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CLPS Inc

CLPS IncCLPS決算レポート

Nasdaq · Information Technology

CLPS Inc is a global information technology, consulting and digital solutions provider primarily serving the financial services sector, including banking, insurance and asset management clients. It also offers tailored tech solutions for retail, healthcare and e-commerce segments, with operating footprints across North America, Asia Pacific and Europe.

What changed in CLPS Inc's 20-F — 2022 vs 2023

Top changes in CLPS Inc's 2023 20-F

491 paragraphs added · 528 removed · 375 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

108 edited+30 added−48 removed453 unchanged
Monthly averages, lows, and highs are calculated using the average of the daily rates during the relevant period. B. Capitalization and Indebtedness Not required. 3 C. Reasons for the Offer and Use of Proceeds Not required. D. Risk factors You should carefully consider the following risk factors, together with all of the other information included in this Annual Report.
Monthly averages, lows, and highs are calculated using the average of the daily rates during the relevant period. B. Capitalization and Indebtedness Not required. C. Reasons for the Offer and Use of Proceeds Not required. 3 D. Risk factors You should carefully consider the following risk factors, together with all of the other information included in this Annual Report.
Challenges we face in the acquisition and integration process include: ● integrating operations, services and personnel in a timely and efficient manner; 9 ● unforeseen or undisclosed liabilities; ● generating sufficient revenue and net income to offset acquisition costs; ● potential loss of, or harm to, employee or client relationships; ● properly structuring our acquisition consideration and any related post-acquisition earn-outs and successfully monitoring any earn-out calculations and payments; ● retaining key senior management and key sales and marketing and research and development personnel; ● potential incompatibility of solutions, services and technology or corporate cultures; ● consolidating and rationalizing corporate, information technology and administrative infrastructures; ● integrating and documenting processes and controls; ● entry into unfamiliar markets; and ● increased complexity from potentially operating additional geographically dispersed sites, particularly if we acquire a company or business with facilities or operations outside of China.
Challenges we face in the acquisition and integration process include: ● integrating operations, services and personnel in a timely and efficient manner; ● unforeseen or undisclosed liabilities; ● generating sufficient revenue and net income to offset acquisition costs; ● potential loss of, or harm to, employee or client relationships; 9 ● properly structuring our acquisition consideration and any related post-acquisition earn-outs and successfully monitoring any earn-out calculations and payments; ● retaining key senior management and key sales and marketing and research and development personnel; ● potential incompatibility of solutions, services and technology or corporate cultures; ● consolidating and rationalizing corporate, information technology and administrative infrastructures; ● integrating and documenting processes and controls; ● entry into unfamiliar markets; and ● increased complexity from potentially operating additional geographically dispersed sites, particularly if we acquire a company or business with facilities or operations outside of China.
These risks and challenges include, among others: ● the uncertainties associated with our ability to continue our growth and maintain profitability; 10 ● preserving our competitive position in the IT services industry in China; ● offering consistent and high-quality services to retain and attract clients; ● implementing our strategy and modifying it from time to time to respond effectively to competition and changes in client preferences; ● managing our expanding operations and successfully expanding our solution and service offerings; ● responding in a timely manner to technological or other changes in the IT services industry; ● managing risks associated with intellectual property; and ● recruiting, training, developing and retaining qualified managerial and other personnel.
These risks and challenges include, among others: ● the uncertainties associated with our ability to continue our growth and maintain profitability; ● preserving our competitive position in the IT services industry in China; ● offering consistent and high-quality services to retain and attract clients; 10 ● implementing our strategy and modifying it from time to time to respond effectively to competition and changes in client preferences; ● managing our expanding operations and successfully expanding our solution and service offerings; ● responding in a timely manner to technological or other changes in the IT services industry; ● managing risks associated with intellectual property; and ● recruiting, training, developing and retaining qualified managerial and other personnel.
This limitation on PCAOB audit and inspection could cause investors and potential investors in our Common Stock to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.
This potential limitation on PCAOB audit and inspection could cause investors and potential investors in our Common Stock to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.
Our business operations are primarily conducted in Mainland China and Hong Kong SAR, and we are subject to complex and evolving Chinese and Hong Kong SAR laws and regulations. For example, the Anti-Monopoly Law of the People’s Republic of China (Revised in 2022) (“Anti-monopoly Law”) came into effect on August 1, 2022.
Our business operations are primarily conducted in Mainland China and Hong Kong SAR, and we are subject to complex and evolving Chinese and Hong Kong SAR laws and regulations. For example, the Anti-Monopoly Law of the People’s Republic of China (Revised in 2022) (“Anti-monopoly Law”) came into effect on August 1, 2022.
The “monopolistic practices” defined by the Anti-Monopoly Law include (a) the conclusion of a monopolistic agreement; (b) the abuse of dominant market positions; and (c) the concentration that eliminates or restricts competition or may eliminate or restrict competition.
The “monopolistic practices” defined by the Anti-Monopoly Law include (a) the conclusion of a monopolistic agreement; (b) the abuse of dominant market positions; and (c) the concentration that eliminates or restricts competition or may eliminate or restrict competition.
Based on Company’s China and global market share, the Company does not have a dominant market position that enables the Company to restrict or eliminate the competition.
Based on Company’s China and global market share, the Company does not have a dominant market position that enables the Company to restrict or eliminate the competition.
China promulgated several laws and regulations on data security and personal information protections in the last two years, mainly the Data Security Law of the People’s Republic of China (“Data Security Law”), which came into effect on September 1, 2021, and the Personal Information Protection Law of the People’s Republic of China (“PIP Law”), which came into effect on November 1, 2021.
China promulgated several laws and regulations on data security and personal information protections in the last two years, mainly the Data Security Law of the People’s Republic of China (“Data Security Law”), which came into effect on September 1, 2021, and the Personal Information Protection Law of the People’s Republic of China (“PIP Law”), which came into effect on November 1, 2021.
And we also face risks associated with regulatory approvals on offshore offerings, as well as the lack of inspection on our Auditor by the PCAOB, which may impact our ability to conduct certain businesses, accept foreign investments, or list and conduct offerings on a United States or other foreign exchange.
And we also face risks associated with regulatory approvals on offshore offerings, as well as the lack of inspection on our Auditor by the PCAOB, which may impact our ability to conduct certain businesses, accept foreign investments, or list and conduct offerings on a United States or other foreign exchange.
The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations.
The PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations.
Furthermore, the PRC government has also recently indicated an intent to exert more oversight and control over securities offerings and other capital markets activities that are conducted overseas and foreign investment in China-based companies like us.
Furthermore, the PRC government has also recently indicated an intent to exert more oversight and control over securities offerings and other capital markets activities that are conducted overseas and foreign investment in China-based companies like us.
The “indirect overseas offering and listing” of PRC domestic companies refers to such securities offering and listing in an overseas market made in the name of an offshore entity, but based on the underlying equity, assets, earnings or other similar rights of a domestic company which operates its main business domestically.
The “indirect overseas offering and listing” of PRC domestic companies refers to such securities offering and listing in an overseas market made in the name of an offshore entity, but based on the underlying equity, assets, earnings or other similar rights of a domestic company which operates its main business domestically.
If the issuer meets the following conditions, the offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) the total assets, net assets, revenues or profits of the domestic operating entity or entities of the issuer in the most recent accounting year account for more than 50% of the corresponding figure in the issuer’s audited consolidated financial statements for the same period; (ii) most of the senior managers in charge of business operation and management of the issuer are Chinese citizens or have domicile in China, and its main places of business are located in China or main business activities are conducted in China.
If the issuer meets the following conditions, the offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) the total assets, net assets, revenues or profits of the domestic operating entity or entities of the issuer in the most recent accounting year account for more than 50% of the corresponding figure in the issuer’s audited consolidated financial statements for the same period; (ii) most of the senior managers in charge of business operation and management of the issuer are Chinese citizens or have domicile in China, and its main places of business are located in China or main business activities are conducted in China.
Any failure to obtain or delay in obtaining such approval or completing such filing or other administrative procedures for any future offshore securities offering, or a rescission of any such approval obtained by us, could subject us to sanctions by the CSRC or other PRC regulatory agencies.
Any failure to obtain or delay in obtaining such approval or completing such filing or other administrative procedures for any future offshore securities offering, or a rescission of any such approval obtained by us, could subject us to sanctions by the CSRC or other PRC regulatory agencies.
In any such event, these regulatory authorities may also impose fines and penalties on our operations in China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from any future offshore securities offering into the PRC or take other actions that could adversely affect our business, operating results and financial condition, as well as our ability to complete any future offshore securities offering.
In any such event, these regulatory authorities may also impose fines and penalties on our operations in China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from any future offshore securities offering into the PRC or take other actions that could adversely affect our business, operating results and financial condition, as well as our ability to complete any future offshore securities offering.
The CSRC or any other PRC government authorities may also take actions requiring us, or making it advisable for us, to halt any future offshore securities offering. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that such settlement and delivery may not occur.
The CSRC or any other PRC government authorities may also take actions requiring us, or making it advisable for us, to halt any future offshore securities offering. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that such settlement and delivery may not occur.
In December 2021, the CAC promulgated the amended Measures of Cybersecurity Review which require cyberspace operators with personal information of more than one million users to file for cybersecurity review with the CRO, in the event such operators plan for an overseas listing.
In December 2021, the CAC promulgated the amended Measures of Cybersecurity Review which require cyberspace operators with personal information of more than one million users to file for cybersecurity review with the CRO, in the event such operators plan for an overseas listing.
The amended Measures of Cybersecurity Review provide that, among others, an application for cybersecurity review must be made by an issuer that is a “network platform operator” as defined therein before such issuer’s securities become listed in a foreign country, if the issuer possesses personal information of more than one million users, and that the relevant governmental authorities in the PRC may initiate cybersecurity review if such governmental authorities determine an operator’s cyber products or services or data processing activities affect or may affect China’s national security.
The amended Measures of Cybersecurity Review provide that, among others, an application for cybersecurity review must be made by an issuer that is a “network platform operator” as defined therein before such issuer’s securities become listed in a foreign country, if the issuer possesses personal information of more than one million users, and that the relevant governmental authorities in the PRC may initiate cybersecurity review if such governmental authorities determine an operator’s cyber products or services or data processing activities affect or may affect China’s national security.
Currently, the cybersecurity laws and regulations have not directly affected our business and operations, As the amended Measures of Cybersecurity Review took effect in February 2022, we may be subject to review when conducting data processing activities, and may face challenges in addressing its requirements and make necessary changes to our internal policies and practices in data processing.
Currently, the cybersecurity laws and regulations have not directly affected our business and operations, As the amended Measures of Cybersecurity Review took effect in February 2022, we may be subject to review when conducting data processing activities, and may face challenges in addressing its requirements and make necessary changes to our internal policies and practices in data processing.
If we are not able to maintain high resource utilization levels without corresponding cost reductions or price increases, our profitability will suffer. 11 A significant portion of our income is generated, and will in the future continue to be generated, on a project basis with a fixed price; we may not be able to accurately estimate costs and determine resource requirements in relation to our projects, which would reduce our margins and profitability.
If we are not able to maintain high resource utilization levels without corresponding cost reductions or price increases, our profitability will suffer. 11 A portion of our income is generated, and will in the future continue to be generated, on a project basis with a fixed price; we may not be able to accurately estimate costs and determine resource requirements in relation to our projects, which would reduce our margins and profitability.
This lack or loss of confidence could also not only cause investors to avoid trading our Common Stock or sell positions in our Common Stock, but could also undermine efforts of the Company to secure equity or debt financing, hinder any efforts to up-list the Common Stock to a national securities exchange, adversely influence the decision of third parties to conduct business with our company, or have other adverse business or financial consequences.
This potential lack or loss of confidence could also not only cause investors to avoid trading our Common Stock or sell positions in our Common Stock, but could also undermine efforts of the Company to secure equity or debt financing, hinder any efforts to up-list the Common Stock to a national securities exchange, adversely influence the decision of third parties to conduct business with our company, or have other adverse business or financial consequences.
Because we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including: ● the sections of the Exchange Act that regulate the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act that require insiders to file public reports of their stock ownership and trading activities and impose liability on insiders who profit from trades made in a short period of time; and ● the rules under the Exchange Act that require the filing of quarterly reports on Form 10-Q containing unaudited financial and other specified information and current reports on Form 8-K upon the occurrence of specified significant events. 41 In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are not large accelerated filers or accelerated filers are required to file their annual report on Form 10-K within 90 days after the end of each fiscal year.
Because we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including: ● the sections of the Exchange Act that regulate the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act that require insiders to file public reports of their stock ownership and trading activities and impose liability on insiders who profit from trades made in a short period of time; and ● the rules under the Exchange Act that require the filing of quarterly reports on Form 10-Q containing unaudited financial and other specified information and current reports on Form 8-K upon the occurrence of specified significant events. 40 In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are not large accelerated filers or accelerated filers are required to file their annual report on Form 10-K within 90 days after the end of each fiscal year.
Any such action, once taken by the PRC government, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless. 24 We face various risks and uncertainties relating to doing business in Mainland China and Hong Kong SAR.
Any such action, once taken by the PRC government, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless. We face various risks and uncertainties relating to doing business in Mainland China and Hong Kong SAR.
Given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant government authorities, we may be required to obtain additional licenses, permits, filings or approvals for the services in the future. 36 Furthermore, in connection with our issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, we, our PRC subsidiaries, (i) are not required to obtain permissions from the China Securities Regulatory Commission, or the CSRC, (ii) are not required to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, and (iii) have not been asked to obtain such permissions by any PRC authority.
Given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant government authorities, we may be required to obtain additional licenses, permits, filings or approvals for the services in the future. 35 Furthermore, in connection with our issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, we, our PRC subsidiaries, (i) are not required to obtain permissions from the China Securities Regulatory Commission, or the CSRC, (ii) are not required to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, and (iii) have not been asked to obtain such permissions by any PRC authority.
Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies. 40 We are a Cayman Islands company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than under U.S. law, you may have less protection for your shareholder rights than you would under U.S. law.
Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies. 39 We are a Cayman Islands company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than under U.S. law, you may have less protection for your shareholder rights than you would under U.S. law.
We may also be liable to our clients for breach of contract for interruptions in service. Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.
We may also be liable to our clients for breach of contract for interruptions in service. 17 Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.
Our Auditor is located in China. 32 The HFCAA states if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by PCAOB for three consecutive years beginning in 2021, being a Listed Auditor, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the counter trading market in the U.S.
Our Auditor is located in China. 31 The HFCAA states if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by PCAOB for three consecutive years beginning in 2021, being a Listed Auditor, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the counter trading market in the U.S.
If the Chinese government’s regulatory involvement expands and we become subject to that expanded involvement, our operations may be negatively impacted, although, as of the date of this annual report, there is no known regulatory involvement of the nature described in this paragraph and there is no discernible immediate impact on our company under the recent regulatory developments described in this paragraph. 35 We face various risks and uncertainties relating to doing business in Mainland China and Hong Kong SAR.
If the Chinese government’s regulatory involvement expands and we become subject to that expanded involvement, our operations may be negatively impacted, although, as of the date of this annual report, there is no known regulatory involvement of the nature described in this paragraph and there is no discernible immediate impact on our company under the recent regulatory developments described in this paragraph. 34 We face various risks and uncertainties relating to doing business in Mainland China and Hong Kong SAR.
A significant portion of our income is generated, and will in the future continue to be generated, from fees we receive for our projects with a fixed price.
A portion of our income is generated, and will in the future continue to be generated, from fees we receive for our projects with a fixed price.
Pursuant to the Draft Confidentiality and Archives Management Provisions, PRC domestic companies that seek to offer and list securities in overseas markets shall establish confidentiality and archives system.
Pursuant to the Confidentiality and Archives Management Provisions, PRC domestic companies that seek to offer and list securities in overseas markets shall establish confidentiality and archives system.
Pursuant to the Draft Confidentiality and Archives Management Provisions, PRC domestic companies that seek to offer and list securities in overseas markets shall establish confidentiality and archives system.
Pursuant to the Confidentiality and Archives Management Provisions, PRC domestic companies that seek to offer and list securities in overseas markets shall establish confidentiality and archives system.
The Company’s results of operations in any period may not necessarily be indicative of the results that may be expected for any future period. See “Risk Factors” included elsewhere in this Annual Report. The following table presents our summary consolidated statements of comprehensive income for the fiscal years ended June 30, 2022, 2021 and 2020, respectively.
The Company’s results of operations in any period may not necessarily be indicative of the results that may be expected for any future period. See “Risk Factors” included elsewhere in this Annual Report. The following table presents our summary consolidated statements of comprehensive income for the fiscal years ended June 30, 2023, 2022, and 2021, respectively.
If our common shares are delisted from the NASDAQ Global Market at some later date or become subject to the penny stock regulations, it is likely that the price of our shares would decline and that our shareholders would find it difficult to sell their shares. 39 The market price for our shares may be volatile.
If our common shares are delisted from the NASDAQ Global Market at some later date or become subject to the penny stock regulations, it is likely that the price of our shares would decline and that our shareholders would find it difficult to sell their shares. 38 The market price for our shares may be volatile.
The PRC domestic companies shall obtain approval from the competent authority and file with the confidential administration department at the same level when providing or publicly disclosing documents and materials related to state secrets or secrets of the governmental authorities to the relevant securities companies, securities service agencies or the offshore regulatory authorities or providing or publicly disclosing such documents and materials through its offshore listing entity, and shall complete corresponding procedures when providing or publicly disclosing documents and materials which may adversely influence national security and the public interest to the relevant securities companies, securities service agencies or the offshore regulatory authorities or providing or publicly disclosing such documents and materials through its offshore listing entity.
The PRC domestic companies shall obtain approval from the competent authority and file with the confidential administration department at the same level when providing or publicly disclosing documents and materials related to state secrets or secrets of the governmental authorities to the relevant individuals or entities including securities companies, securities service agencies or the offshore regulatory authorities or providing or publicly disclosing such documents and materials through its offshore listing entity, and shall complete corresponding procedures when providing or publicly disclosing documents and materials which may adversely influence national security and the public interest to the relevant individuals or entities including securities companies, securities service agencies or the offshore regulatory authorities or providing or publicly disclosing such documents and materials through its offshore listing entity.
The PRC domestic companies shall obtain approval from the competent authority and file with the confidential administration department at the same level when providing or publicly disclosing documents and materials related to state secrets or secrets of the governmental authorities to the relevant securities companies, securities service agencies or the offshore regulatory authorities or providing or publicly disclosing such documents and materials through its offshore listing entity, and shall complete corresponding procedures when providing or publicly disclosing documents and materials which may adversely influence national security and the public interest to the relevant securities companies, securities service agencies or the offshore regulatory authorities or providing or publicly disclosing such documents and materials through its offshore listing entity.
The PRC domestic companies shall obtain approval from the competent authority and file with the confidential administration department at the same level when providing or publicly disclosing documents and materials related to state secrets or secrets of the governmental authorities to the relevant individuals or entities including securities companies, securities service agencies or the offshore regulatory authorities or providing or publicly disclosing such documents and materials through its offshore listing entity, and shall complete corresponding procedures when providing or publicly disclosing documents and materials which may adversely influence national security and the public interest to the relevant individuals or entities including securities companies, securities service agencies or the offshore regulatory authorities or providing or publicly disclosing such documents and materials through its offshore listing entity.
The determination of our status as a foreign private issuer is made annually on the last business day of our most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on or after December 31, 2022.
The determination of our status as a foreign private issuer is made annually on the last business day of our most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on or after December 31, 2023.
Holder. 42 If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our common shares and trading volume could decline. The trading market for our common shares will depend in part on the research and reports that securities or industry analysts publish about us or our business.
Holder. 41 If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our common shares and trading volume could decline. The trading market for our common shares will depend in part on the research and reports that securities or industry analysts publish about us or our business.
ITEM 3. KEY INFORMATION A. Selected financial data The following selected consolidated financial data as of and for the years ended June 30, 2022, 2021 and 2020 have been derived from the audited consolidated financial statements of the Company included in this Annual Report.
ITEM 3. KEY INFORMATION A. Selected financial data The following selected consolidated financial data as of and for the years ended June 30, 2023, 2022, and 2021 have been derived from the audited consolidated financial statements of the Company included in this Annual Report.
If our shares are prohibited from trading in the U.S., there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our shares will develop outside of the U.S.
If our shares are prohibited from trading in the U.S., there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our shares will develop outside of the U.S. Efforts to increase U.S.
The PRC legal system is evolving rapidly, and therefore the interpretations and enforcement of many laws, regulations and rules may contain inconsistencies and uncertainties. From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights.
The PRC legal system is evolving rapidly, and therefore the interpretations and enforcement of many laws, regulations and rules may contain reasonable uncertainties. From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights.
