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Lucas GC Ltd

Lucas GC LtdLGCL财报

Nasdaq

What changed in Lucas GC Ltd's 20-F — 2024 vs 2025

Top changes in Lucas GC Ltd's 2025 20-F

460 paragraphs added · 462 removed · 350 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

165 edited+46 added−42 removed492 unchanged
Under the Regulation on Network Data Security Management, where network data processing activities carried out by a network data processor affect or may affect national security, national security review shall be conducted in accordance with the relevant provisions issued by the state.
Under the Regulation on Network Data Security Management, where network data processing activities carried out by a network data processor affect or may affect national security, national security review shall be conducted in accordance with the relevant provisions issued by the state.
These proceedings, investigations, claims and complaints could be initiated or asserted under or on the basis of a variety of laws in different jurisdictions, including data protection and privacy laws, trucker or consumer protection laws, labor and employment laws, anti-monopoly or competition laws, transportation laws, advertising laws, intellectual property laws, securities laws, tort laws, contract laws and property laws.
These proceedings, investigations, claims and complaints could be initiated or asserted under or on the basis of a variety of laws in different jurisdictions, including data protection and privacy laws, trucker or consumer protection laws, labor and employment laws, anti-monopoly or competition laws, transportation laws, advertising laws, intellectual property laws, securities laws, tort laws, contract laws and property laws.
There is no guarantee that we will be successful in defending ourselves in legal and administrative actions or in asserting our rights under various laws. If we fail to defend ourselves in these actions, we may be subject to restrictions, fines or penalties that will materially and adversely affect our operations.
There is no guarantee that we will be successful in defending ourselves in legal and administrative actions or in asserting our rights under various laws. If we fail to defend ourselves in these actions, we may be subject to restrictions, fines or penalties that will materially and adversely affect our operations.
Even if we are successful in our attempt to defend ourselves in legal and regulatory actions or to assert our rights under various laws and regulations, the process of communicating with relevant regulators, defending ourselves and enforcing our rights against the various parties involved may be expensive and time-consuming.
Even if we are successful in our attempt to defend ourselves in legal and regulatory actions or to assert our rights under various laws and regulations, the process of communicating with relevant regulators, defending ourselves and enforcing our rights against the various parties involved may be expensive and time-consuming.
The PCAOB is expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China and Hong Kong in the future and states that it has already made plans to resume regular inspections in early 2023 and beyond.
The PCAOB is expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China and Hong Kong in the future and states that it has already made plans to resume regular inspections in early 2023 and beyond.
We may be required to file with the CSRC in connection with any of our future offering and listing in an overseas market, including follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities.
We may be required to file with the CSRC in connection with any of our future offering and listing in an overseas market, including other follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities.
Such a judgment must be for a fixed sum and must also come from a “competent” court as determined by the private international law rules applied by the Hong Kong courts.
Such a judgment must be for a fixed sum and must also come from a “competent” court as determined by the private international law rules applied by the Hong Kong courts.
If we fail to complete such filing procedures for any future overseas offering or listing in an overseas market, including our follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities, we may face sanctions by the CSRC or other PRC regulatory authorities, which may include fines and penalties on us, restrictions on or delays to our financing transactions offshore, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ordinary shares. 32 On February 24, 2023, the CSRC, Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China jointly revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which was issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions.
If we fail to complete such filing procedures for any future overseas offering or listing in an overseas market, including our follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities, we may face sanctions by the CSRC or other PRC regulatory authorities, which may include fines and penalties on us, restrictions on or delays to our financing transactions offshore, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our Class A ordinary shares. 32 On February 24, 2023, the CSRC, Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China jointly revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which was issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions.
Pursuant to the HFCA Act, if the Securities and Exchange Commission, or the SEC, determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the Public Company Accounting Oversight Board, or the PCAOB, for two consecutive years, the SEC will prohibit our ordinary shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
Pursuant to the HFCA Act, if the Securities and Exchange Commission, or the SEC, determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the Public Company Accounting Oversight Board, or the PCAOB, for two consecutive years, the SEC will prohibit our Class A ordinary shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our listed securities. 33 You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the annual report based on foreign laws.
Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our listed securities. You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the annual report based on foreign laws.
However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross net revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.
However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.
There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCA Act, and the value of our ordinary shares may significantly decline or become worthless.
There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCA Act, and the value of our Class A ordinary shares may significantly decline or become worthless.
These actions could expose us to negative publicity, substantial monetary damages and legal defense costs, injunctive relief and criminal and civil fines and penalties, including but not limited to suspension or revocation of licenses to conduct business. We may be subject to risks associated with increased scrutiny of environmental, social, and governance matters.
These actions could expose us to negative publicity, substantial monetary damages and legal defense costs, injunctive relief and criminal and civil fines and penalties, including but not limited to suspension or revocation of licenses to conduct business. 27 We may be subject to risks associated with increased scrutiny of environmental, social, and governance matters.
For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. 28 Although the PRC economy has grown significantly in the past decade, that growth may not continue, as evidenced by the slowing of the growth of the PRC economy since 2012.
For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. Although the PRC economy has grown significantly in the past decade, that growth may not continue, as evidenced by the slowing of the growth of the PRC economy since 2012.
These risks are discussed more fully below and include, but are not limited to, risks related to: Risks Related to Our Business and Industry ● We have a limited operating history under our current platforms and business model, which makes it difficult to evaluate our business and prospects, and any future changes to our business model could materially and adversely affect our business, financial condition and results of operations. ● Our growth depends on our ability to attract and retain a large number of users, and the loss of our users, or failure to attract new users, could materially and adversely affect our business. ● Because a substantial portion of the services we offer are recruitment services, if we fail to attract more corporate customers to our platforms, or if corporate customers decide to purchase less of our recruitment services for any reason, our revenues may stagnate or decline, and our business and prospects may be materially and adversely affected. 5 ● Because a significant portion of the services we offer are outsourcing services, a decline in the demand or the market for outsourcing services could materially and adversely affect our business, prospects, financial condition and results of operations. ● Volatility in the financial and economic environment in the markets where we have operations could harm our business. ● If the market for freelancers and the services they offer is not sustained or develops more slowly than we expect, our growth may slow or stall. ● We face significant competition, which may cause us to suffer from a weakened market position that could materially and adversely affect our results of operations. ● Our historical revenue growth should not be considered indicative of our future performance. ● We have incurred negative cash flows in operating activities in the past and may incur operating losses in the future and may not maintain profitability. ● We depend on a limited number of customers for a significant portion of our revenues and the loss of one or more of these customers could adversely affect our business, financial condition, and results of operations. ● We may fail to successfully enter necessary or desirable strategic alliances or make acquisitions or investments, and we may not be able to achieve the anticipated benefits from these alliances, acquisitions or investments we make. ● If we fail to maintain and improve the quality of our PaaS platforms, we may not be able to attract and retain users and corporate customers. ● If our technology capabilities in AI, data analytics and blockchain fail to yield satisfactory results or fail to improve, our platforms may not be able to effectively match our users with suitable positions from corporate customers or to optimally recommend positions for our users, and our user growth, retention, results of operations and business prospects may suffer consequently. ● Our users may engage in intentional or negligent misconduct or other improper activities on our platforms or otherwise misuse our platforms, which may damage our brand image and reputation, our business and our results of operations. ● If we fail to maintain and enhance our brand, our business, results of operations and prospects may be materially and adversely affected. ● Our platforms contain open-source software components, and failure to comply with the terms of the underlying licenses could restrict our ability to market or operate our platforms. ● If we are unable to protect our users’ personal information, we could be exposed to data loss, litigation, and liability, and our reputation could be significantly harmed. ● We are subject to a variety of laws and regulations regarding cybersecurity and data protection, and any failure to comply with applicable laws and regulations, including improper use or appropriation of personal information provided directly or indirectly by our customers or end users, could have a material adverse effect on our business, financial condition and results of operations. ● We are subject to risks relating to our leased properties. ● Any lack of requisite approvals, licenses or permits applicable to our business operation may have a material and adverse impact on our business, financial condition and results of operations. 6 ● There could be adverse legal, tax, and other consequences if users on our platforms were to be classified as our employees or dispatched employees instead of independent contractors. ● Changes in laws and regulations related to the internet and fixed telecommunications or changes in the internet infrastructure and fixed telecommunications networks itself may diminish the demand for our services, and could have a negative impact on our business. ● We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position. ● We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.
These risks are discussed more fully below and include, but are not limited to, risks related to: Risks Related to Our Business and Industry ● We have a limited operating history under our current platforms and business model, which makes it difficult to evaluate our business and prospects, and any future changes to our business model could materially and adversely affect our business, financial condition and results of operations. ● Our growth depends on our ability to attract and retain a large number of users, and the loss of our users, or failure to attract new users, could materially and adversely affect our business. ● Because a substantial portion of the services we offer are recruitment services, if we fail to attract more corporate customers to our platforms, or if corporate customers decide to purchase less of our recruitment services for any reason, our revenues may stagnate or decline, and our business and prospects may be materially and adversely affected. 5 ● Because a significant portion of the services we offer are outsourcing services, a decline in the demand or the market for outsourcing services could materially and adversely affect our business, prospects, financial condition and results of operations. ● Volatility in the financial and economic environment in the markets where we have operations could harm our business. ● If the market for freelancers and the services they offer is not sustained or develops more slowly than we expect, our growth may slow or stall. ● We face significant competition, which may cause us to suffer from a weakened market position that could materially and adversely affect our results of operations. ● We have incurred negative cash flows in operating activities in the past and may incur operating losses in the future and may not maintain profitability. ● We depend on a limited number of customers for a significant portion of our revenues and the loss of one or more of these customers could adversely affect our business, financial condition, and results of operations. ● We may fail to successfully enter necessary or desirable strategic alliances or make acquisitions or investments, and we may not be able to achieve the anticipated benefits from these alliances, acquisitions or investments we make. ● If we fail to maintain and improve the quality of our PaaS platforms, we may not be able to attract and retain users and corporate customers. ● If our technology capabilities in AI, data analytics and blockchain fail to yield satisfactory results or fail to improve, our platforms may not be able to effectively match our users with suitable positions from corporate customers or to optimally recommend positions for our users, and our user growth, retention, results of operations and business prospects may suffer consequently. ● Our users may engage in intentional or negligent misconduct or other improper activities on our platforms or otherwise misuse our platforms, which may damage our brand image and reputation, our business and our results of operations. ● If we fail to maintain and enhance our brand, our business, results of operations and prospects may be materially and adversely affected. ● Our platforms contain open-source software components, and failure to comply with the terms of the underlying licenses could restrict our ability to market or operate our platforms. ● If we are unable to protect our users’ personal information, we could be exposed to data loss, litigation, and liability, and our reputation could be significantly harmed. ● We are subject to a variety of laws and regulations regarding cybersecurity and data protection, and any failure to comply with applicable laws and regulations, including improper use or appropriation of personal information provided directly or indirectly by our customers or end users, could have a material adverse effect on our business, financial condition and results of operations. ● We are subject to risks relating to our leased properties. ● Any lack of requisite approvals, licenses or permits applicable to our business operation may have a material and adverse impact on our business, financial condition and results of operations. 6 ● There could be adverse legal, tax, and other consequences if users on our platforms were to be classified as our employees or dispatched employees instead of independent contractors. ● Changes in laws and regulations related to the internet and fixed telecommunications or changes in the internet infrastructure and fixed telecommunications networks itself may diminish the demand for our services, and could have a negative impact on our business. ● We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position. ● We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.
Fluctuations in the market price of the ordinary shares may cause us to be or become a PFIC for the current or future taxable years because the value of our assets for purposes of the asset test, including the value of our goodwill and unbooked intangibles, may be determined by reference to the market price of the ordinary shares from time to time (which may be volatile).
Fluctuations in the market price of the Class A ordinary shares may cause us to be or become a PFIC for the current or future taxable years because the value of our assets for purposes of the asset test, including the value of our goodwill and unbooked intangibles, may be determined by reference to the market price of the Class A ordinary shares from time to time (which may be volatile).
Risks Related to Our Ordinary Shares If we fail to comply with the continued listing requirements of Nasdaq, we would face possible delisting, which would result in a limited public market for our ordinary shares and make obtaining future debt or equity financing more difficult for us.
Risks Related to Our Class A Ordinary Shares If we fail to comply with the continued listing requirements of Nasdaq, we would face possible delisting, which would result in a limited public market for our Class A ordinary shares and make obtaining future debt or equity financing more difficult for us.
The liabilities and penalties resulting from such non-compliance may materially and adversely damage our business and results of operations. 24 On December 15, 2019, the CAC, released the Provisions on Ecological Governance of Network Information Content, or PEGNIC, which came into force on March 1, 2020.
The liabilities and penalties resulting from such non-compliance may materially and adversely damage our business and results of operations. On December 15, 2019, the CAC, released the Provisions on Ecological Governance of Network Information Content, or PEGNIC, which came into force on March 1, 2020.
Any of these factors may result in large and sudden changes in the volume and price at which our ordinary shares will trade. In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities.
Any of these factors may result in large and sudden changes in the volume and price at which our Class A ordinary shares will trade. In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities.
Defending any actions brought by such affected users could be costly and require significant time and attention of our management and other resources, which would materially and adversely affect our business. 14 If we fail to maintain and enhance our brand, our business, results of operations and prospects may be materially and adversely affected.
Defending any actions brought by such affected users could be costly and require significant time and attention of our management and other resources, which would materially and adversely affect our business. If we fail to maintain and enhance our brand, our business, results of operations and prospects may be materially and adversely affected.
A prohibition of being able to trade in the United States would substantially impair your ability to sell or purchase our ordinary shares when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our ordinary shares.
A prohibition of being able to trade in the United States would substantially impair your ability to sell or purchase our Class A ordinary shares when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our Class A ordinary shares.
