owned subsidiary of Xunlei Network HK. Xunlei Computer primarily engages in the development of computer software and information technology services.
In November 2011, we established Xunlei Computer in China, which is the direct wholly-owned subsidiary of Xunlei Network HK. Xunlei Computer primarily engages in the development of computer software and information technology services.
Xunlei Media Player Xunlei Media Player, which we launched in 2008, is a supplementary tool that helps to deliver a more comprehensive viewing experience of digital media content to the users of Xunlei Accelerator.
Xunlei Media Player Xunlei Media Player, which we launched in 2008, is a supplementary tool that helps deliver a more comprehensive viewing experience of digital media content to the users of Xunlei Accelerator.
Violation of these laws and provisions may result in penalties, including fines, confiscation of illegal income. In the case of serious violations, the competent telecommunication authority, public security authority and other relevant authorities may suspend relevant business, rectification or close down the website, or revoke licenses or permits for their business operations.
Violation of these laws and provisions may result in penalties, including fines, confiscation of illegal income. In the case of serious violations, the competent telecommunication authority, public security authority and other competent authorities may suspend relevant business, rectification or close down the website, or revoke licenses or permits for their business operations.
Under the Company Law, enterprises in the PRC may pay dividends only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations.
Under the PRC Company Law, enterprises in the PRC may pay dividends only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations.
Giganology Shenzhen exclusively owns any intellectual property rights resulting from the performance of this agreement. The service fee payable by Shenzhen Xunlei to Giganology Shenzhen is a certain percentage of its earnings. This agreement will expire in 2025 and may be extended with Giganology Shenzhen’s written confirmation prior to the expiration date.
Giganology Shenzhen exclusively owns any intellectual property rights resulting from the performance of this agreement. The service fee payable by Shenzhen Xunlei to Giganology Shenzhen is a certain percentage of its earnings. This agreement will expire in 2025 and may be extended with Giganology Shenzhen’s written confirmation prior to the expiration date.
Pursuant to these measures, entities are required to obtain relevant Online Culture Operating Permits from the applicable provincial level culture administrative authority if they intend to commercially engage in any of the following types of activities: ● production, duplication, importation, distribution or broadcasting of online cultural products; ● publication of online cultural products on the internet or transmission thereof via information networks such as the internet and the mobile networks to computers, fixed-line or mobile phones, television sets or gaming consoles for the purpose of browsing, reviewing, using or downloading such products by online users; or ● exhibitions or contests related to online cultural products.
Pursuant to these measures, entities are required to obtain Online Culture Operating Permits from the applicable provincial level culture administrative authority if they intend to commercially engage in any of the following types of activities: ● production, duplication, importation, distribution or broadcasting of online cultural products; ● publication of online cultural products on the internet or transmission thereof via information networks such as the internet and the mobile networks to computers, fixed-line or mobile phones, television sets or gaming consoles for the purpose of browsing, reviewing, using or downloading such products by online users; or ● exhibitions or contests related to online cultural products.
On March 12, 2021, the National People’s Congress (NPC) of the People’s Republic of China published Outline of the People’s Republic of China 14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives for 2035 , which states that PRC will accelerate the promotion of digital industrialization including blockchain and will promote the innovation of blockchain technology such as smart contracts, consensus algorithms, encryption algorithms, and distributed systems, focus on alliance chains to develop blockchain service platforms and application solutions in the fields of fintech, supply chain management, and government services, and improve supervision mechanisms.
On March 12, 2021, the National People’s Congress published Outline of the People’s Republic of China 14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives for 2035, which states that PRC will accelerate the promotion of digital industrialization including blockchain and will promote the innovation of blockchain technology such as smart contracts, consensus algorithms, encryption algorithms, and distributed systems, focus on alliance chains to develop blockchain service platforms and application solutions in the fields of fintech, supply chain management, and government services, and improve supervision mechanisms.
Pursuant to the Cybersecurity Law, network operators shall follow their cybersecurity obligations according to the requirements of the classified protection system for cybersecurity, including: (a) formulating internal security management systems and operating instructions, determining the persons responsible for cybersecurity, and implementing the responsibility for cybersecurity protection; (b) taking technological measures to prevent computer viruses, network attacks, network intrusions and other actions endangering cybersecurity; (c) taking technological measures to monitor and record the network operation status and cybersecurity incidents; (d) taking measures such as data classification, and back-up and encryption of important data; and (e) other obligations provided by laws and administrative regulations.
Pursuant to the PRC Cybersecurity Law, network operators shall follow their cybersecurity obligations according to the requirements of the classified protection system for cybersecurity, including: (a) formulating internal security management systems and operating instructions, determining the persons responsible for cybersecurity, and implementing the responsibility for cybersecurity protection; (b) taking technological measures to prevent computer viruses, network attacks, network intrusions and other actions endangering cybersecurity; (c) taking technological measures to monitor and record the network operation status and cybersecurity incidents; (d) taking measures such as data classification, and back-up and encryption of important data; and (e) other obligations provided by laws and administrative regulations.
The failure or inability of our PRC resident shareholders to make any required registrations or comply with other requirements under Circular No. 37 and other related rules may subject such PRC residents or our PRC subsidiaries to fines and legal sanctions and may also limit our ability to raise additional financing and contribute additional capital into or provide loans to (including using the proceeds from our initial public offering) our PRC subsidiaries, limit our PRC subsidiaries’ ability to pay dividends or otherwise distribute profits to us, or otherwise adversely affect us.
The failure or inability of our PRC resident shareholders to make any required registrations or comply with other requirements under SAFE Circular No. 37 and other related rules may subject such PRC residents or our PRC subsidiaries to fines and legal sanctions and may also limit our ability to raise additional financing and contribute additional capital into or provide loans to (including using the proceeds from our initial public offering) our PRC subsidiaries, limit our PRC subsidiaries’ ability to pay dividends or otherwise distribute profits to us, or otherwise adversely affect us.
Pursuant to the Cyber Security Law, any individual or organization using the network must comply with the constitution and the applicable laws, follow the public order and respect social moralities, and must not endanger cyber security, or engage in activities by making use of the network that endanger the national security, honor and interests, or infringe on the fame, privacy, intellectual property and other legitimate rights and interests of others.
Pursuant to the PRC Cyber Security Law, any individual or organization using the network must comply with the constitution and the applicable laws, follow the public order and respect social moralities, and must not endanger cyber security, or engage in activities by making use of the network that endanger the national security, honor and interests, or infringe on the fame, privacy, intellectual property and other legitimate rights and interests of others.
Risk Factors—Risks Related to Our Business—Advertisements displayed on our platform may subject us to penalties and other administrative actions.” PRC regulation on information security and censorship The applicable PRC laws and regulations specifically prohibit the use of internet infrastructure where it may breach public security, provide content harmful to the stability of society or disclose state secrets.
Risk Factors—Risks Related to Our Business—Advertisements displayed on our platform may subject us to penalties and other administrative actions.” PRC regulation on information security and censorship The PRC laws and regulations specifically prohibit the use of internet infrastructure where it may breach public security, provide content harmful to the stability of society or disclose state secrets.
According to the Measures for the Administration of Computer Information Network and International Networking Security Protection, which was issued by the State Council on January 8, 2011 and other relevant regulations, it is mandatory for internet companies in the PRC to complete security filing procedures and regularly update information security and censorship systems for their websites with the local public security bureau.
According to the Measures for the Administration of Computer Information Network and International Networking Security Protection , which was issued by the State Council on January 8, 2011, and other regulations, it is mandatory for internet companies in the PRC to complete security filing procedures and regularly update information security and censorship systems for their websites with the local public security bureau.
The issuer shall also submit a report with respect to the following material events within three business days after the occurrence and announcement of such event: (i) change of control rights; (ii) being investigated or punished by overseas securities regulatory authorities or relevant competent authorities; (iii) change of listing status or listing board; and (iv) voluntary or mandatory termination of the listing.
The issuer shall also submit a report with respect to the following material events within three business days after the occurrence and announcement of such event: (i) change of control rights; (ii) being investigated or punished by overseas securities regulatory authorities or competent authorities; (iii) change of listing status or listing board; and (iv) voluntary or mandatory termination of the listing.
Risk Factors—Risks Related to Our Business—We may not be able to successfully address the challenges and risks we face in the online games market, such as a failure to acquire and operate popular, high-quality games or to obtain all the licenses required to operate online games, which may subject us to penalties from relevant authorities, including the discontinuance of our online game business.” PRC regulation on algorithm recommendations On February 7, 2021, the Anti-Monopoly Commission of the State Council published the Anti-Monopoly Guidelines for the Internet Platform Economy Sector , which stipulates that online platform operators who use technological advantages, such as data and algorithms, to eliminate or restrict competition or impose price restrictions or exclusivity requirements on users, may be deemed as committing an abuse of dominant market position.
Risk Factors—Risks Related to Our Business—We may not be able to successfully address the challenges and risks we face in the online games market, such as a failure to acquire and operate popular, high-quality games or to obtain all the licenses required to operate online games, which may subject us to penalties from competent authorities, including the discontinuance of our online game business.” PRC regulation on algorithm recommendations On February 7, 2021, the Anti-Monopoly Commission of the State Council published the Anti-Monopoly Guidelines for the Internet Platform Economy Sector , which stipulates that online platform operators who use technological advantages, such as data and algorithms, to eliminate or restrict competition or impose price restrictions or exclusivity requirements on users, may be deemed as committing an abuse of dominant market position.
However, we may not be informed of the identities of all the PRC residents holding direct or indirect interest in our company, and we cannot provide any assurances that these PRC residents will comply with our request to make or obtain any applicable registrations or comply with other requirements required by Circular No. 37 or other related rules.
However, we may not be informed of the identities of all the PRC residents holding direct or indirect interest in our company, and we cannot provide any assurances that these PRC residents will comply with our request to make or obtain any applicable registrations or comply with other requirements required by SAFE Circular No. 37 or other related rules.
These measures, which became effective on May 30, 2005, apply to acts of automatically providing services such as uploading, storing, linking or searching works, audio or video products, or other contents through the internet based on the instructions of internet users who publish contents on the internet, without editing, amending or selecting any transmitted content.
These measures, which became effective on May 30, 2005, apply to acts of automatically providing services, such as uploading, storing, linking or searching works, audio or video products, or other content through the internet based on the instructions of internet users who publish content on the internet, without editing, amending or selecting any transmitted content.
Pursuant to the announcement, “fundraising through token offerings” is referred to as a type of fundraising activities where an issuer raises “virtual currencies” such as Bitcoin or Ether from investors through the illegal issuance and subsequent circulation of tokens. Pursuant to the announcement, token fundraising activity is essentially an illegal public fundraising activity without obtaining government approval.
Pursuant to this announcement, “fundraising through token offerings” is referred to as a type of fundraising activities where an issuer raises “virtual currencies” such as Bitcoin or Ether from investors through the illegal issuance and subsequent circulation of tokens. Pursuant to the announcement, token fundraising activity is essentially an illegal public fundraising activity without obtaining government approval.
Item 4. Information on the Company A. History and Development of the Company We commenced operations in January 2003 through the establishment of Shenzhen Xunlei, which currently, together with its various subsidiaries in the PRC, operates our Xunlei internet platform. In February 2005, we established Xunlei Limited as our holding company in the Cayman Islands.
Item 4. Information on the Company A. History and Development of the Company We commenced operations in January 2003 through the establishment of Shenzhen Xunlei, which operates our Xunlei internet platform together with its various subsidiaries in the PRC. In February 2005, we established Xunlei Limited as our holding company in the Cayman Islands.
The Data Security Law establishes a classified and tiered system for data protection based on the level of importance of the data in the economic and social development, as well as the level of danger of the data imposed on national security, public interests, or the legal interests of individuals and organizations upon any manipulation, destruction, leakage, illegal acquisition or illegal usage.
The PRC Data Security Law establishes a classified and tiered system for data protection based on the level of importance of the data in the economic and social development, as well as the level of danger of the data imposed on national security, public interests, or the legal interests of individuals and organizations upon any manipulation, destruction, leakage, illegal acquisition or illegal usage.
It provides powerful and cost-effective cloud computing solutions and shares its extensive node distribution with its enterprise users, enabling efficient and cost-effective access. StellarCloud also offers edge computing, function computing and shared CDN (SCDN) solutions to our enterprise users. Our customers of our StellarCloud include some of the leading internet companies in China.
StellarCloud provides powerful and cost-effective cloud computing solutions and shares its extensive node distribution with our enterprise users, enabling efficient and cost-effective access. StellarCloud also offers edge computing, function computing and shared CDN (SCDN) solutions to our enterprise users. Customers of our StellarCloud include some of the leading internet companies in China.
Service providers that had already started to provide blockchain information services before the Blockchain Provisions became effective are required to do make-up filings within 20 business days after the Blockchain Provisions became effective. As of the date of this annual report, we had obtained the initial record-filing number.
Service providers that had already started to provide blockchain information services before these provisions became effective are required to do make-up filings within 20 business days after these provisions became effective. As of the date of this annual report, we had obtained the initial record-filing number.
According to this notice, if audio-visual programs published to the public through an information network fall under the film and drama category, the requirements of the Permit for Issuance of TV Dramas, Permit for Public Projection of Films, Permit for Issuance of Cartoons or academic literature movies and Permit for Public Projection of Academic Literature Movies and TV Plays will apply accordingly.
According to this notice, if audio-visual programs published to the public through an information network fall under the film and drama category, the requirements of the Permit for Issuance of TV Dramas, Permit for Public Projection of Films, Permit for Issuance of Cartoons or academic literature movies and Permit for Public Projection of Academic Literature Movies and TV Plays apply accordingly.
Risk Factors—Risks Related to Our Business—We may not be able to successfully address the challenges and risks we face in the online games market, such as a failure to operate popular, high-quality games or to obtain all the licenses required to operate online games, which may subject us to penalties from relevant authorities, including the discontinuance of our online game business.” PRC regulation on anti-fatigue system, real-name registration system and parental guardianship project In April 2007, GAPPRFT and several other government agencies issued a circular requiring the implementation of an anti-fatigue system and a real-name registration system by all PRC online game operators to curb addictive online game playing by minors.
Risk Factors—Risks Related to Our Business—We may not be able to successfully address the challenges and risks we face in the online games market, such as a failure to operate popular, high-quality games or to obtain all the licenses required to operate online games, which may subject us to penalties from competent authorities, including the discontinuance of our online game business.” PRC regulation on anti-fatigue system, real-name registration system and parental guardianship project In April 2007, GAPPRFT and several other government agencies issued a circular requiring the implementation of an anti-fatigue system and a real-name registration system by all PRC online game operators to curb addictive online game playing by minors.
Organizational Structure The following diagram illustrates our corporate structure, including the variable interest entity and our principal subsidiaries and principal subsidiaries of the variable interest entity, as of the date of this annual report on Form 20-F: Notes: (1) Shenzhen Xunlei is the variable interest entity. Mr. Sean Shenglong Zou, our co-founder and director, Mr. Hao Cheng, our co-founder, Mr.
Organizational Structure The following diagram illustrates our corporate structure, including the variable interest entity and our principal subsidiaries and principal subsidiaries of the variable interest entity, as of the date of this annual report on Form 20-F: Notes: (1) Shenzhen Xunlei is the variable interest entity. Mr. Sean Shenglong Zou, our co-founder, Mr. Hao Cheng, our co-founder, Mr.
For the restricted industries within the Negative List, some of the industries are limited to equity or contractual joint ventures, while in some cases Chinese partners are required to hold the majority interests in such joint ventures. In addition, restricted category projects are subject to government approvals and certain special requirements.
For the restricted industries within the 2021 Negative List, some of the industries are limited to equity or contractual joint ventures, while in some cases Chinese partners are required to hold the majority interests in such joint ventures. In addition, restricted category projects are subject to government approvals and certain special requirements.
Where an internet user is infringing upon the civil rights or interests of another person via internet, the injured party shall have the right to demand the relevant internet service provider to take necessary measures such as deleting the infringing content, etc. by serving the internet service provider a notice.
Where an internet user is infringing upon the civil rights or interests of another person via internet, the injured party shall have the right to demand the internet service provider to take necessary measures such as deleting the infringing content, etc. by serving the internet service provider a notice.
For our content provided or communicated on the Internet after February 1, 2023, to which Part 10A of the Broadcasting Act applies, we note our ongoing obligation under Section 45A of the Broadcasting Act to ensure that we (a) provide a safe online environment for Singapore end-users that promotes responsible online behaviour, (b) deter objectionable online activity and prevent access to harmful content, (c) place adequate priority on the protection of Singapore end-users who are children of different age groups from exposure to content which may be harmful to them, and (d) be regulated in a manner that enables public interest considerations to be addressed.
For our content provided or communicated on the internet after February 1, 2023, to which Part 10A of the Broadcasting Act applies, we note our ongoing obligation under Section 45A of the Broadcasting Act to ensure that we (a) provide a safe online environment for Singapore end-users that promotes responsible online behavior, (b) deter objectionable online activity and prevent access to harmful content, (c) place adequate priority on the protection of Singapore end-users who are children of different age groups from exposure to content which may be harmful to them, and (d) be regulated in a manner that enables public interest considerations to be addressed.
Moreover, under the EIT Law, enterprises organized under the laws of jurisdictions outside China with their “de facto management bodies” located within China may be considered PRC resident enterprises and therefore subject to PRC enterprise income tax at the rate of 25% on their worldwide income.
Moreover, under the PRC Enterprise Income Tax Law, enterprises organized under the laws of jurisdictions outside China with their “de facto management bodies” located within China may be considered PRC resident enterprises and therefore subject to PRC enterprise income tax at the rate of 25% on their worldwide income.
According to these measures, the business of transmitting in real time the content of online games presented or narrated via information networks such as the internet, mobile communication networks and mobile internet or uploading such contents for communication in the audio-visual form shall be administered as online performances.
According to these measures, the business of transmitting in real time the content of online games presented or narrated via information networks such as the internet, mobile communication networks and mobile internet or uploading such content for communication in the audio-visual form shall be administered as online performances.