Any of the foregoing or similar factors could result in reduced demand for our services which, in turn, could have material adverse effects on our business and results of operations. 43
Any of the foregoing or similar factors could result in reduced demand for our services which, in turn, could have material adverse effects on our business and results of operations. 42
The balances due to subsidiaries from the Company were Nil, Nil and US$7.1 million. as of June 30 for fiscal 2020, 2021 and 2022, respectively. The balances were reflected in the section “PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION” in our financial statements for fiscal 2020, 2021, and 2022, respectively.
The balances due to subsidiaries from the Company were Nil, US$7.1 million, and US$7.6 million as of June 30 for fiscal 2021, 2022, and 2023, respectively. The balances were reflected in the section “PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION” in our financial statements for fiscal 2021, 2022, and 2023, respectively.
For the years ended June 30, 2022, 2021 and 2020, Citibank and its affiliates accounted for 20.6%, 19.1% and 21.5% of the Company’s total revenues, respectively. For fiscal 2022 and 2021, substantially all the service provided by the Company to Citibank was IT consulting services and billed through time-and-expense contracts.
For the years ended June 30, 2023, 2022, and 2021, Citibank and its affiliates accounted for 21.4%, 20.6%, and 19.1% of the Company’s total revenues, respectively. For fiscal 2023 and 2022, substantially all the service provided by the Company to Citibank was IT consulting services and billed through time-and-expense contracts.
At this point, the extent to which the coronavirus has slowed down our projected revenue growth is reflected in our fiscal 2022 financial statements and may continue to slow down our growth for fiscal 2023 and beyond. Fluctuation in the value of the Renminbi and other currencies may have a material adverse effect on the value of your investment.
At this point, the extent to which the coronavirus has slowed down our projected revenue growth is reflected in our fiscal 2023 financial statements and may continue to slow down our growth in the future. Fluctuation in the value of the Renminbi and other currencies may have a material adverse effect on the value of your investment.
We maintain nineteen delivery and/or R&D centers, of which ten are located in Mainland China (Shanghai, Beijing, Dalian, Tianjin, Xi’an, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Hainan) and nine are located globally (Hong Kong SAR, the United States of America, Japan, Singapore, Australia, Malaysia, India, the Philippines, and Vietnam), to serve different customers in various geographic locations.
We maintain 20 delivery and/or R&D centers, of which 10 are located in Mainland China (Shanghai, Beijing, Dalian, Tianjin, Xi’an, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Hainan) and ten are located globally (Hong Kong SAR, the United States of America, Japan, Singapore, Australia, Malaysia, India, the Philippines, Vietnam, and Canada), to serve different customers in various geographic locations.
The inability of the PCAOB to conduct inspections of auditors in Mainland China and Hong Kong SAR makes it more difficult to evaluate the effectiveness of our Auditor’s audit procedures or quality control procedures as compared to auditors outside of Mainland China and Hong Kong SAR that are subject to complete audit and investigation by the PCAOB.
The potential inability of the PCAOB to conduct inspections of auditors in Mainland China and Hong Kong SAR could make it more difficult to evaluate the effectiveness of our Auditor’s audit procedures or quality control procedures as compared to auditors outside of Mainland China and Hong Kong SAR that are subject to complete audit and investigation by the PCAOB.
The number of our total employees grew from 2,746 in fiscal 2020 to 3,352 in fiscal 2021. As of June 30, 2022 we had 3,824 full-time employees. We are actively looking for additional locations to establish new offices and expand our current offices and sales and delivery centers.
The number of our total employees grew from 3,352 in fiscal 2021 to 3,824 in fiscal 2022. As of June 30, 2023 we had 3,509 full-time employees. We are actively looking for additional locations to establish new offices and expand our current offices and sales and delivery centers.
In the foreseeable future, it is our understanding that CLPS will not engage in "data process activities". Therefore, we believe that the Draft does not apply to CLPS. The Draft has no substantial impact on the business of CLPS.
In the foreseeable future, it is our understanding that CLPS will not engage in “data process activities”. Therefore, we believe that the Draft does not apply to CLPS. The Draft has no substantial impact on the business of CLPS.
We cannot predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections available to us and other foreign investors, including you.
We cannot predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof. These uncertainties could limit the legal protections available to us and other foreign investors, including you.
Our annual voluntarily attrition rates were 16.6% and 15% in fiscal 2020 and fiscal 2021, respectively; in fiscal 2022, this rate was 15.4%. We may encounter higher attrition rates in the future, particularly if China continues to experience strong economic growth.
Our annual voluntarily attrition rates were 15% and 15.4% in fiscal 2021 and fiscal 2022, respectively; in fiscal 2023, this rate was 18%. We may encounter higher attrition rates in the future, particularly if China continues to experience strong economic growth.
Trading in our securities may be prohibited under the HFCAA if PCAOB determines that it cannot inspect or investigate completely our Auditor, and that as a result, Nasdaq may determine to delist our securities. 33 Under the current version of HFCAA, an SEC ban on trading shares of Common Stock in the U.S. could take place in early 2024 if we have a Listed Auditor (a public auditor that cannot be completely audited and investigated by the PCAOB for three consecutive fiscal years (being 2021, 2022 and 2023)).
Trading in our securities may be prohibited under the HFCAA if PCAOB should determine that it cannot inspect or investigate completely our Auditor, and that as a result, Nasdaq may determine to delist our securities. 32 Under the current version of HFCAA, an SEC ban on trading shares of Common Stock in the U.S. could take place if we have a Listed Auditor (a public auditor that cannot be completely audited and investigated by the PCAOB for three consecutive fiscal years).
Our exposure to foreign exchange risk primarily relates to the limited cash denominated in currencies other than the functional currencies of each entity and limited revenue contracts dominated in Singapore dollar, Hong Kong dollar, Australian dollar, Indian rupee, Malaysian ringgit and Japanese yen in certain of our operating subsidiaries.
Our exposure to foreign exchange risk primarily relates to the limited cash denominated in currencies other than the functional currencies of each entity and limited revenue contracts dominated in Singapore dollar (SGD), Hong Kong dollar (HKD), Australian dollar (AUD), Indian rupee (INR), Malaysian ringgit (MYR), Japanese yen (JPY), and Philippine peso (PHP) in certain of our operating subsidiaries.
If the CSRC or other PRC regulatory authorities subsequently determine that we need to obtain their approval or complete the required filing or other administrative procedures for any future offshore securities offering or other financing activities, or if such government authorities promulgate any interpretation or implement rules that would require us to obtain approvals from the CSRC or other regulatory authorities or complete required filing or other administrative procedures for any future offshore securities offering or other financing activities, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing or other administrative procedures, or obtain any waiver of aforesaid requirements if and when procedures are established to obtain such waiver.
As the CSRC determine that we need to complete the required filing procedures for any such subsequent securities offerings in the same overseas market where we have previously offered and listed securities, or if such government authorities promulgate any interpretation or implement rules that would require us to obtain approvals from the CSRC or other regulatory authorities or complete required filing or other administrative procedures for any future offshore securities offering or other financing activities, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing or other administrative procedures, or obtain any waiver of aforesaid requirements if and when procedures are established to obtain such waiver.
In 2021 and onwards, U.S. public companies with operations based in China have been subjects of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC and certain members of Congress.
Any unfavorable results from the investigations could harm our business operations and our reputation. In 2021 and onwards, U.S. public companies with operations based in China have been subjects of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC and certain members of Congress.
The potential enactment of the Accelerating Holding Foreign Companies Accountable Act, if it is enacted into law in the U.S., would decrease the number of non-inspection years from three to two years under HFCAA, thus reducing the time period before our shares of Common Stock may be banned from being traded in the U.S.
The enactment of the Accelerating Holding Foreign Companies Accountable Act has decreased the number of non-inspection years from three to two years under HFCAA, thus reducing the time period before our shares of Common Stock may be banned from being traded in the U.S.
As of June 30, 2022 and 2021, our accounts receivable balance, net of allowance, amounted to approximately $53.8 million and $44.1 million, respectively. As of the years ended June 30, 2022 and 2021, Citibank accounted for 30.2% and 23.1% of the Company’s total accounts receivable balance.
As of June 30, 2023 and 2022, our accounts receivable balance, net of allowance, amounted to approximately $48.5 million and $53.8 million, respectively. As of the years ended June 30, 2023 and 2022, Citibank accounted for 32.3% and 30.2% and of the Company’s total accounts receivable balance.
We may not be able to achieve anticipated growth, which could materially and adversely affect our business and prospects. We have significantly grown and expanded our business recently. Our revenues grew from $89.4 million in fiscal 2020 to $126.1 million in fiscal 2021 and to $152.0 million in fiscal 2022.
We may not be able to achieve anticipated growth, which could materially and adversely affect our business and prospects. Our revenues grew from $126.1 million in fiscal 2021 to $152.0 million in fiscal 2022 and decreased to $150.4 million in fiscal 2023.
These risks could result in a material adverse change in our operations and the value of our shares of Common Stock, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of our Common Stock to decline. U.S. regulators’ ability to conduct investigations or enforce rules in China is limited.
These risks could result in a material adverse change in our operations and the value of our shares of Common Stock, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of our Common Stock to decline.
We rely on software licenses from our clients with respect to certain projects. To protect proprietary information and other intellectual property of our clients, we require our employees, subcontractors, consultants, advisors and collaborators to enter into confidentiality agreements with us.
To protect proprietary information and other intellectual property of our clients, we require our employees, subcontractors, consultants, advisors and collaborators to enter into confidentiality agreements with us.
On September 30, 2022, the buying rate announced by the Federal Reserve Statistical Release was RMB 7.1135 to $1.00.
On September 29, 2023, the buying rate announced by the Federal Reserve Statistical Release was RMB 7.2960 to $1.00.
Under the terms of our client contracts, we are required to keep such information strictly confidential. We use network security technologies, surveillance equipment and other methods to protect sensitive and confidential client data.
We are typically required to manage, utilize and store sensitive or confidential client data in connection with the services we provide. Under the terms of our client contracts, we are required to keep such information strictly confidential. We use network security technologies, surveillance equipment and other methods to protect sensitive and confidential client data.
The amounts were offset when the Company’s consolidated financial statements were prepared. The balances due from subsidiaries to the Company were US$7.1 million, US$7.6 million, and US$22.8 million. as of June 30 for fiscal 2020, 2021 and 2022, respectively. The subsidiaries provide cash support to the Company according its business development plan.
The balances due from subsidiaries to the Company were US$7.6 million, US$22.8 million, and US$24.7 million as of June 30 for fiscal 2021, 2022, and 2023, respectively. The subsidiaries provide cash support to the Company according its business development plan.
If our shares are delisted from the NASDAQ Global Market at some later date, our shareholders could find it difficult to sell our shares.
We may not meet continued listing standards on the NASDAQ Global Market. If our shares are delisted from the NASDAQ Global Market at some later date, our shareholders could find it difficult to sell our shares.
The non-resident enterprise, being the transferor, may be subject to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use of company structure without reasonable commercial purposes.
The non-resident enterprise, being the transferor, may be subject to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use of company structure without reasonable commercial purposes. As a result, gains derived from such indirect transfer may be subject to PRC tax at a rate of up to 10%.
Based on the foregoing, we and our PRC legal counsel do not expect that, as of the date of this annual report, the current applicable PRC laws on cybersecurity would have a material adverse impact on our business. We may not meet continued listing standards on the NASDAQ Global Market.
Based on the foregoing, we and our PRC legal counsel do not expect that, as of the date of this annual report, the current applicable PRC laws on cybersecurity would have a material adverse impact on our business. We may not meet regulatory requirements to prepare sufficiently for cybersecurity incident.
Losses or liabilities that are incurred as a result of any of the foregoing could have a material adverse effect on our business. 17 If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations on a timely basis, or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely affected.
If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations on a timely basis, or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely affected.
Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time consuming, and any required approval processes, including obtaining approval from the MOC or its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.
Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time consuming, and any required approval processes, including obtaining approval from the MOC or its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share. 28 Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
Our independent registered public accounting firm that issues the audit report included in this annual report, as auditors of companies that are traded publicly in the United States and a firm registered with the Public Company Accounting Oversight Board, or the PCAOB, is required by the laws of the United States to undergo regular inspections by the PCAOB to assess its compliance with the laws of the United States and professional standards.
Our auditor, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
The National Security Law provides that the state shall safeguard its sovereignty, security and cybersecurity development interests, and that the government shall establish a national security review and supervision system to review, among other things, foreign investment, key technologies, internet and information technology products and services, and other important activities that are likely to impact the national security of China. 22 On November 7, 2016, the Standing Committee of the National People’s Congress issued the Cyber Security Law, which came into effect on June 1, 2017.
The National Security Law provides that the state shall safeguard its sovereignty, security and cybersecurity development interests, and that the government shall establish a national security review and supervision system to review, among other things, foreign investment, key technologies, internet and information technology products and services, and other important activities that are likely to impact the national security of China.
Dividend policy is subject to the discretion of our Board of Directors and will depend on, among other things, our earnings, financial condition, capital requirements and other factors. There is no assurance that our Board of Directors will declare dividends even if we are profitable.
Dividend policy is subject to the discretion of our Board of Directors and will depend on, among other things, our earnings, financial condition, capital requirements and other factors.
The successful assertion of one or more large claims against us could have a material adverse effect on our business, reputation, results of operations, financial condition and cash flows. Even if such assertions against us are unsuccessful, we may incur reputational harm and substantial legal fees.
The successful assertion of one or more large claims against us could have a material adverse effect on our business, reputation, results of operations, financial condition and cash flows.
The Cyber Security Law sets high requirements for the operational security of facilities deemed to be part of the PRC’s “critical information infrastructure.” These requirements include data localization, i.e., storing personal information and important business data in China, and national security review requirements for any network products or services that may have an impact on national security.
The Cyber Security Law also requires network operators that provide network access or domain name registration services, landline or mobile phone network access, or that provide users with information publication or instant messaging services, to require users to provide a real identity when they sign up. 22 The Cyber Security Law sets high requirements for the operational security of facilities deemed to be part of the PRC’s “critical information infrastructure.” These requirements include data localization, i.e., storing personal information and important business data in China, and national security review requirements for any network products or services that may have an impact on national security.
It is possible that, despite existing safeguards, an employee could misappropriate our clients’ proprietary information or data, exposing us to a risk of loss or litigation and possible liability.
It is possible that, despite existing safeguards, an employee could misappropriate our clients’ proprietary information or data, exposing us to a risk of loss or litigation and possible liability. Losses or liabilities that are incurred as a result of any of the foregoing could have a material adverse effect on our business.
As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.
As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. 29 We face uncertainties on the reporting and consequences on future private equity financing transactions, share exchange or other transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises.
As a result, gains derived from such indirect transfer may be subject to PRC tax at a rate of up to 10%. 29 In February 2015, the SAT issued Circular 7 to replace the rules relating to indirect transfers in Circular 698. Circular 7 has introduced a new tax regime that is significantly different from that under Circular 698.
In February 2015, the SAT issued Circular 7 to replace the rules relating to indirect transfers in Circular 698. Circular 7 has introduced a new tax regime that is significantly different from that under Circular 698.
If our subsidiaries in Mainland China are unable to pay dividends or make other payments to us, we may be unable to pay dividends on our shares. 38 The subsidiaries have not declared or paid any cash dividends to the holding company.
If our subsidiaries in Mainland China are unable to pay dividends or make other payments to us, we may be unable to pay dividends on our shares. 37 The Company provides cash support to its subsidiaries according its business development plan.
Selected Consolidated Statement of Comprehensive Income For the years ended June 30, 2022 2021 2020 Revenues $ 152,022,381 $ 126,061,693 $ 89,415,798 Less: Cost of revenues (111,033,345 ) (85,890,757 ) (58,296,097 ) Gross profit 40,989,036 40,170,936 31,119,701 Operating income (expenses): Selling and marketing expenses (4,103,066 ) (3,753,236 ) (3,059,877 ) Research and development (R&D) expenses (7,971,145 ) (13,337,913 ) (10,436,975 ) General and administrative expenses (23,045,664 ) (16,784,688 ) (16,343,936 ) Subsidies and other operating income 1,536,394 2,080,087 1,927,230 Total operating expenses (33,583,481 ) (31,795,750 ) (27,913,558 ) Income from operations 7,405,555 8,375,186 3,206,143 Other income 854,250 296,319 608,638 Other expenses (575,605 ) (351,045 ) (107,322 ) Income before income tax and share of income in equity investees 7,684,200 8,320,460 3,707,459 Provision for income taxes 3,045,992 1,257,124 835,444 Income before share of income in equity investees 4,638,208 7,063,336 2,872,015 Share of (loss) income in equity investees, net of tax (50,297 ) (44,121 ) 207,363 Net income 4,587,911 7,019,215 3,079,378 Less: Net income attributable to noncontrolling interests 132,483 202,643 141,139 Net income attributable to CLPS Incorporation’s shareholders $ 4,455,428 $ 6,816,572 $ 2,938,239 Other comprehensive (loss) income Foreign currency translation (loss) income $ (1,828,542 ) $ 2,695,223 $ (571,943 ) Less: Foreign currency translation (loss) income attributable to noncontrolling interest (48,211 ) 102,475 (22,928 ) Other comprehensive (loss) income attributable to CLPS Incorporation’s shareholders $ (1,780,331 ) $ 2,592,748 $ (549,015 ) Comprehensive income attributable to CLPS Incorporation shareholders $ 2,675,097 $ 9,409,320 $ 2,389,224 Comprehensive income attributable to noncontrolling interests 84,272 305,118 118,211 Comprehensive income $ 2,759,369 $ 9,714,438 $ 2,507,435 Basic earnings per common share 0.21 0.39 0.20 Weighted average number of share outstanding – basic 20,924,683 17,279,443 14,689,224 Diluted earnings per common share 0.21 0.39 0.20 Weighted average number of share outstanding – diluted 21,057,063 17,569,440 14,692,299 Supplemental information: Non-GAAP income before income tax and share of income of equity investees 14,869,062 13,449,156 7,711,539 Non-GAAP net income 11,772,773 12,147,911 7,083,458 Non-GAAP net income attributable to CLPS Incorporation’s shareholders 11,640,290 11,945,268 6,942,319 Non-GAAP basic earnings per common share 0.56 0.69 0.47 Weighted average number of share outstanding – basic 20,924,683 17,279,443 14,689,224 Non-GAAP diluted earnings per common share 0.55 0.68 0.47 Weighted average number of share outstanding – diluted 21,057,063 17,569,440 14,692,299 1 The following table presents our consolidated balance sheet data as of June 30, 2022 and 2021, respectively.
Selected Consolidated Statement of Comprehensive Income For the years ended June 30, 2023 2022 2021 Revenue from third parties $ 150,298,963 $ 151,970,357 $ 125,792,221 Revenue from related parties 57,576 52,024 269,472 Cost of revenue from third parties (115,827,597 ) (110,989,394 ) (85,664,401 ) Cost of revenue from related parties (47,212 ) (43,951 ) (226,356 ) Gross profit 34,481,730 40,989,036 40,170,936 Operating income (expenses): Selling and marketing expenses (3,300,555 ) (4,103,066 ) (3,753,236 ) Research and development (R&D) expenses (8,336,999 ) (7,971,145 ) (13,337,913 ) General and administrative expenses (21,641,317 ) (23,045,664 ) (16,784,688 ) Impairment of goodwill (2,382,538 ) - - Subsidies and other operating income 1,256,070 1,536,394 2,080,087 Total operating expenses (34,405,339 ) (33,583,481 ) (31,795,750 ) Income from operations 76,391 7,405,555 8,375,186 Other income 1,123,612 854,250 296,319 Other expenses (430,357 ) (575,605 ) (351,045 ) Income before income tax and share of income in equity investees 769,646 7,684,200 8,320,460 Provision for income taxes 674,344 3,045,992 1,257,124 Income before share of income in equity investees 95,302 4,638,208 7,063,336 Share of income (loss) in equity investees, net of tax 70,263 (50,297 ) (44,121 ) Net income 165,565 4,587,911 7,019,215 Less: Net (loss) income attributable to noncontrolling interests (26,964 ) 132,483 202,643 Net income attributable to CLPS Incorporation’s shareholders $ 192,529 $ 4,455,428 $ 6,816,572 Other comprehensive (loss) income Foreign currency translation (loss) income $ (3,532,507 ) $ (1,828,542 ) $ 2,695,223 Less: Foreign currency translation (loss) income attributable to noncontrolling interests (92,161 ) (48,211 ) 102,475 Other comprehensive (loss) income attributable to CLPS Incorporation’s shareholders $ (3,440,346 ) $ (1,780,331 ) $ 2,592,748 Comprehensive (loss) income attributable to CLPS Incorporation’s shareholders $ (3,247,817 ) $ 2,675,097 $ 9,409,320 Comprehensive (loss) income attributable to noncontrolling interests (119,125 ) 84,272 305,118 Comprehensive (loss) income $ (3,366,942 ) $ 2,759,369 $ 9,714,438 Basic earnings per common share 0.01 0.21 0.39 Weighted average number of share outstanding – basic 23,153,976 20,924,683 17,279,443 Diluted earnings per common share 0.01 0.21 0.39 Weighted average number of share outstanding – diluted 23,153,976 21,057,063 17,569,440 Supplemental information: Non-GAAP income before income tax and share of income of equity investees 5,630,480 14,869,062 13,449,156 Non-GAAP net income 5,026,399 11,772,773 12,147,911 Non-GAAP net income attributable to CLPS Incorporation’s shareholders 5,053,363 11,640,290 11,945,268 Non-GAAP basic earnings per common share 0.22 0.56 0.69 Weighted average number of share outstanding – basic 23,153,976 20,924,683 17,279,443 Non-GAAP diluted earnings per common share 0.22 0.55 0.68 Weighted average number of share outstanding – diluted 23,153,976 21,057,063 17,569,440 1 The following table presents our consolidated balance sheet data as of June 30, 2023 and 2022, respectively.
The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of our auditor’s audit procedures or quality control procedures as compared to auditors outside of China that are subject to PCAOB inspections. Investors may lose confidence in our reported financial information and procedures and the quality of our financial statements.
The inability of the PCAOB to conduct inspections of auditors in China in the past has made it more difficult to evaluate the effectiveness of our independent registered public accounting firm’s audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections.
It is unclear whether, if we are considered a PRC resident enterprise, holders of our shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. 28 The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
It is unclear whether, if we are considered a PRC resident enterprise, holders of our shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas.
If we are a non-accelerated filer, we will be exempt from Section 404 requirement to have auditor attestation on our internal control over financial reporting, therefore affording investors less statutory protection.
Although we cease to be an “emerging growth company” on June 30, 2023 as such term is defined in the JOBS Act, we are a non-accelerated filer and are exempt from Section 404 requirement to have auditor attestation on our internal control over financial reporting, therefore affording investors less statutory protection.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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CLPS Guangzhou services clients in Guangzhou. ● Ridik Pte. provides both consulting and solution services. Ridik Pte. services in South East Asia region, including Singapore. ● Ridik Software Pte. currently only provides consulting services. Ridik Software Pte. services in South East Asia region, including Singapore. ● Ridik Sdn. currently only provides consulting services.
CLPS Guangzhou services clients in Guangzhou. ● Ridik Pte. provides both consulting and solution services. Ridik Pte. services clients in South East Asia region, including Singapore. ● Ridik Software Pte. currently only provides consulting services. Ridik Software Pte. services in South East Asia region, including Singapore. ● Ridik Sdn. currently only provides consulting services.
Over the past 10 years, the total assets of China’s banking financial institutions grew at a compound annual growth rate of more than 10%.
Over the past 10 years, total assets of China’s banking financial institutions grew at a compound annual growth rate of more than 10%.
If we use our equity interest to purchase the assets or equity interest of a PRC company owned by PRC residents in the future, such PRC residents will be subject to the registration procedures described in Circular 37. 70 New M&A Regulations and Overseas Listings On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Administration for Taxation, the State Administration for Industry and Commerce, CSRC and SAFE, jointly issued the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&A Rule, which became effective on September 8, 2006 and was amended on June 22, 2009.
If we use our equity interest to purchase the assets or equity interest of a PRC company owned by PRC residents in the future, such PRC residents will be subject to the registration procedures described in Circular 37. 72 New M&A Regulations and Overseas Listings On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Administration for Taxation, the State Administration for Industry and Commerce, CSRC and SAFE, jointly issued the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&A Rule, which became effective on September 8, 2006 and was amended on June 22, 2009.