As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our ordinary shares as a source for any future dividend income. Our board of directors has complete discretion as to whether to distribute dividends.
As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Class A ordinary shares as a source for any future dividend income. Our board of directors has complete discretion as to whether to distribute dividends.
If we are classified as a PFIC for any taxable year during which a U.S. Holder (as defined in “Item 10. Additional Information — E. Taxation — U.S. Federal Income Tax Considerations”) holds our ordinary shares, the PFIC tax rules discussed under “Item 10. Additional Information — E. Taxation — U.S.
If we are classified as a PFIC for any taxable year during which a U.S. Holder (as defined in “Item 10. Additional Information — E. Taxation — U.S. Federal Income Tax Considerations”) holds our Class A ordinary shares, the PFIC tax rules discussed under “Item 10. Additional Information — E. Taxation — U.S.
If our ordinary shares are prohibited from trading in the United States, there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our shares will develop outside of the United States.
If our Class A ordinary shares are prohibited from trading in the United States, there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our shares will develop outside of the United States.
Such deceleration may adversely affect our ability to continue expanding our user base. 21 Our technology infrastructure may encounter disruptions or other outages caused by problems or defects in our technologies and systems, such as malfunctions in software or network overload.
Such deceleration may adversely affect our ability to continue expanding our user base. Our technology infrastructure may encounter disruptions or other outages caused by problems or defects in our technologies and systems, such as malfunctions in software or network overload.
Current or potential corporate customers may also react to weak economic conditions or forecasted weak economic conditions by reducing their employee headcount or by lowering their salary or compensation levels, any of which would affect our total net revenues.
Current or potential corporate customers may also react to weak economic conditions or forecasted weak economic conditions by reducing their employee headcount or by lowering their salary or compensation levels, any of which would affect our total revenues.
These regulatory authorities may impose restrictions and penalties on the operations in China, significantly limit or completely hinder our ability to launch any new offering of our securities, limit our ability to pay dividends outside of China, delay or restrict the repatriation of the proceeds from future capital raising activities into China, or take other actions that could materially and adversely affect our business, results of operations, financial condition and prospects, as well as the trading price of our ordinary shares.
These regulatory authorities may impose restrictions and penalties on the operations in China, significantly limit or completely hinder our ability to launch any new offering of our securities, limit our ability to pay dividends outside of China, delay or restrict the repatriation of the proceeds from future capital raising activities into China, or take other actions that could materially and adversely affect our business, results of operations, financial condition and prospects, as well as the trading price of our Class A ordinary shares.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in these jurisdictions and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report by then, our ordinary shares may be prohibited from trading in the United States under the HFCA Act, and such delisting or the threat of delisting may materially and adversely affect the value of your investment.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in these jurisdictions and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report by then, our Class A ordinary shares may be prohibited from trading in the United States under the HFCA Act, and such delisting or the threat of delisting may materially and adversely affect the value of your investment.
If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and the trading price of our ordinary shares may be reduced or more volatile.
If some investors find our Class A ordinary shares less attractive as a result, there may be a less active trading market for our Class A ordinary shares and the trading price of our Class A ordinary shares may be reduced or more volatile.
Such delisting from the Nasdaq and continued or further declines in our ordinary share price could also greatly impair our ability to raise additional necessary capital through equity or debt financing, and could significantly increase the ownership dilution to shareholders caused by our issuing equity in financing or other transactions. 43 The trading price of our ordinary shares is likely to be volatile, which could result in substantial losses to investors.
Such delisting from the Nasdaq and continued or further declines in our ordinary share price could also greatly impair our ability to raise additional necessary capital through equity or debt financing, and could significantly increase the ownership dilution to shareholders caused by our issuing equity in financing or other transactions. 43 The trading price of our Class A ordinary shares is likely to be volatile, which could result in substantial losses to investors.
If we are prevented from obtaining sufficient foreign currency to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of the ordinary shares. 42 If the chops of our PRC subsidiaries are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised.
If we are prevented from obtaining sufficient foreign currency to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our Class A ordinary shares. 42 If the chops of our PRC subsidiaries are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.
As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer. 48
Our current auditor, Enrome LLP (“Enrome”), the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
Our current auditor, Enrome LLP, or Enrome, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in these jurisdictions and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report by then, our ordinary shares may be prohibited from trading in the United States under the HFCA Act, and such delisting or the threat of delisting may materially and adversely affect the value of your investment.” 3 Selected Financial Data The following selected consolidated statements of income and comprehensive income data for the years ended December 31, 2022, 2023 and 2024, selected consolidated balance sheets data as of December 31, 2023 and 2024, and selected consolidated cash flows data for the years ended December 31, 2022, 2023 and 2024 have been derived from our audited consolidated financial statements, which are included in this annual report beginning on page F-1.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in these jurisdictions and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report by then, our Class A ordinary shares may be prohibited from trading in the United States under the HFCA Act, and such delisting or the threat of delisting may materially and adversely affect the value of your investment.” 3 Selected Financial Data The following selected consolidated statements of income and comprehensive income data for the years ended December 31, 2023, 2024 and 2025, selected consolidated balance sheets data as of December 31, 2024 and 2025, and selected consolidated cash flows data for the years ended December 31, 2023, 2024 and 2025 have been derived from our audited consolidated financial statements, which are included in this annual report beginning on page F-1.
However, we cannot guarantee that we will be able to achieve similar user growth in the future. For example, in our recruitment services, our corporate customers and users have many different ways to market their services and secure candidates, including meeting and contacting prospective candidates through other platforms and advertising to prospective candidates online or offline through other methods.
We cannot guarantee that we will be able to achieve user growth in the future. For example, in our recruitment services, our corporate customers and users have many different ways to market their services and secure candidates, including meeting and contacting prospective candidates through other platforms and advertising to prospective candidates online or offline through other methods.
We apply technology to serve our clients more efficiently and bring them better user experience. Our success will in part depends on our ability to keep up with the changes in technology and the continued successful implementation of advanced technology, including AI, 5G, cloud computing, distributed architecture and big data analytics.
We apply technology to serve our clients more efficiently and bring them better user experience. Our success will in part depend on our ability to keep up with the changes in technology and the continued successful implementation of advanced technology, including AI, 5G, cloud computing, distributed architecture and big data analytics.
Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our ordinary shares for return on your investment. We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business.
Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Class A ordinary shares for return on your investment. We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business.
For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. We cannot predict whether investors will find our ordinary shares less attractive if we rely on these exemptions.
For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. We cannot predict whether investors will find our Class A ordinary shares less attractive if we rely on these exemptions.
We are subject to rules and regulations by various governing bodies and self-regulatory organizations, including, for example, the SEC and The Nasdaq Stock Market, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law.
We are subject to rules and regulations by various governing bodies and self-regulatory organizations, including, for example, the SEC and The Nasdaq Stock Market LLC (“Nasdaq”), which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law.
We cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business, financial condition, results of operations and the value of our ordinary shares. Our business is also subject to various government and regulatory interference.
We cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business, financial condition, results of operations and the value of our Class A ordinary shares. Our business is also subject to various government and regulatory interference.
In addition, if we issue additional ordinary shares, either through private transactions or in the public markets in the United States or other jurisdiction, your ownership interests in our company would be diluted and this, in turn, would have an adverse effect on the price of our ordinary shares.
In addition, if we issue additional Class A ordinary shares, either through private transactions or in the public markets in the United States or other jurisdiction, your ownership interests in our company would be diluted and this, in turn, would have an adverse effect on the price of our Class A ordinary shares.
If we raise additional funds through further issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares.
If we raise additional funds through further issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A ordinary shares.
If our ordinary shares were to trade on the over-the-counter market, selling our ordinary shares could be more difficult because smaller quantities of securities would likely be bought and sold, transactions could be delayed, and security analysts’ coverage of us may be reduced.
If our Class A ordinary shares were to trade on the over-the-counter market, selling our Class A ordinary shares could be more difficult because smaller quantities of securities would likely be bought and sold, transactions could be delayed, and security analysts’ coverage of us may be reduced.
As of December 31, 2024, we had not received any notice that we are a critical information infrastructure operator from any government authority, nor had we received any request from the CAC to undergo a cybersecurity review in relation to our initial public offering.
As of December 31, 2025, we had not received any notice that we are a critical information infrastructure operator from any government authority, nor had we received any request from the CAC to undergo a cybersecurity review in relation to our initial public offering.
Accordingly, the return on your investment in our ordinary shares will likely depend entirely upon any future price appreciation of our ordinary shares. There is no guarantee that our ordinary shares will appreciate in value or even maintain the price at which you purchased the ordinary shares.
Accordingly, the return on your investment in our Class A ordinary shares will likely depend entirely upon any future price appreciation of our Class A ordinary shares. There is no guarantee that our Class A ordinary shares will appreciate in value or even maintain the price at which you purchased the Class A ordinary shares.
As of the date of this annual report, we have not granted any awards under the 2024 Plan. We believe the grant of share incentive awards is of significant importance to our ability to attract and retain employees, and we may grant share incentive awards to employees in the future.
As of the date of this annual report, we have not granted any awards under the Amended and Restated 2024 Plan. We believe the grant of share incentive awards is of significant importance to our ability to attract and retain employees, and we may grant share incentive awards to employees in the future.
If PRC income tax is imposed on gains realized through the transfer of our ordinary shares or on dividends paid to our non-PRC resident investors, the value of your investment in our ordinary shares may be materially and adversely affected.
If PRC income tax is imposed on gains realized through the transfer of our ordinary shares or on dividends paid to our non-PRC resident investors, the value of your investment in our Class A ordinary shares may be materially and adversely affected.
The trading performances of these Chinese companies’ securities after their offerings may affect the attitudes of investors toward Chinese companies listed in the United States in general and consequently may impact the trading performance of our ordinary shares, regardless of our actual operating performance.
The trading performances of these Chinese companies’ securities after their offerings may affect the attitudes of investors toward Chinese companies listed in the United States in general and consequently may impact the trading performance of our Class A ordinary shares, regardless of our actual operating performance.
As of the date of this annual report, we have ten patents registered in the U.S. and nine patents registered in China, all in the areas of artificial intelligence, data analytics and blockchain technology, 68 registered trademarks, 75 registered copyrights, and ten registered domain names.
As of the date of this annual report, we have 11 patents registered in the U.S. and 11 patents registered in China, all in the areas of artificial intelligence, data analytics and blockchain technology, 68 registered trademarks, 75 registered copyrights, and ten registered domain names.
Sales of substantial amounts of our ordinary shares in the public market, or the perception that these sales could occur, could adversely affect the market price of our ordinary shares and could materially impair our ability to raise capital through equity offerings in the future.
Sales of substantial amounts of our Class A ordinary shares in the public market, or the perception that these sales could occur, could adversely affect the market price of our Class A ordinary shares and could materially impair our ability to raise capital through equity offerings in the future.
We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our ordinary shares.
We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our Class A ordinary shares.
In addition to market and industry factors, the price and trading volume for our ordinary shares may be highly volatile for factors specific to our own operations, including the following: ● variations in our income, earnings and cash flow; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new services and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● our share repurchase program; ● detrimental adverse publicity about us, our services or our industry; ● additions or departures of key personnel; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; and ● potential litigation or regulatory investigations.
In addition to market and industry factors, the price and trading volume for our Class A ordinary shares may be highly volatile for factors specific to our own operations, including the following: ● variations in our income, earnings and cash flow; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new services and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● detrimental adverse publicity about us, our services or our industry; ● additions or departures of key personnel; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; and ● potential litigation or regulatory investigations.
As of December 31, 2024, we had obtained the licenses, permits and registrations from the PRC government authorities that are material and necessary for our business operations in China.
As of December 31, 2025, we had obtained the licenses, permits and registrations from the PRC government authorities that are material and necessary for our business operations in China.
On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in “Restrictive Market”, (ii) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors. 30 On May 20, 2020, the U.S.
On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in “Restrictive Market”, (ii) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.
The fluctuation in the trading price of our ordinary shares may continue to happen because of broad market and industry factors, like the performance and fluctuation of the market prices of other companies with business operations located mainly in China that have listed their securities in the United States.
However, the fluctuation in the trading price of our Class A ordinary shares may continue to happen because of broad market and industry factors, like the performance and fluctuation of the market prices of other companies with business operations located mainly in China that have listed their securities in the United States.
You may be subject to PRC income tax on dividends from us or on any gain realized on the transfer of our ordinary shares.
You may be subject to PRC income tax on dividends from us or on any gain realized on the transfer of our Class A ordinary shares.
We are subject to the reporting requirements of the Exchange Act of 1934, or Exchange Act, the Sarbanes- Oxley Act of 2002 and the rules and regulations of the Nasdaq Stock Market.
We are subject to the reporting requirements of the Exchange Act of 1934, or Exchange Act, the Sarbanes- Oxley Act of 2002 and the rules and regulations of the Nasdaq.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC. 35 We believe none of our entities outside of China is a PRC resident enterprise for PRC tax purposes.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.
If our ordinary shares lose their status on The Nasdaq Capital Market, our ordinary shares would likely trade in the over-the-counter market.
If our Class A ordinary shares lose their status on the Nasdaq Capital Market, our Class A ordinary shares would likely trade in the over-the-counter market.
Howard Lee, our founder, chairman of the Board and CEO, and our other executive officers named in this annual report. While we have provided different incentives to our management, we cannot assure you that we can continue to retain their services.
Howard Lee, our founder, chairman of the board of directors and chief executive officer, and our other executive officers named in this annual report. While we have provided different incentives to our management, we cannot assure you that we can continue to retain their services.
Because a significant portion of the services we offer are outsourcing services, a decline in the demand or the market for outsourcing services could materially and adversely affect our business, prospects, financial condition and results of operations. In 2022, 2023 and 2024, approximately 39.4%, 48.4% and 73.8% of the services we offer relate to outsourcing services, respectively.