The Measures specifically require internet platform operators to take measures to prevent and stop illegal advertisements, which include recording and storing the real identity information of users who publish advertisements for at least three years, monitoring and investigating advertisement content, and employing measures to stop illegal advertisements.
These measures specifically require internet platform operators to take measures to prevent and stop illegal advertisements, which include recording and storing the real identity information of users who publish advertisements for at least three years, monitoring and investigating advertisement content, and employing measures to stop illegal advertisements.
In addition, the State Administration for Taxation has issued certain circulars concerning employee share awards. Under these circulars, our employees working in the PRC who exercise share options or hold the vested restricted shares will be subject to PRC individual income tax.
In addition, the State Administration for Taxation issued certain circulars concerning employee share awards. Under these circulars, our employees working in the PRC who exercise share options or hold the vested restricted shares will be subject to PRC individual income tax.
Pursuant to the Live Streaming Opinions, online platforms are prohibited from ranking, introducing or recommending live streaming performers solely by the monetary amount of virtual gifts that they have received from users, nor could the platforms rank users based on the monetary amount of virtual gifts that they have given to live streaming performers.
Pursuant to these opinions, online platforms are prohibited from ranking, introducing or recommending live streaming performers solely by the monetary amount of virtual gifts that they have received from users, nor could the platforms rank users based on the monetary amount of virtual gifts that they have given to live streaming performers.
In addition, the Cyber Security Law requires network operators must not collect personal information irrelevant to their services. The network operators are required to strictly keep confidential users’ personal information that they have collected and to establish and improve user information protective mechanism.
In addition, the PRC Cyber Security Law requires network operators must not collect personal information irrelevant to their services. The network operators are required to strictly keep confidential users’ personal information that they have collected and to establish and improve user information protective mechanism.
In addition, the Blockchain Provisions also imposed an array of obligations to the providers of blockchain information services. For example, blockchain information service providers are required to set up various rules and procedures in terms of user registration, information verification, emergency response, and safeguard measures.
In addition, these provisions also imposed an array of obligations to the providers of blockchain information services. For example, blockchain information service providers are required to set up various rules and procedures in terms of user registration, information verification, emergency response, and safeguard measures.
According to the Review Measures, (i) when the purchase of network products and services by a critical information infrastructures operator or the data processing activities conducted by a network platform operator affect or may affect national security, a cybersecurity review shall be conducted pursuant to the Review Measures.
According to these measures, (i) when the purchase of network products and services by a critical information infrastructures operator or the data processing activities conducted by a network platform operator affect or may affect national security, a cybersecurity review shall be conducted pursuant to these measures.
Our PRC subsidiaries have obligations to file documents related to employee share awards with relevant tax authorities and to withhold individual income taxes of those employees who exercise their share options or hold the vested restricted shares.
Our PRC subsidiaries have obligations to file documents related to employee share awards with tax authorities and to withhold individual income taxes of those employees who exercise their share options or hold the vested restricted shares.
The Trial Measures also identify certain circumstances that will preclude issuers from pursuing overseas offerings and listings, including (i) explicit prohibition from financing through listing by laws, administrative regulations, or relevant national provisions; (ii) recognition by the relevant competent department of the State Council that the issuer’s overseas offering and listing may harm national security; (iii) commission of criminal offenses, such as embezzlement, bribery, misappropriation of property, or disruption of market orders by the domestic companies, its controlling shareholder, or the actual controller within the past three years; (iv) ongoing investigation by law enforcement agencies for suspected criminal or significant illegal and irregular activities without any clear conclusion yet; and (v) material ownership disputes over shares held by the controlling shareholder or by other shareholders that are controlled by controlling shareholder and/or actual controller.
These measures also identify certain circumstances that will preclude issuers from pursuing overseas offerings and listings, including (i) explicit prohibition from financing through listing by laws, administrative regulations or national provisions; (ii) recognition by the competent department of the State Council that the issuer’s overseas offering and listing may harm national security; (iii) commission of criminal offenses, such as embezzlement, bribery, misappropriation of property, or disruption of market orders by the domestic companies, its controlling shareholder, or the actual controller within the past three years; (iv) ongoing investigation by law enforcement agencies for suspected criminal or significant illegal and irregular activities without any clear conclusion yet; and (v) material ownership disputes over shares held by the controlling shareholder or by other shareholders that are controlled by controlling shareholder and/or actual controller.
In July 2011, GAPPRFT, together with several other government agencies, jointly issued the Notice on Initializing the Verification of Real-name Registration for the Anti-Fatigue System on Online Games , or the Real-name Registration Notice, to strengthen the implementation of the anti-fatigue and real-name registration system.
In July 2011, GAPPRFT, together with several other government agencies, jointly issued the Notice on Initializing the Verification of Real-name Registration for the Anti-Fatigue System on Online Games to strengthen the implementation of the anti-fatigue and real-name registration system.
When imposing administrative penalties upon the act which infringes upon any users’ right of communication through information networks, the Measures for Imposing Copyright Administrative Penalties , promulgated in 2009, shall be applied. 100 Table of Contents Pursuant to the Regulation on Protection of the Right of Communication through Information Network (2006) , as amended in 2013, an ICP service provider may be exempted from indemnification liabilities under certain circumstances: ● any ICP service provider, who provides automatic internet access service upon instructions of its users or provides automatic transmission service of works, performance and audio-visual products provided by its users, will not be required to assume the indemnification liabilities if (i) it has not chosen or altered the transmitted works, performance and audio-visual products; and (ii) it provides such works, performance and audio-visual products to the designated user and prevents any person other than such designated user from obtaining the access. ● any ICP service provider who, for the sake of improving network transmission efficiency, automatically provides to its own users, based on the technical arrangement, the relevant works, performances and audio-visual products obtained from any other ICP service providers will not be required to assume the indemnification liabilities if (i) it has not altered any of the works, performance or audiovisual products that are automatically stored; (ii) it has not affected such original ICP service provider in grasping the circumstances where the users obtain the relevant works, performance and audio-visual products; and (iii) when the original ICP service provider revises, deletes or shields the works, performance and audio-visual products, it will automatically revise, delete or shield the same based on the technical arrangement. ● any ICP service provider, who provides its users with information memory space for such users to provide the works, performance and audio-visual products to the general public via the information network, will not be required to assume the indemnification liabilities if (i) it clearly indicates that the information memory space is provided to the users and publicizes its own name, contact person and web address; (ii) it has not altered the works, performance and audio-visual products that are provided by the users; (iii) it is not aware of or has no reason to know the infringement of the works, performance and audio-visual products provided by the users; (iv) it has not directly derived any economic benefit from the provision of the works, performance and audio-visual products by its users; and (v) after receiving a notice from the right holder, it has deleted such works, performance and audio-visual products as alleged for infringement pursuant to such regulation. ● any ICP service provider, who provides its users with search services or links, will not be required to assume the indemnification liabilities if, after receiving a notice from the rights holder, it has deleted the works, performance and audio-visual products as alleged for copyright infringement pursuant to this regulation.
When imposing administrative penalties upon the act which infringes upon any users’ right of communication through information networks, the Measures for Imposing Copyright Administrative Penalties , promulgated in 2009, shall be applied. 94 Table of Contents Pursuant to the Regulation on Protection of the Right of Communication through Information Network , as amended in 2013, an ICP service provider may be exempted from indemnification liabilities under following circumstances: ● any ICP service provider, who provides automatic internet access service upon instructions of its users or provides automatic transmission service of works, performance and audio-visual products provided by its users, will not be required to assume the indemnification liabilities if (i) it has not chosen or altered the transmitted works, performance and audio-visual products; and (ii) it provides such works, performance and audio-visual products to the designated user and prevents any person other than such designated user from obtaining the access. ● any ICP service provider who, for the sake of improving network transmission efficiency, automatically provides to its own users, based on the technical arrangement, the relevant works, performances and audio-visual products obtained from any other ICP service providers will not be required to assume the indemnification liabilities if (i) it has not altered any of the works, performance or audiovisual products that are automatically stored; (ii) it has not affected such original ICP service provider in grasping the circumstances where the users obtain the relevant works, performance and audio-visual products; and (iii) when the original ICP service provider revises, deletes or shields the works, performance and audio-visual products, it will automatically revise, delete or shield the same based on the technical arrangement. ● any ICP service provider, who provides its users with information memory space for such users to provide the works, performance and audio-visual products to the general public via the information network, will not be required to assume the indemnification liabilities if (i) it clearly indicates that the information memory space is provided to the users and publicizes its own name, contact person and web address; (ii) it has not altered the works, performance and audio-visual products that are provided by the users; (iii) it is not aware of or has no reason to know the infringement of the works, performance and audio-visual products provided by the users; (iv) it has not directly derived any economic benefit from the provision of the works, performance and audio-visual products by its users; and (v) after receiving a notice from the right holder, it has deleted such works, performance and audio-visual products as alleged for infringement pursuant to such regulation. ● any ICP service provider, who provides its users with search services or links, will not be required to assume the indemnification liabilities if, after receiving a notice from the rights holder, it has deleted the works, performance and audio-visual products as alleged for copyright infringement pursuant to this regulation.
The Online Live Streaming Regulations provide that online live streaming service providers and distributors must legally obtain the qualification for internet news information services before providing such services on the internet, and engage in online news information services only to the licensed extent.
These regulations provide that online live streaming service providers and distributors must legally obtain the qualification for internet news information services before providing such services on the internet, and engage in online news information services only to the licensed extent.
After receiving an application, the PRC Trademark Office will make a public announcement if the relevant trademark passes the preliminary examination. Within three months after such public announcement, any person may file an opposition against a trademark that has passed a preliminary examination.
After receiving an application, the PRC Trademark Office will make a public announcement if the trademark passes the preliminary examination. Within three months after such public announcement, any person may file an opposition against a trademark that has passed a preliminary examination.
We offer cloud computing services by crowdsourcing of idle bandwidth capacity and potential storage from users and continuously deliver computing resources to third parties, such as internet content providers, through our CDN services.
We offer cloud computing services by crowdsourcing idle bandwidth capacity and potential storage from users and continuously deliver computing resources to third parties, such as internet content providers, through our CDN services.
On December 6, 2007, the State Council promulgated the Implementation Rules to the PRC Enterprise Income Tax Law , or the Implementation Rules, which also became effective on January 1, 2008 and last revised on April 23, 2019.
On December 6, 2007, the State Council promulgated the Implementation Rules to the PRC Enterprise Income Tax Law , which also became effective on January 1, 2008 and last revised on April 23, 2019.
It is a suspected illegal offering of tokens, illegal offering of securities, illegal fundraising, financial fraud, or pyramid scheme, which are criminal offenses under the PRC law. The announcement prohibits fundraising activities through token issuance.
It is a suspected illegal offering of tokens, illegal offering of securities, illegal fundraising, financial fraud, or pyramid scheme, which are criminal offenses under the PRC law. This announcement prohibits fundraising activities through token issuance.
Combining our industry-leading peer-to-peer technology and the scheduling mechanism that has been improved for years, StellarCloud CDN moves data distribution from IDC to cost-effective shared nodes, cutting bandwidth costs without compromising the quality of service. Blockchain platform We launched ThunderChain, a high-performance blockchain infrastructure product, which can concurrently process millions of transactions per second.
Combining our industry-leading peer-to-peer technology and the scheduling mechanism that has been improved for years, StellarCloud CDN moves data distribution from IDCs to cost-effective shared nodes, cutting bandwidth costs without compromising the quality of service. Blockchain platform We launched ThunderChain, a high-performance blockchain infrastructure product, which can concurrently process millions of transactions per second.
In addition, the announcement also provides that token trading platform should not be engaged in (i) the exchange between any statutory currency with tokens and “virtual currencies,” (ii) the trading, either as a central counterparty or not, of the tokens or “virtual currencies,” and (iii) token or “virtual currency” pricing, information intermediary services or other services for tokens or “virtual currencies.” On September 15, 2021, the People’s Bank of China, the Office of the Central Cyberspace Affairs Commission, the Supreme People’s Court, the Supreme People’s Procuratorate, the MIIT, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange jointly promulgated the Circular on Further Preventing and Disposing of Risks in Virtual Currency Trading and Speculation to further strengthen the administration of the virtual currency trading.
In addition, the announcement also provides that token trading platform should not be engaged in (i) the exchange between any statutory currency with tokens and “virtual currencies,” (ii) the trading, either as a central counterparty or not, of the tokens or “virtual currencies,” and (iii) token or “virtual currency” pricing, information intermediary services or other services for tokens or “virtual currencies.” On September 15, 2021, the People’s Bank of China, the Office of the Central Cyberspace Affairs Commission, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission and the State Administration of Foreign Exchange jointly promulgated the Circular on Further Preventing and Disposing of Risks in Virtual Currency Trading and Speculation to further strengthen the administration of the virtual currency trading.
In providing advertising services, advertising operators and advertising distributors must review the supporting documents provided by advertisers for advertisements and verify that the content of the advertisements complies with applicable PRC laws and regulations.
In providing advertising services, advertising operators and advertising distributors must review the supporting documents provided by advertisers for advertisements and verify that the content of the advertisements complies with PRC laws and regulations.
On April 12, 2016, General Office of the State Council issued a Circular of the General Office of the State Council on Issuing the Implementing Proposals for the Special Rectification of Internet Financial Risks, pursuant to which online P2P lending platforms or equity-based crowdfunding platforms shall not engage in asset management, claims or equity transfer, capital allocation in the high-risk securities market, or other financial business without approval.
On April 12, 2016, General Office of the State Council issued a Circular of the General Office of the State Council on Issuing the Implementing Proposals for the Special Rectification of Internet Financial Risks, pursuant to which online peer-to-peer lending platforms or equity-based crowdfunding platforms shall not engage in asset management, claims or equity transfer, capital allocation in the high-risk securities market, or other financial business without approval.
Although instances in the past have suggested that our information security and content-filtering systems may not be compliant with relevant laws and regulations in all respects, we strive to improve our systems by continuously implementing additional protective and examining measures to reduce the risk of cyber-incidents and to detect improper or illegal contents. See “Item 3. Key Information-D.
Although instances in the past have suggested that our information security and content-filtering systems may not be compliant with laws and regulations in all respects, we strive to improve our systems by continuously implementing additional protective and examining measures to reduce the risk of cyber-incidents and to detect improper or illegal content. See “Item 3. Key Information—D.
Internet enterprises that have not obtained the relevant financial business qualifications may not carry out the corresponding business by relying on the internet, and the nature of the business they carry out shall comply with the business qualifications obtained.
Internet enterprises that have not obtained the financial business qualifications may not carry out the corresponding business by relying on the internet, and the nature of the business they carry out shall comply with the business qualifications obtained.
In addition, the Circular Related to Relevant Issues on the Identification of a Chinese holding Company Incorporated Overseas as a Residential Enterprise under the Criterion of De Facto Management Bodies issued by the SAT on April 22, 2009 provides that a foreign enterprise controlled by a PRC enterprise or a PRC enterprise group will be classified as a “resident enterprise” with its “de facto management bodies” located within China if the following requirements are satisfied: (i) the senior management and core management departments in charge of its daily operations function mainly in the PRC; (ii) its financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (iii) its major assets, accounting books, company seals, and minutes and files of its board and shareholders’ meetings are located or kept in the PRC; and (iv) at least half of the enterprise’s directors or senior management with voting rights reside in the PRC.
In addition, the Circular Related to Relevant Issues on the Identification of a Chinese holding Company Incorporated Overseas as a Residential Enterprise under the Criterion of De Facto Management Bodies issued by the State Administration of Taxation on April 22, 2009 provides that a foreign enterprise controlled by a PRC enterprise or a PRC enterprise group will be classified as a “resident enterprise” with its “de facto management bodies” located within China if the following requirements are satisfied: (i) the senior management and core management departments in charge of its daily operations function mainly in the PRC; (ii) its financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (iii) its major assets, accounting books, company seals, and minutes and files of its board and shareholders’ meetings are located or kept in the PRC; and (iv) at least half of the enterprise’s directors or senior management with voting rights reside in the PRC.
On September 28, 2009, GAPPRFT, the National Copyright Administration and the National Office of Combating Pornography and Illegal Publications jointly published the Notice Regarding the Consistent Implementation of the “Stipulations on ‘Three Provisions’ of the State Council and the Relevant Interpretations of the State Commission Office for Public Sector Reform and the Further Strengthening of the Administration of Pre-examination and Approval of Internet Games and the Examination and Approval of Imported Internet Games ”, or the Notice of Three Provisions and Internet Games, which expressly requires that all online games need to be approved by GAPPRFT through the advanced approvals before they are operated online, and any updated online game versions or any change to the online games shall be subject to further advanced approvals before they can be operated online.
On September 28, 2009, GAPPRFT, the National Copyright Administration and the National Office of Combating Pornography and Illegal Publications jointly published the Notice Regarding the Consistent Implementation of the “Stipulations on ‘Three Provisions’ of the State Council and the Relevant Interpretations of the State Commission Office for Public Sector Reform and the Further Strengthening of the Administration of Pre-examination and Approval of Internet Games and the Examination and Approval of Imported Internet Games ,” which expressly requires that all online games need to be approved by GAPPRFT through the advance approvals before they are operated online, and any updated online game versions or any change to the online games shall be subject to further advanced approvals before they can be operated online.
SAFE Circular No. 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular No. 37 as a “special purpose vehicle.” The term “control” under SAFE Circular No. 37 is broadly defined as the operation rights, beneficiary rights or decision-making rights acquired by the PRC residents in the offshore special purpose vehicles or PRC companies by such means as acquisition, trust, proxy, voting rights, repurchase, convertible bonds or other arrangements.
This circular requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in this circular as a “special purpose vehicle.” The term “control” under this circular is broadly defined as the operation rights, beneficiary rights or decision-making rights acquired by the PRC residents in the offshore special purpose vehicles or PRC companies by such means as acquisition, trust, proxy, voting rights, repurchase, convertible bonds or other arrangements.
We also employ data mining algorithms, studying user habits in order to maximize the speed of our data delivery by ranking the keyword indexes that users search for and placing digital media content more likely to be searched by users in the more easily accessible locations in our network for optimal delivery speed. 79 Table of Contents Distributed internet crawling techniques .