A product developed to enable digital transformation, CAKU has made breakthroughs in the following areas: ● Architectural design- CAKU has adopted an independent, secure and reliable distributed architecture, using a flexible unitized system to divide into microservices that creates an open source platform solution, is independent from mainframe platform, and is able to iterate faster; ● Business application- CAKU offers a new ’scenario-driven’ business model, featuring over a thousand standardized business components, more than 1,000 API interfaces, and more than 8,000 business parameters, to ensure that the credit card system is configurable and provides refined management and fast parameterization; ● Technological innovation- CAKU features a high performance, high availability and high expansibility system based on an advanced real-time entry design scheme, graphics engine design concept and powerful front-end tr ansaction, which can meet the process requirement of over 200,000 transactions per second (TPS).
A product developed to enable digital transformation, CAKU has made breakthroughs in the following areas: ● Architectural design- CAKU has adopted an independent, secure and reliable distributed architecture, using a flexible unitized system to divide into microservices that creates an open source platform solution, is independent from mainframe platform, and is able to iterate faster; ● Business application- CAKU offers a new ’scenario-driven’ business model, featuring over a thousand standardized business components, more than 1,000 API interfaces, and more than 8,000 business parameters, to ensure that the credit card system is configurable and provides refined management and fast parameterization; ● Technological innovation- CAKU features a high performance, high availability and high expansibility system based on an advanced real-time entry design scheme, graphics engine design concept and powerful front-end transaction, which can meet the process requirement of over 200,000 transactions per second (TPS).
The aforementioned share transfer was part of reorganization of the group. 45 On August 4, 2017, CLPS QC (WOFE) received a business license from China (Shanghai) Pilot Free Trade Zone Administration for Industry and Commerce and was established by Qinheng as a PRC limited liability company. Qinheng subscribed USD 200,000 and held 100% of equity interest in CLPS QC (WOFE).
The aforementioned share transfer was part of reorganization of the group. 44 On August 4, 2017, CLPS QC (WOFE) received a business license from China (Shanghai) Pilot Free Trade Zone Administration for Industry and Commerce and was established by Qinheng as a PRC limited liability company. Qinheng subscribed USD 200,000 and held 100% of equity interest in CLPS QC (WOFE).
We believe that the depth and comprehensive nature of our talent training services are key features that distinguish us from our competitions. For more than ten years, the Company has been recruiting, training, developing and retaining human capital and talents. We have been developing and upgrading our CLPS Virtual Banking Platform (CLB) to train specialized financial IT professionals.
We believe that the depth and comprehensive nature of our talent training services are key features that distinguish us from our competitions. For more than 15 years, the Company has been recruiting, training, developing and retaining human capital and talents. We have been developing and upgrading our CLPS Virtual Banking Platform (CLB) to train specialized financial IT professionals.
For the fiscal year 2022, revenues from existing and new clients accounted for 97.3% and 2.7% of the total revenue, respectively. ● Continue to invest in research and development, deepen domain expertise and develop specific solutions for target industry verticals — We will continue to enhance our domain knowledge in the financial industry and relevant business-specific processes.
For the fiscal year 2023, revenues from existing and new clients accounted for 97.3% and 2.7% of the total revenue, respectively. ● Continue to invest in research and development, deepen domain expertise and develop specific solutions for target industry verticals — We will continue to enhance our domain knowledge in the financial industry and relevant business-specific processes.
This strategic partnership aligns the unique competitive advantages of both parties to produce highly skilled IT talents that can meet industry demands in Singapore and the neighboring countries in Southeast Asia. 56 Our TDP program is a continuous internal training program for our skilled-professionals in order to serve our clients better.
This strategic partnership aligns the unique competitive advantages of both parties to produce highly skilled IT talents that can meet industry demands in Singapore and the neighboring countries in Southeast Asia. 55 Our TDP program is a continuous internal training program for our skilled-professionals in order to serve our clients better.
After this share transfer, Xiao Feng Yang and Raymond Ming Hui Lin respectively held 50% shares of CLPS Shanghai. 44 On June 24, 2014, CLPS Shanghai increased its registered capital to RMB30,000,000 (approximately US$4,759,004). Xiao Feng Yang and Raymond Ming Hui Lin respectively increased their subscribed capital to RMB15,000,000 (approximately US$2,379,502).
After this share transfer, Xiao Feng Yang and Raymond Ming Hui Lin respectively held 50% shares of CLPS Shanghai. 43 On June 24, 2014, CLPS Shanghai increased its registered capital to RMB30,000,000 (approximately US$4,759,004). Xiao Feng Yang and Raymond Ming Hui Lin respectively increased their subscribed capital to RMB15,000,000 (approximately US$2,379,502).
We will continue to develop our new IT solutions to meet the evolving needs of our Chinese and global financial institutional clientele drawing upon the forward-looking research of our R&D center. Revenues from our customized IT solution services were approximately $6.7 million, $3.1 million, and $1.8 million, respectively.
We will continue to develop our new IT solutions to meet the evolving needs of our Chinese and global financial institutional clientele drawing upon the forward-looking research of our R&D center. Revenues from our customized IT solution services were approximately $4.6 million, $6.7 million, and $3.1 million, respectively.
Approximately 70% of our personnel are dedicated to serving our foreign financial institution clients. Such personnel maintain up to date financial domain knowledge, technical development and testing skills in Java, .Net, C, C++, testing tools, android or iOS app, blockchain, big data, cloud computing and mainframe COBOL.
Approximately 62% of our personnel are dedicated to serving our foreign financial institution clients. Such personnel maintain up to date financial domain knowledge, technical development and testing skills in Java, .Net, C, C++, testing tools, android or iOS app, blockchain, big data, cloud computing, and mainframe COBOL.
Government Regulation Regulations Relating to PRC Information Technology Service Industry According to the Catalogue of Industries for Encouraging Foreign Investment (2020) issued by the National Development and Reform Commission and the Ministry of Commerce, IT services fall into the category of industries in which foreign investment is encouraged.
Regulations Relating to PRC Information Technology Service Industry According to the Catalogue of Industries for Encouraging Foreign Investment (2020) issued by the National Development and Reform Commission and the Ministry of Commerce, IT services fall into the category of industries in which foreign investment is encouraged.
We believe that maintaining our Company as a proven, reliable partner to our financial industry clients both in China and globally positions us well to capture greater opportunities in the rapidly evolving global market for IT consulting and solutions.
We believe that maintaining our Company as a proven and reliable partner to our clients both in China and globally positions us well to capture greater opportunities in the rapidly evolving global market for IT consulting and solutions.
The Trademark Office of the State Administration for Industry and Commerce handles trademark registrations and grants a renewable protection term of 10 years to registered trademarks. 69 Regulation of Foreign Currency Exchange and Dividend Distribution Foreign Currency Exchange.
The Trademark Office of the State Administration for Industry and Commerce handles trademark registrations and grants a renewable protection term of 10 years to registered trademarks. 71 Regulation of Foreign Currency Exchange and Dividend Distribution Foreign Currency Exchange.
We plan to enhance our sales efforts by recruiting more sales personnel both domestically and overseas. 57 Competition The market for IT services is highly competitive and we expect competition to intensify.
We plan to enhance our sales efforts by recruiting more sales personnel both domestically and overseas. 56 Competition The market for IT services is highly competitive and we expect competition to intensify.
Among them, more than 96% work full-time for customers and the rest of the 4% work on project-based such as IT engineers, project managers, business analysts, among others, or are involved in research of innovative projects. Our greatest edge in terms of human capital is our employees’ English communication skills capability and are familiar with international financial business environment.
Among them, more than 98% work full-time for customers and the rest of the 2% work on project-based such as IT engineers, project managers, business analysts, among others, or are involved in research of innovative projects. Our greatest edge in terms of human capital is our employees’ English communication skills capability and are familiar with international financial business environment.
Registered China 19289112 Class 38: Information transmission; Computer terminal communication; Computer-aided information and image transmission; Information transmission equipment rental; Provide telecommunications link services to connect with the global computer network; Telecommunications routing and junction services; Provide access service for global computer network users; Provide database access service; Digital file transfer Teleconference call service ChinaLink Professional Services Co., Ltd.
Registered China 19289112 Class 38: Information transmission; Computer terminal communication; Computer-aided information and image transmission; Information transmission equipment rental; Provide telecommunications link services to connect with the global computer network; Telecommunications routing and junction services; Provide access service for global computer network users; Provide database access service; Digital file transfer Teleconference call service CLPS Shanghai Co., Ltd.
In addition to trademark protection, we own 3 URL designations and domain names, including clps.com.cn, clpsglobal.com, and clpsgroup.com.cn. 59 We have registered for the following trademarks: Mark Country of Registration Application Number Class/Description Current Owner Status China 19288958 Class 9: Recorded computer programs (programs); Recorded computer operating programs Computer peripherals; Computer software (recorded); Connector (data processing equipment); Monitor program (computer program); Electronic publications (downloadable); Computer program (downloadable software); Downloadable computer application software; Computer hardware ChinaLink Professional Services Co., Ltd.
In addition to trademark protection, we own 3 URL designations and domain names, including clps.com.cn, clpsglobal.com, and clpsgroup.com.cn. 58 We have registered for the following trademarks: Mark Country of Registration Application Number Class/Description Current Owner Status China 19288958 Class 9: Recorded computer programs (programs); Recorded computer operating programs Computer peripherals; Computer software (recorded); Connector (data processing equipment); Monitor program (computer program); Electronic publications (downloadable); Computer program (downloadable software); Downloadable computer application software; Computer hardware CLPS Shanghai Co., Ltd.
However, the banking industry has faced many challenges, such as the competition with private capital, the participation of technological enterprises, changes in the financial market, the tightening of regulatory policies, and more diversified deposit substitute products, among others.
However, the banking industry is facing many challenges, such as the competition with private capital, the participation of technological enterprises, changes in the financial market, the tightening of regulatory policies, and more diversified deposit substitute products, among others.
We create, develop, and maintain a large pool of qualified and rich experienced talents, with bilingual or multilingual capability so support the client’s communication need, which is vital for a business’ success. As of fiscal year 2022, CLPS maintained more than 3,824 employees, of which, more than 3,420 IT talents serve our customers.
We create, develop, and maintain a large pool of qualified and rich experienced talents, with bilingual or multilingual capability so support the client’s communication need, which is vital for a business’ success. As of fiscal year 2023, CLPS maintained more than 3,509 employees, of which, more than 3,099 IT talents serve our customers.
Revenues from our customized IT solution services accounted for 4.4%, 2.5%, and 2.1% of our total revenues in fiscal years 2022, 2021, and 2020 respectively. Other Services CLPS Virtual Banking Platform (CLB) CLB is a unique and successful training platform for IT talents owned by CLPS.
Revenues from our customized IT solution services accounted for 3.0%, 4.4%, and 2.5% of our total revenues in fiscal years 2023, 2022, and 2021, respectively. Other Services CLPS Virtual Banking Platform (CLB) CLB is a unique and successful training platform for IT talents owned by CLPS.
After the above-mentioned subscription, the shareholding structure of CLPS Shanghai was as follows: INVESTORS PLACE OF REGISTRATION SHARES Shanghai Qincheng Information Technology Co., Ltd. PRC 27,651,699 Qiner Co., Limited Hong Kong 22,348,301 Total: 50,000,000 As of the date of this Annual Report, CLPS Shanghai has three wholly-owned subsidiaries: CLPS RC, Huanyu, and CLPS Hangzhou.
After the above-mentioned subscription, the shareholding structure of CLPS Shanghai was as follows: INVESTORS PLACE OF REGISTRATION SHARES Shanghai Qincheng Information Technology Co., Ltd. PRC 27,651,699 Qiner Co., Limited Hong Kong 22,348,301 Total: 50,000,000 As of the date of this Annual Report, CLPS Shanghai has four wholly-owned subsidiaries: CLPS Chengdu, CLPS Shenzhen, CLPS Xi’an, and CLPS Hangzhou.
In addition, CLPS has developed the website and product market data analysis for a leading and international travel e-commerce platform, and the e-Commerce platform for a large investment holding group in China. 52 Revenues from our e-Commerce area were approximately $29.4 million, $19.2 million, and $11.1 million for the years ended June 30, 2022, 2021, and 2020, respectively.
In addition, CLPS has developed the website and product market data analysis for a leading and international travel e-commerce platform, and the e-Commerce platform for a large investment holding group in China. Revenues from our e-Commerce area were approximately $25.5 million, $29.4 million, and $19.2 million for the years ended June 30, 2023, 2022, and 2021, respectively.
Revenues from our credit card area accounted for 9.7%, 18.7%, and 21.3% of our banking revenues in fiscal years 2022, 2021, and 2020, respectively. 51 Core Banking Area We are one of China’s largest core banking system services providers for global banks. Most global banks establish their IT development centers and gradually expand their business in China.
Revenues from our credit card area accounted for 7.0%, 9.7%, and 18.7%of our banking revenues in fiscal years 2023, 2022, and 2021, respectively. 50 Core Banking Area We are one of China’s largest core banking system services providers for global banks. Most global banks establish their IT development centers and gradually expand their business in China.
Revenues from our IT consulting services were approximately $144.1 million, $122.3 million, $87.1 million, respectively. Revenues from our IT consulting services accounted for 94.8%, 97.0%, and 97.5% of our total revenues in fiscal years 2022, 2021, and 2020 respectively.
Revenues from our IT consulting services were approximately $144.3 million, $144.1 million, and $122.3 million, respectively. Revenues from our IT consulting services accounted for 96.0%, 94.8%, and 97.0% of our total revenues in fiscal years 2023, 2022, and 2021 respectively.
Registered China 19289341 Class 42: Technical research; Research or develop new products for others; Computer programming; Computer software design; Computer hardware design and development consulting; Computer software rental; Computer software maintenance; Computer system analysis; Computer software installation; Computer software consulting ChinaLink Professional Services Co., Ltd.
Registered China 19289341 Class 42: Technical research; Research or develop new products for others; Computer programming; Computer software design; Computer hardware design and development consulting; Computer software rental; Computer software maintenance; Computer system analysis; Computer software installation; Computer software consulting CLPS Shanghai Co., Ltd.
Registered 60 The following is a list of the Company’s copyrights: Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS HR Management Platform Software V1.0 China 2009SR015975 ChinaLink Professional Services Co., Ltd. 29 th April 2009 Registered CLPS Food and Beverage Report Analysis and Management Platform Software V1.0 China 2009SR060110 ChinaLink Professional Services Co., Ltd. 28 th December 2009 Registered CLPS Apparel Industry POS Management Platform Software V1.0 China 2009SR060102 ChinaLink Professional Services Co., Ltd. 28 th December 2009 Registered CLPS Express Information Interactive Platform Software V1.0 China 2009SR060112 ChinaLink Professional Services Co., Ltd. 28 th December 2009 Registered CLPS Chain Store Information Interactive Platform Software V1.0 China 2009SR060108 ChinaLink Professional Services Co., Ltd. 28 th December 2009 Registered CLPS Project Analysis and Management Platform Software V1.0 China 2009SR060169 ChinaLink Professional Services Co., Ltd. 28 th December 2009 Registered CLPS Payroll Accounting System Platform Software V1.0 China 2010SR043564 ChinaLink Professional Services Co., Ltd. 25 th August 2010 Registered CLPS Fast Moving Consumer Goods Frontline Staff Management Platform Software V1.0 China 2010SR043561 ChinaLink Professional Services Co., Ltd. 25 th August 2010 Registered CLPS Staff Management Platform Software V1.0 China 2010SR043562 ChinaLink Professional Services Co., Ltd. 25 th August 2010 Registered CLPS Coal Mining Enterprise Information System Management Platform Software V1.0 China 2010SR045449 ChinaLink Professional Services Co., Ltd. 1 st September 2010 Registered CLPS Campus Expense Card Web Service System Platform Software V1.0 China 2010SR045441 ChinaLink Professional Services Co., Ltd. 1 st September 2010 Registered CLPS Campus Expense Card Bathroom Management Service Software V1.0 China 2010SR045444 ChinaLink Professional Services Co., Ltd. 1 st September 2010 Registered CLPS Machinery Industry ERP Management Platform Software V1.0 China 2010SR045802 ChinaLink Professional Services Co., Ltd. 2 nd September 2010 Registered CLPS Assignment and Task Management Platform Software (short name: Assignment and Task Management System) V1.0 China 2011SR076863 ChinaLink Professional Services Co., Ltd. 25 th October 2011 Registered CLPS Marketing Assistant System Platform Software V1.0 China 2012SR096727 ChinaLink Professional Services Co., Ltd. 15 th October 2012 Registered CLPS Outsourcing Service Staff Management System Platform Software V1.0 China 2012SR096666 ChinaLink Professional Services Co., Ltd. 15 th October 2012 Registered 61 Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS Outsourcing Service Staff System Background Management Software V1.0 China 2012SR096731 ChinaLink Professional Services Co., Ltd. 15 th October 2012 Registered CLPS Logistics Terminal Distribution Platform Software V1.0 China 2012SR096668 ChinaLink Professional Services Co., Ltd. 19 th October 2012 Registered CLPS HR Background Support Management System V1.0 China 2012SR098440 ChinaLink Professional Services Co., Ltd. 19 th October 2012 Registered CLPS HR Management System Platform Software (short name: HR Management System) V1.0 China 2012SR098429 ChinaLink Professional Services Co., Ltd. 19 th October 2012 Registered CLPS Outsourcing Service Staff Resume Entry System Platform Software V1.0 China 2012SR098687 ChinaLink Professional Services Co., Ltd. 19 th October 2012 Registered CLPS Bank Document Business Management Software (short name: Document Management) V1.0 China 2013SR054800 ChinaLink Professional Services Co., Ltd. 5 th June 2013 Registered CLPS Bank Monetary Transaction Management Software (short name: Monetary Transaction Management) V1.0 China 2013SR054796 ChinaLink Professional Services Co., Ltd. 5 th June 2013 Registered CLPS Bank Expense Management Software V1.0 China 2014SR168125 ChinaLink Professional Services Co., Ltd. 4 th November 2014 Registered CLPS Bank Repayment Process Software V1.0 China 2014SR168130 ChinaLink Professional Services Co., Ltd. 4 th November 2014 Registered CLPS Bank Point Accumulative Management Software V1.0 China 2014SR168132 ChinaLink Professional Services Co., Ltd. 4 th November 2014 Registered CLPS Bank Interest Process Software V1.0 China 2014SR168136 ChinaLink Professional Services Co., Ltd. 4 th November 2014 Registered CLPS Bank Credit Application Software V1.0 China 2014SR168138 ChinaLink Professional Services Co., Ltd. 4 th November 2014 Registered CLPS Mortgage Loan Plan Spreadsheet Tool Software (short name: Loan Spreadsheet) V1.0 China 2015SR198772 ChinaLink Professional Services Co., Ltd. 16 th October 2015 Registered 62 Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS Bank Product Management Software V1.0 China 2015SR198610 ChinaLink Professional Services Co., Ltd. 16 th October 2015 Registered CLPS Bank Deposit and Withdrawal Services Management Software V1.0 China 2015SR198176 ChinaLink Professional Services Co., Ltd. 16 th October 2015 Registered CLPS Bank Loan Application Management Software V1.0 China 2015SR198654 ChinaLink Professional Services Co., Ltd. 16 th October 2015 Registered CLPS Bank Repayment Management Software V1.0 China 2015SR198649 ChinaLink Professional Services Co., Ltd. 16 th October 2015 Registered CLPS Bank Exchange Rate Management Software V1.0 China 2015SR198774 ChinaLink Professional Services Co., Ltd. 16 th October 2015 Registered CLPS Bank Interest Settlement Software V1.0 China 2015SR198246 ChinaLink Professional Services Co., Ltd. 16 th October 2015 Registered CLPS Bank Foreign Exchange Transaction Software V1.0 China 2015SR198240 ChinaLink Professional Services Co., Ltd. 16 th October 2015 Registered CLPS Bank Investment Management Securities Business Software V1.0 China 2016SR376924 ChinaLink Professional Services Co., Ltd. 16 th December 2016 Registered CLPS Bank Big Data Decision-making Platform Customer Portrayal Software V1.0 China 2016SR382920 ChinaLink Professional Services Ca, Ltd. 20 th December 2016 Registered CLPS Internet Financial Cloud Mobile Banking Software V2.0 China 2016SR398821 ChinaLink Professional Services Co., Ltd. 27 th December 2016 Registered CLPS Wantong Calculus Mall Software V2.0 China 2017SR118507 CLPS Beijing Hengtong Co., Ltd. 17 th April 2017 Registered CLPS RC Rules Engine Software China 2017SR169307 CLPS Ruicheng Co., Ltd. 9 th May 2017 Registered CLPS Internet Financing Collection Management Software V2.0 China 2017SR119266 CLPS Ruicheng Co., Ltd. 17 th April 2017 Registered CLPS Points Management Platform Software China 2017SR119078 CLPS Ruicheng Co., Ltd. 17 th April 2017 Registered CLPS Full-web Order Receiving Unified Platform Management Software V2.0 China 2017SR202535 CLPS Ruicheng Co., Ltd. 24 th May 2017 Registered CLPS Quanxi Intelligent Marketing Platform Clients Growth Center Software V2.0 China 2017SR565576 ChinaLink Professional Services Co., Ltd. 13 th October 2017 Registered CLPS Enterprise Recruitment Intelligent Cooperation Platform Software V2.0 China 2017SR646712 ChinaLink Professional Services Co., Ltd. 24 th November 2017 Registered CLPS Intelligent Online Training Test Instructional Management Software V1.0 China 2017SR646507 ChinaLink Professional Services Co., Ltd. 24 th November 2017 Registered 63 Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS Enterprise Internet Qinqin Loan Background Management Software V1.0 China 2017SR647634 ChinaLink Professional Services Co., Ltd. 24 th November 2017 Registered CLPS Blockchain Based Virtual Credits Background Management Software V2.0 China 2017SR645676 ChinaLink Professional Services Co., Ltd. 24 th November 2017 Registered CLPS Enterprise Talent Information Intelligent Management Software V2.0 China 2017SR645650 ChinaLink Professional Services Co., Ltd. 24 th November 2017 Registered CLPS Enterprise Recruitment Intelligent Cooperation Platform Software V2.0 China 2017SR647190 ChinaLink Professional Services Co., Ltd. 24 th November 2017 Registered CLPS General Points Platform and Business Center Software V1.0 China 2019SR0004653 ChinaLink Professional Services Co., Ltd. 2 nd January 2019 Registered CLPS Online Financial Microloan Software V1.0 China 2019SR0004669 ChinaLink Professional Services Co., Ltd. 2 nd January 2019 Registered CLPS Bank Customer Management Software V1.0 China 2019SR0004663 ChinaLink Professional Services Co., Ltd. 2 nd January 2019 Registered CLPS Online Financial Management Software V1.0 China 2019SR0140935 ChinaLink Professional Services Co., Ltd. 14 th February 2019 Registered CLPS Talent Training One-Stop Platform Software V1.0 China 2020SR0094641 ChinaLink Professional Services Co., Ltd. 19 th January 2020 Registered CLPS Project Management Software [PMS]V2.0 China 2020SR0095716 ChinaLink Professional Services Co., Ltd. 19 th January 2020 Registered CLPS Online Financial Management Software V2.0 China 2020SR0095716 ChinaLink Professional Services Co., Ltd. 19 th January 2020 Registered CLPS Online Financial Microloan Software V3.0 China 2020SR0094745 ChinaLink Professional Services Co., Ltd. 19 th January 2020 Registered CLPS Bank Customer Management Software V3.0 China 2020SR0095318 ChinaLink Professional Services Co., Ltd. 19 th January 2020 Registered CLPS Online Financial Accounting Management Software V1.0 China 2020SR0095725 ChinaLink Professional Services Co., Ltd. 19 th January 2020 Registered 64 Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS Blockchain Based Virtual Credits Background Management Software V3.0 China 2020SR0224622 CLPS Guangzhou Co., Ltd. 9 th March 2020 Registered CLPS Enterprise Recruitment Intelligent Cooperation Platform Software V3.0 China 2020SR0224616 CLPS Guangzhou Co., Ltd. 9 th March 2020 Registered CLPS Enterprise Talent Information Intelligent Management Software (“ERP System”) V3.0 China 2020SR0224243 CLPS Guangzhou Co., Ltd. 9 th March 2020 Registered CLPS Ruicheng ERP-TRMS Software (“ERP-TRMS”) V1.0 China 2020SR1691822 CLPS Ruicheng Co., Ltd. 30 th November 2020 Registered CLPS Ruicheng BPM Organizational Structure and Process Approval Software (“BPM”) V1.0 China 2020SR1691823 CLPS Ruicheng Co., Ltd. 30 th November 2020 Registered CLPS Ruicheng Timesheet CLPS Management Software(“Timesheet”) V2.0 China 2020SR1691884 CLPS Ruicheng Co., Ltd. 30 th November 2020 Registered CLPS Ruicheng WeChat Based Timesheet Management Software (“Timesheet”) V1.0 China 2020SR1691802 CLPS Ruicheng Co., Ltd. 30 th November 2020 Registered JAJI China EKYC Based Mobile Banking Software(“Mobile Banking”) V1.0 China 2020SR1692693 JAJI (Shanghai) Co., Ltd. 30 th November 2020 Registered CLPS Project Management Software(“PMS”) V3.0 China 2021SR0113240 ChinaLink Professional Services Co., Ltd. 21 st January 2021 Registered CLPS Credit Card Comprehensive Information Platform Software(“ChinaLinkV”) V2.1.1 China 2021SR0113286 ChinaLink Professional Services Co., Ltd. 21 st January 2021 Registered CLPS Meeting Room Reservation Management Software(“Meeting”) V1,0 China 2021SR0113234 ChinaLink Professional Services Co., Ltd. 21 st January 2021 Registered CLPS BPM Organizational Structure and Process Approval Software(“BPM”) V2.0 China 2021SR0216840 ChinaLink Professional Services Co., Ltd. 7 th February 2021 Registered CLPS EKYC Based Mobile Banking Software (“Mobile Banking”) V2.0 China 2021SR0216890 ChinaLink Professional Services Co., Ltd. 7 th February 2021 Registered Hainan Qincheng BPM Organization Structure and Process Approval Software(“BPM”) V2.0 China 2021SR783928 Hainan Qincheng Software Technology Co., Ltd. 27 th May 2021 Registered Hainan Qincheng ERP-TRMS Software(“ERP-TRMS”) V2.0 China 2021SR0783904 Hainan Qincheng Software Technology Co., Ltd. 27 th May 2021 Registered Hainan Qincheng Timesheet Management Software(“Timesheet”) V3.0 China 2021SR0783929 Hainan Qincheng Software Technology Co., Ltd. 27 th May 2021 Registered 65 Software Name Country of Registration Registration Number Current Owner Approval Date Status Hainan Qincheng WeChat Based Timesheet Management Software (“Timesheet”) V2.0 China 2021SR0783905 Hainan Qincheng Software Technology Co., Ltd. 27 th May 2021 Registered JAJI Project Management Software V4.0 China 2021SR1775321 JAJI (Shanghai) Co., Ltd. 30 th June 2021 Registered CLPS Meeting Room Reservation Management Software V2.0 China 2021SR1628925 ChinaLink Professional Services Co., Ltd. 31 st July 2021 Registered JAJI One-Stop Platform for Talent Cultivation Based on Internationalization V2.0 China 2021SR1775007 JAJI (Shanghai) Co., Ltd. 28 th September 2021 Registered JAJI Project Lifeline Tracking Management System V1.0 China 2021SR1952575 JAJI (Shanghai) Co., Ltd. 30 th September 2021 Registered JAJI Salary Query Software V1.2 China 2021SR1952576 JAJI (Shanghai) Co., Ltd. 13 th October 2021 Registered JAJI Internet Financial Accounting Management Software V2.0 China 2021SR2008521 JAJI (Shanghai) Co., Ltd. 14 th October 2021 Registered JAJI Bank Clients Management Software Based on Distributed Architecture V1.0 China 2021SR1969086 JAJI (Shanghai) Co., Ltd. 14 th October 2021 Registered JAJI Talent Recommendation and Recruitment Mobile Platform Software V1.0 China 2021SR2085396 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI BPM BPM Organizational Structure and Process Approval Software V4.0 China 2021SR1880802 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI Online Finance Management Software Based on Distributed Architecture V1.0 China 2021SR2008522 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI Enterprise Talent Information Analysis and Management Software Based on Distributed Architecture V2.0 China 2021SR1901457 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI Mobile Banking System Based on Intelligent Face Recognition V1.0 China 2021SR1969085 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI Talent Resume Management DB Database Software V1.5 China 2021SR1952673 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI Business Points Mall WeChat Platform Software V1.0 China 2021SR1952574 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered CLPS EKYC Based Mobile Banking Software (“Mobile Banking”) V3.0 China 2021SR1617316 ChinaLink Professional Services Co., Ltd. 2 nd November 2021 Registered 66 Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS Credit Card Comprehensive Information Platform Software(“ChinaLinkV”) V3.0 China 2021SR1617317 ChinaLink Professional Services Co., Ltd. 2 nd November 2021 Registered CLPS Credit Card Big Data Integrated Management Background Software V2.0 China 2021SR1619652 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Clearing Management Software V1.0 China 2021SR1619639 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Risk Management Software V1.0 China 2021SR1619640 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Account Establishment and Card Making Software V1.0 China 2021SR1619641 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Authorization Management Software V1.0 China 2021SR1619642 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Customer Service Management Software V1.0 China 2021SR1619643 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Merchant Consumption Integrated Comprehensive Management Software V1.0 China 2021SR1619651 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Internet Financing Collection Software V1.5 China 2021SR1666790 ChinaLink Professional Services Co., Ltd. 8 th November 2021 Registered CLPS Online Learning Platform Software V1.5 China 2021SR1666804 ChinaLink Professional Services Co., Ltd. 8 th November 2021 Registered JAJI Dual Recording Platform Software V1.0 China 2021SR2116913 JAJI (Shanghai) Co., Ltd. 17 th November 2021 Registered 67 Properties Our principal executive office is located at Unit 1102, 11th Floor, Millennium City III, 370 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong SAR.