Because a significant portion of the services we offer are outsourcing services, a decline in the demand or the market for outsourcing services could materially and adversely affect our business, prospects, financial condition and results of operations. In 2023, 2024 and 2025, approximately 48.4%, 73.8% and 86.1% of the services we offer relate to outsourcing services, respectively.
Any requirement to disclose our source code or pay damages for breach of contract could be harmful to our business, results of operations and financial condition. Our business depends on the continued efforts of our senior management, particularly our founder, chairman of the Board and CEO, Mr. Howard Lee. If Mr.
Any requirement to disclose our source code or pay damages for breach of contract could be harmful to our business, results of operations and financial condition. Our business depends on the continued efforts of our senior management, particularly our founder, chairman of the board of directors and chief executive officer, Mr. Howard Lee. If Mr.
Furthermore, our shareholders whose jurisdictions of residence have tax treaties or arrangements with China may not qualify for benefits under these tax treaties or arrangements. 40 In addition, pursuant to the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Tax Evasion With Respect to Taxes On Income, and the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties issued in 2009 by the SAT, if a Hong Kong resident enterprise owns more than 25% of the equity interest of a PRC company at all times during the twelve-month period immediately prior to obtaining a dividend from such company, the 10% withholding tax on the dividend is reduced to 5%, provided that certain other conditions and requirements are satisfied at the discretion of the PRC tax authority, however, if the PRC tax authorities determine, in their discretion, that a company benefits from the reduced income tax rate due to a structure or arrangement that is primarily tax-driven, the PRC tax authorities may adjust the preferential tax treatment.
In addition, pursuant to the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Tax Evasion With Respect to Taxes On Income, and the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties issued in 2009 by the SAT, if a Hong Kong resident enterprise owns more than 25% of the equity interest of a PRC company at all times during the twelve-month period immediately prior to obtaining a dividend from such company, the 10% withholding tax on the dividend is reduced to 5%, provided that certain other conditions and requirements are satisfied at the discretion of the PRC tax authority, however, if the PRC tax authorities determine, in their discretion, that a company benefits from the reduced income tax rate due to a structure or arrangement that is primarily tax-driven, the PRC tax authorities may adjust the preferential tax treatment.
On January 15, 2025, we received a notification letter from The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that we are currently not in compliance with the minimum bid price requirement (the “Minimum Bid Price Requirement”) set forth under Nasdaq Listing Rule 5550(a)(2) because the closing bid price of our ordinary shares was below US$1.00 per share for a period of 30 consecutive business days.
On January 15, 2025, we received a notification letter from the Nasdaq notifying us that we are currently not in compliance with the minimum bid price requirement set forth under Rule 5550(a)(2) of the Listing Rules of the Nasdaq because the closing bid price of our ordinary shares was below US$1.00 per share for a period of 30 consecutive business days.
As of the date of this annual report, five of our lease agreements had not been registered.
As of the date of this annual report, three of our lease agreements had not been registered.
In 2022, 2023 and 2024, approximately 53.9%, 44.7% and 20.3% of our net revenues were generated from recruitment services for corporate customers, respectively. Corporate customers are by far the most important source of revenue for us, and attracting more corporate customers to our platforms is therefore of critical importance to us.
In 2023, 2024 and 2025, approximately 44.7%, 20.3% and 10.7% of our revenues were generated from recruitment services for corporate customers, respectively. Corporate customers are by far the most important source of revenue for us, and attracting more corporate customers to our platforms is therefore of critical importance to us.
In addition, the Rules on Implementation of Security Review System for the Merger and Acquisitions of Domestic Enterprises by Foreign Investors issued by the Ministry of Commerce and became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the Ministry of Commerce, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement.
In addition, the Rules on Implementation of Security Review System for the Merger and Acquisitions of Domestic Enterprises by Foreign Investors issued by the Ministry of Commerce and became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the Ministry of Commerce, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. 37 In the future, we may pursue potential strategic acquisitions that are complementary to our business and operations.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in these jurisdictions and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report by then, our ordinary shares may be prohibited from trading in the United States under the HFCA Act, and such delisting or the threat of delisting may materially and adversely affect the value of your investment. ● You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the annual report based on foreign laws. ● You may incur additional costs and procedural obstacles in effecting service of legal process, enforcing foreign judgments or bringing actions in Hong Kong against us or our management named in this annual report based on Hong Kong laws. ● It may be difficult for overseas regulators to conduct investigations or collect evidence within China. ● It may be difficult for overseas shareholders and/or regulators to conduct investigations or collect evidence within Hong Kong. ● If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders. ● The M&A Rules and certain other PRC regulations may make it more difficult for us to pursue growth through acquisitions. 7 Risks Related to Our Ordinary Shares ● If we fail to comply with the continued listing requirements of Nasdaq, we would face possible delisting, which would result in a limited public market for our ordinary shares and make obtaining future debt or equity financing more difficult for us. ● The trading price of our ordinary shares is likely to be volatile, which could result in substantial losses to investors. ● If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our ordinary shares, the market price for our ordinary shares and trading volume could decline. ● The sale or availability for sale of substantial amounts of our ordinary shares could adversely affect their market price. ● We cannot guarantee that any share repurchase program will be fully consummated or that any share repurchase program will enhance long-term shareholder value, and share repurchases could increase the volatility of the price of our ordinary shares and could diminish our cash reserves. ● Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our ordinary shares for return on your investment. ● There can be no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could subject U.S. investors in our ordinary shares or ordinary shares to significant adverse U.S. federal income tax consequences. ● You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law. ● Certain judgments obtained against us by our shareholders may not be enforceable. ● We are a “controlled company” within the meaning of the Nasdaq Stock Market listing rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies. ● We are an emerging growth company and the reduced disclosure requirements applicable to emerging growth companies may make our ordinary shares less attractive to investors. ● We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies. 8 Risks Related to Our Business and Industry We have a limited operating history under our current platforms and business model, which makes it difficult to evaluate our business and prospects, and any future changes to our business model could materially and adversely affect our business, financial condition and results of operations.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in these jurisdictions and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report by then, our Class A ordinary shares may be prohibited from trading in the United States under the HFCA Act, and such delisting or the threat of delisting may materially and adversely affect the value of your investment. ● You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the annual report based on foreign laws. ● You may incur additional costs and procedural obstacles in effecting service of legal process, enforcing foreign judgments or bringing actions in Hong Kong against us or our management named in this annual report based on Hong Kong laws. ● It may be difficult for overseas regulators to conduct investigations or collect evidence within China. ● It may be difficult for overseas shareholders and/or regulators to conduct investigations or collect evidence within Hong Kong. ● If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders. ● The M&A Rules and certain other PRC regulations may make it more difficult for us to pursue growth through acquisitions. 7 Risks Related to Our Class A Ordinary Shares ● If we fail to comply with the continued listing requirements of Nasdaq, we would face possible delisting, which would result in a limited public market for our Class A ordinary shares and make obtaining future debt or equity financing more difficult for us. ● The trading price of our Class A ordinary shares is likely to be volatile, which could result in substantial losses to investors. ● You may experience dilution as a result of our current and/or future equity offerings. ● If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Class A ordinary shares, the market price for our Class A ordinary shares and trading volume could decline. ● The sale or availability for sale of substantial amounts of our Class A ordinary shares could adversely affect their market price. ● Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Class A ordinary shares for return on your investment. ● There can be no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could subject U.S. investors in our Class A ordinary shares to significant adverse U.S. federal income tax consequences. ● You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law. ● Our Dual-Class Share Structure 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 may view as beneficial. ● Our Dual-Class Share S tructure may render our Class A ordinary shares ineligible for inclusion in certain stock market indices, and thus adversely affect the trading price and liquidity of our Class A ordinary shares. ● Certain judgments obtained against us by our shareholders may not be enforceable. ● We are an emerging growth company and the reduced disclosure requirements applicable to emerging growth companies may make our Class A ordinary shares less attractive to investors. ● We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies. 8 Risks Related to Our Business and Industry We have a limited operating history under our current platforms and business model, which makes it difficult to evaluate our business and prospects, and any future changes to our business model could materially and adversely affect our business, financial condition and results of operations.
The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions.
PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions.
There can be no assurance that we will be able to regain or maintain the compliance with the Nasdaq Listing Rules. If we fail to comply with the Bid Price Requirement or any other listing rules when required in the future, we could be subject to suspension and delisting proceedings.
History and Development of the Company.” There can be no assurance that we will be able to maintain compliance with the Listing Rules of the Nasdaq in the future. If we fail to comply with the Minimum Bid Price Requirement or any other listing rules when required in the future, we could be subject to suspension and delisting proceedings.
Senate passed the HFCA Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection.
On May 20, 2020, the U.S. Senate passed the HFCA Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection.
Repayment of the debts may divert a substantial portion of cash flow to repay principal and service interest on such debt, which would reduce the funds available for expenses, capital expenditures, acquisitions and other general corporate purposes; and we may suffer default and foreclosure on our assets if our operating cash flow is insufficient to service debt obligations, which could in turn result in acceleration of obligations to repay the indebtedness and limit our sources of financing.
Repayment of the debts may divert a substantial portion of cash flow to repay principal and service interest on such debt, which would reduce the funds available for expenses, capital expenditures, acquisitions and other general corporate purposes; and we may suffer default and foreclosure on our assets if our operating cash flow is insufficient to service debt obligations, which could in turn result in acceleration of obligations to repay the indebtedness and limit our sources of financing. 12 Volatility in the credit markets may also have an adverse effect on our ability to obtain debt financing.
As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise.
Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise.
Our use of open-source software may also present additional security risks because the source code for open-source software is publicly available, which may make it easier for hackers and other third parties to determine how to breach our website and systems that rely on open-source software.
Our use of open-source software may also present additional security risks because the source code for open-source software is publicly available, which may make it easier for hackers and other third parties to determine how to breach our website and systems that rely on open-source software. Any of these risks could be difficult to eliminate or manage.
If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our ordinary shares, the market price for our ordinary shares and trading volume could decline. The trading market for our ordinary shares will be influenced by research or reports that industry or securities analysts publish about our business.
If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Class A ordinary shares, the market price for our Class A ordinary shares and trading volume could decline.
For the years ended December 31, 2022, 2023 and 2024, we had 391, 582 and 463 corporate customers, respectively, and net revenues generated in relation to our five largest corporate customers in terms of contract amount accounted for approximately 23.3%, 15.9% and 23.6%, respectively.
For the years ended December 31, 2023, 2024 and 2025, we had 582, 463 and 242 corporate customers, respectively, and revenues generated in relation to our five largest corporate customers in terms of contract amount accounted for approximately 15.9%, 23.6% and 37.7%, respectively.
Uncertainties with respect to the PRC legal system, including uncertainties regarding the interpretation and enforcement of laws, and sudden or unexpected changes of PRC laws and regulations with little advance notice could adversely affect us and limit the legal protections available to you and us, and the Chinese government may exert more oversight and control over offerings that are conducted overseas, which changes could materially hinder our ability to continue to offer our securities, and cause the value of our securities to significantly decline or become worthless.
Such developments could adversely affect our business and operating results, lead to reduction in demand for our services and adversely affect our competitive position. 28 Uncertainties with respect to the PRC legal system, including uncertainties regarding the interpretation and enforcement of laws, and sudden or unexpected changes of PRC laws and regulations with little advance notice could adversely affect us and limit the legal protections available to you and us, and the Chinese government may exert more oversight and control over offerings that are conducted overseas, which changes could materially hinder our ability to continue to offer our securities, and cause the value of our securities to significantly decline or become worthless.
It is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country or area of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in the ordinary shares.
It is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country or area of tax residence and the PRC in the event that we are treated as a PRC resident enterprise.
The Chinese government has substantial oversight and influence over the manner in which we must conduct our business and may intervene or influence our operations at any time, which actions could impact our operations materially and adversely, and significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.
Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas could materially and adversely hinder our ability to offer or continue to offer our securities, and cause the value of our securities to significantly decline or become worthless. 29 The Chinese government has substantial oversight and influence over the manner in which we must conduct our business and may intervene or influence our operations at any time, which actions could impact our operations materially and adversely, and significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

55 edited+27 added−23 removed145 unchanged
We charge those who enroll in training classes enrollment fees that are determined by us based upon our training material development costs or the costs of training courses sourced from the third-party providers. Taking the Certified Career Resources Planner (“CCRP”) certificate training program that is self-developed by us as an example.
We charge those who enroll in training classes enrollment fees that are determined by us based upon our training material development costs or the costs of training courses sourced from the third-party providers. 52 Taking the Certified Career Resources Planner (“CCRP”) certificate training program that is self-developed by us as an example.
Thus, to empower HRs and hiring companies, we provide coordination and execution assistance via our talent scouts in the candidate sourcing and hiring process in daily recruitment practice to free HRs from the burdensome researching and administrative work. 49 Our agent-centric recruitment services are mainly carried out by means of permanent employment recruitment services and flexible employment recruitment services.
Thus, to empower HRs and hiring companies, we provide coordination and execution assistance via our talent scouts in the candidate sourcing and hiring process in daily recruitment practice to free HRs from the burdensome researching and administrative work. Our agent-centric recruitment services are mainly carried out by means of permanent employment recruitment services and flexible employment recruitment services.
We believe it will have a positive effect on increasing the transaction closing rates. We invest substantial resources to improve our technology and data infrastructure, strengthen our data processing and analytic capabilities, develop new solutions that are complementary to existing ones and find ways to better serve our users and corporate customers.
We believe it will have a positive effect on increasing the transaction closing rates. 53 We invest substantial resources to improve our technology and data infrastructure, strengthen our data processing and analytic capabilities, develop new solutions that are complementary to existing ones and find ways to better serve our users and corporate customers.
Our extensive experience and quality of service not only secure long-term clients, but also create a word-of-mouth effect for developing new clients. 52 Quality Control We believe that our ability to maintain the quality of our services is critical to our growth. Our quality assurance measures include the following: ● Internal quality control regulations and policies .