We also employ data mining algorithms, studying user habits in order to maximize the speed of our data delivery by ranking the keyword indexes that users search for and placing digital media content more likely to be searched by users in the more easily accessible locations in our network for optimal delivery speed. 71 Table of Contents Distributed internet crawling techniques .
We, through Shenzhen Xunlei, currently hold a VATS License covering its ICP services expiring on April 30, 2025 and another VATS License for its provision of could computing services including internet data center services and internet access services expiring on October 31, 2024, and own the essential trademarks and domain names in relation to our value-added telecommunications business.
We, through Shenzhen Xunlei, currently hold a Value-added Telecommunication Services License covering its ICP services expiring on April 30, 2025 and another Value-added Telecommunication Services License for its provision of could computing services including internet data center services and internet access services expiring on October 31, 2024, and own the essential trademarks and domain names in relation to our value-added telecommunications business.
Shenzhen Wangwenhua has also obtained a Medicine Information Service Qualification Certificate from Guangdong Food and Drug Administration for the provision of internet medical information services with the expiry date extended to August 23, 2027. PRC regulation on advertising business The State Administration for Market Regulation, or the SAMR, is the government agency responsible for regulating advertising activities in the PRC.
Shenzhen Wangwenhua has also obtained a Medicine Information Service Qualification Certificate from Guangdong Food and Drug Administration for the provision of internet medical information services with the expiry date extended to August 23, 2027. PRC regulation on advertising business The State Administration for Market Regulation is the government agency responsible for regulating advertising activities in the PRC.
According to such provisions, internet comments posting services refer to the services of publishing transcripts, symbols, expressions, pictures, audio and video and other information offered by Internet websites, applications, interactive communication platforms and other types of website platforms having the capabilities of social mobilization or influencing public opinion by way of comment, reply, message, bullet screen, like and using other means.
According to these provisions, internet comments posting services refer to the services of publishing transcripts, symbols, expressions, pictures, audio and video and other information offered by Internet websites, applications, interactive communication platforms and other types of website platforms having the capabilities of social mobilization or influencing public opinion by way of comment, reply, message, bullet screen, like and using other means.
The internet forum and community service providers shall not use internet forum and community services to publish or disseminate information banned by laws, regulations and the relevant provisions of the state.
The internet forum and community service providers shall not use internet forum and community services to publish or disseminate information banned by laws, regulations and provisions of the state.
Itui has developed a precision customer target algorithm, and by cooperating with them, we hope to improve advertisement placement and improve revenues as a result. Pursuant to the agreement, Itui is responsible for operating our advertising services and share a portion of revenue generated from placing advertisements on our PC websites and mobile platform.
Itui has developed a precision customer target algorithm, and by cooperating with them, we hope to improve advertisement placement and improve revenues as a result. Pursuant to the agreement, Itui is responsible for operating our advertising services and shares a portion of revenue generated from placing advertisements on our PC websites and mobile platform.
To comply with these then and currently effective laws and regulations, Shenzhen Xunlei obtained an Online Culture Operating Permit, which was last renewed in February 2022 with an effective period from March 16, 2022 to March 15, 2025 to offer music entertainment product online, operate online performance business and online shows business, and engage in the exhibition of online culture products and competition activities.
To comply with these laws and regulations, Shenzhen Xunlei obtained an Online Culture Operating Permit, which was last renewed in February 2022 with an effective period from March 16, 2022 to March 15, 2025 to offer music entertainment product online, operate online performance business and online shows business, and engage in the exhibition of online culture products and competition activities.
Our platform On our platform, users can accelerate internet content transmission and store the digital contents in the cloud drive, develop and operate blockchain-based services and applications and enjoy popular forms of internet-based entertainment, such as watching online digital contents and live performances, playing online games, and interacting with broadcasters through video and audio live streaming platforms.
Our platform On our platform, users can accelerate internet content transmission and store digital content in the cloud drive, develop and operate blockchain-based services and applications, as well as enjoy popular forms of internet-based entertainment, such as watching online digital content and live performances, playing online games, and interacting with broadcasters through video and audio live streaming platforms.
With this set of releases, ThunderChain now can offer a wide range of effective blockchain product solutions. 77 Table of Contents Our ThunderChain platform addresses the difficulties that both enterprise users and developers face in applying blockchain in an all-dimensional approach. For example, our ThunderChain platform has a strong concurrent processing capability.
With this set of releases, ThunderChain now can offer a wide range of effective blockchain product solutions. 69 Table of Contents Our ThunderChain platform addresses the difficulties that both enterprise users and developers face in applying blockchain in an all-dimensional approach. For example, our ThunderChain platform has a strong concurrent processing capability.
Shared cloud computing model for edge computing services We created a shared computing model and network by encouraging millions of personal users to share idle resources such as computing power, storage and bandwidth by deploying sharing economy smart devices such as OneThing Cloud and ZQB. With the shared cloud computing model, Xunlei provides high-quality, cost-effective cloud services for corporate clients.
Shared cloud computing model for edge computing services We created a shared computing model and network by encouraging millions of personal users to share idle resources such as computing power, storage and bandwidth by deploying sharing economy smart devices such as OneThing Cloud and Zhuanqianbao. With the shared cloud computing model, Xunlei provides high-quality, cost-effective cloud services for corporate clients.
StellarCloud CDN service is a distributed CDN service that integrates traditional cloud computing data centers and shared node networks. It provides common CDN capabilities such as video on demand, live video streaming, and file distribution. The system splits and encodes the data into segments and deploy them to multiple shared nodes according to a certain strategy.
StellarCloud CDN service is a distributed CDN service that integrates traditional cloud computing data centers and shared node networks. It provides common CDN capabilities such as video on demand, live video streaming, and file distribution. The system splits and encodes the data into segments and deploys them to multiple shared nodes according to a certain strategy.
Shared Computing Ecology Another key part of our strategies is to continue our innovation in crowdsourcing of idle bandwidth capacity and potential storage from users of our cloud computing hardware devices so that we can continuously deliver computing resources to third parties, such as internet content providers, through our CDN services.
Shared Computing Ecology Another key aspect of our strategies is to continue our innovation in crowdsourcing of idle bandwidth capacity and potential storage from users of our cloud computing hardware devices so that we can continuously deliver computing resources to third parties, such as internet content providers, through our CDN services.
Our users are also able to purchase virtual items in those web games using a payment channel provided by us. Mobile games developed by third-party online game developers are available on our mobile app as usual. Users can download mobile games they are interested in through our mobile app and login the games by using their Xunlei account.
Our users are also able to purchase virtual items in those web games using a payment channel provided by us. Mobile games developed by third-party online game developers are available on our mobile app as usual. Users can download mobile games they are interested in through our mobile app and login the games by using their Xunlei accounts.
On July 6, 2005, MOC, GAPPRFT, the NDRC and the Ministry of Commerce, jointly adopted the Several Opinions on Canvassing Foreign Investment into the Cultural Sector . According to these regulations, non-State-owned capital and foreign investors are not allowed to conduct the business of transmitting audio-visual programs via information network.
On July 6, 2005, the Ministry of Culture, the GAPPRFT, the NDRC and the Ministry of Commerce jointly adopted the Several Opinions on Canvassing Foreign Investment into the Cultural Sector . According to these regulations, non-State-owned capital and foreign investors are not allowed to conduct the business of transmitting audio-visual programs via information network.
In order to promote customer loyalty, we may elevate the VIP levels of our subscribers if they actively engage in our services. Once upgraded to certain higher VIP levels, our subscribers may be offered additional independent accounts, internally termed as sub-accounts, and allow users to access our premium acceleration services, at no additional charges.
In order to promote customer loyalty, we may elevate the VIP levels of our subscribers if they actively engage in our services. Once upgraded to certain higher VIP levels, our subscribers may be offered additional independent accounts, internally termed as sub-accounts, which allow users to access our premium acceleration services, at no additional charges.
As of the date of this annual report, we are involved in two pending copyright lawsuits in China. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—The intellectual property protection mechanism we have implemented may not always be effective or sufficient.
As of the date of this annual report, we are involved in seven pending copyright lawsuits in China. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—The intellectual property protection mechanism we have implemented may not always be effective or sufficient.
We also periodically review our privacy policies and amend as needed based on the development and changes of the personal information we will collect and process to ensure that we have comply with relevant, requirements including, among others, obtaining users’ prior consent to the collection and processing of their personal information before such collecting and processing.
We also periodically review our privacy policies and amend as needed based on the development and changes of the personal information we will collect and process to ensure that we have comply with relevant requirements, including obtaining users’ prior consent to the collection and processing of their personal information before such collecting and processing.
On July 6, 2021, the relevant PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law .
On July 6, 2021, the PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law .
Pursuit to the Circular, virtual currencies do not have the same legal status as legal currencies and it is strictly prohibited and banned that virtual currency-related business activities are illegal financial activities, including carrying out exchange services between legal currencies and virtual currencies or between virtual currencies, buying and selling virtual currencies as a central counterparty, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, virtual currency derivative transactions and other virtual currency-related business activities are suspected of illegal sale of tokens, unauthorized public issuance of securities, illegal operation of futures business, illegal fundraising and other illegal financial activities.
Pursuant to this circular, virtual currencies do not have the same legal status as legal currencies and it is strictly prohibited and banned that virtual currency-related business activities are illegal financial activities, including carrying out exchange services between legal currencies and virtual currencies or between virtual currencies, buying and selling virtual currencies as a central counterparty, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, virtual currency derivative transactions and other virtual currency-related business activities are suspected of illegal sale of tokens, unauthorized public issuance of securities, illegal operation of futures business, illegal fundraising and other illegal financial activities.
Users can retrieve the internet contents they stored on Xunlei Cloud Drive whenever they want through different terminals including tablets, smartphones and desktops. Xunlei Cloud Drive also allows users to share the data saved on the cloud server among each other. Users are able to access our Xunlei Cloud Drive service for free through our Xunlei Accelerator.
Users can retrieve the internet content they stored on Xunlei Cloud Drive whenever they want through different terminals including tablets, smartphones and desktops. Xunlei Cloud Drive also allows users to share the data saved on the cloud server among each other. Users are able to access our Xunlei Cloud Drive service for free through our Xunlei Accelerator.
To retain and drive the growth of our subscribers, we market our premium paid services and place subscription advertisements at prominent locations throughout our integrated service offerings. 81 Table of Contents Intellectual property Protection of our intellectual property Our patents, copyrights, trademarks, trade secrets and other intellectual property rights are critical to our business.
To retain and drive the growth of our subscribers, we market our premium paid services and place subscription advertisements at prominent locations throughout our integrated service offerings. 73 Table of Contents Intellectual property Protection of our intellectual property Our patents, copyrights, trademarks, trade secrets and other intellectual property rights are critical to our business.
The Online Live Streaming Regulations also stipulate that online live streaming service providers must carry out their subject responsibility, arrange professionals commensurate with its service size, establish and improve various management systems, and have the technical capability to immediately cut online live streaming, and its technical plans shall comply with relevant national standards.
These regulations also stipulate that online live streaming service providers must carry out their subject responsibility, arrange professionals commensurate with its service size, establish and improve various management systems, and have the technical capability to immediately cut online live streaming, and its technical plans shall comply with national standards.
Failure to comply with relevant requirements in the Blockchain Provisions may subject blockchain information service providers to administrative penalties such as warning, being ordered to temporarily suspend relevant business operations to rectify within prescribed time period, or fines, or criminal liabilities, depending on which provisions are violated.
Failure to comply with requirements in these provisions may subject blockchain information service providers to administrative penalties such as warning, being ordered to temporarily suspend relevant business operations to rectify within prescribed time period, or fines, or criminal liabilities, depending on which provisions are violated.
In May 2018, we supplemented our live streaming business by launching another audio live streaming service through our mobile app. Users and broadcasters may interact with each other in the chatrooms with different topics through audio streaming and purchase virtual items from our platform to reward each other. We further diversified our live streaming offerings in 2021.
In May 2018, we expanded our live streaming business by launching another audio live streaming service through our mobile app. Users and broadcasters may interact with each other in the chatrooms with different topics through audio streaming and purchase virtual items from our platform to reward each other. We further diversified our live streaming offerings in 2021.
The Audiovisual Program Provisions apply to the provision of audio-visual program services to the public via internet (including mobile network) within the territory of the PRC. Providers of internet audio-visual program services are required to obtain a License for Online Transmission of Audio-visual Programs issued by GAPPRFT or complete certain registration procedures with GAPPRFT.
These provisions apply to the provision of audio-visual program services to the public via internet (including mobile network) within the territory of the PRC. Providers of internet audio-visual program services are required to obtain a License for Online Transmission of Audio-visual Programs issued by GAPPRFT or complete certain registration procedures with GAPPRFT.
The network publication services refer to the activities of providing network publications to the public through information networks; and the network publications refer to the digitalized works with the publishing features such as editing, producing and processing. The Administrative Measures on Network Publication also provide the detailed qualifications and application procedures for obtaining an Internet Publishing Services License.
The network publication services refer to the activities of providing network publications to the public through information networks; and the network publications refer to the digitalized works with the publishing features such as editing, producing and processing. These administrative measures also provide the detailed qualifications and application procedures for obtaining an Internet Publishing Services License.
To the extent that we provide an online communication service that is not exempted under the Broadcasting Act, the Infocomm Media Development Authority (the “IMDA”), namely the regulator of the information, communications and media sectors in Singapore, the IMDA may designate our online communication service as a regulated online communication service pursuant to Section 45K of the Broadcasting Act.
To the extent that we provide an online communication service that is not exempted under the Broadcasting Act, the Infocomm Media Development Authority, namely the regulator of the information, communications and media sectors in Singapore, the Infocomm Media Development Authority may designate our online communication service as a regulated online communication service pursuant to Section 45K of the Broadcasting Act.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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With a view to better presenting our revenues, we reclassified our revenues for the purpose of analysis at the beginning of 2022 by re-grouping previous four types, i.e. subscriptions, online advertising, product revenue, and cloud computing and other internet value-added services, into three types, i.e. cloud computing, subscriptions, and live streaming and other internet value-added services.
With a view to better presenting our revenues, we reclassified our revenues for the purpose of analysis at the beginning of 2022 by re-grouping the previous four types of revenues, i.e., subscriptions, online advertising, product revenue, and cloud computing and other internet value-added services, into three types of revenues, i.e., cloud computing, subscriptions, and live streaming and other internet value-added services.
Our other income, net increased by 189.5% from US$4.7 million in 2021 to US$13.5 million in 2022, primarily due to an increase in foreign exchange gains and reversal of certain outstanding payables that were past due for a long period of time and with a low probability of payment during the year. Income tax (expenses)/benefits .
Our other income, net increased by 189.5% from US$4.7 million in 2021 to US$13.5 million in 2022, primarily due to an increase in foreign exchange gains and reversal of certain outstanding payables that were past due for a long period of time and with a low probability of payment during the year. Income tax benefits/(expenses) .
Financing activities Net cash generated from financing activities amounted to US$6.6 million in 2022, primarily attributable to proceeds from bank borrowings of US$16.7 million, repayment of bank borrowings of US$3.3 million and repurchase of shares of US$6.7 million.
Net cash generated from financing activities amounted to US$6.6 million in 2022, primarily attributable to proceeds from bank borrowings of US$16.7 million, repayment of bank borrowings of US$3.3 million and repurchase of shares of US$6.7 million.
Our cost of revenue sharing of live streaming services increased by 196.7% from US$26.5 million in 2021 to US$78.6 million in 2022, primarily due to the increased fees we pay to broadcasters and talent agencies. Such increase is consistent with the growth in our live streaming revenue. Depreciation of servers and other equipment .
Our cost of live streaming services or revenue-sharing of the live streaming increased by 196.7% from US$26.5 million in 2021 to US$78.6 million in 2022, primarily due to the increased fees we pay to broadcasters and talent agencies. Such increase is consistent with the growth in our live streaming revenue. Depreciation of servers and other equipment .
We are the principal in the provision of the live streaming content and experience, which is considered as the performance obligation of us. We recognize revenue from sales of virtual gifts to the viewers when the relevant virtual gifts are presented to the performers or broadcasters or over the duration of stated period of the time-based item.
We are the principal in the provision of the live streaming content and experience, which is considered as the performance obligation of us. We recognize revenue from sales of virtual gifts to the viewers when the virtual gifts are presented to the performers or broadcasters or over the duration of stated period of the time-based item.
Our total revenues increased by 43.0% from US$239.6 million in 2021 to US$342.6 million in 2022, primarily due to an increase in revenue from our live streaming services, cloud computing services and subscription services. ● Revenue from subscription services increased by 10.3% from US$91.2 million in 2021 to US$100.6 million in 2022, primarily due to an increase in the number of subscribers from 4.39 million as of December 31, 2021 to 4.99 million as of December 31, 2022. ● Revenue from cloud computing services and products increased by 26.2% from US$94.8 million in 2021 to US$119.6 million in 2022, primarily due to the increased sales of cloud computing services as a result of our expanded service capabilities and increased demand from our major customers. 128 Table of Contents ● Revenues from live streaming and other internet value-added services increased by 128.2% from US$53.6 million in 2021 to US$122.4 million in 2022, primarily due to increased demand for our live streaming services and enhanced monetization capabilities.
Our total revenues increased by 43.0% from US$239.6 million in 2021 to US$342.6 million in 2022, primarily due to an increase in revenue from our live streaming services, cloud computing services and subscription services. ● Revenue from subscription services increased by 10.3% from US$91.2 million in 2021 to US$100.6 million in 2022, primarily due to an increase in the number of subscribers from 4.39 million as of December 31, 2021 to 4.99 million as of December 31, 2022. ● Revenue from cloud computing services and products increased by 26.2% from US$94.8 million in 2021 to US$119.6 million in 2022, primarily due to the increased sales of cloud computing services as a result of our expanded service capabilities and increased demand from our major customers. ● Revenues from live streaming and other internet value-added services increased by 128.2% from US$53.6 million in 2021 to US$122.4 million in 2022, primarily due to increased demand for our live streaming services and enhanced monetization capabilities.
