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Lixiang Education Holding Co. Ltd.

Lixiang Education Holding Co. Ltd.LXEH決算レポート

Nasdaq

Lixiang Education Holding Co. Ltd. is a China-based education service provider that delivers after-school tutoring, extracurricular learning courses, and personalized academic support services for K-12 students across multiple first-tier and second-tier cities in China. Its core offerings cover key academic subjects and skill development programs to meet diverse student learning needs.

What changed in Lixiang Education Holding Co. Ltd.'s 20-F — 2023 vs 2024

Top changes in Lixiang Education Holding Co. Ltd.'s 2024 20-F

476 paragraphs added · 455 removed · 377 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

188 edited+29 added−47 removed456 unchanged
The Opinions has put forward that vocational education, an important part of the national education system and human resource development, shoulders the important responsibility of training diversified talents, inheriting technical skills, and promoting employment and entrepreneurship.
The Vocational Education Opinions has put forward that vocational education, an important part of the national education system and human resource development, shoulders the important responsibility of training diversified talents, inheriting technical skills, and promoting employment and entrepreneurship.
The Opinions urged that a batch of excellent secondary vocational schools and high-quality majors shall be established by greatly improving the quality of secondary vocational education, carrying out the projects of reaching the standards for secondary vocational schools, and taking such measures as consolidation, cooperation, trusteeship and group school-running.
The Vocational Education Opinions urged that a batch of excellent secondary vocational schools and high-quality majors shall be established by greatly improving the quality of secondary vocational education, carrying out the projects of reaching the standards for secondary vocational schools, and taking such measures as consolidation, cooperation, trusteeship and group school-running.
The Opinions also encouraged various enterprises to participate in the vocational education in line with law, vocational schools to cooperate with social capitals in jointly constructing vocational education infrastructures and practical training bases, as well as jointly constructing and sharing public practical training bases.
The Vocational Education Opinions also encouraged various enterprises to participate in the vocational education in line with law, vocational schools to cooperate with social capitals in jointly constructing vocational education infrastructures and practical training bases, as well as jointly constructing and sharing public practical training bases.
The aforementioned agreements will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities held by Nominee Shareholders in accordance with the Exclusive Call Option Agreement.
The aforementioned agreements will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities held by Nominee Shareholders in accordance with the Exclusive Call Option Agreement.
The purchase price payable by Liandu WFOE or its designated purchaser in respect of the transfer of Lishui Mengxiang’s direct and/or indirect equity interest or equity interests shall be at the lowest price permitted under the PRC laws and regulations.
The purchase price payable by Liandu WFOE or its designated purchaser in respect of the transfer of Lishui Mengxiang’s direct and/or indirect equity interest or equity interests shall be at the lowest price permitted under the PRC laws and regulations.
Such equity transfer price is not expressly provided for in the current PRC laws and regulations and it is uncertain whether it may be further regulated by future PRC laws and regulations.
Such equity transfer price is not expressly provided for in the current PRC laws and regulations and it is uncertain whether it may be further regulated by future PRC laws and regulations.
Pursuant to the Exclusive Call Option Agreement, all taxes and fees associated with the equity transfer shall be paid by Lishui Mengxiang’s shareholders and/or the direct equity holders of the VIEs upon the transfer.
Pursuant to the Exclusive Call Option Agreement, all taxes and fees associated with the equity transfer shall be paid by Lishui Mengxiang’s shareholders and/or the direct equity holders of the VIEs upon the transfer.
In the absence of written consent from Liandu WFOE, except as otherwise described in the Exclusive Call Option Agreement, Lishui Mengxiang and its shareholders shall not sell, transfer, assign or otherwise dispose of or create any encumbrance on any of Lishui Mengxiang’s assets, businesses or equity interests or procure separation or merge with any other entities.
In the absence of written consent from Liandu WFOE, except as otherwise described in the Exclusive Call Option Agreement, Lishui Mengxiang and its shareholders shall not sell, transfer, assign or otherwise dispose of or create any encumbrance on any of Lishui Mengxiang’s assets, businesses or equity interests or procure separation or merge with any other entities.
Furthermore, without written consent from Liandu WFOE, Lishui Mengxiang may not terminate any material contracts or enter into any other contracts which may contradict such material contracts, incur any indebtedness or provide any loan or guarantee to a third party, except as disclosed to Liandu WFOE, or alter the nature or scope of its business.
Furthermore, without written consent from Liandu WFOE, Lishui Mengxiang may not terminate any material contracts or enter into any other contracts which may contradict such material contracts, incur any indebtedness or provide any loan or guarantee to a third party, except as disclosed to Liandu WFOE, or alter the nature or scope of its business.
The Exclusive Call Option Agreement will remain in force during the operation term of VIEs and any periods that are renewable pursuant to the PRC laws, and will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities of VIEs in accordance with this agreement.
The Exclusive Call Option Agreement will remain in force during the operation term of VIEs and any periods that are renewable pursuant to the PRC laws, and will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities of VIEs in accordance with this agreement.
In particular, such services include but not limited to developing curriculum, conducting market research and offering management and marketing advice, providing technology services, providing public relations services, providing support for teacher hiring and training and providing other services that the VIEs may need from time to time.
In particular, such services include but not limited to developing curriculum, conducting market research and offering management and marketing advice, providing technology services, providing public relations services, providing support for teacher hiring and training and providing other services that the VIEs may need from time to time.
Without the prior consent of Liandu WFOE, none of the VIEs may accept such services provided by any third party.
Without the prior consent of Liandu WFOE, none of the VIEs may accept such services provided by any third party.
As part of the business cooperative agreement, VIEs and the shareholders of Lishui Mengxiang agree that they will not take any actions except as otherwise described in the Business Cooperation Agreement, such as incurring indebtedness, disposing of material assets, materially changing the scope or nature of the business of the VIEs, disposing of their equity interests in the VIEs, or paying dividends or other similar payments to the sponsors or the shareholders VIEs in the absence of written consent from Liandu WFOE.
As part of the business cooperative agreement, VIEs and the shareholders of Lishui Mengxiang agree that they will not take any actions except as otherwise described in the Business Cooperation Agreement, such as incurring indebtedness, disposing of material assets, materially changing the scope or nature of the business of the VIEs, disposing of their equity interests in the VIEs, or paying dividends or other similar payments to the sponsors or the shareholders VIEs in the absence of written consent from Liandu WFOE.
The aforementioned agreements will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities held by Nominee Shareholders in accordance with the Exclusive Call Option Agreement.
The aforementioned agreements will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities held by Nominee Shareholders in accordance with the Exclusive Call Option Agreement.
Unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or the shareholders of Lishui Mengxiang unilaterally, but may only be terminated by the Liandu WFOE after notice in advance.
Unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or the shareholders of Lishui Mengxiang unilaterally, but may only be terminated by the Liandu WFOE after notice in advance.
The equity interests of Chuangmei Weiye were transferred back to Beijing S.K.’s affiliates at a price of RMB6.36 million and the transfer was completed on November 9, 2023. After the transaction, the amount of RMB6.36 million has been added to the total debts owed by Beijing S.K. to Lishui Mengxiang.
The equity interests of Chuangmei Weiye were transferred back to Beijing S.K.’s affiliates at a price of RMB6.36 million and the transfer was completed on November 9, 2023. After the transaction, the amount of RMB6.36 million has been added to the total debts owed by Beijing S.K. to Lishui Mengxiang.
According to the Notice on Carrying out the Pilot Program for Unified Registration and Administration of Various Public Institutions issued by the Lishui People’s Government on December 31, 2015, (i) all non-profit public welfare institutions with state-owned assets that comply with the provisions of the Interim Regulations on the Administration of the Registration of Public Institutions, which are established with social forces and engaged in education, culture, sports, medical treatment, elderly care (health preservation) and other activities are allowed to be registered as public institutions and shall be collectively referred to as non-state public institutions, and the registration and administration of non-state public institutions shall be temporarily conducted in education and medical services; (ii) the registered non-state public institutions shall enjoy the same treatment as the public institutions of the same category except for those in which the funds are not guaranteed and the staff are not supported by the financial resources; and (iii) the founders of the non-state public institutions shall have the property ownership of the actual capital contributions (including the amount of capital added during the existence) and assume the corresponding liability for debts; during the existence of the non-state public institutions, the assets invested in them shall not be transferred by any means; the surplus income of the non-state public institutions shall not be distributed, but the corresponding investment incentive system may be established and the specific incentive standards shall be formulated by the competent departments of the industry. 94 In accordance with the Interim Rules of Lishui Municipality on the Administration of Registration of Public Institutions by Non-Profit Schools Run by Social Capital issued by Lishui Municipal Education Bureau, Lishui Municipal Human Resources and Social Security Bureau and Office for Public Sector Reform Commission of Lishui on December 29, 2015, (i) a private school that is registered as a public institution shall establish a sound and effective financial supervision system and maintain normal teaching order; (ii) a public institution risk fund system shall be established for private schools, which is earmarked for the relevant expenses for returning fees, refunding fees and compensation at the time of termination (closure) of the private school; (iii) after the school reserves development fund and withdraws other relevant expenses, the school may, on the premise that there is balance of non-fiscal funds in school running, withdraw a certain proportion of funds from the balance of non-fiscal funds to reward the contributors upon research and decision made by the decision-making body of the school and approval by the administrative department of education or the administrative department of human resources and social security.
According to the Notice on Carrying out the Pilot Program for Unified Registration and Administration of Various Public Institutions issued by the Lishui People’s Government on December 31, 2015, (i) all non-profit public welfare institutions with state-owned assets that comply with the provisions of the Interim Regulations on the Administration of the Registration of Public Institutions, which are established with social forces and engaged in education, culture, sports, medical treatment, elderly care (health preservation) and other activities are allowed to be registered as public institutions and shall be collectively referred to as non-state public institutions, and the registration and administration of non-state public institutions shall be temporarily conducted in education and medical services; (ii) the registered non-state public institutions shall enjoy the same treatment as the public institutions of the same category except for those in which the funds are not guaranteed and the staff are not supported by the financial resources; and (iii) the founders of the non-state public institutions shall have the property ownership of the actual capital contributions (including the amount of capital added during the existence) and assume the corresponding liability for debts; during the existence of the non-state public institutions, the assets invested in them shall not be transferred by any means; the surplus income of the non-state public institutions shall not be distributed, but the corresponding investment incentive system may be established and the specific incentive standards shall be formulated by the competent departments of the industry. 97 In accordance with the Interim Rules of Lishui Municipality on the Administration of Registration of Public Institutions by Non-Profit Schools Run by Social Capital issued by Lishui Municipal Education Bureau, Lishui Municipal Human Resources and Social Security Bureau and Office for Public Sector Reform Commission of Lishui on December 29, 2015, (i) a private school that is registered as a public institution shall establish a sound and effective financial supervision system and maintain normal teaching order; (ii) a public institution risk fund system shall be established for private schools, which is earmarked for the relevant expenses for returning fees, refunding fees and compensation at the time of termination (closure) of the private school; (iii) after the school reserves development fund and withdraws other relevant expenses, the school may, on the premise that there is balance of non-fiscal funds in school running, withdraw a certain proportion of funds from the balance of non-fiscal funds to reward the contributors upon research and decision made by the decision-making body of the school and approval by the administrative department of education or the administrative department of human resources and social security.
The school may continue running during the process of the liquidation, re-handling of the permit for the establishment of the school and registration as a legal person; and (v) When an existing private school is terminated, if there is surplus property after repayment in accordance with the Law of the People’s Republic of China on the Promotion of Private Schools, the Implementation Measures for Existing Private Schools to Change Registration Status, the Measures for the Financial Settlement of Private Schools in Zhejiang Province and other regulations, certain compensation or reward (the proportion and standard shall be determined by local authorities according to relevant laws and regulations and in combination with local actual conditions) shall be given to the capital contributors according to the application of the capital contributors and in comprehensive consideration of factors such as the capital contribution made before August 31, 2017, reasonable returns obtained and school-running benefits; the remaining property shall continue to be used for running other non-profit schools. 92 On November 22, 2021, Lishui Education Bureau has promulgated the Work Plan for Classified Registration and Administration of Existing Private Schools (Kindergartens) of Lishui City, which stipulates that they shall adhere to the principles of voluntary selection, smooth classification, public welfare orientation, and compliance with laws and regulations, and strive to complete the classified registration of existing private schools by December 30, 2022.
The school may continue running during the process of the liquidation, re-handling of the permit for the establishment of the school and registration as a legal person; and (v) When an existing private school is terminated, if there is surplus property after repayment in accordance with the Law of the People’s Republic of China on the Promotion of Private Schools, the Implementation Measures for Existing Private Schools to Change Registration Status, the Measures for the Financial Settlement of Private Schools in Zhejiang Province and other regulations, certain compensation or reward (the proportion and standard shall be determined by local authorities according to relevant laws and regulations and in combination with local actual conditions) shall be given to the capital contributors according to the application of the capital contributors and in comprehensive consideration of factors such as the capital contribution made before August 31, 2017, reasonable returns obtained and school-running benefits; the remaining property shall continue to be used for running other non-profit schools. 95 On November 22, 2021, Lishui Education Bureau has promulgated the Work Plan for Classified Registration and Administration of Existing Private Schools (Kindergartens) of Lishui City, which stipulates that they shall adhere to the principles of voluntary selection, smooth classification, public welfare orientation, and compliance with laws and regulations, and strive to complete the classified registration of existing private schools by December 30, 2022.
The SPV is defined as an “offshore enterprise directly established or indirectly controlled by the domestic resident (including domestic institution and individual resident) with their legally owned assets and equity of the domestic enterprise, or legally owned offshore assets or equity, for the purpose of investment and financing;” “Round Trip Investments” refer to “the direct investment activities carried out by a domestic resident directly or indirectly via an SPV, i.e. establishing a foreign-invested enterprise or project within the PRC through a new entity, merger or acquisition and other ways, while obtaining ownership, control, operation and management and other rights and interests.” In addition, according to the procedural guidelines as attached to Circular 37, the principle of review has been changed to “the domestic individual resident is only required to register the SPV directly established or controlled (first level).” 106 Pursuant to Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies, or Circular 13, which was promulgated on February 13, 2015, implemented on June 1, 2015 and amended on December 30, 2019, the initial foreign exchange registration for establishing or taking control of a SPV by domestic residents can be conducted with a qualified bank, instead of the local foreign exchange bureau, and Circular 13 also simplifies some procedures relating to foreign exchange for direct investments.
The SPV is defined as an “offshore enterprise directly established or indirectly controlled by the domestic resident (including domestic institution and individual resident) with their legally owned assets and equity of the domestic enterprise, or legally owned offshore assets or equity, for the purpose of investment and financing;” “Round Trip Investments” refer to “the direct investment activities carried out by a domestic resident directly or indirectly via an SPV, i.e. establishing a foreign-invested enterprise or project within the PRC through a new entity, merger or acquisition and other ways, while obtaining ownership, control, operation and management and other rights and interests.” In addition, according to the procedural guidelines as attached to Circular 37, the principle of review has been changed to “the domestic individual resident is only required to register the SPV directly established or controlled (first level).” 109 Pursuant to Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies, or Circular 13, which was promulgated on February 13, 2015, implemented on June 1, 2015 and amended on December 30, 2019, the initial foreign exchange registration for establishing or taking control of a SPV by domestic residents can be conducted with a qualified bank, instead of the local foreign exchange bureau, and Circular 13 also simplifies some procedures relating to foreign exchange for direct investments.
These rights include, but are not limited to: (a) the right to appoint and/or elect of council members of Langfang School; (b) the right to appoint and/or elect the supervisors of Langfang School; the right to put forward the School’s mission and scope of operation;(c)the right to examine or approve the Articles of Association of Langfang School, development planning, major projects and budget for revenues and expenditures;(d) the right to supervise the performance of Langfang School and the achievement of the objectives set out in the bylaw;(e) the right to establish the executive school council in accordance with the authority and procedures prescribed in the bylaw of Langfang School and to participate in the running and management of the School;(f) the right to access the information about the operation conditions and financial conditions of Langfang School;(g) the right to consult the resolutions, records, financial and accounting statements and reports of the school council meetings in accordance with the PRC laws;(h) the right to obtain reasonable returns from Langfang School’s Sponsor in accordance with the PRC laws;(i) the right to obtain the remaining property of Langfang School after the liquidation in accordance with the PRC laws;(j) the right to transfer the interests of Langfang School’s Sponsor in accordance with the PRC laws;(k) the right to select the profitability and non-profitability of the characteristic of Langfang School in accordance with the PRC laws, regulations or regulatory documents; and(l) any other rights of Langfang School’s Sponsor provided by other applicable laws and regulations of the PRC and the articles of association of Langfang School (as amended from time to time). 116 The appointed Council Members of Langfang School from Beijing P.X. has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Langfang School to the extent permitted by the PRC laws.
These rights include, but are not limited to: (a) the right to appoint and/or elect of council members of Langfang School; (b) the right to appoint and/or elect the supervisors of Langfang School; the right to put forward the School’s mission and scope of operation;(c)the right to examine or approve the articles of association of Langfang School, development planning, major projects and budget for revenues and expenditures;(d) the right to supervise the performance of Langfang School and the achievement of the objectives set out in the bylaw;(e) the right to establish the executive school council in accordance with the authority and procedures prescribed in the bylaw of Langfang School and to participate in the running and management of the School;(f) the right to access the information about the operation conditions and financial conditions of Langfang School;(g) the right to consult the resolutions, records, financial and accounting statements and reports of the school council meetings in accordance with the PRC laws;(h) the right to obtain reasonable returns from Langfang School’s Sponsor in accordance with the PRC laws;(i) the right to obtain the remaining property of Langfang School after the liquidation in accordance with the PRC laws;(j) the right to transfer the interests of Langfang School’s Sponsor in accordance with the PRC laws;(k) the right to select the profitability and non-profitability of the characteristic of Langfang School in accordance with the PRC laws, regulations or regulatory documents; and(l) any other rights of Langfang School’s Sponsor provided by other applicable laws and regulations of the PRC and the articles of association of Langfang School (as amended from time to time). 119 The appointed Council Members of Langfang School from Beijing P.X. has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Langfang School to the extent permitted by the PRC laws.
These rights include, but are not limited to: (a) the right to appoint and/or elect of council members of Lishui International School; (b) the right to appoint and/or elect the supervisors of Lishui International School; the right to put forward the School’s mission and scope of operation;(c)the right to examine or approve the Articles of Association of Lishui International School, development planning, major projects and budget for revenues and expenditures;(d) the right to supervise the performance of Lishui International School and the achievement of the objectives set out in the bylaw;(e) the right to establish the executive school council in accordance with the authority and procedures prescribed in the bylaw of Lishui International School and to participate in the running and management of the School;(f) the right to access the information about the operation conditions and financial conditions of Lishui International School;(g) the right to consult the resolutions, records, financial and accounting statements and reports of the school council meetings in accordance with the PRC laws;(h) the right to use the remaining property of the school after the liquidation for running other non-profit schools continuously in accordance with the PRC laws;(i) the right to transfer the interests of Lishui International School’s sponsor in accordance with the PRC laws;and (j) any other rights of Lishui International School’s Sponsor provided by other applicable laws and regulations of the PRC and the articles of association of Lishui International School (as amended from time to time). 118 The appointed Council Members of Lishui International School from Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Lishui International School to the extent permitted by the PRC laws.
These rights include, but are not limited to: (a) the right to appoint and/or elect of council members of Lishui International School; (b) the right to appoint and/or elect the supervisors of Lishui International School; the right to put forward the School’s mission and scope of operation;(c)the right to examine or approve the articles of association of Lishui International School, development planning, major projects and budget for revenues and expenditures;(d) the right to supervise the performance of Lishui International School and the achievement of the objectives set out in the bylaw;(e) the right to establish the executive school council in accordance with the authority and procedures prescribed in the bylaw of Lishui International School and to participate in the running and management of the School;(f) the right to access the information about the operation conditions and financial conditions of Lishui International School;(g) the right to consult the resolutions, records, financial and accounting statements and reports of the school council meetings in accordance with the PRC laws;(h) the right to use the remaining property of the school after the liquidation for running other non-profit schools continuously in accordance with the PRC laws;(i) the right to transfer the interests of Lishui International School’s sponsor in accordance with the PRC laws;and (j) any other rights of Lishui International School’s Sponsor provided by other applicable laws and regulations of the PRC and the articles of association of Lishui International School (as amended from time to time). 121 The appointed Council Members of Lishui International School from Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Lishui International School to the extent permitted by the PRC laws.
Comprehensive Human Resource Services The two of the VIEs, Chuangmei Weiye and Hebei Chuangxiang, generate the revenue from providing comprehensive services for flexible employment, which primarily focuses on recommending interns from schools to various clients with human resources demand. We, Chuangmei Weiye and Heibei Chuangxiang conclude that there is a single performance obligation to fulfill service requirements from clients.
Comprehensive Human Resource Services The two of the VIEs, Chuangmei Weiye and Hebei Chuangxiang, generate the revenue from providing comprehensive services for flexible employment, which primarily focuses on recommending interns from schools to various clients with human resources demand. We, Chuangmei Weiye and Hebei Chuangxiang conclude that there is a single performance obligation to fulfill service requirements from clients.
These rights include, but are not limited to: (a) the right to attend the shareholders’ meeting of our school acting as WFOE’s nominee; (b) the right to vote on behalf of the sponsors for all matters requiring discussion and resolution of the shareholders’ meeting; (c) the right to sign the shareholders’ minutes, resolutions or other legal documents; (d) the right to indicate the directors, the legal representative, etc. to act in accordance with WFOE’s intention; (e) the right to handle legal procedures containing registration, examination and approval and license of schools at the competent departments of governments; (f) the right to decide to transfer or otherwise dispose of the equity of our school; (g) any other shareholder rights as pursuant to the applicable PRC laws, regulations and our school’s articles of association as amended from time to time. 114 Business Cooperation Agreement .
These rights include, but are not limited to: (a) the right to attend the shareholders’ meeting of our school acting as WFOE’s nominee; (b) the right to vote on behalf of the sponsors for all matters requiring discussion and resolution of the shareholders’ meeting; (c) the right to sign the shareholders’ minutes, resolutions or other legal documents; (d) the right to indicate the directors, the legal representative, etc. to act in accordance with WFOE’s intention; (e) the right to handle legal procedures containing registration, examination and approval and license of schools at the competent departments of governments; (f) the right to decide to transfer or otherwise dispose of the equity of our school; (g) any other shareholder rights as pursuant to the applicable PRC laws, regulations and our school’s articles of association as amended from time to time. 117 Business Cooperation Agreement .
Domain name registrations are handled through domain name service agencies established under the relevant regulations, and the applicants become domain name holders upon successful registration. 102 PRC Laws and Regulations Relating to Labor Protection Employment According to the Labor Law of the PRC, or the Labor Law, which was promulgated by the Standing Committee of the NPC on July 5, 1994 and became effective on January 1, 1995 and was amended on December 29, 2018, an employer shall establish a comprehensive management system to safeguard the rights of its employees, including developing and improving its labor safety and health system, stringently implementing national protocols and standards on labor safety and health, conducting labor safety and health education for workers, guarding against labor accidents and reducing occupational hazards.
Domain name registrations are handled through domain name service agencies established under the relevant regulations, and the applicants become domain name holders upon successful registration. 105 PRC Laws and Regulations Relating to Labor Protection Employment According to the Labor Law of the PRC, or the Labor Law, which was promulgated by the Standing Committee of the NPC on July 5, 1994 and became effective on January 1, 1995 and was amended on December 29, 2018, an employer shall establish a comprehensive management system to safeguard the rights of its employees, including developing and improving its labor safety and health system, stringently implementing national protocols and standards on labor safety and health, conducting labor safety and health education for workers, guarding against labor accidents and reducing occupational hazards.
Our compensation committee consists of three members, namely Mr. Teck Yong Heng, Mr. Yan Kit Lee and Mr. Guoliang Chen. The compensation committee is chaired by Mr. Yan Kit Lee. Each of Mr. Teck Yong Heng and Mr. Yan Kit Lee satisfies the “independence” requirements of Rule 5605(c)(2) of the Listing Rules of the Nasdaq Stock Market.
Our compensation committee consists of three members, namely Mr. Teck Yong Heng, Mr. Yan Kit Lee and Mr. Guoliang Chen. The compensation committee is chaired by Mr. Yan Kit Lee. Each of Mr. Teck Yong Heng and Mr. Yan Kit Lee satisfies the “independence” requirements of Rule 5605(c)(2) of the Listing Rules of the Nasdaq Stock Market. Having Mr.
According to the SAT Bulletin 7, “PRC taxable assets” include assets attributed to an establishment in China, immovable properties located in China, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being a non-PRC resident enterprise, would be subject to PRC enterprise income taxes. 104 Income Tax in Relation to Dividend Distribution The PRC and the government of Hong Kong entered into the Arrangement between the Mainland of the PRC and Hong Kong for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, or the Double Tax Avoidance Arrangement on August 21, 2006.
According to the SAT Bulletin 7, “PRC taxable assets” include assets attributed to an establishment in China, immovable properties located in China, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being a non-PRC resident enterprise, would be subject to PRC enterprise income taxes. 107 Income Tax in Relation to Dividend Distribution The PRC and the government of Hong Kong entered into the Arrangement between the Mainland of the PRC and Hong Kong for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, or the Double Tax Avoidance Arrangement on August 21, 2006.
Langfang School provides vacational school education services, in which case the foreign investors shall be a foreign education institution or a foreign vocational skills training institution with relevant qualifications on education services and operating high-quality educations in accordance with the current PRC laws and regulations.
Langfang School provides vocational school education services, in which case the foreign investors shall be a foreign education institution or a foreign vocational skills training institution with relevant qualifications on education services and operating high-quality educations in accordance with the current PRC laws and regulations.
Qingtian International School and Lishui International School provide PRC high school curriculum program combined with the courses designed for the PRC Joint Recruitment Examination, using small-class teaching method and semi-military management, which enable its students to gain admission to the most prestigious colleges and universities and therefore we believe our outstanding admission performance will enhance our and the VIEs’ schools’ reputation in the industry and improve our prospects. 122 We and the VIEs offer vocational education services through the Vocational Education Services Providers, namely Beijing Xinxiang, Langfang School and Hainan Jiangcai.
Qingtian International School and Lishui International School provide PRC high school curriculum program combined with the courses designed for the PRC Joint Recruitment Examination, using small-class teaching method and semi-military management, which enable its students to gain admission to the most prestigious colleges and universities and therefore we believe our outstanding admission performance will enhance our and the VIEs’ schools’ reputation in the industry and improve our prospects. 125 We and the VIEs offer vocational education services through the Vocational Education Services Providers, namely Beijing Xinxiang, Langfang School and Hainan Jiangcai.
Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. C. Research and Development Not applicable. D.
Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. C. Research and Development Not applicable. 143 D.
According to Circular 9, the calculation of the upper limit of the risk-weighted balance for cross-border financing =the capital or the net assets × the leverage rate of cross-border financing × the macro-prudential adjustment parameters, among which, enterprises are calculated at their net assets based on the latest audited financial statements, the leverage rate for cross-border financing for enterprises is 2, and the macro-prudential adjustment parameter is 1. 107 On October 25, 2022, the PBOC and the SAFE issued Notice of People’s Bank of China and State Administration of Foreign Exchange on the Adjustment of Macro-Prudential Adjustment Parameters for Cross-border Financing of Enterprises, and decided to raise the macro-prudential adjustment parameter for cross-border financing of enterprises from 1 to 1.25.
According to Circular 9, the calculation of the upper limit of the risk-weighted balance for cross-border financing =the capital or the net assets × the leverage rate of cross-border financing × the macro-prudential adjustment parameters, among which, enterprises are calculated at their net assets based on the latest audited financial statements, the leverage rate for cross-border financing for enterprises is 2, and the macro-prudential adjustment parameter is 1. 110 On October 25, 2022, the PBOC and the SAFE issued Notice of People’s Bank of China and State Administration of Foreign Exchange on the Adjustment of Macro-Prudential Adjustment Parameters for Cross-border Financing of Enterprises, and decided to raise the macro-prudential adjustment parameter for cross-border financing of enterprises from 1 to 1.25.
Board Diversity Disclosure The following information was provided by our directors on a voluntary basis. 143 Board Diversity Matrix (As of date of this annual report) Country of Principal Executive Offices China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 6 Female Male Non-Binary Did not disclose Part I: Gender Identity Directors 1 5 0 0 Part II: Demographic Background Underrepresented Individual in Home Country 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 B.
Board Diversity Disclosure The following information was provided by our directors on a voluntary basis. 146 Board Diversity Matrix (As of date of this annual report) Country of Principal Executive Offices China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 6 Female Male Non-Binary Did not disclose Part I: Gender Identity Directors 1 5 0 0 Part II: Demographic Background Underrepresented Individual in Home Country 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 B.
On January 6, 2023, Beijing P.X. established Hebei Chuangxiang as its wholly-owned subsidiary to expand the human resources services business. Hebei Chuangxiang is a human resources services provider for internship and employment recommendations.
On January 6, 2023, Beijing P.X. established Hebei Chuangxiang as its wholly-owned subsidiary to expand the comprehensive human resources services business. Hebei Chuangxiang is a human resources services provider for internship and employment recommendations.
As of the date of the annual report, Langfang City has not released any detailed rules on classification registration of private schools and we have not received any relevant notice from the competent authorities of Langfang City since January 1, 2022 when Beijing P.X. began to hold the whole sponsorship interests of Langfang School. 93 Guidelines for Further Easing the Burden of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education.
As of the date of the annual report, Langfang City has not released any detailed rules on classification registration of private schools and we have not received any relevant notice from the competent authorities of Langfang City since January 1, 2022 when Beijing P.X. began to hold the whole sponsorship interests of Langfang School. 96 Guidelines for Further Easing the Burden of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education.
Schools should only order meals from off-site providers that have obtained the relevant food production licenses and should conduct regular inspections on the meal provided. 97 Pursuant to Measures for the Administration of Food Trade Licensing and Recordation promulgated on June,15 2023 and took effect on December 1 2023, a food operation license shall be obtained in accordance with the law to engage in food selling and catering services within the territory of the PRC.
Schools should only order meals from off-site providers that have obtained the relevant food production licenses and should conduct regular inspections on the meal provided. 100 Pursuant to Measures for the Administration of Food Trade Licensing and Recordation promulgated on June,15 2023 and took effect on December 1 2023, a food operation license shall be obtained in accordance with the law to engage in food selling and catering services within the territory of the PRC.
Unless otherwise prescribed under the PRC laws and regulations, Liandu WFOE shall have exclusive proprietary rights to any technology and intellectual property developed and materials prepared in the course of the provision of research and development, technical support and services by Liandu WFOE to Langfang School and Beijing P.X., and any intellectual property in the products developed, including any other rights derived thereunder, in the course of performance of obligations under the Exclusive Technical Service and Business Consulting Agreement and/or any other agreements entered into between Liandu WFOE, Langfang School and Beijing P.X.. 117 Equity Pledge Agreement .
Unless otherwise prescribed under the PRC laws and regulations, Liandu WFOE shall have exclusive proprietary rights to any technology and intellectual property developed and materials prepared in the course of the provision of research and development, technical support and services by Liandu WFOE to Langfang School and Beijing P.X., and any intellectual property in the products developed, including any other rights derived thereunder, in the course of performance of obligations under the Exclusive Technical Service and Business Consulting Agreement and/or any other agreements entered into between Liandu WFOE, Langfang School and Beijing P.X.. 120 Equity Pledge Agreement .
Any violation of the provisions and requirements under the Cyber Security Law may subject an internet service provider to rectifications, warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of qualifications, closedown of websites or even criminal liabilities. 100 The Data Security Law of the PRC was passed by the Standing Committee of the 13th NPC at the 29 th Session on June 10, 2021 and came into effect on September 1, 2021.
Any violation of the provisions and requirements under the Cyber Security Law may subject an internet service provider to rectifications, warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of qualifications, closedown of websites or even criminal liabilities. 103 The Data Security Law of the PRC was passed by the Standing Committee of the 13th NPC at the 29 th Session on June 10, 2021 and came into effect on September 1, 2021.
Revenue from Chuangmei Weiye To expand our and the VIE's business into vocational education, Lishui Mengxiang entered into definitive agreements to acquire 100% of the equity interests of Beijing P.X. on January 1, 2022, which was a wholly-owned subsidiary of Beijing S.K. at the time, so that after the transaction, Lishui Mengxiang through its shareholding of Beijing P.X. would in turn hold 100% of the equity interests of Chuangmei Weiye and Hainan Jiangcai, and 100% of the sponsorship interests of Langfang School.
Revenue from Chuangmei Weiye To expand our and the VIEs’ business into vocational education, Lishui Mengxiang entered into definitive agreements to acquire 100% of the equity interests of Beijing P.X. on January 1, 2022, which was a wholly-owned subsidiary of Beijing S.K. at the time, so that after the transaction, Lishui Mengxiang through its shareholding of Beijing P.X. would in turn hold 100% of the equity interests of Chuangmei Weiye and Hainan Jiangcai, and 100% of the sponsorship interests of Langfang School.
Wei has been a director of Lianwai School since September 2002 and a director of Lishui Yuanmeng Training Company Limited since 2014. Mr. Biao Wei served as a director of Liandu Foreign Language School Kindergarten from 2014 to 2018. Mr.
Wei has served as a director of Lianwai School since September 2002 and a director of Lishui Yuanmeng Training Company Limited since 2014. Mr. Biao Wei served as a director of Liandu Foreign Language School Kindergarten from 2014 to 2018. Mr.
The compensation committee is responsible for, among other things: ● reviewing and making recommendations to the board of directors with respect to directors’ compensation; ● reviewing and approving to the board with respect to the compensation for our chief executive officer and other executive officers; ● reviewing periodically and approving any incentive compensation or equity plans, programs or other similar arrangements; ● approving guidelines for senior management salary, incentive, stock option, benefit and other compensation levels; and ● producing an annual report on executive compensation in accordance with applicable rules and regulations. 146 Nominating and Corporate Governance Committee.
The compensation committee is responsible for, among other things: ● reviewing and making recommendations to the board of directors with respect to directors’ compensation; ● reviewing and approving to the board with respect to the compensation for our chief executive officer and other executive officers; ● reviewing periodically and approving any incentive compensation or equity plans, programs or other similar arrangements; ● approving guidelines for senior management salary, incentive, stock option, benefit and other compensation levels; and ● producing an annual report on executive compensation in accordance with applicable rules and regulations. 149 Nominating and Corporate Governance Committee.
If a foreign investor merges and acquires a domestic non-foreign-invested enterprise through the acquisition of equity in the domestic non-foreign-invested enterprise, it shall submit the initial report through the enterprise registration system while applying for change of registration of the merged enterprise. 108 Regulatory Approval from the China Securities Regulatory Commission On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises, or the Trial Measures, which became effective on March 31, 2023.
If a foreign investor merges and acquires a domestic non-foreign-invested enterprise through the acquisition of equity in the domestic non-foreign-invested enterprise, it shall submit the initial report through the enterprise registration system while applying for change of registration of the merged enterprise. 111 Regulatory Approval from the China Securities Regulatory Commission On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises, or the Trial Measures, which became effective on March 31, 2023.
Schools which expropriate arable land upon approval shall be exempt from arable land use tax. 105 PRC Laws and Regulations Relating to Companies The establishment, operation and management of corporate entities in the PRC are governed by the Company Law of the PRC, or the Company Law, which was promulgated on December 29, 1993 and amended on December 25, 1999, August 28, 2004, October 27, 2005, December 28, 2013, October 26, 2018 and December 29, 2023, respectively.
Schools which expropriate arable land upon approval shall be exempt from arable land use tax. 108 PRC Laws and Regulations Relating to Companies The establishment, operation and management of corporate entities in the PRC are governed by the Company Law of the PRC, or the Company Law, which was promulgated on December 29, 1993 and amended on December 25, 1999, August 28, 2004, October 27, 2005, December 28, 2013, October 26, 2018 and December 29, 2023, respectively.
To expand our and the VIE's business into vocational education, Lishui Mengxiang entered into definitive agreements to acquire 100% of the equity interests of Beijing P.X. on January 1, 2022, which was a wholly-owned subsidiary of Beijing S.K. at the time, so that after the transaction, Lishui Mengxiang through its shareholding of Beijing P.X. would in turn hold 100% of the equity interests of Chuangmei Weiye and Hainan Jiangcai, and 100% of the sponsorship interests of Langfang School.
To expand our and the VIEs’ business into vocational education, Lishui Mengxiang entered into definitive agreements to acquire 100% of the equity interests of Beijing P.X. on January 1, 2022, which was a wholly-owned subsidiary of Beijing S.K. at the time, so that after the transaction, Lishui Mengxiang through its shareholding of Beijing P.X. would in turn hold 100% of the equity interests of Chuangmei Weiye and Hainan Jiangcai, and 100% of the sponsorship interests of Langfang School.
We have evaluated the disposal of Chuangmei Weiye and concluded that the disposal should be accounted as discontinued operation for the year ended and as of December 31, 2023 since this disposal had a major effect on our operations and financial results. 127 Chuangmei Weiye mainly provided comprehensive services for flexible employment, which primarily focused on recommending interns from schools to various enterprises with human resources demand.
We have evaluated the disposal of Chuangmei Weiye and concluded that the disposal should be accounted as discontinued operation for the year ended and as of December 31, 2023 since this disposal had a major effect on our operations and financial results. 130 Chuangmei Weiye mainly provided comprehensive services for flexible employment, which primarily focused on recommending interns from schools to various enterprises with human resources demand.
If the VIEs or their respective ultimate shareholders fail to perform their obligations under our contractual arrangements, we may have to incur additional costs and expend substantial resources to enforce our contractual arrangements, temporarily or permanently lose control over our primary operations or lose access to our primary sources of revenue. 111 There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the contractual arrangements and the VIE structure.
If the VIEs or their respective ultimate shareholders fail to perform their obligations under our contractual arrangements, we may have to incur additional costs and expend substantial resources to enforce our contractual arrangements, temporarily or permanently lose control over our primary operations or lose access to our primary sources of revenue. 114 There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the contractual arrangements and the VIE structure.
Consistent with the criteria of ASC 606, we follow five steps for its revenue recognition: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. 134 Education Services For continuing operations, we and the VIEs offer school curriculum education services, including high school curriculum and vocational school curriculum, to students.
Consistent with the criteria of ASC 606, we follow five steps for its revenue recognition: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. 137 Education Services For continuing operations, we and the VIEs offer school curriculum education services, including high school curriculum and vocational school curriculum, to students.
Other than those shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2023. G. Safe Harbor This annual report on Form 20-F contains forward-looking statements. These statements are made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended.
Other than those shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2024. G. Safe Harbor This annual report on Form 20-F contains forward-looking statements. These statements are made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended.
It may take approximately 70 business days in maximum for the general cybersecurity review upon the delivery of their applications, which may be subject to extensions for a special review. 101 Legal Regulations over Intellectual Property in the PRC Copyright Pursuant to the Copyright Law of the PRC, or the Copyright Law which last amended on November 11, 2020 with the effective date of June 1, 2021.
It may take approximately 70 business days in maximum for the general cybersecurity review upon the delivery of their applications, which may be subject to extensions for a special review. 104 Legal Regulations over Intellectual Property in the PRC Copyright Pursuant to the Copyright Law of the PRC, or the Copyright Law which last amended on November 11, 2020 with the effective date of June 1, 2021.
The agreement covers the facilities located at No.63 Aiminxi road, Anci District in Langfang City, Hubei Province, and its term is from December 2022 to December 2024. Langfang School agreed to pay the rent based on the numbers of apartments used in the school years, and the annual rent for an apartment accommodating 4 students ranges from RMB30,600 to RMB31,800.
The agreement covers the facilities located at No.63 Aiminxi road, Anci District in Langfang City, Hebei Province, and its term is from December 2022 to December 2024. Langfang School agreed to pay the rent based on the numbers of apartments used in the school years, and the annual rent for an apartment accommodating 4 students ranges from RMB30,600 to RMB31,800.
We and the VIEs enter into standard labor contracts with our employees. We may also enter into standard confidentiality and non-compete agreements with the executive officers. See “—C. Board Practices—Employment Agreements and Confidentiality Agreements .” E. Share Ownership Please refer to “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders” and “—B. Compensation—Share Incentive Plan.” 148
We and the VIEs enter into standard labor contracts with our employees. We may also enter into standard confidentiality and non-compete agreements with the executive officers. See “—C. Board Practices—Employment Agreements and Confidentiality Agreements .” E. Share Ownership Please refer to “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders” and “—B. Compensation—Share Incentive Plan.” F.
Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this annual report on Form 20-F and in the exhibits is as of the date of the annual report, and we do not undertake any obligation to update any such information, except as required under applicable law. 141 ITEM 6.
Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this annual report on Form 20-F and in the exhibits is as of the date of the annual report, and we do not undertake any obligation to update any such information, except as required under applicable law. 144 ITEM 6.
We made no provision for Hong Kong profits tax in our consolidated financial statements as our Hong Kong subsidiary had no assessable profit in 2021, 2022 and 2023. British Virgin Islands Under the current laws of the British Virgin Islands, our British Virgin Islands subsidiary, Lianwai Investment Co., Ltd., is not subject to income or capital gains taxes.
We made no provision for Hong Kong profits tax in our consolidated financial statements as our Hong Kong subsidiary had no assessable profit in 2022, 2023 and 2024. British Virgin Islands Under the current laws of the British Virgin Islands, our British Virgin Islands subsidiary, Lianwai Investment Co., Ltd., is not subject to income or capital gains taxes.
Granted Options and Restricted Share Units For the fiscal year ended December 31, 2023, no options or restricted share units under the 2020 Equity Incentive Plan had been granted. C. Board Practices Our board of directors consists of six directors, including four executive directors and two non-executive directors. We also promote gender diversity among our board members.
Granted Options and Restricted Share Units For the fiscal year ended December 31, 2024, no options or restricted share units under the 2020 Equity Incentive Plan had been granted. C. Board Practices Our board of directors consists of six directors, including four executive directors and two non-executive directors. We also promote gender diversity among our board members.
The equity pledge agreement remains in full force and effect until all of the obligations under the contractual arrangements have been duly performed or the guaranteed debts are duly paid. The pledge of equity interests in Lishui Mengxiang has been duly registered with the local branch of SAIC and is effective upon such registration. 115 Acknowledge Agreement.
The equity pledge agreement remains in full force and effect until all of the obligations under the contractual arrangements have been duly performed or the guaranteed debts are duly paid. The pledge of equity interests in Lishui Mengxiang has been duly registered with the local branch of SAIC and is effective upon such registration. 118 Acknowledge Agreement.
Therefore, we act as a principal, and recognize revenue in the gross amount of consideration to which it expects to be entitled in exchange for the specified services transferred. 135 Course Design, Development and Training The VIE, Hainan Jiangcai, jointly designs and develops curriculum and training programs with Hainan Technical School.
Therefore, we act as a principal, and recognize revenue in the gross amount of consideration to which it expects to be entitled in exchange for the specified services transferred. 138 Course Design, Development and Training The VIE, Hainan Jiangcai, jointly designs and develops curriculum and training programs with Hainan Technical School.
Heng graduated from Nanyang Technological University with a bachelor’s degree in Accountancy (Honors). He is also an alumni of Harvard Business School and attended its General Management Program. He is a Chartered Financial Analyst (CFA), Chartered Accountant (CA), Financial Risk Manager (FRM) and a member of Singapore Institute of Directors. Mr.
Heng graduated from Nanyang Technological University with a bachelor’s degree in Accountancy (Honors). He is also an alumnus of Harvard Business School and attended its General Management Program. He is a Chartered Financial Analyst (CFA), Chartered Accountant (CA), Financial Risk Manager (FRM) and a member of Singapore Institute of Directors. Mr.
We deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023. 112 On March 28, 2023, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Beijing P.X. and Langfang School, shareholders of Beijing P.X. and the Council Members of Langfang School.
We deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023. 115 On March 28, 2023, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Beijing P.X. and Langfang School, shareholders of Beijing P.X. and the Council Members of Langfang School.
Hong Kong Our Hong Kong subsidiary, Hong Kong Mengxiang Education Development Group Limited, is located in Hong Kong and is subject to an income tax rate of 16.5% for its estimated assessable profit for the years ended December 31, 2021, 2022 and 2023. Dividend income received from subsidiaries in China is not subject to Hong Kong profit tax.
Hong Kong Our Hong Kong subsidiary, Hong Kong Mengxiang Education Development Group Limited, is located in Hong Kong and is subject to an income tax rate of 16.5% for its estimated assessable profit for the years ended December 31, 2022, 2023 and 2024. Dividend income received from subsidiaries in China is not subject to Hong Kong profit tax.
Our expected credit loss for receivables and other assets amounted to RMB65.1 million (US$9.2 million) in 2023, primarily because the collectability from Beijing S.K. is remote as its lacks profitability and financing capacity, and therefore we made full provision for receivables from Beijing S.K.. Loss from operations .
Expected credit loss for receivables and other assets. Our expected credit loss for receivables and other assets amounted to RMB65.1 million (US$9.2 million) in 2023, primarily because the collectability from Beijing S.K. is remote as it lacks profitability and financing capacity, and therefore we made full provision for receivables from Beijing S.K. Loss from operations .
In such cases, where a existing enterprise issues securities in the same overseas market after its initial public offering and listing overseas, it shall file with the CSRC within three working days of completion of issuance; where a existing enterprise issues securities in other overseas markets after its initial public offering and listing overseas, it shall file with the CSRC within three working days of submission of application documents for initial public offering and listing overseas. 109 C.
In such cases, where a existing enterprise issues securities in the same overseas market after its initial public offering and listing overseas, it shall file with the CSRC within three working days of completion of issuance; where a existing enterprise issues securities in other overseas markets after its initial public offering and listing overseas, it shall file with the CSRC within three working days of submission of application documents for initial public offering and listing overseas. 112 C.
(4) According to PRC laws and regulations, entities and individuals who establish private schools are commonly referred to as “sponsors” instead of “owners” or “shareholders.” The economic substance of “sponsorship” with respect to private schools is substantially similar to that of ownership with regard to legal, regulatory and tax matters.
(3) According to PRC laws and regulations, entities and individuals who establish private schools are commonly referred to as “sponsors” instead of “owners” or “shareholders.” The economic substance of “sponsorship” with respect to private schools is substantially similar to that of ownership with regard to legal, regulatory and tax matters.
Fen Ye served as a director of Liandu Foreign Language School Kindergarten from 2014 to 2018. Mr. Biao Wei , aged 52, is the spouse of Ms. Fen Ye and has served as our director since September 2018. Mr. Biao Wei joined us in August 2001 as the general manager of Lishui Mengxiang. Mr.
Fen Ye served as a director of Liandu Foreign Language School Kindergarten from 2014 to 2018. Mr. Biao Wei , aged 53, is the spouse of Ms. Fen Ye and has served as our director since September 2018. Mr. Biao Wei joined us in August 2001 as the general manager of Lishui Mengxiang. Mr.
For-profit human resources service institutions engaging in labor dispatch business shall comply with the relevant labor dispatch provisions of the State. 99 Regulations on Labor Dispatch Services The Measures for the Implementation of Administrative License for Labor Dispatch promulgated by the MHRSS on June 20, 2013 and became effective on July 1, 2013.
For-profit human resources service institutions engaging in labor dispatch business shall comply with the relevant labor dispatch provisions of the State. 102 Regulations on Labor Dispatch Services The Measures for the Implementation of Administrative License for Labor Dispatch promulgated by the MHRSS on June 20, 2013 and became effective on July 1, 2013.
As a result of the foregoing, our gross profit increased by 318.2% from RMB0.9 million in 2022 to RMB4.0 million (US$0.6 million) in 2023. Our gross margin increased from 2.3% in 2022 to 7.8% in 2023, primarily due to increased profit from Langfang School and Hainan Jiangcai. General and administrative expenses .
Gross profit . As a result of the foregoing, our gross profit increased by 318.2% from RMB0.9 million in 2022 to RMB4.0 million in 2023. Our gross margin increased from 2.3% in 2022 to 7.8% in 2023, primarily due to increased profit from Langfang School and Hainan Jiangcai. General and administrative expenses .
Seasonality Our financial performance is subject to seasonality as each of the school years includes a winter holiday between December and January and a summer holiday between July and August. Our net income and results of operations normally fluctuate from quarter to quarter as a result of seasonal variations in our education operations.
Seasonality Our financial performance is subject to seasonality as each of the school years includes a winter holiday between December and January and a summer holiday between July and August. Our net loss and results of operations normally fluctuate from quarter to quarter as a result of seasonal variations in our education operations.
One-half of the shares subject to an option will vest on each of the first and second annual anniversaries of the vesting commencement date, unless otherwise provided in the award agreement. 144 Restricted Shares A restricted share award agreement will specify restrictions on the duration of the restricted period and the number of shares granted.
One-half of the shares subject to an option will vest on each of the first and second annual anniversaries of the vesting commencement date, unless otherwise provided in the award agreement. 147 Restricted Shares A restricted share award agreement will specify restrictions on the duration of the restricted period and the number of shares granted.
Teck Yong Heng , aged 50, has served as our independent director since September 30, 2020. Mr. Heng currently serves as the managing partner of C 2 Partners, or C-Squared Partners, a China focused consumer sector private equity fund.
Teck Yong Heng , aged 51, has served as our independent director since September 30, 2020. Mr. Heng currently serves as the managing partner of C 2 Partners, or C-Squared Partners, a China focused consumer sector private equity fund.
In addition, unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or its shareholders unilaterally, but may only be terminated by Liandu WFOE after notice in advance. 113 Proxy Agreement for School’s Sponsors and Council Members.
In addition, unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or its shareholders unilaterally, but may only be terminated by Liandu WFOE after notice in advance. 116 Proxy Agreement for School’s Sponsors and Council Members.
Fen Ye , aged 52, is our founder and has served as our chairlady and director since September 2018. Ms. Fen Ye founded the Company in August 2001 by establishing Lishui Mengxiang. Since 2003, Ms. Fen Ye has served as a director, chairlady and legal representative of Lianwai School. Ms.
Fen Ye , aged 53, is our founder and has served as our chairlady and director since September 2018. Ms. Fen Ye founded the Company in August 2001 by establishing Lishui Mengxiang. Since 2003, Ms. Fen Ye has served as a director, chairlady and legal representative of Lianwai School. Ms.
We offer high school curriculum programs and accommodation service to the students, and generally charges the students tuition and accommodation fees prior to the beginning of each semester. During the stay in school, Qingtian High School offers students with meals, and meal fees are collected each time students had meal.
We offer high school curriculum programs and accommodation service to the students, and generally charge the students tuition and accommodation fees prior to the beginning of each semester. During the stay in school, Qingtian High School offers students with meals, and meal fees are collected each time students had meal.
Beijing P.X., Chuangmei Weiye, Hainan Jiangcai, Langfang School and Hebei Chuangxiang are qualified small-size enterprises for the year ended December 31, 2023. See “ Item 4. Information on the Company—B.
Beijing P.X., Chuangmei Weiye, Hainan Jiangcai, Langfang School and Hebei Chuangxiang are qualified small-size enterprises for the year ended December 31, 2024. See “ Item 4. Information on the Company—B.
Business Overview—Regulation—Regulations on Taxation in the PRC. ” 129 Results of Operations The following table sets forth a summary of our consolidated results of operations by amount and as a percentage of total revenue for the periods indicated.
Business Overview—Regulation—Regulations on Taxation in the PRC. ” 132 Results of Operations The following table sets forth a summary of our consolidated results of operations by amount and as a percentage of total revenue for the periods indicated.
In 2023, we had net cash used in operating activities from continuing operations of RMB66.9 million (US$9.4 million) which is primarily attribute to net loss of RMB127.0 million (US$17.9 million) adjusted by impairment loss of goodwill of RMB22.7 million (US$3.2 million), provision for doubtful accounts of RMB65.1 million (US$9.2 million) of receivables from Beijing S.K. and changes in the working capital accounts mainly included an increase in amounts due from Qingtian International School of RMB10.8 million (US$1.5 million) due to deconsolidation, a decrease in amounts due to Lianwai School of RMB60.4 million (US$8.5 million) due to repayment, partly offset by a decrease in prepayments and other current assets of RMB5.2 million (US$0.7 million) and an increase in amounts due to a related party of $7.7 million (US$1.1 million). 138 In 2022, we had net cash provided by operating activities from continuing operations of RMB41.3 million (US$6.0 million) which is primarily attribute to net loss of RMB8.1 million (US$1.2 million) adjusted by impairment loss of goodwill of RMB18.8 million (US$2.7 million), and changes in the working capital accounts mainly included an increase in amounts due to Lianwai School of RMB54.6 million (US$7.9 million), partly offset by fair value change of contingent consideration of RMB22.9 million (US$3.3 million), a decrease in accrued liabilities and other current liabilities of RMB4.6 million (US$0.7 million), a decrease in lease payment liabilities of RMB3.9 million (US$0.6 million) and a decrease in accounts payable of RMB3.6 million (US$0.5 million).