Registered 60 The following is a list of the Company’s copyrights: Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS HR Management Platform Software V1.0 China 2009SR015975 CLPS Shanghai Co., Ltd. 29 th April 2009 Registered CLPS Food and Beverage Report Analysis and Management Platform Software V1.0 China 2009SR060110 CLPS Shanghai Co., Ltd. 28 th December 2009 Registered CLPS Apparel Industry POS Management Platform Software V1.0 China 2009SR060102 CLPS Shanghai Co., Ltd. 28 th December 2009 Registered CLPS Express Information Interactive Platform Software V1.0 China 2009SR060112 CLPS Shanghai Co., Ltd. 28 th December 2009 Registered CLPS Chain Store Information Interactive Platform Software V1.0 China 2009SR060108 CLPS Shanghai Co., Ltd. 28 th December 2009 Registered CLPS Project Analysis and Management Platform Software V1.0 China 2009SR060169 CLPS Shanghai Co., Ltd. 28 th December 2009 Registered CLPS Payroll Accounting System Platform Software V1.0 China 2010SR043564 CLPS Shanghai Co., Ltd. 25 th August 2010 Registered CLPS Fast Moving Consumer Goods Frontline Staff Management Platform Software V1.0 China 2010SR043561 CLPS Shanghai Co., Ltd. 25 th August 2010 Registered CLPS Staff Management Platform Software V1.0 China 2010SR043562 CLPS Shanghai Co., Ltd. 25 th August 2010 Registered CLPS Coal Mining Enterprise Information System Management Platform Software V1.0 China 2010SR045449 CLPS Shanghai Co., Ltd. 1 st September 2010 Registered CLPS Campus Expense Card Web Service System Platform Software V1.0 China 2010SR045441 CLPS Shanghai Co., Ltd. 1 st September 2010 Registered CLPS Campus Expense Card Bathroom Management Service Software V1.0 China 2010SR045444 CLPS Shanghai Co., Ltd. 1 st September 2010 Registered CLPS Machinery Industry ERP Management Platform Software V1.0 China 2010SR045802 CLPS Shanghai Co., Ltd. 2 nd September 2010 Registered CLPS Assignment and Task Management Platform Software (short name: Assignment and Task Management System) V1.0 China 2011SR076863 CLPS Shanghai Co., Ltd. 25 th October 2011 Registered CLPS Marketing Assistant System Platform Software V1.0 China 2012SR096727 CLPS Shanghai Co., Ltd. 15 th October 2012 Registered CLPS Outsourcing Service Staff Management System Platform Software V1.0 China 2012SR096666 CLPS Shanghai Co., Ltd. 15 th October 2012 Registered 61 Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS Outsourcing Service Staff System Background Management Software V1.0 China 2012SR096731 CLPS Shanghai Co., Ltd. 15 th October 2012 Registered CLPS Logistics Terminal Distribution Platform Software V1.0 China 2012SR096668 CLPS Shanghai Co., Ltd. 19 th October 2012 Registered CLPS HR Background Support Management System V1.0 China 2012SR098440 CLPS Shanghai Co., Ltd. 19 th October 2012 Registered CLPS HR Management System Platform Software (short name: HR Management System) V1.0 China 2012SR098429 CLPS Shanghai Co., Ltd. 19 th October 2012 Registered CLPS Outsourcing Service Staff Resume Entry System Platform Software V1.0 China 2012SR098687 CLPS Shanghai Co., Ltd. 19 th October 2012 Registered CLPS Bank Document Business Management Software (short name: Document Management) V1.0 China 2013SR054800 CLPS Shanghai Co., Ltd. 5 th June 2013 Registered CLPS Bank Monetary Transaction Management Software (short name: Monetary Transaction Management) V1.0 China 2013SR054796 CLPS Shanghai Co., Ltd. 5 th June 2013 Registered CLPS Bank Expense Management Software V1.0 China 2014SR168125 CLPS Shanghai Co., Ltd. 4 th November 2014 Registered CLPS Bank Repayment Process Software V1.0 China 2014SR168130 CLPS Shanghai Co., Ltd. 4 th November 2014 Registered CLPS Bank Point Accumulative Management Software V1.0 China 2014SR168132 CLPS Shanghai Co., Ltd. 4 th November 2014 Registered CLPS Bank Interest Process Software V1.0 China 2014SR168136 CLPS Shanghai Co., Ltd. 4 th November 2014 Registered CLPS Bank Credit Application Software V1.0 China 2014SR168138 CLPS Shanghai Co., Ltd. 4 th November 2014 Registered CLPS Mortgage Loan Plan Spreadsheet Tool Software (short name: Loan Spreadsheet) V1.0 China 2015SR198772 CLPS Shanghai Co., Ltd. 16 th October 2015 Registered 62 Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS Bank Product Management Software V1.0 China 2015SR198610 CLPS Shanghai Co., Ltd. 16 th October 2015 Registered CLPS Bank Deposit and Withdrawal Services Management Software V1.0 China 2015SR198176 CLPS Shanghai Co., Ltd. 16 th October 2015 Registered CLPS Bank Loan Application Management Software V1.0 China 2015SR198654 CLPS Shanghai Co., Ltd. 16 th October 2015 Registered CLPS Bank Repayment Management Software V1.0 China 2015SR198649 CLPS Shanghai Co., Ltd. 16 th October 2015 Registered CLPS Bank Exchange Rate Management Software V1.0 China 2015SR198774 CLPS Shanghai Co., Ltd. 16 th October 2015 Registered CLPS Bank Interest Settlement Software V1.0 China 2015SR198246 CLPS Shanghai Co., Ltd. 16 th October 2015 Registered CLPS Bank Foreign Exchange Transaction Software V1.0 China 2015SR198240 CLPS Shanghai Co., Ltd. 16 th October 2015 Registered CLPS Bank Investment Management Securities Business Software V1.0 China 2016SR376924 CLPS Shanghai Co., Ltd. 16 th December 2016 Registered CLPS Bank Big Data Decision-making Platform Customer Portrayal Software V1.0 China 2016SR382920 CLPS Shanghai Co., Ltd. 20 th December 2016 Registered CLPS Internet Financial Cloud Mobile Banking Software V2.0 China 2016SR398821 CLPS Shanghai Co., Ltd. 27 th December 2016 Registered CLPS Wantong Calculus Mall Software V2.0 China 2017SR118507 CLPS Beijing Hengtong Co., Ltd. 17 th April 2017 Registered CLPS RC Rules Engine Software China 2017SR169307 CLPS Ruicheng Co., Ltd. 9 th May 2017 Registered CLPS Internet Financing Collection Management Software V2.0 China 2017SR119266 CLPS Ruicheng Co., Ltd. 17 th April 2017 Registered CLPS Points Management Platform Software China 2017SR119078 CLPS Ruicheng Co., Ltd. 17 th April 2017 Registered CLPS Full-web Order Receiving Unified Platform Management Software V2.0 China 2017SR202535 CLPS Ruicheng Co., Ltd. 24 th May 2017 Registered CLPS Quanxi Intelligent Marketing Platform Clients Growth Center Software V2.0 China 2017SR565576 CLPS Shanghai Co., Ltd. 13 th October 2017 Registered CLPS Enterprise Recruitment Intelligent Cooperation Platform Software V2.0 China 2017SR646712 CLPS Shanghai Co., Ltd. 24 th November 2017 Registered CLPS Intelligent Online Training Test Instructional Management Software V1.0 China 2017SR646507 CLPS Shanghai Co., Ltd. 24 th November 2017 Registered 63 Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS Enterprise Internet Qinqin Loan Background Management Software V1.0 China 2017SR647634 CLPS Shanghai Co., Ltd. 24 th November 2017 Registered CLPS Blockchain Based Virtual Credits Background Management Software V2.0 China 2017SR645676 CLPS Shanghai Co., Ltd. 24 th November 2017 Registered CLPS Enterprise Talent Information Intelligent Management Software V2.0 China 2017SR645650 CLPS Shanghai Co., Ltd. 24 th November 2017 Registered CLPS Enterprise Recruitment Intelligent Cooperation Platform Software V2.0 China 2017SR647190 CLPS Shanghai Co., Ltd. 24 th November 2017 Registered CLPS General Points Platform and Business Center Software V1.0 China 2019SR0004653 CLPS Shanghai Co., Ltd. 2 nd January 2019 Registered CLPS Online Financial Microloan Software V1.0 China 2019SR0004669 CLPS Shanghai Co., Ltd. 2 nd January 2019 Registered CLPS Bank Customer Management Software V1.0 China 2019SR0004663 CLPS Shanghai Co., Ltd. 2 nd January 2019 Registered CLPS Online Financial Management Software V1.0 China 2019SR0140935 CLPS Shanghai Co., Ltd. 14 th February 2019 Registered CLPS Talent Training One-Stop Platform Software V1.0 China 2020SR0094641 CLPS Shanghai Co., Ltd. 19 th January 2020 Registered CLPS Project Management Software [PMS]V2.0 China 2020SR0095716 CLPS Shanghai Co., Ltd. 19 th January 2020 Registered CLPS Online Financial Management Software V2.0 China 2020SR0095716 CLPS Shanghai Co., Ltd. 19 th January 2020 Registered CLPS Online Financial Microloan Software V3.0 China 2020SR0094745 CLPS Shanghai Co., Ltd. 19 th January 2020 Registered CLPS Bank Customer Management Software V3.0 China 2020SR0095318 CLPS Shanghai Co., Ltd. 19 th January 2020 Registered CLPS Online Financial Accounting Management Software V1.0 China 2020SR0095725 CLPS Shanghai Co., Ltd. 19 th January 2020 Registered 64 Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS Blockchain Based Virtual Credits Background Management Software V3.0 China 2020SR0224622 CLPS Guangzhou Co., Ltd. 9 th March 2020 Registered CLPS Enterprise Recruitment Intelligent Cooperation Platform Software V3.0 China 2020SR0224616 CLPS Guangzhou Co., Ltd. 9 th March 2020 Registered CLPS Enterprise Talent Information Intelligent Management Software (“ERP System”) V3.0 China 2020SR0224243 CLPS Guangzhou Co., Ltd. 9 th March 2020 Registered CLPS Ruicheng ERP-TRMS Software (“ERP-TRMS”) V1.0 China 2020SR1691822 CLPS Ruicheng Co., Ltd. 30 th November 2020 Registered CLPS Ruicheng BPM Organizational Structure and Process Approval Software (“BPM”) V1.0 China 2020SR1691823 CLPS Ruicheng Co., Ltd. 30 th November 2020 Registered CLPS Ruicheng Timesheet CLPS Management Software(“Timesheet”) V2.0 China 2020SR1691884 CLPS Ruicheng Co., Ltd. 30 th November 2020 Registered CLPS Ruicheng WeChat Based Timesheet Management Software (“Timesheet”) V1.0 China 2020SR1691802 CLPS Ruicheng Co., Ltd. 30 th November 2020 Registered JAJI China EKYC Based Mobile Banking Software(“Mobile Banking”) V1.0 China 2020SR1692693 JAJI (Shanghai) Co., Ltd. 30 th November 2020 Registered CLPS Project Management Software(“PMS”) V3.0 China 2021SR0113240 CLPS Shanghai Co., Ltd. 21 st January 2021 Registered CLPS Credit Card Comprehensive Information Platform Software(“ChinaLinkV”) V2.1.1 China 2021SR0113286 CLPS Shanghai Co., Ltd. 21 st January 2021 Registered CLPS Meeting Room Reservation Management Software(“Meeting”) V1,0 China 2021SR0113234 CLPS Shanghai Co., Ltd. 21 st January 2021 Registered CLPS BPM Organizational Structure and Process Approval Software(“BPM”) V2.0 China 2021SR0216840 CLPS Shanghai Co., Ltd. 7 th February 2021 Registered CLPS EKYC Based Mobile Banking Software (“Mobile Banking”) V2.0 China 2021SR0216890 CLPS Shanghai Co., Ltd. 7 th February 2021 Registered Hainan Qincheng BPM Organization Structure and Process Approval Software(“BPM”) V2.0 China 2021SR783928 Hainan Qincheng Software Technology Co., Ltd. 27 th May 2021 Registered Hainan Qincheng ERP-TRMS Software(“ERP-TRMS”) V2.0 China 2021SR0783904 Hainan Qincheng Software Technology Co., Ltd. 27 th May 2021 Registered Hainan Qincheng Timesheet Management Software(“Timesheet”) V3.0 China 2021SR0783929 Hainan Qincheng Software Technology Co., Ltd. 27 th May 2021 Registered 65 Software Name Country of Registration Registration Number Current Owner Approval Date Status Hainan Qincheng WeChat Based Timesheet Management Software (“Timesheet”) V2.0 China 2021SR0783905 Hainan Qincheng Software Technology Co., Ltd. 27 th May 2021 Registered JAJI Project Management Software V4.0 China 2021SR1775321 JAJI (Shanghai) Co., Ltd. 30 th June 2021 Registered CLPS Meeting Room Reservation Management Software V2.0 China 2021SR1628925 CLPS Shanghai Co., Ltd. 31 st July 2021 Registered JAJI One-Stop Platform for Talent Cultivation Based on Internationalization V2.0 China 2021SR1775007 JAJI (Shanghai) Co., Ltd. 28 th September 2021 Registered JAJI Project Lifeline Tracking Management System V1.0 China 2021SR1952575 JAJI (Shanghai) Co., Ltd. 30 th September 2021 Registered JAJI Salary Query Software V1.2 China 2021SR1952576 JAJI (Shanghai) Co., Ltd. 13 th October 2021 Registered JAJI Internet Financial Accounting Management Software V2.0 China 2021SR2008521 JAJI (Shanghai) Co., Ltd. 14 th October 2021 Registered JAJI Bank Clients Management Software Based on Distributed Architecture V1.0 China 2021SR1969086 JAJI (Shanghai) Co., Ltd. 14 th October 2021 Registered JAJI Talent Recommendation and Recruitment Mobile Platform Software V1.0 China 2021SR2085396 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI BPM BPM Organizational Structure and Process Approval Software V4.0 China 2021SR1880802 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI Online Finance Management Software Based on Distributed Architecture V1.0 China 2021SR2008522 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI Enterprise Talent Information Analysis and Management Software Based on Distributed Architecture V2.0 China 2021SR1901457 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI Mobile Banking System Based on Intelligent Face Recognition V1.0 China 2021SR1969085 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI Talent Resume Management DB Database Software V1.5 China 2021SR1952673 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered JAJI Business Points Mall WeChat Platform Software V1.0 China 2021SR1952574 JAJI (Shanghai) Co., Ltd. 17 th October 2021 Registered CLPS EKYC Based Mobile Banking Software (“Mobile Banking”) V3.0 China 2021SR1617316 CLPS Shanghai Co., Ltd. 2 nd November 2021 Registered 66 Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS Credit Card Comprehensive Information Platform Software(“ChinaLinkV”) V3.0 China 2021SR1617317 CLPS Shanghai Co., Ltd. 2 nd November 2021 Registered CLPS Credit Card Big Data Integrated Management Background Software V2.0 China 2021SR1619652 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Clearing Management Software V1.0 China 2021SR1619639 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Risk Management Software V1.0 China 2021SR1619640 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Account Establishment and Card Making Software V1.0 China 2021SR1619641 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Authorization Management Software V1.0 China 2021SR1619642 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Customer Service Management Software V1.0 China 2021SR1619643 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Credit Card Merchant Consumption Integrated Comprehensive Management Software V1.0 China 2021SR1619651 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2021 Registered CLPS Internet Financing Collection Software V1.5 China 2021SR1666790 CLPS Shanghai Co., Ltd. 8 th November 2021 Registered CLPS Online Learning Platform Software V1.5 China 2021SR1666804 CLPS Shanghai Co., Ltd. 8 th November 2021 Registered 67 Software Name Country of Registration Registration Number Current Owner Approval Date Status JAJI Dual Recording Platform Software V1.0 China 2021SR2116913 JAJI (Shanghai) Co., Ltd. 17 th November 2021 Registered Chenqin FATA Authorized Testing Automation Tool Software China 2022SR1457563 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2022 Registered Chenqin MC Transaction Simulation Tool Software China 2022SR1457579 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2022 Registered Chenqin OpenAPI Interface Resource Management Platform Software China 2022SR1457562 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2022 Registered Chenqin VISA Transaction Simulation Tool Software China 2022SR1462651 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2022 Registered Chenqin Scene Engine Software China 2022SR1462652 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2022 Registered Chenqin Batch Scheduling Management Platform Software China 2022SR1462653 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2022 Registered Chenqin Authorization Authentication Management Software China 2022SR1457578 Shanghai Chenqin Information Technology Services Co., Ltd. 3 rd November 2022 Registered Chenqin CUP Trading Simulation Tool Software China 2022SR1474275 Shanghai Chenqin Information Technology Services Co., Ltd. 4 th November 2022 Registered Chenqin JCB Transaction Simulation Tool Software China 2022SR1480972 Shanghai Chenqin Information Technology Services Co., Ltd. 8 th November 2022 Registered 68 Software Name Country of Registration Registration Number Current Owner Approval Date Status CLPS CRM Customer Management Software V1.0 China 2022SR1561547 CLPS Shanghai Co., Ltd. 23 rd November 2022 Registered CLPS Talent Order Matching Software V1.0 China 2022SR1561546 CLPS Shanghai Co., Ltd. 23 rd November 2022 Registered CLPS Talent Delivery Management Software V1.0 China 2022SR1561545 CLPS Shanghai Co., Ltd. 23 rd November 2022 Registered CLPS Rules and Regulations Document Management Software V1.0 China 2022SR1561390 CLPS Shanghai Co., Ltd. 23 rd November 2022 Registered CLPS Data Sharing SD Software V2.0 China 2022SR1561392 CLPS Shanghai Co., Ltd. 23 rd November 2022 Registered CLPS PL Report System Software V2.0 China 2022SR1561391 CLPS Shanghai Co., Ltd. 23 rd November 2022 Registered JAJI CRM Customer Management Software User Manual V2.0 China 2023SR0235089 JAJI (Shanghai) Co., Ltd. 14 th February 2023 Registered JAJI Talent Order Matching Software User Manual V2.0 China 2023SR0235088 JAJI (Shanghai) Co., Ltd. 14 th February 2023 Registered JAJI Talent Delivery Management System User Manual V2.0 China 2023SR0235112 JAJI (Shanghai) Co., Ltd. 14 th February 2023 Registered JAJI Rules and Regulations Document Management System User Manual V2.0 China 2023SR0235113 JAJI (Shanghai) Co., Ltd. 14 th February 2023 Registered JAJI Data Sharing SD Software V3.0 China 2023SR0235114 JAJI (Shanghai) Co., Ltd. 14 th February 2023 Registered JAJI PL Report System Software V3.0 China 2023SR0235115 JAJI (Shanghai) Co., Ltd. 14 th February 2023 Registered Digital Currency Happy Shopping Platform Software V2.0 China 2023SR0911860 CLPS Shenzhen Co., Ltd. 9 th August 2023 Registered 69 Properties On July 2023, we relocated our principal executive office to Unit 1000, 10 th Floor Millennium City III, 370 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong SAR.
As a result, graduates have an equivalent of nine months’ worth of “on the job” training and experience. For the fiscal year 2022, we trained 250 interns who have successfully worked for our clients. In addition, through our wholly-owned subsidiary, CLPS Technology (Singapore) Pte. Ltd., we signed a Collaboration Agreement (the “Agreement”) with Educare Global Academy Pte. Ltd.
As a result, graduates have an equivalent of nine months’ worth of “on the job” training and experience. For the fiscal year 2023, we trained 180 interns. In addition, through our wholly-owned subsidiary, CLPS Technology (Singapore) Pte. Ltd., we signed a Collaboration Agreement (the “Agreement”) with Educare Global Academy Pte. Ltd.
Registered China 19289214 Class 41: Teaching; Education; Training; Practical training (demonstration); Employment guidance (education or training consultants); Arrange and organize academic seminars; Arrange and organize meetings; Arrange and organize general meeting; Arrange and organize symposium; Arrange and organize training classes ChinaLink Professional Services Co., Ltd.
Registered China 19289214 Class 41: Teaching; Education; Training; Practical training (demonstration); Employment guidance (education or training consultants); Arrange and organize academic seminars; Arrange and organize meetings; Arrange and organize general meeting; Arrange and organize symposium; Arrange and organize training classes CLPS Shanghai Co., Ltd.
Revenues from our banking area were approximately $67.7 million, $60.0 million, and $44.5 million for the years ended June 30, 2022, 2021, and 2020, respectively. Revenues from our banking area accounted for 44.5%, 47.6%, and 49.8% of our total revenues in fiscal years 2022, 2021, and 2020, respectively. Significant portion of our services caters the banking clients.
Revenues from our banking area were approximately $61.5 million, $67.7 million, and $60.0 million for the years ended June 30, 2023, 2022, and 2021, respectively. Revenues from our banking area accounted for 40.9%, 44.5%, and 47.6%of our total revenues in fiscal years 2023, 2022, and 2021, respectively. Significant portion of our services caters the banking clients.
Facility Address Space (m2) Shanghai Office 2 nd Floor, Building 18, Shanghai Pudong Software Park, 498 Guoshoujing Road, Pudong District, Shanghai, PRC 1,259.94 Shanghai Office 1 st Floor, Building 18, Shanghai Pudong Software Park, 498 Guoshoujing Road, Pudong District, Shanghai, PRC 914.62 Dalian Office Room 501-503/504-506/507, 5/F, No. 30, Cuitao Street, High Tech Park, Ganjingzi District, Dalian, Liaoning Province, PRC 1,388.45 Tianjin Office Room 5601-8, F6, Building No.5, Xinhuan West Road, TEDA, Tianjin, PRC 56.07 Shenzhen Office Room 2804, Ludan Building, Guiyuan Street, Luohu District, Shenzhen, PRC 299.00 Guangzhou Office Room 409-411, Tower B, China Shine Plaza, No. 9 Linhe Xi Road, Tianhe District, Guangzhou, Guangdong, PRC 331.16 Xi’an Office Room 1901,Tower C2 of Yunhuigu Software Park, Yunshui 1st Road, Xi ‘an High-Tech Zone, Xian, PRC 1,989.32 Chengdu Office Unit 04 , 05, 12/Floor, Tower 2, 88 Jitai 5th Road, Gaoxin District, Chengdu, Sichuan District, PRC 120.00 Beijing Office Room 1329-1332, 13 th Floor, Building 2, Yard 26, Chengtong Road, Shijingshan District, Beijing, PRC 222.88 Singapore Office 10 UBI Crescent, #03-29, UBI Techpark, Singapore, 408564 84 Singapore Office 141 Cecil Street, #06-07, Tung Ann Association Building, Singapore, 069541 27.87 Hong Kong Office Unit 1102, Level 11, Millennium City III, 370 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong 210.15 Japan Office 4F 1-36-3 Nihonbashi-Kakigara-cho,Chuo-ku,Tokyo, Japan, 103-0014 40.17 India Office Unit No. 222, DLF Cybercity, Idco Info Park, Technology Corridor, Chandaka Industrial Estate, Bhubaneswar, Odisha, India, 751024 113.85 US Office 1460 Mission Street, San Francisco, CA 94103 6 Hainan Office Room B1013, Binhai Avenue, 109-9 Haihang Plaza, Hainan, PRC 63.62 Hangzhou Office Room 308, Building 4, 970-1 Gaojiao Road, Yuhang District, Hangzhou , Zhejiang, PRC 106.8 Hong Kong Office 10/F, Level 10 Millennium City 3, 378 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong 756.23 Philippines Office 20th Floor, Picadilly Star Building, 4th Avenue Corner 27th Street, Bonifacio Global City, Fort Bonifacio, Taguig City, Metro Manila, Philippines 10 Vietnam Office 12th Floor, Viettel Complex Building, No. 285 Cach Mang Thang Tam Street, Ward 12, District 10, Ho Chi Minh City, Vietnam 10 Singapore Office 60 Paya Lebar Road #05-29&#05-30, Paya Lebar Square, Singapore, 409051 270 68 Legal Proceedings We are currently not involved in any legal proceedings; nor are we aware of any claims that could have a material adverse effect on our business, financial condition, results of operations or cash flows.
Facility Address Space (m2) Shanghai Office 2 nd Floor, Building 18, Shanghai Pudong Software Park, 498 Guoshoujing Road, Pudong District, Shanghai, PRC 1,259.94 Shanghai Office 1 st Floor, Building 18, Shanghai Pudong Software Park, 498 Guoshoujing Road, Pudong District, Shanghai, PRC 914.62 Dalian Office Room 501-503/504-506/507, 5/F, No. 30, Cuitao Street, High Tech Park, Ganjingzi District, Dalian, Liaoning Province, PRC 1,388.45 Tianjin Office Room 4403, F4, Building No.4, Xinhuan West Road, TEDA, Tianjin, PRC 76.55 Shenzhen Office Room 2804, Ludan Building, Guiyuan Street, Luohu District, Shenzhen, PRC 299.00 Guangzhou Office Room 409-411, Tower B, China Shine Plaza, No. 9 Linhe Xi Road, Tianhe District, Guangzhou, Guangdong, PRC 331.16 Xi’an Office Room 1901,Tower C2 of Yunhuigu Software Park, Yunshui 1st Road, Xi ‘an High-Tech Zone, Xian, PRC 1,232.92 Chengdu Office Unit 04,05, 12/Floor, Tower 2, 88 Jitai 5th Road, Gaoxin District, Chengdu, Sichuan District, PRC 120.00 Beijing Office Room 1329-1332, 13 th Floor, Building 2, Yard 26, Chengtong Road, Shijingshan District, Beijing, PRC 222.88 Hong Kong Office Unit 1102, Level 11, Millennium City III, 370 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong 210.15 Japan Office 4F 1-36-3 Nihonbashi-Kakigara-cho,Chuo-ku,Tokyo, Japan, 103-0014 40.17 India Office Unit No. 222, DLF Cybercity, Idco Info Park, Technology Corridor, Chandaka Industrial Estate, Bhubaneswar, Odisha, India, 751024 113.85 US Office Two Embarcadero Center, 8th Floor, San Francisco, CA 94111 6 Hainan Office Room B1013, Binhai Avenue, 109-9 Haihang Plaza, Hainan, PRC 63.62 Hangzhou Office Room701-3,Building7, 970-1 Gaojiao Road, Yuhang District, Hangzhou , Zhejiang, PRC 106.8 Hong Kong Office 10/F, Level 10 Millennium City 3, 378 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong 756.23 Philippines Office 20th Floor, Picadilly Star Building, 4th Avenue Corner 27th Street, Bonifacio Global City, Fort Bonifacio, Taguig City, Metro Manila, Philippines 10 Vietnam Office 12th Floor, Viettel Complex Building, No. 285 Cach Mang Thang Tam Street, Ward 12, District 10, Ho Chi Minh City, Vietnam 10 Singapore Office 60 Paya Lebar Road #05-29&#05-30, Paya Lebar Square, Singapore, 409051 270 Guangzhou Office Units 01-11, 21st Floor, No. 67 Tianhe East Road, Tianhe District, Guangzhou 2,354.13 Guangzhou Office Units 01-11, 20th Floor, No. 67 Tianhe East Road, Tianhe District, Guangzhou 2,354.13 70 Legal Proceedings We are currently not involved in any legal proceedings; nor are we aware of any claims that could have a material adverse effect on our business, financial condition, results of operations or cash flows.
Revenues from our automotive area were approximately $10.4 million, $8.5 million, and $3.6 million for the years ended June 30, 2022, 2021, and 2020, respectively. Revenues from our automotive area accounted for 6.8%, 6.7%, and 4.1% of our total revenues in fiscal 2022, 2021, and 2020, respectively.
Revenues from our automotive area were approximately $14.2 million, $10.4 million, $8.5 million, and $3.6 million for the years ended June 30, 2023, 2022, and 2021, respectively. Revenues from our automotive area accounted for 9.4%, 6.8%, and 6.7%of our total revenues in fiscal 2023, 2022, and 2021, respectively.
The consideration was fully paid on July 21, 2021. On July 30, 2021, CLPS, through its wholly-owned subsidiary, Noni Singapore, entered into a purchase agreement to acquire commercial real estate located at 60 Paya Lebar Road #05-29 and #05-30, Singapore for a consideration of US$4,614,743. The consideration was fully paid on October 25, 2021.
On July 30, 2021, CLPS, through its wholly-owned subsidiary, Noni Singapore, entered into a purchase agreement to acquire commercial real estate located at 60 Paya Lebar Road #05-29 and #05-30, Singapore for a consideration of US$4,614,743. The consideration was fully paid on October 25, 2021. In addition, the Company manages and operates several other facilities.
Employees We believe resource management and planning is critically important to supporting our growth, and we are committed to effectively recruiting, training, developing and retaining our human capital. Our total number of employees has grown to 3,824 employees as of June 30, 2022 from 3,352 employees in June 30, 2021.
Employees We believe resource management and planning is critically important to supporting our growth, and we are committed to effectively recruiting, training, developing and retaining our human capital. Our total number of employees was 3,509 employees as of June 30, 2023 from 3,824 employees in June 30, 2022.
Besides the three wholly-owned subsidiaries, CLPS Shanghai participated in the following investments: ● CLPS Beijing — CLPS Shanghai holds 49% of equity interest in CLPS Beijing, a PRC limited liability company ● CLPS Shenzhen — CLPS Shanghai holds 70% of equity interest in CLPS Shenzhen, a PRC limited liability company. ● CLPS Guangzhou — CLPS Shanghai holds 51% of equity interest in CLPS Guangzhou, a PRC limited liability company. ● CLPS Dalian — CLPS Shanghai holds 49% of equity interest in CLPS Dalian, a PRC limited liability company. ● CLPS Shenzhen Robotics — CLPS Shanghai holds 10% of equity interest in CLPS Shenzhen Robotics, a PRC limited liability company. ● SSIT — CLPS Shanghai holds 35% of equity interest in SSIT, a PRC limited liability company. ● UniDev — CLPS Shanghai holds 15% of equity interest in UniDev, a PRC limited liability company.
Besides the four wholly-owned subsidiaries, CLPS Shanghai participated in the following investments: ● CLPS Beijing — CLPS Shanghai holds 49% of equity interest in CLPS Beijing, a PRC limited liability company ● CLPS Guangzhou — CLPS Shanghai holds 51% of equity interest in CLPS Guangzhou, a PRC limited liability company. ● CLPS Dalian — CLPS Shanghai holds 49% of equity interest in CLPS Dalian, a PRC limited liability company. ● SSIT — CLPS Shanghai holds 35% of equity interest in SSIT, a PRC limited liability company. ● UniDev — CLPS Shanghai holds 15% of equity interest in UniDev, a PRC limited liability company.