If an uncertain tax position is taken or expected to be taken in a tax return, the tax benefit from that uncertain position is recognized in our consolidated financial statements if it is more likely than not that the position is sustainable upon examination by the relevant taxing authority.
If an uncertain tax position is taken or expected to be taken in a tax return, the tax benefit from that uncertain position is recognized in our consolidated financial statements if it is more likely than not that the position is sustainable upon examination by the taxing authority.
We provide users with quick and easy access to digital media content on the internet through our core product and services, available to users for free and for a subscription fee, respectively. Our acceleration product and services include Xunlei Accelerator and our subscription services (delivered through our product).
We provide users with quick and easy access to digital media content on the internet through our core product and services, available to users for free and for a subscription fee, respectively. Our acceleration product and services include Xunlei Accelerator and our subscription services delivered through our products.
For example, our subscription services offer users value-added services for speed. We intend to further monetize our user base and aim to convert users to subscribers by expanding our offering of value-added services, such as cloud-based storage and mobile access.
For example, our subscription services offer users value-added services for speed. We intend to further monetize our user base and aim to convert users to subscribers by expanding our offering of value-added services, such as cloud-based storage mobile and TV access.
As a result of the above, there was a net income of US$21.3 million in 2022, as compared with a net income of US$1.1 million in 2021. The change was primarily due to the increases in gross profit and other income. Net (loss)/income attributable to Xunlei Limited .
As a result of the above, there was a net income of US$21.3 million in 2022, as compared with a net income of US$1.1 million in 2021. The change was primarily due to the increases in gross profit and other income. Net income attributable to Xunlei Limited .
Risk Factors—Risks Related to Our Corporate Structure—PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from making loans to our PRC subsidiaries and variable interest entity and its subsidiaries or making additional capital contributions to our PRC subsidiaries, which may materially and adversely affect our liquidity and our ability to fund and expand our business.” As a result, uncertainties exist as to our ability to provide prompt financial support to our PRC subsidiaries or variable interest entity when needed.
Risk Factors—Risks Related to Our Corporate Structure—PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and government control of currency conversion may restrict or prevent us from making loans to our PRC subsidiaries and variable interest entity and its subsidiaries or making additional capital contributions to our PRC subsidiaries, which may materially and adversely affect our liquidity and our ability to fund and expand our business.” As a result, uncertainties exist as to our ability to provide prompt financial support to our PRC subsidiaries or variable interest entity when needed.
PRC value-added tax VAT payable on goods sold or taxable labor services provided by a general VAT taxpayer for a taxable period is the net balance of the output VAT for the period after crediting the input VAT for the period.
PRC value-added tax Value-added tax payable on goods sold or taxable labor services provided by a general value-added taxpayer for a taxable period is the net balance of the output value-added tax for the period after crediting the input value-added tax for the period.
We recorded income tax expenses of US$4.1 million in 2022, compared with income tax benefits of US$0.1 million in 2021. We recorded income tax expenses in 2022 primarily due to an increase in taxable profit. Net (loss)/income .
We recorded income tax expenses of US$4.1 million in 2022, compared with income tax benefits of US$0.1 million in 2021. We recorded income tax expenses in 2022 primarily due to an increase in taxable profit. Net income .
See “Forward-looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report on Form 20-F. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. 121 Table of Contents A.
See “Forward-looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report on Form 20-F. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. 113 Table of Contents A.
The details of how we manage the regulatory risk are described in “Certain risk and concentration” in Note 26 to our audited consolidated financial statements for the years ended December 31, 2020, 2021 and 2022. Non-controlling interests represent the portion of the net assets of a subsidiary attributable to interests that are not owned by our company.
The details of how we manage the regulatory risk are described in “Certain risk and concentration” in Note 26 to our audited consolidated financial statements for the years ended December 31, 2021, 2022 and 2023. Non-controlling interests represent the portion of the net assets of a subsidiary attributable to interests that are not owned by our company.
Our estimates of these inputs require subjective management judgment and are inherently uncertain. Changes in our estimates of these inputs may cause us to record impairment in the future. No goodwill impairment losses were recognized for the years ended December 31, 2020, 2021 and 2022 based on the impairment test performed by us.
Our estimates of these inputs require subjective management judgment and are inherently uncertain. Changes in our estimates of these inputs may cause us to record impairment in the future. No goodwill impairment losses were recognized for the years ended December 31, 2021, 2022 and 2023 based on the impairment test performed by us.
If a company is considered as a PRC resident enterprise for tax purposes, it would be subject to the PRC Enterprise Income Tax at the rate of 25% on its worldwide income after January 1, 2008. As of December 31, 2022, our company has not accrued for PRC tax on such basis.
If a company is considered as a PRC resident enterprise for tax purposes, it would be subject to the PRC Enterprise Income Tax at the rate of 25% on its worldwide income after January 1, 2008. As of December 31, 2023, our company has not accrued for PRC tax on such basis.
Our results of operations will continue to be affected by such general factors. Our results of operations are also directly affected by a number of company-specific factors, including: 122 Table of Contents Our ability to continue to enhance and innovate our service offerings, including our mobile products and our cloud computing services.
Our results of operations will continue to be affected by such general factors. Our results of operations are also directly affected by a number of company-specific factors, including: 114 Table of Contents Our ability to continue to enhance and innovate our service offerings, including our mobile products and our cloud computing services.
No goodwill impairment losses were recognized in 2020, 2021 and 2022 based on the impairment test performed by us. Consolidation The consolidated financial statements include the financial statements of Xunlei Limited, our subsidiaries, the VIE for which Xunlei Limited is the primary beneficiary and the subsidiaries of the VIE.
No goodwill impairment losses were recognized in 2021, 2022 and 2023 based on the impairment test performed by us. Consolidation The consolidated financial statements include the financial statements of Xunlei Limited, our subsidiaries, the VIE for which Xunlei Limited is the primary beneficiary and the subsidiaries of the VIE.
See Note 21 to the Consolidated Financial Statements for information regarding taxation. Impairment of goodwill Under U.S. GAAP, goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. Application of a goodwill impairment test requires significant management judgment.
See Note 21 to the consolidated financial statements for information regarding taxation. 133 Table of Contents Impairment of goodwill Under U.S. GAAP, goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. Application of a goodwill impairment test requires significant management judgment.
According to the EIT Law and its implementation rules, foreign enterprises, which have no commercial presence in the PRC but derive dividends, interest, rents, royalties and other income (including capital gains) from sources in the PRC, are subject to a 10% PRC withholding tax, or WHT (a further reduced WHT rate may be available according to the applicable double tax treaty or arrangement).
According to the PRC Enterprise Income Tax Law and its implementation rules, foreign enterprises which have no commercial presence in the PRC but derive dividends, interest, rents, royalties and other income (including capital gains) from sources in the PRC are subject to a 10% PRC withholding tax (a further reduced withholding tax rate may be available according to the applicable double tax treaty or arrangement).
The subscription fee is time-based and is collected up-front from subscribers. The terms of time-based subscriptions range from one month to twelve months, with the subscribers having the option to renew the contracts. The receipt of subscription fee is initially recorded as contract liabilities.
The subscription fee is duration-based and is collected up-front from subscribers. The terms of duration-based subscriptions range from one month to twelve months, with the subscribers having the option to renew the contracts. The receipt of subscription fee is initially recorded as contract liabilities.
The CECL methodology requires that the full amount of expected credit losses for the lifetime of the financial instrument be recorded at the time it is originated or acquired, considering relevant historical experience, current conditions and reasonable and supportable macroeconomic forecasts that affect the collectability of financial assets, and adjusted for changes in expected lifetime credit losses subsequently, which may require earlier recognition of credit losses.
Allowance for expected credit losses The current expected credit losses methodology requires that the full amount of expected credit losses for the lifetime of the financial instrument be recorded at the time it is originated or acquired, considering historical experience, current conditions and reasonable and supportable macroeconomic forecasts that affect the collectability of financial assets, and adjusted for changes in expected lifetime credit losses subsequently, which may require earlier recognition of credit losses.
GAAP”), which requires our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods.
GAAP, which requires our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods.
If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. We are involved in a number of cases pending in various courts.
If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. 127 Table of Contents We are involved in a number of cases pending in various courts.
We apply the quantitative assessment for the impairment test of goodwill as of December 31, 2021 and 2022. The impairment test for goodwill that determines the fair value of the reporting unit, and compares it to the carrying value of the assets and liabilities, including goodwill, of the reporting unit.
We apply the quantitative assessment for the impairment test of goodwill as of December 31, 2022 and 2023. The impairment test for goodwill that determines the fair value of the reporting unit, and compares it to the carrying value of the assets and liabilities, including goodwill, of the reporting unit.
Sales and marketing expenses consist primarily of salaries, sales commissions and benefits for our sales and marketing personnel and marketing and promotional expenses.
Sales and marketing expenses consist primarily of salaries and benefits for our sales and marketing personnel and marketing and promotional expenses.
We did not have any significant uncertain tax position and there was no effect on our financial position or results of operations as a result of implementing the ASC 740 “Income Taxes”. We recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense, if any.
We did not have any significant uncertain tax position and there was no effect on our financial position or results of operations as a result of implementing the ASC 740 “Income Taxes.” We recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense, if any.
The credit loss assessment for each pool was mainly based on past collection experience, consideration of current and future economic conditions and changes in our collection trends. Taxation and Uncertain Tax Positions Income taxes are accounted for under the asset and liability method.
The credit loss assessment for each pool was mainly based on past collection experience, consideration of current and future economic conditions and changes in our collection trends. 126 Table of Contents Taxation and uncertain tax positions Income taxes are accounted for under the asset and liability method.
Recent Accounting Pronouncements See Item 18 of Part III, “Financial Statements—Note 2—Summary of significant accounting policies—Recent accounting pronouncements.” 136 Table of Contents B. Liquidity and Capital Resources We have financed our operations primarily by using our existing internal cash reserves and borrowing bank loans.
Recent Accounting Pronouncements See Item 18 of Part III, “Financial Statements—Note 2—Summary of significant accounting policies—Recent accounting pronouncements.” B. Liquidity and Capital Resources We have financed our operations primarily by using our existing internal cash reserves and borrowing bank loans.
Any inability of CDN purchasers and Itui, especially those that accounted for a significant percentage of our accounts receivables in the past, to pay us in a timely manner may adversely affect our liquidity and cash flows. ​ 137 Table of Contents In the future, we may rely on dividends and other distributions on equity paid by our wholly owned PRC subsidiaries for our cash and financing requirements.
Any inability of CDN purchasers and Itui, especially those that accounted for a significant percentage of our accounts receivable in the past, to pay us in a timely manner may adversely affect our liquidity and cash flows. 128 Table of Contents In the future, we may rely on dividends and other distributions on equity paid by our wholly-owned PRC subsidiaries for our cash and financing requirements.
China Pursuant to the PRC EIT Law, which became effective on January 1, 2008 and last revised in December 2018, a 25% enterprise income tax rate is generally applicable to both foreign-invested enterprises and domestic enterprises, except where a special preferential rate applies.
China Pursuant to the PRC Enterprise Income Tax Law, effective on January 1, 2008 and last revised in December 2018, a 25% enterprise income tax rate is generally applicable to both foreign-invested enterprises and domestic enterprises, except where a special preferential rate applies.
In addition, the current EIT Law treats enterprises established outside the PRC with “effective management and control” located in the PRC as PRC resident enterprises for tax purposes. The term “effective management and control” is generally defined as exercising overall management and control over the business, personnel, accounting, properties, etc. of an enterprise.
In addition, the PRC Enterprise Income Tax Law treats enterprises established outside the PRC with “effective management and control” located in the PRC as PRC resident enterprises for tax purposes. The term “effective management and control” is generally defined as exercising overall management and control over the business, personnel, accounting, properties, etc. of an enterprise.
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2022.
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2023.
Subscription fees are time-based and are primarily collected up-front from subscribers on a monthly, quarterly or yearly basis. ● Cloud computing services and products. We provide cloud computing services to our customers, such as internet content providers, through our cost-efficient CDN services by crowdsourcing idle bandwidth from our users.
Subscription fees are duration-based and are primarily collected up-front from subscribers on a monthly, quarterly or annual basis. ● Cloud computing services and products. We provide cloud computing services to our customers, such as internet content providers, through our cost-efficient CDN services by crowdsourcing idle bandwidth from our users.
Our payment handling charges increased by 112.0% from US$3.1 million in 2021 to US$6.5 million in 2022, primarily due to an increase in the number of third-party payment service providers we cooperate with to collect fees for rendering live streaming services, the revenue of which increased by 200.4% as compared to that in 2021. Other costs .
Our payment handling charges increased by 112.0% from US$3.1 million in 2021 to US$6.5 million in 2022, primarily due to an increase in the number of third-party payment service providers we cooperate with to collect fees for rendering live streaming services, the revenue of which increased by 200.4% as compared to that in 2021. Cost of inventories sold .
Credit loss expenses/(write-back), net, primarily consist of credit losses allowances for accounts receivable, due from related parties and other receivables. The credit loss write-back in 2022 mainly represents reversal of credit losses allowance for certain receivables based on our assessment. Taxation Cayman Islands We are incorporated in the Cayman Islands.
Credit loss expenses/(write-back), net, primarily consist of credit losses allowances for accounts receivable, due from related parties and other receivables. The credit loss expenses in 2023 mainly represents accrual of credit losses allowance for certain receivables based on our assessment. Taxation Cayman Islands We are incorporated in the Cayman Islands.
We plan to provide one-stop services for our users, in terms of accessing content and storage and synchronization of content across devices, including mobile devices and PC. Our ability to maintain our technology leadership and cost-efficient infrastructure.
We plan to provide one-stop services for our users, in terms of accessing content and storage and synchronization of content across devices. Our ability to maintain our technology leadership and cost-efficient infrastructure.
Furthermore, we do not have any guarantees, retained or contingent interest in assets transferred to an unconsolidated entity, contractual arrangements that support the credit, liquidity or market risk for transferred assets; obligations that arise or could arise from variable interests held in an unconsolidated entity. 141 Table of Contents C.
Furthermore, we do not have any guarantees, retained or contingent interest in assets transferred to an unconsolidated entity, contractual arrangements that support the credit, liquidity or market risk for transferred assets; obligations that arise or could arise from variable interests held in an unconsolidated entity. C.
The 10% WHT is generally applicable to any dividends to be distributed from Giganology Shenzhen and Xunlei Computer to us out of any profits of Giganology Shenzhen and Xunlei Computer derived after January 1, 2008.
The 10% withholding tax is generally applicable to any dividends to be distributed from Giganology Shenzhen and Xunlei Computer to us out of any profits of Giganology Shenzhen and Xunlei Computer derived after January 1, 2008.
Our interest income increased by 162.5% from US$0.7 million in 2021 to US$1.9 million in 2022, primarily due to the increase in our bank deposits. 129 Table of Contents Interest expense . Our interest expense remained stable at US$0.1 million in 2021 and 2022. Other income, net .
Our interest income increased by 162.5% from US$0.7 million in 2021 to US$1.9 million in 2022, primarily due to the increase in our bank deposits. Interest expense . Our interest expense remained stable at US$0.1 million in 2021 and 2022. Other income, net .
Research and Development We believe that our commitment to research and development is an important contributing factor in our success. As of December 31, 2022, we had a team of 552 engineers. We provide our engineers with various continuing training programs and opportunities.
Research and Development We believe that our commitment to research and development is an important contributing factor in our success. As of December 31, 2023, we had a team of 559 engineers. We provide our engineers with various continuing training programs and opportunities.
See Note 12 to the consolidated financial statements for information regarding goodwill. Impairment of long-lived assets We evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable.
See Notes 2 (k) and 12 to the consolidated financial statements for information regarding goodwill. Impairment of long-lived assets We evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable.
An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. Inherent in the undiscounted future cash flows are assumptions and estimates derived from a review of business plan forecasts, expected growth rates, and market economy.
An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. Inherent in the undiscounted future cash flows are assumptions and estimates derived from a review of business plan forecasts, expected growth rates, and market economy. Changes in assumptions or estimates can materially affect the fair value measurement.
Live streaming revenues We operate certain live streaming platforms where users can access the platform, view the live streaming content provided by performers or broadcasters, and purchase virtual gifts which they can grant to performers or broadcasters in the live streaming platforms to show support for their favorite performers or broadcasters.
Live streaming and other internet value-added services revenues We operate certain live streaming platforms where users can access the platform, view the live streaming content provided by performers or broadcasters, and purchase virtual gifts which they can grant to performers or broadcasters in the live streaming platforms to show support for their favorite performers or broadcasters.
Although Xunlei Computer and Giganology Shenzhen had retained earnings as of December 31, 2021 and December 31, 2022, the directors of the company decided to reinvest the retained earnings permanently in China and therefore no such WHT is required.
Although Xunlei Computer and Giganology Shenzhen had retained earnings as of December 31, 2022 and December 31, 2023, the directors of the company decided to reinvest the retained earnings permanently in China and therefore no such withholding tax is required.
General and administrative expenses consist primarily of salaries and benefits, professional service fees and other administrative expenses. We expect our general and administrative expenses to increase in the future as we expect our business to continue to grow and as a result of general inflation. 126 Table of Contents Credit loss expenses/(write-back), net .
General and administrative expenses consist primarily of salaries and benefits, depreciation of property and equipment, professional service fees and other administrative expenses. We expect our general and administrative expenses to increase in the future as we expect our business to continue to grow and as a result of general inflation. Credit loss expenses/(write-back), net .
The 15% preferential tax rate is awarded to companies that are located in the western and certain other regions of China, including Ganzhou of Jiangxi Province, and operate in certain encouraged industries. Jiangxi Node is qualified for such preferential tax rate for both 2021 and 2022.
The 15% preferential tax rate is awarded to companies that are located in the western and certain other regions of China until December 31, 2030, including Ganzhou of Jiangxi Province, and operate in certain encouraged industries. Jiangxi Node is qualified for such preferential tax rate for 2021, 2022 and 2023.