Our extensive experience and quality of service not only secure long-term clients, but also create a word-of-mouth effect for developing new clients. Quality Control We believe that our ability to maintain the quality of our services is critical to our growth. Our quality assurance measures include the following: ● Internal quality control regulations and policies .
We have also embedded extensive monitoring and alerting infrastructure into our platform to maintain reliability and platform performance. We protect our users’ data through a combination of internal audits, processing procedures and technology tools, and we are focused on making our platform more trustworthy.
We have also embedded extensive monitoring and alerting infrastructure into our platform to maintain reliability and platform performance. 55 We protect our users’ data through a combination of internal audits, processing procedures and technology tools, and we are focused on making our platform more trustworthy.
Under the Copyright Law, the term of protection for software copyright is 50 years. 59 Domain Name Domain names are protected under the Administrative Measures for Internet Domain Names, or the Domain Name Measures, promulgated by the MIIT, effective on November 1, 2017. MIIT is the major regulatory body responsible for the administration of the PRC internet domain names.
Under the Copyright Law, the term of protection for software copyright is 50 years. Domain Name Domain names are protected under the Administrative Measures for Internet Domain Names, or the Domain Name Measures, promulgated by the MIIT, effective on November 1, 2017. MIIT is the major regulatory body responsible for the administration of the PRC internet domain names.
SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on www.sec.gov . You can also find information on our website https://www.lucasgchr.com/. The information contained on our website is not a part of this annual report. B.
SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on www.sec.gov . You can also find information on our website www.lucasgchr.com . The information contained on our website is not a part of this annual report. 49 B.
As of December 31, 2024, the approximate gross floor area of our leased properties was 548 square meters in aggregate and we did not have self-held properties. We lease our premises from unrelated third parties under operating lease agreements.
As of December 31, 2025, the approximate gross floor area of our leased properties was 548 square meters in aggregate and we did not have self-held properties. We lease our premises from unrelated third parties under operating lease agreements.
We intend to establish a research center in the U.S. to conduct such research and development activities, to take advantage of the fact that our IP consultant Dr. Wong and our founder, chairman of the Board and CEO, Mr. Lee, have decades of work and academic experience in the technical field in the U.S.
We intend to establish a research center in the U.S. to conduct such research and development activities, to take advantage of the fact that our IP consultant Dr. Wong and our founder, chairman of the board of directors and chief executive officer, Mr. Lee, have decades of work and academic experience in the technical field in the U.S.
The designated foreign exchange bank shall handle the formalities for the domestic institution after an authenticity check. 61 Pursuant to the Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies, promulgated on February 13, 2015 and implemented on June 1, 2015 and last amended and implemented on December 30 2019, the SAFE decided to further simplify and improve policies for the foreign exchange administration of direct investment around the entire nation, by cancelling two administrative approval items: confirmation of foreign exchange registration under domestic direct investment and confirmation of foreign exchange registration under overseas direct investment and, instead, banks shall directly examine and handle foreign exchange registration under domestic direct investment and foreign exchange registration under overseas direct investment, and the SAFE and its branch offices shall indirectly regulate the foreign exchange registration of direct investment through banks and simplifying the procedures for some foreign exchange transactions under direct investment.
Pursuant to the Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies, promulgated on February 13, 2015 and implemented on June 1, 2015 and last amended and implemented on December 30, 2019, the SAFE decided to further simplify and improve policies for the foreign exchange administration of direct investment around the entire nation, by cancelling two administrative approval items: confirmation of foreign exchange registration under domestic direct investment and confirmation of foreign exchange registration under overseas direct investment and, instead, banks shall directly examine and handle foreign exchange registration under domestic direct investment and foreign exchange registration under overseas direct investment, and the SAFE and its branch offices shall indirectly regulate the foreign exchange registration of direct investment through banks and simplifying the procedures for some foreign exchange transactions under direct investment.
The Foreign Investment Law provides that foreign invested entities shall not operate foreign prohibited industries and foreign invested entities operating in foreign restricted industries shall meet the investment conditions stipulated under the negative list. 55 In addition, the Foreign Investment Law also provides several protective rules and principles for foreign investors and their investments in the PRC, including, among others, that local governments shall abide by their commitments to the foreign investors; foreign-invested enterprises are allowed to issue stocks and corporate bonds; except for special circumstances, in which case statutory procedures shall be followed, and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; mandatory technology transfer is prohibited; and the capital contributions, profits, capital gains, proceeds out of asset disposal, licensing fees of intellectual property rights, indemnity or compensation legally obtained, or proceeds received upon settlement by foreign investors within China, may be freely remitted inward and outward in RMB or a foreign currency.
In addition, the Foreign Investment Law also provides several protective rules and principles for foreign investors and their investments in the PRC, including, among others, that local governments shall abide by their commitments to the foreign investors; foreign-invested enterprises are allowed to issue stocks and corporate bonds; except for special circumstances, in which case statutory procedures shall be followed, and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; mandatory technology transfer is prohibited; and the capital contributions, profits, capital gains, proceeds out of asset disposal, licensing fees of intellectual property rights, indemnity or compensation legally obtained, or proceeds received upon settlement by foreign investors within China, may be freely remitted inward and outward in RMB or a foreign currency.
According to the Foreign Investment Law, “foreign investment” refers to investment activities directly or indirectly conducted by one or more natural persons, business entities, or otherwise organizations of a foreign country (collectively referred to as “foreign investor”) within China, and the investment activities include the following situations: (i) a foreign investor, individually or collectively with other investors, establishes a foreign-invested enterprise within China; (ii) a foreign investor acquires stock shares, equity shares, shares in assets, or other like rights and interests of an enterprise within China; (iii) a foreign investor, individually or collectively with other investors, invests in a new project within China; and (iv) investments in other means as provided by laws, administrative regulations, or the State Council.
The Foreign Investment Law establishes the basic framework for the access to and the promotion, protection, and administration of foreign investments in view of investment protection and fair competition. 56 According to the Foreign Investment Law, “foreign investment” refers to investment activities directly or indirectly conducted by one or more natural persons, business entities, or otherwise organizations of a foreign country (collectively referred to as “foreign investor”) within China, and the investment activities include the following situations: (i) a foreign investor, individually or collectively with other investors, establishes a foreign-invested enterprise within China; (ii) a foreign investor acquires stock shares, equity shares, shares in assets, or other like rights and interests of an enterprise within China; (iii) a foreign investor, individually or collectively with other investors, invests in a new project within China; and (iv) investments in other means as provided by laws, administrative regulations, or the State Council.
E. Organizational Structure The following diagram illustrates our corporate structure as of the date of this annual report. Note: (1) Our founder, chairman of the Board, and CEO, Mr.
E. Organizational Structure The following diagram illustrates our corporate structure as of the date of this annual report. Note: (1) Our founder, chairman of the board of directors, and chief executive officer, Mr.
Any employer that fails to make social insurance contributions may be ordered to rectify the non-compliance and pay the required contributions within a prescribed time limit and be subject to a late fee.
These payments are made to local administrative authorities. Any employer that fails to make social insurance contributions may be ordered to rectify the non-compliance and pay the required contributions within a prescribed time limit and be subject to a late fee.
According to the Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, which was promulgated and implemented by the SAFE on June 9, 2016, the tentative percentage of foreign exchange settlement for foreign currency earnings in capital account of domestic institutions is 100%, subject to adjustment of the SAFE in due time in accordance with international revenue and expenditure conditions.
According to the announcement promulgated by the PBOC and the SAFE on July 20, 2023, the macro-prudent regulation parameter is raised to 1.5. 61 According to the Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, which was promulgated and implemented by the SAFE on June 9, 2016, the tentative percentage of foreign exchange settlement for foreign currency earnings in capital account of domestic institutions is 100%, subject to adjustment of the SAFE in due time in accordance with international revenue and expenditure conditions.
On July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Outbound Data Transfer, which became effective on September 1, 2022, pursuant to which, to provide data abroad, including where the data collected and generated by data handlers are stored in China and can be accessed or invoked by overseas institutions, organizations or individuals, under any of the following circumstances, a data processor shall apply to the national cyberspace administration for the security assessment of the outbound data transfer through the local provincial cyberspace administration: (i) the data processor provides important data abroad; (ii) the critical information infrastructure operator or the data processor that has processed the personal information of over one million people provides personal information abroad; (iii) the data processor that has provided the personal information of over 100,000 people or the sensitive personal information of over 10,000 people cumulatively since January 1 of the previous year provides personal information abroad; and (iv) any other circumstance where an application for the security assessment of outbound data transfer is required by the national cyberspace administration. 58 On March 22, 2024, the CAC promulgated the Provisions on Promoting and Regulating Cross-border Data Flows, which stipulate that, if the data have not been informed or publicly announced as important data by relevant PRC departments or regions, data processors are not required to apply for security assessment for cross-border provision of the data as important data.
On July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Outbound Data Transfer, which became effective on September 1, 2022, pursuant to which, to provide data abroad, including where the data collected and generated by data handlers are stored in China and can be accessed or invoked by overseas institutions, organizations or individuals, under any of the following circumstances, a data processor shall apply to the national cyberspace administration for the security assessment of the outbound data transfer through the local provincial cyberspace administration: (i) the data processor provides important data abroad; (ii) the critical information infrastructure operator or the data processor that has processed the personal information of over one million people provides personal information abroad; (iii) the data processor that has provided the personal information of over 100,000 people or the sensitive personal information of over 10,000 people cumulatively since January 1 of the previous year provides personal information abroad; and (iv) any other circumstance where an application for the security assessment of outbound data transfer is required by the national cyberspace administration.
The M&A Rules further requires that an offshore special purpose vehicle, or the SPV, that is controlled directly or indirectly by the PRC companies or individuals and that has been formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals, shall obtain the approval of CSRC prior to overseas listing and trading of such SPV’s securities on an overseas stock exchange.
The M&A Rules further requires that an offshore special purpose vehicle, or the SPV, that is controlled directly or indirectly by the PRC companies or individuals and that has been formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals, shall obtain the approval of CSRC prior to overseas listing and trading of such SPV’s securities on an overseas stock exchange. 65 On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, which became effective on March 31, 2023.
As of the date of this annual report, we hold ten patents registered in the U.S. and nine patents registered in China, 68 registered trademarks, 75 registered copyrights, and ten registered domain names along with eight additional patent applications that are pending in the U.S. and China, all in the areas of artificial intelligence, data analytics and blockchain technologies. 51 Our technologies are well recognized by industry peers.
As of the date of this annual report, we hold eleven patents registered in the U.S. and eleven patents registered in China, 68 registered trademarks, 75 registered copyrights, and ten registered domain names, all in the areas of artificial intelligence, data analytics and blockchain technologies. Our technologies are well recognized by industry peers.
The SCNPC enacted the Decisions on the Maintenance of Internet Security on December 28, 2000, which was latest amended on August 27, 2009, providing that the following activities conducted through the internet are subject to criminal liabilities: (i) gaining improper entry into any of the computer information networks relating to state affairs, national defensive affairs, or cutting-edge science and technology; (ii) violation of relevant provisions of the State in the form of unauthorized interruption of any computer network or communication service, as a result of which the computer network or communication system cannot function normally; (iii) spreading rumor, slander or other harmful information via the internet for the purpose of inciting subversion of the state political power; (iv) stealing or divulging state secrets, intelligence or military secrets via internet; (v) spreading false or inappropriate commercial information; or (vi) infringing on the intellectual property. 57 On November 7, 2016, the SCNPC promulgated the Cyber Security Law of the PRC, which became effective on June 1, 2017, pursuant to which, network operators shall comply with laws and regulations and fulfill their obligations to safeguard security of the network when conducting business and providing services.
The SCNPC enacted the Decisions on the Maintenance of Internet Security on December 28, 2000, which was latest amended on August 27, 2009, providing that the following activities conducted through the internet are subject to criminal liabilities: (i) gaining improper entry into any of the computer information networks relating to state affairs, national defensive affairs, or cutting-edge science and technology; (ii) violation of relevant provisions of the State in the form of unauthorized interruption of any computer network or communication service, as a result of which the computer network or communication system cannot function normally; (iii) spreading rumor, slander or other harmful information via the internet for the purpose of inciting subversion of the state political power; (iv) stealing or divulging state secrets, intelligence or military secrets via internet; (v) spreading false or inappropriate commercial information; or (vi) infringing on the intellectual property.
Lucas GC Limited is not a Chinese operation company but a Cayman Islands holding company with operations primarily conducted through its PRC subsidiaries. F. Property, Plant and Equipment Our corporate headquarters are located in Beijing, China.
We do not currently use, and have not used in the past, a variable interest entity structure. Lucas GC Limited is not a Chinese operation company but a Cayman Islands holding company with operations primarily conducted through its PRC subsidiaries. F. Property, Plant and Equipment Our corporate headquarters are located in Beijing, China.
Many factors contribute to our competitiveness, including an established social network based on acquaintances and linking various users, agent-centric business model to drive the operation of social networks, low frequency, high price and non-standard services, and continuously improved platform matching efficiency by data analytics and artificial intelligence technology.
Many factors contribute to our competitiveness, including an established social network based on acquaintances and linking various users, agent-centric business model to drive the operation of social networks, low frequency, high price and non-standard services, and continuously improved platform matching efficiency by data analytics and artificial intelligence technology. 54 As our business continues to grow rapidly, we face significant competition from a number of online and offline platforms and services to attract and retain users.