Registered China 19289503 Class 9: Recorded computer programs (programs); Recorded computer operating programs; Computer peripherals; Computer software (recorded); Connector (data processing equipment); Monitor program (computer program); Electronic publications (downloadable); Computer program (downloadable software); Downloadable computer application software; Computer hardware ChinaLink Professional Services Co., Ltd.
Registered China 19289503 Class 9: Recorded computer programs (programs); Recorded computer operating programs; Computer peripherals; Computer software (recorded); Connector (data processing equipment); Monitor program (computer program); Electronic publications (downloadable); Computer program (downloadable software); Downloadable computer application software; Computer hardware CLPS Shanghai Co., Ltd.
As of June 30, 2022, our business development teams consisted of 36 full-time sales and marketing personnel, including 33 sales managers, each of whom is responsible for a designated sales region or client account.
As of June 30, 2023, our business development teams consisted of 52 full-time sales and marketing personnel, including 49 sales managers, each of whom is responsible for a designated sales region or client account.
Furthermore, the total amount of foreign debts that can be borrowed by such PRC subsidiaries, including any shareholder loans, shall not exceed the difference between the total investment amount and the registered capital amount of the PRC subsidiaries, both of which are subject to the governmental approval. 71
Furthermore, the total amount of foreign debts that can be borrowed by such PRC subsidiaries, including any shareholder loans, shall not exceed the difference between the total investment amount and the registered capital amount of the PRC subsidiaries, both of which are subject to the governmental approval. 73 ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
Under the Agreement, CLPS and Educare Global Academy will collaborate and integrate their respective industry expertise and resources to provide an education program focused on banking and fintech, the Post Graduate Diploma in New Banking Technologies: Application, Implementation & Legacy Systems Integration.
(“Educare Global Academy”), a well-known private educational institution in Singapore. Under the Agreement, CLPS and Educare Global Academy will collaborate and integrate their respective industry expertise and resources to provide an education program focused on banking and fintech, the Post Graduate Diploma in New Banking Technologies: Application, Implementation & Legacy Systems Integration.
For more than ten years, we have served as an IT solutions provider to a growing network of clients in the global financial industry, including large financial institutions from the US, Europe, Australia, Southeast Asia and Hong Kong, and their PRC-based IT centers. We have created and developed a particular market niche by providing turn-key financial solution.
For more than 15 years, we have served as an IT service provider to a growing network of clients in the global financial industry, including large financial institutions in the U.S., Europe, Australia, Asia, and their PRC-based IT centers. We have created and developed a particular market niche by providing turn-key financial solutions.
Revenues from our wealth management area were approximately $32.1 million, $25.2 million, and $19.2 million for the years ended June 30, 2022, 2021, and 2020, respectively. Revenues from our wealth management area accounted for 21.1%, 20.0%, 21.5% of our total revenues in fiscal years 2022,2021, and 2020, respectively.
Revenues from our wealth management area were approximately $37.4 million, $32.1 million, and $25.2 million for the years ended June 30, 2023, 2022, and 2021, respectively. Revenues from our wealth management area accounted for 24.9%, 21.1%, and 20.0% of our total revenues in fiscal years 2023, 2022, and 2021, respectively.
Revenues from our core banking area were approximately $61.1 million, $48.8 million, and $35.0 million for the years ended June 30, 2022, 2021, and 2020, respectively.
Revenues from our core banking area were approximately $57.2 million, $61.1 million, and $48.8 million, for the years ended June 30, 2023, 2022, and 2021, respectively.
Generally, it includes domain knowledge, technology skills, data security and management compliance training, soft skills for personnel; and English language skills including verbal and business correspondence for all level, especially for those who need to communicate with global customers directly on a daily basis.
Generally, it includes domain knowledge, technology skills, data security and management compliance training, soft skills for personnel; and English language skills including verbal and business correspondence for all level, especially for those who need to communicate with global customers directly on a daily basis. However, the training content and approach can be customized based on the client’s training needs.
Revenues from our credit card area were approximately $6.6 million, $11.2 million, and $9.5 million for the years ended June 30, 2022, 2021, and 2020, respectively.
Revenues from our credit card area were approximately $4.3 million, $6.6 million, and $11.2 million for the years ended June 30, 2023, 2022, and 2021, respectively.
Customers Our clients include large corporations headquartered in China and globally which include, among others: ● Banking or their China-based IT centers — Citibank, Standard Chartered Bank (China) Ltd., ANZ Bank, and Bank of Communications. ● Wealth Management — AIA, China Life Insurance, First Data, Haitong Securities, and Orient Securities. ● E-Commerce — eBay, PayPal, Greendot Shanghai, Stubhub, and Gumtree. ● Automotive and Technology — SAIC Motors, Sony, Cisco, CRIF Information Technology, Experian, AGFA Healthcare, Neusoft, and Kodak.
Customers Our clients include large corporations headquartered in China and globally which include, among others: ● Banking or their China-based IT centers — Citibank, HSBC, Standard Chartered Bank (China) Ltd., The Bank of East Asia, Limited, Bank of China (Hong Kong) Limited, ANZ Bank, and Bank of Communications. ● Wealth Management — AIA, CUP Data, First Data, and Orient Securities. ● E-Commerce — eBay, PayPal, Greendot Shanghai, Stubhub, and Gumtree. ● Automotive and Technology — SAIC Motors, Rising Auto, Sony, Cisco, AGFA Healthcare, Neusoft, and Kodak.
However, the training content and approach can be customized based on the client’s training needs. 54 Our Strategies We have developed and intend to implement the following strategies to expand and grow the revenue, the number of employees, and the number of service locations of our Company: ● Grow revenue with existing and new clients — We intend to pursue additional revenue opportunities from existing Chinese and global clients, which include many of the leading companies in our financial industry.
Our Strategies We have developed and intend to implement the following strategies to expand and grow the revenue, the number of employees, and the number of service locations of our Company: ● Grow revenue with existing and new clients — We intend to pursue additional revenue opportunities from existing Chinese and global clients, which include many of the leading companies in our financial industry.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company We are a global information technology (“IT”), consulting and solutions service provider focused on delivering services to global institutions in banking, insurance and financial sectors, both in China and globally.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company We are a global information technology (“IT”), consulting and solutions service provider focused on delivering services primarily to global institutions, including banking, wealth management, ecommerce, and automotive areas both in China and globally.
We maintain nineteen delivery and/or R&D centers, of which ten are located in Mainland China (Shanghai, Beijing, Dalian, Tianjin, Xi’an, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Hainan) and nine are located globally (Hong Kong SAR, the United States of America, Japan, Singapore, Malaysia, Australia, Malaysia, and India, the Philippines, and Vietnam), to serve different customers in various geographic locations.
We maintain 20 delivery and/or R&D centers, of which 10 are strategically located in Mainland China (Shanghai, Beijing, Dalian, Tianjin, Xi’an, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Hainan) and 10 are located globally (Hong Kong SAR, the United States of America, Japan, Singapore, Australia, Malaysia, India, the Philippines, Vietnam, and Canada).
We launched the commercial edition of our new generation credit card system product, CAKU. Built on an open source architecture, CAKU offers fast implementation and flexibility for replacing existing credit card system, giving global banking institutions a competitive edge in digital transformation.
Built on an open source architecture, CAKU offers fast implementation and flexibility for replacing existing credit card system, giving global banking institutions a competitive edge in digital transformation.
(“JAJI China”) and JAJI (Shanghai) Human Resource Co., Ltd. (“JAJI HR”), respectively. ● CLPS Hong Kong provides both consulting and solution services. CLPS Hong Kong services clients in East Asia region, including Hong Kong. ● CLPS Shenzhen currently only provides consulting services. CLPS Shenzhen services clients in Shenzhen. ● CLPS Guangzhou currently only provides consulting services.
(“JAJI HR”), respectively. 45 ● CLPS Hong Kong provides both consulting and solution services. CLPS Hong Kong services clients in East Asia region, including Hong Kong. ● CLPS Shenzhen currently only provides consulting services. CLPS Shenzhen services clients in Shenzhen. ● CLPS Guangzhou currently only provides consulting services.
By combining onsite or onshore support and consulting with scalable and high-efficiency offsite or offshore services and processing, we are able to meet client demands in a cost-effective manner while retaining significant operational flexibility.
Our extensive network enables us to serve different clients across various geographic locations. By combining onsite or onshore support and consulting with scalable and high-efficiency offsite or offshore services and processing, we are able to meet client demands in a cost-effective manner while retaining significant operational flexibility.
Registered Hong Kong, China 47628610 Class 36: Financial management; Financial consulting; Credit card payment processing; Debit card payment processing; Credit card issuing; Online banking service; Credit card related investigations; Electronic credit card transaction processing; Credit card issuance; Credit card verification; Credit card transaction processing service; Banking services CLPS Technology (HONG KONG) Co., Ltd.
Registered 59 Mark Country of Registration Application Number Class/Description Current Owner Status Hong Kong, China 47628610 Class 36: Financial management; Financial consulting; Credit card payment processing; Debit card payment processing; Credit card issuing; Online banking service; Credit card related investigations; Electronic credit card transaction processing; Credit card issuance; Credit card verification; Credit card transaction processing service; Banking services CLPS Technology (HONG KONG) Co., Ltd.
We are fully committed of providing digital transformation services with focused on financial and technology in the banking, wealth management, e-commerce, and automotive industries, among others, through the utilization of innovative technology to achieve our client’s goals.
We are fully committed of delivering digital transformation services with a focus on the fintech within the areas of banking, wealth management, e-commerce, and automotive, among others, through the utilization of innovative technology to achieve our client’s goals.
JAJI China focuses on expanding its client bases with collaboration efforts with The Judge Group. On April 2, 2021, as part of business strategy, the Company changed the English entity name of its majority-owned subsidiary, Judge (Shanghai) Co., Ltd. and its wholly-owned subsidiary Judge (Shanghai) Human Resource Co., Ltd., to JAJI (Shanghai) Co., Ltd.
On April 2, 2021, as part of business strategy, the Company changed the English entity name of its majority-owned subsidiary, Judge (Shanghai) Co., Ltd. and its wholly-owned subsidiary Judge (Shanghai) Human Resource Co., Ltd., to JAJI (Shanghai) Co., Ltd. (“JAJI China”) and JAJI (Shanghai) Human Resource Co., Ltd.
We are fully committed of providing digital transformation services with focused on financial and technology in the banking, wealth management, e-commerce, and automotive industries, among others, through the utilization of innovative technology to achieve our client’s goals.
We are fully committed of delivering digital transformation services with a focus on the fintech within the areas of banking, wealth management, e-commerce, and automotive, among others, through the utilization of innovative technology to achieve our client’s goals.
We will continue to identify and assess opportunities to enhance our abilities to serve our clients. We will focus on enhancing our technology capabilities, deepening our penetration into key clients, expanding our portfolio of service offerings and expanding our operations geographically. 55 CLPS, through its majority-owned subsidiary, JAJI (Shanghai) Co., Ltd.
We will continue to identify and assess opportunities to enhance our abilities to serve our clients. We will focus on enhancing our technology capabilities, deepening our penetration into key clients, expanding our portfolio of service offerings and expanding our operations geographically.
Following the upgrade of our credit card system product, a joint effort of CLPS Innovation Lab and Credit Card Service teams, launch of the commercial edition of its new generation credit card system product, CAKU.
Following the upgrade of our credit card system product, a joint effort of CLPS Innovation Lab and Credit Card Service teams, CLPS launched CAKU 2.0, the upgraded new generation of credit card system product of CLPS.
B. Business Overview Overview We are a global information technology (“IT”), consulting and solutions service provider focused on delivering services to global institutions in banking, insurance and financial sectors, both in China and globally.
B. Business Overview Overview We are a global information technology (“IT”), consulting and solutions service provider focused on delivering services primarily to global institutions, including banking, wealth management, ecommerce, and automotive areas both in China and globally.
We maintain nineteen delivery and/or R&D centers, of which ten are located in China (Shanghai, Beijing, Dalian, Tianjin, Xi’an, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Hainan) and nine are located globally (Hong Kong SAR, the United States of America, Japan, Singapore, Australia, Malaysia, India, the Philippines, and Vietnam), to serve different customers in various geographic locations.
We maintain 20 delivery and/or R&D centers, of which 10 are strategically located in Mainland China (Shanghai, Beijing, Dalian, Tianjin, Xi’an, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Hainan) and 10 are located globally (Hong Kong SAR, the United States of America, Japan, Singapore, Australia, Malaysia, India, the Philippines, Vietnam, and Canada).
Central and western regions achieved higher growth rates compared to the national average, at 1.2% and 1.7%, respectively. 49 Financial institutions/banking IT solutions refer to the software or IT related services provided by professional IT service providers who use their own experience and technology to meet each bank’s needs in business development, strategic development, and management efficiency.
Among them, the central and western regions are 5.7 and 3.1 percentage points higher than the national average growth rate. 48 Financial institutions/banking IT solutions refer to the software or IT related services provided by professional IT service providers who use their own experience and technology to meet each bank’s needs in business development, strategic development, and management efficiency.
Industry and Market Background China’s Banking Industry According to the 2021 annual report of China Banking and Insurance Regulatory Commission (CBIRC), China’s banking financial institutions had total assets of RMB 337.7 trillion (USD 53.0 trillion) at the end of 2021, a year-on-year increase of RMB 25.0 trillion (USD 3.9 trillion), or 8.0%.
Industry and Market Background China’s Banking Industry According to the 2022 annual report of China Banking and Insurance Regulatory Commission (CBIRC), China’s banking financial institutions had total assets of RMB 379.4 trillion (USD 55.0 trillion) at the end of 2022, a year-on-year increase of RMB 41.7 trillion (USD 6.0 trillion), or 10.0%.
The development of China’s software and IT service industry is generally characterized by: ● Software products —In 2021, the industry’s revenue from software products reached RMB 2.44 trillion (USD 0.4 trillion), an increase of 12.3% over the previous year, accounting for 25.7% of the industry’s revenue.
The development of China’s software and IT service industry is generally characterized by: ● Software products —In 2022, the industry’s revenue from software products reached RMB 2.66 trillion (USD 385.7 billion), an increase of 9.9% over the previous year, accounting for 24.6% of the industry’s revenue.
CLPS Dalian services clients in China’s north east region, including Dalian. ● CLPS RC provides consulting services. CLPS RC focuses on small and medium domestic financial institutions. ● CLPS Beijing provides both consulting and solution services. CLPS Beijing services clients in China’s central east region, including Beijing and Tianjin. ● CLPS-Ridik AU currently only provides consulting services.
CLPS Dalian services clients in China’s north east region, including Dalian. ● CLPS Beijing provides both consulting and solution services. CLPS Beijing services clients in China’s central east region, including Beijing and Tianjin. ● Ridik AU currently only provides consulting services. Ridik AU services clients in Australia. ● CLPS SG currently only provides consulting services.
On September 24, 2021, CLPS, through its wholly-owned subsidiary, Arabian Jasmine, entered into a purchase agreement to acquire commercial real estate located at Unit 1-2, 10 th Floor, Millennium City III, 370 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong SAR for a consideration of US$11,286,971. The consideration was fully paid on December 8, 2021.
On September 24, 2021, CLPS, through its wholly-owned subsidiary, Arabian Jasmine, entered into a purchase agreement to acquire the commercial real estate located at 10 th Floor, Millennium City III, 370 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong SAR for a consideration of US$11,286,971, which has been and will continue to be used as the Company’s principal executive office.
Through this solution, CLPS will be able to facilitate Chinese financial institutions create a better digital RMB application ecosystem, penetrate the market opportunity quickly, and expand customer acquisition channels. In addition, the solution can be customized based on corporate client’s demands, enabling a wide range of application scenarios.
Through this solution, CLPS will be able to facilitate Chinese financial institutions create a better digital RMB application ecosystem, penetrate the market opportunity quickly, and expand customer acquisition channels.
By serving both Chinese and global clients on a common platform, we are able to leverage the shared resources, management, industry expertise and technological know-how to attract new business and remain cost competitive. Corporate History and Background CLPS Incorporation was incorporated under the laws of the Cayman Islands on May 11, 2017.
By serving both Chinese and global clients on a common platform, we are able to leverage the shared resources, management proficiency, industry expertise and technological know-how to attract new business and remain cost competitive.
Automotive With the extensive experience of CLPS in the IT services application in the financial and e-commerce industries, and its innovative implementation of cutting-edge technology such as big data, artificial intelligence and robotic process automation (RPA), it has also extended its business to automotive industry.
Revenues from our e-Commerce area accounted for 17.0%, 19.4%, and 15.2% of our total revenues in fiscal years 2023, 2022, and 2021, respectively. 51 Automotive With the extensive experience of CLPS in the IT services application in the financial and e-commerce industries, and its innovative implementation of cutting-edge technology such as big data, artificial intelligence and robotic process automation (RPA), it has also extended its business to automotive industry.
For more than ten years, we have served as an IT solutions provider to a growing network of clients in the global financial industry, including large financial institutions in the US, Europe, Australia, Southeast Asia, and Hong Kong and their PRC-based IT centers.
For more than 15 years, we have served as an IT service provider to a growing network of clients in the global financial industry, including large financial institutions in the U.S., Europe, Australia, Asia, and their PRC-based IT centers. We have created and developed a particular market niche by providing turn-key financial solutions.
In addition, by integrating bank-enterprise interaction, smart contract, aggregate payment, retail settlement, supply chain management, marketing and promotion as an end-to-end service platform, a trading platform based on digital currency payment scenarios can be developed, helping financial institutions accelerate adoption and widespread use of digital currency.
In addition, by integrating bank-enterprise interaction, smart contract, aggregate payment, retail settlement, supply chain management, marketing and promotion as an end-to-end service platform, a trading platform based on digital currency payment scenarios can be developed, helping financial institutions accelerate adoption and widespread use of digital currency. 52 A key strategic target of the People’s Bank of China, digital RMB has achieved significant progress in terms of application scenarios, transaction volume, number of accounts opened, and an expanded pilot scheme to more areas.
E-commerce platform technical services revenues reached RMB 1.0 trillion (USD 0.2 trillion), an increase of 33.0% over the previous year. ● Information security products and services – In 2021, the revenue of information security products and services reached RMB 182.5 billion (USD 28.6 billion), an increase of 13.0% over the previous year. ● Embedded system software – In 2021, the revenue of embedded system software reached RMB 842.5 billion (USD 132.2 billion), an increase of 19.0% over the previous year. ● Development on regional level — The eastern region maintained its rapid growth, while the central and western regions showed remarkable growth.
E-commerce platform technical services revenues reached RMB 1.1 trillion (USD 159.5 billion), an increase of 18.5% over the previous year. ● Information security products and services – In 2022, the revenue of information security products and services reached RMB 203.8 billion (USD 29.6 billion), an increase of 10.4% over the previous year. ● Embedded system software – In 2022, the revenue of embedded system software reached RMB 937.6 billion (USD 135.9 billion), an increase of 11.3% over the previous year. ● Development on regional level — The eastern region maintained rapid growth, and the central and western regions showed remarkable growth.
Spearheaded by the CLPS Academy, the strength of our TCP/TDP program adds to our recognition in the industry by competitors and customers alike. For the fiscal year 2022, we trained 250 interns who have successfully worked for our clients. In addition, through our wholly-owned subsidiary, CLPS Technology (Singapore) Pte.
Spearheaded by the CLPS Academy, the strength of our TCP/TDP program adds to our recognition in the industry by competitors and customers alike. For the fiscal year 2023, we trained more than 180 interns. In addition, through our wholly-owned subsidiary, CLPS Technology (Singapore) Pte. Ltd., we signed a Collaboration Agreement (the “Agreement”) with Educare Global Academy Pte. Ltd.
CLPS-Ridik AU services clients in Australia. 46 ● CLPS SG currently only provides consulting services. CLPS SG services clients in South East Asia region, including Singapore. ● JAJI China is a joint venture with The Judge Group in the US. JAJI China continues to service The Judge Group’s clients in China.
CLPS SG services clients in South East Asia region, including Singapore. ● JAJI China is a joint venture with The Judge Group in the US. JAJI China continues to service The Judge Group’s clients in China. JAJI China focuses on expanding its client bases with collaboration efforts with The Judge Group.
By combining onsite (when we send our team to our client) or onshore (when we send our team to client’s overseas location) support and consulting with scalable and high-efficiency offsite (when we send our team to a location other than client’s location) or offshore (when we send our team to a location that is other than a client’s location overseas) services and processing, we are able to meet client demands in a cost-effective manner while retaining significant operational flexibility.
Our extensive network enables us to serve different clients across various geographic locations. By combining onsite or onshore support and consulting with scalable and high-efficiency offsite or offshore services and processing, we are able to meet client demands in a cost-effective manner while retaining significant operational flexibility.
Total liabilities were RMB 308.4 trillion (USD 48.4 trillion), a year-on-year increase of RMB 22.1 trillion (USD 3.5 trillion), or 7.7%. The total assets of banking financial institutions were RMB 94.3 trillion (USD 14.8 trillion) in 2010.
Total liabilities equalled to RMB 348.0 trillion (USD 50.5 trillion), a year-on-year increase of RMB 39.6 trillion (USD 5.7 trillion), or 10.4%. The total assets of banking financial institutions were RMB 94.3 trillion (USD 13.7 trillion) in 2010.
In addition, the Company manages and operates several other facilities. We rent office space in Shanghai, Tianjin, Shenzhen, Guangzhou, Dalian, Xi’an, Chengdu, Beijing, Baoding, Hainan, Singapore, Hong Kong, Japan, India, the U.S., and the Philippines. Rent expenses amounted to $1,085,888, $942,606, and $944,645 for the years ended June 30, 2022, 2021 and 2020, respectively.
We rent office space in Shanghai, Hangzhou, Tianjin, Shenzhen, Guangzhou, Dalian, Xi’an, Chengdu, Beijing, Hainan, Japan, India, the U.S., Vietnam and the Philippines. Rent expenses amounted to $1,086,622, $1,085,888, and $942,606 for the years ended June 30, 2023, 2022, and 2021, respectively. We believe our facilities are adequate for our current needs.
We will continue to pursue growth in our global footprint and market share as well as in technological and talent development. By delivering on our strategy, we expect to drive shareholder value. CLPS established CLPS Technology (Philippines) Corp. (“CLPS Philippines”) in Metro Manila.
We will continue to pursue growth in our global footprint and market share as well as in technological and talent development. By delivering on our strategy, we expect to drive shareholder value. CLPS has appointed Mr. Srustijeet Mishra as CEO of its subsidiary, CLPS Technology (California) Inc.
The common shares were sold at an offering price of $5.25 per share, generating gross proceeds of approximately $10.5 million, and net proceeds of approximately $9.5 million. The registration statement relating to this IPO also covered the underwriters’ common stock purchase warrants and the common shares issuable upon the exercise thereof in the total amount of 83,162 common shares.
The registration statement relating to this IPO also covered the underwriters’ common stock purchase warrants and the common shares issuable upon the exercise thereof in the total amount of 83,162 common shares.
By the end of May 2022, foreign banks had set up 41 foreign legal entities, 116 branches of foreign banks and 134 representative offices in China, with a total of 919 business institutions. 48 Software and Information Technology Service Industry in China According to the 2021 Economic Performance of the Software Industry report of Ministry of Industry and Information Technology (MIIT), China’s software and information technology service industry has maintained a good performance, with robust revenue growth in software business, sustained profitability improvement, growth in software export, and increase in number of employees.
By the end of 2022, foreign banks had set up 41 foreign legal entities, 116 branches of foreign banks and 135 representative offices in China, with a total of 911 business institutions. 47 Software and Information Technology Service Industry in China According to the 2022 Economic Performance of the Software Industry report of Ministry of Industry and Information Technology (MIIT), China’s software and information technology service industry ran steadily, with software business revenue has jumping to RMB 10 trillion (USD 1.4 trillion), profitability remaining stable, and software business exports maintaining growth.
In 2021, the industry achieved a total profit of RMB 1.2 trillion (USD 0.2 trillion), an increase of 7.6% over the previous year. Software export continued to grow. In 2021, the software-related exports were USD 52.1 billion, an increase of 8.8% over the previous year.
In 2022, the industry achieved a total profit of RMB 1.26 trillion (USD 182.7 billion), an increase of 5.7% over the previous year. Software exports continued to grow. In 2022, the software business exported USD 52.4 billion, an increase of 3.0% over the previous year. Among them, the export of software outsourcing services increased by 9.2% over the previous year.
In 2021, the overall market size of China’s banking IT solution market reached RMB 58.93 billion (USD 9.2 billion), an increase of 17.3% over 2020. IDC predicts that by 2026, the IT solution market for China’s banking industry will reach RMB 131.29 billion (USD 20.6 billion).
In 2022, the overall market size of China’s banking IT solution market reached RMB 64.88 billion (USD 9.41 billion), an increase of 10.1% over 2021. IDC predicts that by 2027, the IT solution market for China’s banking industry will reach RMB 142.91 billion (USD 20.72 billion).