In addition to the sales of our cloud computing services, we sell hardware devices that provide our users with easy access to our cloud computing services. Revenues from Cloud computing services and products contributed 34.9 % of our revenue in 2022. ● Live streaming and other internet value-added services .
In addition to the sales of our cloud computing services, we sell hardware devices that provide our users with easy access to our cloud computing services. Revenues from cloud computing services and products contributed 33.8 % of our revenue in 2023. ● Live streaming and other internet value-added services .
Revenues in each of 2021 and 2020 have been retrospectively reclassified so that the numbers can be compared and analyzed.
Revenues in 2021 have been retrospectively reclassified so that the numbers can be compared and analyzed.
Gross profit margin decreased by 8.9 percentage points from approximately 50.2% in 2021 to approximately 41.3% in 2022. Operating expenses .
Gross profit margin decreased by 8.9 percentage points from approximately 50.2% in 2021 to approximately 41.3% in 2022. 122 Table of Contents Operating expenses .
However, we plan to continue to increase the uplink capacity we crowdsource through our cloud computing services, which is expected to reduce our bandwidth cost incurred in our purchase from traditional suppliers, contribute to the cost efficiency of our overall infrastructure and generate additional revenue when we sell those capacity to our customers. 123 Table of Contents Our ability to control our costs and operating expenses.
However, we plan to continue to increase the uplink capacity we crowdsource through our cloud computing services, which is expected to reduce our bandwidth cost incurred in our purchase from traditional suppliers, contribute to the cost efficiency of our overall infrastructure and generate additional revenue when we sell those capacity to our customers.
E. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S.
Critical Accounting Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States, or U.S.
We generate revenues primarily through the following services: ● Subscription services . We provide subscription services for subscribers to enable faster and more reliable access to digital media content. Revenues from subscription services contributed to 29.4% of our revenue in 2022.
We generate revenues primarily through the following services: ● Subscription services . We provide subscription services for subscribers to enable faster and more reliable access to digital media content. Revenues from subscription services contributed 32.7% of our revenue in 2023.
Our bandwidth costs increased by 29.6% from US$80.7 million in 2021 to US$104.6 million in 2022, primarily due to increased demand for our cloud computing services, which was consistent with the growth in our cloud computing services. Cost of inventories sold .
Our bandwidth costs increased by 29.6% from US$80.7 million in 2021 to US$104.6 million in 2022, primarily due to increased demand for our cloud computing services, which was consistent with the growth in our cloud computing services. Cost of live streaming services or revenue-sharing of the live streaming .
We introduced our subscription services in March 2009. We generate revenues from providing our users with exclusive services, such as access to high-speed online transmission, premium acceleration or access privileges, for a time-based subscription fee.
We generate revenues from providing our users with exclusive services, such as access to high-speed online transmission, premium acceleration or access privileges, for a duration-based subscription fee.
Bandwidth is a significant component of our cost of our total revenues. We expect our bandwidth costs to increase, but we anticipate the costs as a percentage of revenues would decline as we plan to rely more on crowdsourced bandwidth and further diversify our procurement sources. For details on our cloud computing services and products, see “Item 4.
We expect our bandwidth costs to increase, but we anticipate the costs as a percentage of revenues would decline as we plan to rely more on crowdsourced bandwidth and further diversify our procurement sources. For details on our cloud computing services and products, see “Item 4. Information on the Company—B.
Our cost of inventories sold increased by 47.0% from US$1.5 million in 2021 to US$2.2 million in 2022, primarily due to the increased sales of our cloud computing products. Cost of revenue sharing of live streaming .
Our cost of inventories sold increased by 47.0% from US$1.5 million in 2021 to US$2.2 million in 2022, primarily due to the increased sales of our cloud computing products. Other costs .
As of December 31, 2022, the amount of the restricted net assets, which represents registered capital and additional paid-in capital cumulative appropriations made to statutory reserves, was US$172.1 million.
As of December 31, 2023, the amount of the restricted net assets, which represents registered capital and additional paid-in capital cumulative appropriations made to statutory reserves, was US$173.2 million.
As we have granted restricted shares with service-only condition, we elected to recognize compensation costs net of estimated forfeitures on a straight-line basis over the requisite service period, which is generally the same as the vesting period.
We measure share-based compensation based on the stock price at the grant date. As we have granted restricted shares with service-only condition, we elected to recognize compensation costs net of estimated forfeitures on a straight-line basis over the requisite service period, which is generally the same as the vesting period.
If the carrying amount of a reporting unit exceeds its fair value, the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized as impairment. 133 Table of Contents Our goodwill was attributable to our company as a whole.
If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized as impairment. Our goodwill was attributable to our company as a whole.
Although the results of unsettled litigation and claims cannot be predicted with certainty, we do not expect that the outcome of these lawsuits will result in the amounts accrued materially different from the range of reasonably possible losses.
We are in the process of appealing certain judgments for which the losses had been accrued. Although the results of unsettled litigation and claims cannot be predicted with certainty, we do not expect that the outcome of these lawsuits will result in the amounts accrued materially different from the range of reasonably possible losses.
The standard subscription fee is RMB10 (US$1.5) per month or RMB99 (US$14.6) per year, and we also offer premium subscription packages with prices at RMB15 (US$2.2) per month or RMB149 (US$22.0) per year or RMB30 (US$4.4) per month or RMB288 (US$41.4) per year to cater to subscribers’ different demand for acceleration speed and user experience, which are becoming increasingly popular among our subscribers.
The standard subscription fee is RMB10 (US$1.41) per month or RMB99 (US$13.98) per year, and we also offer premium subscription packages with prices at RMB15 (US$2.12) per month or RMB149 (US$21.04) per year or RMB30 (US$4.24) per month or RMB288 (US$40.66) per year to cater to subscribers’ different demand for acceleration speed and user experience, which are becoming increasingly popular among our subscribers.
If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand, we may seek to issue debt or equity securities or obtain additional credit facilities. 138 Table of Contents Cash Flows The following table sets forth a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2020 2021 2022 ​ ​ (in thousands of US$) Net cash (used in)/generated from operating activities (13,911) 19,480 ​ 51,109 Net cash (used in)/generated from investing activities (20,756) (32,619) ​ 11,758 Net cash generated from/(used in) financing activities 2,679 (223) ​ 6,641 Net (decrease)/increase in cash, cash equivalents and restricted cash (31,988) (13,362) ​ 69,508 Cash, cash equivalents and restricted cash at the beginning of year 165,448 138,789 ​ 127,436 Effect of exchange rates on cash, cash equivalents, and restricted cash 5,329 2,009 ​ (12,136) Cash, cash equivalents and restricted cash at end of year 138,789 127,436 ​ 184,808 ​ As of December 31, 2022, we had cash or cash equivalents, including restricted cash, of US$184.8 million in total, including RMB752.7 million (US$108.1 million) and US$31.2 million located within the PRC, of which RMB465.0 million (US$66.8 million) and US$0.6 million was held by the VIE, Shenzhen Xunlei, and its subsidiaries.
If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand, we may seek to issue debt or equity securities or obtain additional credit facilities. 129 Table of Contents Cash Flows The following table sets forth a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2021 2022 2023 ​ ​ (in thousands of US$) Net cash generated from operating activities 19,480 ​ 51,109 ​ 25,716 Net cash (used in)/generated from investing activities (32,619) ​ 11,758 ​ (23,898) Net cash (used in)/generated from financing activities (223) ​ 6,641 ​ (13,524) Net (decrease)/increase in cash, cash equivalents and restricted cash (13,362) ​ 69,508 ​ (11,706) Cash, cash equivalents and restricted cash at the beginning of year 138,789 ​ 127,436 ​ 184,808 Effect of exchange rates on cash, cash equivalents, and restricted cash 2,009 ​ (12,136) ​ (2,300) Cash, cash equivalents and restricted cash at end of year 127,436 ​ 184,808 ​ 170,802 ​ As of December 31, 2023, we had cash or cash equivalents of US$170.8 million in total, including RMB648.2 million (US$91.5 million) and US$32.6 million located within the PRC, of which RMB259.5 million (US$36.6 million) and US$0.6 million was held by Shenzhen Xunlei and its subsidiaries.
We had a net loss attributable to Xunlei Limited of US$13.8 million in 2020 and a net income of US$1.2 million and US$21.5 million in 2021 and 2022, respectively.
We had a net income attributable to Xunlei Limited of US$1.2 million, US$21.5 million and US$14.2 million in 2021, 2022 and 2023, respectively.
Cost of inventories sold mainly consists of the cost associated with the sale of hardware devices in connection with our cloud computing services such as OneThing Cloud and OneThing Edge Station, a product similar to OneThing Cloud but with higher computing power. Depreciation of servers and other equipment .
Cost of inventories sold mainly consists of the cost associated with the sale of hardware devices in connection with our cloud computing services such as OneThing Edge Cube and OneThing Edge Station. Depreciation of servers and other equipment .
Our results of operations depend on our ability to control our costs and operating expenses. We expect our bandwidth costs to increase as we grow our business, in particular CDN business, although we expect such costs to be partly offset by the fact that we expect to source an increasing amount of bandwidth from our cloud computing services.
We expect our bandwidth costs to increase as we grow our business, in particular CDN business, although we expect such costs to be partly offset by the fact that we expect to source an increasing amount of bandwidth from our cloud computing services.
Long term debt obligations Our long term debt obligations primarily consist of bank borrowings and estimated interest payments. Our long term loan is bank borrowing for the construction of our headquarters building, and the interest rate is calculated based on the Loan Prime Rate plus 15 basis points.
Our long term loan is bank borrowing for the construction of our headquarters building, and the interest rate is calculated based on the loan prime rate plus 15 basis points.
The following table sets forth the components of our cost of revenues by amounts and percentages of our revenues for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 2022 ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Bandwidth costs 62,384 33.4 80,720 33.7 ​ 104,580 ​ 30.5 Cost of live streaming services or revenue-sharing of the live streaming 15,640 8.4 26,506 11.1 ​ 78,636 ​ 23.0 Cost of inventories sold 1,660 0.9 1,516 0.6 ​ 2,228 ​ 0.7 Depreciation of servers and other equipment 6,247 3.3 4,805 2.0 ​ 1,363 ​ 0.4 Payment handling charges 1,459 0.8 3,066 1.3 ​ 6,500 ​ 1.9 Other costs 5,247 2.8 1,990 0.8 ​ 6,747 ​ 1.9 Total 92,637 49.6 118,603 49.5 ​ 200,054 ​ 58.4 ​ Bandwidth costs .
The following table sets forth the components of our cost of revenues by amounts and percentages of our revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 2023 ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Bandwidth costs 80,720 33.7 ​ 104,580 ​ 30.5 ​ 112,522 ​ 30.8 Cost of live streaming services or revenue-sharing of the live streaming 26,506 11.1 ​ 78,636 ​ 23.0 ​ 67,302 ​ 18.4 Depreciation of servers and other equipment 4,805 2.0 ​ 1,363 ​ 0.4 ​ 740 ​ 0.2 Payment handling charges 3,066 1.3 ​ 6,500 ​ 1.9 ​ 8,494 ​ 2.3 Cost of inventories sold 1,516 0.6 ​ 2,228 ​ 0.7 ​ 5,911 ​ 1.7 Other costs 1,990 0.8 ​ 6,747 ​ 1.9 ​ 5,680 ​ 1.6 Total 118,603 49.5 ​ 200,054 ​ 58.4 ​ 200,649 ​ 55.0 ​ Bandwidth costs .
Revenues from live streaming and other internet value-added services increased from US$38.0 million in 2020 to US$53.6 million in 2021 and further to US$122.4 million in 2022. Revenues from live streaming and other internet value-added services were generated primarily from our live streaming services, online advertising services, online games and other technical services.
Revenues from live streaming and other internet value-added services increased from US$53.6 million in 2021 to US$122.4 million in 2022 but slightly decreased to US$122.2 million in 2023. Revenues from live streaming and other internet value-added services were generated primarily from our live streaming services, online advertising services, online games and other technical services.
Bandwidth costs consist of the fees we pay to telecommunications carriers and other service providers for telecommunications services and for hosting our servers at their internet data centers and the fees we compensate users of our ZQB and OneThing Cloud devices for the use of their idle uplink capacity.
Bandwidth costs consist of the fees we pay to telecommunications carriers and other service providers for telecommunications services and for hosting our servers at their internet data centers and the fees we compensate users of our cloud computing hardware devices for the use of their idle uplink capacity. Bandwidth is a significant component of our cost of our total revenues.
Our company will continue to monitor its tax status. 127 Table of Contents Hong Kong Our subsidiaries in Hong Kong are subject to 16.5% income tax on their taxable income generated from operations in Hong Kong. Singapore Our subsidiaries incorporated in Singapore were subject to 17% of their taxable income.
Our company will continue to monitor its tax status. Hong Kong Our subsidiaries in Hong Kong are subject to 16.5% income tax on their taxable income generated from operations in Hong Kong.
As of the date of this annual report, we have five lawsuits pending against us relating to the alleged copyright infringement and claims for other damages, with an aggregate amount of claimed damages of approximately RMB5.6 million (US$0.8 million) which occurred before December 31, 2022.
As of the date of this annual report, we have fourteen lawsuits pending against us relating to the alleged copyright infringement and claims for other damages, with an aggregate amount of claimed damages of approximately RMB20.1 million (US$2.9 million) which occurred before December 31, 2023.
Other internet value-added services primarily include online advertising, online game and other technical services. Revenues from live streaming and other internet value-added services accounted for 35.7% of our total revenue in 2022. Our total revenues increased from US$186.7 million in 2020 to US$239.6 million in 2021, and further increased to US$342.6 million in 2022.
Other internet value-added services primarily include online advertising, online games and other technical services. Revenues from live streaming and other internet value-added services accounted for 33.5% of our total revenue in 2023. Our total revenues increased from US$239.6 million in 2021 to US$342.6 million in 2022, and further increased to US$364.9 million in 2023.
As these third-party advertising platforms were viewed as customers in these transactions, revenue was recognized monthly based on the data publicized on the platforms and pre-agreed sharing portion. Revenues from online game revenues. We enter into a series of technical cooperation agreements with third-party online game operators.
Revenue arising from such transactions is recognized monthly based on the data publicized on the platforms and pre-agreed sharing portion. Revenues from online game revenues. We enter into a series of technical cooperation agreements with third-party online game operators.
The following table sets forth the principal components of our total revenues by amounts and percentages of our revenues for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 2022 ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Cloud computing services and products 64,345 34.5 94,813 39.6 ​ 119,635 ​ 34.9 Subscriptions 84,299 45.1 91,174 38.0 ​ 100,557 ​ 29.4 Live streaming and other internet value-added services 38,039 20.4 53,614 22.4 ​ 122,372 ​ 35.7 Total 186,683 100.0 239,601 100.0 ​ 342,564 ​ 100.0 ​ Cloud computing services and products.
The following table sets forth the principal components of our total revenues by amounts and percentages of our revenues for the years presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 2023 ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Cloud computing services and products 94,813 39.6 ​ 119,635 ​ 34.9 ​ 123,411 ​ 33.8 Subscriptions 91,174 38.0 ​ 100,557 ​ 29.4 ​ 119,343 ​ 32.7 Live streaming and other internet value-added services 53,614 22.4 ​ 122,372 ​ 35.7 ​ 122,157 ​ 33.5 Total 239,601 100.0 ​ 342,564 ​ 100.0 ​ 364,911 ​ 100.0 ​ Cloud computing services and products .
The results of operations in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 2022 ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Total revenue, net of rebates and discounts 186,683 100.0 239,601 100.0 ​ 342,564 ​ 100.0 Business taxes and surcharge (312) (0.2) (819) (0.3) ​ (1,067) ​ (0.3) Total net revenues 186,371 99.8 238,782 99.7 ​ 341,497 ​ 99.7 Cost of revenues (92,637) (49.6) (118,603) (49.5) ​ (200,054) ​ (58.4) Gross profit 93,734 50.2 120,179 50.2 ​ 141,443 ​ 41.3 Research and development expenses (55,463) (29.7) (61,859) (25.8) ​ (67,680) ​ (19.8) Sales and marketing expenses (18,064) (9.7) (24,569) (10.3) ​ (24,841) ​ (7.3) General and administrative expenses (33,910) (18.2) (36,868) (15.4) ​ (39,701) ​ (11.6) Credit loss (expenses)/write-back, net (5,090) (2.7) (1,206) (0.5) ​ 844 ​ 0.3 Total operating expenses (112,527) (60.3) (124,502) (52.0) ​ (131,378) ​ (38.4) Operating (loss)/income (18,793) (10.1) (4,323) (1.8) ​ 10,065 ​ 2.9 Interest income 1,471 0.8 723 0.3 ​ 1,898 ​ 0.6 Interest expense (406) (0.2) (95) — ​ (93) ​ — Other income, net 4,737 2.5 4,678 2.0 ​ 13,545 ​ 4.0 (Loss)/income before income tax (12,991) (7.0) 983 0.4 ​ 25,415 ​ 7.4 Income tax (expenses)/benefits (1,149) (0.6) 125 0.1 ​ (4,068) ​ (1.2) Net (loss)/income for the year (14,140) (7.6) 1,108 0.5 ​ 21,347 ​ 6.2 Less: Net loss attributable to the non-controlling interest (300) (0.2) (83) — ​ (116) ​ (0.1) Net (loss)/income attributable to Xunlei Limited (13,840) (7.4) 1,191 0.5 ​ 21,463 ​ 6.3 ​ Year ended December 31, 2022 compared with year ended December 31, 2021.