In 2023, we had net cash used in operating activities from continuing operations of RMB66.9 million which is primarily attribute to net loss of RMB127.0 million adjusted by impairment loss of goodwill of RMB22.7 million, provision for doubtful accounts of RMB65.1 million of receivables from Beijing S.K. and changes in the working capital accounts mainly included an increase in amounts due from Qingtian International School of RMB10.8 million due to deconsolidation, a decrease in amounts due to Lianwai School of RMB60.4 million due to repayment, partially offset by a decrease in prepayments and other current assets of RMB5.2 million and an increase in amounts due to a related party of $7.7 million. 141 In 2022, we had net cash provided by operating activities from continuing operations of RMB41.3 million which is primarily attribute to net loss of RMB8.1 million adjusted by impairment loss of goodwill of RMB18.8 million, and changes in the working capital accounts mainly included an increase in amounts due to Lianwai School of RMB54.6 million, partly offset by fair value change of contingent consideration of RMB22.9 million, a decrease in accrued liabilities and other current liabilities of RMB4.6 million, a decrease in lease payment liabilities of RMB3.9 million and a decrease in accounts payable of RMB3.6 million.
In addition, unless otherwise stipulated by laws, this agreement may not be terminated by VIEs or the shareholders, but may only be terminated by Liandu WFOE after notice in advance. 119 Exclusive Technical Service and Business Consulting Agreement.
In addition, unless otherwise stipulated by laws, this agreement may not be terminated by VIEs or the shareholders, but may only be terminated by Liandu WFOE after notice in advance. 122 Exclusive Technical Service and Business Consulting Agreement.
Chuangmei Weiye and Heibei Chuangxiang charge service fees from clients based on service periods at a fixed rate per day, and recognize revenue at the point of time or overtime whenever the service requirement is satisfied.
Chuangmei Weiye and Hebei Chuangxiang charge service fees from clients based on service periods at a fixed rate per day, and recognize revenue at the point of time or overtime whenever the service requirement is satisfied.
Organizational Structure The following diagram illustrates our corporate structure, including our subsidiaries and consolidated affiliated entities as of the date of the annual report: 110 Notes: (1) Lishui Mengxiang holds 100% of the sponsorship interests of Lishui International School.
Organizational Structure The following diagram illustrates our corporate structure, including our subsidiaries and consolidated affiliated entities as of the date of the annual report: 113 Notes: (1) Lishui Mengxiang holds 100% of the sponsorship interests of Lishui International School.
As a result of the foregoing, our loss from continuing operations, net of tax increased by 944.3% from RMB9.9 million in 2022 to RMB103.6 million (US$14.6 million) in 2023. (Loss)/income from discontinued operation, net of tax.
As a result of the foregoing, our loss from continuing operations, net of tax increased by 944.3% from RMB9.9 million in 2022 to RMB103.6 million in 2023. (Loss)/income from discontinued operation, net of tax.
Lee has over 20 years of abundant experience in the banking and financial industry as well as public relations and market strategy. Mr. Lee has been the director of Hoyan Group International Limited since September 2016. Mr.
Lee has over 20 years of abundant experience in the banking and financial industry as well as public relations and market strategy. Mr. Lee has served as the director of Hoyan Group International Limited since September 2016. Mr.
Each committee’s members and functions are described below. 145 Audit Committee. Our audit committee consists of three directors, namely Mr. Teck Yong Heng, Mr. Yan Kit Lee and Mr. Guoliang Chen. The audit committee is chaired by Mr. Teck Yong Heng. Each of Mr. Teck Yong Heng and Mr.
Each committee’s members and functions are described below. 148 Audit Committee. Our audit committee consists of three directors, namely Mr. Teck Yong Heng, Mr. Yan Kit Lee and Mr. Guoliang Chen. The audit committee is chaired by Mr. Teck Yong Heng. Each of Mr. Teck Yong Heng and Mr.
Risk Factors—Risks Relating to Doing Business in China—Fluctuations in exchange rates may result in foreign currency exchange losses and may have a material adverse effect on your investment.” and “Item 11. Quantitative and Qualitative Disclosures about Market Risk—Foreign Exchange Risk.” Impact of Governmental Policies See “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China” and “Item 4.
Risk Factors—Risks Relating to Doing Business in China—Fluctuations in exchange rates may result in foreign currency exchange losses and may have a material adverse effect on your investment .” and “ Item 11. Quantitative and Qualitative Disclosures about Market Risk—Foreign Exchange Risk .” Impact of Governmental Policies See “Item 3. Key Information—D.
Trend Information Other than as disclosed elsewhere in this annual report on Form 20-F, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2023 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. 140 E.
Trend Information Other than as disclosed elsewhere in this annual report on Form 20-F, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2024 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Sponsors of non-profit private schools are not entitled to any distribution of profits from their schools and all revenue must be used for the operation of the schools.
Sponsors of non-profit private schools are not entitled to any distribution of profits from their schools and all revenue must be used for the operation of the schools.
Under the 2021 Implementation Rules which took effect on September 1, 2021, social organizations and individuals are prohibited from controlling a private school that provides compulsory education by means of, among others, merger, acquisition, and contractual arrangements, and a private school providing compulsory education is prohibited from conducting transactions with its related party.
Under the 2021 Implementation Rules which took effect on September 1, 2021, social organizations and individuals are prohibited from controlling a private school that provides compulsory education by means of, among others, merger, acquisition, and contractual arrangements, and a private school providing compulsory education is prohibited from conducting transactions with its related party.
In particular, the prohibition over related party transactions has significantly affected the enforceability of the exclusive management services and business cooperation agreements among Liandu WFOE and Lianwai School providing compulsory education. Therefore, we re-assessed our control over Lianwai School. Based on the relevant accounting standard in accordance with U.S.
In particular, the prohibition over related party transactions has significantly affected the enforceability of the exclusive management services and business cooperation agreements among Liandu WFOE and Lianwai School providing compulsory education. Therefore, we re-assessed our control over Lianwai School. Based on the relevant accounting standard in accordance with U.S.
GAAP, we have concluded that we have lost control of Lianwai School since August 31, 2021, in view of the significant uncertainties and restrictions the 2021 Implementation Rules impose on our ability to direct the range of ongoing activities that would most significantly impact the returns of Lianwai School.
GAAP, we have concluded that we have lost control of Lianwai School since August 31, 2021, in view of the significant uncertainties and restrictions the 2021 Implementation Rules impose on our ability to direct the range of ongoing activities that would most significantly impact the returns of Lianwai School.
In light of such regulatory developments, on April 20, 2022, we entered into an acknowledgment agreement of contractual agreements with Lianwai School and respective directors, to confirm all the terms of rights and obligations relating to Lianwai School and the directors appointed by the sponsor under the contractual arrangements in relation to Lianwai School, and agree among the parties that such arrangements shall have been terminated on August 31, 2021.
In light of such regulatory developments, on April 20, 2022, we entered into an acknowledgment agreement of contractual agreements with Lianwai School and respective directors, to confirm all the terms of rights and obligations relating to Lianwai School and the directors appointed by the sponsor under the contractual arrangements in relation to Lianwai School, and agree among the parties that such arrangements shall have been terminated on August 31, 2021.
On November 5, 2023, Lishui Mengxiang elected to exercise the right to sell 100% of the equity interests of Chuangmei Weiye back to Beijing S.K. and its affiliates pursuant to that certain supplementary agreement by and among Lishui Mengxiang, Beijing S.K., certain affiliates of Beijing S.K. and Beijing P.X. dated August 20, 2023, primarily due to the substantial amount of Chuangmei Weiye’s historical debts.
On November 5, 2023, Lishui Mengxiang elected to exercise the right to sell 100% of the equity interests of Chuangmei Weiye back to Beijing S.K. and its affiliates pursuant to that certain supplementary agreement by and among Lishui Mengxiang, Beijing S.K., certain affiliates of Beijing S.K. and Beijing P.X. dated August 20, 2023, primarily due to the substantial amount of Chuangmei Weiye’s historical debts.
On August 17, 2020, MOE, NDRC, the Ministry of Finance, and the State Administration for Industry and Commerce or the SAMR, and the General Administration of Press and Publication jointly released the Opinions on Further Strengthening and Regulating the Administration of Education Fees, or the Opinions, effective as of the same date.
On August 17, 2020, MOE, NDRC, the Ministry of Finance, and the State Administration for Industry and Commerce or the SAMR, and the General Administration of Press and Publication jointly released the Opinions on Further Strengthening and Regulating the Administration of Education Fees, or the Education Fees Opinions, effective as of the same date.
Under the deposit agreement for the ADSs, if you do not give timely voting instructions to the depositary to direct how the ordinary shares underlying your ADSs are voted, the depositary shall deem you to have instructed the depositary to give us a discretionary proxy to vote the ordinary shares underlying your ADSs at shareholders’ meetings unless: ● we have instructed the depositary that we do not wish a discretionary proxy to be given; ● we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; ● a matter to be voted on at the meeting would have a material adverse impact on shareholders; or ● the voting at the meeting is to be made on a show of hands.
Under the deposit agreement for the ADSs, if you do not give timely voting instructions to the depositary to direct how the Class A ordinary shares underlying your ADSs are voted, the depositary shall deem you to have instructed the depositary to give us a discretionary proxy to vote the Class A ordinary shares underlying your ADSs at shareholders’ meetings unless: ● we have instructed the depositary that we do not wish a discretionary proxy to be given; ● we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; ● a matter to be voted on at the meeting would have a material adverse impact on shareholders; or ● the voting at the meeting is to be made on a show of hands.
In addition, under our memorandum and articles of association, for the purposes of determining those shareholders who are entitled to attend and vote at any general meeting, our directors may close our register of members and fix in advance a record date for such meeting, and such closure of our register of members or the setting of such a record date may prevent you from withdrawing the ordinary shares underlying your ADSs and becoming the registered holder of such shares prior to the record date, so that you would not be able to attend the general meeting or to vote directly.
In addition, under our memorandum and articles of association, for the purposes of determining those shareholders who are entitled to attend and vote at any general meeting, our directors may close our register of members and fix in advance a record date for such meeting, and such closure of our register of members or the setting of such a record date may prevent you from withdrawing the Class A ordinary shares underlying your ADSs and becoming the registered holder of such shares prior to the record date, so that you would not be able to attend the general meeting or to vote directly.
Furthermore, securities markets may from time to time experience significant price and volume fluctuations that are not related to our operating performance, which may have a material and adverse effect on the trading price of our ADSs. 69 In addition to the above factors, the price and trading volume of our ADSs may be highly volatile due to multiple factors, including the following: ● regulatory developments affecting us or our industry; ● variations in our revenue, profit, and cash flow; ● changes in the economic performance or market valuations of other education service providers; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; ● detrimental negative publicity about us, our services, our officers, directors, Controlling Shareholder, or our industry; ● announcements by us or our competitors of new service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● potential litigation or regulatory proceedings involving us, our officers, directors, or controlling shareholder; ● negative publicity on our direct and indirect shareholders; ● release or expiry of lock-up or other transfer restrictions on our outstanding shares or our ADSs; and ● sales or perceived potential sales of additional ordinary shares or ADSs.
Furthermore, securities markets may from time to time experience significant price and volume fluctuations that are not related to our operating performance, which may have a material and adverse effect on the trading price of our ADSs. 71 In addition to the above factors, the price and trading volume of our ADSs may be highly volatile due to multiple factors, including the following: ● regulatory developments affecting us or our industry; ● variations in our revenue, profit, and cash flow; ● changes in the economic performance or market valuations of other education service providers; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; ● detrimental negative publicity about us, our services, our officers, directors, Controlling Shareholder, or our industry; ● announcements by us or our competitors of new service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● potential litigation or regulatory proceedings involving us, our officers, directors, or controlling shareholder; ● negative publicity on our direct and indirect shareholders; ● release or expiry of lock-up or other transfer restrictions on our outstanding shares or our ADSs; and ● sales or perceived potential sales of additional ordinary shares or ADSs.
This forum selection clause does not apply to claims under the Securities Exchange Act of 1934, which are subject to the exclusive jurisdiction of U.S. federal district courts, and it does not require investors to waive the requirements of the U.S. federal securities laws. 75 In addition, the forum selection provision in our memorandum and articles of association provides that the courts of the Cayman Islands shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or its members, (iii) any action asserting a claim arising pursuant to any provision of the Companies Act (As Revised) of the Cayman Islands or the memorandum and articles of association including but not limited to any purchase or acquisition of Shares, security or guarantee provided in consideration thereof, or (iv) any action asserting a claim against the Company which if brought in the United States of America would be a claim arising under the internal affairs doctrine (as such concept is recognized under the laws of the United States of America from time to time).
This forum selection clause does not apply to claims under the Securities Exchange Act of 1934, which are subject to the exclusive jurisdiction of U.S. federal district courts, and it does not require investors to waive the requirements of the U.S. federal securities laws. 78 In addition, the forum selection provision in our memorandum and articles of association provides that the courts of the Cayman Islands shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or its members, (iii) any action asserting a claim arising pursuant to any provision of the Companies Act (As Revised) of the Cayman Islands or the memorandum and articles of association including but not limited to any purchase or acquisition of Shares, security or guarantee provided in consideration thereof, or (iv) any action asserting a claim against the Company which if brought in the United States of America would be a claim arising under the internal affairs doctrine (as such concept is recognized under the laws of the United States of America from time to time).
The deposit agreement governing the ADSs representing our ordinary shares provides that, to the fullest extent permitted by applicable law, holders and beneficial owners of ADSs irrevocably waive the right to a jury trial of any claim that they may have against us or the depositary arising from or relating to our ordinary shares, our ADSs or the deposit agreement, including any claim under the U.S. federal securities laws.
The deposit agreement governing the ADSs representing our Class A ordinary shares provides that, to the fullest extent permitted by applicable law, holders and beneficial owners of ADSs irrevocably waive the right to a jury trial of any claim that they may have against us or the depositary arising from or relating to our Class A ordinary shares, our ADSs or the deposit agreement, including any claim under the U.S. federal securities laws.
Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; ● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material nonpublic information under Regulation FD. 76 We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year.
Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; ● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material nonpublic information under Regulation FD. 79 We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year.
Operating Results .” Qingtian International School Our high school curriculum programs offered at Qingtian International School are designed for students from overseas Chinese families returning to China who are commonly known as the overseas Chinese returnees. The increasing population of overseas Chinese returnees and their immediate relatives in Zhejiang Province provides a growing opportunity in the private education industry.
Operating Results .” Qingtian International School The high school curriculum programs offered at Qingtian International School are designed for students from overseas Chinese families returning to China who are commonly known as the overseas Chinese returnees. The increasing population of overseas Chinese returnees and their immediate relatives in Zhejiang Province provides a growing opportunity in the private education industry.
Further, as far as we know, relevant authorities in Zhejiang Province or Hebei Province have not approved any establishment of Sino-foreign cooperative high school or vocational school in at least past five years. Therefore, we can only consolidate Qingtian International School, Lishui International School and Langfang School through the contractual arrangements in accordance with U.S.
Further, as far as we know, relevant authorities in Zhejiang Province or Hebei Province have not approved any establishment of Sino-foreign cooperative high school or vocational school in at least past five years. Therefore, we can only consolidate Lishui International School and Langfang School through the contractual arrangements in accordance with U.S.
In particular, the part of provisions on improving the governance mechanism for education fee charges stipulate that “efforts shall be made to explore the establishment of a special audit system for school fees, with the focus on the audit of non-profit privately-run schools, and the sponsors of non-profit privately-run schools and non-profit privately-run sino-foreign cooperative educators shall be prohibited from obtaining proceeds from school-running such as tuition income, distributing school balances (residual assets) or transferring proceeds from school running through related-party transactions or affiliated parties or other means.” The Opinions have not specified whether the contractual arrangements fall within the activities of transferring the school-running proceeds through related-party transactions and affiliated parties, and the Opinions have not specified the relevant legal consequences of such activities. 91 For a detailed discussion on how the above laws and regulations will affect our school, see “
In particular, the part of provisions on improving the governance mechanism for education fee charges stipulate that “efforts shall be made to explore the establishment of a special audit system for school fees, with the focus on the audit of non-profit privately-run schools, and the sponsors of non-profit privately-run schools and non-profit privately-run sino-foreign cooperative educators shall be prohibited from obtaining proceeds from school-running such as tuition income, distributing school balances (residual assets) or transferring proceeds from school running through related-party transactions or affiliated parties or other means.” The Education Fees Opinions have not specified whether the contractual arrangements fall within the activities of transferring the school-running proceeds through related-party transactions and affiliated parties, and the Education Fees Opinions have not specified the relevant legal consequences of such activities. 94 For a detailed discussion on how the above laws and regulations will affect our school, see “
To the extent that there is a distribution, the depositary has agreed to pay you the cash dividends or other distributions it or the custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent.
To the extent that there is a distribution, the depositary has agreed to pay you the cash dividends or other distributions it or the custodian receives on our Class A ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of Class A ordinary shares your ADSs represent.
When a general meeting is convened, you may not receive sufficient advance notice of the meeting to withdraw the ordinary shares underlying your ADSs and become the registered holder of such shares to allow you to vote directly with respect to any specific matter or resolution to be considered and voted upon at the general meeting.
When a general meeting is convened, you may not receive sufficient advance notice of the meeting to withdraw the Class A ordinary shares underlying your ADSs and become the registered holder of such shares to allow you to vote directly with respect to any specific matter or resolution to be considered and voted upon at the general meeting.
There can be no assurance that we will not be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in the ADSs or ordinary shares to significant adverse United States federal income tax consequences.
There can be no assurance that we will not be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in the ADSs or Class A ordinary shares to significant adverse United States federal income tax consequences.
Further, if we are a PFIC for any year during which a U.S. Holder holds our ADSs or our ordinary shares, we will generally continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or our ordinary shares. For more information, see “ Item 10. Additional Information—E.
Further, if we are a PFIC for any year during which a U.S. Holder holds our ADSs or our Class A ordinary shares, we will generally continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or our Class A ordinary shares. For more information, see “ Item 10. Additional Information—E.
If any or all of the foregoing were to occur, and if our Hong Kong subsidiary elects to carry out substantive business activities in the future, it could lead to a material adverse change in Lixiang’s operations and limit or hinder our ability to offer securities to overseas investors or remain listed in the U.S., which could cause the value of our ADSs to significantly decline or become worthless. 66 Based on the recent development of PRC law, there is significant uncertainty about the application and interpretation of the Law on the Promotion of Private Education, the 2021 Implementation Rules and their detailed implementation rules and regulations.
If any or all of the foregoing were to occur, and if our Hong Kong subsidiary elects to carry out substantive business activities in the future, it could lead to a material adverse change in Lixiang’s operations and limit or hinder our ability to offer securities to overseas investors or remain listed in the U.S., which could cause the value of our ADSs to significantly decline or become worthless. 68 Based on the recent development of PRC law, there is significant uncertainty about the application and interpretation of the Law on the Promotion of Private Education, the 2021 Implementation Rules and their detailed implementation rules and regulations.
Students as overseas Chinese returnees have the opportunity to attend the PRC Joint Recruitment Examination for overseas Chinese returnees and students in Hong Kong, Macau and Taiwan as a parallel track to the college entrance exam taken by local students, and therefore we believe our graduates who are overseas Chinese returnees have a better opportunity to attend China’s top universities, which in turn enhances our and the VIEs’ schools’ reputation in the industry and improves our prospects. 81 As a boarding school specialized in providing high school education to overseas Chinese returnees, Qingtian International School provides high school education by small-class teaching method and semi-military management, enabling its students to gain admission to the most prestigious colleges and universities.
Students as overseas Chinese returnees have the opportunity to attend the PRC Joint Recruitment Examination for overseas Chinese returnees and students in Hong Kong, Macau and Taiwan as a parallel track to the college entrance exam taken by local students, and therefore we believe our graduates who are overseas Chinese returnees have a better opportunity to attend China’s top universities, which in turn enhances our and the VIEs’ schools’ reputation in the industry and improves our prospects. 84 As a boarding school specialized in providing high school education to overseas Chinese returnees, Qingtian International School provides high school education by small-class teaching method and semi-military management, enabling its students to gain admission to the most prestigious colleges and universities.
Our memorandum and articles of association contain anti-takeover provisions that could discourage a third party from acquiring us, which could limit our shareholders’ opportunity to sell their ordinary shares, including ordinary shares represented by the ADSs, at a premium.
Our memorandum and articles of association contain anti-takeover provisions that could discourage a third party from acquiring us, which could limit our shareholders’ opportunity to sell their Class A ordinary shares, including Class A ordinary shares represented by the ADSs, at a premium.
The depositary may refuse to deliver, transfer or register transfers of the ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason. 74 You may experience difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited as we are incorporated under the Cayman Islands law.
The depositary may refuse to deliver, transfer or register transfers of the ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason. 77 You may experience difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited as we are incorporated under the Cayman Islands law.
Pursuant to the 2020 Negative List, ordinary high school education are restricted industries for foreign investors, and foreign investments are only allowed to invest in ordinary high school education in cooperative ways and the domestic party shall play a dominant role in the cooperation, which means the principal or other chief executive officer of the schools shall be a PRC national and the representative of the domestic party shall account for no less than half of the total members of the board of directors, the executive council or the joint administration committee of the Sino-foreign cooperative educational institution.
Pursuant to the 2021 Negative List, ordinary high school education are restricted industries for foreign investors, and foreign investments are only allowed to invest in ordinary high school education in cooperative ways and the domestic party shall play a dominant role in the cooperation, which means the principal or other chief executive officer of the schools shall be a PRC national and the representative of the domestic party shall account for no less than half of the total members of the board of directors, the executive council or the joint administration committee of the Sino-foreign cooperative educational institution.
In such cases, where an existing enterprise issues securities in the same overseas market after its initial public offering and listing overseas, it shall file with the CSRC within three working days of completion of issuance; where an existing enterprise issues securities in other overseas markets after its initial public offering and listing overseas, it shall file with the CSRC within three working days of submission of application documents for initial public offering and listing overseas. 65 As advised by our PRC legal counsel, Beijing DeHeng Law Offices, since we are existing enterprises, we are not required to fulfill the filing procedures for our initial public offering in 2020.
In such cases, where an existing enterprise issues securities in the same overseas market after its initial public offering and listing overseas, it shall file with the CSRC within three working days of completion of issuance; where an existing enterprise issues securities in other overseas markets after its initial public offering and listing overseas, it shall file with the CSRC within three working days of submission of application documents for initial public offering and listing overseas. 67 As advised by our PRC legal counsel, Beijing DeHeng Law Offices, since we are existing enterprises, we are not required to fulfill the filing procedures for our initial public offering in 2020.
For example, our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares, in the form of ADSs or otherwise.
For example, our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Class A ordinary shares, in the form of ADSs or otherwise.
If a lawsuit is brought against us or the depositary according to the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may have different outcomes compared to that of a jury trial, including results that could be less favorable to the plaintiff(s) in any such action. 73 Moreover, as the jury trial waiver relates to claims arising out of or relating to the ADSs or the deposit agreement, we believe that, as a matter of construction of the clause, the waiver would likely continue to apply to ADS holders who withdraw the ordinary shares from the ADS facility with respect to claims arising before the cancelation of the ADSs and the withdrawal of the ordinary shares, and the waiver would most likely not apply to ADS holders who subsequently withdraw the ordinary shares represented by ADSs from the ADS facility with respect to claims arising after the withdrawal.
If a lawsuit is brought against us or the depositary according to the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may have different outcomes compared to that of a jury trial, including results that could be less favorable to the plaintiff(s) in any such action. 76 Moreover, as the jury trial waiver relates to claims arising out of or relating to the ADSs or the deposit agreement, we believe that, as a matter of construction of the clause, the waiver would likely continue to apply to ADS holders who withdraw the Class A ordinary shares from the ADS facility with respect to claims arising before the cancelation of the ADSs and the withdrawal of the Class A ordinary shares, and the waiver would most likely not apply to ADS holders who subsequently withdraw the Class A ordinary shares represented by ADSs from the ADS facility with respect to claims arising after the withdrawal.
To expand our and the VIE's business into vocational education, Lishui Mengxiang entered into definitive agreements to acquire 100% of the equity interests of Beijing P.X. on January 1, 2022, which was a wholly-owned subsidiary of Beijing S.K. at the time, so that after the transaction, Lishui Mengxiang through its shareholding of Beijing P.X. would in turn hold 100% of the equity interests of Chuangmei Weiye and Hainan Jiangcai, and 100% of the sponsorship interests of Langfang School.
To expand our and the VIEs’ business into vocational education, Lishui Mengxiang entered into definitive agreements to acquire 100% of the equity interests of Beijing P.X. on January 1, 2022, which was a wholly-owned subsidiary of Beijing S.K. at the time, so that after the transaction, Lishui Mengxiang through its shareholding of Beijing P.X. would in turn hold 100% of the equity interests of Chuangmei Weiye and Hainan Jiangcai, and 100% of the sponsorship interests of Langfang School.
The Personal Information Protection Law includes the basic rules for personal information processing, the rules for cross-border provision of personal information, the rights of individuals in personal information processing activities, the obligations of personal information processors, and the legal responsibilities for illegal collection, processing, and use of personal information. 68 On December 28, 2021, thirteen PRC governmental and regulatory agencies, including the CAC published the Measures for Cyber Security Review which further restates and expands the applicable scope of the cybersecurity review.
The Personal Information Protection Law includes the basic rules for personal information processing, the rules for cross-border provision of personal information, the rights of individuals in personal information processing activities, the obligations of personal information processors, and the legal responsibilities for illegal collection, processing, and use of personal information. 70 On December 28, 2021, thirteen PRC governmental and regulatory agencies, including the CAC published the Measures for Cyber Security Review which further restates and expands the applicable scope of the cybersecurity review.
After the transaction, the amount of RMB6.36 million has been added to the total debts owed by Beijing S.K. to Lishui Mengxiang. 85 Hebei Chuangxiang On January 6, 2023, Beijing P.X. established Hebei Chuangxiang as its wholly-owned subsidiary to expand the comprehensive human resources services business. Hebei Chuangxiang is a human resources services provider for internship and employment recommendations.
After the transaction, the amount of RMB6.36 million has been added to the total debts owed by Beijing S.K. to Lishui Mengxiang. 88 Hebei Chuangxiang On January 6, 2023, Beijing P.X. established Hebei Chuangxiang as its wholly-owned subsidiary to expand the comprehensive human resources services business. Hebei Chuangxiang is a human resources services provider for internship and employment recommendations.
Regulations on Sino-Foreign Cooperation in operating school Pursuant to the 2021 Negative List, ordinary high school education are restricted industries for foreign investors, and foreign investments are only allowed to invest in ordinary high school education in cooperative ways and the domestic party shall play a dominant role in the cooperation, which means the principal or other chief executive officer of the schools shall be a PRC national and the representative of the domestic party shall account for no less than half of the total members of the board of directors, the executive council or the joint administration committee of the Sino-foreign cooperative educational institution. 88 Sino-foreign cooperation in operating schools is specifically governed by the Regulation on Operating Sino-foreign Schools of the PRC, which was promulgated by the State Council on March 1, 2003, took effect from September 1, 2003 and recently amended on March 2, 2019, and the Implementing Rules for the Regulations on Operating Sino-foreign Schools of the PRC, or the Implementing Rules, which were issued by the Ministry of Education of the PRC, or the MOE on June 2, 2004 and became effective on July 1, 2004.