According to the Circular of the State Administration of Foreign Exchange on Further Promoting Cross-Border Trade and Investment Facilitation, which was promulgated and implemented by the SAFE on October 23, 2019, non-investment foreign-funded enterprises are allowed to lawfully make domestic equity investments by using their capital on the premise of no violation of the Negative List and the authenticity and compliance with the regulations of domestic investment projects. 60 According to the Circular on Optimizing Administration of Foreign Exchange to Support the Development of Foreign-related Business, or Circular 8 issued by the SAFE on April 10, 2020, eligible enterprises are allowed to make domestic payments by using their capital funds, foreign credits and the income under capital accounts of overseas listing, with no need to provide the evidentiary materials concerning authenticity of such capital for banks on a transaction-by-transaction basis in advance, provided that their capital use shall be authentic and in line with provisions, and conform to the prevailing administrative regulations on the use of income under capital accounts.
According to the Circular on Optimizing Administration of Foreign Exchange to Support the Development of Foreign-related Business, or Circular 8 issued by the SAFE on April 10, 2020, eligible enterprises are allowed to make domestic payments by using their capital funds, foreign credits and the income under capital accounts of overseas listing, with no need to provide the evidentiary materials concerning authenticity of such capital for banks on a transaction-by-transaction basis in advance, provided that their capital use shall be authentic and in line with provisions, and conform to the prevailing administrative regulations on the use of income under capital accounts.
For the years ended December 31, 2022, 2023 and 2024, our gross profit amounted to RMB215.2 million, RMB418.6 million and RMB357.4 million (US$49.0 million), respectively, representing an increase of 94.5% and a decrease of 14.6%, respectively.
For the years ended December 31, 2023, 2024 and 2025, our gross profit amounted to RMB418.6 million, RMB357.4 million and RMB352.0 million (US$50.3 million), respectively, representing a decrease of 14.6% and a decrease of 1.5%, respectively.
And based on the Announcement on Certain Issues with Respect to the “Beneficial Owner” in Tax Treaties issued by the SAT on February 3, 2018 and effective from April 1, 2018, if an applicant’s business activities do not constitute substantive business activities, it could result in the negative determination of the applicant’s status as a “beneficial owner”, and consequently, the applicant could be precluded from enjoying the above-mentioned reduced income tax rate of 5% under the Double Tax Avoidance Arrangement. 62 Regulations on PRC Value-Added Tax According to the Interim Regulation of PRC on Value Added Tax promulgated by the State Council on December 13, 1993 and last revised on November 19, 2017, the value added tax (“VAT”) rate to be imposed on HR services shall be 6%.
And based on the Announcement on Certain Issues with Respect to the “Beneficial Owner” in Tax Treaties issued by the SAT on February 3, 2018 and effective from April 1, 2018, if an applicant’s business activities do not constitute substantive business activities, it could result in the negative determination of the applicant’s status as a “beneficial owner”, and consequently, the applicant could be precluded from enjoying the above-mentioned reduced income tax rate of 5% under the Double Tax Avoidance Arrangement.
For the years ended December 31, 2022, 2023 and 2024, net revenues from our recruitment services amounted to RMB413.0 million, RMB659.0 million and RMB216.1 million (US$29.6 million), respectively.
For the years ended December 31, 2023, 2024 and 2025, revenues from our recruitment services amounted to RMB659.0 million, RMB216.1 million and RMB111.5 million (US$15.9 million), respectively.
Our outsourcing services help us build a close partnership with large corporations, differentiating us from traditional human capital management companies. Attributable to our network of high-skilled freelancers and specialized companies, our corporate customers are able to delegate certain tasks to third-party contractors through us and focus on developing their businesses in a more cost-efficient way.
Attributable to our network of high-skilled freelancers and specialized companies, our corporate customers are able to delegate certain tasks to third-party contractors through us and focus on developing their businesses in a more cost-efficient way.
The revised Provisions require that, including but not limited to (a) a domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. 64 On or after March 31, 2023, any failure or perceived failure by the Company or PRC subsidiaries to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in that the relevant entities would be held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.
The revised Provisions require that, including but not limited to (a) a domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.
Recruitment Services Equipped with a well-established talent scout network and comprehensive technology infrastructure, our platforms Columbus and Star Career alleviate our corporate customers from the burden associated with discovering, training, managing and maintaining a sufficient number of skilled workers, allowing them to better focus on their core businesses. We have experienced rapid growth of active registered users.
Recruitment Services Equipped with a well-established talent scout network and comprehensive technology infrastructure, our platforms Columbus and Star Career alleviate our corporate customers from the burden associated with discovering, training, managing and maintaining a sufficient number of skilled workers, allowing them to better focus on their core businesses. 50 The recruitment services we provide are based on our profound industry knowledge and in-depth understanding of the unmet demands of both our corporate customers and the professionals.
And an App provider providing internet information services that must be subject to examination and approval of the competent authority or have obtained relevant permit in accordance with the law may only provide services upon examination and approval of the competent authority or with the relevant permit.
And an App provider providing internet information services that must be subject to examination and approval of the competent authority or have obtained relevant permit in accordance with the law may only provide services upon examination and approval of the competent authority or with the relevant permit. 58 Regulations Relating to Internet Information Security and Privacy Protection Internet content in China is regulated and restricted from a state security standpoint.
Regulations Relating to Dividend Withholding Tax Pursuant to the EIT Law and its implementation rules, if a non-resident enterprise has not set up an organization or establishment in the PRC or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%.
In January 2016, the State Administration of Taxation, or SAT, the Ministry of Science and Technology, and the Ministry of Finance, or MOF, jointly issued the Administrative Rules for the Certification of High and New Technology Enterprises, specifying the criteria and procedures for the certification of High and New Technology Enterprises. 63 Regulations Relating to Dividend Withholding Tax Pursuant to the EIT Law and its implementation rules, if a non-resident enterprise has not set up an organization or establishment in the PRC or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%.
Pursuant to the Circular of the State Administration of Foreign Exchange on Relevant Issues concerning Foreign Exchange Administration of Overseas Investment and Financing and Return Investments Conducted by Domestic Residents through Overseas Special Purpose Vehicles, issued by SAFE on July 14, 2014, offshore enterprise directly established or indirectly controlled by the PRC resident individuals with their legally owned onshore or offshore assets and equity, for the purposes of investment and financing shall be subject to foreign exchange registration for offshore investment with SAFE.
If investors are not within the same administrative jurisdiction, the MOFCOM or the department in charge of commerce, which is responsible for handling the verification and archive filing, shall notify the departments in charge of commerce of the place where other investors are located of the relevant results. 62 Pursuant to the Circular of the State Administration of Foreign Exchange on Relevant Issues concerning Foreign Exchange Administration of Overseas Investment and Financing and Return Investments Conducted by Domestic Residents through Overseas Special Purpose Vehicles, issued by SAFE on July 14, 2014, offshore enterprise directly established or indirectly controlled by the PRC resident individuals with their legally owned onshore or offshore assets and equity, for the purposes of investment and financing shall be subject to foreign exchange registration for offshore investment with SAFE.
Labor Law According to the Labor Law of the PRC (2018 Amendment) issued by the SCNPC on December 29, 2018, the employing units must establish and improve the system of labor safety and health, strictly implement the national regulations and standards on labor safety and health, educate workers on labor safety and health, prevent accidents in the process of labor and reduce occupational hazards employers shall develop and improve their rules and regulations to ensure that workers enjoy their labor rights and perform their labor obligations.
Labor Law According to the Labor Law of the PRC (2018 Amendment) issued by the SCNPC on December 29, 2018, the employing units must establish and improve the system of labor safety and health, strictly implement the national regulations and standards on labor safety and health, educate workers on labor safety and health, prevent accidents in the process of labor and reduce occupational hazards employers shall develop and improve their rules and regulations to ensure that workers enjoy their labor rights and perform their labor obligations. 64 Social Insurance and Housing Fund As required under the PRC Social Insurance Law implemented on July 1, 2011 and amended on December 29, 2018, employers are required to provide their employees in the PRC with welfare benefits covering pension insurance, unemployment insurance, maternity insurance, labor injury insurance and medical insurance.
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC, or the Personal Information Protection Law, which became effective on November 1, 2021, pursuant to which, personal information processors shall be responsible for their personal information processing activities, and take necessary measures to guarantee the security of the personal information they process.
Any organization or individual that need to obtain personal information of others shall obtain such information legally and ensure the safety of such information, and shall not illegally collect, use, process or transmit personal information of others, or illegally purchase or sell, provide or make public personal information of others. 59 On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC, or the Personal Information Protection Law, which became effective on November 1, 2021, pursuant to which, personal information processors shall be responsible for their personal information processing activities, and take necessary measures to guarantee the security of the personal information they process.
Unless their acquaintances actively register themselves on our platform, either through our Star Career or Columbus applications or Tencent’s mini-program, we do not collect personal information about our users’ acquaintances.
Data Security Our platform is based on analyzing the behaviors, profiles and interests of our users and their acquaintances in their own private mobile networks. Unless their acquaintances actively register themselves on our platform, either through our Star Career or Columbus applications or Tencent’s mini-program, we do not collect personal information about our users’ acquaintances.
However, as of the date of this annual report, neither the PBOC nor SAFE has issued any new regulations regarding the appropriate means of calculating the maximum amount of foreign debt for foreign-invested enterprises. According to the announcement promulgated by the PBOC and the SAFE on July 20, 2023, the macro-prudent regulation parameter is raised to 1.5.
However, as of the date of this annual report, neither the PBOC nor SAFE has issued any new regulations regarding the appropriate means of calculating the maximum amount of foreign debt for foreign-invested enterprises.
We currently do not have any business liability or disruption insurance. 54 Our insurance coverage does not violate any mandatory provisions of PRC laws. We believe that such coverage is in line with industry norms in the PRC and is adequate and sufficient for our current operations. See “Item 3. Key Information — D.
We believe that such coverage is in line with industry norms in the PRC and is adequate and sufficient for our current operations. See “Item 3. Key Information — D.
Insurance We participate in various government statutory social security plans, including a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan, a maternity insurance plan and a housing provident fund.
Insurance We participate in various government statutory social security plans, including a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan, a maternity insurance plan and a housing provident fund. We currently do not have any business liability or disruption insurance. Our insurance coverage does not violate any mandatory provisions of PRC laws.
We rely on a combination of confidentiality clauses, contractual commitments, trade secret protections, copyrights, trademarks, patents, and other legal rights to protect our intellectual property and know-how. We enter into confidentiality and proprietary rights agreements with our employees, consultants and business partners, and we control access to and distribution of our proprietary information.
Our continued success depends upon our ability to protect our core technology and intellectual property. We rely on a combination of confidentiality clauses, contractual commitments, trade secret protections, copyrights, trademarks, patents, and other legal rights to protect our intellectual property and know-how.
Patent Pursuant to the Patent Law of the PRC, or the Patent Law, which was issued by the SCNPC on March 12, 1984, and latest revised on October 17, 2020 and to be effective as of June 1, 2021, a patentable invention, utility model or design must meet three conditions: novelty, inventiveness and practical applicability.
Any person applying for the registration of a trademark may not prejudice the existing right of others, nor may any person register in advance a trademark that has already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use. 60 Patent Pursuant to the Patent Law of the PRC, or the Patent Law, which was issued by the SCNPC on March 12, 1984, and latest revised on October 17, 2020 and to be effective as of June 1, 2021, a patentable invention, utility model or design must meet three conditions: novelty, inventiveness and practical applicability.
As such, we bear the obligations of paying salaries and deducting the taxes in due course for the candidate who is most likely a freelancer. Our corporate customers thus have more flexibility in terms of fulfilling their temporary business needs which may not be stable.
As such, we bear the obligations of paying salaries and deducting the taxes in due course for the candidate who is most likely a freelancer.
Regulations Relating to Talent Intermediary Services The Employment Promotion Law of the People’s Republic of China, or the Employment Promotion Law, promulgated by SCNPC, on August 30, 2007 and latest amended on April 24, 2015 stipulates that employment intermediary agencies shall register and seek approval from the competent labor administrative department after their corporation.
If a foreign-invested enterprise investing in the PRC has submitted reports for its establishment, modification and cancellation, as well as its annual reports, the relevant information will be shared by the competent market regulation department with the competent commercial department, and such foreign-invested enterprise is not required to submit the reports separately. 57 Regulations Relating to Talent Intermediary Services The Employment Promotion Law of the People’s Republic of China, or the Employment Promotion Law, promulgated by SCNPC, on August 30, 2007 and latest amended on April 24, 2015 stipulates that employment intermediary agencies shall register and seek approval from the competent labor administrative department after their corporation.
Outsourcing Services We provide outsourcing services, mostly in technology-related projects, to our corporate customers who need a “turnkey solution” and rely on us to design, develop and deliver the projects within budget and on time with acceptable quality. We were designated as a “Technologically Advanced Small and Medium-sized Enterprises” by the MIIT of China.
We were designated as a “Technologically Advanced Small and Medium-sized Enterprises” by the MIIT of China. We leverage our qualifications, vast industry knowledge, and expert networks to offer cost-effective solutions to our corporate customers who rely on us to deliver the expected solutions on time, within budget and of acceptable quality.
In addition, this regulation also reiterates the requirements under the Employment Promotion Law that as a talent intermediary service agency, we are prohibited from providing fake information, making false promises and publishing fake recruitment advertisement. 56 On June 29, 2018, the State Council issued the Interim Regulations for the Human Resources Market, effective on October 1, 2018, according to which, the human resources services (the “HR services”) providers include public HR service providers established by the relevant PRC governmental authorities and commercial HR service providers.
On June 29, 2018, the State Council issued the Interim Regulations for the Human Resources Market, effective on October 1, 2018, according to which, the human resources services (the “HR services”) providers include public HR service providers established by the relevant PRC governmental authorities and commercial HR service providers.
Because the “negative list” has yet to be published, it is unclear whether it will differ from the Negative List as currently in effect.
Because the “negative list” has yet to be published, it is unclear whether it will differ from the Negative List as currently in effect. The Foreign Investment Law provides that foreign invested entities shall not operate foreign prohibited industries and foreign invested entities operating in foreign restricted industries shall meet the investment conditions stipulated under the negative list.