The results of operations in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 2023 ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Total revenue, net of rebates and discounts 239,601 100.0 ​ 342,564 ​ 100.0 ​ 364,911 ​ 100.0 Business taxes and surcharge (819) (0.3) ​ (1,067) ​ (0.3) ​ (1,189) ​ (0.3) Total net revenues 238,782 99.7 ​ 341,497 ​ 99.7 ​ 363,722 ​ 99.7 Cost of revenues (118,603) (49.5) ​ (200,054) ​ (58.4) ​ (200,649) ​ (55.0) Gross profit 120,179 50.2 ​ 141,443 ​ 41.3 ​ 163,073 ​ 44.7 Research and development expenses (61,859) (25.8) ​ (67,680) ​ (19.8) ​ (74,201) ​ (20.3) Sales and marketing expenses (24,569) (10.3) ​ (24,841) ​ (7.3) ​ (43,509) ​ (11.9) General and administrative expenses (36,868) (15.4) ​ (39,701) ​ (11.6) ​ (46,875) ​ (12.8) Credit loss (expenses)/write-back, net (1,206) (0.5) ​ 844 ​ 0.3 ​ (100) ​ (0.0) Total operating expenses (124,502) (52.0) ​ (131,378) ​ (38.4) ​ (164,685) ​ (45.0) Operating (loss)/income (4,323) (1.8) ​ 10,065 ​ 2.9 ​ (1,612) ​ (0.3) Interest income 723 0.3 ​ 1,898 ​ 0.6 ​ 4,619 ​ 1.3 Interest expense (95) — ​ (93) ​ — ​ (1,514) ​ (0.4) Other income, net 4,678 2.0 ​ 13,545 ​ 4.0 ​ 16,904 ​ 4.6 Income before income tax 983 0.4 ​ 25,415 ​ 7.4 ​ 18,397 ​ 5.2 Income tax benefits/(expenses) 125 0.1 ​ (4,068) ​ (1.2) ​ (4,131) ​ (1.1) Net income for the year 1,108 0.5 ​ 21,347 ​ 6.2 ​ 14,266 ​ 4.1 Less: Net (loss)/income attributable to the non-controlling interest (83) — ​ (116) ​ (0.1) ​ 41 ​ — Net income attributable to Xunlei Limited 1,191 0.5 ​ 21,463 ​ 6.3 ​ 14,225 ​ 4.1 ​ Year ended December 31, 2023 compared with year ended December 31, 2022.
A subsidiary is an entity in which we, directly or indirectly, control more than one-half of the voting power, or has the power to appoint or remove the majority of the members of the board of directors to cast a majority of the votes at meetings of the board of directors or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.
All transactions and balances among our subsidiaries, the variable interest entity and us have been eliminated upon consolidation. 125 Table of Contents A subsidiary is an entity in which we, directly or indirectly, control more than one-half of the voting power, or has the power to appoint or remove the majority of the members of the board of directors to cast a majority of the votes at meetings of the board of directors or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.
Information on the Company—B. Business Overview.” 125 Table of Contents Cost of live streaming services . Cost of live streaming services mainly represents the fees we pay to broadcasters and talent agencies. We expect such cost to increase in the near future. Cost of inventories sold .
Business Overview.” Cost of live streaming services or revenue-sharing of the live streaming . Cost of live streaming services or revenue-sharing of the live streaming mainly represents the fees we pay to broadcasters and talent agencies. We expect such cost to increase in the near future. Cost of inventories sold .
The following table sets forth the components of our operating expenses by amounts and percentages of our revenues for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 2022 ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Research and development expenses 55,463 29.7 61,859 25.8 ​ 67,680 ​ 19.8 Sales and marketing expenses 18,064 9.7 24,569 10.3 ​ 24,841 ​ 7.3 General and administrative expenses 33,910 18.2 36,868 15.4 ​ 39,701 ​ 11.6 Credit loss expenses/(write-back), net 5,090 2.7 1,206 0.5 ​ (844) ​ (0.3) Total 112,527 60.3 124,502 52.0 ​ 131,378 ​ 38.4 ​ Research and development expenses .
The following table sets forth the components of our operating expenses by amounts and percentages of our revenues for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 2023 ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Research and development expenses 61,859 25.8 ​ 67,680 ​ 19.8 ​ 74,201 ​ 20.3 Sales and marketing expenses 24,569 10.3 ​ 24,841 ​ 7.3 ​ 43,509 ​ 11.9 General and administrative expenses 36,868 15.4 ​ 39,701 ​ 11.6 ​ 46,875 ​ 12.8 Credit loss expenses/(write-back), net 1,206 0.5 ​ (844) ​ (0.3) ​ 100 ​ 0.0 Total 124,502 52.0 ​ 131,378 ​ 38.4 ​ 164,685 ​ 45.0 ​ Research and development expenses .

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The corporate governance and nominating committee assists the board in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
The nominating and corporate governance committee assists the board in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
The corporate governance and nominating committee is responsible for, among other things: ● recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, age, skills, experience and availability of service to us; ● selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the corporate governance and nominating committee itself; ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
The nominating and corporate governance committee is responsible for, among other things: ● recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, age, skills, experience and availability of service to us; ● selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
At any time and from time to time, our board of directors may terminate, amend or modify the 2020 Plan; provided, however, that (a) to the extent necessary and desirable to comply with applicable laws or stock exchange rules, shareholder approval is required for any amendment in such a manner and to such a degree as required, unless we decide to follow home country practice, and (b) unless we decide to follow home country practice, shareholder approval is required for any amendment to the Amended and Restated 2020 Plan that (i) increases the number of shares available under the Amended and Restated 2020 Plan, or (ii) permits the committee to extend the term of the Amended and Restated 2020 Plan or the exercise period for an option beyond ten years from the date of grant.
At any time and from time to time, our board of directors may terminate, amend or modify the 2020 Plan; provided, however , that (a) to the extent necessary and desirable to comply with applicable laws or stock exchange rules, shareholder approval is required for any amendment in such a manner and to such a degree as required, unless we decide to follow home country practice, and (b) unless we decide to follow home country practice, shareholder approval is required for any amendment to the 2020 Plan that (i) increases the number of shares available under the 2020 Plan, or (ii) permits the committee to extend the term of the 2020 Plan or the exercise period for an option beyond ten years from the date of grant.
The compensation committee is responsible for, among other things: ● reporting regularly to the board; ● reviewing the total compensation package for our two most senior executives and making recommendations to the board with respect to it; ● approving and overseeing the total compensation package for our executives other than the two most senior executives; ● reviewing the compensation of our directors and making recommendations to the board with respect to it; and ● periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, and employee pension and welfare benefit plans. 149 Table of Contents Corporate governance and nominating committee Our corporate governance and nominating committee consists of Ms.
The compensation committee is responsible for, among other things: ● reporting regularly to the board; ● reviewing the total compensation package for our two most senior executives and making recommendations to the board with respect to it; ● approving and overseeing the total compensation package for our executives other than the two most senior executives; ● reviewing the compensation of our directors and making recommendations to the board with respect to it; and ● periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, and employee pension and welfare benefit plans. 139 Table of Contents Nominating and corporate governance committee Our nominating and corporate governance committee consists of Ms.
The following table summarizes, as of March 31, 2023, the outstanding awards granted to our executive officers and directors under the Amended and Restated 2020 plan. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of restricted ​ Exercise price ​ ​ ​ ​ Name shares awarded (1) (US$/share) Date of grant Date of expiration Jinbo Li 6,693,040 — May 25, 2021 — Yubo Zhang ​ 6,693,040 ​ — ​ May 25, 2021 ​ — ​ 9,725,750 — ​ March 13, 2023 — Naijiang (Eric) Zhou * — ​ March 1, 2018 — Jenny Wenjie Wu, ​ * ​ — ​ June 23, 2014 ​ — ​ * — ​ April 13, 2018 — ​ ​ * ​ — ​ April 29, 2021 ​ — Ya Li ​ * ​ — ​ March 7, 2017 ​ — ​ ​ * ​ — ​ April 13, 2018 ​ — ​ ​ * ​ — ​ April 29, 2021 ​ — (1) The number in this column does not include the common shares issued to the grantee upon vesting of restricted shares. * Less than one percent of our total outstanding share capital.
The following table summarizes the awards granted to our executive officers and directors under the 2020 plan as of March 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of restricted ​ Exercise price ​ ​ ​ ​ Name share units awarded (1) (US$/share) Date of grant Date of expiration Jinbo Li 6,693,040 — May 25, 2021 — Yubo Zhang ​ 6,693,040 ​ — ​ May 25, 2021 ​ — ​ 9,725,750 — ​ March 13, 2023 ​ Naijiang (Eric) Zhou * — ​ March 1, 2018 — Jenny Wenjie Wu ​ * ​ — ​ June 23, 2014 ​ — ​ * — ​ April 13, 2018 — ​ ​ * ​ — ​ April 29, 2021 ​ — Ya Li ​ * ​ — ​ March 7, 2017 ​ — ​ ​ * ​ — ​ April 13, 2018 ​ — ​ ​ * ​ — ​ April 29, 2021 ​ — (1) The number in this column does not include the common shares issued to the grantee upon vesting of restricted shares. * Less than one percent of our total outstanding share capital.
In addition, we paid approximately US$0.5 million in pension, housing funds, transportation subsidies and commercial insurance to our executive officers, and we did not set aside or accrued any amount to provide such benefits to our non-executive directors.
In addition, we paid approximately US$0.4 million in pension, housing funds, transportation subsidies and commercial insurance to our executive officers, and we did not set aside or accrued any amount to provide such benefits to our non-executive directors.
The Amended and Restated 2020 Plan shall be administered by the board or the compensation committee of the board to whom the board shall delegate the authority to grant or amend awards to participants other than any of the compensation committee members and independent directors. Award agreement .
The 2020 Plan shall be administered by the board or the compensation committee of the board to whom the board shall delegate the authority to grant or amend awards to participants other than any of the compensation committee members and independent directors. Award agreement .
Zhou has extensive professional experience covering corporate finance, financial planning and analysis, domestic and international investment project due diligence, and mutual fund and private equity investment research and management in the U.S. and in China. Most recently, Mr. Zhou was an interim chief financial officer at ChinaCache International Holdings Limited. Mr.
Zhou has extensive professional experience covering corporate finance, financial planning and analysis, domestic and international investment project due diligence, and mutual fund and private equity investment research and management in the U.S. and in China. Furthermore, Mr. Zhou was an interim chief financial officer at ChinaCache International Holdings Limited. Mr.
Except as otherwise provided by the committee or pursuant to the Amended and Restated 2020 Plan, no awards shall be assigned, transferred, or otherwise disposed of other than by will or the laws of descent and distribution. Termination . Unless terminated earlier, the 2020 Plan will expire automatically in June 2030.
Except as otherwise provided by the committee or pursuant to the Amended and Restated 2020 Plan, no awards shall be assigned, transferred, or otherwise disposed of other than by will or the laws of descent and distribution. 136 Table of Contents Termination . Unless terminated earlier, the 2020 Plan will expire automatically in June 2030.
We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit committee Our audit committee consists of Ms. Jenny Wenjie Wu and Mr. Ya Li, and is chaired by Ms. Jenny Wenjie Wu. Our board of directors has determined that each of Ms. Jenny Wenjie Wu and Mr.
We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. 138 Table of Contents Audit committee Our audit committee consists of Ms. Jenny Wenjie Wu and Mr. Ya Li, and is chaired by Ms. Jenny Wenjie Wu. Our board of directors has determined that each of Ms.
In addition, the office of a director will be vacated if such director (a) dies, becomes bankrupt or makes any arrangement or composition with his creditors, (b) is found to be or becomes of unsound mind, or (c) resigns his office by notice in writing to us. D.
In addition, the office of a director will be vacated if such director (a) dies, becomes bankrupt or makes any arrangement or composition with his creditors, (b) is found to be or becomes of unsound mind, or (c) resigns his office by notice in writing to us. 140 Table of Contents D.
Zhou obtained a bachelor’s degree with honors in Petroleum Management Engineering from China Petroleum University, and both MBA in Finance and Ph.D. in Interdisciplinary Energy and Mineral Resources from the University of Texas at Austin. Mr. Zhou is a CFA charter holder. B.
Zhou obtained a bachelor’s degree with honors in Petroleum Management Engineering from China Petroleum University, and both MBA in Finance and Ph.D. in Interdisciplinary Energy and Mineral Resources from the University of Texas at Austin. Mr. Zhou is a CFA charter holder. 135 Table of Contents B.
Li founded Itui International Inc., a company focusing on developing mobile applications for social networking services, in 2014 and acted as its chairman and chief executive officer since then. Mr. Li received his bachelor’s degree in 1998 from Shandong University in China and master’s degree in 2001 from Peking University in China. Mr.
Li founded Itui International Inc., a company focusing on developing mobile applications for social networking services, in 2014 and acted as its chairman and chief executive officer since then. Mr. Li received his bachelor’s degree in 1998 from Shandong University in China and master’s degree in 2001 from Peking University in China. 134 Table of Contents Mr.
Board Practices Board of Directors Our board of directors consists of seven directors. A director is not required to hold any shares in our company to qualify to serve as a director.
Board Practices Board of Directors Our board of directors consists of five directors. A director is not required to hold any shares in our company to qualify to serve as a director.
Compensation For the fiscal year ended December 31, 2022, we paid an aggregate of approximately US$1.0 million in cash to our executive officers, and we paid approximately US$0.2 million in cash compensation to our non-executive directors.
Compensation For the fiscal year ended December 31, 2023, we paid an aggregate of approximately US$1.6 million in cash to our executive officers, and we paid approximately US$0.2 million in cash compensation to our non-executive directors.
Ya Li satisfies the “independence” requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended, and Rule 5605(a)(2) of the NASDAQ Listing Rules. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Jenny Wenjie Wu and Mr. Ya Li satisfies the “independence” requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended, and Rule 5605(a)(2) of the Nasdaq Listing Rules. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Board Diversity Matrix Subject to the Nasdaq Stock Market rules, the below table sets forth our board diversity matrix as of the date of this annual report. ​ ​ ​ ​ ​ ​ ​ ​ ​ Board Diversity Matrix Country of Principal Executive Offices People’s Republic of China ​ Foreign Private Issuer ​ Yes ​ Disclosure Prohibited Under Home Country Law ​ No ​ Total Number of Directors ​ 7 ​ ​ ​ Female Male Non-Binary Did Not Disclose Gender ​ Part I: Gender Identity ​ ​ ​ ​ ​ ​ ​ ​ ​ Directors ​ 1 ​ 6 ​ 0 ​ 0 ​ Part II: Demographic Background ​ ​ ​ ​ ​ ​ ​ ​ ​ Underrepresented Individual in Home Country Jurisdiction ​ 0 ​ LGBTQ ​ 0 ​ Did Not Disclose Demographic Background ​ 1 ​ ​ 148 Table of Contents Committees of the Board of Directors We have established an audit committee, a compensation committee and a nominating and corporate governance committee under the board of directors.
Board Diversity Matrix The below table sets forth our board diversity matrix as of the date of this annual report. ​ ​ ​ ​ ​ ​ ​ ​ ​ Board Diversity Matrix Country of Principal Executive Offices People’s Republic of China ​ Foreign Private Issuer ​ Yes ​ Disclosure Prohibited Under Home Country Law ​ No ​ Total Number of Directors ​ 5 ​ ​ ​ Female Male Non-Binary Did Not Disclose Gender ​ Part I: Gender Identity ​ ​ ​ ​ ​ ​ ​ ​ ​ Directors ​ 1 ​ 4 ​ 0 ​ 0 ​ Part II: Demographic Background ​ ​ ​ ​ ​ ​ ​ ​ ​ Underrepresented Individual in Home Country Jurisdiction ​ 0 ​ LGBTQ ​ 0 ​ Did Not Disclose Demographic Background ​ 0 ​ ​ Committees of the Board of Directors We have established an audit committee, a compensation committee and a nominating and corporate governance committee under the board of directors.
In general, the plan administrator determines the vesting schedule, which is set forth in the award agreement. 146 Table of Contents Transfer restrictions .
In general, the plan administrator determines the vesting schedule, which is set forth in the award agreement. Transfer restrictions .
For share incentive grants to our officers and directors under our share incentive plan and restricted share grants outside the share incentive plan, see “—Share Incentive Plan.” 145 Table of Contents Share Incentive Plan Our board of directors approved the termination of the 2010 share incentive plan, 2013 share incentive plan and 2014 share incentive plan (the “Existing Plans”), and adopted a 2020 share incentive plan, or the 2020 Plan, on June 30, 2020.
For share incentive grants to our officers and directors under our share incentive plan and restricted share grants outside the share incentive plan, see “—Share Incentive Plan.” Share Incentive Plan On June 30, 2020, our board of directors approved the termination of the 2010 share incentive plan, the 2013 share incentive plan and the 2014 share incentive plan, or collectively, the Terminated Plans, and adopted a 2020 share incentive plan, or the 2020 Plan.
A shareholder may in certain circumstances have rights to damages if a duty owed by the directors is breached. ​ 150 Table of Contents Terms of Directors and Executive Officers Our directors may be elected by an ordinary resolution of our shareholders, or by the affirmative vote of a simple majority of our directors (which should include one non-independent director) present and voting at a meeting of our board of directors, and shall hold office until the expiration of his term and until his successor has been elected and qualified, or until such time as they are removed from office by ordinary resolution or the unanimous written resolution of all shareholders.
Terms of Directors and Executive Officers Our directors may be elected by an ordinary resolution of our shareholders, or by the affirmative vote of a simple majority of our directors (which should include one non-independent director) present and voting at a meeting of our board of directors, and shall hold office until the expiration of his term and until his successor has been elected and qualified, or until such time as they are removed from office by ordinary resolution or the unanimous written resolution of all shareholders.
Each officer also agrees that during the term of employment and within one year of termination of employment, he or she will not approach clients, customers or contacts of our company or other persons or entities introduced to such officer in the his/her capacity as a representative of our company for the purposes of doing business with such persons or entities which will harm the business relationship between our company and such persons or entities.
The officer will indemnify us and hold us harmless from and against all claims, liabilities, damages and expenses. 137 Table of Contents Each officer also agrees that during the term of employment and within one year of termination of employment, he or she will not approach clients, customers or contacts of our company or other persons or entities introduced to such officer in his/her capacity as a representative of our company for the purposes of doing business with such persons or entities which will harm the business relationship between our company and such persons or entities.
Our company may have the right to seek damages if a duty owed by our directors is breached.