Regulations on Sino-Foreign Cooperation in operating school Pursuant to the 2024 Negative List, ordinary high school education are restricted industries for foreign investors, and foreign investments are only allowed to invest in ordinary high school education in cooperative ways and the domestic party shall play a dominant role in the cooperation, which means the principal or other chief executive officer of the schools shall be a PRC national and the representative of the domestic party shall account for no less than half of the total members of the board of directors, the executive council or the joint administration committee of the Sino-foreign cooperative educational institution. 91 Sino-foreign cooperation in operating schools is specifically governed by the Regulation on Operating Sino-foreign Schools of the PRC, which was promulgated by the State Council on March 1, 2003, took effect from September 1, 2003 and recently amended on March 2, 2019, and the Implementing Rules for the Regulations on Operating Sino-foreign Schools of the PRC, or the Implementing Rules, which were issued by the Ministry of Education of the PRC, or the MOE on June 2, 2004 and became effective on July 1, 2004.
The waiver continues to apply to claims that arise during the period when a holder holds the ADSs, even if the ADS holder subsequently withdraws the underlying ordinary shares.
The waiver continues to apply to claims that arise during the period when a holder holds the ADSs, even if the ADS holder subsequently withdraws the underlying Class A ordinary shares.
Taxation—United States Federal Income Taxation”) may incur significantly increased United States income tax on gain recognized on the sale or other disposition of our ADSs or ordinary shares and on the receipt of distributions on our ADSs or ordinary shares to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules, and such holder may be subject to burdensome reporting requirements.
Taxation—United States Federal Income Taxation”) may incur significantly increased United States income tax on gain recognized on the sale or other disposition of our ADSs or Class A ordinary shares and on the receipt of distributions on our ADSs or Class A ordinary shares to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules, and such holder may be subject to burdensome reporting requirements.
See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—We and the VIEs face intense competition in the education industry and we and the VIEs may fail to compete effectively.” 86 Regulation This section sets forth a summary of the most significant rules and regulations that affect our and the VIEs’ business activities in China.
See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—We and the VIEs face intense competition in the education industry and we and the VIEs may fail to compete effectively.” 89 Regulation This section sets forth a summary of the most significant rules and regulations that affect our and the VIEs’ business activities in China.
We and the VIEs may be subject to severe penalties if the PRC government finds that the agreements that establish the structure for operating our and the VIEs’ business in China do not comply with applicable PRC laws and regulations .” 67 Our subsidiaries and affiliated entities in China are subject to restrictions on making dividends and other payments to us.
We and the VIEs may be subject to severe penalties if the PRC government finds that the agreements that establish the structure for operating our and the VIEs’ business in China do not comply with applicable PRC laws and regulations .” 69 Our subsidiaries and affiliated entities in China are subject to restrictions on making dividends and other payments to us.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our ADSs to decline. 70 The sale or availability for sale of substantial amounts of our ADSs in the public market could adversely affect their market price.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our ADSs to decline. 73 The sale or availability for sale of substantial amounts of our ADSs in the public market could adversely affect their market price.
Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our and the VIEs’ business operations, and any investment in the ADSs could be greatly reduced or even rendered worthless. 72 You may not receive cash dividends if the depositary decides it is impractical to make them available to you.
Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our and the VIEs’ business operations, and any investment in the ADSs could be greatly reduced or even rendered worthless. 75 You may not receive cash dividends if the depositary decides it is impractical to make them available to you.
The Opinions mainly stipulate the basic principles of education fee charging, modification of the policies and the management systems of education fee charging, including the legal consequences of charging in violation of the provisions.
The Education Fees Opinions mainly stipulate the basic principles of education fee charging, modification of the policies and the management systems of education fee charging, including the legal consequences of charging in violation of the provisions.
Seasonality Our financial performance is subject to seasonality as each of the school years includes a winter holiday between December and January and a summer holiday between July and August. Our net income and results of operations normally fluctuate from quarter to quarter as a result of seasonal variations in our and the VIEs’ education operations. See “ Item 5.
Seasonality Our financial performance is subject to seasonality as each of the school years includes a winter holiday between December and January and a summer holiday between July and August. Our net loss and results of operations normally fluctuate from quarter to quarter as a result of seasonal variations in our and the VIEs’ education operations. See “ Item 5.
Because there are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year. 77 If we are a PFIC in any taxable year, a U.S.
Because there are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year. 80 If we are a PFIC in any taxable year, a U.S.
Hainan Jiangcai and Chuangmei Weiye were acquired by Lishui Mengxiang in January 2022. 83 We and the VIEs take advantage of the school-operating experience and high-quality resources that the Vocational Education Services Providers accumulated in the vocational education industry in the past to teach students career-focused skill sets.
Hainan Jiangcai and Chuangmei Weiye were acquired by Lishui Mengxiang in January 2022. 86 We and the VIEs take advantage of the school-operating experience and high-quality resources that the Vocational Education Services Providers accumulated in the vocational education industry in the past to teach students career-focused skill sets.
All teachers in Qingtian International School have obtained the teacher’s qualification license in accordance with relevant regulations. 82 On January 15, 2024, Lishui Mengxiang entered into a definitive agreement to transfer 100% of the sponsorship interests of Qingtian International School to Qiaoxiang Education, an entity affiliated with Mr.
All teachers in Qingtian International School have obtained the teacher’s qualification license in accordance with relevant regulations. 85 On January 15, 2024, Lishui Mengxiang entered into a definitive agreement to transfer 100% of the sponsorship interests of Qingtian International School to Qiaoxiang Education, an entity affiliated with Mr.
On January 6, 2023, Beijing P.X. established a wholly-owned subsidiary, Hebei Chuangxiang, a human resources services provider for internship and employment recommendations. 80 B. Business Overview Our and the VIEs’ private education services primarily consist of high school education and vocational education.
On January 6, 2023, Beijing P.X. established a wholly-owned subsidiary, Hebei Chuangxiang, a human resources services provider for internship and employment recommendations. 83 B. Business Overview Our and the VIEs’ private education services primarily consist of high school education and vocational education.
On June 10, 2021, the Standing Committee of the NPC promulgated the Data Security Law which took effect in September 1, 2021.
On June 10, 2021, the Standing Committee of the NPC promulgated the Data Security Law which took effect on September 1, 2021.
The effect of this discretionary proxy is that if you do not give timely voting instructions to the depositary to direct how the ordinary shares underlying your ADSs are voted, you cannot prevent the ordinary shares underlying your ADSs from being voted, except under the circumstances described above.
The effect of this discretionary proxy is that if you do not give timely voting instructions to the depositary to direct how the Class A ordinary shares underlying your ADSs are voted, you cannot prevent the Class A ordinary shares underlying your ADSs from being voted, except under the circumstances described above.
We deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023. 79 In order to fully utilize the existing educational resources and meet the demand of society for high-quality high school education, Lishui International School was established in June 2023.
We deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023. 82 In order to fully utilize the existing educational resources and meet the demand of society for high-quality high school education, Lishui International School was established in June 2023.
The voting rights of holders of our ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct how the ordinary shares represented by your ADSs are voted. Holders of our ADSs do not have the same rights as our registered shareholders.
The voting rights of holders of our ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct how the Class A ordinary shares represented by your ADSs are voted. Holders of our ADSs do not have the same rights as our registered shareholders.
We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs. 78 ITEM 4. INFORMATION ON THE COMPANY A.
We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs. 81 ITEM 4. INFORMATION ON THE COMPANY A.
This means that you may not be able to exercise your right to direct how the ordinary shares underlying your ADSs are voted and you may have no legal remedy if the ordinary shares underlying your ADSs are not voted as you requested. 71 The depositary shall deem you to have instructed the depositary to give us a discretionary proxy to vote the ordinary shares underlying your ADSs if you do not give timely voting instructions to the depositary to direct how the ordinary shares underlying your ADSs are voted, except in limited circumstances, which could adversely affect your interests.
This means that you may not be able to exercise your right to direct how the Class A ordinary shares underlying your ADSs are voted and you may have no legal remedy if the Class A ordinary shares underlying your ADSs are not voted as you requested. 74 The depositary shall deem you to have instructed the depositary to give us a discretionary proxy to vote the Class A ordinary shares underlying your ADSs if you do not give timely voting instructions to the depositary to direct how the Class A ordinary shares underlying your ADSs are voted, except in limited circumstances, which could adversely affect your interests.
You will not be able to directly exercise your right to vote with respect to the underlying ordinary shares represented by your ADSs unless you withdraw the shares and become the registered holder of such shares prior to the record date for the general meeting.
You will not be able to directly exercise your right to vote with respect to the underlying Class A ordinary shares represented by your ADSs unless you withdraw the shares and become the registered holder of such shares prior to the record date for the general meeting.
Chuangmei Weiye has 5 branches in Henan Province, Guangdong Province, Hainan Province, Gansu Province and Xinjiang Province, and reached strategic cooperation with many reputable companies in the industries, and has a talent pool consisting of the graduates from its cooperative vocational schools.
Chuangmei Weiye has five branches in Henan Province, Guangdong Province, Hainan Province, Gansu Province and Xinjiang Province, and reached strategic cooperation with many reputable companies in the industries, and has a talent pool consisting of the graduates from its cooperative vocational schools.
GAAP. 89 Regulations on Private Education in the PRC Education Law of the PRC On March 18, 1995, the National People’s Congress of PRC, or the NPC enacted the Education Law of the PRC, or the Education Law, which was amended on August 27, 2009, December 27, 2015 and April 29, 2021, respectively.
GAAP. 92 Regulations on Private Education in the PRC Education Law of the PRC On March 18, 1995, the National People’s Congress of PRC, or the NPC enacted the Education Law of the PRC, or the Education Law, which was amended on August 27, 2009, December 27, 2015 and April 29, 2021, respectively.
We and the VIEs currently have less than 100 subscribers on our digital platform such as WeChat public account. We and the VIEs have no registered users on our website. We and the VIEs only require and obtain user information after users register with us.
We and the VIEs currently have less than 200 subscribers on our digital platform such as WeChat public account. We and the VIEs have no registered users on our website. We and the VIEs only require and obtain user information after users register with us.
You will only be able to exercise the voting rights that are carried by the underlying ordinary shares represented by your ADSs indirectly by giving voting instructions to the depositary in accordance with the provisions of the deposit agreement.
You will only be able to exercise the voting rights that are carried by the underlying Class A ordinary shares represented by your ADSs indirectly by giving voting instructions to the depositary in accordance with the provisions of the deposit agreement.
If we instruct the depositary to ask for your instructions, then upon timely receipt of your voting instructions, the depositary will try, as far as practicable, to vote the underlying ordinary shares represented by your ADSs in accordance with your instructions.
If we instruct the depositary to ask for your instructions, then upon timely receipt of your voting instructions, the depositary will try, as far as practicable, to vote the underlying Class A ordinary shares represented by your ADSs in accordance with your instructions.
As of December 31, 2023, we and the VIEs had no trademarks pending registration in the PRC. We obtained five computer software copyrights through the acquisition of Hangzhou Youxi by Liandu WFOE in February 2021.
As of December 31, 2024, we and the VIEs had no trademarks pending registration in the PRC. We obtained five computer software copyrights through the acquisition of Hangzhou Youxi by Liandu WFOE in February 2021.
However, to our knowledge, there has been no case law on the applicability of the jury trial waiver to ADS holders who withdraw the ordinary shares represented by the ADSs from the ADS facility.
However, to our knowledge, there has been no case law on the applicability of the jury trial waiver to ADS holders who withdraw the Class A ordinary shares represented by the ADSs from the ADS facility.
If our board of directors decides to issue preferred shares, the price of our ADSs may fall and the voting and other rights of the holders of our ordinary shares and our ADSs may be materially and adversely affected.
If our board of directors decides to issue preferred shares, the price of our ADSs may fall and the voting and other rights of the holders of our Class A ordinary shares and our ADSs may be materially and adversely affected.
The teachers are employed through different channels and methods, including campus recruitment, general public recruitment, candidate self-nominations and the use of online recruiting websites. The school determines the recruitment demands before advertising for recruitment. The school screens resumes received and select appropriate candidates.
The teachers are employed through different channels and methods, including campus recruitment, general public recruitment, candidate self-nominations and the use of online recruiting websites. The school determines the recruitment demands before advertising for recruitment. The school screens resumés received and select appropriate candidates.
If the ADS facility will terminate, ADS holders will receive at least thirty (30) days’ prior notice, but no prior consent is required from them.
If the ADS facility is terminated, ADS holders will receive at least thirty (30) days’ prior notice, but no prior consent is required from them.
Vocational Education Services Providers We and the VIEs offer vocational education services at the Vocational Education Services Providers, namely Beijing Xinxiang, Langfang School and Hainan Jiangcai. Beijing Xinxiang was formed in January 2022 by Lishui Mengxiang and Beijing R.R.Z. Langfang School.
Vocational Education Services Providers We and the VIEs offer vocational education services at the Vocational Education Services Providers, namely Beijing Xinxiang, Langfang School and Hainan Jiangcai. Beijing Xinxiang was formed in January 2022 by Lishui Mengxiang and Beijing R.R.Z., and was deregistered in June 2024. Langfang School.
Each student has the opportunities to take the exam twice and chooses to attend a preferred university if two admission offers are received. As of September 1, 2023, there were 74 students in two classes enrolled in Lishui International School with 100% of the students living on-campus.
Each student has the opportunities to take the exam twice and chooses to attend a preferred university if two admission offers are received. As of September 1, 2024, there were 129 students in four classes enrolled in Lishui International School with 100% of the students living on-campus.
The entities engaging in our main business include: ● Qingtian International School and Lishui International School, educational institutions specialized in providing high school education to students from overseas Chinese families returning to China who are commonly known as the overseas Chinese returnees; ● Beijing Xinxiang, Langfang School and Hainan Jiangcai, vocational education services providers offering a variety of vocational education programs with the aim to help students to equip with practical vocational skill sets; and ● Chuangmei Weiye and Hebei Chuangxiang, human resources service providers connecting enterprises and vocational school students, providing talents to enterprises and assisting vocational schools to provide internship opportunities to their students.
The entities engaging in our main business include: ● Lishui International School, an educational institution specialized in providing high school education to students from overseas Chinese families returning to China who are commonly known as the overseas Chinese returnees; ● Beijing Xinxiang (deregistered in June 2024), Langfang School and Hainan Jiangcai, vocational education services providers offering a variety of vocational education programs with the aim to help students to equip with practical vocational skill sets; and ● Hebei Chuangxiang, a human resources service provider connecting enterprises and vocational school students, providing talents to enterprises and assisting vocational schools to provide internship opportunities to their students.
Besides, with the acquisition of the Vocational Education Services Providers and Chuangmwei Weiye, we extended out business layout to the vocational education services in Hebei province and Hainan province and also to the comprehensive human resources services.
Besides, with the acquisition of the Vocational Education Services Providers and the establishment of Hebei Chuangxiang, we extended out business layout to the vocational education services in Hebei province and Hainan province and also to the comprehensive human resources services.
The 2021 Negative List remains unchanged with respect to the education industry., while it further provides that any domestic enterprise, which is engaged in the field of business that foreign investment is prohibited from investing as set forth in the 2021 Negative List, shall be examined and approved by the relevant state authorities before issuing shares and listing and trading abroad.
While it further provides that any domestic enterprise, which is engaged in the field of business that foreign investment is prohibited from investing as set forth in the 2021 Negative List, shall be examined and approved by the relevant state authorities before issuing shares and listing and trading abroad.
For the year ended December 31, 2023, we and the VIEs have established an education services network consisting of two high schools, three vocational education services providers and two comprehensive human resources services providers, covering Zhejiang Province, Hebei Province, and Hainan Province in mainland China.
For the year ended December 31, 2024, we and the VIEs have established an education services network consisting of a high school, three vocational education services providers and a comprehensive human resources services provider, covering Zhejiang Province, Hebei Province, and Hainan Province in mainland China.
We have not received any notice of warning or been subject to any penalties or disciplinary action from government authorities due to the lack of the teacher’s qualification license or the vocational school teacher’s license. 84 In 2023, Langfang school provided intensive training for a total of 212 students who registered to sit for the vocational college entrance exam held in April, and 586 students graduated from Langfang School, with 327 graduates employed after graduation and 141 students pursuing college education.
We have not received any notice of warning or been subject to any penalties or disciplinary action from government authorities due to the lack of the teacher’s qualification license or the vocational school teacher’s license. 87 In 2024, Langfang school provided intensive training for a total of 501 students who registered to sit for the vocational college entrance exam held in April, and 751 students graduated from Langfang School, with 250 graduates employed after graduation and 441 students pursuing college education.
Prior to investing in the restricted fields in the Negative List, foreign investor shall obtain foreign investment access permit. Unless otherwise provided in other laws, a foreign investment in areas not listed on the Negative List is unconditionally permitted and shall be treated in the same manner as domestic investment.
Unless otherwise provided in other laws, a foreign investment in areas not listed on the 2024 Negative List is unconditionally permitted and shall be treated in the same manner as domestic investment.
As of December 31, 2023, Hebei Chuangxiang provided human resources services to over 20 companies, and provided internship and employment opportunities to over 1,000 students. Intellectual Property As of December 31, 2023, we and the VIEs had 46 and two registered trademarks in the PRC and Hong Kong, respectively.
For the year ended December 31, 2024, Hebei Chuangxiang provided such human resources services to 18 companies, and provided internship and employment opportunities to 397 students. Intellectual Property As of December 31, 2024, we and the VIEs had 46 and two registered trademarks in the PRC and Hong Kong, respectively.
The trading prices of our ADSs has ranged from US$0.404 to US$8.04 in 2023. The trading prices of our ADSs are likely to be volatile and could fluctuate widely due to factors beyond our control.
The trading prices of our ADSs has ranged from US$1.95 to US$65.06 in 2024. The trading prices of our ADSs are likely to be volatile and could fluctuate widely due to factors beyond our control.
Furthermore, On December 27, 2021, the NDRC and the MOFCOM jointly issued the Special Administrative Measures for the Access of Foreign Investment (Negative List) (the “2021 Negative List”) with effect from January 1, 2022 and replaced the 2020 Negative List. The Negative List sets out the areas where foreign investment is prohibited, and the areas where foreign investment is restricted.
The Negative List and the Encouraging Catalogue On December 27, 2021, the NDRC and the MOFCOM jointly issued the Special Administrative Measures for the Access of Foreign Investment (Negative List) (the “2021 Negative List”) with effect from January 1, 2022.
The following table sets out the vocational education programs and the corresponding numbers of the enrolled students in Langfang School as of September 1, 2023: Vocational Education Programs in Langfang School Number of Student Enrolled as of September 1, 2023 3D Printing Technology Operation 172 Urban Rail Transportation Management 44 Nursing 24 Computer Operation, Maintenance and Repairment 437 Cross-border E-commerce 14 Graphic Design 98 Automobile Maintenance and Repairment 110 Railway Attendant Training 325 Unmanned Aerial Vehicle Operation 66 Preschool Teacher Training 264 Total 1554 Langfang School hires a number of qualified and dedicated teachers.
The following table sets out the vocational education programs and the corresponding numbers of the enrolled students in Langfang School as of September 1, 2024: Vocational Education Programs in Langfang School Number of Student Enrolled as of September 1, 2024 3D Printing Technology Operation 83 Urban Rail Transportation Management 31 Nursing 56 Computer Operation, Maintenance and Repairment 231 Cross-border E-commerce 15 Graphic Design 138 Automobile Maintenance and Repairment 141 Railway Attendant Training 183 Unmanned Aerial Vehicle Operation 32 Preschool Teacher Training 144 Total 1,054 Langfang School hires a number of qualified and dedicated teachers.
The following table sets out the programs and the corresponding numbers of the students enrolled in the programs of Hainan Jiangcai as of September 1, 2023: Vocational Education Programs of Hainan Jiangcai Number of Student Enrolled as of September 1, 2023 Transportation Attendant Training 415 Unmanned Aerial Vehicle (Computer Operation) 65 Total 480 Hainan Jiangcai hires a number of qualified and dedicated teachers.
The following table sets out the programs and the corresponding numbers of the students enrolled in the programs of Hainan Jiangcai (through its cooperator Hainan Technical School) as of September 1, 2024: Vocational Education Programs of Hainan Jiangcai Number of Student Enrolled as of September 1, 2024 Transportation Attendant Training 385 Unmanned Aerial Vehicle (Computer Operation) 94 Railway Attendant Training 104 Urban Rail Transportation Management 102 Total 685 Hainan Jiangcai hires a number of qualified and dedicated teachers.
As of September 1, 2023, Langfang School had 84 teachers, with a teacher-student ratio of 1:19.
As of September 1, 2024, Langfang School had 80 teachers, with a teacher-student ratio of 1:13.2.
Besides, any foreign investor shall not participate in the management of such domestic enterprise, and its shareholding ratio shall follow the relevant provisions regulating foreign investors’ investment in domestic securities. 87 On June 30, 2019, MOFCOM and NDRC jointly issued the Catalogue of Industries for Encouraging Foreign Investment (Edition 2019), or the Encouraging Catalogue (Edition 2019).
Besides, any foreign investor shall not participate in the management of such domestic enterprise, and its shareholding ratio shall follow the relevant provisions regulating foreign investors’ investment in domestic securities.
The school recorded a utilization rate of 92.5% with the capacity of 80 students as of September 1, 2023. As of September 1, 2023, Lishui International School had nine teachers, with a teacher-student ratio of 1:8.2.
The school recorded a utilization rate of 72% with the capacity of 180 students as of September 1, 2024. As of September 1, 2024, Lishui International School had ten teachers, with a teacher-student ratio of 1:12.9.
Nevertheless, we cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the underlying ordinary shares represented by your ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions.
Nevertheless, we cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the underlying Class A ordinary shares represented by your ADSs.
The Negative List and the Encouraging Catalogue On June 23, 2020, the NDRC and the MOFCOM jointly issued the Special Administrative Measures for the Access of Foreign Investment (Negative List) (the “2020 Negative List”) with effect from July 23, 2020.
Furtermore, On September 6, 2024, the NDRC and the MOFCOM jointly issued the Special Administrative Measures for the Access of Foreign Investment (Negative List) (the “2024 Negative List”) with effect from November 1, 2024 and replaced the 2021 Negative List.
Besides, we have submitted the filing documents to the CSRC in respect of the 2023 Private Placement. As of the date of the annual report, we have not received any notice or determination from the CSRC confirming that we have completed our filing procedures.
As of the date of the annual report, we have not received any notice or determination from the CSRC confirming that we have completed our filing procedures for our 2024 Private Placement. It is uncertain whether such filing can be completed or how long it will take to complete such filing.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The Opinions on Further Strengthening and Regulating the Administration of Education Fees, or the Opinions, which were issued on August 17, 2020 by the relevant authorities, reiterate the provision from the Decision that the sponsors of non-profit privately-run schools shall not gain proceeds from the running of schools.
The Opinions on Further Strengthening and Regulating the Administration of Education Fees, or the Education Fees Opinions, which were issued on August 17, 2020 by the relevant authorities, reiterate the provision from the Decision that the sponsors of non-profit privately-run schools shall not gain proceeds from the running of schools.
After consulting with our PRC legal counsel, Beijing DeHeng Law offices, we are of the view that, as of the date of the annual report, except for the circumstances which would not in the aggregate have a material adverse effect on our financial conditions, Lixiang, our PRC subsidiaries and the VIEs have received from PRC authorities requisite licenses, permissions or approvals needed to engage in the businesses currently conducted in China.
After consulting with our PRC legal counsel, Beijing DeHeng Law offices, we are of the view that, as of the date of the annual report, except for the circumstances which would not in the aggregate have a material adverse effect on our financial conditions, Lixiang, our PRC subsidiaries and the VIEs have received from PRC authorities requisite licenses, permissions or approvals needed to engage in the businesses currently conducted in China.
As advised by our PRC legal counsel, Beijing DeHeng Law Offices, if Lixiang, our PRC subsidiaries or the VIEs (i) do not receive or maintain required permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and Lixiang, our PRC subsidiaries or the VIEs are required to obtain such permissions or approvals in the future, we could be subject to fines or legal sanctions, which may materially and adversely affect the business, financial condition and results of operations of us and the VIEs.
As advised by our PRC legal counsel, Beijing DeHeng Law Offices, if Lixiang, our PRC subsidiaries or the VIEs (i) do not receive or maintain required permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and Lixiang, our PRC subsidiaries or the VIEs are required to obtain such permissions or approvals in the future, we could be subject to fines or legal sanctions, which may materially and adversely affect the business, financial condition and results of operations of us and the VIEs.
As of the date of the annual report on Form 20-F, the administrative procedures for changing the sponsor of Langfang School with the PRC governmental authorities, especially for renewing the Permit for Establishment of Privately-run Schools, have not been completed due to the internal procedures of the competent authorities and we and the VIEs are still in the process of active communication with such local authorities.
As of the date of the annual report on Form 20-F, the administrative procedures for changing the sponsor of Langfang School with the PRC governmental authorities, especially for renewing the Permit for Establishment of Privately-run Schools, have not been completed due to the internal procedures of the competent authorities and we and the VIEs are still in the process of active communication with such local authorities.
Our Directors consider the main challenges involved in integrating acquired entities to include the following: ● retaining qualified teaching staff of any acquired school; ● consolidating the educational services offered by the acquired school; ● complying with the regulatory requirements; ● the acquired schools having a culture that may be adverse to change and may not be receptive to our and the VIEs’ educational values and methods; ● integrating educational and administrative systems; ● minimizing disruptions to existing students’ curricula and ensuring their ability to progress through the applicable education programs is not hindered as a result of the acquisition; ● ensuring and illustrating to our students and their parents that the new acquisitions will not result in any adverse changes to our established brand image, reputation, service quality or standards; and ● minimizing the diversion of our management’s attention from its on-going business concerns The operations of Qingtian International School, Lishui International School are subject to general conditions and the education industry of Lishui City and/or Zhejiang Province, while the operation of Langfang School is subject to general conditions and the education industry of Langfang City and/or Hebei Province.
Our Directors consider the main challenges involved in integrating acquired entities to include the following: ● retaining qualified teaching staff of any acquired school; ● consolidating the educational services offered by the acquired school; ● complying with the regulatory requirements; ● the acquired schools having a culture that may be adverse to change and may not be receptive to our and the VIEs’ educational values and methods; ● integrating educational and administrative systems; ● minimizing disruptions to existing students’ curricula and ensuring their ability to progress through the applicable education programs is not hindered as a result of the acquisition; ● ensuring and illustrating to our students and their parents that the new acquisitions will not result in any adverse changes to our established brand image, reputation, service quality or standards; and ● minimizing the diversion of our management’s attention from its on-going business concerns The operations of Qingtian International School and Lishui International School are subject to general conditions and the education industry of Lishui City and/or Zhejiang Province, while the operation of Langfang School is subject to general conditions and the education industry of Langfang City and/or Hebei Province.