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

113 edited+13 added−78 removed120 unchanged
Raymond Ming Hui Lin, the Company’s Chief Executive Officer and Director are the controlling shareholders of the Company (the “Controlling Shareholders”). On August 15, 2018, the shareholders of CLPS SG and CLPS-Ridik AU were changed to Qiner from CLPS Shanghai pursuant to the share purchase agreements.
Raymond Ming Hui Lin, the Company’s Chief Executive Officer and Director are the controlling shareholders of the Company (the “Controlling Shareholders”). On August 15, 2018, the shareholders of CLPS SG and Ridik AU were changed to Qiner from CLPS Shanghai pursuant to the share purchase agreements.
Qiner purchased the 100% equity interest of CLPS SG and CLPS-Ridik AU from CLPS Shanghai for consideration of $0.6 million (or approximately 850,000 Singapore dollars) and $0.1 million (or approximately 200,000 Australian dollars), respectively. These transactions did not change the holding company’s ownership of these entities. On August 20, 2018, CLPS SG acquired an 80% interest in Infogain Solutions PTE.
Qiner purchased the 100% equity interest of CLPS SG and Ridik AU from CLPS Shanghai for consideration of $0.6 million (or approximately 850,000 Singapore dollars) and $0.1 million (or approximately 200,000 Australian dollars), respectively. These transactions did not change the holding company’s ownership of these entities. On August 20, 2018, CLPS SG acquired an 80% interest in Infogain Solutions Pte.
The purchase price allocation of the transaction was determined by the Company with the assistance of an independent appraisal firm based on the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date.
The purchase price allocation of the transaction was determined by the Company with the assistance of an independent appraisal firm based on the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date.
The purchase price allocation of the transaction was determined by the Company with the assistance of an independent appraisal firm based on the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date.
The purchase price allocation of the transaction was determined by the Company with the assistance of an independent appraisal firm based on the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date.
The most significant variables in the valuation are discount rate, terminal value, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows.
The most significant variables in the valuation are discount rate, terminal value, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows.
Our customer contracts may be categorized by pricing model into time-and-expense contracts and fixed-price contracts. Under time-and-expense contracts, we are compensated for actual time incurred by our IT professionals at negotiated daily billing rates. We are also entitled to charge overtime fees in addition to the daily billing rates under some time-and-expense contracts.
Our customer contracts may be categorized by pricing model into time-and-expense contracts and fixed-price contracts. Under time-and-expense contracts, we are compensated for actual time incurred by our IT professionals at negotiated daily billing rates. We are also entitled to charge overtime fees in addition to the daily billing rates under some time-and-expense contracts.
Fixed-price contracts require us to develop customized IT solutions throughout the contractual period, and we are paid in installments upon completion of specified milestones under the contracts. The following table presents our revenues by our service lines.
Fixed-price contracts require us to develop customized IT solutions throughout the contractual period, and we are paid in installments upon completion of specified milestones under the contracts. The following table presents our revenues by our service lines.
General and administrative expenses General and administrative expenses primarily consisted of salary and compensation expenses relating to our finance, legal, human resources and executive office personnel, and included share-based compensation expenses, rental expenses, depreciation and amortization expenses, office overhead, professional service fees and travel and transportation costs.
General and administrative expenses General and administrative expenses primarily consisted of salary and compensation expenses relating to our finance, legal, human resources and executive office personnel, and included share-based compensation expenses, rental expenses, depreciation and amortization expenses, office overhead, professional service fees and travel and transportation costs.
Subsidies and other operating income Subsidies and other operating income primarily included government subsidies which represented amounts granted by local government authorities as a general incentive for us to promote development of the local technology industry. The Company records government subsidies in subsidies and other operating income upon received and when there is no further performance obligation.
Subsidies and other operating income Subsidies and other operating income primarily included government subsidies which represented amounts granted by local government authorities as a general incentive for us to promote development of the local technology industry. The Company records government subsidies in subsidies and other operating income upon received and when there is no further performance obligation.
Subsequent Event None. Critical Accounting Policies and Estimates We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures.
Subsequent Event None. Critical Accounting Policies We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures.
The purchase price allocation to assets acquired and liabilities assumed as of the date of acquisition was as follows: Amounts Cash acquired $ 474,323 Accounts receivable, net 618,144 Prepayments, deposits and other assets, net 103,697 Property and equipment, net 1,493 Customer relationship 904,748 Short-term bank loans and long-term bank loans, current portion (48,103 ) Accounts payable and other current liabilities (128,688 ) Tax payables (102,978 ) Salaries and benefits payable (431,548 ) Long-term bank loans (44,201 ) Deferred tax liabilities (162,855 ) Noncontrolling interests (411,351 ) Goodwill 1,689,899 Total consideration $ 2,462,580 Identifiable intangible assets acquired included customer relationship, which was valued using an income approach and determined to carry estimated remaining useful life of approximately ten years. 79 On January 6, 2020, Ridik Pte. acquired 100% equity interest in Ridik Consulting Private Limited (“Ridik Consulting”) from third-party selling shareholders with the final purchase price of $5,520 (396,700 Indian Rupees).
The purchase price allocation to assets acquired and liabilities assumed as of the date of acquisition was as follows: Amounts Cash acquired $ 474,323 Accounts receivable, net 618,144 Prepayments, deposits and other assets, net 103,697 Property and equipment, net 1,493 Customer relationship 904,748 Short-term bank loans and long-term bank loans, current portion (48,103 ) Accounts payable and other current liabilities (128,688 ) Tax payables (102,978 ) Salaries and benefits payable (431,548 ) Long-term bank loans (44,201 ) Deferred tax liabilities (162,855 ) Noncontrolling interests (411,351 ) Goodwill 1,689,899 Total consideration $ 2,462,580 Identifiable intangible assets acquired included customer relationship, which was valued using an income approach and determined to carry estimated remaining useful life of approximately ten years. 82 On January 6, 2020, Ridik Pte. acquired 100% equity interest in Ridik Consulting Private Limited (“Ridik Consulting”) from third-party selling shareholders with the final purchase price of $5,520 (396,700 Indian Rupees).
Qiner subsequently made a capital contribution of $0.44 million (RMB 3 million) to EMIT directly. There is remaining capital contribution of $0.23 million not paid as of June 30, 2021. 73 On July 31, 2019, the Company incorporated CLPS Hangzhou Co., Ltd. (“CLPS Hangzhou”), to develop the business in related areas.
Qiner subsequently made a capital contribution of $0.44 million (RMB 3 million) to EMIT directly. There is remaining capital contribution of $0.23 million not paid as of June 30, 2021. On July 31, 2019, the Company incorporated CLPS Hangzhou Co., Ltd. (“CLPS Hangzhou”), to develop the business in related areas.
The purchase price allocation to assets acquired and liabilities assumed as of the date of acquisition was as follows: Amounts Cash acquired $ 268,014 Accounts receivable, net 325,888 Prepayments, deposits and other assets, net 67,570 Property and equipment, net 1,875 Intangible assets, net 339,883 Salaries and benefits payable (86,483 ) Tax payables (16,147 ) Accounts payable and other current liabilities (259,361 ) Deferred tax liabilities (65,264 ) Noncontrolling interests (290,994 ) Goodwill 195,080 Total consideration $ 480,061 76 The intangible assets include customer contracts of $339,883, which were acquired by JAJI China in 2013 with an estimated useful life of 10 years.
The purchase price allocation to assets acquired and liabilities assumed as of the date of acquisition was as follows: Amounts Cash acquired $ 268,014 Accounts receivable, net 325,888 Prepayments, deposits and other assets, net 67,570 Property and equipment, net 1,875 Intangible assets, net 339,883 Salaries and benefits payable (86,483 ) Tax payables (16,147 ) Accounts payable and other current liabilities (259,361 ) Deferred tax liabilities (65,264 ) Noncontrolling interests (290,994 ) Goodwill 195,080 Total consideration $ 480,061 79 The intangible assets include customer contracts of $339,883, which were acquired by JAJI China in 2013 with an estimated useful life of 10 years.
For the Year ended June 30, 2022 2021 Revenue % of total Revenue Revenue % of total Revenue Variance Variance % IT consulting services $ 144,092,811 94.8 % $ 122,273,395 97.0 % 21,819,416 17.8 % Customized IT solution services 6,738,118 4.4 % 3,130,646 2.5 % 3,607,472 115.2 % Other 1,191,452 0.8 % 657,652 0.5 % 533,800 81.2 % Total 152,022,381 100.0 % 126,061,693 100.0 % 25,960,688 20.6 % 84 Our total revenues increased by approximately $26.0 million, or 20.6%, to approximately $152.0 million for the fiscal year ended June 30, 2022 from approximately $126.1 million for the fiscal year ended June 30, 2021.
For the Year ended June 30, 2022 2021 Revenue % of total Revenue Revenue % of total Revenue Variance Variance % IT consulting services $ 144,092,811 94.8 % $ 122,273,395 97.0 % 21,819,416 17.8 % Customized IT solution services 6,738,118 4.4 % 3,130,646 2.5 % 3,607,472 115.2 % Other 1,191,452 0.8 % 657,652 0.5 % 533,800 81.2 % Total 152,022,381 100.0 % 126,061,693 100.0 % 25,960,688 20.6 % 91 Our total revenues increased by approximately $26.0 million, or 20.6%, to approximately $152.0 million for the fiscal year ended June 30, 2022 from approximately $126.1 million for the fiscal year ended June 30, 2021.
The carrying amounts of the net identifiable assets of MSCT as of the date of acquisition were as follows: Amounts Cash acquired $ 205,711 Technology 151,168 Other payable and other current liabilities (5,390 ) Deferred tax liabilities (23,971 ) Noncontrolling interests (121,807 ) Total consideration $ 205,711 Identifiable intangible assets acquired include technology, which were valued using an income approach and determined to carry estimated remaining useful lives of approximately ten years. 81 Results of Operations Results of Operations for Continuing Operations The following table sets forth a summary of our consolidated statements of operations for the periods indicated.
The carrying amounts of the net identifiable assets of MSCT as of the date of acquisition were as follows: Amounts Cash acquired $ 205,711 Technology 151,168 Other payable and other current liabilities (5,390 ) Deferred tax liabilities (23,971 ) Noncontrolling interests (121,807 ) Total consideration $ 205,711 Identifiable intangible assets acquired include technology, which were valued using an income approach and determined to carry estimated remaining useful lives of approximately ten years. 85 Results of Operations Results of Operations for Continuing Operations The following table sets forth a summary of our consolidated statements of operations for the periods indicated.
Investment in CLPS Shenzhen Robotics On August 28, 2020, the Company, the Chairman of the Company and a third-party company incorporated CLPS Shenzhen Robotics Co. Ltd. (“CLPS Shenzhen Robotics”) in Shenzhen. The Company holds 10% of equity interest in CLPS Shenzhen Robotics valued at $0.14 million (RMB 1,000,000).
Investment in and disposal of CLPS Shenzhen Robotics On August 28, 2020, the Company, the Chairman of the Company and a third-party company incorporated CLPS Shenzhen Robotics Co. Ltd. (“CLPS Shenzhen Robotics”) in Shenzhen. The Company holds 10% of equity interest in CLPS Shenzhen Robotics valued at $0.14 million (RMB 1,000,000).
For the Years Ended June 30, 2021 and 2020 Revenues We derive revenues by providing integrated IT services and solutions, including: (i) IT consulting services, which primarily includes application development services for banks and institutions in the financial industry, which are billed on a time-and-expense basis, (ii) customized IT solutions services, which primarily includes customized solution development and maintenance service for general enterprises with acceptance requirement, which are billed either on a time-and-expense basis with enforceable right to payment or on a fixed-price basis, and (iii) other revenue from product and third-party software sales, training and headhunting.
For the Years Ended June 30, 2022 and 2021 Revenues We derive revenues by providing integrated IT services and solutions, including: (i) IT consulting services, which primarily includes application development services for banks and institutions in the financial industry, which are billed on a time-and-expense basis, (ii) customized IT solutions services, which primarily includes customized solution development and maintenance service for general enterprises with acceptance requirement, which are billed either on a time-and-expense basis with enforceable right to payment or on a fixed-price basis, and (iii) other revenue from product and third-party software sales, training and headhunting.
On May 31, 2021, the Company incorporated Shanghai Chenqin Information Technology Services Co., Ltd. (“Shanghai Chenqin”) in Shanghai to develop business in related areas. On June 22, 2021, the Company incorporated Noni (Singapore) Pte. Ltd. (“Noni Singapore”) in Singapore to develop business in related areas.
On May 31, 2021, the Company incorporated Shanghai Chenqin Information Technology Services Co., Ltd. (“Shanghai Chenqin”) in Shanghai to develop business in related areas. 77 On June 22, 2021, the Company incorporated Noni (Singapore) Pte. Ltd. (“Noni Singapore”) in Singapore to develop business in related areas.
Time-and-expense basis contracts The series of IT services are substantially the same from day to day, and each day of the service is considered to be distinct and separately identifiable as it benefits the customer daily.
IT consulting services IT consulting services are time-and-expense basis contracts. The series of IT consulting services are substantially the same from day to day, and each day of the service is considered to be distinct and separately identifiable as it benefits the customer daily.
On September 13, 2019, the Company incorporated CLPS Technology Japan (“CLPS Japan”) to develop business in related areas. On September 26, 2019, Qiner acquired an 80% interest in Ridik Pte. Ltd.
On September 13, 2019, the Company incorporated CLPS Technology Japan (“CLPS Japan”) to develop business in related areas. 75 On September 26, 2019, Qiner acquired an 80% interest in Ridik Pte. Ltd.
The Company believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of non-cash share-based compensation expenses, which have been and will continue to be significant recurring expenses in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool.
The Company believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of non-cash share-based compensation expenses and impairment of goodwill, which have been and will continue to be significant recurring expenses in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool.
For the period from July 1, 2019 to April 30, 2020, the Company’s share of CLPS Lihong’s results of operations was income of $250,290 (RMB 1,759,764). 78 In July 2021, the Company sold its remaining 7% equity interest of CLPS Lihong to the third party for the consideration of $645,122 (RMB 4.2 million) which was received on July 27,2021.
For the period from July 1, 2019 to April 30, 2020, the Company’s share of CLPS Lihong’s results of operations was income of $250,290 (RMB 1,759,764). 81 In July 2021, the Company sold its remaining 7% equity interest of CLPS Lihong to the third party for the consideration of $645,122 (RMB 4.2 million) which was received on July 27,2021.
The total consideration was allocated to the acquisition of 100% equity interests in CareerWin and the acquisition of 30% noncontrolling interest in JAJI HR at $289,980 (RMB1.88 million) and $18,995 (RMB0.12 million), respectively. 80 The acquisition of the 100% equity interest in CareerWin was completed on March 3, 2021 and was accounted for as a business combination using the purchase method of accounting.
The total consideration was allocated to the acquisition of 100% equity interests in CareerWin and the acquisition of 30% noncontrolling interest in JAJI HR at $289,980 (RMB1.88 million) and $18,995 (RMB0.12 million), respectively. 83 The acquisition of the 100% equity interest in CareerWin was completed on March 3, 2021 and was accounted for as a business combination using the purchase method of accounting.
We expect our selling and marketing expenses to increase as we continue our business expansion, we expect these expenses to remain relatively steady as a percentage of our net revenues to support our business growth in the future. 85 Research and development (“R&D”) expenses R&D expenses primarily consisted of compensation and benefit expenses relating to our research and development personnel as well as office overhead and other expenses relating to our R&D activities.
We expect our selling and marketing expenses to increase as we continue our business expansion, we expect these expenses to remain relatively steady as a percentage of our net revenues to support our business growth in the future. 92 Research and development (“R&D”) expenses R&D expenses primarily consisted of compensation and benefit expenses relating to our research and development personnel as well as office overhead and other expenses relating to our R&D activities.
In assessing our liquidity, we monitor and analyze our cash on hand, our ability to generate sufficient revenue sources in the future and our operating and capital expenditure commitments. The Company plans to fund working capital through its operations, bank borrowings and additional capital contribution from shareholders. Our operating cash flow was positive for the year ended June 30, 2022.
In assessing our liquidity, we monitor and analyze our cash on hand, our ability to generate sufficient revenue sources in the future and our operating and capital expenditure commitments. The Company plans to fund working capital through its operations, bank borrowings and additional capital contribution from shareholders. Our operating cash flow was positive for the year ended June 30, 2023.
Results of subsidiaries and businesses acquired from third parties are consolidated from the date on which control is transferred to us. 72 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Annual Report.
Results of subsidiaries and businesses acquired from third parties are consolidated from the date on which control is transferred to us. 74 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Annual Report.
We believe that we will have sufficient working capital to operate our business for the next 12 months from the issuance date of this report. 89 Substantially all of our operations are conducted in China and all of our revenue, expenses, cash and cash equivalents are denominated in RMB.
We believe that we will have sufficient working capital to operate our business for the next 12 months from the issuance date of this report. 94 Substantially all of our operations are conducted in China and all of our revenue, expenses, cash and cash equivalents are denominated in RMB.
We believe that maintaining our Company as a proven, reliable partner to our financial industry clients both in China and globally positions us well to capture greater opportunities in the rapidly evolving global market for IT consulting and solutions.
We believe that maintaining our Company as a proven and reliable partner to our clients both in China and globally positions us well to capture greater opportunities in the rapidly evolving global market for IT consulting and solutions.
The share of loss in equity investees, net of tax in fiscal 2021 was net equity investment loss of SSIT and EMIT. 86 Net income Net income decreased by $2.4 million or 34.6% to $4.6 million in fiscal 2022 from a net income of $7.0 million in fiscal 2021.
The share of loss in equity investees, net of tax in fiscal 2021 was net equity investment loss of SSIT and EMIT. 93 Net income Net income decreased by $2.4 million or 34.6% to $4.6 million in fiscal 2022 from a net income of $7.0 million in fiscal 2021.
GAAP. 82 The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP.
GAAP. 86 The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP.
All of the tax returns of our subsidiaries in China remain subject to examination by the tax authorities for five years from the date of filing through year 2025, and the examination period was extended to 10 years for entities qualified as High and New Technology Enterprises (“HNTEs”) in 2018 and thereafter.
All of the tax returns of our subsidiaries in China remain subject to examination by the tax authorities for five years from the date of filing through year 2026, and the examination period was extended to 10 years for entities qualified as High and New Technology Enterprises (“HNTEs”) in 2018 and thereafter. 99
The balances due to subsidiaries from the Company were Nil, Nil and US$7.1 million. as of June 30 for fiscal 2020, 2021 and 2022, respectively. The balances were reflected in the section “PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION” in our financial statements for fiscal 2020, 2021, and 2022, respectively.
The balances due to subsidiaries from the Company were Nil, US$7.1 million, and US$7.6 million as of June 30 for fiscal 2021, 2022, and 2023, respectively. The balances were reflected in the section “PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION” in our financial statements for fiscal 2021, 2022, and 2023, respectively.
In the same contract, we are generally required to provide post-contract customer support (“PCS’) for a period from three months to one year (“PCS period”) after the customized application is delivered. The type of service for PCS clause is generally not specified in the contract or stand-ready service on when-and-if-available basis.
In the same contract, we are generally required to provide post-contract customer support (“PCS’) for a period from three months to one year (“PCS period”) after the customized application is delivered. The type of service for PCS is stand-ready service on when-and-if-available basis.
The amounts were offset when the Company’s consolidated financial statements were prepared. The balances due from subsidiaries to the Company were US$7.1 million, US$7.6 million, and US$22.8 million as of June 30 for fiscal 2020, 2021 and 2022, respectively. The subsidiaries provide cash support to the Company according its business development plan.
The amounts were offset when the Company’s consolidated financial statements were prepared. The balances due from subsidiaries to the Company were US$7.6 million, US$22.8 million, and US$24.7 million as of June 30 for fiscal 2021, 2022, and 2023, respectively. The subsidiaries provide cash support to the Company according its business development plan.
Capital Expenditures The Company made capital expenditures of $20.8 million, $1.1 million, and $0.2 million for the years ended June 30, 2022, 2021, and 2020, respectively. In these periods, our capital expenditures were mainly used for purchases of office building and office equipment. The Company will continue to make capital expenditures to meet the expected growth of its business.
Capital Expenditures The Company made capital expenditures of $0.5 million, $20.8 million, and $1.1 million for the years ended June 30, 2023, 2022, and 2021, respectively. In these periods, our capital expenditures were mainly used for purchases of office building and office equipment. The Company will continue to make capital expenditures to meet the expected growth of its business.
CLPS Incorporation has not declared or paid any cash dividends to pay any cash dividends on its ordinary shares. The Company provides cash support to its subsidiaries according its business development plan. For fiscal year 2020, 2021, 2022, the Company provided cash support to its subsidiaries in Mainland China, Singapore and Hong Kong SAR.
CLPS Incorporation has not declared or paid any cash dividends to pay any cash dividends on its ordinary shares. The Company provides cash support to its subsidiaries according its business development plan. For fiscal years 2021, 2022, and 2023, the Company provided cash support to its subsidiaries in Mainland China, Singapore and Hong Kong SAR.
Net proceeds from the transaction after issuance cost of $1,317,119 were $14,682,877 which was allocated to common shares and warrants issued on their relative fair value basis of $11,131,829 and $3,551,048, respectively. As of June 30, 2022, we had cash and cash equivalents of approximately $18.4 million.
Net proceeds from the transaction after issuance cost of $1,317,119 were $14,682,877 which was allocated to common shares and warrants issued on their relative fair value basis of $11,131,829 and $3,551,048, respectively. As of June 30, 2023, we had cash and cash equivalents of approximately $22.3 million.
Impact of Inflation We do not believe the impact of inflation on our company is material. Our operations are in China and China’s inflation rates have been relatively stable over the last two years: 3.4% in 2021 and 2.5% in 2020. Contractual Obligations The Company’s subsidiaries lease office spaces under various operating leases.
Impact of Inflation We do not believe the impact of inflation on our company is material. Our operations are in China and China’s inflation rates have been relatively stable over the last two years: 3.7% in 2022 and 3.4% in 2021. Contractual Obligations The Company’s subsidiaries lease office spaces under various operating leases.
Fixed-price basis contracts Revenues from fixed-price customized solution contracts require us to perform services for systems design, planning and integrating based on customers’ specific needs which requires significant production and customization. The required customization work period is generally less than one year. Upon delivery of the services, customer acceptance is generally required.
Customized IT solution service Revenues from customized IT solution contracts require us to perform services for systems design, planning and integrating based on customers’ specific needs which requires significant production and customization. The required customization work period is generally less than one year. Upon delivery of the services, customer acceptance is generally required.
Our operations are primarily based in mainland China, where we derive a substantial portion of our revenues. For the years ended June 30, 2022, 2021 and 2020, our revenues were $152.0 million, $126.1 million, and $89.4 million, respectively. Revenues generated outside of mainland China were approximately $14.1 million, $13.6 million and $10.6 million for fiscal 2022, 2021 and 2020, respectively.
Our operations are primarily based in Mainland China, where we derive a substantial portion of our revenues. For the years ended June 30, 2023, 2022, and 2021, our revenues were $150.4 million, $152.0 million, and $126.1 million, respectively. Revenues generated outside of Mainland China were approximately $16.2 million, $14.1 million, and $13.6 million for fiscal 2023, 2022, and 2021, respectively.
The transaction was accounted for as a business combination using the purchase method of accounting. As the business combination was achieved in stages, the Company remeasured its previously held 30% of equity interest in Huanyu at its acquisition date fair value of $152,312. A loss of $19,682 was recognized in subsidies and other income net in relation to the remeasurement.
As the business combination was achieved in stages, the Company remeasured its previously held 30% of equity interest in Huanyu at its acquisition date fair value of $152,312. A loss of $19,682 was recognized in subsidies and other income net in relation to the remeasurement.
The goodwill recognized represents the expected synergies and is not tax deductible. Pro forma financial information of CareerWin is not presented as the effects of the acquisition on the Company’s consolidated financial statements were not material.
The goodwill recognized represents the expected synergies and is not tax deductible. Pro forma financial information of CareerWin is not presented as the effects of the acquisition on the Company’s consolidated financial statements were not material. In January 2023, CareerWin was liquidated.
During fiscal 2022, our revenue derived from our IT consulting services increased by 17.8% or $21.8 million from fiscal 2021, mainly attributable to revenue growth from our existing clients. IT consulting services revenue from new clients amounted to approximately $3.5 million in fiscal 2022.
During fiscal 2022, our revenue derived from our IT consulting services increased by 17.8% or $21.8 million from fiscal 2021, mainly attributable to revenue growth from our existing clients. IT consulting services revenue from new clients amounted to approximately $3.5 million in fiscal 2022. ● Our ability to expand our portfolio of service offerings.
On August 28, 2020, the Company, the Chairman of the Company and a third-party company incorporated CLPS Shenzhen Robotics Co. Ltd. (“CLPS Shenzhen Robotics”) in Shenzhen. The Company holds 10% of equity interest in CLPS Shenzhen Robotics valued at $0.14 million (RMB 1,000,000).
On August 28, 2020, the Company, the Chairman of the Company and a third-party company incorporated CLPS Shenzhen Robotics Co. Ltd. (“CLPS Shenzhen Robotics”) in Shenzhen. The Company holds 10% of equity interest in CLPS Shenzhen Robotics valued at $0.14 million (RMB 1,000,000). On September 15, 2020, the Company injected $147,451 (RMB1,000,000) to CLPS Shenzhen Robotics.
Net cash provided by operating activities was approximately $5.9 million in fiscal 2020, including net income of $3.1 million, adjusted for non-cash items of $4.4 million and negative adjustments for changes in operating assets and liabilities of $1.6 million.
Net cash provided by operating activities was approximately $3.2 million in fiscal 2022, including net income of $4.6 million, adjusted for non-cash items of $8.2 million and negative adjustments for changes in operating assets and liabilities of $9.6 million.
For more than ten years, we have served as an IT solutions provider to a growing network of clients in the global financial industry, including large financial institutions from the US, Europe, Australia, Southeast Asia. and Hong Kong, and their PRC-based IT centers. We have created and developed a particular market niche by providing turn-key financial solutions.
For more than 15 years, we have served as an IT service provider to a growing network of clients in the global financial industry, including large financial institutions in the U.S., Europe, Australia, Asia, and their PRC-based IT centers. We have created and developed a particular market niche by providing turn-key financial solutions.
Gross margin decreased to 31.9% in fiscal 2021 from 34.8% for the same period of last year. Selling and marketing expenses Selling and marketing expenses primarily consisted of salary and compensation expenses relating to our sales and marketing personnel, and also included entertainment, travel and transportation, and other expenses relating to our marketing activities.
Gross margin decreased to 22.9% in fiscal 2023 from 27.0% for the same period of last year. Selling and marketing expenses Selling and marketing expenses primarily consisted of salary and compensation expenses relating to our sales and marketing personnel, and also included entertainment, travel and transportation, and other expenses relating to our marketing activities.
Our total liabilities as of June 30, 2022 were $34.1 million. 75 Factors Affecting Our Results of Operations We believe the most significant factors that affect our business and results of operations include the following: ● Our ability to obtain new clients and repeat business from existing clients.
Our total liabilities as of June 30, 2023 were $29.8 million. 78 Factors Affecting Our Results of Operations We believe the most significant factors that affect our business and results of operations include the following: ● Our ability to obtain new clients and repeat business from existing clients.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS Overview We are a global information technology (“IT”), consulting and solutions service provider focused on delivering services to global institutions in banking, insurance and financial sectors, both in China and globally.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS Overview We are a global information technology (“IT”), consulting and solutions service provider focused on delivering services primarily to global institutions, including banking, wealth management, ecommerce, and automotive both in China and globally.
Net cash provided by financing activities was approximately $19.3 million in fiscal 2021. During the fiscal 2021, we had bank loans of approximately $13.3 million, repaid loans of approximately $8.3 million, received capital contribution from private placement of $14.7 million, received capital contribution from option exercise of $0.1 million and purchase of noncontrolling interest of $0.5 million.
During the fiscal 2021, we had bank loans of approximately $13.3 million, repaid loans of approximately $8.3 million, received capital contribution from private placement of $14.7 million, received capital contribution from option exercise of $0.1 million and purchase of noncontrolling interest of $0.5 million.
The balance sheet amounts with the exception of equity as of June 30, 2021 were translated at 6.4566 RMB to 1.00 USD as compared to 7.0651 RMB to 1.00 USD as of June 30, 2020. The equity accounts were stated at their historical rate.
The balance sheet amounts with the exception of equity as of June 30, 2023 were translated at 7.2513 RMB to 1.00 USD as compared to 6.6981 RMB to 1.00 USD as of June 30, 2022. The equity accounts were stated at their historical rate.
For fiscal 2021 and 2020, 40.1% and 40.0% of our IT consulting services revenue were from international banks, respectively. In fiscal 2021, we strengthened our expertise in the financial industry to leverage our existing industry knowledge and grew our customer base of local Chinese financial institutions.
For fiscal 2023 and 2022, 38.2% and 41.2% of our IT consulting services revenue were from international banks, respectively. In fiscal 2023, we strengthened our expertise in the financial industry to leverage our existing industry knowledge and grew our customer base of local Chinese financial institutions.
Investment in Fuson On August 1, 2021, the Company reached an equity transfer and capital increase agreement with a third party of the target company Fuson Group Limited (“Fuson”). After the equity transfer and capital increase, the Company holds 35.02% of equity interest in Fuson for $0.16 million (HKD 1,225,000).
After the capital increase, the Company holds 15% of equity interest in UniDev for $0.26 million (RMB 1,689,000). 84 Investment in Fuson On August 1, 2021, the Company reached an equity transfer and capital increase agreement with a third party of the target company Fuson Group Limited (“Fuson”).
We maintain nineteen delivery and/or R&D centers, of which ten are located in Mainland China (Shanghai, Beijing, Dalian, Tianjin, Xi’an, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Hainan) and nine are located globally (Hong Kong SAR, the United States of America, Japan, Singapore, Australia, Malaysia, India, the Philippines, and Vietnam), to serve different customers in various geographic locations.
We maintain 20 delivery and/or R&D centers, of which 10 are strategically located in Mainland China (Shanghai, Beijing, Dalian, Tianjin, Xi’an, Chengdu, Guangzhou, Shenzhen, Hangzhou, and Hainan) and 10 are located globally (Hong Kong SAR, the United States of America, Japan, Singapore, Australia, Malaysia, India, the Philippines, Vietnam, and Canada).
The following table sets forth summary of our cash flows for the periods indicated: For the Years Ended June 30, 2022 2021 2020 Net cash provided by (used in) operating activities 3,200,889 $ (2,609,773 ) $ 5,931,124 Net cash (used in) provided by investing activities (16,290,683 ) (5,619,471 ) 173,229 Net cash provided by financing activities 7,474,641 19,340,588 125,362 Effect of exchange rate change (727,242 ) 975,918 (178,930 ) Net (decrease) increase in cash (6,342,395 ) 12,087,262 6,050,785 Cash and cash equivalents at the beginning of the year 24,739,382 12,652,120 6,601,335 Cash and cash equivalents at the end of the year 18,396,987 $ 24,739,382 $ 12,652,120 Operating Activities Net cash provided by operating activities was approximately $3.2 million in fiscal 2022, including net income of $4.6 million, adjusted for non-cash items of $8.2 million and negative adjustments for changes in operating assets and liabilities of $9.6 million.
The following table sets forth summary of our cash flows for the periods indicated: For the Years Ended June 30, 2023 2022 2021 Net cash provided by (used in) operating activities $ 9,705,951 $ 3,200,889 $ (2,609,773 ) Net cash used in investing activities (306,046 ) (16,290,683 ) (5,619,471 ) Net cash (used in) provided by financing activities (4,319,331 ) 7,474,641 19,340,588 Effect of exchange rate change (1,175,928 ) (727,242 ) 975,918 Net increase (decrease) in cash 3,904,646 (6,342,395 ) 12,087,262 Cash and cash equivalents at the beginning of the year 18,396,987 24,739,382 12,652,120 Cash and cash equivalents at the end of the year 22,301,633 $ 18,396,987 $ 24,739,382 Operating Activities Net cash provided by operating activities was approximately $9.7 million in fiscal 2023, including net income of $0.2 million, adjusted for non-cash items of $7.2 million and positive adjustments for changes in operating assets and liabilities of $3.4 million.
By combining onsite or onshore support and consulting with scalable and high-efficiency offsite or offshore services and processing, we are able to meet client demands in a cost-effective manner while retaining significant operational flexibility.
Our extensive network enables us to serve different clients across various geographic locations. By combining onsite or onshore support and consulting with scalable and high-efficiency offsite or offshore services and processing, we are able to meet client demands in a cost-effective manner while retaining significant operational flexibility.
We are fully committed of providing digital transformation services with focused on financial and technology in the banking, wealth management, e-commerce, and automotive industries, among others, through the utilization of innovative technology to achieve our client’s goals.
We are fully committed of delivering digital transformation services with a focus on the fintech within the areas of banking, wealth management, e-commerce, and automotive, among others, through the utilization of innovative technology to achieve our client’s goals.
For the years ended June 30, 2020, 2021 and 2022, cash and cash equivalents of PRC companies were RMB 77.91 million (US$11.03 million), 62.66 million (US$9.71 million), and 99.0 million (US$14.8 million).
For the years ended June 30, 2021, 2022, and 2023, cash and cash equivalents of PRC companies were RMB 62.66 million (US$9.71 million), 99.0 million (US$14.8 million), and 129.1 million (US$17.8 million), respectively.
Total government subsidies amounted to $2.1 million and $1.9 million in fiscal 2021 and 2020, respectively. 88 Income before income taxes and share of (loss) income in equity investees Income before income taxes and share of (loss) income in equity investees increased by $4.6 million to a $8.3 million income in fiscal 2021 from an income of $3.7 million in fiscal 2020.
Total government subsidies amounted to $1.3 million and $1.5 million in fiscal 2023 and 2022, respectively. Income before income taxes and share of loss in equity investees Income before income taxes and share of loss in equity investees decreased by $6.9 million to a $0.8 million income in fiscal 2023 from an income of $7.7 million in fiscal 2022.
Share of (loss) income in equity investees, net of tax The share of loss in equity investees, net of tax in fiscal 2021 was net equity investment loss of SSIT and EMIT. The share of income in equity investees, net of tax in fiscal 2020 was net equity investment income of Lihong and EMIT.
Share of loss in equity investees, net of tax The share of loss in equity investees, net of tax in fiscal 2023 was net equity investment income of SSIT, and Fuson.
The average translation rates applied to the income statements accounts for the years ended June 30, 2021 and 2020 were 6.6212 RMB to 1.00 USD and 7.0309 RMB to 1.00 USD, respectively.
The average translation rates applied to the income statements accounts for the years ended June 30, 2023 and 2022 were 6.9536 RMB to 1.00 USD and 6.4554 RMB to 1.00 USD, respectively.
The Company made the first payment of $0.08 million (HKD 612,500) on August 16, 2021. Acquisition of MSCT On August 16, 2021, Growth Ring reached a capital increase agreement with the prior shareholder of MSCT. After the capital increase, the Company holds 53.33% equity interest in MSCT and its wholly owned subsidiaries.
After the equity transfer and capital increase, the Company holds 35.02% of equity interest in Fuson for $0.16 million (HKD 1,225,000). The Company made the first payment of $0.08 million (HKD 612,500) on August 16, 2021. Acquisition of MSCT On August 16, 2021, Growth Ring reached a capital increase agreement with the prior shareholder of MSCT.
Non-GAAP income before income tax and share of loss income of equity investees is income before income tax and share of loss income of equity investees excluding share-based compensation expenses. Non-GAAP net income is net income excluding share-based compensation expenses. Non-GAAP net income attributable to CLPS Incorporation’s shareholders is net income attributable to CLPS Incorporation’s shareholders excluding share-based compensation expenses.
Non-GAAP income before income tax and share of loss income of equity investees is income before income tax and share of loss income of equity investees excluding share-based compensation expenses and impairment of goodwill. Non-GAAP net income is net income excluding share-based compensation expenses and impairment of goodwill.
Investment in Huanyu On September 27, 2017, the Company made an investment of $0.15 million (RMB 1,000,000) for a 30% of equity interest in Huanyu which was accounted for as an equity method investment. On May 24, 2019, the Company purchased the remaining 70% equity interest of Huanyu for $0.07 million (RMB 462,000) and became the sole shareholder of Huanyu.
Investment in and dissolution of Huanyu On September 27, 2017, the Company made an investment of $0.15 million (RMB 1,000,000) for a 30% of equity interest in Huanyu which was accounted for as an equity method investment.
Operating lease expense amounted to $1,413,521, $942,606, and $944,645 for the years ended June 30, 2022, 2021, and 2020, respectively.
Operating lease expenses amounted to $1,086,622, $1,413,521, and $942,606 for the years ended June 30, 2023, 2022, and 2021, respectively.
Net cash provided by investing activities was approximately $0.2 million in fiscal 2020, primarily due to our purchase of office equipment and furniture of $0.2 million, disposition of long term investment of $1.0 million, our business acquisition of $1.6 million and short-term investments of $1.1 million in fiscal 2020, to better manage opportunities and capitalize on the growth potential in the human resource related industry.
Net cash used in investing activities was approximately $16.3 million in fiscal 2022, primarily due to our purchase of office building, office equipment and furniture of $20.8 million, disposition of long term investment of $0.4 million, loans provided to related party of $0.08 million, and maturities of short-term investments of $4.2 million in fiscal 2022, to better manage opportunities and capitalize on the growth potential in the human resource related industry.
Our R&D expenses were $13.3 million in fiscal 2021, which increased by $2.9 million or 27.8% compared to $10.4 million in fiscal 2020, representing 10.6% and 11.7% of our total revenues for fiscal 2021 and 2020, respectively.
Our R&D expenses were $8.3 million in fiscal 2023, which increased by $0.3 million or 4.6% compared to $8.0 million in fiscal 2022, representing 5.5% and 5.2% of our total revenues for fiscal 2023 and 2022, respectively.
We had a net income of $4.6 million in fiscal 2022, a net income of $7.0 million in fiscal 2021, and a net income of $3.1 million in fiscal 2020, respectively. We had a non-GAAP net income of $11.8 million in fiscal 2022.
We had a net income of $0.2 million in fiscal 2023, a net income of $4.6 million in fiscal 2022, and a net income of $7.0 million in fiscal 2021. We had a non-GAAP net income of $5.0 million in fiscal 2023.
The adjustments for changes in operating assets and liabilities also included an increase in salaries and benefits payable of $0.3 million and an increase in accounts payable and other payables of $0.4 million in fiscal 2021.
The adjustments for changes in operating assets and liabilities also included a decrease in prepayment, deposits and other assets of $3.5 million, a decrease in salaries and benefits payable of $0.8 million, an increase in accounts payable and other liabilities of $0.2 million, and an increase in tax payables of $0.1 million in fiscal 2023.
The adjustments for changes in operating assets and liabilities also included offset with an increase in salaries and benefits payable of $3.6 million due to unpaid employee compensation and benefits, and an increase in accounts payable and other payables of $0.1 million in fiscal 2020. 90 Investing Activities Net cash used in investing activities was approximately $16.3 million in fiscal 2022, primarily due to our purchase of office building, office equipment and furniture of $20.8 million, disposition of long term investment of $0.4 million, loans provided to related party of $0.08 million, and maturities of short-term investments of $4.2 million in fiscal 2022, to better manage opportunities and capitalize on the growth potential in the human resource related industry.
The adjustments for changes in operating assets and liabilities also included an increase in salaries and benefits payable of $0.3 million and an increase in accounts payable and other payables of $0.4 million in fiscal 2021. 95 Investing Activities Net cash used in investing activities was approximately $0.3 million in fiscal 2023, primarily due to our purchase of property and equipment of $0.5 million, disposition of long term investment of $0.1 million, repayments from a related party of $0.2 million in fiscal 2023, to better manage opportunities and capitalize on the growth potential in the human resource related industry.
Investment in UniDev On July 8, 2021, the Company reached a capital increase agreement with two third parties of the target company Beijing UniDev Software Co., Ltd. (“UniDev”). After the capital increase, the Company holds 15% of equity interest in UniDev for $0.26 million (RMB 1,689,000).
Investment in UniDev On July 8, 2021, the Company reached a capital increase agreement with two third parties of the target company Beijing UniDev Software Co., Ltd. (“UniDev”).
Other comprehensive income (loss) Foreign currency translation adjustments amounted to income of $2.6 and loss of $0.5 million for the years ended June 30, 2021 and 2020, respectively.
Other comprehensive (loss) income Foreign currency translation adjustments amounted to a loss of $3.5 million and a loss of $1.8 million for the years ended June 30, 2023 and 2022, respectively.
After the deduction of $5.1 million non-cash share-based compensation expenses related to the grants under the 2017 Incentive Compensation Plan, non-GAAP general and administrative expenses decreased by $0.8 million, or 6.2%, to $11.8 million in fiscal 2021 from $12.6 million in the same period of the previous year.
After the deduction of $2.3 million non-cash share-based compensation expenses related to the grants under the 2021 Incentive Compensation Plan and deduction of $2.4 million goodwill impairment losses, non-GAAP general and administrative expenses increased by $3.2 million, or 20.2%, to $19.3 million in fiscal 2023 from $16.1 million in the same period of the previous year.
As of June 30, 2022, cash and cash equivalents of approximately RMB99.0 million ($14.8 million), SGD2.8 million ($2.0 million), AUD0.01 million ($0.007 million), HKD9.4 million ($1.2 million), INR0.3 million ($0.004 million),MYR0.4 million ($0.08 million), JPY10.2 million ($0.08 million), USD0.1 million, and PHP5.1 million ($0.09 million) were held by the Company and its subsidiaries in Mainland China, Singapore, Australia, Hong Kong, India, Malaysia, Japan, the United States of America and Philippines, respectively.
As of June 30, 2023, cash and cash equivalents of approximately RMB129.1 million ($17.8 million), SGD1.7 million ($1.3 million), AUD0.02 million ($0.01 million), HKD22.2 million ($2.8 million), INR2.7 million ($0.03 million), MYR0.4 million ($09 million), JPY5.0 million ($0.03 million), USD1 million, and PHP4.4 million ($0.08 million) were held by the Company and its subsidiaries in Mainland China, Singapore, Australia, Hong Kong, India, Malaysia, Japan, the United States of America, and the Philippines, respectively.
The following table sets forth our contractual obligations and commercial commitments as of June 30, 2022: Payment Due by Period Total Less than 1 Year 1-3 Years More than 3 Years Operating lease arrangements $ 2,129,203 $ 1,174,688 $ 954,515 $ - Bank loans 14,474,363 14,474,363 - - Total $ 16,603,566 $ 15,649,051 $ 954,515 $ - 91 Off-Balance Sheet Arrangements There were no off-balance sheet arrangements and undisclosed material cash requirement for the years ended June 30, 2022 that have or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.
The following table sets forth our contractual obligations and commercial commitments as of June 30, 2023: Payment Due by Period Total Less than 1 Year 1-3 Years More than 3 Years Operating lease arrangements $ 839,045 $ 733,982 $ 105,063 $ - Bank loans 10,554,617 10,554,617 - - Total $ 11,393,662 $ 11,288,599 $ 105,063 $ - 96 Off-Balance Sheet Arrangements There were no off-balance sheet arrangements and undisclosed material cash requirement for the years ended June 30, 2023 that have or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.
Basic and diluted non-GAAP net income per share is non-GAAP net income attributable to CLPS Incorporation’s shareholders divided by weighted average number of shares used in the calculation of basic and diluted net income per share. The Company believes that separate analysis and exclusion of the non-cash impact of share-based compensation expenses clarity to the constituent parts of its performance.
Non-GAAP net income attributable to CLPS Incorporation’s shareholders is net income attributable to CLPS Incorporation’s shareholders excluding share-based compensation expenses and impairment of goodwill. Basic and diluted non-GAAP net income per share is non-GAAP net income attributable to CLPS Incorporation’s shareholders divided by weighted average number of shares used in the calculation of basic and diluted net income per share.
After the deduction of non-cash share-based compensation expenses, non-GAAP income before income taxes and share of (loss) income in equity investees increased by $5.7 million, or 74.4%, to $13.4 million in fiscal 2021 from $7.7 million in the same period of the previous year.
After the deduction of non-cash share-based compensation expenses and goodwill impairment losses, non-GAAP income before income taxes and share of loss in equity investees decreased by $9.3 million, or 62.1%, to $5.6 million in fiscal 2023 from $14.9 million in the same period of the previous year.
General and administrative expenses increased by $0.5 million, or 2.7%, to $16.8 million in fiscal 2021 from $16.3 million in the prior year.
General and administrative expenses increased by $1.0 million, or 4.2%, to $24.0 million in fiscal 2023 from $23.0 million in the prior year.
Research and development (“R&D”) expenses R&D expenses primarily consisted of compensation and benefit expenses relating to our research and development personnel as well as office overhead and other expenses relating to our R&D activities.
Accordingly, as a percentage of sales, our selling expenses were 2.2% of revenues in fiscal 2023 compared to 2.7% in fiscal 2022. 89 Research and development (“R&D”) expenses R&D expenses primarily consisted of compensation and benefit expenses relating to our research and development personnel as well as office overhead and other expenses relating to our R&D activities.
Net cash provided by financing activities was approximately $0.1 million in fiscal 2020. During the fiscal 2020, we had bank loans of approximately $3.8 million, repaid loans of approximately $3.9 million, and received the over-allotment proceeds of $0.2 million.
During the fiscal 2022, we had bank loans of approximately $22.0 million and repaid loans of approximately $14.5 million. Net cash provided by financing activities was approximately $19.3 million in fiscal 2021.