Our company may have the right to seek damages if a duty owed by our directors is breached. A shareholder may in certain circumstances have rights to damages if a duty owed by the directors is breached.
Wu served as an independent director of BlueCity Holdings Limited from July 2020 to August 2022. Ms. Wu served as the chief investment officer of New Hope Group from November 2018 to February 2020. Prior to joining New Hope Group, Ms. Wu was a founding and managing partner of Baidu Capital from November 2016 to November 2018. Ms.
Wu served as the chief investment officer of New Hope Group from November 2018 to February 2020. Prior to joining New Hope Group, Ms. Wu was a founding and managing partner of Baidu Capital from November 2016 to November 2018. Ms.
As of March 31, 2023, our employees other than directors and executive officers as a group held 8,803,340 outstanding restricted shares and restricted share units that remain unvested. These restricted shares and restricted share units were granted on various dates from January 1, 2021 through September 1, 2022.
As of March 31, 2024, our employees other than directors and executive officers as a group held 6,472,845 outstanding restricted shares and restricted share units that remain unvested. These restricted shares and restricted share units were granted on various dates between January 1, 2021 and March 31, 2023.
A senior executive officer may terminate his or her employment by giving two-month or three-month prior notice. ​ 147 Table of Contents Each senior executive officer has agreed that he or she shall not, at any time during the period of employment or after the termination of the period of employment, except for the benefit of our company, use or disclose any confidential information to any person, corporation or other entity without our written consent.
Each senior executive officer has agreed that he or she shall not, at any time during the period of employment or after the termination of the period of employment, except for the benefit of our company, use or disclose any confidential information to any person, corporation or other entity without our written consent.
Directors and Senior Management The following table sets forth information regarding our executive officers and directors as of the date of this annual report. ​ Directors and Executive Officers Age Position/Title Jinbo Li ​ 47 ​ Chairman and Chief Executive Officer ​ Sean Shenglong Zou ​ 51 ​ Co-Founder and Director ​ Yubo Zhang ​ 46 ​ Director and President ​ Peng Shi ​ 35 ​ Director ​ Hui Duan ​ 43 ​ Director ​ Jenny Wenjie Wu ​ 48 ​ Independent Director ​ Ya Li ​ 53 ​ Independent Director ​ Naijiang (Eric) Zhou ​ 60 ​ Chief Financial Officer ​ ​ Mr.
Directors and Senior Management The following table sets forth information regarding our executive officers and directors as of the date of this annual report. ​ Directors and Executive Officers Age Position/Title Jinbo Li ​ 49 ​ Chairman and Chief Executive Officer ​ Yubo Zhang ​ 48 ​ Director and President ​ Peng Shi ​ 37 ​ Director ​ Jenny Wenjie Wu ​ 50 ​ Independent Director ​ Ya Li ​ 55 ​ Independent Director ​ Naijiang (Eric) Zhou ​ 62 ​ Chief Financial Officer ​ ​ Mr.
We may also terminate a senior executive officer’s employment upon at least two months’ prior written notice.
We may also terminate a senior executive officer’s employment upon at least two months’ prior written notice. A senior executive officer may terminate his or her employment by giving two-month or three-month prior notice.
The following paragraphs summarize the terms of the Amended and Restated 2020 Plan. Types of awards . The Amended and Restated 2020 Plan permits the awards of option, restricted share, restricted share unit or other types of award approved by the committee or the board. Plan administration .
As of March 31, 2024, 16,198,595 restricted share units were granted and outstanding under the 2020 Plan. The following paragraphs summarize the terms of the 2020 Plan. Types of awards . The 2020 Plan permits the awards of option, restricted share, restricted share unit or other types of award approved by the committee or the board. Plan administration .
Duan received his bachelor’s degree in computer science from Peking University in 2001 and EMBA degree from China Europe International Business School in 2015. Ms. Jenny Wenjie Wu has been serving as our independent director since June 2014 and is currently an independent non-executive director of Kingsoft Corporation Limited (3888.HK). Ms.
Mr. Shi received his bachelor’s degree in software engineering from Beihai College of Beihang University in China in 2011. Ms. Jenny Wenjie Wu has been serving as our independent director since June 2014 and is currently an independent non-executive director of Kingsoft Corporation Limited (3888.HK) and an independent non-executive director of Aquila Acquisition Corporation (7836.HK). Ms.
We maintain good employee relations and have not experienced any material labor disputes since our inception. E. 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.
We have granted stock options and restricted shares to management and key employees in order to reward their services and provide them with equity incentives. We maintain good employee relations and have not experienced any material labor disputes since our inception. E. Share Ownership For information regarding the share ownership of our directors and officers, see “Item 7.
After the award pool expansion, the maximum aggregate number of shares available for grant of awards was increased from 31,000,000 under the original 2020 Plan to 46,561,200 under the Amended and Restated 2020 Plan, consisting of (i) 25,228,430 common shares of our company underlying the 5,045,686 American depositary shares our company repurchased pursuant to the repurchase programs authorized by our company in December 2014, January 2016 and March 2022, (ii) 10,150,313 common shares of our company previously reserved for issuance under the Amended and Restated 2020 Plan, representing 10,150,313 common shares of the company that were previously reserved under the company’s 2010 share incentive plan but the corresponding share incentive awards had not been granted as of the termination of our company’s 2010 share incentive plan, (iii) 10,889,429 common shares of our company currently held by Leading Advice Holding Limited, our company’s share incentive awards holding platform under our company’s 2013 share incentive plan and 2014 share incentive plan, representing the amount of common shares of which the corresponding awards under our company’s 2013 share incentive plan and 2014 share incentive plan had not been granted as of the termination of our company’s 2013 share incentive plan and 2014 share incentive plan, and (iv) 293,028 common shares of our company reserved for issuance under the Amended and Restated 2020 Plan.
On March 13, 2023, our board of directors amended and restated the 2020 Plan to expand the award pool of 31,000,000 shares to 46,561,200 shares, which consist of (i) 25,228,430 common shares underlying the 5,045,686 ADSs repurchased pursuant to our repurchase programs, (ii) 10,150,313 common shares reserved for issuance, which were previously reserved but not granted under our Terminated Plans, (iii) 10,889,429 common shares, which were previously reserved but not granted under our Terminated Plans, held by Leading Advice Holding Limited, a share incentive awards holding platform, and (iv) 293,028 common shares reserved for issuance under the 2020 Plan.
Zhang received his bachelor’s degree in mechanical design and manufacturing from Jilin University of Technology in China in 1999. Mr. Peng Shi has been serving as a director of our company since April 2020. Mr. Shi has also been serving as the president of product at Beijing Itui Technology Co., Ltd since March 2018. Prior to joing Beijing Itui, Mr.
Peng Shi has been serving as a director of our company since April 2020. Mr. Shi has also been serving as the president of product at Beijing Itui Technology Co., Ltd since March 2018. Prior to join Beijing Itui, Mr. Shi served as the general manager at Qutoutiao Inc.
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” ​ F. Disclosure of A Registrant’s Action to Recover Erroneously Awarded Compensation ​ Not applicable. ​
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 Plan.” ​ F. Disclosure of A Registrant’s Action to Recover Erroneously Awarded Compensation ​ Not applicable. ​
Upon the termination of the Existing Plans, the awards that are granted and outstanding under the Existing Plans and the evidencing original award agreements shall survive the termination of the Existing Plans and remain effective and binding under the 2020 Plan, subject to any amendment and modification to the original award agreements that our company shall determine.
The awards that were granted and outstanding under the Terminated Plans and the evidencing original award agreements survived the termination of the Terminated Plans and remain effective and binding under the 2020 Plan.
Zhang joined our company for the first time in August 2005 and was one of the core founding members of our company. During his ten years with us, Mr. Zhang served various management positions including a senior vice president of our company and the president of a major subsidiary of our company from August 2005 to March 2015. Mr.
Zhang served various management positions including a senior vice president of our company and the president of a major subsidiary of our company from August 2005 to March 2015. Mr. Zhang received his bachelor’s degree in mechanical design and manufacturing from Jilin University of Technology in China in 1999. Mr.
Zhang served as the chief executive officer of Beijing Nesound International Media Corp, Ltd., or Nesound, from April 2015 to April 2020. During his tenure at Nesound, Mr. Zhang combined the respective advantages of live broadcasting and traditional film & television businesses and built a multifaceted platform incorporating self-produced exclusive contents, star development plans and Internet services. Mr.
Zhang combined the respective advantages of live broadcasting and traditional film & television businesses and built a multifaceted platform incorporating self-produced exclusive content, star development plans and Internet services. Mr. Zhang joined our company for the first time in August 2005 and was one of the core founding members of our company. During his ten years with us, Mr.
As required by PRC regulations, we participate in employee benefit plans organized by government authorities, including pensions, work-related injury benefits, medical benefits, maternity benefits, unemployment benefit and housing fund plans. We have granted stock options and restricted shares to management and key employees in order to reward their services and provide them with equity incentives.
The following table sets forth the number of our employees by function as of December 31, 2023: ​ ​ ​ Function Number Research and development 878 Sales and marketing 168 General administration 169 Total 1,215 ​ As required by PRC regulations, we participate in employee benefit plans organized by government authorities, including pensions, work-related injury benefits, medical benefits, maternity benefits, unemployment benefit and housing fund plans.
Zou received a master’s degree in computer science from Duke University in the United States in 1998 and a bachelor’s degree in computer science from University of Wisconsin-Madison in 1997. Mr. Yubo Zhang has been serving as our president since April 2020. Prior to rejoining us in April 2020, Mr.
Yubo Zhang has been serving as our president since April 2020. Prior to rejoining us in April 2020, Mr. Zhang served as the chief executive officer of Beijing Nesound International Media Corp, Ltd., or Nesound, from April 2015 to April 2020. During his tenure at Nesound, Mr.
Removed
Sean Shenglong Zou is one of our co-founders and served as our chief executive officer from our inception in February 2005 to July 2017 and chairman of the board from our inception in February 2005 to December 2017. Mr. Zou currently serves as a director of our company. Mr. Zou is an expert in distributed computing. Mr.
Added
Employees As of December 31, 2021, 2022 and 2023, we had 918, 1,097 and 1,215 employees, respectively.
Removed
Zou pioneered the theory of content-based multimedia indexing technology and resource discovery network that provides time-saving online experience for internet users and has led our company to revolutionize traditional internet acceleration by the technology and network. Mr.
Removed
Shi served as the general manager at Qutoutiao Inc.
Removed
Mr. Shi received his bachelor’s degree in software engineering from Beihai College of Beihang University in China in 2011. 144 Table of Contents Mr. Hui Duan has been serving as a director of our company since April 2020. Mr. Duan currently also serves as the chief technology officer of Beijing Itui Technology Co., Ltd. Prior to that, Mr.
Removed
Duan founded his own company that provided HR SaaS products and services from October 2015 to 2017. From April 2008 to April 2015, Mr. Duan served various management positions at Xunlei including vice president and the chief executive officer of a major subsidiary of Xunlei. Mr.
Removed
The restricted shares granted and outstanding under our 2013 share incentive plan and 2014 share incentive plan and held by Leading Advice Holding Limited on behalf of relevant grantees as of the termination of the Existing Plans shall still be by Leading Advice Holding Limited on behalf of those grantees under the 2020 Plan.
Removed
Upon the termination of the Existing Plans and the adoption of the 2020 Plan, Leading Advice Holding Limited shall act as the holding platform of certain share incentive awards under the 2020 Plan and continue to hold 10,889,429 common shares of our company under the 2020 Plan.
Removed
Under the 2020 Plan, the maximum aggregate number of common shares available for grant of awards was 31,000,000. On March 13, 2023, our board of directors amended and restated the 2020 Plan, or the Amended and Restated 2020 Plan, to expand the existing award pool of 31,000,000 shares by authorizing the issuance of additional 15,561,200 shares.
Removed
The additional shares that will be issued pursuant to awards to be granted from the expanded portion of the enlarged pool will be issued from 15,561,200 common shares underlying 3,112,240 American depositary shares repurchased by the Company under the share repurchase program adopted by the Company in March 2022.
Removed
As of March 31, 2023, 25,092,130 restricted share units had been granted and outstanding under the Amended and Restated 2020 Plan. As of March 31, 2023, there were also 160,000 unvested restricted shares that survived the termination of our previous share incentive plans and remained outstanding under the Amended and Restated 2020 Plan.
Removed
The officer will indemnify us and hold us harmless from and against all claims, liabilities, damages and expenses.
Removed
Employees As of December 31, 2022, we had 1,097 employees, including 143 in general administration, 786 in research and development and 168 in sales and marketing. We group our employees into three categories: research and development, sales and marketing and general administration.

Item 7. Management's Discussion & Analysis

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

33 edited+5 added−12 removed11 unchanged
Through such cooperation, Xiaomi phones would be pre-installed with our mobile acceleration applications and Xiaomi phone users would have access to our acceleration services. We provided such pre-installing service at no charge which was consistent with our pre-installing agreements with other unrelated parties. The Pre-installing Services Agreement had a term of one year, which is renewed on a yearly basis.
Through such cooperation, Xiaomi phones would be pre-installed with our mobile acceleration applications and Xiaomi phone users would have access to our acceleration services. We provided such pre-installed service at no charge which was consistent with our pre-installed agreements with other unrelated parties. The Pre-installed Services Agreement had a term of one year, which is renewed on a yearly basis.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days of March 31, 2023, including through the exercise of any option, warrant or other right or the conversion of any other security, in both the numerator and the denominator.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days of March 31, 2024, including through the exercise of any option, warrant or other right or the conversion of any other security, in both the numerator and the denominator.
Major Shareholders Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our shares as of March 31, 2023 held by: ● each of our current directors and executive officers; and ● each person known to us to beneficially own more than 5% of our common shares.
Major Shareholders Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our shares as of March 31, 2024 held by: ● each of our current directors and executive officers; and ● each person known to us to beneficially own more than 5% of our common shares.
The Supplemental Agreement had a term of two years from mid-June 2017 to mid-June 2019 and was automatically extended for another two years from mid-June 2019 to mid-June 2021. In 2021, we renewed the supplemental agreement of the pre-installing services agreement, with another Xiaomi group company, Shenzhen Xiaomi Information Service Co.Ltd., or Shenzhen Xiaomi.
The Supplemental Agreement had a term of two years from mid-June 2017 to mid-June 2019 and was automatically extended for another two years from mid-June 2019 to mid-June 2021. In 2021, we renewed the supplemental agreement of the pre-installed services agreement, with another Xiaomi group company, Shenzhen Xiaomi Information Service Co. Ltd., or Shenzhen Xiaomi.
Parties renewed such agreement in 2015 and 2016. In 2017, we entered into a supplemental agreement of the Pre-installing Services Agreement, or the Supplemental Agreement, with another Xiaomi group company, Guangzhou Millet Information Service Co., Ltd., or Guangzhou Millet. Pursuant to the Supplemental Agreement, Guangzhou Millet replaced Beijing Xiaomi under the Pre-installing Services Agreement.
Parties renewed such agreement in 2015 and 2016. In 2017, we entered into a supplemental agreement of the Pre-installed Services Agreement, or the Supplemental Agreement, with another Xiaomi group company, Guangzhou Millet Information Service Co., Ltd., or Guangzhou Millet. Pursuant to the Supplemental Agreement, Guangzhou Millet replaced Beijing Xiaomi under the Pre-installed Services Agreement.
To our knowledge, as of March 31, 2023, 263,662,524 of our outstanding common shares were held by two record holders in the United States including 263,662,520 common shares held by The Bank of New York Mellon, the depositary of our ADS program.
To our knowledge, as of March 31, 2024, 263,662,524 of our outstanding common shares were held by two record holders in the United States including 263,662,520 common shares held by The Bank of New York Mellon, the depositary of our ADS program.
In 2014, we entered into a Xunlei Accelerator Mobile Pre-installing Services Agreement, or the Pre-installing Services Agreement, with Beijing Xiaomi Mobile Software Co., Ltd., or Beijing Xiaomi, a company controlled by one of our shareholders, Best Ventures Limited.
In 2014, we entered into a Xunlei Accelerator Mobile Pre-installed Services Agreement, or the Pre-installed Services Agreement, with Beijing Xiaomi Mobile Software Co., Ltd., or Beijing Xiaomi, a company controlled by one of our indirect shareholders, Best Ventures Limited.
For the years ended December 31, 2020, 2021 and 2022, the aggregate amount of the fees that have been incurred by Shenzhen Xunlei for the technology development services and the software license provided by Xunlei Computer under the framework agreement was US$6.4 million, US$7.2 million and US$4.0 million, respectively.
For the years ended December 31, 2021, 2022 and 2023, the aggregate amount of the fees that have been incurred by Shenzhen Xunlei for the technology development services and the software license provided by Xunlei Computer under the framework agreement was US$7.2 million, US$4.0 million and US$12.4 million, respectively.
As of December 31, 2022, the amount of outstanding cloud computing service revenue from Itui was US$0.5 million. Term Loan Agreement. In September 2021, we approved to provide a term loan in the amount of US$20 million to Chizz (HK) Limited, a company controlled by Itui, our largest shareholder.
As of December 31, 2023, the amount of outstanding cloud computing service revenue from Beijing Itui was US$0.3 million. Term Loan Agreement. In September 2021, we approved to provide a term loan in the amount of US$20 million to CHIZZ (HK) LIMITED, a company controlled by Itui, our largest shareholder.
Transactions with Xiaomi In December 2013, we entered into a Cooperation Framework Agreement with Millet Communication Technology Co., Ltd., or Millet Communication, a company controlled by one of our shareholders, Best Ventures Limited (formerly known as Xiaomi Ventures Limited). Parties would enter into separate agreements to carry our detailed cooperation. 154 Table of Contents Xunlei Accelerator Mobile Pre-installing Services Agreement.
Transactions with Xiaomi In December 2013, we entered into a Cooperation Framework Agreement with Millet Communication Technology Co., Ltd., or Millet Communication, a company controlled by one of our indirect shareholders, Best Ventures Limited (formerly known as Xiaomi Ventures Limited). Parties would enter into separate agreements to carry our detailed cooperation. Xunlei Accelerator Mobile Pre-installed Services Agreement .