In order to enable our students get admission to the prestigious colleges in China, Qingtian International School and Lishui International School are required to offer not only the ordinary PRC high school curriculum program but also the courses designed for the National Joint Entrance Examination for overseas Chinese students.
In order to enable our students to get admission to the prestigious colleges in China, Qingtian International School and Lishui International School are required to offer not only the ordinary PRC high school curriculum program but also the courses designed for the National Joint Entrance Examination for overseas Chinese students.
The Opinions further underline that the sponsors of non-profit privately-run schools and non-profit privately-run sino-foreign cooperative educators shall be prohibited from obtaining proceeds from the running of schools such as tuition income, distributing school balances (residual assets) or transferring proceeds from the running of schools through related-party transactions or affiliated parties or other means. 31 On April 7, 2021, the State Council promulgated the 2021 Implementation Rules for Private Education Laws, which became effective on September 1, 2021.
The Education Fees Opinions further underline that the sponsors of non-profit privately-run schools and non-profit privately-run sino-foreign cooperative educators shall be prohibited from obtaining proceeds from the running of schools such as tuition income, distributing school balances (residual assets) or transferring proceeds from the running of schools through related-party transactions or affiliated parties or other means. 31 On April 7, 2021, the State Council promulgated the 2021 Implementation Rules for Private Education Laws, which became effective on September 1, 2021.
We are also not aware of when official administrative or judicial declaration or interpretation on that matter will be released, if at all, and we cannot assure you that the Opinions will not be interpreted, or further laws and regulations will not be promulgated, in a way that would affect or impair our ability to retain the tuition and boarding fees under the contractual arrangements in the future.
We are also not aware of when official administrative or judicial declaration or interpretation on that matter will be released, if at all, and we cannot assure you that the Education Fees Opinions will not be interpreted, or further laws and regulations will not be promulgated, in a way that would affect or impair our ability to retain the tuition and boarding fees under the contractual arrangements in the future.
Since 2022, to both parties’ consensus, the amount due to Lianwai School would not be settled within one year, and thus, it was classified as non-current liabilities. We cannot assure you that we will not experience periods of net current liabilities in the future. We may record net current liabilities in future periods as we continue to expand.
Since 2022, to both parties’ consensus, the amount due to Lianwai School would not be settled within one year, and thus, it was classified as our non-current liabilities. We cannot assure you that we will not experience periods of net current liabilities in the future. We may record net current liabilities in future periods as we continue to expand.
In addition, criteria such as dedication, capability and loyalty are difficult to ascertain during the recruitment process and we and the VIEs may fail to identify and select the desired candidates. Furthermore, we and the VIEs may be unable to retain high quality teachers or have to incur significant expenditures for our retention efforts.
In addition, criteria such as dedication, capability and loyalty are difficult to ascertain during the recruitment process and we and the VIEs may fail to identify and select the desired candidates. 38 Furthermore, we and the VIEs may be unable to retain high quality teachers or have to incur significant expenditures for our retention efforts.
If Langfang City or Hebei Province experiences an event that materially and adversely affects its education industry, such as an economic downturn, a natural disaster or an outbreak of a contagious disease, or if any governmental authorities governing Langfang City or Hebei Province adopt regulations that place additional restrictions or burdens on Langfang School or on the education industry in general, our and the VIEs’ business, financial condition and results of operations may be materially and adversely affected. 40 In addition, given that we and the VIEs mainly offer the education services at Qingtian International School, Lishui International School and Langfang School, any material negative development with respect to Qingtian International School, Lishui International School or Langfang School could have a material adverse effect on our and the VIEs’ business, financial condition and results of operations as a whole.
If Langfang City or Hebei Province experiences an event that materially and adversely affects its education industry, such as an economic downturn, a natural disaster or an outbreak of a contagious disease, or if any governmental authorities governing Langfang City or Hebei Province adopt regulations that place additional restrictions or burdens on Langfang School or on the education industry in general, our and the VIEs’ business, financial condition and results of operations may be materially and adversely affected. 41 In addition, given that we and the VIEs mainly offer the education services at Qingtian International School, Lishui International School and Langfang School, any material negative development with respect to Qingtian International School, Lishui International School or Langfang School could have a material adverse effect on our and the VIEs’ business, financial condition and results of operations as a whole.
Where any other private schools conducts any transaction with any interested related party, it shall follow the principles of openness, fairness and impartiality, fix the price reasonably and regulate the decision-making, and shall not damage the state interests, the interests of the school or the rights and interests of the teachers and students.
Where any other private school conducts any transaction with any interested related party, it shall follow the principles of openness, fairness and impartiality, fix the price reasonably and regulate the decision-making, and shall not damage the state interests, the interests of the school or the rights and interests of the teachers and students.
See “Risk Factors—Risks Relating to Our Corporate Structure—Our contractual arrangements may not be as effective in providing control over the VIEs as equity ownership” and “Risk Factors—Risks Relating to Our Corporate Structure—If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, we may be unable to assert our contractual rights over the assets of the VIEs, and our ADSs or ordinary shares may decline in value or become worthless.” ● We may have to incur additional costs and expend substantial resources to enforce our contractual arrangements.
See “Risk Factors—Risks Relating to Our Corporate Structure—Our contractual arrangements may not be as effective in providing control over the VIEs as equity ownership” and “Risk Factors—Risks Relating to Our Corporate Structure—If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, we may be unable to assert our contractual rights over the assets of the VIEs, and our ADSs or Class A ordinary shares may decline in value or become worthless.” ● We may have to incur additional costs and expend substantial resources to enforce our contractual arrangements.
If we and the VIEs are unable to successfully retain and attract students, maintain or increase our tuition level, recruit and retain qualified teachers or other key personnel, enhance the quality of our and the VIEs’ educational services or control competition costs, our and the VIEs’ business, financial condition and results of operations may be materially and adversely affected. 38 We and the VIEs may not be able to obtain all necessary approvals, licenses and permits and to make all necessary registrations and filings for our and the VIEs’ educational and other services in China.
If we and the VIEs are unable to successfully retain and attract students, maintain or increase our tuition level, recruit and retain qualified teachers or other key personnel, enhance the quality of our and the VIEs’ educational services or control competition costs, our and the VIEs’ business, financial condition and results of operations may be materially and adversely affected. 39 We and the VIEs may not be able to obtain all necessary approvals, licenses and permits and to make all necessary registrations and filings for our and the VIEs’ educational and other services in China.
Beijing P.X. and Hainan Technical School may be ordered to return the tuition, accommodation and miscellaneous fees and be imposed fines, and the revenue from the cooperation may be adversely affected. 39 We and the VIEs may not be able to successfully integrate businesses operated by Qingtian International School, Lishui International School, Vocational Education Services Providers, Chuangmei Weiye and Hebei Chuangxiang, which may cause us to lose the anticipated benefits from such business expansions and to incur significant additional expenses.
Beijing P.X. and Hainan Technical School may be ordered to return the tuition, accommodation and miscellaneous fees and be imposed fines, and the revenue from the cooperation may be adversely affected. 40 We and the VIEs may not be able to successfully integrate businesses operated by Qingtian International School, Lishui International School, Vocational Education Services Providers, Chuangmei Weiye and Hebei Chuangxiang, which may cause us to lose the anticipated benefits from such business expansions and to incur significant additional expenses.
If the VIEs or their respective ultimate shareholders fail to perform their obligations under our contractual arrangements, we may have to incur additional costs and expend substantial resources to enforce our contractual arrangements, temporarily or permanently lose control over our primary operations or lose access to our primary sources of revenue. 13 There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the contractual arrangements and the VIE structure.
If the VIEs or their respective ultimate shareholders fail to perform their obligations under our contractual arrangements, we may have to incur additional costs and expend substantial resources to enforce our contractual arrangements, temporarily or permanently lose control over our primary operations or lose access to our primary sources of revenue. 12 There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the contractual arrangements and the VIE structure.
Additionally, we filed a registration statement with the SEC covering the resale of the ADSs representing the ordinary shares that would be issued to such investors under the Purchase Agreements.
Additionally, we filed a registration statement with the SEC covering the resale of the ADSs representing the ordinary shares that would be issued to such investors under the 2023 Purchase Agreements.
Any inability to track and respond to these changes in a cost-effective and timely manner or to tailor our vocational education programs to the market demand in China would render our programs less attractive to students, which may materially and adversely affect our reputation and ability to continue to attract students and cause us to lose market share. 41 We and the VIEs may not be able to successfully implement our business strategies.
Any inability to track and respond to these changes in a cost-effective and timely manner or to tailor our vocational education programs to the market demand in China would render our programs less attractive to students, which may materially and adversely affect our reputation and ability to continue to attract students and cause us to lose market share. 42 We and the VIEs may not be able to successfully implement our business strategies.
If we and the VIEs fail to expand our capacity as quickly as the demand for our services grows, or if we and the VIEs otherwise fail to grow by acquiring or establishing schools and campuses, we and the VIEs could lose potential students to competitors, and our and the VIEs’ business, financial condition and results of operations may be materially and adversely affected. 43 Our historical financial and operating results may not be indicative of our future performance and our financial and operating results may be difficult to forecast.
If we and the VIEs fail to expand our capacity as quickly as the demand for our services grows, or if we and the VIEs otherwise fail to grow by acquiring or establishing schools and campuses, we and the VIEs could lose potential students to competitors, and our and the VIEs’ business, financial condition and results of operations may be materially and adversely affected. 44 Our historical financial and operating results may not be indicative of our future performance and our financial and operating results may be difficult to forecast.
If we fail to meet our financial obligations, our and the VIEs’ business, liquidity, financial position and prospects could be materially and adversely affected. We face risks related to health epidemics, natural disasters or terrorist attacks in China. We and the VIEs offer accommodation service to our students of Qingtian International School, Lishui International School and Langfang School.
If we fail to meet our financial obligations, our and the VIEs’ business, liquidity, financial position and prospects could be materially and adversely affected. We face risks related to health epidemics, natural disasters or terrorist attacks in China. We and the VIEs offer accommodation service to students of Qingtian International School, Lishui International School, Langfang School and Hainan Technical School.
See “Risk Factors—Risks Relating to Our Corporate Structure—We rely on dividends and other payments from Liandu WFOE to pay dividends and other cash distributions to our shareholders.” ● Qingtian International School, Lishui International School and Langfang School may be subject to limitations on their ability to operate private education or make payments to related parties.
See “Risk Factors—Risks Relating to Our Corporate Structure—We rely on dividends and other payments from Liandu WFOE to pay dividends and other cash distributions to our shareholders.” ● Qingtian International School, Lishui International School, Langfang School and Hainan Jiangcai may be subject to limitations on their ability to operate private education or make payments to related parties.
Selected Financial Data The following summary consolidated statements of operations and comprehensive loss for the fiscal years ended December 31, 2021, 2022 and 2023 and summary consolidated balance sheets as of December 31, 2022 and 2023 have been derived from our audited consolidated financial statements included in this annual report on Form 20-F beginning on page F-1.
Selected Financial Data The following summary consolidated statements of operations and comprehensive loss for the fiscal years ended December 31, 2022, 2023 and 2024 and summary consolidated balance sheets as of December 31, 2023 and 2024 have been derived from our audited consolidated financial statements included in this annual report on Form 20-F beginning on page F-1.
However, the Measures for Cyber Security Review provide no further explanation on the extent of “network platform operator”, “affect or may affect national security” or “foreign” listing. We currently have less than 100 subscribers on our digital platform such as WeChat public account. We have no registered users on our website.
However, the Measures for Cyber Security Review provide no further explanation on the extent of “network platform operator”, “affect or may affect national security” or “foreign” listing. We currently have less than 200 subscribers on our digital platform such as WeChat public account. We have no registered users on our website.
As a result, our and the VIEs’ business, financial condition and results of operations may be materially and adversely affected. 42 Since the worldwide outbreak of the COVID-19 pandemic in early 2020, all sectors have been severely affected with no exception to the education industry.
As a result, our and the VIEs’ business, financial condition and results of operations may be materially and adversely affected. 43 Since the worldwide outbreak of the COVID-19 pandemic in early 2020, all sectors have been severely affected with no exception to the education industry.
Our financial statements contained in this annual report on Form 20-F for the fiscal years ended December 31, 2021 and 2022 have been audited by WWC Professional Corporation Limited, or WWC, P.C., an independent registered public accounting firm headquartered in the United States and is among the public accounting firms that are registered with the Public Company Accounting Oversight Board of the United States, or the PCAOB.
Our financial statements contained in this annual report on Form 20-F for the fiscal year ended December 31, 2022 have been audited by WWC Professional Corporation Limited, or WWC, P.C., an independent registered public accounting firm headquartered in the United States and is among the public accounting firms that are registered with the Public Company Accounting Oversight Board of the United States, or the PCAOB.
See “ Risk Factors—Risks Relating to Our Corporate Structure—Qingtian International School, Lishui International School and Langfang Shool may be subject to limitations on their ability to operate private education or make payments to related parties. ” Risks Relating to Doing Business in China ● The inherent uncertainties in the PRC legal system could materially and adversely affect us.
See “ Risk Factors—Risks Relating to Our Corporate Structure—Qingtian International School, Lishui International School, Langfang School and Hainan Jiangcai may be subject to limitations on their ability to operate private education or make payments to related parties. ” Risks Relating to Doing Business in China ● The inherent uncertainties in the PRC legal system could materially and adversely affect us.
As of the date of the annual report, however, we are not aware of any official administrative or judicial declaration on, or interpretation of, the Opinions, especially as applied to contractual or other similar arrangements under which we operate.
As of the date of the annual report, however, we are not aware of any official administrative or judicial declaration on, or interpretation of, the Education Fees Opinions, especially as applied to contractual or other similar arrangements under which we operate.
Our financial statements contained in this annual report on Form 20-F for the fiscal year ended December 31, 2023 have been audited by Audit Alliance LLP, an independent registered public accounting firm headquartered in Singapore and is among the public accounting firms that are registered with the PCAOB.
Our financial statements contained in this annual report on Form 20-F for the fiscal years ended December 31, 2023 and 2024 have been audited by Audit Alliance LLP, an independent registered public accounting firm headquartered in Singapore and is among the public accounting firms that are registered with the PCAOB.
Operating and Financial Review and Prospects” below. 29 The following table presents our summary consolidated statements of operations and comprehensive loss for the fiscal years ended December 31, 2021, 2022 and 2023.
Operating and Financial Review and Prospects” below. 29 The following table presents our summary consolidated statements of operations and comprehensive loss for the fiscal years ended December 31, 2022, 2023 and 2024.
Loss of taxes and fees may incur in the process, which may have an adverse impact on Qingtian International School’s and Langfang School’s operations.” ● We may not be able to successfully integrate businesses operated by Qingtian International School, Lishui International School, Vocational Education Services Providers, Chuangmei Weiye and Hebei Chuangxiang.
Loss of taxes and fees may incur in the process, which may have an adverse impact on the VIEs’ operations.” ● We may not be able to successfully integrate businesses operated by Qingtian International School, Lishui International School, Vocational Education Services Providers, Chuangmei Weiye and Hebei Chuangxiang.
Business License Market Supervision Administration of Dongcheng District, Beijing Until December 22, 2051 Hainan Jiangcai Business License Market Supervision Administration of Hainan Province Long-term Langfang School Registration Certificate for Private Non-enterprise Entities Administrative Examination and Approval Bureau of Langfang City Until July 7, 2027 Permit for Establishment of Privately-run Schools Department of Human Resources and Social Security of Hebei Province Until August, 2025 Food Operation License Administrative Examination and Approval Bureau of Anci District, Langfang City Until October 15, 2027 Chuangmei Weiye Business License Market Supervision Administration of Chaoyang District, Beijing Until January 4, 2042 Labor Dispatch Operation License Human Resources and Social Security Bureau of Dongcheng District, Beijing Until November 26, 2025 Human Resources Service License Human Resources and Social Security Bureau of Dongcheng District, Beijing Until March 29, 2026 Hebei Chuangxiang Business License China (Hebei) Pilot Free Trade Zone Zhengding Area Management Committee Long-term Labor Dispatch Operation License China (Hebei) Pilot Free Trade Zone Zhengding Area Management Committee Until February 27, 2026 Human Resources Service License China (Hebei) Pilot Free Trade Zone Zhengding Area Management Committee Until January 9, 2028 Lishui International School Social Service Institution Registration Certificate Civil Affairs Bureau of Lishui City Until June 24, 2028 Permit for Establishment of Privately-run Schools Lishui Education Bureau Until May 31, 2026 15 We cannot assure you that Lixiang, our PRC subsidiaries and the VIEs are always able to successfully update or renew the licenses or permits required for the relevant business in a timely manner or that these licenses or permits are sufficient to conduct all of our and the VIEs’ present or future business.
Business License Market Supervision Administration of Chaoyang District, Beijing Until December 22, 2051 Hainan Jiangcai Business License Market Supervision Administration of Hainan Province Long-term Langfang School Registration Certificate for Private Non-enterprise Entities Administrative Examination and Approval Bureau of Langfang City Until July 7, 2027 Permit for Establishment of Privately-run Schools Department of Human Resources and Social Security of Hebei Province Until August, 2025 Food Operation License Administrative Examination and Approval Bureau of Anci District, Langfang City Until October 15, 2027 Hebei Chuangxiang Business License China (Hebei) Pilot Free Trade Zone Zhengding Area Management Committee Long-term Labor Dispatch Operation License China (Hebei) Pilot Free Trade Zone Zhengding Area Management Committee Until February 27, 2026 Human Resources Service License China (Hebei) Pilot Free Trade Zone Zhengding Area Management Committee Until January 9, 2028 Lishui International School Social Service Institution Registration Certificate Civil Affairs Bureau of Lishui City Until June 24, 2028 Permit for Establishment of Privately-run Schools Lishui Education Bureau Until May 31, 2026 15 We cannot assure you that Lixiang, our PRC subsidiaries and the VIEs are always able to successfully update or renew the licenses or permits required for the relevant business in a timely manner or that these licenses or permits are sufficient to conduct all of our and the VIEs’ present or future business.
We’ve been closely monitoring the developments of the 2021 Implementation Rules and are carefully evaluating the possible impact of the 2021 Implementation Rules on our and the VIEs’ business development and financial performance. There is no expected timeline for the local government and education authorities to release such rules, guidelines or opinions.
We have been closely monitoring the developments of the 2021 Implementation Rules and are carefully evaluating the possible impact of the 2021 Implementation Rules on our and the VIEs’ business development and financial performance. There is no expected timeline for the local government and education authorities to release such rules, guidelines or opinions.
Lishui Mengxiang is no longer defined as an affiliated entity of Lianwai School. 33 Furthermore, our contractual arrangements may be regarded as related party transactions of Qingtian International School, Lishui International School and Langfang School, and we may incur substantial compliance costs for establishing disclosure mechanisms and undergoing review by the relevant government authorities.
Lishui Mengxiang is no longer defined as an affiliated entity of Lianwai School. 33 Furthermore, our contractual arrangements may be regarded as related party transactions of the VIEs, and we may incur substantial compliance costs for establishing disclosure mechanisms and undergoing review by the relevant government authorities.
Qingtian International School also provides on-campus or nearby off-site accommodation to our teachers and staff.
Lishui International School also provides on-campus or nearby off-site accommodation to our teachers and staff.
Both Qingtian International School and Lishui International School and their operations are currently located in Lishui City, Zhejiang Province. According to the latest census report of Zhejiang Province, the population of Lishui City and Zhejiang Province in 2023 was 2.5 million and 66.3 million, respectively.
Both Qingtian International School and Lishui International School and their operations are currently located in Lishui City, Zhejiang Province. According to the latest census report of Zhejiang Province, the population of Lishui City and Zhejiang Province in 2024 was 2.5 million and 66.7 million, respectively.
As of December 31, 2021, 2022 and 2023, we had net current liabilities of RMB113 million, net current assets of RMB195 million and net current assets of RMB142 million, respectively. The net current liabilities as of December 31, 2021 was primarily due to the amount due to Lianwai School.
As of December 31, 2022, 2023 and 2024, we had net current assets of RMB195 million, RMB142 million, and RMB124 million, respectively. However, we recorded net current liabilities of RMB113 million as of December 31, 2021. The net current liabilities as of December 31, 2021 was primarily due to the amount due to Lianwai School.
If we fail to successfully execute our growth strategies, we may not be able to maintain our growth rate and our and the VIEs’ business, financial condition and results of operations may be materially and adversely affected. We recorded net current liabilities as of December 31, 2021.
If we fail to successfully execute our growth strategies, we may not be able to maintain our growth rate and our and the VIEs’ business, financial condition and results of operations may be materially and adversely affected. We historically recorded net current liabilities.
After such registration statement was declared effective by the SEC and a final prospectus in connection therewith was filed and the other conditions set forth in the Purchase Agreements were satisfied, we issued and sold the 50,000,000 ordinary shares to be represented by ADSs to the investors and the transaction was closed on October 6, 2023.
After such registration statement was declared effective by the SEC and a final prospectus in connection therewith was filed and the other conditions set forth in the Purchase Agreements were satisfied, we issued and sold the 1,800,000,000 Class A ordinary shares to be represented by ADSs to the investors and the transaction was closed in early 2025.
Langfang School and its operations are currently located in Langfang City, Hebei Province. As of the date of the annual report, according to the latest census report of Hebei Province, the population of Langfang City and Hebei Province in 2023 was 5.5 million and 73.9 million, respectively.
Langfang School and its operations are currently located in Langfang City, Hebei Province. According to the latest census report of Hebei Province, the population of Langfang City and Hebei Province in 2024 was 5.5 million and 73.8 million, respectively.
History and Development of the Company. ” There are substantial uncertainties regarding the interpretation and application of the Decision, the current Promotion Law, the Opinions and the 2021 Implementation Rules, which affect or may affect our industry as a whole or the schools, including Lianwai School and its subsidiaries, Qingtian International School, Lishui International School and Langfang School.
History and Development of the Company. ” There are substantial uncertainties regarding the interpretation and application of the Decision, the current Promotion Law, the Education Fees Opinions and the 2021 Implementation Rules, which affect or may affect Lishui International School, Langfang School and Hainan Jiangcai, or our industry as a whole.
Loss of taxes and fees may incur in the process, which may have an adverse impact on Qingtian International School’s and Langfang School’s operations.
Loss of taxes and fees may incur in the process, which may have an adverse impact on the VIEs’ operations.
For the years ended December 31, 2021, 2022 and 2023, the cash flows that have occurred between the Company, the VIEs and their consolidated subsidiaries, Liandu WFOE which is the primary beneficiary of the VIEs, and other subsidiaries are summarized as the following: For the years ended December 31, 2021 2022 2023 RMB Cash paid by Lianwai School to other subsidiaries for food procurement service 16,056,452 — — Cash transfer from Liandu WFOE to other subsidiaries — 600,000 — Cash transfer from Liandu WFOE to VIEs and their consolidated subsidiaries 46,860,000 17,350,000 15,800,000 Cash transfer from VIEs and their consolidated subsidiaries to Liandu WFOE 33,601,578 18,788,590 15,550,000 Cash transfer from other subsidiaries to Liandu WFOE 17,600,000 — — Cash transfer from other subsidiaries to VIEs and their consolidated subsidiaries 9,900,000 45,000,000 650,000 Cash transfer from VIEs and their consolidated subsidiaries to other subsidiaries 15,110,752 — 20,150,000 From January 1, 2024 to the date of this annual report, cash is transferred among the Company, Liandu WFOE, the VIEs and their consolidated subsidiaries, in the following manners: (i) Liandu WFOE provided a total of RMB6,145,405 in cash to VIEs and their consolidated subsidiaries and RMB9,350,000 in cash to other subsidiaries; (ii) VIEs and their consolidated subsidiaries provided a total of RMB15,500,000 in cash to Liandu WFOE and RMB100,000 in cash to other subsidiaries; (iii) Other subsidiaries provided a total of RMB100,000 in cash to VIEs and their consolidated subsidiaries; (Ⅳ) Other subsidiaries provided a total of RMB141,950 in cash to Lianwai Investment.
For the years ended December 31, 2022, 2023 and 2024, the cash flows that have occurred between the Company, the VIEs and their consolidated subsidiaries, Liandu WFOE which is the primary beneficiary of the VIEs, and other subsidiaries are summarized as the following: For the years ended December 31, 2022 2023 2024 RMB Cash paid by Lianwai School to other subsidiaries for food procurement service — — — Cash transfer from Liandu WFOE to other subsidiaries 600,000 — — Cash transfer from Liandu WFOE to VIEs and their consolidated subsidiaries 17,350,000 15,800,000 — Cash transfer from VIEs and their consolidated subsidiaries to Liandu WFOE 18,788,590 15,550,000 — Cash transfer from other subsidiaries to Liandu WFOE — — — Cash transfer from other subsidiaries to VIEs and their consolidated subsidiaries 45,000,000 650,000 100,000 Cash transfer from VIEs and their consolidated subsidiaries to other subsidiaries — 20,150,000 — From January 1, 2025 to the date of this annual report, cash is transferred among the Company, Liandu WFOE, the VIEs and their consolidated subsidiaries, in the following manners: (i) other subsidiaries provided a total of RMB150,000 in cash to VIEs and their consolidated subsidiaries; (ii) VIEs and their consolidated subsidiaries provided a total of RMB150,000 in cash to other subsidiaries and (iii) other subsidiaries provided a total of RMB290,000 in cash to the Company.
On January 24, 2024, the Company received a letter from the Nasdaq Hearing Panel (the “Panel”), notifying the Company that it has regained compliance with the Bid Price Rule, as required by the Panel’s decision dated November 30, 2023. Accordingly, the Panel determined to continue the listing of the Company’s securities on Nasdaq and this matter was closed.
On January 24, 2024, the Company received a letter from the Nasdaq Hearing Panel (the “Panel”), notifying the Company that it has regained compliance with the Bid Price Rule, as required by the Panel’s decision dated November 30, 2023.