Box 30746, Seven Mile Beach, Grand Cayman KY1-1203, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc. located at 122 East 42nd Street, 18th Floor, New York, NY 10168.
Our registered office is located at ICS Corporate Services (Cayman) Limited, Palm Grove Unit 4, 265 Smith Road, George Town, P.O. Box 52A Edgewater Way, #1653, Grand Cayman KY1-9006, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc. located at 122 East 42nd Street, 18th Floor, New York, NY 10168.
Where an employer fails to pay or fully pay the housing provident fund, the housing provident fund management center shall order it to make payment within the prescribed period; if it fails to make payment within such prescribed period, the center may apply to the people’s court for enforcement. 63 Regulations on Stock Incentive Plans SAFE promulgated the Notice of Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company, or SAFE Circular 7, on February 15, 2012.
Regulations on Stock Incentive Plans SAFE promulgated the Notice of Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company, or SAFE Circular 7, on February 15, 2012.
As a company empowered by AI, data analytics, and blockchain technologies, we are committed to digitalizing and intellectualizing the entire human capital management process. We provide a platform to support trusted and private social networks of professionals, through which we provide services consisting of recruitment services, outsourcing services, and other services such as information technology services and training services.
We provide a platform to support trusted and private social networks of professionals, through which we provide services consisting of recruitment services, outsourcing services, and other services such as information technology services and training services. Our users are primarily professionals who work in human resources related functions.
As of the date of this annual report, we hold ten patents registered in the U.S. and nine patents registered in China, 68 registered trademarks, 75 registered copyrights, and ten registered domain names along with eight additional patent applications that are pending in the U.S. and China. 53 According to Frost & Sullivan, we ranked fourth among the well-known platforms in the human capital management industry in China in terms of the number of patents we owned as of December 31, 2022.
According to Frost & Sullivan, we ranked fourth among the well-known platforms in the human capital management industry in China in terms of the number of patents we owned as of December 31, 2022. In addition, we ranked first among all these platforms in terms of the total numbers of patents registered in the U.S. as of December 31, 2022.
For the years ended December 31, 2022, 2023 and 2024, net revenues from our other services amounted to RMB51.6 million, RMB101.0 million and RMB62.2 million (US$8.5 million), respectively. Information Technology Services Our information technology services are aimed at generating sales leads for our corporate customers who offer products and services that our users and their acquaintances may find interesting.
Information Technology Services Our information technology services are aimed at generating sales leads for our corporate customers who offer products and services that our users and their acquaintances may find interesting.
For the years ended December 31, 2022, 2023 and 2024, net revenues from our outsourcing services amounted to RMB301.9 million, RMB714.0 million and RMB785.1 million (US$107.6 million), respectively, representing a year-over-year growth of 136.5% and 10.0%, respectively. 50 Our service fees and the forms of the outsourcing service agreement are usually determined on a case-by-case basis and are subject to market conditions and mutual negotiations each time an order is placed.
For the years ended December 31, 2023, 2024 and 2025, revenues from our outsourcing services amounted to RMB714.0 million, RMB785.1 million and RMB897.9 million (US$128.4 million), respectively, representing a year-over-year growth of 10.0% and 14.4%, respectively.
From time to time, third parties may initiate litigation against us alleging infringement of their proprietary rights or declaring their non-infringement of our intellectual property rights. Data Security Our platform is based on analyzing the behaviors, profiles and interests of our users and their acquaintances in their own private mobile networks.
Even if our efforts are successful, we may incur significant costs in defending our rights. From time to time, third parties may initiate litigation against us alleging infringement of their proprietary rights or declaring their non-infringement of our intellectual property rights.
(2) The English names of our PRC business entities are directly translated from Chinese and may be different from their names shown on their respective records filed with relevant PRC authorities. We do not currently use, and have not used in the past, a variable interest entity structure.
Howard Lee, owns approximately 2.8% of the equity interests in our company through his wholly owned company, HTL Lucky Holding Limited, as of the date of this annual report. 66 (2) The English names of our PRC business entities are directly translated from Chinese and may be different from their names shown on their respective records filed with relevant PRC authorities.
We intend to protect our intellectual properties vigorously, but there can be no assurance that our efforts will be successful. Even if our efforts are successful, we may incur significant costs in defending our rights.
We enter into confidentiality and proprietary rights agreements with our employees, consultants and business partners, and we control access to and distribution of our proprietary information. We intend to protect our intellectual properties vigorously, but there can be no assurance that our efforts will be successful.
Pursuant to the outsourcing service agreement that we sign with the corporate customers, we will receive scheduled payments upon project acceptance and satisfaction of key performance indicators. Other Services We launched other services as value-added services in August 2021, which include information technology services and training services.
Our service fees and the forms of the outsourcing service agreement are usually determined on a case-by-case basis and are subject to market conditions and mutual negotiations each time an order is placed. Pursuant to the outsourcing service agreement that we sign with the corporate customers, we will receive scheduled payments upon project acceptance and satisfaction of key performance indicators.
Business Overview Overview We are the largest technology-driven online agent-centric human capital management service provider targeting professionals based on PaaS in China in terms of the number of active users in the human resources industry as of June 30, 2022 and total net revenues for the year ended December 31, 2021.
Business Overview Overview We are a technology-driven, agent-centric online human capital management service provider targeting professionals in China, operating on a PaaS model . As a company empowered by AI, data analytics, and blockchain technologies, we are committed to digitalizing and intellectualizing the entire human capital management process.
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Our principal executive offices are located at Room 5A01, 4th Floor, Air China Building, Xiaoyun Road, Sanyuanqiao, Chaoyang District, Beijing 100027, China. Our telephone number at this address is (86) 18500976532. Our registered office is located at ICS Corporate Services (Cayman) Limited, 3-212 Governors Square, 23 Lime Tree Bay Avenue, P.O.
Added
In August 2024, our board of directors authorized a share repurchase program, under which we may repurchase up to US$6 million of our ordinary shares, effective on August 8, 2024 through up to August 7, 2025.
Removed
Our users are primarily professionals who work in human resources related functions. Our corporate customers are corporations with recruitment, training, sales leads generation and outsourcing demands.
Added
As of December 31, 2025, a total of 2,406 Class A ordinary shares had been repurchased by us in open market pursuant to this program.
Removed
As of December 31, 2024, we had approximately 780,320 active registered users on our proprietary platforms, Star Career and Columbus , through which the users of our platforms will receive customized job recommendations and work as talent scouts to source suitable candidates for our corporate customers through their own trusted and private social network, as well as receive trainings and other value-added services. 48 For the years ended December 31, 202 2, 2023 and 2024, our total revenue amounted to RMB766.6 million, RMB1,474.0 million and RMB1,063.4 million (US$145.7 million), respectively, representing an increase of 92.3% and a decrease of 27.9%, respectively.
Added
On January 15, 2025, we received a notification letter from the Nasdaq, respectively, notifying us that we were not in compliance with minimum bid price requirement set forth under Rule 5550(a)(2) the Listing Rules of the Nasdaq because the closing bid price of our ordinary shares was below US$1.00 per share for a period of 30 consecutive business days.
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As of December 31, 2022, 2023 and 2024, we had approximately 431,220, 638,020 and 780,320 active registered users, respectively.
Added
On April 21, 2025, we initially filed with the SEC a shelf registration statement on Form F-3 (File No. 333-286651), which was later declared effective by the SEC on September 15, 2025.
Removed
We define active registered users as those who login to the application at least once within a 30-day period and who may engage in such activities as recommending job opportunities to their friends, providing us with information on which companies may have job openings that may potentially be our clients, or commenting or forwarding videos or articles generated on our network to their friends.
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This Form F-3 shelf registration statement provides a base prospectus covering the offer, issuance and sale of up to US$100,000,000 or its equivalent in any other currency, currency units, or composite currency or currencies, of our ordinary shares, par value US$0.000005 per share, preferred shares, warrants to purchase ordinary shares, debt securities, subscription rights and a combination of such securities, separately or as units, in one or more offerings, from time to time, on a delayed or continuous basis pursuant to Rule 415 under the Securities A ct.
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Our business model is to help our clients who pay us the recruitment fees to look for qualified candidates who mostly are currently employed but are open to new job opportunities. As such, we do not approach active job seekers directly.
Added
As of the date of this annual report, no securities had been sold under this shelf registration.
Removed
When compared to those traditional recruitment firms who rely on their own in-house consultants to look for qualified candidates which will normally take an average of 30 to 60 days to close a job assignment, we only need less than half of the time required, since we use our patented technology and leverage big data to push the client’s job assignments only to those users who are also talent scouts acting as consultants and have suitable candidates in their networks.
Added
On June 23, 2025, we closed our “best efforts” follow-on offering of 32,150,000 ordinary shares, par value US$0.000005 per share, at a public offering price of US$0.20 per share, for total gross proceeds of US$6.4 million before deducting placement agent’s fee and offering expenses. AC Sunshine Securities LLC acted as the placement agent for this follow-on offering.
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In addition, since the users already know the candidates in their friendship networks, it is normally much easier to convince the candidates to consider the job opportunities and be more active and cooperative in participating in the interview processes whereas a traditional recruitment firm uses in-house consultants to cold-call candidates who do not know each other, the efficiency is much lower than ours.
Added
On July 21, 2025, the Nasdaq informed us that we had regained compliance with the minimum bid price requirement set forth under Rule 5550(a)(2) of the Listing Rules of the Nasdaq after maintaining a closing bid price of $1.00 per share or greater for 20 consecutive business days.
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Over 80% of our users remain active in a twelve-month period as of December 31, 2024, because our platform is useful for them to both make money by acting as a part-time talent scout or providing information to us on potential clients, and forward useful career development related contents developed by our platform to their friends via their social networks so that they can maintain an active linkage with their friends in a positive way, rather than posting rudimentary information or daily routines, many of which are uninteresting to their friends.
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On September 5, 2025, we received another letter from The Nasdaq Stock Market LLC, notifying us that we were not in compliance with the minimum bid price requirement set forth under Rule 5550(a)(2) of the Listing Rules of the Nasdaq because the closing bid price of our ordinary shares was below $1.00 per share for a period of 30 consecutive business days.
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Therefore, our users have high incentives to continue to use our platform in an active way. The recruitment services we provide are based on our profound industry knowledge and in-depth understanding of the unmet demands of both our corporate customers and the professionals.
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On October 13, 2025, we effected (i) a forty (40)-for-one (1) share consolidation of our issued and unissued shares, whereby every 40 authorized issued and unissued shares, par value US$0.000005 per share, in our authorized share capital be consolidated into one share, par value US$0.0002 per share, or the Share Consolidation, such that our authorized share capital shall be US$50,000 divided into 250,000,000 shares, par value US$0.0002 per share, (ii) an adoption of dual-class share structure, or the Dual-Class Share Structure, upon which (A) our authorized share capital was changed from US$50,000 divided into 250,000,000 ordinary shares, par value US$0.0002 per share, to US$50,000 divided into 235,000,000 Class A ordinary shares, par value US$0.0002 per share and 15,000,000 Class B ordinary shares, par value US$0.0002 per share, and (B) all of the shares issued as of the date thereof were re-designated to Class A ordinary shares, par value US$0.0002 per share; and (iii) amendments to our amended and restated memorandum and articles of association to reflect the same.
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We leverage our qualifications, vast industry knowledge, and expert networks to offer cost-effective solutions to our corporate customers who rely on us to deliver the expected solutions on time, within budget and of acceptable quality. Our corporate customer will perform acceptance tests on the project which we will normally only get paid after the client signs off.
Added
On November 3, 2025, the Nasdaq informed us that we had regained compliance with the minimum bid price requirement set forth under Rule 5550(a)(2) of the Listing Rules of the Nasdaq after maintaining a closing price of US$1.00 per share or greater for 15 consecutive business days.
Removed
As our business continues to grow rapidly, we face significant competition from a number of online and offline platforms and services to attract and retain users.
Added
On December 5, 2025, we held an extraordinary general meeting (the “EGM”) at which meeting the shareholders approved (i) an increase in our authorized share capital from US$50,000 divided into 250,000,000 shares of a par value of US$0.0002 each, comprising of 235,000,000 Class A ordinary shares of a par value of US$0.0002 each and 15,000,000 Class B ordinary shares of a par value of US$0.0002 each, to US$500,000 divided into 2,500,000,000 shares of US$0.0002 each, comprising 2,475,000,000 Class A ordinary shares of a par value of US$0.0002 each and 25,000,000 Class B ordinary shares of a par value of US$0.0002 each, (ii) authorize the board of directors, at its absolute and sole discretion, to either (a) implement one or more share consolidation(s), and determine the exact consolidation ratio and effective date of such share consolidation during a period of two years of the date of the EGM, at the exact consolidation ratio and effective time as our board of directors may determine from time to time in its absolute discretion, provided that the accumulative consolidation ratio for all such share consolidation(s) (altogether, the “Future Share Consolidations” and each, a “Future Share Consolidation”) shall not be more than 5000:1; or (b) elect not to implement any share consolidation(s) during a period of two years of the date of the EGM, (iii) amendments to its amended and restated memorandum and articles of association, and (iv) upon the implementation of a Future Share Consolidation with the exact consolidation ratio and the effective date of such Future Share Consolidation as determined by the board of directors, the adoption of an amended and restated memorandum and articles of association in substitution for, and to the exclusion of, our memorandum and articles of association in effect immediately prior to the implementation of such Future Share Consolidation, to reflect such Future Share Consolidation.
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In addition, we ranked first among all these platforms in terms of the total numbers of patents registered in the U.S. as of December 31, 2022. Our continued success depends upon our ability to protect our core technology and intellectual property.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

90 edited+16 added−36 removed85 unchanged
Other income, net Total other income, net decreased by 26.2% from RMB2.6 million for the year ended December 31, 2023 to RMB1.9 million (US$0.3 million) for the year ended December 31, 2024. Our other non-operating income, remained stable of both approximately RMB3.5 million (US$0.5 million) for the year ended December 31, 2023 and 2024.