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Item 6. [Reserved]

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

34 edited+31 added−1 removed137 unchanged
The Committee has the discretion to grant non-qualified stock options or incentive stock options to participants and to set the terms and conditions applicable to the options, including the type of option, the number of shares subject to the option and the vesting schedule; each option will expire ten years from the date of grant and no dividend equivalents may be paid with respect to stock options.
The Committee has the discretion to grant non-qualified stock options or incentive stock options to participants and to set the terms and conditions applicable to the options, including the type of option, the number of shares subject to the option and the vesting schedule; each option will expire ten years from the date of grant and no dividend equivalents may be paid with respect to stock options.
Stock awards will consist of common shares granted without any consideration from the participant or shares sold to the participant for appropriate consideration as determined by the Board. The number of shares awarded to each participant, and the restrictions, terms and conditions of the award, will be at the discretion of the Committee.
Stock awards will consist of common shares granted without any consideration from the participant or shares sold to the participant for appropriate consideration as determined by the Board. The number of shares awarded to each participant, and the restrictions, terms and conditions of the award, will be at the discretion of the Committee.
Subject to the restrictions, a participant will be a shareholder with respect to the shares awarded to him or her and will have the rights of a shareholder with respect to the shares, including the right to vote the shares and receive dividends on the shares; provided that dividends otherwise payable on any performance-based stock award will be held by us and will be paid to the holder of the stock award only to the extent the restrictions on such stock award lapse, and the Committee in its discretion can accumulate and hold such amounts payable on any other stock awards until the restrictions on the stock award lapse.
Subject to the restrictions, a participant will be a shareholder with respect to the shares awarded to him or her and will have the rights of a shareholder with respect to the shares, including the right to vote the shares and receive dividends on the shares; provided that dividends otherwise payable on any performance-based stock award will be held by us and will be paid to the holder of the stock award only to the extent the restrictions on such stock award lapse, and the Committee in its discretion can accumulate and hold such amounts payable on any other stock awards until the restrictions on the stock award lapse.
The Committee may make one or more of the following methods available for payment of any award, including the exercise price of a stock option, and for payment of the minimum required tax obligation associated with an award: (i) cash; (ii) cash received from a broker-dealer to whom the holder has submitted an exercise notice together with irrevocable instructions to deliver promptly to us the amount of sales proceeds from the sale of the shares subject to the award to pay the exercise price or withholding tax; (iii) by directing us to withhold common shares otherwise issuable in connection with the award having a fair market value equal to the amount required to be withheld; and (iv) by delivery of previously acquired common shares that are acceptable to the Committee and that have an aggregate fair market value on the date of exercise equal to the exercise price or withholding tax, or certification of ownership by attestation of such previously acquired shares.
The Committee may make one or more of the following methods available for payment of any award, including the exercise price of a stock option, and for payment of the minimum required tax obligation associated with an award: (i) cash; (ii) cash received from a broker-dealer to whom the holder has submitted an exercise notice together with irrevocable instructions to deliver promptly to us the amount of sales proceeds from the sale of the shares subject to the award to pay the exercise price or withholding tax; (iii) by directing us to withhold common shares otherwise issuable in connection with the award having a fair market value equal to the amount required to be withheld; and (iv) by delivery of previously acquired common shares that are acceptable to the Committee and that have an aggregate fair market value on the date of exercise equal to the exercise price or withholding tax, or certification of ownership by attestation of such previously acquired shares.
Amendment of Award Agreements; Amendment and Termination of the Plan; Term of the Plan .
Amendment of Award Agreements; Amendment and Termination of the Plan; Term of the Plan .
The Committee may amend any award agreement at any time, provided that no amendment may adversely affect the right of any participant under any agreement in any material way without the written consent of the participant, unless such amendment is required by applicable law, regulation or stock exchange rule.
The Committee may amend any award agreement at any time, provided that no amendment may adversely affect the right of any participant under any agreement in any material way without the written consent of the participant, unless such amendment is required by applicable law, regulation or stock exchange rule.
Notwithstanding the foregoing, neither the Plan nor any outstanding award agreement can be amended in a way that results in the repricing of a stock option.
Notwithstanding the foregoing, neither the Plan nor any outstanding award agreement can be amended in a way that results in the repricing of a stock option.
The Committee has the discretion to grant non-qualified stock options or incentive stock options to participants and to set the terms and conditions applicable to the options, including the type of option, the number of shares subject to the option and the vesting schedule; each option will expire ten years from the date of grant and no dividend equivalents may be paid with respect to stock options.
The Committee has the discretion to grant non-qualified stock options or incentive stock options to participants and to set the terms and conditions applicable to the options, including the type of option, the number of shares subject to the option and the vesting schedule; each option will expire ten years from the date of grant and no dividend equivalents may be paid with respect to stock options.
Stock awards will consist of common shares granted without any consideration from the participant or shares sold to the participant for appropriate consideration as determined by the Board. The number of shares awarded to each participant, and the restrictions, terms and conditions of the award, will be at the discretion of the Committee.
Stock awards will consist of common shares granted without any consideration from the participant or shares sold to the participant for appropriate consideration as determined by the Board. The number of shares awarded to each participant, and the restrictions, terms and conditions of the award, will be at the discretion of the Committee.
Subject to the restrictions, a participant will be a shareholder with respect to the shares awarded to him or her and will have the rights of a shareholder with respect to the shares, including the right to vote the shares and receive dividends on the shares; provided that dividends otherwise payable on any performance-based stock award will be held by us and will be paid to the holder of the stock award only to the extent the restrictions on such stock award lapse, and the Committee in its discretion can accumulate and hold such amounts payable on any other stock awards until the restrictions on the stock award lapse.
Subject to the restrictions, a participant will be a shareholder with respect to the shares awarded to him or her and will have the rights of a shareholder with respect to the shares, including the right to vote the shares and receive dividends on the shares; provided that dividends otherwise payable on any performance-based stock award will be held by us and will be paid to the holder of the stock award only to the extent the restrictions on such stock award lapse, and the Committee in its discretion can accumulate and hold such amounts payable on any other stock awards until the restrictions on the stock award lapse.
Upon exercise, an SAR entitles the participant to receive from the Company the number of Shares having an aggregate fair market value equal to the excess of the fair market value of one Share as of the date on which the SAR is exercised over the exercise price, multiplied by the number of Shares with respect to which the SAR is being exercised.
Upon exercise, an SAR entitles the participant to receive from the Company the number of Shares having an aggregate fair market value equal to the excess of the fair market value of one Share as of the date on which the SAR is exercised over the exercise price, multiplied by the number of Shares with respect to which the SAR is being exercised.
The Committee, in its discretion, shall be entitled to cause the Company to elect to settle any part or all of its obligations arising out of the exercise of an SAR by the payment of cash in lieu of all or part of the Shares it would otherwise be obligated to deliver in an amount equal to the fair market value of such Shares on the date of exercise.
The Committee, in its discretion, shall be entitled to cause the Company to elect to settle any part or all of its obligations arising out of the exercise of an SAR by the payment of cash in lieu of all or part of the Shares it would otherwise be obligated to deliver in an amount equal to the fair market value of such Shares on the date of exercise.
The Committee may make one or more of the following methods available for payment of any award, including the exercise price of a stock option, and for payment of the minimum required tax obligation associated with an award: (i) cash; (ii) cash received from a broker-dealer to whom the holder has submitted an exercise notice together with irrevocable instructions to deliver promptly to us the amount of sales proceeds from the sale of the shares subject to the award to pay the exercise price or withholding tax; (iii) by directing us to withhold common shares otherwise issuable in connection with the award having a fair market value equal to the amount required to be withheld; and (iv) by delivery of previously acquired common shares that are acceptable to the Committee and that have an aggregate fair market value on the date of exercise equal to the exercise price or withholding tax, or certification of ownership by attestation of such previously acquired shares.
The Committee may make one or more of the following methods available for payment of any award, including the exercise price of a stock option, and for payment of the minimum required tax obligation associated with an award: (i) cash; (ii) cash received from a broker-dealer to whom the holder has submitted an exercise notice together with irrevocable instructions to deliver promptly to us the amount of sales proceeds from the sale of the shares subject to the award to pay the exercise price or withholding tax; (iii) by directing us to withhold common shares otherwise issuable in connection with the award having a fair market value equal to the amount required to be withheld; and (iv) by delivery of previously acquired common shares that are acceptable to the Committee and that have an aggregate fair market value on the date of exercise equal to the exercise price or withholding tax, or certification of ownership by attestation of such previously acquired shares.
The Committee may amend any award agreement at any time, provided that no amendment may adversely affect the right of any participant under any agreement in any material way without the written consent of the participant, unless such amendment is required by applicable law, regulation or stock exchange rule.
The Committee may amend any award agreement at any time, provided that no amendment may adversely affect the right of any participant under any agreement in any material way without the written consent of the participant, unless such amendment is required by applicable law, regulation or stock exchange rule.
If the executive’s employment with the Company is terminated for any reason, the Company will pay to such executive any unpaid portion of his salary through the date of his termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of his benefits under the agreement.
If the executive’s employment with the Company is terminated for any reason, the Company will pay to such executive any unpaid portion of his salary through the date of his termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of his benefits under the agreement.
The nominating committee considers diversity of opinion and experience when nominating directors. 106 Audit Committee The Audit Committee will be responsible for, among other matters: ● appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm; ● discussing with our independent registered public accounting firm the independence of its members from its management; ● reviewing with our independent registered public accounting firm the scope and results of their audit; ● approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; ● overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; ● reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements; ● coordinating the oversight by our board of directors of our code of business conduct and our disclosure controls and procedures ● establishing procedures for the confidential and or anonymous submission of concerns regarding accounting, internal controls or auditing matters; and ● reviewing and approving related-party transactions.
The nominating committee considers diversity of opinion and experience when nominating directors. 110 Audit Committee The Audit Committee will be responsible for, among other matters: ● appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm; ● discussing with our independent registered public accounting firm the independence of its members from its management; ● reviewing with our independent registered public accounting firm the scope and results of their audit; ● approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; ● overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; ● reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements; ● coordinating the oversight by our board of directors of our code of business conduct and our disclosure controls and procedures ● establishing procedures for the confidential and or anonymous submission of concerns regarding accounting, internal controls or auditing matters; and ● reviewing and approving related-party transactions.
Our board has affirmatively determined that each of the members of the Compensation Committee meets the definition of “independent director” for purposes of serving on Compensation Committee under NASDAQ rules. 107 Nominating Committee The Nominating Committee will be responsible for, among other matters: ● selecting or recommending for selection candidates for directorships; ● evaluating the independence of directors and director nominees; ● reviewing and making recommendations regarding the structure and composition of our board and the board committees; ● developing and recommending to the board corporate governance principles and practices; ● reviewing and monitoring the Company’s Code of Business Conduct and Ethics; and ● overseeing the evaluation of the Company’s management Our Nominating Committee consists of consists of Zhao Hui Feng, Jin He Shao, and Kee Chong Seng, with Mr.
Our board has affirmatively determined that each of the members of the Compensation Committee meets the definition of “independent director” for purposes of serving on Compensation Committee under NASDAQ rules. 111 Nominating Committee The Nominating Committee will be responsible for, among other matters: ● selecting or recommending for selection candidates for directorships; ● evaluating the independence of directors and director nominees; ● reviewing and making recommendations regarding the structure and composition of our board and the board committees; ● developing and recommending to the board corporate governance principles and practices; ● reviewing and monitoring the Company’s Code of Business Conduct and Ethics; and ● overseeing the evaluation of the Company’s management Our Nominating Committee consists of consists of Zhao Hui Feng, Jin He Shao, and Kee Chong Seng, with Mr.
Kee spent a career in the information technology industry, most recently as an operation manager at Citibank from 2003 until his full retirement in 2015. 98 None of the events listed in Item 401(f) of Regulation S-K has occurred during the past ten years that is material to the evaluation of the ability or integrity of any of our directors, director nominees or executive officers.
Kee spent a career in the information technology industry, most recently as an operation manager at Citibank from 2003 until his full retirement in 2015. 100 None of the events listed in Item 401(f) of Regulation S-K has occurred during the past ten years that is material to the evaluation of the ability or integrity of any of our directors, director nominees or executive officers.
The aggregate maximum number of shares that may be used for Stock Awards, Stock Bonus Awards and or Stock Unit Awards that may be granted to any Key Employee in any calendar year is 250,000, or, in the event the award is settled in cash, an amount equal to the fair market value of such number of shares on the date on which the award is settled. 100 Payment for Stock Options and Withholding Taxes .
The aggregate maximum number of shares that may be used for Stock Awards, Stock Bonus Awards and or Stock Unit Awards that may be granted to any Key Employee in any calendar year is 250,000, or, in the event the award is settled in cash, an amount equal to the fair market value of such number of shares on the date on which the award is settled. 102 Payment for Stock Options and Withholding Taxes .
Yang any unpaid portion of his salary through the date of his termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of his benefits under the employment agreement. 104 Raymond Ming Hui Lin Employment Agreement On December 9, 2017, we entered into an employment agreement with Raymond Ming Hui Lin pursuant to which he agreed to serve as our Chief Executive Officer.
Yang any unpaid portion of his salary through the date of his termination, and any unpaid bonus through the date of termination, as well as any unpaid or unused portions of his benefits under the employment agreement. 108 Raymond Ming Hui Lin Employment Agreement On December 9, 2017, we entered into an employment agreement with Raymond Ming Hui Lin pursuant to which he agreed to serve as our Chief Executive Officer.
Our board of directors shall hold meetings on at least a quarterly basis. 105 Under the NASDAQ rules we are only required to maintain a board of directors comprised of at least 50% independent directors, and an audit committee of at least two members, comprised solely of independent directors who also meet the requirements of Rule 10A-3 under the Securities Exchange Act of 1934.
Our board of directors shall hold meetings on at least a quarterly basis. 109 Under the NASDAQ rules we are only required to maintain a board of directors comprised of at least 50% independent directors, and an audit committee of at least two members, comprised solely of independent directors who also meet the requirements of Rule 10A-3 under the Securities Exchange Act of 1934.
(6) Appointed Independent Director effective as of September 2019. (7) Appointed Independent Director effective as of July 2020. 99 Under Chinese law, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which the employment agreement is scheduled to expire.
(6) Appointed Independent Director effective as of September 2019. (7) Appointed Independent Director effective as of July 2020. 101 Under Chinese law, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which the employment agreement is scheduled to expire.
The aggregate maximum number of shares that may be used for Stock Awards, Stock Bonus Awards and or Stock Unit Awards that may be granted to any employee in any calendar year is 800,000 or, in the event the award is settled in cash, an amount equal to the fair market value of such number of shares on the date on which the award is settled. 103 Stock Unit Awards.
The aggregate maximum number of shares that may be used for Stock Awards, Stock Bonus Awards and or Stock Unit Awards that may be granted to any employee in any calendar year is 800,000 or, in the event the award is settled in cash, an amount equal to the fair market value of such number of shares on the date on which the award is settled. 105 Stock Unit Awards.
Selected employees, directors, and consultants of the Company are eligible to receive awards under the 2019 Plan. 101 Awards to Participants . The 2019 Plan provides for discretionary awards of, among others, stock options, stock awards, stock unit awards, or SAR to participants.
Selected employees, directors, and consultants of the Company are eligible to receive awards under the 2019 Plan. 103 Awards to Participants . The 2019 Plan provides for discretionary awards of, among others, stock options, stock awards, stock unit awards, or SAR to participants.
Our 2019 Plan was automatically terminated upon the 2020 Plan’s taking effect. 102 On April 3, 2020, our annual meeting of shareholders approved the 2020 Equity Incentive Plan (the “2020 Plan”).
Our 2019 Plan was automatically terminated upon the 2020 Plan’s taking effect. 104 On April 3, 2020, our annual meeting of shareholders approved the 2020 Equity Incentive Plan (the “2020 Plan”).
Compensation Executive Compensation The following table shows the annual compensation paid by us for the years ended June 30, 2022, 2021, and 2020.
Compensation Executive Compensation The following table shows the annual compensation paid by us for the years ended June 30, 2023, 2022, and 2021.
Directors and senior management The following table sets forth our executive officers and directors, their ages and the positions held by them, as of the date of this Annual Report: Name Age Position Xiao Feng Yang 59 Chairman of the Board Raymond Ming Hui Lin 58 Chief Executive Officer and Director Rui Yang 39 Chief Financial Officer Li Li 46 Chief Operating Officer Jin He Shao (1)(4) 55 Independent Director Zhao Hui Feng (3) 52 Independent Director Kee Chong Seng (2) 70 Independent Director (1) Chair of the Audit Committee.
Directors and senior management The following table sets forth our executive officers and directors, their ages and the positions held by them, as of the date of this Annual Report: Name Age Position Xiao Feng Yang 60 Chairman of the Board Raymond Ming Hui Lin 59 Chief Executive Officer and Director Rui Yang 40 Chief Financial Officer Li Li 47 Chief Operating Officer Jin He Shao (1)(4) 56 Independent Director Zhao Hui Feng (3) 53 Independent Director Kee Chong Seng (2) 71 Independent Director (1) Chair of the Audit Committee.
Name/principal position Year Salary Equity Compensation All Other Compensation Total Paid Xiao Feng Yang, Chairman of the Board (1) 2022 $ 106,104 $ $ 106,104 2021 $ 99,445 $ — $ — $ 99,445 2020 $ 112,762 $ — $ — $ 112,762 Raymond Ming Hui Lin, CEO and Director (2) 2022 $ 257,531 $ $ $ 257,531 2021 $ 192,747 — $ — $ 192,747 2020 $ 112,449 $ — $ — $ 112,449 Rui Yang, CFO (3) 2022 $ 133,841 $ $ $ 133,841 2021 $ 75,742 $ — $ — $ 75,742 2020 $ 64,839 $ — $ — $ 64,839 Li Li, Chief Operating Officer (4) 2022 $ 216,175 $ $ $ 216,175 2021 $ 183,202 $ — $ — $ 183,202 2020 $ 150,594 $ — $ — $ 150,594 Jin He Shao, Independent Director (5) 2022 $ 18,000 $ $ $ 18,000 2021 $ 18,000 $ — $ — $ 18,000 2020 $ 18,000 $ — $ — $ 18,000 Kee Chong Seng, Independent Director (6) 2022 $ 18,000 $ $ $ 18,000 2021 $ 18,000 $ — $ — $ 18,000 2020 $ 13,500 $ — $ — $ 13,500 Zhao Hui Feng, Independent Director (7) 2022 $ 18,000 $ $ $ 18,000 2021 $ 18,000 $ — $ — $ 18,000 2020 $ — $ — $ — $ — (1) Appointed Chairman effective as of December 9, 2017 and President effective from December 9, 2017 to August 19, 2020.
Name/principal position Year Salary Equity Compensation All Other Compensation Total Paid Xiao Feng Yang, Chairman of the Board (1) 2023 $ 104,651 — $ — $ 104,651 2022 $ 106,104 — $ — $ 106,104 2021 $ 99,445 $ — $ — $ 99,445 Raymond Ming Hui Lin, CEO and Director (2) 2023 $ 258,614 $ — $ — $ 258,614 2022 $ 257,531 $ — $ — $ 257,531 2021 $ 192,747 — $ — $ 192,747 Rui Yang, CFO (3) 2023 $ 152,031 $ — $ — $ 152,031 2022 $ 133,841 $ — $ — $ 133,841 2021 $ 75,742 $ — $ — $ 75,742 Li Li, Chief Operating Officer (4) 2023 $ 205,359 $ — $ — $ 205,359 2022 $ 216,175 $ — $ — $ 216,175 2021 $ 183,202 $ — $ — $ 183,202 Jin He Shao, Independent Director (5) 2023 $ 18,000 $ — $ — $ 18,000 2022 $ 18,000 $ — $ — $ 18,000 2021 $ 18,000 $ — $ — $ 18,000 Kee Chong Seng, Independent Director (6) 2023 $ 18,000 $ — $ — $ 18,000 2022 $ 18,000 $ — $ — $ 18,000 2021 $ 18,000 $ — $ — $ 18,000 Zhao Hui Feng, Independent Director (7) 2023 $ 18,000 $ — $ — $ 18,000 2022 $ 18,000 $ — $ — $ 18,000 2021 $ 18,000 $ — $ — $ 18,000 (1) Appointed Chairman effective as of December 9, 2017 and President effective from December 9, 2017 to August 19, 2020.
Awards may be made under the 2020 Plan for up to 11,011,663 of our common shares. 5,001,720 restricted shares have been granted under the 2020 Plan as of today.
Awards may be made under the 2020 Plan for up to 11,011,663 of our common shares. 6,109,320 restricted shares have been granted under the 2020 Plan as of today.
We consider our relations with our employees to be good. 2022 2021 2020 Number of Employees 3,824 3,352 2,746 E. Share Ownership See Item 7 below. 108
We consider our relations with our employees to be good. 2023 2022 2021 Number of Employees 3,509 3,824 3,352 E. Share Ownership See Item 7 below. 112
Yang will be entitled to receive an annual cash bonus the extent and timing of which are to be determined by the Company’s Compensation Committee; Mr. Yang is also entitled to reimbursement of reasonable expenses, and vacation, sick leave, health and other benefits customary to the agreements of this nature. This employment agreement was automatically terminated upon Mr.
Yang is also entitled to reimbursement of reasonable expenses, and vacation, sick leave, health and other benefits customary to the agreements of this nature. This employment agreement was automatically terminated upon Mr. Yang’s resignation in August 2020. The Company has paid Mr.
Director Compensation All directors hold office until the next annual meeting of shareholders until their successors have been duly elected and qualified. There are no family relationships among our directors or executive officers. Officers are elected by and serve at the discretion of the Board of Directors. Employee directors do not receive any compensation for their services.
Notwithstanding anything to the contrary contained herein, no awards shall be granted on or after the tenth anniversary of the adoption of this Plan. Director Compensation All directors hold office until the next annual meeting of shareholders until their successors have been duly elected and qualified. There are no family relationships among our directors or executive officers.
The agreement provides for an annual base salary of RMB144,000 and HK$566,472 (a total of approximately USD94,100) payable in accordance with the Company’s ordinary payroll practices. Under the terms of the agreement, commencing with the year ended June 30, 2018, Mr.
Employment Agreements Xiao Feng Yang Employment Agreement On December 9, 2017, we entered into an employment agreement with Xiao Feng Yang pursuant to which he agreed to serve as our President. The agreement provides for an annual base salary of RMB144,000 and HK$566,472 (a total of approximately USD94,100) payable in accordance with the Company’s ordinary payroll practices.
Non-employee directors are entitled to receive $1,500 per month for serving as directors and may receive option grants from our company. Employment Agreements Xiao Feng Yang Employment Agreement On December 9, 2017, we entered into an employment agreement with Xiao Feng Yang pursuant to which he agreed to serve as our President.
Officers are elected by and serve at the discretion of the Board of Directors. Employee directors do not receive any compensation for their services. Non-employee directors are entitled to receive $1,500 per month for serving as directors and may receive option grants from our company.
Removed
Yang’s resignation in August 2020. The Company has paid Mr.
Added
On April 24, 2023, our annual meeting of shareholders approved the 2023 Equity Incentive Plan (the “2023 Plan”). All of our employees, officers, and directors, and consultants are eligible to be granted options, restricted stock awards, stock unit awards, or stock appreciate rights (each, an “Award”) under the 2023 Plan.
Added
The 2023 Plan is currently administered by the Board, which has all the power to administer the 2023 Plan according to its terms, including the power to grant Awards, determine who may be granted Awards and the types and amounts of Awards to be granted, prescribe Award agreements, and establish programs for granting Awards.
Added
Awards may be made under the 2023 Plan for up to 20,000,000 of our common shares. 1,934,000 restricted shares have been granted under the 2023 Plan as of today.
Added
The 2023 Plan is a stock-based compensation plan that provides for discretionary grants of, among others, stock options, stock awards and stock unit awards to employees, directors and consultants of the Company and its subsidiaries.
Added
The purpose of the 2023 Plan is to attract and retain outstanding individuals as employees, directors and consultants of the Company and its subsidiaries, to recognize the contributions made to the Company and its subsidiaries by employees, directors and consultants, and to provide such employees, directors and consultants with additional incentive to expand and improve the profits and achieve the objectives of the Company and its subsidiaries, by providing such employees, directors and consultants with the opportunity to acquire or increase their proprietary interest in the Company through receipt of awards.
Added
The following is a summary of the 2023 Plan and is qualified by the full text of the 2023 Plan. 106 Administration. The 2023 Plan will be administered by our board of directors, or, once constituted, the Compensation Committee of the board of directors (we refer to body administering the 2023 Plan as the “Committee”).
Added
Number of Shares of Common Shares. The number of common shares that may be issued under the 2023 Plan is 20,000,000. Shares issuable under the 2023 Plan may be authorized but unissued shares or treasury shares.
Added
The number of shares delivered by a participant or withheld by the Company on behalf of any such participant as full or partial payment of an award, including the exercise price of a stock option or of any required withholding taxes, shall not again be available for issuance pursuant to subsequent awards, and shall count towards the aggregate number of shares that may be issued under the 2023 Plan.
Added
Any shares purchased by the Company with proceeds from a stock option exercise shall not again be available for issuance pursuant to subsequent awards, shall count against the aggregate number of shares that may be issued under the 2023 Plan and shall not increase the number of shares available under the 2023 Plan.
Added
If there is a lapse, forfeiture, expiration, termination or cancellation of any award for any reason, or if shares are issued under such award and thereafter are reacquired by the Company pursuant to rights reserved by the Company upon issuance thereof, the shares subject to such award or reacquired by the Company shall again be available for issuance pursuant to subsequent awards, and shall not count towards the aggregate number of shares that may be issued under the 2023 Plan.
Added
Eligibility. All employees, directors, and consultants of the Company are eligible to receive awards under the 2023 Plan. Awards to Participants. The Plan provides for discretionary awards of, among others, stock options, stock awards, stock unit awards and stock appreciation rights to participants.
Added
Each award made under the 2023 Plan will be evidenced by a written award agreement specifying the terms and conditions of the award as determined by the Committee in its sole discretion, consistent with the terms of the 2023 Plan. Stock Options.
Added
Subject to the terms of the 2023 Plan, the Committee may from time to time grant stock options to participants. Stock Options granted under the 2023 Plan to employees shall be non-qualified stock options (NSOs) unless the award agreement expressly provides that the stock option is an incentive stock options (ISO).
Added
Stock options granted under the 2023 Plan to consultants and directors who are not employees shall be NSOs The grant of each stock option shall be evidenced by a written stock option agreement specifying the type of stock option granted, the exercise period, the exercise price, the terms for payment of the exercise price, the expiration date of the stock option, the number of shares to be subject to each stock option and such other terms and conditions established by the Committee, in its sole discretion, not inconsistent with the 2023 Plan.
Added
Stock Awards. The Committee may, in its discretion, (a) grant shares under the 2023 Plan to any participant without consideration from such participant or (b) sell shares under the 2023 Plan to any participant for such amount of cash, shares or other consideration as the Committee deems appropriate.
Added
Each shares granted or sold hereunder shall be subject to such restrictions, conditions and other terms as the Committee may determine at the time of grant or sale, the general provisions of the Plan, the restrictions, terms and conditions of the related Stock Award Agreement Stock Unit Awards.
Added
The Committee may, in its discretion, grant stock unit awards to any participant.
Added
Each stock unit subject to the award shall entitle the participant to receive, on the date or the occurrence of an event (including the attainment of performance goals) as described in the stock unit award agreement, a share or cash equal to the fair market value of a share on the date of such event as provided in the stock unit award agreement.
Added
Stock Appreciation Rights or SAR. The Committee may grant SARs to participants.
Added
Upon exercise, a SAR entitles the participant to receive from the Company the number of shares having an aggregate fair market value equal to the excess of the fair market value of one share as of the date on which the SAR is exercised over the exercise price, multiplied by the number of shares with respect to which the SAR is being exercised.
Added
The Committee, in its discretion, shall be entitled to cause the Company to elect to settle any part or all of its obligations arising out of the exercise of an SAR by the payment of cash in lieu of all or part of the shares it would otherwise be obligated to deliver in an amount equal to the fair market value of such shares on the date of exercise.
Added
Cash shall be delivered in lieu of any fractional Shares. The terms and conditions of any such award shall be determined at the time of grant. 107 Payment for Stock Options and Withholding Taxes.
Added
In connection with any award, and as a condition to the issuance or delivery of any Shares to the participant in connection therewith, the Company shall require the participant to pay the Company the minimum amount of federal, state, local or foreign taxes required to be withheld, and in the Company’s sole discretion, the Company may permit the participant to pay the Company up to the maximum individual statutory rate of applicable withholding.
Added
The Company in its sole discretion may make available one or more of the following alternatives for the payment of such taxes: (i) in cash; (ii) in cash received from a broker-dealer to whom the participant has submitted notice together with irrevocable instructions to deliver promptly to the Company the amount of sales proceeds from the sale of the shares subject to the award to pay the withholding taxes; (iii) by directing the Company to withhold such number of shares otherwise issuable in connection with the award having an aggregate fair market value equal to the minimum amount of tax required to be withheld; (iv) by delivering previously acquired shares of the Company that are acceptable to the Board that have an aggregate fair market value equal to the amount required to be withheld; or (v) by certifying to ownership by attestation of such previously acquired shares.
Added
The Committee shall have the sole discretion to establish the terms and conditions applicable to any alternative made available for payment of the required withholding taxes. Amendment of Award Agreements; Amendment and Termination of the 2023 Plan; Term of the 2023 Plan.
Added
The Committee shall have the authority to amend any award agreement at any time; provided however, that no such amendment shall adversely affect the right of any participant under any outstanding award agreement in any material way without the written consent of the participant, unless such amendment is required by applicable law, regulation or rule of any stock exchange on which the shares are listed.
Added
The Board may terminate, suspend, or amend the 2023 Plan, in whole or in part, from time to time, without the approval of the shareholders of the Company, unless such approval is required by applicable law, regulation or rule of any stock exchange on which the shares are listed.
Added
No amendment or termination of the 2023 Plan shall adversely affect the right of any participant under any outstanding award in any material way without the written consent of the participant, unless such amendment or termination is required by applicable law, regulation or rule of any stock exchange on which the shares are listed.
Added
Subject to the foregoing, the Committee may correct any defect or supply an omission or reconcile any inconsistency in the 2023 Plan or in any award granted hereunder in the manner and to the extent it shall deem desirable, in its sole discretion, to effectuate the 2023 Plan.
Added
The Board shall have the authority to amend the 2023 Plan to the extent necessary or appropriate to comply with applicable law, regulation or accounting rules in order to permit participants who are located outside of the United States to participate in the 2023 Plan.
Added
Under the terms of the agreement, commencing with the year ended June 30, 2018, Mr. Yang will be entitled to receive an annual cash bonus the extent and timing of which are to be determined by the Company’s Compensation Committee; Mr.