For the year ended December 31, 2021 Condensed Consolidating Schedule of Results of Operations Parent VIEs and their consolidated subsidiaries Liandu WFOE which is the primary beneficiary of the VIEs Other subsidiaries Elimination adjustments Total RMB Continuing operations Revenue — 20,112,033 3,459,777 10,864,732 230 34,436,772 Cost of revenue — (10,419,986 ) (2,210,487 ) (4,725,977 ) — (17,356,450 ) General and administrative expenses (1,059,294 ) (9,601,120 ) (6,327,602 ) (1,384,517 ) (230 ) (18,372,763 ) (Loss)/Income from operations (1,059,294 ) 90,927 (5,078,312 ) 4,754,238 — (1,292,441 ) Other expense, net — (558,309 ) (14,640 ) (38,445 ) 2,823,630 2,212,236 Equity in (loss)/profit of subsidiaries and VIEs, net (242,760,667 ) — 4,045,103 1,047,849 237,667,715 — (Loss)/Income before income tax expenses (243,819,961 ) (467,382 ) (1,047,849 ) 5,763,642 240,491,345 919,795 Income tax expense — — — (670,976 ) — (670,976 ) (Loss)/Income from continuing operations, net of tax (243,819,961 ) (467,382 ) (1,047,849 ) 5,092,666 240,491,345 248,819 Loss from discontinued operation, net of tax — (244,068,780 ) — — (244,068,780 ) Net (loss)/income (243,819,961 ) (244,536,162 ) (1,047,849 ) 5,092,666 240,491,345 (243,819,961 ) Condensed Consolidating Schedule of Cash Flows Net cash (used in)/provided by operating activities (2,290,367 ) 29,764,431 (1,397,532 ) 3,040,518 1,490,550 30,607,600 Net cash used in investing activities — (153,593,942 ) (423,550 ) (1,153,024 ) 120,000 (155,050,516 ) Net cash provided by financing activities — 115,671,061 — 120,000 (120,000 ) 115,671,061 Effect of exchange rate changes on cash and cash equivalents (3,088,575 ) — — (6,903 ) (1,490,550 ) (4,586,028 ) Net changes in cash and cash equivalents (5,378,942 ) (8,158,450 ) (1,821,082 ) 2,000,591 — (13,357,883 ) Cash and cash equivalents at the beginning of year 200,108,273 9,611,773 2,880,261 169,399 — 212,769,706 Cash and cash equivalents at the end of year 194,729,331 1,453,323 1,059,179 2,169,990 — 199,411,823 24 For the year ended December 31, 2022 Condensed Consolidating Schedule of Results of Operations Parent VIEs and their consolidated subsidiaries Liandu WFOE which is the primary beneficiary of the VIEs Other subsidiaries Elimination adjustment Total RMB Continuing operation Revenue - 38,096,542 3,257,199 - - 41,353,741 Cost of revenue - (38,988,285 ) (1,397,604 ) (19,073 ) - (40,404,962 ) General and administrative expenses (2,360,615 ) (43,124,641 ) (553,351 ) (467,924 ) - (46,506,531 ) Sales and marketing expenses - (61,645 ) - - - (61,645 ) Income from operations (2,360,615 ) (44,078,029 ) 1,306,244 (486,997 ) - (45,619,397 ) Other income, net 12,107 35,717,046 16,757 2,109 - 35,748,019 Equity in loss of subsidiaries and VIEs, net (5,441,353 ) - (470,467 ) (852,534 ) 6,764,354 - Income before income tax expenses (7,789,861 ) (8,360,983 ) 852,534 (1,337,422 ) 6,764,354 (9,871,378 ) Income tax expense - (58,664 ) - 10,273 - (48,391 ) Income from continuing operations, net of tax (7,789,861 ) (8,419,647 ) 852,534 (1,327,149 ) 6,764,354 (9,919,769 ) Income from discontinued operations, net of tax - 1,828,539 - - - 1,828,539 Net (loss)/income (7,789,861 ) (6,591,108 ) 852,534 (1,327,149 ) 6,764,354 (8,091,230 ) Condensed Consolidating Schedule of Cash Flows Net cash (used in)/provided by operating activities (1,900,037 ) 43,586,442 (32,749 ) (685,955 ) - 40,967,701 Net cash used in investing activities - (456,381 ) - - - (456,381 ) Net cash used in financing activities - (11,218,750 ) - - - (11,218,750 ) Effect of exchange rate changes on cash and cash equivalents 17,940,145 - - 117,010 - 18,057,155 Net increase in cash and cash equivalents 16,040,108 31,911,311 (32,749 ) (568,945 ) - 47,349,725 Cash and cash equivalents at the beginning of year 194,729,331 1,453,323 1,059,179 2,169,990 - 199,411,823 Cash and cash equivalents at the end of year 210,769,439 33,364,634 1,026,430 1,601,045 - 246,761,548 Less cash and cash equivalents of discontinued operations–end of year - 491,106 - - - 491,106 Cash and cash equivalents of continuing operations–end of year 210,769,439 32,873,528 1,026,430 1,601,045 - 246,270,442 25 For the year ended December 31, 2023 Condensed Consolidating Schedule of Results of Operations Parent VIEs and their consolidated subsidiaries Liandu WFOE which is the primary beneficiary of the VIEs Other subsidiaries Elimination adjustment Total RMB Continuing operation Revenue - 48,374,296 2,441,120 - - 50,815,416 Cost of revenue - (46,182,644 ) (662,871 ) (4,799 ) - (46,850,314 ) General and administrative expenses (1,292,974 ) (110,694,880 ) (652,759 ) (621,002 ) - (113,261,615 ) Sales and marketing expenses - (18,300 ) - - - (18,300 ) (Loss)/income from operations (1,292,974 ) (108,521,528 ) 1,125,490 (625,801 ) - (109,314,813 ) Other income, net 336 8,263,054 569,101 6,693 - 8,839,184 Equity in (loss)/income of subsidiaries and VIEs (125,338,010 ) - (3,518,720 ) 1,824,129 127,032,601 - (Loss)/income before income tax expenses (126,630,648 ) (100,258,474 ) (1,824,129 ) 1,205,021 127,032,601 (100,475,629 ) Income tax expense - (216,120 ) - (2,903,456 ) - (3,119,576 ) (Loss)/income from continuing operations, net of tax (126,630,648 ) (100,474,594 ) (1,824,129 ) (1,698,435 ) 127,032,601 (103,595,205 ) Loss from discontinued operations, net of tax - (23,394,661 ) - - - (23,394,661 ) Net (loss)/income (126,630,648 ) (123,869,255 ) (1,824,129 ) (1,698,435 ) 127,032,601 (126,989,866 ) Condensed Consolidating Schedule of Cash Flows Net cash (used in)/provided by operating activities (42,725,890 ) (16,213,871 ) 283,574 (543,288 ) - (59,199,475 ) Net cash used in investing activities - (7,576,283 ) - - - (7,576,283 ) Net cash provided by financing activities 41,856,435 2,227,473 - - - 44,083,908 Effect of exchange rate changes on cash and cash equivalents 2,947,203 - - 23,350 - 2,970,553 Net increase in cash and cash equivalents 2,077,748 (21,562,681 ) 283,574 (519,938 ) - (19,721,297 ) Cash and cash equivalents at the beginning of year 210,769,439 32,873,528 1,026,430 1,601,045 - 246,270,442 Cash and cash equivalents of discontinued operations–beginning of year - 491,106 - - - 491,106 Cash and cash equivalents at the end of year 212,847,187 11,801,953 1,310,004 1,081,107 - 227,040,251 Less cash and cash equivalents of discontinued operations–end of year - - - - - - Cash and cash equivalents of continuing operations–end of year 212,847,187 11,801,953 1,310,003 1,081,108 - 227,040,251 26 Cash and Asset Flows through Our Organization The Company may (i) transfer the net proceeds into Liandu WFOE to pay in their initially subscribed registered capital, and (ii) provide loans to Liandu WFOE and the VIEs.
For the year ended December 31, 2022 Condensed Consolidating Schedule of Results of Operations Parent VIEs and their consolidated subsidiaries Liandu WFOE which is the primary beneficiary of the VIEs Other subsidiaries Elimination adjustment Total RMB Continuing operation Revenue - 38,096,542 3,257,199 - - 41,353,741 Cost of revenue - (38,988,285 ) (1,397,604 ) (19,073 ) - (40,404,962 ) General and administrative expenses (2,360,615 ) (43,124,641 ) (553,351 ) (467,924 ) - (46,506,531 ) Sales and marketing expenses - (61,645 ) - - - (61,645 ) Income from operations (2,360,615 ) (44,078,029 ) 1,306,244 (486,997 ) - (45,619,397 ) Other income, net 12,107 35,717,046 16,757 2,109 - 35,748,019 Equity in loss of subsidiaries and VIEs, net (5,441,353 ) - (470,467 ) (852,534 ) 6,764,354 - Income before income tax expenses (7,789,861 ) (8,360,983 ) 852,534 (1,337,422 ) 6,764,354 (9,871,378 ) Income tax expense - (58,664 ) - 10,273 - (48,391 ) Income from continuing operations, net of tax (7,789,861 ) (8,419,647 ) 852,534 (1,327,149 ) 6,764,354 (9,919,769 ) Income from discontinued operations, net of tax - 1,828,539 - - - 1,828,539 Net (loss)/income (7,789,861 ) (6,591,108 ) 852,534 (1,327,149 ) 6,764,354 (8,091,230 ) Condensed Consolidating Schedule of Cash Flows Net cash (used in)/provided by operating activities (1,900,037 ) 43,586,442 (32,749 ) (685,955 ) - 40,967,701 Net cash used in investing activities - (456,381 ) - - - (456,381 ) Net cash used in financing activities - (11,218,750 ) - - - (11,218,750 ) Effect of exchange rate changes on cash and cash equivalents 17,940,145 - - 117,010 - 18,057,155 Net increase in cash and cash equivalents 16,040,108 31,911,311 (32,749 ) (568,945 ) - 47,349,725 Cash and cash equivalents at the beginning of year 194,729,331 1,453,323 1,059,179 2,169,990 - 199,411,823 Cash and cash equivalents at the end of year 210,769,439 33,364,634 1,026,430 1,601,045 - 246,761,548 Less cash and cash equivalents of discontinued operations–end of year - 491,106 - - - 491,106 Cash and cash equivalents of continuing operations–end of year 210,769,439 32,873,528 1,026,430 1,601,045 - 246,270,442 24 For the year ended December 31, 2023 Condensed Consolidating Schedule of Results of Operations Parent VIEs and their consolidated subsidiaries Liandu WFOE which is the primary beneficiary of the VIEs Other subsidiaries Elimination adjustment Total RMB Continuing operation Revenue - 48,374,296 2,441,120 - - 50,815,416 Cost of revenue - (46,182,644 ) (662,871 ) (4,799 ) - (46,850,314 ) General and administrative expenses (1,292,974 ) (110,694,880 ) (652,759 ) (621,002 ) - (113,261,615 ) Sales and marketing expenses - (18,300 ) - - - (18,300 ) (Loss)/income from operations (1,292,974 ) (108,521,528 ) 1,125,490 (625,801 ) - (109,314,813 ) Other income, net 336 8,263,054 569,101 6,693 - 8,839,184 Equity in (loss)/income of subsidiaries and VIEs (125,338,010 ) - (3,518,720 ) 1,824,129 127,032,601 - (Loss)/income before income tax expenses (126,630,648 ) (100,258,474 ) (1,824,129 ) 1,205,021 127,032,601 (100,475,629 ) Income tax expense - (216,120 ) - (2,903,456 ) - (3,119,576 ) (Loss)/income from continuing operations, net of tax (126,630,648 ) (100,474,594 ) (1,824,129 ) (1,698,435 ) 127,032,601 (103,595,205 ) Loss from discontinued operations, net of tax - (23,394,661 ) - - - (23,394,661 ) Net (loss)/income (126,630,648 ) (123,869,255 ) (1,824,129 ) (1,698,435 ) 127,032,601 (126,989,866 ) Condensed Consolidating Schedule of Cash Flows Net cash (used in)/provided by operating activities (42,725,890 ) (16,213,871 ) 283,574 (543,288 ) - (59,199,475 ) Net cash used in investing activities - (7,576,283 ) - - - (7,576,283 ) Net cash provided by financing activities 41,856,435 2,227,473 - - - 44,083,908 Effect of exchange rate changes on cash and cash equivalents 2,947,203 - - 23,350 - 2,970,553 Net increase in cash and cash equivalents 2,077,748 (21,562,681 ) 283,574 (519,938 ) - (19,721,297 ) Cash and cash equivalents at the beginning of year 210,769,439 32,873,528 1,026,430 1,601,045 - 246,270,442 Cash and cash equivalents of discontinued operations–beginning of year - 491,106 - - - 491,106 Cash and cash equivalents at the end of year 212,847,187 11,801,953 1,310,004 1,081,107 - 227,040,251 Less cash and cash equivalents of discontinued operations–end of year - - - - - - Cash and cash equivalents of continuing operations–end of year 212,847,187 11,801,953 1,310,003 1,081,108 - 227,040,251 25 For the year ended December 31, 2024 Condensed Consolidating Schedule of Results of Operations Parent VIEs and their consolidated subsidiaries Liandu WFOE which is the primary beneficiary of the VIEs Other subsidiaries Elimination adjustment Total RMB Revenue - 32,139,658 661,002 - - 32,800,660 Cost of revenue - (35,844,133 ) (2,810 ) (4,162 ) - (35,851,105 ) General and administrative expenses (2,647,144 ) (18,717,355 ) (577,702 ) (856,964 ) - (22,799,165 ) Sales and marketing expenses - (111,780 ) - - - (111,780 ) (Loss)/income from operations (2,647,144 ) (22,533,610 ) 80,490 (861,126 ) - (25,961,390 ) Other income, net 18 1,255,874 1,570 1,895 - 1,259,357 Equity in (loss)/income of subsidiaries and VIEs, net (21,980,540 ) - (822,165 ) 740,105 22,062,600 - Loss before income tax expenses (24,627,666 ) (21,277,736 ) (740,105 ) (119,126 ) 22,062,600 (24,702,033 ) Income tax expense - - - - - - Net loss (24,627,666 ) (21,277,736 ) (740,105 ) (119,126 ) 22,062,600 (24,702,033 ) Condensed Consolidating Schedule of Cash Flows Net cash used in operating activities (861,999 ) (16,099,979 ) (455,100 ) (904,713 ) - (18,321,791 ) Net cash used in investing activities - (554,082 ) - - - (554,082 ) Net cash provided by financing activities - 8,750,000 - - - 8,750,000 Effect of exchange rate changes on cash and cash equivalents 3,785,027 - - 24,833 - 3,809,860 Net increase/(decrease) in cash and cash equivalents 2,923,028 (7,904,061 ) (455,100 ) (879,880 ) - (6,316,013 ) Cash and cash equivalents at the beginning of year 212,847,187 11,801,953 1,310,004 1,081,107 - 227,040,251 Cash and cash equivalents at the end of year 215,770,215 3,897,892 854,904 201,227 - 220,724,238 26 Cash and Asset Flows through Our Orga nization The Company may (i) transfer the net proceeds into Liandu WFOE to pay in their initially subscribed registered capital, and (ii) provide loans to Liandu WFOE and the VIEs.
Langfang School had 1554 students enrolled and it recorded a utilization rate of approximately 60.8% as of September 1, 2023. If Qingtian International School, Lishui International School and Langfang School are unable to attract and retain students to fully utilize the campuses, they may record lower operation efficiency and we may be unable to benefit from the acquisitions.
Hainan Jiangcai (through its cooperator Hainan Technical School) had 685 students enrolled as of September 1, 2024. If Qingtian International School, Lishui International School, Langfang School and Hainan Technical School are unable to attract and retain students to fully utilize the campuses, they may record lower operation efficiency and we may be unable to benefit from the acquisitions.
The following table provides details on the aforementioned licenses and permissions held by our PRC subsidiaries and VIEs. 14 Company/School License/Permission Issuing Authority Validity Liandu WFOE Business License Market Supervision Administration of Lishui City Until October 9, 2068 Xianke Business License Market Supervision Administration of Jingning Shezu Autonomous County Long-term Food Operation License Market Supervision Administration of Jingning Shezu Autonomous County Until August 24, 2025 Hangzhou Youxi Business License Market Supervision Administration of Hangzhou City Long-term Lishui Mengxiang Business License Market Supervision Administration of Lishui City Until August 16, 2051 Qingtian International School Public Institution Legal Person Certificate Registration Administration of Public Institutions of Qingtian County Until August 1, 2024 Permit for Establishment of Privately-run Schools Qingtian Education Bureau Until July 31, 2029 Food Operation License Market Supervision Administration of Qingtian County Until September 8, 2026 Beijing Xinxiang Business License Market Supervision Administration of Chaoyang District, Beijing Until February 13, 2062 Beijing P.X.
The following table provides details on the aforementioned licenses and permissions held by our PRC subsidiaries and VIEs. 14 Company/School License/Permission Issuing Authority Validity Liandu WFOE Business License Market Supervision Administration of Lishui City Until October 9, 2068 Xianke Business License Market Supervision Administration of Jingning Shezu Autonomous County Long-term Food Operation License Market Supervision Administration of Jingning Shezu Autonomous County Until August 24, 2025 Hangzhou Youxi Business License Market Supervision Administration of Hangzhou City Long-term Lishui Mengxiang Business License Market Supervision Administration of Lishui City Until August 16, 2051 Beijing P.X.
See “Risk Factors—Risks Relating to Our ADSs—The trading price of our ADSs may be volatile, which could result in substantial losses to you,” “Risk Factors—Risks Relating to Our ADSs—The voting rights of holders of our ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct how the ordinary shares represented by your ADSs are voted,” and “Risk Factors—Risks Relating to Our ADSs—The depositary shall deem you to have instructed the depositary to give us a discretionary proxy to vote the ordinary shares underlying your ADSs if you do not give timely voting instructions to the depositary to direct how the ordinary shares underlying your ADSs are voted, except in limited circumstances, which could adversely affect your interests.” 21 Financial Information Related to the VIEs The following table presents the condensed consolidating schedule of financial position of our parent company, VIEs and their consolidated subsidiaries, Liandu WFOE that is the primary beneficiary of the VIEs, and other subsidiaries as of the December 31, 2022 and 2023.
See “Risk Factors—Risks Relating to Our ADSs—The trading price of our ADSs may be volatile, which could result in substantial losses to you,” “Risk Factors—Risks Relating to Our ADSs—The voting rights of holders of our ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct how the Class A ordinary shares represented by your ADSs are voted,” and “Risk Factors—Risks Relating to Our ADSs—The depositary shall deem you to have instructed the depositary to give us a discretionary proxy to vote the Class A ordinary shares underlying your ADSs if you do not give timely voting instructions to the depositary to direct how the Class A ordinary shares underlying your ADSs are voted, except in limited circumstances, which could adversely affect your interests.” ● Our dual-class share structure with different voting rights will limit our ADSs holders’ rights and affect the trading price and liquidity of our ADSs.
For the years ended December 31, 2021 2022 2023 RMB RMB RMB US$ (Note 2(g)) Net revenues: Revenue from third parties 8,512,992 40,599,456 50,061,131 7,050,963 Revenue from related parties 906,667 754,285 754,285 106,239 Revenue from affected entity 25,017,113 - - - Total net revenues 34,436,772 41,353,741 50,815,416 7,157,202 Cost of revenues (17,356,450 ) (40,404,962 ) (46,850,314 ) (6,598,729 ) Gross profit 17,080,322 948,779 3,965,102 558,473 Operating expenses: General and administrative expenses (18,372,763 ) (27,664,531 ) (25,445,401 ) (3,583,910 ) Selling and marketing expenses - (61,645 ) (18,300 ) (2,578 ) Impairment loss on goodwill - (18,842,000 ) (22,677,921 ) (3,194,118 ) Expected credit loss for receivables and other assets - - (65,138,293 ) (9,174,537 ) Total operating expenses (18,372,763 ) (46,568,176 ) (113,279,915 ) (15,955,143 ) Operating loss (1,292,441 ) (45,619,397 ) (109,314,813 ) (15,396,670 ) Interest expense (2,393,178 ) (4,014,414 ) (3,634,721 ) (511,940 ) Interest income 14,834 73,705 134,011 18,875 Fair value change gain of contingent consideration - 22,850,000 - - Other income, net 4,590,580 16,838,728 12,339,894 1,738,038 Income/(loss) before income tax expense 919,795 (9,871,378 ) (100,475,629 ) (14,151,697 ) Income tax expenses (670,976 ) (48,391 ) (3,119,576 ) (439,383 ) Income/(loss) from continuing operations, net of tax 248,819 (9,919,769 ) (103,595,205 ) (14,591,080 ) (Loss)/income from discontinued operation, net of tax (244,068,780 ) 1,828,539 (23,394,661 ) (3,295,070 ) Net loss (243,819,961 ) (8,091,230 ) (126,989,866 ) (17,886,150 ) Net loss attributable to Lixiang Education Holding Co., Ltd. shareholders (243,819,961 ) (7,789,861 ) (126,630,648 ) (17,835,555 ) Net loss attributable to non-controlling interests - (301,369 ) (359,218 ) (50,595 ) Other comprehensive (loss)/income: Foreign currency translation adjustment, net of nil tax (4,586,027 ) 18,057,155 2,970,553 418,394 Comprehensive (loss)/income (248,405,988 ) 9,965,925 (124,019,313 ) (17,467,756 ) Total comprehensive loss attributable to non-controlling interests - (301,369 ) (359,218 ) (50,595 ) Total comprehensive (loss)/income attributable to Lixiang Education Holding Co., Ltd. shareholders (248,405,988 ) 10,267,294 (123,660,095 ) (17,417,161 ) Earnings/(loss) per ordinary share attributable to Lixiang Education Holding Co., Ltd. shareholders from continuing operations 0.00 (0.15 ) (1.32 ) (0.19 ) —Basic and diluted (Loss)/Earnings per ordinary share attributable to Lixiang Education Holding Co., Ltd. shareholders from discontinued operation (3.66 ) 0.03 (0.30 ) (0.04 ) —Basic and diluted Weighted average number of ordinary shares outstanding 66,667,000 66,667,000 78,584,808 78,584,808 30 The following table presents our summary consolidated balance sheet data as of December 31, 2022 and 2023.
For the years ended December 31, 2022 2023 2024 RMB RMB RMB US$ Net revenues: Revenue from third parties 40,599,456 50,061,131 32,046,375 4,390,335 Revenue from a related party 754,285 754,285 754,285 103,337 Total net revenues 41,353,741 50,815,416 32,800,660 4,493,672 Cost of revenues (40,404,962 ) (46,850,314 ) (35,851,105 ) (4,911,581 ) Gross profit/(loss) 948,779 3,965,102 (3,050,445 ) (417,909 ) Operating expenses: General and administrative expenses (27,664,531 ) (25,445,401 ) (22,799,165 ) (3,123,473 ) Selling and marketing expenses (61,645 ) (18,300 ) (111,780 ) (15,314 ) Impairment loss on goodwill (18,842,000 ) (22,677,921 ) - - Expected credit loss for receivables and other assets - (65,138,293 ) - - Total operating expenses (46,568,176 ) (113,279,915 ) (22,910,945 ) (3,138,787 ) Operating loss (45,619,397 ) (109,314,813 ) (25,961,390 ) (3,556,696 ) Interest expense (4,014,414 ) (3,634,721 ) (2,860,956 ) (391,949 ) Interest income 73,705 134,011 289,865 39,711 Fair value change gain of contingent consideration 22,850,000 - - - Other income, net 16,838,728 12,339,894 3,830,448 524,769 Loss before income tax expense (9,871,378 ) (100,475,629 ) (24,702,033 ) (3,384,165 ) Income tax expense (48,391 ) (3,119,576 ) - - Loss from continuing operations, net of tax (9,919,769 ) (103,595,205 ) (24,702,033 ) (3,384,165 ) Income/(loss) from discontinued operation, net of tax 1,828,539 (23,394,661 ) - - Net loss (8,091,230 ) (126,989,866 ) (24,702,033 ) (3,384,165 ) Net loss attributable to Lixiang Education Holding Co., Ltd. shareholders (7,789,861 ) (126,630,648 ) (24,627,666 ) (3,373,977 ) Net loss attributable to non-controlling interests (301,369 ) (359,218 ) (74,367 ) (10,188 ) Other comprehensive income/(loss): Foreign currency translation adjustment, net of nil tax 18,057,155 2,970,553 3,809,859 521,949 Comprehensive income/(loss) 9,965,925 (124,019,313 ) (20,892,174 ) (2,862,216 ) Total comprehensive loss attributable to non-controlling interests (301,369 ) (359,218 ) (74,367 ) (10,188 ) Total comprehensive income/(loss) attributable to Lixiang Education Holding Co., Ltd. shareholders 10,267,294 (123,660,095 ) (20,817,807 ) (2,852,028 ) Loss per ordinary share attributable to Lixiang Education Holding Co., Ltd. shareholders from continuing operations (0.15 ) (1.32 ) (0.21 ) (0.03 ) —Basic and diluted Earnings/(loss) per ordinary share attributable to Lixiang Education Holding Co., Ltd. shareholders from discontinued operation 0.03 (0.30 ) - - —Basic and diluted Weighted average number of ordinary shares outstanding 66,667,000 78,584,808 116,667,000 116,667,000 30 The following table presents our summary consolidated balance sheet data as of December 31, 2023 and 2024.
Reverse Stock Split On May 3, 2023, the Company was first notified by the Nasdaq Stock Market LLC (“Nasdaq”) of its failure to maintain a minimum bid price of US$1.00 per share for 30 consecutive trading days under Nasdaq Listing Rules 5450(a)(1) (the “Bid Price Rule”), and was given its first 180-day extension, or until October 30, 2023 to regain compliance.
Accordingly, the Panel determined to continue the listing of the Company’s securities on Nasdaq and this matter was closed. 2024 Reverse Stock Split On May 7, 2024, the Company was notified by the Nasdaq of its failure to maintain a minimum bid price of US$1.00 per share for 30 consecutive trading days under the Bid Price Rule, and was given a compliance period of 180-day extension, or until November 4, 2024 to regain compliance.
Lishui International School was established in June 2023 and started to enroll student in September 2023. Lishui International School had 74 students as of September 1, 2023 and it recorded a utilization rate of approximately 92.5% as of September 1, 2023.
We deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023. Lishui International School was established in June 2023 and started to enroll student in September 2023. Lishui International School had 126 students as of September 1, 2024 and it recorded a utilization rate of approximately 70% as of September 1, 2024.
We and the VIEs may not be able to expand our capacity at our current campus unless we and the VIEs relocate to other facilities in the local area with more space.
None of Lishui International School, Langfang School, and Hainan Technical School had a lack of capacity for enrolling students as of September 1, 2024. We and the VIEs may not be able to expand our capacity at our current campus unless we and the VIEs relocate to other facilities in the local area with more space.
Besides, we have submitted the filing documents to the CSRC in respect of the 2023 Private Placement. As of the date of the annual report, we have not received any notice or determination from the CSRC confirming that we have completed our filing procedures.
As of the date of the annual report, we have not received any notice or determination from the CSRC confirming that we have completed our filing procedures for our 2024 Private Placement. It is uncertain whether such filing can be completed or how long it will take to complete such filing.