Other income, net Total other income, net decreased by 26.2% from RMB2.6 million for the year ended December 31, 2023 to RMB1.9 million (US$0.3 million) for the year ended December 31, 2024. Our other non-operating income, remained stable of both approximately RMB3.5 million for the year ended December 31, 2023 and 2024.
This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any period are not necessarily indicative of the results that may be expected for any future period.
This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any period are not necessarily indicative of the results that may be expected for any future period.
The increase was primarily driven by the increase of our corporate customers, which was attributable to (i) our continuing marketing efforts in business line expansion; (ii) the growing demands of corporate customers to develop IT system to optimize the business processes and reduce labor cost; and (iii) our diversified products can meet the needs of different customers.
The increase was primarily driven by the increase of our corporate customers, which was attributable to (i) our continuing marketing efforts in business line expansion, (ii) the growing demands of customers to develop IT system to optimize the business processes and reduce labor cost, and (iii) our diversified products which can meet the needs of different customers.
Gross profits and margin The following table sets forth a breakdown of our gross profit, margin by revenue streams, expressed as an absolute amount and as a percentage of their corresponding revenues for the periods indicated.
Gross profits and margin The following table sets forth a breakdown of our gross profit, margin by revenue streams, expressed as an absolute amount and as a percentage of their corresponding revenues for the periods indicated.
Specific Factors Affecting Our Results of Operations While our business is influenced by general factors affecting the on-demand employment services market and workforce operational solution market in China generally, our results of operations are also directly affected by certain company-specific factors, including the following major factors: Our ability to expand our portfolio of users through delivering services with higher efficiency for human capital management Our core competitive strengths derive from our massive multidimensional data insights, powerful AI algorithm and big data capacity which enable us to effectively process the data and continuously improve our two-way matching accuracy.
Specific Factors Affecting Our Results of Operations While our business is influenced by general factors affecting the on-demand employment services market and workforce operational solution market in China generally, our results of operations are also directly affected by certain company-specific factors, including the following major factors: 67 Our ability to expand our portfolio of users through delivering services with higher efficiency for human capital management Our core competitive strengths derive from our massive multidimensional data insights, powerful AI algorithm and big data capacity which enable us to effectively process the data and continuously improve our two-way matching accuracy.
We consider our critical accounting estimates include (i) allowance for credit losses for accounts receivable; (ii) useful lives of software; (iii) valuation allowance of deferred tax assets, and (iv) valuation of redeemable preferred shares of non-controlling interest. 83 Accounts receivable, net Accounts receivable, net are stated at the original amount less allowances for credit losses.
We consider our critical accounting estimates include (i) allowance for credit losses for accounts receivable; (ii) useful lives of software; (iii) valuation allowance of deferred tax assets, and (iv) valuation of redeemable preferred shares of non-controlling interest. Accounts receivable, net Accounts receivable, net are stated at the original amount less allowances for credit losses.
We derive net revenues from service fees paid by corporate customers for arranging flexible workers with corresponding abilities and qualifications on demand and sourcing eligible candidates for opening jobs to fulfill their various operation and employment needs.
We derive revenues from service fees paid by corporate customers for arranging flexible workers with corresponding abilities and qualifications on demand and sourcing eligible candidates for opening jobs to fulfill their various operation and employment needs.
Additionally, upon payments of dividends to our shareholders, no BVI withholding tax will be imposed. Hong Kong Our subsidiaries, Lucas Star Global Limited and Lucas GC Limited (HK) are incorporated in Hong Kong and are subject to Hong Kong profits tax rate.
Additionally, upon payments of dividends to our shareholders, no BVI withholding tax will be imposed. 83 Hong Kong Our subsidiaries, Lucas Star Global Limited and Lucas GC Limited (HK) are incorporated in Hong Kong and are subject to Hong Kong profits tax rate.
With the advent of the AI era, we are committed to maintaining a high level of investment in research and development, which is expected to further boost the proportion of research and development expenses to our total net revenues.
With the advent of the AI era, we are committed to maintaining a high level of investment in research and development, which is expected to further boost the proportion of research and development expenses to our total revenues.
Research and development expenses Our research and development expenses increased by 7.0% from RMB157.5 million for the year ended December 31, 2023 to RMB168.6 million (US$23.1 million) for the year ended December 31, 2024, resulting from the continuous investments in AI-enabled technologies including Generative Pre-trained Transformer and related artificial intelligence generated content technologies, and investments in our proprietary platforms, Star Career and Columbus , which gave us a cutting edge in business expansion and market competition.
Research and development expenses Our research and development expenses increased by 7.0% from RMB157.5 million for the year ended December 31, 2023 to RMB168.6 million for the year ended December 31, 2024, resulting from the continuous investments in AI-enabled technologies including Generative Pre-trained Transformer and related artificial intelligence generated content technologies, and investments in our proprietary platforms, Star Career and Columbus , which gave us a cutting edge in business expansion and market competition.
The following table sets forth a breakdown of our cost of revenues by revenue streams, expressed as an absolute amount and as a percentage of the total net revenues, for the periods indicated.
The following table sets forth a breakdown of our cost of revenues by revenue streams, expressed as an absolute amount and as a percentage of the total revenues, for the periods indicated.
This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. The Group adopted ASU 2016-13 from January 1, 2023 using modified-retrospective transition approach with a cumulative-effect adjustment to shareholders’ equity amounting to RMB617 recognized as of January 1, 2023.
This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. The Company adopted ASU 2016-13 from January 1, 2023 using modified-retrospective transition approach with a cumulative-effect adjustment to shareholders’ equity amounting to RMB617 recognized as of January 1, 2023.
If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from this offering and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity, our ability to fund and expand our business and our ordinary shares.
If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from this offering and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity, our ability to fund and expand our business and our Class A ordinary shares.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2025 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2026 that are reasonably likely to have a material and adverse effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
Selling and marketing expenses Our selling and marketing expenses decreased by 12.3% from RMB84.9 million for the year ended December 31, 2023 to RMB74.5 million (US$10.2 million) for the year ended December 31, 2024, which was mainly due to our strategic transition from pursuing revenue scale expansion to driving value optimization through gross margin enhancement, and thus we optimized our promotional activities to more accurately target potential customers’ requirement.
Selling and marketing expenses Our selling and marketing expenses decreased by 12.3% from RMB84.9 million for the year ended December 31, 2023 to RMB74.5 million for the year ended December 31, 2024, which was mainly due to our strategic transition from pursuing revenue scale expansion to driving value optimization through gross margin enhancement, and thus we optimized our promotional activities to more accurately target potential customers’ requirement.
Cost related to other services decreased by approximately RMB22.2 million, or 33.8%, from RMB65.5 million for the year ended December 31, 2023 to RMB43.4 million (US$5.9 million) for the year ended December 31, 2024, primarily in line with the decrease in other services.
Cost related to other services decreased by approximately RMB22.2 million, or 33.8%, from RMB65.5 million for the year ended December 31, 2023 to RMB43.4 million for the year ended December 31, 2024, primarily in line with the decrease in other services.
Cost related to outsourcing services increased by approximately RMB53.5 million, or 11.2%, from RMB476.5 million for the year ended December 31, 2023 to RMB530.0 million (US$72.6 million) for the year ended December 31, 2024, primarily attributable to the increase in cost paid to workers and third-party services providers engaged in the solution process, generally in line with our revenue growth in outsourcing services.
Cost related to outsourcing services increased by approximately RMB53.5 million, or 11.2%, from RMB476.5 million for the year ended December 31, 2023 to RMB530.0 million for the year ended December 31, 2024, primarily attributable to the increase in cost paid to workers and third-party services providers engaged in the solution process, generally in line with our revenue growth in outsourcing services.
Inflation Since our inception, inflation in China has not materially affected our results of operations. According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for 2022, 2023 and 2024, were an increase of 1.8%, 2.0%, and 0.2%, respectively.
Inflation Since our inception, inflation in China has not materially affected our results of operations. According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for 2023, 2024 and 2025, were an increase of 2.0%, 0.2%, and 0.8%, respectively.
The following table sets forth a breakdown of our cost of revenues by revenue streams, expressed as an absolute amount and as a percentage of the net revenues, for the periods indicated.
The following table sets forth a breakdown of our cost of revenues by revenue streams, expressed as an absolute amount and as a percentage of the total revenues, for the periods indicated.
Financing activities For the year ended December 31, 2024, our net cash provided by financing activities was RMB60.7 million (US$8.3 million), which was primarily attributable to (i) proceeds from short-term borrowings of RMB90.3 million (US$12.4 million); (ii) sale of public shares through public offering of RMB38.5 million(US$5.3 million); offset by (iii) repayment of short-term borrowing of RMB62.2 million(US$8.5 million);(iv) payments of offering costs related to initial public offering of RMB2.7 million(US$0.4 million); (v) payments of offering costs related to followed-on offering of RMB2.3 million(US$0.3 million).
For the year ended December 31, 2024, our net cash provided by financing activities was RMB60.7 million, which was primarily attributable to (i) proceeds from short-term borrowings of RMB90.3 million; (ii) sale of public shares through public offering of RMB38.5 million; offset by (iii) repayment of short-term borrowing of RMB62.2 million;(iv) payments of offering costs related to initial public offering of RMB2.7 million; (v) payments of offering costs related to followed-on offering of RMB2.3 million.
The following table sets forth a breakdown of our net revenues, each expressed in the absolute amount and as a percentage of our total net revenues, for the periods indicated: For the years ended December 31, Variance 2023 2024 Amount Percentage RMB % RMB US$ % RMB % (In thousands, except percentages) Net revenues: Recruitment service 659,049 44.7 216,083 29,603 20.3 (442,966 ) (67.2 ) Outsourcing service 713,957 48.4 785,096 107,558 73.8 71,139 10.0 Others 100,952 6.9 62,230 8,525 5.9 (38,722 ) (38.4 ) Total revenues 1,473,958 100.0 1,063,409 145,686 100.0 (410,549 ) (27.9 ) Net revenues from recruitment services decreased by RMB443.0 million, or 67.2%, from RMB659.0 million for the year ended December 31, 2023 to RMB216.1 million (US$29.6 million) for the year ended December 31, 2024.
The following table sets forth a breakdown of our revenues, each expressed in the absolute amount and as a percentage of our total revenues, for the periods indicated: For the Year Ended December 31, Variance 2023 2024 Amount Percentage RMB % RMB % RMB % (In thousands, except percentages) Revenues: Recruitment service 659,049 44.7 216,083 20.3 (442,966 ) (67.2 ) Outsourcing service 713,957 48.4 785,096 73.8 71,139 10.0 Others 100,952 6.9 62,230 5.9 (38,722 ) (38.4 ) Total revenues 1,473,958 100.0 1,063,409 100.0 (410,549 ) (27.9 ) Revenues from recruitment services decreased by RMB443.0 million, or 67.2%, from RMB659.0 million for the year ended December 31, 2023 to RMB216.1 million for the year ended December 31, 2024.
For the years ended December 31, Variance 2023 2024 Amount Percentage RMB % RMB US$ % RMB % (In thousands, except percentages) Cost of revenues: Recruitment service 513,390 34.8 132,657 18,174 12.4 (380,733 ) (74.2 ) Outsourcing service 476,474 32.3 529,963 72,605 49.8 53,489 11.2 Others 65,542 4.5 43,387 5,944 4.2 (22,155 ) (33.8 ) Total cost of revenues 1,055,406 71.6 706,007 96,723 66.4 (349,399 ) (33.1 ) Cost related to recruitment services decreased by approximately RMB380.7 million, or 74.2%, from RMB513.4 million for the year ended December 31, 2023 to RMB132.7 million (US$18.2 million) for the year ended December 31, 2024, primarily due to the decrease of revenues in recruitment service.
For the Year Ended December 31, Variance 2023 2024 Amount Percentage RMB % RMB % RMB % (In thousands, except percentages) Cost of revenues: Recruitment service 513,390 34.8 132,657 12.4 (380,733 ) (74.2 ) Outsourcing service 476,474 32.3 529,963 49.8 53,489 11.2 Others 65,542 4.5 43,387 4.2 (22,155 ) (33.8 ) Total cost of revenues 1,055,406 71.6 706,007 66.4 (349,399 ) (33.1 ) 76 Cost related to recruitment services decreased by approximately RMB380.7 million, or 74.2%, from RMB513.4 million for the year ended December 31, 2023 to RMB132.7 million for the year ended December 31, 2024, primarily due to the decrease of revenues in recruitment service.
The certificate is valid for three years. 82 According to relevant laws and regulations promulgated by the State Administration of Tax of the PRC effective from 2018 onwards, enterprises engaging in research and development activities are entitled to claim an additional tax deduction amounting to 75% or 100% of qualified R&D expenses incurred in determining its tax assessable profits for that year (“Super Deduction”).
According to relevant laws and regulations promulgated by the State Administration of Tax of the PRC effective from 2018 onwards, enterprises engaging in research and development activities are entitled to claim an additional tax deduction amounting to 75% or 100% of qualified R&D expenses incurred in determining its tax assessable profits for that year (“Super Deduction”).
This increase was primarily attributable to the increase of recognized deferred tax assets for net operating loss carry forward due to the additional deduction of research and development expenses.
The decrease was primarily attributable to the decrease of recognized deferred tax assets for net operating loss carry forward due to the additional deduction of research and development expenses.
Investing activities For the year ended December 31, 2024, our net cash used in investing activities was RMB79.9 million (US$11.0 million), which was primarily due to (i) purchase of software and equipment of RMB44.7 million (US$6.1 million); (ii) purchase of short-term investments of RMB2.8 million (US$0.4 million) and (iii) purchase of research development of RMB32.5 million(US$4.5 million).