Item 7. Management's Discussion & Analysis

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

22 edited+10 added−1 removed27 unchanged
The total grant of 3,000 common shares vests in three equal installments, with the first installment vesting upon grant, and the second and third – on the first and second anniversary of the grant. Represents vested portion of the restricted stock granted dated as of May 7, 2021.
The total grant of 3,000 common shares vests in three equal installments, with the first installment vesting upon grant, and the second and third – on the first and second anniversary of the grant. Represents vested portion of the restricted stock granted dated as of May 7, 2021.
The total grant of 2,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of August 23, 2021. The total grant of 2,000 common shares vests in whole immediately on the grant date of award.
The total grant of 2,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of August 23, 2021. The total grant of 2,000 common shares vests in whole immediately on the grant date of award.
Represents vested portion of the restricted stock granted dated as of January 31, 2022. The total grant of 2,000 common shares vests in whole immediately on the grant date of award.
The total grant of 2,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of January 31, 2022. The total grant of 2,000 common shares vests in whole immediately on the grant date of award.
Represents vested portion of the restricted stock granted dated as of May 7, 2021. The total grant of 20,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of August 23, 2021. The total grant of 150,000 common shares and vest on May 23, 2022.
The total grant of 20,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of August 23, 2021. The total grant of 150,000 common shares and vest on May 23, 2022. Represents vested portion of the restricted stock granted dated as of August 23, 2021.
(1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the common shares or the power to receive the economic benefit of the common shares. 109 (2) A British Virgin Islands corporation with the mailing address of c/o Vistra Corporate Services Centre, Wickham’s Cay II, Road Town, Tortola, VG 1110, British Virgin Islands, with Xiao Feng Yang as its sole shareholder.
(1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the common shares or the power to receive the economic benefit of the common shares. 113 (2) A British Virgin Islands corporation with the mailing address of c/o Vistra Corporate Services Centre, Wickham’s Cay II, Road Town, Tortola, VG 1110, British Virgin Islands, with Xiao Feng Yang as its sole shareholder.
The total grant of 2,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of August 23, 2021. The total grant of 2,000 common shares vests in whole immediately on the grant date of award.
Represents vested portion of the restricted stock granted dated as of May 7, 2021. The total grant of 2,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of August 23, 2021.
The total grant of 12,000 common shares vested in whole on June 11, 2022. Represents vested portion of the restricted stock granted dated as of November 6, 2020. The total grant of 150,000 common shares and 30% vests immediately on the grant date of award, the rest 70% vests on May 6, 2021.
The total grant of 150,000 common shares and 30% vests immediately on the grant date of award, the rest 70% vests on May 6, 2021. Represents vested portion of the restricted stock granted dated as of May 7, 2021. The total grant of 12,000 common shares vested in whole on June 11, 2022.
Represents vested portion of the restricted stock granted dated as of August 23, 2021. The total grant of 76,000 common shares and 10,000 vest on June 11, 2022. Represents vested portion of the restricted stock granted dated as of January 31, 2022. The total grant of 150,000 common shares vests in whole immediately on the grant date of award.
The total grant of 76,000 common shares and 10,000 vest on June 11, 2022. Represents vested portion of the restricted stock granted dated as of January 31, 2022. The total grant of 150,000 common shares vests in whole immediately on the grant date of award.
Represents vested portion of the restricted stock granted dated as of January 31, 2022. The total grant of 2,000 common shares vests in whole immediately on the grant date of award. (10) Represents vested portion of the restricted stock granted dated as of November 6, 2020.
Represents vested portion of the restricted stock granted dated as of January 31, 2022. The total grant of 2,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of November 14, 2022.
Applicable percentage ownership is based on 22,446,822 common shares outstanding as of September 24, 2022. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o CLPS Incorporation, c/o Unit 1102, 11th Floor, Millennium City III, 370 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong SAR.
Applicable percentage ownership is based on 25,586,122 common shares outstanding as of September 24, 2023. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o CLPS Incorporation, c/o Unit 1102, 11th Floor, Millennium City III, 370 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong SAR.
The total grant of 3,000 common shares vests in three equal installments, with the first installment vesting upon grant, and the second and third – on the first and second anniversary of the grant. Represents vested portion of the restricted stock granted dated as of May 7, 2021.
(10) Represents vested portion of the restricted stock granted dated as of November 6, 2020. The total grant of 3,000 common shares vests in three equal installments, with the first installment vesting upon grant, and the second and third – on the first and second anniversary of the grant.
Represents vested portion of the restricted stock granted dated as of May 6, 2020. The total grant of 100,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of June, 24, 2020. The total grant of 12,000 common shares vested in whole on June 11, 2021.
Represents vested portion of the restricted stock granted dated as of June, 24, 2020. The total grant of 12,000 common shares vested in whole on June 11, 2021. Represents vested portion of the restricted stock granted dated as of November 6, 2020.
The related parties that had transactions or balances with the Company in 2022 and 2021 consisted of: Related Party Relationship with the Company Xiao Feng Yang Chairman of the Board Raymond Ming Hui Lin CEO of the Company EMIT Equity investee of the Company Beijing Bright Technology Co., Ltd (“Beijing Bright”) Noncontrolling interest shareholder of JAJI China UniDev Equity investee of the Company Fuson Group Limited (“Fuson”) Equity investee of the Company MCT Noncontrolling interest shareholder of MSCT (a) Related party balances As of June 30, 2022 2021 Due from related parties: EMIT $ 226,421 $ 152,367 Beijing Bright 102,993 393,761 UniDev 44,341 - Fuson 3,887 - Total $ 377,642 $ 546,128 Due from related parties mainly represents loan provided to EMIT and software development fee prepaid to Beijing Bright.
The related parties that had transactions or balances with the Company in 2023 and 2022 consisted of: Related Party Relationship with the Company Xiao Feng Yang Chairman of the Board Raymond Ming Hui Lin CEO of the Company EMIT Equity investee of the Company Beijing Bright Technology Co., Ltd (“Beijing Bright”) Noncontrolling interest shareholder of JAJI China UniDev Equity investee of the Company Fuson Group Limited (“Fuson”) Equity investee of the Company MCT Noncontrolling interest shareholder of MSCT (a) Related party balances As of June 30, 2023 2022 Due from related parties: UniDev $ 201,908 $ 44,341 Fuson 189,363 3,887 EMIT - 226,421 Beijing Bright - 102,993 Total $ 391,271 $ 377,642 Due from related parties mainly represents loan provided to UniDey and Fuson and unreceived IT service fee from Fuson.
The total grant of 517,000 common shares and vest immediately on the grant date of award. From September 24, 2021 to September 24, 2022, a total of 100,211 shares were disposed of in various occasions, resulting in the net increased holding of 716,789 shares.
The total grant of 517,000 common shares and vest immediately on the grant date of award. From September 24, 2021 to September 24, 2022, a total of 100,211 shares were disposed of in various occasions, resulting in the net increased holding of 716,789 shares. Represents vested portion of the restricted stock granted dated as of November 14, 2022.
(2) 4,976,000 22.17 % Qinhui Ltd. (3) 4,999,996 22.27 % 5% or greater beneficial owners as a group 9,975,996 44.44 % * Less than 1%.
(2) 4,976,000 19.45 % Qinhui Ltd. (3) 4,999,996 19.54 % 5% or greater beneficial owners as a group 9,975,996 38.99 % * Less than 1%.
From September 24, 2021 to September 24, 2022, a total of 31,120 shares were disposed of in various occasions, resulting in the net increased holding of 180,880 shares. (5) Represents vested portion of the restricted stock granted dated as of July 12, 2018.
From September 24, 2021 to September 24, 2022, a total of 31,120 shares were disposed of in various occasions, resulting in the net increased holding of 180,880 shares. Represents vested portion of the restricted stock granted dated as of August 23, 2021. The total grant of 48,000 common shares and 12,000 vest on November 1, 2022.
Represents vested portion of the restricted stock granted dated as of January 31, 2022. The total grant of 2,000 common shares vests in whole immediately on the grant date of award. 110 (6) Executive officer. (7) Director. (8) The total grant of 12,000 common shares vests in one year after the date of award.
(8) The total grant of 12,000 common shares vests in one year after the date of award. Represents vested portion of the restricted stock granted dated as of May 6, 2020. The total grant of 100,000 common shares vests in whole immediately on the grant date of award.
From September 24, 2021 to September 24, 2022, a total of 22,671 shares were disposed of in various occasions, resulting in the net increased holding of 299,329 shares (9) Represents vested portion of the restricted stock granted dated as of November 6, 2020.
From September 24, 2021 to September 24, 2022, a total of 22,671 shares were disposed of in various occasions, resulting in the net increased holding of 299,329 shares. Represents vested portion of the restricted stock granted dated as of August 23, 2021. The total grant of 76,000 common shares and 22,000 vest on June 11, 2022.
Name of Beneficial Owner Common Shares Ownership% (1) Xiao Feng Yang (2)(7) 5,542,950 24.69 % Raymond Ming Hui Lin (3)(6)(7) 6,750,873 30.07 % Rui Yang (4)(6) 307,448 1.37 % Li Li(6)(8) 535,138 2.38 % Jin He Shao (5)(7) 11,000 * Kee Chong Seng(7)(10) 24,500 * Zhao Hui Feng(7)(9) 8,000 * All directors and executive officers as a group (7 persons) 13,179,909 58.72 % Qinrui Ltd.
Name of Beneficial Owner Common Shares Ownership% (1) Xiao Feng Yang (2)(7) 5,667,950 22.15 % Raymond Ming Hui Lin (3)(6)(7) 7,605,873 29.73 % Rui Yang (4)(6) 690,710 2.7 % Li Li(6)(8) 819,863 3.2 % Jin He Shao (5)(7) 17,000 * Kee Chong Seng(7)(10) 30,500 * Zhao Hui Feng(7)(9) 14,000 * All directors and executive officers as a group (7 persons) 14,845,896 58.02 % Qinrui Ltd.
As of June 30, 2022 2021 Due to related parties: EMIT $ 27,616 $ 183,148 UniDev 33,727 - MCT 5,541 - Total $ 66,884 $ 183,148 Due to related parties mainly represents the unpaid consulting service fee to EMIT and Beijing UniDev and unpaid administrative fee to MCT. 112 (b) Related party transactions For the year ended, 2022 2021 2020 a) Consulting services provided to the related parties UniDev $ 46,008 $ - $ - EMIT 6,016 - - CareerWin - - 165,161 CLPS Lihong - 269,472 - $ 52,024 $ 269,472 $ 165,161 b) Services provided by the related parties EMIT $ 157,762 $ 758,976 $ 209,318 UniDev 34,995 - - CareerWin - - 195,817 Beijing Bright 142,487 604,033 165,040 $ 335,244 $ 1,363,009 $ 570,175 c) Loans provided to the related parties CLPS Lihong $ - $ - $ 149,341 EMIT* 83,651 151,783 28,446 $ 83,651 $ 151,783 $ 177,787 d) Repayment of loans from the related parties CLPS Lihong $ - $ - $ 149,341 EMIT 15,491 - 28,446 $ 15,491 $ - $ 177,787 e) Interest income received from the related parties EMIT 9,260 - - CLPS Lihong - - 2,328 $ 9,260 $ - $ 2,328 f) Rental income from the related party Fuson 3,587 - - $ 3,587 $ - $ - * The loan is charged at the interest rate of 4.35%.
As of June 30, 2023 2022 Due to related parties: UniDev $ 19,445 $ 33,727 MCT 5,444 5,541 EMIT - 27,616 Total $ 24,889 $ 66,884 Due to related parties mainly represents the unpaid consulting service fee to UniDev and unpaid administrative fee to MCT. 116 (b) Related party transactions For the year ended, 2023 2022 2021 a) Consulting services provided to the related parties UniDev $ - $ 46,008 $ - EMIT 158 6,016 - Fuson 57,418 - - CLPS Lihong - - 269,472 Total $ 57,576 $ 52,024 $ 269,472 b) Services provided by the related parties EMIT $ 221,584 $ 157,762 $ 758,976 UniDev 269,966 34,995 - Beijing Bright 99,208 142,487 604,033 Total $ 590,758 $ 335,244 $ 1,363,009 c) Loans provided to the related parties UniDev $ 143,810 $ - $ - Fuson 130,402 - - EMIT - 83,651 151,783 Total $ 274,212 $ 83,651 $ 151,783 d) Repayment of loans from the related parties EMIT $ 204,211 $ 15,491 $ - Total $ 204,211 $ 15,491 $ - e) Interest income received from the related parties UniDev $ 6,342 $ - $ - Fuson 1,518 - - EMIT 3,704 9,260 - Total $ 11,564 $ 9,260 $ - f) Rental income from the related party Fuson $ 10,718 $ 3,587 $ - C.
From September 24, 2021 to September 24, 2022, a total of 220,823 shares were disposed of in various occasions, resulting in the net increased holding of 49,177 shares.
From September 24, 2021 to September 24, 2022, a total of 220,823 shares were disposed of in various occasions, resulting in the net increased holding of 49,177 shares. Represents vested portion of the restricted stock granted dated as of November 14, 2022. The total grant of 50,000 common shares vests in whole immediately on the grant date of award.
From March 10, 2021 to April 1, 2022 a total of 16,500 shares were acquired from the market. 111 As of September 24, 2022, there were nine holders of record entered in our share register, of which no holders were U.S. residents.
Represents vested portion of the restricted stock granted dated as of August 16, 2023. The total grant of 3,000 common shares vests in whole immediately on the grant date of award. 115 As of September 24, 2023, there were nine holders of record entered in our share register, of which no holders were U.S. residents.
Removed
C. Interests of Experts and Counsel Not required.
Added
Represents vested portion of the restricted stock granted dated as of August 16, 2023. The total grant of 75,000 common shares vests in whole immediately on the grant date of award.
Added
The total grant of 325,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of August 16, 2023. The total grant of 530,000 common shares vests in whole immediately on the grant date of award.
Added
Represents vested portion of the restricted stock granted dated as of November 14, 2022. The total grant of 150,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of August 16, 2023.
Added
The total grant of 250,000 common shares vests in whole immediately on the grant date of award. From September 24, 2022 to September 24, 2023, a total of 28,738 shares were disposed of in various occasions, resulting in the net increased holding of 383,262 shares. (5) Represents vested portion of the restricted stock granted dated as of July 12, 2018.
Added
The total grant of 2,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of August 16, 2023. The total grant of 3,000 common shares vests in whole immediately on the grant date of award. 114 (6) Executive officer. (7) Director.
Added
Represents vested portion of the restricted stock granted dated as of November 14, 2022. The total grant of 100,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of August 16, 2023.
Added
The total grant of 150,000 common shares vests in whole immediately on the grant date of award. From September 24, 2022 to September 24, 2023, a total of 12,725 shares were acquired from the market. (9) Represents vested portion of the restricted stock granted dated as of November 6, 2020.
Added
Represents vested portion of the restricted stock granted dated as of January 31, 2022. The total grant of 2,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of November 14, 2022.
Added
The total grant of 2,000 common shares vests in whole immediately on the grant date of award. Represents vested portion of the restricted stock granted dated as of August 16, 2023. The total grant of 3,000 common shares vests in whole immediately on the grant date of award.
Added
From March 10, 2021 to April 1, 2022 a total of 16,500 shares were acquired from the market. Represents vested portion of the restricted stock granted dated as of November 14, 2022. The total grant of 2,000 common shares vests in whole immediately on the grant date of award.

Other CLPS 10-K year-over-year comparisons