The PRC government could even disallow the VIE structure completely, which would likely result in a material adverse change in our operations and the ADSs may significantly decline in value or become worthless. 2023 Private Placement On August 25, 2023, we entered into a share subscription agreement with each of Xiaoxiong Li, Haibin Gong, Yiqiang Dong, Huafeng Hong, Kin Mang Kung, Shulin Gong, Kim Tuk Yeung, Qunzhu Dong, Jinglong Hong and Canghai Hong (collectively, the “Purchase Agreements”), pursuant to which we agreed to issue and sell to such individual investors a total of 50,000,000 ordinary shares with a par value of US$0.0001 each of the Company, in the aggregate consideration of US$6,000,000.
See “ Risk Factors—Risks Relating to Doing Business in China—Implementation of the Law of the PRC on Safeguarding National Security in Hong Kong involves uncertainty, and the recent policy pronouncements by the PRC government regarding business activities of U.S.-listed PRC businesses may negatively impact Lixiang’s existing and future operations in Hong Kong. ” 2023 Private Placement On August 25, 2023, we entered into a share subscription agreement with each of Xiaoxiong Li, Haibin Gong, Yiqiang Dong, Huafeng Hong, Kin Mang Kung, Shulin Gong, Kim Tuk Yeung, Qunzhu Dong, Jinglong Hong and Canghai Hong (collectively, the “2023 Purchase Agreements”), pursuant to which we agreed to issue and sell to such individual investors a total of 50,000,000 ordinary shares (now redesignated as Class A ordinary shares) with a par value of US$0.0001 each of the Company, in the aggregate consideration of US$6,000,000.
As of December 31, 2022 Condensed Consolidating Schedule of Financial Position Parent VIEs and their consolidated subsidiaries Liandu WFOE which is the primary beneficiary of the VIEs Other subsidiaries Elimination adjustment Total RMB Assets Cash and cash equivalents 210,769,439 32,873,528 1,026,430 1,601,045 - 246,270,442 Inter-group balance due from VIEs and subsidiaries of continuing operation 7,686 57,331,944 16,855,664 50,350,000 (124,545,294 ) - Prepayments and other current assets - 74,180,309 27,594 1,298,263 - 75,506,166 Other current assets - 11,148 1,156,628 - - 1,167,776 Investment deficit in subsidiaries and VIEs 84,528,603 - - - (84,528,603 ) - Current assets belong to discontinued operation - 6,609,704 - - - 6,609,704 Total current assets 295,305,728 171,006,633 19,066,316 53,249,308 (209,073,897 ) 329,554,088 Property and equipment, net - 159,226,997 - 882,112 - 160,109,109 Land use right - 35,820,632 - - - 35,820,632 Goodwill - 70,369,837 - - - 70,369,837 Other non-current assets - 7,582,202 - 318,656 2,802,091 10,702,949 Investments in subsidiaries - - 3,903,286 648,631 (4,551,917 ) - Non-current assets belong to discontinued operation - 2,369,839 - - - 2,369,839 Total non-current assets - 275,369,507 3,903,286 1,849,399 (1,749,826 ) 279,372,366 Total assets 295,305,728 446,376,140 22,969,602 55,098,707 (210,823,723 ) 608,926,454 Short-term borrowings - 61,000,000 - - - 61,000,000 Inter-group balance due to VIEs and subsidiaries of continuing operation 42,307,875 35,000,000 34,000,406 7,687 (111,315,968 ) - Accrued liabilities and other current liabilities - 14,207,561 567,687 - - 14,775,248 Other current liabilities 55,717 19,826,532 1,537,396 1,228,414 - 22,648,059 Investment deficit in subsidiaries and VIEs - - - - - Amounts due to related party - 323,400 - - - 323,400 Amounts due to Affected Entity, current - 21,225,707 16,531 2,342,668 - 23,584,906 Current liabilities belong to discontinued operations - 11,762,881 - - - 11,762,881 Total current liabilities 42,363,592 163,346,081 36,122,020 3,578,769 (111,315,968 ) 134,094,494 Amounts due to Affected Entity, non-current - 194,552,414 151,519 21,472,630 - 216,176,563 Other non-current liabilities - 4,808,380 - - - 4,808,380 Non-current liabilities belong to discontinued operations - 356,250 - - - 356,250 Total non-current liabilities - 199,717,044 151,519 21,472,630 - 221,341,193 Total liabilities 42,363,592 363,063,125 36,273,539 25,051,399 (111,315,968 ) 355,435,687 Non-controlling interests - 548,631 - - - 548,631 Total shareholders’ equity (deficit) 252,942,136 83,313,015 (13,303,937 ) 30,047,308 (99,507,755 ) 253,490,767 22 As of December 31, 2023 Condensed Consolidating Schedule of Financial Position Parent VIEs and their consolidated subsidiaries Liandu WFOE which is the primary beneficiary of the VIEs Other subsidiaries Elimination adjustment Total RMB Assets Cash and cash equivalents 212,847,187 11,801,953 1,310,004 1,081,107 - 227,040,251 Inter-group balance due from VIEs and subsidiaries of continuing operation 42,496,200 14,585,744 16,876,506 31,904,317 (105,862,767 ) - Prepayments and other current assets - 5,180,474 58,187 954,883 - 6,193,544 Other current assets - 9,380 886,895 - - 896,275 Amounts due from related party - 10,750,000 - - - 10,750,000 Current assets belong to discontinued operation - - - - - - Total current assets 255,343,387 42,327,551 19,131,592 33,940,307 (105,862,767 ) 244,880,070 Property and equipment, net - 150,806,607 - 742,979 - 151,549,586 Land use right - 34,873,935 - - - 34,873,935 Goodwill - - - - - - Other non-current assets - 2,480,864 - 186,615 - 2,667,479 Investments in subsidiaries - - 384,566 2,472,760 (2,857,326 ) - Non-current assets belong to discontinued operation - - - - - - Total non-current assets - 188,161,406 384,566 3,402,354 (2,857,326 ) 189,091,000 Total assets 255,343,387 230,488,957 19,516,158 37,342,661 (108,720,093 ) 433,971,070 Short-term borrowings - 74,000,000 - - - 74,000,000 Inter-group balance due to VIEs and subsidiaries of continuing operation 43,765,484 15,500,000 33,750,406 - (93,015,890 ) - Accrued liabilities and other current liabilities - 5,946,598 - 1,244 - 5,947,842 Other current liabilities 56,662 13,794,749 980,457 412,086 - 15,243,954 Investment deficit in subsidiaries and VIEs 54,111,743 - - - (54,111,743 ) Amounts due to related party - 8,000,000 - - - 8,000,000 Amounts due to Affected Entity, current - - - - - - Current liabilities belong to discontinued operations - - - - - - Total current liabilities 97,933,889 117,241,347 34,730,863 413,330 (147,127,633 ) 103,191,796 Amounts due to Affected Entity, non-current - 162,500,961 - 11,179,402 - 173,680,363 Other non-current liabilities - - - - - - Non-current liabilities belong to discontinued operations - - - - - - Total non-current liabilities - 162,500,961 - 11,179,402 - 173,680,363 Total liabilities 97,933,889 279,742,308 34,730,863 11,592,732 (147,127,633 ) 276,872,159 Non-controlling interests - (310,587 ) - - - (310,587 ) Total shareholders’ equity (deficit) 157,409,498 (49,253,351 ) (15,214,705 ) 25,749,929 38,407,540 157,098,911 23 The following table presents the condensed consolidating schedule of results of operations and cash flows of our parent company, VIEs and their consolidated subsidiaries, Liandu WFOE that is the primary beneficiary of the VIEs, and other subsidiaries for the years ended December 31, 2021, 2022 and 2023.
As of December 31, 2023 Condensed Consolidating Schedule of Financial Position Parent VIEs and their consolidated subsidiaries Liandu WFOE which is the primary beneficiary of the VIEs Other subsidiaries Elimination adjustment Total RMB Assets Cash and cash equivalents 212,847,187 11,801,953 1,310,004 1,081,107 - 227,040,251 Inter-group balance due from VIEs and subsidiaries of continuing operation 42,496,200 14,585,744 16,876,506 31,904,317 (105,862,767 ) - Prepayments and other current assets - 5,180,474 58,187 954,883 - 6,193,544 Other current assets - 9,380 886,895 - - 896,275 Amounts due from a related party - 10,750,000 - - - 10,750,000 Current assets belong to discontinued operation - - - - - - Total current assets 255,343,387 42,327,551 19,131,592 33,940,307 (105,862,767 ) 244,880,070 Property and equipment, net - 150,806,607 - 742,979 - 151,549,586 Land use right - 34,873,935 - - - 34,873,935 Goodwill - - - - - - Other non-current assets - 2,480,864 - 186,615 - 2,667,479 Investments in subsidiaries - - 384,566 2,472,760 (2,857,326 ) - Non-current assets belong to discontinued operation - - - - - - Total non-current assets - 188,161,406 384,566 3,402,354 (2,857,326 ) 189,091,000 Total assets 255,343,387 230,488,957 19,516,158 37,342,661 (108,720,093 ) 433,971,070 Short-term borrowings - 74,000,000 - - - 74,000,000 Inter-group balance due to VIEs and subsidiaries of continuing operation 43,765,484 15,500,000 33,750,406 - (93,015,890 ) - Accrued liabilities and other current liabilities - 5,946,598 - 1,244 - 5,947,842 Other current liabilities 56,662 13,794,749 980,457 412,086 - 15,243,954 Investment deficit in subsidiaries and VIEs 54,111,743 - - - (54,111,743 ) Amounts due to related party - 8,000,000 - - - 8,000,000 Amounts due to Affected Entity, current - - - - - - Current liabilities belong to discontinued operations - - - - - - Total current liabilities 97,933,889 117,241,347 34,730,863 413,330 (147,127,633 ) 103,191,796 Amounts due to Affected Entity, non-current - 162,500,961 - 11,179,402 - 173,680,363 Other non-current liabilities - - - - - - Non-current liabilities belong to discontinued operations - - - - - - Total non-current liabilities - 162,500,961 - 11,179,402 - 173,680,363 Total liabilities 97,933,889 279,742,308 34,730,863 11,592,732 (147,127,633 ) 276,872,159 Non-controlling interests - (310,587 ) - - - (310,587 ) Total shareholders’ equity (deficit) 157,409,498 (49,253,351 ) (15,214,705 ) 25,749,929 38,407,540 157,098,911 22 As of December 31, 2024 Condensed Consolidating Schedule of Financial Position Parent VIEs and their consolidated subsidiaries Liandu WFOE which is the primary beneficiary of the VIEs Other subsidiaries Elimination adjustment Total RMB Assets Cash and cash equivalents 215,770,215 3,897,892 854,904 201,227 - 220,724,238 Inter-group balance due from VIEs and subsidiaries 43,130,675 15,356,140 3,105,881 24,159,107 (85,751,803 ) - Prepayments and other current assets - 4,426,665 365,085 1,054,980 - 5,846,730 Other current assets - 156,770 - - - 156,770 Amounts due from a related party - 9,542,000 - - - 9,542,000 Total current assets 258,900,890 33,379,467 4,325,870 25,415,314 (85,751,803 ) 236,269,738 Property and equipment, net - 146,646,206 - 603,848 - 147,250,054 Land use right - 33,927,238 - - - 33,927,238 Other non-current assets - 53,014,362 - 155,938 - 53,170,300 Investments in subsidiaries - - 3,081,121 1,388,736 (4,469,857 ) - Total non-current assets - 233,587,806 3,081,121 2,148,522 (4,469,857 ) 234,347,592 Total assets 258,900,890 266,967,273 7,406,991 27,563,836 (90,221,660 ) 470,617,330 Short-term borrowings - 84,000,000 - - - 84,000,000 Inter-group balance due to VIEs and subsidiaries 46,586,500 20,645,000 19,805,002 - (87,036,502 ) - Accrued liabilities and other current liabilities 31,932 7,457,837 - - - 7,489,769 Other current liabilities - 19,304,474 38,078 72,096 - 19,414,648 Investment deficit in subsidiaries and VIEs 66,144,375 - - - (66,144,375 ) - Amounts due to a related party - 1,817,485 - - - 1,817,485 Total current liabilities 112,762,807 133,224,796 19,843,080 72,096 (153,180,877 ) 112,721,902 Amounts due to Affected Entity, non-current - 158,514,326 - 14,531,837 - 173,046,163 Other non-current liabilities - 39,352,135 - - - 39,352,135 Total non-current liabilities - 197,866,461 - 14,531,837 - 212,398,298 Total liabilities 112,762,807 331,091,257 19,843,080 14,603,933 (153,180,877 ) 325,120,200 Non-controlling interests - (640,953 ) - - - (640,953 ) Total shareholders’ equity/(deficit) 146,138,083 (64,123,984 ) (12,436,089 ) 12,959,903 62,959,217 145,497,130 23 The following table presents the condensed consolidating schedule of results of operations and cash flows of our parent company, VIEs and their consolidated subsidiaries, Liandu WFOE that is the primary beneficiary of the VIEs, and other subsidiaries for the years ended December 31, 2022, 2023 and 2024.
We and the VIEs may not be able to admit all qualified students who would like to enroll in our school due to the capacity constraints of our current school facilities. Qingtian International School’s capacity was 810 as of September 1, 2023 and it recorded a utilization rate of approximately 60.6% as of September 1, 2023.
We and the VIEs may not be able to admit all qualified students who would like to enroll in our school due to the capacity constraints of our current school facilities. As of September 1, 2024, there were 126, 1,054 and 685 students enrolled in Lishui International School, Langfang School, and Hainan Jiangcai (through its cooperator Hainan Technical School).
See “ Item 4. Information on the Company—B. Business Overview—Regulation—Implementing Rules on Classification Registration of Private Schools ” for details.
See “ Item 4. Information on the Company—B. Business Overview—Regulation—Implementing Rules on Classification Registration of Private Schools ” for details. 35 On January 9, 2018, five departments of Hebei Province including the Department of Education of Hebei Province issued the Implementation Measures for the Classification Registration of Private Schools in Hebei Province, which came into effect on the same day.
The main arbitration claim was to request the respondents to pay the contract amount of RMB72.41 million and the liquidated damages of RMB20 million. As of the date of this annual report, the case is still in the process of service of arbitration documents. See “
The main arbitration claim was to request the respondents to pay the contracted amount of RMB72.41 million and liquidated damages of RMB20 million. On April 3, 2025, the Beijing Arbitration Commission rendered a final award granting the applicant’s main arbitration claim. As of the date of this annual report, Lishui Mengxiang has not yet received the aforementioned amount.
As of December 31, 2022 2023 RMB RMB US$ Selected Consolidated Balance Sheet Data Cash and cash equivalents 246,270,442 227,040,251 31,977,951 TOTAL ASSETS 608,926,454 433,971,070 61,123,547 TOTAL LIABILITIES 355,435,687 276,872,159 38,996,628 Ordinary shares (USD$0.0001 par value; 500,000,000 shares authorized, 66,667,000 and 116,667,000 shares issued and outstanding as of December 31, 2022 and 2023, respectively) 45,198 81,092 11,422 TOTAL SHAREHOLDERS’ EQUITY 253,490,767 157,098,911 22,126,919 B.
As of December 31, 2023 2024 RMB RMB US$ Selected Consolidated Balance Sheet Data Cash and cash equivalents 227,040,251 220,724,238 30,239,097 TOTAL ASSETS 433,971,070 470,617,330 64,474,311 TOTAL LIABILITIES 276,872,159 325,120,200 44,541,286 Class A ordinary shares (USD$0.0001 par value; 19,700,000,000 shares authorized, 71,667,000 and 71,667,000 shares issued and outstanding as of December 31, 2023 and 2024, respectively) 50,584 50,584 6,930 Class B ordinary shares (USD$0.0001 par value; 100,000,000 shares authorized, 45,000,000 and 45,000,000 shares issued and outstanding as of December 31, 2023 and 2024, respectively) 30,508 30,508 4,180 TOTAL SHAREHOLDERS’ EQUITY 157,098,911 145,497,130 19,933,025 B.
Removed
It is uncertain whether such filing can be completed or how long it will take to complete such filing.
Added
The PRC government could even disallow the VIE structure completely, which would likely result in a material adverse change in our operations and the ADSs may significantly decline in value or become worthless.
Removed
With the approval of Education Bureau of Qingtian County, Qingtian International School is a non-state public institution providing non-profit social welfare services for senior high school education with the status of an independent legal person, whose sponsor is Lishui Mengxiang after the acquisition.
Added
On June 30, 2020, the Standing Committee of the National People’s Congress of the PRC (the “Standing Committee of the NPC”), promulgated the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region, or the Law of PRC on Safeguarding National Security in Hong Kong, the interpretation of which involves a degree of uncertainty.
Removed
In accordance with the Circular of the Lishui Municipal People’s Government on Carrying out Pilot Programs for Unified Registration Administration of Various Public Institutions, except that funds are not guaranteed and personnel are not supported by financial resources, Qingtian International School shall enjoy the same treatment as the public institutions of the same category, and enjoy the supportive policies of the government for private social undertakings.
Added
The PRC government has also announced recently that it would step up supervision of overseas listed PRC businesses, and check sources of funding for securities investment and control leverage ratios.
Removed
As of the date of the annual report, we have not received any formal notice from the competent authorities of Qingtian County requesting us to conduct the classified registration of private schools.
Added
The PRC government has also opened a probe into several U.S.-listed technology companies focusing on anti-monopoly, financial technology regulation and more recently, with the passage of the PRC Data Security Law, how companies collect, store, process and transfer personal data.
Removed
However, given that Qingtian International School is a non-state public institution legal person, and it has been classified as a non-profit private school by Qingtian Education Bureau according to its Permit for Establishment of Privately-run Schools renewed in 2023, it may not need to go through additional registration procedures. 35 On January 9, 2018, five departments of Hebei Province including the Department of Education of Hebei Province issued the Implementation Measures for the Classification Registration of Private Schools in Hebei Province, which came into effect on the same day.
Added
Currently these laws (other than the Law of the PRC on Safeguarding National Security in Hong Kong) are expected to apply to China domestic businesses, rather than businesses in Hong Kong which operate under a different set of laws from China.
Removed
Lishui International School’s capacity was 80 as of September 1, 2023 and it recorded a utilization rate of approximately 92.5% as of September 1, 2023. Langfang School’s capacity was 2556 as of September 1, 2023 and it recorded a utilization rate of approximately 60.8% as of September 1, 2023.
Added
However, there can be no assurance that the government of Hong Kong will not enact similar laws and regulations applicable to companies operating in Hong Kong.
Removed
Hainan Technical School, which is the cooperator of Hainan Jiangcai, has a capacity for enrolling 800 students as of September 1, 2023 and it recorded a utilization rate of approximately 60.0% as of September 1, 2023.
Added
For example, the PRC government may pressure the government of Hong Kong to enact similar laws and regulations to those in the PRC, which may seek to exert control over offerings conducted overseas by Hong Kong companies.
Added
If any or all of the foregoing were to occur, and if our Hong Kong subsidiary elects to carry out substantive business activities in the future, it could lead to a material adverse change in our operations and limit or hinder our ability to offer securities to overseas investors or remain listed in the United States, which could cause the value of our ADSs to significantly decline or become worthless.
Added
After such registration statement was declared effective by the SEC and a final prospectus in connection therewith was filed and the other conditions set forth in the Purchase Agreements were satisfied, we issued and sold the 50,000,000 ordinary shares (now redesignated as Class A ordinary shares) to be represented by ADSs to the investors and the transaction was closed on October 6, 2023. 2023 Reverse Stock Split On May 3, 2023, the Company was first notified by the Nasdaq Stock Market LLC (“Nasdaq”) of its failure to maintain a minimum bid price of US$1.00 per share for 30 consecutive trading days under Nasdaq Listing Rules 5450(a)(1) (the “Bid Price Rule”), and was given its first 180-day extension, or until October 30, 2023 to regain compliance.
Added
Effective September 30, 2024, the Company effected a 1-for-10 reverse stock split.
Added
On October 14, 2024, the Company received a letter from the Nasdaq, notifying the Company that it had regained compliance with the Bid Price Rule and this matter was closed. 13 Variation of Share Capital On November 18, 2024, we held our annual general meeting and approved that the authorised share capital of the Company be increased, re-classified and re-designated as follows (together, the “Variation of Share Capital”): (a) by the creation of an additional 19,500,000,000 shares with a par value of US$0.0001 each to rank pari passu in all respects with the existing shares, such that following such increase of capital, the authorized share capital of the Company shall be US$2,000,000 divided into 20,000,000,000 shares of a par value of US$0.0001 each, (b) by re-designating 19,700,000,000 shares, including all of the then issued and outstanding shares immediately prior to the October 4, 2024 (except for those held by Mengxiang Holdings Limited) and certain authorized but unissued shares, as Class A ordinary shares of a par value of US$0.0001 each, (c) by re-designating 100,000,000 shares, including those held by Mengxiang Holdings Limited immediately prior to October 4, 2024 and certain authorized but unissued shares, as Class B ordinary shares of a par value of US$0.0001 each, and (d) by re-designating 200,000,000 authorized but unissued shares as shares of such class or classes (however designated) as the board of directors may determine in accordance with the third amended and restated memorandum and articles of association of the Company, such that following Variation of Share Capital, the authorised share capital of the Company shall be US$2,000,000 divided into (i) 19,700,000,000 Class A ordinary shares of a par value of US$0.0001 each, (ii) 100,000,000 Class B ordinary shares of a par value of US$0.0001 each, and (iii) 200,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with the third amended and restated memorandum and articles of association of the Company. 2024 Private Placement On November 28, 2024, we entered into a share subscription agreement with each of Jong Tchun Jin, Chong Juinn Hui, Kon Chee Thong, Ong Sin Leong, Man Ken Toh, Vun Siong Wee, Law Kok Leong, Raymond Wee Hian Sen, Chai Kueh Sin, Wong Siong Yee and Siaw Ting Liang (collectively, the “2024 Purchase Agreements”), pursuant to which we agreed to issue and sell to such individual investors a total of 1,800,000,000 Class A ordinary shares with a par value of US$0.0001 each of the Company, in the aggregate consideration of US$34,200,000.
Added
Additionally, we filed a registration statement with the SEC covering the resale of the ADSs representing the Class A ordinary shares that would be issued to such investors under the 2024 Purchase Agreements.
Added
However, we have completed the filing procedures with the CSRC on August 20, 2024 for our 2023 Private Placement. Besides, we have submitted the filing documents to the CSRC in respect of the 2024 Private Placement.
Added
See “Risk Factors—Risks Relating to Our ADSs—Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial,” “Risk Factors—Risks Relating to Our ADSs— Our dual-class voting structure may render the ADSs representing our Class A ordinary shares ineligible for inclusion in certain stock market indices, and thus adversely affect the trading price and liquidity of the ADSs.” 21 Financial Information Related to the VIEs The following table presents the condensed consolidating schedule of financial position of our parent company, VIEs and their consolidated subsidiaries, Liandu WFOE that is the primary beneficiary of the VIEs, and other subsidiaries as of the December 31, 2023 and 2024.
Added
Langfang School had 1,054 students enrolled as of September 1, 2024. We and the VIEs cooperate with Hainan Technical School, a reputable vocational education school in Haikou City, Hainan Province, through Hainan Jiangcai, a subsidiary of Beijing P.X., to jointly design and develop curriculum programs based on the prevalent market trends and employer preferences.

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Item 6. [Reserved]

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

32 edited+5 added−0 removed169 unchanged
Transfer of Ordinary Shares Subject to any applicable restrictions set forth in our memorandum and articles of association as set out below, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or in a form prescribed by the Nasdaq Global Market or in another form that our directors may approve.
Subject to any applicable restrictions set forth in our memorandum and articles of association as set out below, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or in a form prescribed by the Nasdaq Global Market or in another form that our directors may approve.
The Companies Act provides shareholders with only limited rights to requisition a general meeting and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association.
The Companies Act provides shareholders with only limited rights to requisition a general meeting and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association.
Liquidation Subject to any future shares which are issued with specific rights, (1) if we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the surplus shall be distributed amongst the shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise, and (2) if we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the share capital, those assets shall be distributed so that, as nearly as may be, the losses shall be borne by the shareholders in proportion to the par value of the shares held by them.
Subject to any future shares which are issued with specific rights, (1) if we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the surplus shall be distributed amongst the shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise, and (2) if we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the share capital, those assets shall be distributed so that, as nearly as may be, the losses shall be borne by the shareholders in proportion to the par value of the shares held by them.
The discussion neither addresses the tax consequences to any particular investor nor describes all of the tax consequences applicable to persons in special tax situations, such as: ● banks; ● certain financial institutions; ● insurance companies; ● regulated investment companies; ● real estate investment trusts; ● brokers or dealers in stocks and securities, or currencies; ● persons who are required to use a mark-to-market method of accounting; ● certain former citizens or residents of the United States subject to Section 877 of the Code; ● entities subject to the United States anti-inversion rules; ● tax-exempt organizations and entities; ● persons subject to the alternative minimum tax provisions of the Code; ● persons whose functional currency is other than the United States dollar; 164 ● persons holding ADSs or ordinary shares as part of a straddle, hedging, conversion or integrated transaction; ● persons holding ADSs or ordinary shares through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States; ● persons that actually or constructively own 10% or more of our stock by vote or value; ● persons subject to special tax accounting rules under Section 451(b) of the Code; ● persons who acquired ADSs or ordinary shares pursuant to the exercise of an employee stock option or otherwise as compensation; or ● partnerships or other pass-through entities, or persons holding ADSs or ordinary shares through such entities.
The discussion neither addresses the tax consequences to any particular investor nor describes all of the tax consequences applicable to persons in special tax situations, such as: ● banks; ● certain financial institutions; ● insurance companies; ● regulated investment companies; ● real estate investment trusts; ● brokers or dealers in stocks and securities, or currencies; ● persons who are required to use a mark-to-market method of accounting; ● certain former citizens or residents of the United States subject to Section 877 of the Code; ● entities subject to the United States anti-inversion rules; ● tax-exempt organizations and entities; ● persons subject to the alternative minimum tax provisions of the Code; ● persons whose functional currency is other than the United States dollar; 167 ● persons holding ADSs or ordinary shares as part of a straddle, hedging, conversion or integrated transaction; ● persons holding ADSs or ordinary shares through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States; ● persons that actually or constructively own 10% or more of our stock by vote or value; ● persons subject to special tax accounting rules under Section 451(b) of the Code; ● persons who acquired ADSs or ordinary shares pursuant to the exercise of an employee stock option or otherwise as compensation; or ● partnerships or other pass-through entities, or persons holding ADSs or ordinary shares through such entities.
Variations of Rights of Shares If at any time, our share capital is divided into different classes of shares, all or any of the special rights attached to any class of shares may, subject to the provisions of the Companies Act, be varied with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with the sanction of a resolution passed by at least a two-thirds majority of the holders of shares of the class present in person or by proxy at a separate general meeting of the holders of the shares of that class.