(4) 133,018,479 41.1 % Sean Shenglong Zou (2) 22,931,611 7.1 % Notes: * Less than 1% of the total outstanding common shares. ** The business address of Messrs Jinbo Li, Sean Shenglong Zou, Yubo Zhang, Naijiang (Eric) Zhou, Peng Shi and Ms. Jenny Wenjie Wu is 3709 Baishi Road, Nanshan District, Shenzhen, 518000, the People’s Republic of China.
(3) 133,018,479 41.3 % Sean Shenglong Zou (4) 22,931,611 7.1 % Notes: * Less than 1% of our total outstanding common shares. ** The business addresses of Mr. Jinbo Li, Yubo Zhang, Naijiang (Eric) Zhou, Peng Shi and Ms. Jenny Wenjie Wu are 3709 Baishi Road, Nanshan District, Shenzhen, 518000, the People’s Republic of China. The business address of Mr.
Jinbo Li, our chairman and chief executive officer, through his holding vehicle, owns 19.4% of the total outstanding shares (equal to 54.5% of the total voting power of all outstanding shares) of Itui International Inc.
Jinbo Li, our chairman and chief executive officer, through his holding vehicle, owns 14.4% of the total outstanding shares (equal to 45.7% of the total voting power of all outstanding shares) of Itui International Inc.
Related Party Transactions Contractual arrangements with our PRC variable interest entity and its shareholders Due to current legal restrictions on foreign ownership and investment in value-added telecommunications services in China, we conduct our operations in China principally through a series of contractual arrangements with the variable interest entity and its shareholders in China.
Related Party Transactions Contractual arrangements with Shenzhen Xunlei and its shareholders Due to current legal restrictions on foreign ownership and investment in value-added telecommunications services in China, we conduct our operations in China principally through a series of contractual arrangements with the variable interest entity and its shareholders in China. For a description of these contractual arrangements, see “Item 4.
(1) Mr. Jinbo Li, through his holding vehicle, owns 19.4% of the total outstanding shares (equal to 54.5% of the total voting power of all outstanding shares) of Itui International Inc., which in turn owns 101,820,239 common shares and 6,239,648 ADSs of our company. In addition, there are 3,346,520 common shares beneficially owned by Mr.
(1) Mr. Jinbo Li, through his holding vehicle, owns 14.4% of the total outstanding shares (equal to 45.7% of the total voting power of all outstanding shares) of Itui International Inc., which in turn owns 101,820,239 common shares and 6,239,648 ADSs of our company. In addition, 6,693,040 common shares are beneficially owned by Mr. Li.
Under this framework agreement, Xunlei Computer provides Shenzhen Xunlei with technology development services according to Shenzhen Xunlei’s business needs. Any new intellectual property resulting from the technology development services is owned by Xunlei Computer, and cannot be substituted or sub-licensed to any third party by Shenzhen Xunlei without the prior written consent of Xunlei Computer.
Any new intellectual property resulting from the technology development services is owned by Xunlei Computer, and cannot be substituted or sub-licensed to any third party by Shenzhen Xunlei without the prior written consent of Xunlei Computer.
The number of our common shares held by The Bank of New York Mellon include 1,370,285 common shares representing 274,057 ADSs held by Leading Advice Holdings Limited and 40,336,845 common shares (i) issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our share incentive plans, and (ii) repurchased by our company but not yet cancelled.
The number of our common shares held by The Bank of New York Mellon include 1,370,285 common shares representing 274,057 ADSs held for purposes of our share incentive plan and 42,237,510 common shares (i) reserved for bulk issuance of ADSs for future issuances upon the exercise or vesting of awards granted under our share incentive plan, and (ii) repurchased by our company but not yet cancelled.
The agreement and the supplemental agreement both have a term ranging from January 1, 2022 to December 31, 2023. In 2022, we paid revenue sharing of US$0.01 million to Beijing Xiaobu. As of December 31, 2022, the amount of outstanding live streaming revenues due from Beijing Xiaobu was US$1.4 million. C. Interests of Experts and Counsel Not applicable. ​
In 2023, we paid revenue sharing of US$0.03 million to Beijing Xiaobu. As of December 31, 2023, the amount of outstanding live streaming revenues due from Beijing Xiaobu was US$0.4 million. C. Interests of Experts and Counsel Not applicable. ​
Ya Li is Room 1B-2901 Park 1872, 217 Ba Li Zhuang Bei Li, Chaoyang District, Beijing, China. † For each person and group included in this column, percentage ownership is calculated by dividing the number of common shares beneficially owned by such person or group, including shares that such person or group has the right to acquire within 60 days of March 31, 2023, by the sum of (i) the total number of outstanding common shares as of March 31, 2023, 323,775,666, and (ii) the number of common shares underlying share options, restricted shares, restricted share units and warrants held by such person or group that are exercisable within 60 days of March 31, 2023.
Ya Li is Room 8-4-101 Xi Rui Chun Qiu, Sunhe, Chaoyang District, Beijing, China. † For each person and group included in this column, percentage ownership is calculated by dividing the number of common shares beneficially owned by such person or group, including shares that such person or group has the right to acquire within 60 days of March 31, 2024, by the sum of (i) the total number of outstanding common shares as of March 31, 2024, and (ii) the number of common shares underlying share options, restricted shares, restricted share units and warrants held by such person or group that are exercisable within 60 days of March 31, 2024.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares Beneficially Owned ​ ​ Number %† Directors and executive officers**: ​ ​ Jinbo Li (1) 139,711,519 42.7 % Sean Shenglong Zou (2) 22,931,611 7.1 % Yubo Zhang (3) 6,780,710 2.1 % Peng Shi * * ​ Hui Duan — — ​ Jenny Wenjie Wu * * ​ Ya Li * * ​ Naijiang (Eric) Zhou * * ​ All directors and executive officers as group 170,358,310 51.6 % Principal shareholders: ​ Itui International Inc.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares Beneficially Owned ​ ​ Number %† Directors and executive officers**: ​ ​ Jinbo Li (1) 139,711,519 43.4 % Yubo Zhang (2) 6,780,710 2.1 % Peng Shi * * ​ Jenny Wenjie Wu * * ​ Ya Li — — ​ Naijiang (Eric) Zhou * * ​ All directors and executive officers as group 147,370,209 45.8 % Principal shareholders: ​ Itui International Inc.
In 2022, we recognized a net revenue of US$7.8 million from placing advertisements on our PC websites and mobile platform from Itui. As of December 31, 2022, the amount of outstanding advertising services revenue from Itui was US$7.9 million. Cloud Computing Service Agreement.
The agreement has a term of one year and is renewable on a yearly basis. In 2023, we recognized a net revenue of US$9.0 million from placing advertisements on our PC websites and mobile platform from Itui Online. As of December 31, 2023, the amount of outstanding advertising services revenue from Itui was US$9.5 million. Cloud Computing Service Agreement.
Yubo Zhang has the right to acquire within 60 days of March 31, 2023. 152 Table of Contents (4) Represents 101,820,239 common shares and 6,239,648 ADSs held by Itui International Inc., a limited liability company incorporated under the laws of the Cayman Islands. Mr.
Yubo Zhang. 142 Table of Contents (3) Represents 101,820,239 common shares and 6,239,648 ADSs held by Itui International Inc., a limited liability company incorporated under the laws of the Cayman Islands. Mr.
We entered into an agreement with Itui in July 2019 to provide cloud computing services at market prices. The agreement is renewed every year and the price may be adjusted semi-annually. In 2022, we generated cloud computing services revenue of US$0.6 million from Itui.
We entered into an agreement with Beijing Itui Technology Co., Ltd. (“Beijing Itui”), a company controlled by Itui, our largest shareholder, in July 2019 to provide cloud computing services at market prices. The agreement is renewed every year and the price may be adjusted semi-annually. In 2023, we generated cloud computing services revenue of US$0.4 million from Beijing Itui.
Percentage of beneficial ownership is based on 323,775,666 total outstanding common shares as of March 31, 2023, excluding (i) 1,370,285 common shares representing 274,057 ADSs and 9,519,144 common shares held by Leading Advice Holdings Limited, a share incentive awards holding platform, and (ii) 40,336,845 common shares, consisting of shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our share incentive plans and shares repurchased by us but not yet cancelled. 151 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Percentage of beneficial ownership is based on 321,875,001 total outstanding common shares as of March 31, 2024, excluding (i) 42,237,510 common shares that are reserved for bulk issuance upon the exercise or vesting of awards granted under our share incentive plan, or repurchased by our company but not yet cancelled, and (ii) 10,889,429 common shares, consisting of 274,057 ADSs (representing 1,370,285 common shares) and 9,519,144 common shares held by Leading Advice Holding Limited, a share incentive awards holding platform). 141 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Pursuant to the renewed supplemental agreement, Shenzhen Xiaomi replaced Guangzhou Millet under the pre-services agreement. The renewed supplemental agreement has a term of two years from mid-June 2021 to mid-June 2023. In 2022, we recognized a revenue of US$2.5 million from Shenzhen Xiaomi. As of December 31, 2022, the amount of outstanding revenue from Shenzhen Xiaomi was US$1.4 million.
Pursuant to the renewed supplemental agreement, Shenzhen Xiaomi replaced Guangzhou Millet under the pre-installed agreement. The renewed supplemental agreement has a term of two years from mid-June 2021 to mid-June 2023 and was automatically extended for another two years from mid-June 2023 to mid-June 2025. In 2023, we recognized a revenue of US$0.4 million from Shenzhen Xiaomi.
(2) Represents (i) 2,186,322 ADSs and one common share directly held by Vantage Point Global Limited, a British Virgin Islands company which is 100% beneficially owned by Mr.
(4) Represents (i) 2,186,322 ADSs and one common share directly held by Vantage Point Global Limited, a British Virgin Islands company, and (ii) 2,400,000 ADSs directly held by Eagle Spirit LLC, a Delaware limited liability company. Vantage Point Global Limited is wholly owned by Choice & Chance Limited, which is wholly owned by Mr. Zou with Mr.
Ltd., or Beijing Xiaobu, a company controlled by Itui, in January and December 2022, respectively, to jointly operate our live audio streaming product, Hiya Voice, on Beijing Xiaobu’s platform. Pursuant to the agreements, we agree to share the profits generated from the joint operation of Hiya Voice.
We entered into an agreement and a supplemental agreement with Beijing Xiaobu Co. Ltd., or Beijing Xiaobu, a company controlled by Itui, our largest shareholder in January and December 2022, respectively, to jointly operate our live audio streaming product, Hiya Voice, on Beijing Xiaobu’s platform.
Intellectual property framework agreement between Shenzhen Xunlei and Xunlei Computer On December 24, 2013, Shenzhen Xunlei and Xunlei Computer entered into a technology development and software license framework agreement. The term of the agreement is two years from the date of its execution.
Compensation—Share incentive plan.” Intellectual property framework agreement between Shenzhen Xunlei and Xunlei Computer On December 24, 2013, Shenzhen Xunlei and Xunlei Computer entered into a technology development and software license framework agreement.
The loan has a term of two years and the interest of the loan is 3% per annum. Our audit committee had also approved the transaction. As of December 31, 2022, the term loan remained unpaid. 155 Table of Contents Joint Operation Agreements. We entered into an agreement and a supplemental agreement with Beijing Xiaobu Co.
The loan has a term of two years and the interest of the loan is 3% per annum. In September 2023, the loan was extended for another two years and the interest of the loan is 5.1% per annum. Our audit committee had also approved the transaction. As of December 31, 2023, the term loan remained unpaid. Joint Operation Agreements.
Pursuant to the agreement, Itui will be responsible for operating our advertising services and share a portion of revenue generated from placing advertisements on our PC websites and mobile platform. The agreement has a term of one year and is renewable on a yearly basis.
In May 2020, we entered into a user traffic monetization agreement with Itui Online, a company controlled by Itui, our largest shareholder. Pursuant to the agreement, Itui Online will be responsible for operating our advertising services and share a portion of revenue generated from placing advertisements on our PC websites and mobile platform.
None of our shareholders has informed us that he or she is affiliated with a registered broker-dealer or is in the business of underwriting securities. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. B.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. B.
In 2022, our total cloud computing service revenue was US$5.0 million from Xiaomi Technology. As of December 31, 2022, the amount of outstanding cloud computing service revenue was US$1.9 million from Xiaomi Technology. Advertising Services Agreement. We entered into an agreement with Shenzhen Xiaomi to provide advertising service on its advertising platform.
As of December 31, 2023, the amount of outstanding revenue from Shenzhen Xiaomi was US$0.7 million. Cloud Computing Service Agreement . We entered into an agreement with Millet Technology Co., Ltd., or Millet Technology, in April 2019 and renewed every year to provide cloud computing services at market prices based on the actual usage.
Li and another 3,346,520 common shares issuable to Mr. Li upon the vesting of restricted share units within 60 days after March 31, 2023. By virtue of his controlling interest in Itui International Inc. and upon the vesting of granted restricted share units, Mr. Jinbo Li is deemed to be a beneficial owner of 139,711,519 common shares of our company.
By virtue of his controlling interest in Itui International Inc. and the common shares directly held by him in our company, Mr. Jinbo Li is deemed to beneficial own 139,711,519 common shares of our company. (2) Represents 6,780,710 common shares in the form of 1,356,142 ADSs directly held by Mr.
Directors, Senior Management and Employees—B. Compensation—Employment agreements.” Share incentives See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share incentive plan.” In relation to our 2013 share incentive plan and 2014 share incentive plan, we have appointed Leading Advice Holdings Limited, or Leading Advice, as the administer of both plans.
Information on the Company—C. Organizational Structure.” Employment agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation—Employment agreements.” Share incentive plans See “Item 6. Directors, Senior Management and Employees—B.
Removed
The business address of Mr. Hui Duan is Room 407, Taixing Building, No. 11 Huayuan East Road, Haidian District. Beijing 100089, China. The business address of Mr.
Added
Zou as a director. Mr. Zou indirectly holds all voting and investment powers of Vantage Point Global Limited and its assets. Eagle Spirit LLC is wholly owned by a United States irrevocable trust with Mr. Zou as the settlor and Mr. Zou is the sole director of Eagle Spirit LLC. Mr.
Removed
Zou through a family trust, and (ii) 2,400,000 ADSs held by Eagle Spirit LLC, a Delaware limited liability company, which is wholly owned by a Choice & Chance Limited, a wholly owned subsidiary of Mr. Zou, and Mr. Zou is the sole director of Eagle Spirit LLC.
Added
Zou indirectly holds the voting power and investment power of all of the common shares held by Eagle Spirit LLC.
Removed
(3) Represents (i) 3,434,190 common shares in the form of 686,838 ADSs directly held by Mr. Yubo Zhang, and (ii) 3,346,520 common shares which Mr.
Added
The term of the agreement is two years from the date of its execution. 143 Table of Contents Under this framework agreement, Xunlei Computer provides Shenzhen Xunlei with technology development services according to Shenzhen Xunlei’s business needs.
Removed
For a description of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure.” Shareholders agreement In connection with the issuance of our series E preferred shares, we entered into a seventh amended and restated shareholders agreement in April 2014 with our shareholders and relevant parties therein.
Added
Millet Technology is a company controlled by one of our indirect shareholders, Best Ventures Limited. In 2023, our total cloud computing service revenue was US$7.6 million from Millet Technology. As of December 31, 2023, the amount of outstanding cloud computing service revenue was US$1.8 million from Millet Technology. 144 Table of Contents Transactions with Itui International Inc. Advertising Services Agreement.
Removed
Except for the registration rights, all preferred shareholders’ rights automatically terminated upon the completion of our initial public offering. Additionally, the co-founders have agreed to the transfer restrictions imposed on an aggregate number of 39,934,162 common shares beneficially owned by the co-founders.
Added
Pursuant to the agreements, we agree to share the profits generated from the joint operation of Hiya Voice. The agreement and the supplemental agreement both had a term ranging from January 1, 2022 to December 31, 2023 and were not renewed as the operation of Hiya Voice was terminated.
Removed
Accordingly, the co-founders are unable to transfer the relevant shares to any third party until April 24, 2019 or April 24, 2018, as the case may be. The registration rights we granted to certain of our shareholders expired on the fifth anniversary of the completion of our initial public offering in June 2014. Employment agreements See “Item 6.
Removed
On behalf of us, Leading Advice executes actions based on our instruction to select the eligible grantees, to determine the number of awards and the conditions and provision of such awards, including but not limited to the vesting schedule and acceleration of the awards. ​ 153 Table of Contents Leading Advice is not entitled to the following rights in relation to the shares registered under its name: (i) dividends, (ii) voting powers prior to vesting of relevant shares and (ii) transfer of the unvested portion of the awards or awards that have not been granted.
Removed
In addition, upon the liquidation or the dissolution of Leading Advice or the expiration of the relevant plan, common shares not granted as awards shall be transferred back to us at no consideration. For the awards that have been granted and become vested, Leading Advice will solicit voting instructions from each grantee, and vote in accordance with such instructions.
Removed
The grantees will be entitled to dividends and have the right to request Leading Advice to transfer vested awards to a transferee designated by the grantees. Advance extended to a director We extended an advance amounting to RMB60,000 to Mr.
Removed
Shenglong Zou in 2014 for business purposes of setting up certain companies in China to operate a part of our business and consolidate the financial results of such business into the financial statements of our company. As of the December 31, 2022, the advance to Mr. Shenglong Zou remained outstanding.
Removed
Cloud Computing Service Agreement. We entered into an agreement with Xiaomi Technology in April 2019 and renewed every year to provide cloud computing services at market prices based on the actual usage. Beijing Xiaomi and Xiaomi Technology are companies controlled by one of our shareholders, Best Ventures Limited.
Removed
We are entitled to receive a mutually agreed sharing of net advertising revenue. In 2022, our total advertising revenue from Shenzhen Xiaomi was US$0.1 million and the amounts of outstanding advertising revenue was US$4.3 thousand. Transactions with Itui International Inc. Advertising Services Agreement. In May 2020, we entered into a user traffic monetization agreement with Itui.

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