If at any time, our share capital is divided into different classes of shares, all or any of the special rights attached to any class of shares may, subject to the provisions of the Companies Act, be varied with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with the sanction of a resolution passed by at least a two-thirds majority of the holders of shares of the class present in person or by proxy at a separate general meeting of the holders of the shares of that class.
Our memorandum and articles of association provide that we shall indemnify our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such directors or officer, other than by reason of such person’s dishonesty, willful default or fraud, in or about the conduct of our company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. 159 In addition, we have entered into indemnification agreements with our directors and executive officers that provide such persons with additional indemnification beyond that provided in our memorandum and articles of association.
Our memorandum and articles of association provide that we shall indemnify our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such directors or officer, other than by reason of such person’s dishonesty, willful default or fraud, in or about the conduct of our company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. 162 In addition, we have entered into indemnification agreements with our directors and executive officers that provide such persons with additional indemnification beyond that provided in our memorandum and articles of association.
The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful. 158 Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by (a) 75% in value of the shareholders or class of shareholders, as the case may be, or (b) a majority in number representing 75% in value of the creditors or each class of creditors, as the case may be, with whom the arrangement is to be made, that are, in each case, present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose.
The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful. 161 Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by (a) 75% in value of the shareholders or class of shareholders, as the case may be, or (b) a majority in number representing 75% in value of the creditors or each class of creditors, as the case may be, with whom the arrangement is to be made, that are, in each case, present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose.
Holder recognizes upon the sale or other disposition of our ADSs in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as ordinary loss, but such loss will only be treated as ordinary loss to the extent of the net amount previously included in income as a result of the mark-to-market election. 168 The mark-to-market election is available only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter, or regularly traded, on a qualified exchange or other market, as defined in applicable United States Treasury regulations.
Holder recognizes upon the sale or other disposition of our ADSs in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as ordinary loss, but such loss will only be treated as ordinary loss to the extent of the net amount previously included in income as a result of the mark-to-market election. 171 The mark-to-market election is available only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter, or regularly traded, on a qualified exchange or other market, as defined in applicable United States Treasury regulations.
This summary does not deal with all possible tax consequences relating to an investment in our ADSs or ordinary shares, such as the tax consequences under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands, PRC and the United States. 162 Cayman Islands Taxation The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty.
This summary does not deal with all possible tax consequences relating to an investment in our ADSs or ordinary shares, such as the tax consequences under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands, PRC and the United States. 165 Cayman Islands Taxation The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty.
Accordingly, deposits or withdrawals of ordinary shares for ADSs should not be subject to United States federal income tax. 165 The United States Treasury Department and the IRS have expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security (for example, a pre-release of ADSs to persons that do not have beneficial ownership of the securities underlying the ADSs).
Accordingly, deposits or withdrawals of ordinary shares for ADSs should not be subject to United States federal income tax. 168 The United States Treasury Department and the IRS have expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security (for example, a pre-release of ADSs to persons that do not have beneficial ownership of the securities underlying the ADSs).
For example, for shareholders eligible for the benefits of the tax treaty between China and Hong Kong, the tax rate is reduced to 5% for dividends if relevant conditions are met. 163 It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise.
For example, for shareholders eligible for the benefits of the tax treaty between China and Hong Kong, the tax rate is reduced to 5% for dividends if relevant conditions are met. 166 It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise.
Holders that are exempt from backup withholding and properly certify their exemption) if the holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with applicable backup withholding requirements. U.S. Holders who are required to establish their exempt status generally must provide a properly completed IRS Form W-9. 169 Backup withholding is not an additional tax.
Holders that are exempt from backup withholding and properly certify their exemption) if the holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with applicable backup withholding requirements. U.S. Holders who are required to establish their exempt status generally must provide a properly completed IRS Form W-9. 172 Backup withholding is not an additional tax.
Our memorandum and articles of association provide that we may (but are not obliged to) in each calendar year hold a general meeting as our annual general meeting in which case we shall specify the meeting as such in the notices calling it, and the annual general meeting shall be held at such time and place as may be determined by our directors. 155 Shareholders’ general meetings may be convened by a majority of our board of directors.
Our memorandum and articles of association provide that we may (but are not obliged to) in each calendar year hold a general meeting as our annual general meeting in which case we shall specify the meeting as such in the notices calling it, and the annual general meeting shall be held at such time and place as may be determined by our directors. 158 Shareholders’ general meetings may be convened by a majority of our board of directors.
Under circumstances where our revenue from activities that produce passive income significantly increases relative to our revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming a PFIC may substantially increase. 166 If we are a PFIC for any year during which a U.S.
Under circumstances where our revenue from activities that produce passive income significantly increases relative to our revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming a PFIC may substantially increase. 169 If we are a PFIC for any year during which a U.S.
Inspection of Books and Records Holders of our ordinary shares have no general right under Cayman Islands law to inspect or obtain copies of our register of members or our corporate records (other than copies of our memorandum and articles of association, our register of mortgages and charge, and any special resolution passed by our shareholders).
Holders of our ordinary shares have no general right under Cayman Islands law to inspect or obtain copies of our register of members or our corporate records (other than copies of our memorandum and articles of association, our register of mortgages and charge, and any special resolution passed by our shareholders).
A special resolution will be required for important matters such as a change of name or making changes to our memorandum and articles of association. Our shareholders may, among other things, divide or combine their shares by ordinary resolution.
A special resolution will be required for important matters such as a change of name or making changes to our memorandum and articles of association. Our shareholders may, among other things, divide or combine their shares by ordinary resolution. General Meetings of Shareholders.
Other than this right to requisition a shareholders’ meeting, our memorandum and articles of association do not provide our shareholders with any other right to put proposals before annual general meetings or extraordinary general meetings not called by such shareholders. 160 Cumulative Voting.
Other than this right to requisition a shareholders’ meeting, our memorandum and articles of association do not provide our shareholders with any other right to put proposals before annual general meetings or extraordinary general meetings not called by such shareholders. 163 Cumulative Voting.
However, notwithstanding the presentation of a petition for the appointment of a restructuring officer or the appointment of a restructuring officer, a creditor who has security over the whole or part of the assets of the company is entitled to enforce the security without the leave of the court and without reference to the restructuring officer appointed. 161 Dissolution; Winding up.
However, notwithstanding the presentation of a petition for the appointment of a restructuring officer or the appointment of a restructuring officer, a creditor who has security over the whole or part of the assets of the company is entitled to enforce the security without the leave of the court and without reference to the restructuring officer appointed. 164 Dissolution; Winding up.
The rules governing the foreign tax credit are complex and U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances. 167 Sale or Other Disposition A U.S.
The rules governing the foreign tax credit are complex and U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances. 170 Sale or Other Disposition A U.S.
The depositary will make such notices, reports and communications available to holders of ADSs and, if we so request, will provide copies thereof to all record holders of ADSs. I. Subsidiary Information Not applicable. 170
The depositary will make such notices, reports and communications available to holders of ADSs and, if we so request, will provide copies thereof to all record holders of ADSs. I. Subsidiary Information Not applicable. 173
Documents on Display We previously filed with the SEC our registration statement on Form F-1, as amended, to register our ordinary shares in relation to our initial public offering. We have also filed with the SEC a related registration statement on F-6 (Registration No. 333-249010) to register the ADSs.
Documents on Display We previously filed with the SEC our registration statement on Form F-1, as amended, to register our ordinary shares (now redesignated as Class A ordinary shares) in relation to our initial public offering. We have also filed with the SEC a related registration statement on F-6 (Registration No. 333-249010) to register the ADSs.
Redemption, Repurchase and Surrender of Ordinary Shares We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders of these shares, on such terms and in such manner as may be determined by either our board of directors or by a special resolution of our shareholders.
We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders of these shares, on such terms and in such manner as may be determined by either our board of directors or by a special resolution of our shareholders.
General Meetings of Shareholders As a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders’ annual general meetings.
As a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders’ annual general meetings.
However, our memorandum and articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders.
However, our memorandum and articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders. Transfer of Ordinary Shares.
The rights conferred upon the holders of the shares of any class issued shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu with such existing class of shares.
The rights conferred upon the holders of the shares of any class issued shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu with such existing class of shares. Inspection of Books and Records.
Issuance of these shares may dilute the voting power of holders of ordinary shares. 157 Anti-Takeover Provisions Some provisions of our memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that: ● authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders. ● limit the ability of shareholders to requisition and convene general meetings of shareholders.
Some provisions of our memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that: ● authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders. ● limit the ability of shareholders to requisition and convene general meetings of shareholders.
The ordinary shares that have been called upon and remain unpaid are subject to forfeiture.
The ordinary shares that have been called upon and remain unpaid are subject to forfeiture. Redemption, Repurchase and Surrender of Ordinary Shares.
The liquidator may also vest the whole or any part of these assets in trustees upon such trusts for the benefit of the shareholders as the liquidator shall think fit, but so that no shareholder will be compelled to accept any assets, shares or other securities upon which there is a liability. 156 Calls on Ordinary Shares and Surrender of Ordinary Shares Subject to our memorandum and articles of association and to the terms of allotment our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their ordinary shares in a notice served to such shareholders at least 14 days prior to the specified time of payment.
The liquidator may also vest the whole or any part of these assets in trustees upon such trusts for the benefit of the shareholders as the liquidator shall think fit, but so that no shareholder will be compelled to accept any assets, shares or other securities upon which there is a liability. 159 Calls on Ordinary Shares and Surrender of Ordinary Shares.
Our board of directors may issue preferred shares without action by our shareholders to the extent authorized but unissued.
Our board of directors may issue preferred shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of ordinary shares. 160 Anti-Takeover Provisions.
Our shareholders who are non-residents of the Cayman Islands may freely hold and transfer their ordinary shares.
Our ordinary shares are issued in registered form and are issued when registered in our register of members (shareholders). We may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and transfer their ordinary shares. Conversion.
No dividend or other money payable by us on or in respect of any share shall bear interest against us. Voting Rights On a show of hands each shareholder is entitled to one vote or, on a poll, each shareholder is entitled to one vote for ordinary share, on all matters that require a shareholder’s vote.
No dividend or other money payable by us on or in respect of any share shall bear interest against us. Voting Rights.
Item 6. Directors, Senior Management and Employees—C. Board Practices—Terms of Directors and Officers .” Ordinary Shares General Our authorized share capital is US$50,000 consisting of 500,000,000 ordinary shares with par value of US$0.0001 each. Our ordinary shares are issued in registered form and are issued when registered in our register of members (shareholders). We may not issue shares to bearer.
Item 6. Directors, Senior Management and Employees—C. Board Practices—Terms of Directors and Officers .” Ordinary Shares General.
Added
Our authorized share capital is US$2,000,000 divided into (i) 19,700,000,000 Class A ordinary shares of a par value of US$0.0001 each, (ii) 100,000,000 Class B ordinary shares of a par value of US$0.0001 each, and (iii) 200,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with our articles of association, as amended or substituted from time to time.
Added
Each Class B ordinary share is convertible into one (1) Class A ordinary share at any time at the option of the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.
Added
Any number of Class B ordinary shares held by a holder thereof will be automatically and immediately converted into an equal number of Class A ordinary shares upon the occurrence of any of the following: (a) any direct or indirect sale, transfer, assignment or disposition of such number of Class B ordinary shares by the holder thereof or the direct or indirect transfer or assignment of the voting power attached to such number of Class B ordinary shares through voting proxy or otherwise to any person that is neither an affiliate of such holder nor another holder of Class B ordinary shares or an affiliate of such another holder; or (b) any direct or indirect sale, transfer, assignment or disposition of a majority of the issued and outstanding voting securities of, or the direct or indirect transfer or assignment of the voting power attached to such voting securities through voting proxy or otherwise, or the direct or indirect sale, transfer, assignment or disposition of all or substantially all of the assets of, a holder of Class B ordinary shares that is an entity to any person that is neither an affiliate of such holder nor another holder of Class B ordinary shares or an affiliate of such holder.
Added
Each Class A ordinary share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of the Company, and each Class B ordinary share shall entitle the holder thereof to two hundred (200) votes on all matters subject to vote at general meetings of the Company.
Added
Subject to our memorandum and articles of association and to the terms of allotment our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their ordinary shares in a notice served to such shareholders at least 14 days prior to the specified time of payment.

Item 7. Management's Discussion & Analysis

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

14 edited+8 added−16 removed22 unchanged
Major Shareholders The following table presents information regarding the beneficial ownership of our ordinary shares as of March 31, 2023 by: ● each person or entity that we know beneficially owns or will beneficially own more than 5% of our outstanding ordinary shares; ● each director or executive officer who beneficially owns or will beneficially own more than 1% of our outstanding ordinary shares; and ● all of our directors and executive officers as a group.
Major Shareholders The following table presents information regarding the beneficial ownership of our ordinary shares as of March 31, 2025 by: ● each person or entity that we know beneficially owns or will beneficially own more than 5% of our outstanding ordinary shares; ● each director or executive officer who beneficially owns or will beneficially own more than 1% of our outstanding ordinary shares; and ● all of our directors and executive officers as a group.
We deconsolidated Lianwai School commencing from September 1, 2021 and presented it as a discontinued operation in current and comparative period financial statements. 150 Lishui Mengxiang completed the required registration to hold 100% sponsorship interests of Qingtian International School on August 24, 2021.
We deconsolidated Lianwai School commencing from September 1, 2021 and presented it as a discontinued operation in current and comparative period financial statements. 153 Lishui Mengxiang completed the required registration to hold 100% sponsorship interests of Qingtian International School on August 24, 2021.
Box 2221, Road Town Tortola, British Virgin Islands. (6) A British Virgins Islands company which is wholly-owned and controlled by Ms. Hong Ye. The registered office of Lianwai Holdings Co., Ltd. is at Coastal Building, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands. (7) A British Virgin Islands company which is wholly-owned and controlled by Ms.
Box 2221, Road Town Tortola, British Virgin Islands. (7) A British Virgins Islands company which is wholly-owned and controlled by Ms. Hong Ye. The registered office of Lianwai Holdings Co., Ltd. is at Coastal Building, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands. (8) A British Virgin Islands company which is wholly-owned and controlled by Ms.
On August 25, 2023, we entered into a share subscription agreement with each of Xiaoxiong Li, Haibin Gong, Yiqiang Dong, Huafeng Hong, Kin Mang Kung, Shulin Gong, Kim Tuk Yeung, Qunzhu Dong, Jinglong Hong and Canghai Hong, pursuant to which we agreed to issue and sell to such individual investors a total of 50,000,000 ordinary shares of the Company with a par value of US$0.0001 each, in the aggregate consideration of US$6,000,000.
On August 25, 2023, we entered into a share subscription agreement with each of Xiaoxiong Li, Haibin Gong, Yiqiang Dong, Huafeng Hong, Kin Mang Kung, Shulin Gong, Kim Tuk Yeung, Qunzhu Dong, Jinglong Hong and Canghai Hong, pursuant to which we agreed to issue and sell to such individual investors a total of 50,000,000 ordinary shares (now redesignated as Class A ordinary shares) of the Company with a par value of US$0.0001 each, in the aggregate consideration of US$6,000,000.
In 2021, 2022 and 2023, our rental income from related parties was RMB0.9 million, RMB0.8 million and RMB0.8 million, respectively. The terms of the leases are three years. Under the leasing agreements, we can terminate the lease at any time for cause. Private Placements See “ Item 10. Additional Information—B.
In 2022, 2023 and 2024, our rental income from related parties was RMB0.8 million and RMB0.8 million and RMB0.8 million, respectively. The terms of the leases are three years. Under the leasing agreements, we can terminate the lease at any time for cause. Private Placements See “ Item 10. Additional Information—B.
Additionally, we filed a registration statement with the SEC covering the resale of the ADSs representing the ordinary shares that would be issued to such investors under the Purchase Agreements.
Additionally, we filed a registration statement with the SEC covering the resale of the ADSs representing the Class A ordinary shares that would be issued to such investors under the 2024 Purchase Agreements.
After such registration statement was declared effective by the SEC and a final prospectus in connection therewith was filed and the other conditions set forth in the Purchase Agreements were satisfied, we issued and sold the 50,000,000 ordinary shares to be represented by ADSs to the investors and the transaction was closed on October 6, 2023.
After such registration statement was declared effective by the SEC and a final prospectus in connection therewith was filed and the other conditions set forth in the Purchase Agreements were satisfied, we issued and sold the 50,000,000 ordinary shares (now redesignated as Class A ordinary shares) to be represented by ADSs to the investors and the transaction was closed on October 6, 2023.
(3) Mr. Biao Wei is the spouse of Ms. Fen Ye. (4) Mr. Zhaoxiang Wei is the son of Ms. Fen Ye and Mr. Biao Wei. 149 (5) A British Virgin Islands company which is wholly-owned and controlled by Ms. Fen Ye. The registered office of Mengxiang Holdings is at Coastal Building, Wickham’s Cay II, P.O.
(4) Mr. Biao Wei is the spouse of Ms. Fen Ye. (5) Mr. Zhaoxiang Wei is the son of Ms. Fen Ye and Mr. Biao Wei. 152 (6) A British Virgin Islands company which is wholly-owned and controlled by Ms. Fen Ye. The registered office of Mengxiang Holdings is at Coastal Building, Wickham’s Cay II, P.O.
(2) For each person and group included in this column, percentage ownership is calculated by dividing the number of ordinary shares beneficially owned by such person or group, including shares that such person or group has the right to acquire within 60 days after March 31, 2024, by the sum of (i) 116,667,000 which is the total number of ordinary shares outstanding as of March 31, 2024, and (ii) the number of ordinary shares such person or group has the right to acquire within 60 days after March 31, 2024.
(2) For each person and group included in this column, percentage ownership is calculated by dividing the number of Class A ordinary shares beneficially owned by such person or group, including shares that such person or group has the right to acquire within 60 days after March 31, 2025, by the sum of (i) 1,871,667,000 which is the total number of Class A ordinary shares outstanding as of March 31, 2025, and (ii) the number of Class A ordinary shares such person or group has the right to acquire within 60 days after March 31, 2025.
Memorandum and Articles of Association—Ordinary Shares .” Employment Agreements and Indemnification Agreements See “ Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements and Confidentiality Agreements .” Share Incentive Plans See “ Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan .” C. Interests of Experts and Counsel Not applicable. 152 ITEM 8. FINANCIAL INFORMATION A.
Memorandum and Articles of Association—Ordinary Shares .” Employment Agreements and Indemnification Agreements See “ Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements and Confidentiality Agreements .” Share Incentive Plans See “ Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan .” C. Interests of Experts and Counsel Not applicable. 155
As of March 31, 2024, a total of 66,667,000 ordinary shares were held by one record holder in the United States in the form of ADSs, representing 57.14% of our total outstanding shares. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. B.
As of March 31, 2025, a total of 1,866,667,000 ordinary shares were held by one record holder in the United States in the form of ADSs, representing 97.4% of our total outstanding shares. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. B.
The percentage of beneficial ownership of our ordinary shares is based on 116,667,000 ordinary shares outstanding immediately as of March 31, 2024.
The percentage of beneficial ownership of our ordinary shares is based on 1,871,667,000 Class A ordinary shares and 45,000,000 Class B ordinary shares outstanding immediately as of March 31, 2025.
As of the date of the annual report on Form 20-F, we and the VIEs are still in the process to complete such registration. 151 Lease agreements with related parties We and the VIEs leased certain properties and facilities to Lishui Yuanmeng Training Company Limited, a company controlled by Mr.
As of the date of the annual report on Form 20-F, we and the VIEs are still in the process to complete such registration. 154 Lease agreements with related parties We and the VIEs lease the school buildings and the related properties and facilities to Liandu Foreign Language School Kindergarten.
Ordinary Shares Beneficially Owned Number % (2) Directors and Executive Officers (1) : Fen Ye 47,500,000 40.71 Biao Wei (3) — — Zhaoxiang Wei (4) — — Guoliang Chen — — Luoyuan Ye — — Teck Yong Heng — — Yan Kit Lee — — All directors and executive officers as a group 47,500,000 40.71 Principal Shareholders: Mengxiang Holdings (5) 45,000,000 38.57 Lianwai Holdings Co., Ltd.(6) 2,500,000 2.14 Mengxiang Investment Co., Ltd.(7) 2,500,000 2.14 Notes: (1) The address of our directors and executive officers is, No. 818 Hua Yuan Street, Liandu District, Lishui City, Zhejiang Province, 323000, the PRC.
Class A Ordinary Shares Percentage of Beneficial Ownership of Class A Ordinary Shares Class B Ordinary Shares Percentage of Beneficial Ownership of Class B Ordinary Shares Percentage of Aggregate Voting Power** Name of Beneficial Owner Number % (2) Number % (3) % Directors and Executive Officers (1) Fen Ye 2,500,000 * 45,000,000 100.0 % 82.8 % Biao Wei (4) - - - - - Zhaoxiang Wei (5) - - - - - Guoliang Chen - - - - - Zhifu Yang - - - - - Teck Yong Heng - - - - - Yan Kit Lee - - - - - All directors and executive officers as a group: 2,500,000 * 45,000,000 100.0 % 82.8 % Principal Shareholders Mengxiang Holdings (6) 45,000,000 100.0 % 82.8 % Lianwai Holdings Co., Ltd.
Removed
Biao Wei, our director and Chief Executive Officer, in which the lease was terminated on February 28, 2021. Furthermore, we and the VIEs ceased to lease our non-education space to Lishui Yuanmeng Training Company Limited after February 28, 2021. We and the VIEs also lease the school buildings and the related properties and facilities to Liandu Foreign Language School Kindergarten.
Added
(7) 2,500,000 * - - * Mengxiang Investment Co., Ltd.
Removed
Consolidated Statements and Other Financial Information Please refer to Item 18. Legal Proceedings From time to time, we are subject to legal proceedings, investigations and claims during the course of our and the VIEs’ business.
Added
(8) 2,500,000 * - - * Notes: * Less than 1%. ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our outstanding Class A ordinary shares and Class B ordinary shares as a single class.
Removed
We are currently a party to two legal proceedings which, in the opinion of our management, is likely to have a material adverse effect on our and the VIEs’ business, financial condition or results of operations.
Added
Each holder of our Class A ordinary shares is entitled to one vote per share. Each holder of Class B ordinary shares is entitled to 200 votes per share, and while on all matters submitted to them for a vote.
Removed
On October 12, 2023, Langfang School received a court notice from the People’s Court of Anci District, Langfang City, Hebei Province that Hebei Technical College of Petroleum Profession (河北石油职业技术学院), as the plaintiff, had filed a complaint in relation to its contractual dispute against Langfang School and Beijing S.K.’s affiliates.
Added
Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders. (1) The address of our directors and executive officers is, No. 818 Hua Yuan Street, Liandu District, Lishui City, Zhejiang Province, 323000, the PRC.
Removed
On December 18, 2023, Langfang School received the first-instance judgment, pursuant to which the court ruled that Langfang School should, within ten days after the effectiveness of the judgment, pay the plaintiff overdue rental expenses of RMB25,235,000 for the period from January 1, 2022 to August 31, 2023, and continue to pay rent for the period from September 1, 2023 to the date when the lease is terminated.
Added
(3) For each person and group included in this column, percentage ownership is calculated by dividing the number of Class B ordinary shares beneficially owned by such person or group, including shares that such person or group has the right to acquire within 60 days after March 31, 2025, by the sum of (i) 45,000,000 which is the total number of Class B ordinary shares outstanding as of March 31, 2025, and (ii) the number of Class B ordinary shares such person or group has the right to acquire within 60 days after March 31, 2025.
Removed
Langfang School filed for a second-instance lawsuit on December 19, 2023. A trial for cross-examination was held on January 31, 2024.
Added
Additionally, we filed a registration statement with the SEC covering the resale of the ADSs representing the ordinary shares (now redesignated as Class A ordinary shares) that would be issued to such investors under the Purchase Agreements.
Removed
On April 19, 2024, Langfang School received the final judgment that it would not need to pay rental expenses for the period from January 1, 2022 to August 31, 2023 or the period after September 1, 2023, but should vacate the premises in relation to the dispute by July 30, 2024.
Added
On November 28, 2024, we entered into a share subscription agreement with each of Jong Tchun Jin, Chong Juinn Hui, Kon Chee Thong, Ong Sin Leong, Man Ken Toh, Vun Siong Wee, Law Kok Leong, Raymond Wee Hian Sen, Chai Kueh Sin, Wong Siong Yee and Siaw Ting Liang (collectively, the “2024 Purchase Agreements”), pursuant to which we agreed to issue and sell to such individual investors a total of 1,800,000,000 Class A ordinary shares with a par value of US$0.0001 each of the Company, in the aggregate consideration of US$34,200,000.
Removed
On December 18, 2023, Lishui Mengxiang, as applicant, filed an arbitration application against Beijing S.K. and its affiliates, as respondents in relation to the breach of the investment cooperation agreement entered into between the two parties on July 27, 2021 and a series of investment supplemental agreement entered into between the two parties during 2022 and 2023.
Added
After such registration statement was declared effective by the SEC and a final prospectus in connection therewith was filed and the other conditions set forth in the Purchase Agreements were satisfied, we issued and sold the 1,800,000,000 Class A ordinary shares to be represented by ADSs to the investors and the transaction was closed in early 2025.
Removed
The main arbitration claim was to request the respondents to pay the contract amount of RMB72.41 million and the liquidated damages of RMB20 million. As of the date of this annual report, the case is still in the process of service of arbitration documents.
Removed
Dividend Policy Our board of directors has discretion on whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors.
Removed
In either case, all dividends are subject to certain restrictions under Cayman Islands law, namely that our company may only pay dividends out of profits or share premium, and provided always that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business.
Removed
Even if we decide to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. We do not have any present plan to pay any cash dividends on our ordinary shares in the foreseeable future.
Removed
We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our and the VIEs’ business. We are a holding company incorporated in the Cayman Islands. We may rely on dividends from our subsidiaries in China for our cash requirements, including any payment of dividends to our shareholders.
Removed
PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. See “ Item 4. Information on the Company—B. Business Overview—Regulation—PRC Laws and Regulations Relating to Foreign Exchange ” and “ Item 4. Information on the Company—B.
Removed
Business Overview—Regulation—Regulations on Taxation in the PRC—Income Tax in relation to Dividend Distribution. ” If we pay any dividends on our ordinary shares, we will pay those dividends which are payable in respect of the ordinary shares underlying our ADSs to the depositary, as the registered holder of such ordinary shares, and the depositary then will pay such amounts to our ADS holders in proportion to ordinary shares underlying the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder.
Removed
Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars. See “ Item 12. Description of Securities other than Equity Securities—D. American Depositary Shares. ” B. Significant Changes We have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report on Form 20-F. 153

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