For the year ended December 31, 2024, our net cash used in investing activities was RMB79.9 million, which was primarily due to (i) purchase of software and equipment of RMB44.7 million; (ii) purchase of short-term investments of RMB2.8 million and (iii) purchase of research development of RMB32.5 million.
For the years ended December 31, Variance 2023 2024 Amount Percentage RMB % RMB US$ % RMB % (In thousands, except percentages) Total revenues 1,473,958 100.0 1,063,409 145,686 100.0 (410,549 ) (27.9 ) Cost of revenues (1,055,406 ) (71.6 ) (706,007 ) (96,723 ) (66.4 ) 349,399 (33.1 ) Gross profit 418,552 28.4 357,402 48,963 33.6 (61,150 ) (14.6 ) Operating expenses Selling and marketing expenses (84,917 ) (5.8 ) (74,514 ) (10,208 ) (7.0 ) 10,403 (12.3 ) General and administrative expenses (108,376 ) (7.4 ) (86,261 ) (11,818 ) (8.1 ) 22,115 (20.4 ) Research and development expenses (157,543 ) (10.7 ) (168,616 ) (23,100 ) (15.9 ) (11,073 ) 7.0 Total operating expenses (350,836 ) (23.8 ) (329,391 ) (45,126 ) (31.0 ) 21,445 (6.1 ) Operating profit 67,716 4.6 28,011 3,837 2.6 (39,705 ) (58.6 ) Other (expenses) income Financial income, net (893 ) (0.1 ) (1,624 ) (222 ) (0.2 ) (731 ) 81.9 Other income, net 3,478 0.2 3,531 484 0.3 53 1.5 Total other income, net 2,585 0.1 1,907 262 0.1 (678 ) (26.2 ) Income before income tax expense 70,301 4.7 29,918 4,099 2.7 (40,383 ) (57.4 ) Income tax benefit 7,880 0.5 10,167 1,393 1.0 2,287 29.0 Net income 78,181 5.2 40,085 5,492 3.7 (38,096 ) (48.7 ) 70 Net revenues Our net revenues decreased by approximately RMB410.5 million, or 27.9%, from RMB1,474.0 million for the year ended December 31, 2023 to RMB1,063.4 million (US$145.7 million) for the year ended December 31, 2024, primarily due to a decrease of net revenues from recruitment service.
For the Year Ended December 31, Variance 2023 2024 Amount Percentage RMB % RMB % RMB % (In thousands, except percentages) Total revenues 1,473,958 100.0 1,063,409 100.0 (410,549 ) (27.9 ) Cost of revenues (1,055,406 ) (71.6 ) (706,007 ) (66.4 ) 349,399 (33.1 ) Gross profit 418,552 28.4 357,402 33.6 (61,150 ) (14.6 ) Operating expenses Selling and marketing expenses (84,917 ) (5.8 ) (74,514 ) (7.0 ) 10,403 (12.3 ) General and administrative expenses (108,376 ) (7.4 ) (86,261 ) (8.1 ) 22,115 (20.4 ) Research and development expenses (157,543 ) (10.7 ) (168,616 ) (15.9 ) (11,073 ) 7.0 Total operating expenses (350,836 ) (23.8 ) (329,391 ) (31.0 ) 21,445 (6.1 ) Operating profit 67,716 4.6 28,011 2.6 (39,705 ) (58.6 ) Other (expenses) income Financial expenses, net (893 ) (0.1 ) (1,624 ) (0.2 ) (731 ) 81.9 Other income, net 3,478 0.2 3,531 0.3 53 1.5 Total other income, net 2,585 0.1 1,907 0.1 (678 ) (26.2 ) Income before income tax benefit 70,301 4.7 29,918 2.7 (40,383 ) (57.4 ) Income tax benefit 7,880 0.5 10,167 1.0 2,287 29.0 Net income 78,181 5.2 40,085 3.7 (38,096 ) (48.7 ) 75 Revenues Our revenues increased by approximately RMB410.5 million, or 27.9%, from RMB1,474.0 million for the year ended December 31, 2023 to RMB1,063.4 million for the year ended December 31, 2024, primarily due to a decrease of revenues from recruitment service.
A 10% increase or reversal in our credit impairment losses would have decreased our net income before tax by 0.0%, 1.5% for the years ended December 31, 2022 and 2023 and increased our net income before tax by 1.2% for the year ended December 31, 2024, respectively.
A 10% increase or reversal in our credit impairment losses would have decreased our net income before tax by 1.5% for the year ended December 31, 2023, increased our net income before tax by 1.2% for the year ended December 31, 2024, and decreased our net income before tax by 1.9% for the year ended December 31, 2025, respectively.
Net revenues from outsourcing services increased by approximately RMB71.1 million, or 10.0%, from RMB714.0 million for the year ended December 31, 2023 to RMB785.1 million (US$107.6 million) for the year ended December 31, 2024.
Revenues from outsourcing services increased by approximately RMB71.1 million, or 10.0%, from RMB714.0 million for the year ended December 31, 2023 to RMB785.1 million for the year ended December 31, 2024.
For the years ended December 31, Variance 2023 2024 Amount Percentage RMB % RMB US$ % RMB % (In thousands, except percentages) Gross profits: Recruitment service 145,659 22.1 83,426 11,429 38.6 (62,233 ) (42.7 ) Outsourcing service 237,483 33.3 255,133 34,953 32.5 17,650 7.4 Others 35,410 35.1 18,843 2,581 30.3 (16,567 ) (46.8 ) Total gross profits 418,552 28.4 357,402 48,963 33.6 (61,150 ) (14.6 ) 72 As a result of the foregoing, we recorded a gross profit of RMB418.6 million and RMB357.4 million (US$49.0 million) for the years ended December 31, 2023 and 2024, respectively.
For the Year Ended December 31, Variance 2023 2024 Amount Percentage RMB % RMB % RMB % (In thousands, except percentages) Gross profits: Recruitment service 145,659 22.1 83,426 38.6 (62,233 ) (42.7 ) Outsourcing service 237,483 33.3 255,133 32.5 17,650 7.4 Others 35,410 35.1 18,843 30.3 (16,567 ) (46.8 ) Total gross profits 418,552 28.4 357,402 33.6 (61,150 ) (14.6 ) As a result of the foregoing, we recorded a gross profit of RMB418.6 million and RMB357.4 million for the years ended December 31, 2023 and 2024, respectively.
As a human capital management service provider, we are dedicated to innovating and diversifying our offerings for corporate customers in the recruitment and employment process based on the PaaS platforms, big data analytics and artificial intelligence technologies. Our net revenues are presented net of business tax and surcharges.
As a human capital management service provider, we are dedicated to innovating and diversifying our offerings for corporate customers in the recruitment and employment process based on the PaaS platforms, big data analytics and artificial intelligence technologies.
To date, we have financed our working capital requirements from cash flow from operations, debt financings and capital contributions from our existing shareholders. We had cash and cash equivalents of RMB30.1 million and RMB30.4 million (US$4.2 million), and restricted cash of RMB0.1 million and RMB1.3 million (US$0.2 million ) as of December 31, 2023 and 2024, respectively.
To date, we have financed our working capital requirements from cash flow from operations, debt financings and capital contributions from our existing shareholders. We had cash and cash equivalents of RMB30.4 million and RMB30.3 million (US$4.3 million), and restricted cash of RMB1.3 million and nil as of December 31, 2024 and 2025, respectively.
Customers cannot control the IT projects in progress as the IT projects are not developed in the customers’ location or IT environment, and before the successful completion of the IT projects, customers cannot simultaneously receive or consume the benefits provided by our service, because the IT projects in progress are only dispersed computer codes, which neither provide any function for the customer, nor are delivered to customers until the successful completion.
Customers cannot control the IT projects in progress as the IT projects are not developed in the customers’ location or IT environment, and before the successful completion of the IT projects, customers cannot simultaneously receive or consume the benefits provided by our service, because the IT projects in progress are only dispersed computer codes, which neither provide any function for the customer, nor are delivered to customers until the successful completion. 86 Customers generally make the payment within one or two months upon the successful delivery of IT projects and acceptance.
The filing and registration processes for loans typically take approximately four weeks or longer to complete.
The relevant filing and registration processes for capital contributions typically take approximately eight weeks to complete. The filing and registration processes for loans typically take approximately four weeks or longer to complete.
Net revenues are presented net of business tax and surcharges. The following five steps are applied to achieve the core principle of this standard: 1. Identification of the contract, or contracts, with the customer; 2. Identification of the performance obligations in the contract; 3. Determination of the transaction price; 4.
The following five steps are applied to achieve the core principle of this standard: 1. Identification of the contract, or contracts, with the customer; 2. Identification of the performance obligations in the contract; 3. Determination of the transaction price; 4. Allocation of the transaction price to the performance obligations in the contract; and 5.
For the year ended December 31, 2023, our net cash used in operating activities was RMB36.4 million, which was primarily attributable to (i) net income of RMB78.2 million, adjusted for depreciation of software and equipment of RMB4.3 million, provision for credit losses of RMB11.7 million, and amortization of right-of-use assets of RMB0.7 million; (ii) a net increase of advance to supplier of RMB125.4 million, and decrease of accounts payable of RMB51.8 million, due to the increase of prepayment for technology outsourcing service, recruitment service and brand promotion as market demand recovery; (iii) a decrease in contract liabilities of RMB11.2 million due to less recognition of contract obligation with advance payments; (iv) an increase in deferred tax assets, net of RMB7.9 million as we expanded R&D investment for new products; offset by a decrease of accounts receivable of RMB63.7million due to collection from customers. 79 For the year ended December 31, 2022, our net cash used in operating activities was RMB15.1 million, which was primarily attributable to (i) net income of RMB36.4 million, adjusted for depreciation of software and equipment of RMB3.3 million, and amortization of right-of-use assets of RMB0.6 million; (ii) a net decrease of advance to supplier of RMB4.5 million, net of the decrease of accounts payable, due to the decrease of prepayment for technology outsourcing service, recruitment service and brand promotion, and timely payment for accounts payable, offset by (i) an increase of accounts receivable of RMB44.9 million due to continuously increased corporate customers as a result of business expansion and higher penetration in market; (ii) a decrease of contract liabilities of RMB9.8 million due to less recognition of contract obligation with advance payments; and (iii) a decrease of accrued expenses and other current liabilities of RMB2.3 million due to timely repayment.
For the year ended December 31, 2023, our net cash used in operating activities was RMB36.4 million, which was primarily attributable to (i) net income of RMB78.2 million, adjusted for depreciation of software and equipment of RMB4.3 million, provision for expected credit losses of RMB11.7 million, and amortization of right-of-use assets of RMB0.7 million; (ii) a net increase of advance to supplier of RMB125.4 million, and decrease of accounts payable of RMB51.8 million, due to the increase of prepayment for technology outsourcing service, recruitment service and brand promotion as market demand recovery; (iii) a decrease in contract liabilities of RMB11.2 million due to less recognition of contract obligation with advance payments; (iv) an increase in deferred tax assets, net of RMB7.9 million as we expanded R&D investment for new products; offset by a decrease of accounts receivable of RMB63.7million due to collection from customers.
Revenue from flexible employment services is recognized over time as the customers can simultaneously receive and consume the benefits in the period the flexible workers provide the service. The contract payment is not subject to any variable consideration, refund, cancellation, or termination provision.
The contract consideration is determined by the days flexible workers have worked times their workday pay rate. Revenue from flexible employment services is recognized over time as the customers can simultaneously receive and consume the benefits in the period the flexible workers provide the service. The contract payment is not subject to any variable consideration, refund, cancellation, or termination provision.
We identify only one performance obligation in flexible employment recruitment services as the contract comprises of a series of distinct services that are substantially the same and have the same pattern of transfer to the corporate customers, which is to provide flexible workers in accordance with the demand orders. 84 The contract consideration is determined by the days flexible workers have worked times their workday pay rate.
We identify only one performance obligation in flexible employment recruitment services as the contract comprises of a series of distinct services that are substantially the same and have the same pattern of transfer to the corporate customers, which is to provide flexible workers in accordance with the demand orders.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
When reviewing our financial statements, you should consider: ● our selection of critical accounting policies; ● the judgments and other uncertainties affecting the application of such policies; ● the sensitivity of reported results to changes in conditions and assumptions. 84 We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
Net income As a result of the foregoing, our net income increased by RMB41.8 million, from RMB36.4 million for the year ended December 31, 2022 to RMB78.2 million for the year ended December 31, 2023. B. Liquidity and Capital Resources In assessing our liquidity, we monitor and analyze our cash on-hand and our operating and capital expenditure commitments.
Net income As a result of the foregoing, our net income decreased by RMB38.1 million, from RMB78.2 million for the year ended December 31, 2023 to RMB40.1 million for the year ended December 31, 2024. 78 B. Liquidity and Capital Resources In assessing our liquidity, we monitor and analyze our cash on-hand and our operating and capital expenditure commitments.
Operating expenses Our operating expenses de creased from RMB350.8 million for the year ended December 31, 2023 to RMB329.4 million (US$45.1 million) for the year ended December 31, 2024, representing a decrease of 6.1%, primarily due to the following: General and administrative expenses Our general and administrative expenses decreased by 20.4% from RMB108.4 million for the year ended December 31, 2023 to RMB86.3 million (US$11.8 million) for the year ended December 31, 2024, which was primarily due to (i) a decrease of RMB17.2 million (US$2.4 million) in Certified Career Resources Planner Certificate user support operation expenses as the user number increased and more experts from various industries were invited to maintain activity level of users; (ii) a decrease in allowance of credit losses of RMB15.3 million (US$2.1 million); and offset by an increase in professional expenses of RMB10.9 million(US$1.5 million) regarding the compliance service as a listed company.
Moreover, our strategic transit from pursuing revenue scale expansion to driving value optimization through gross margin enhancement, attributable to gross profit margin increase from 28.4% to 33.6% in 2023 and 2024, respectively. 77 Operating expenses Our operating expenses decreased from RMB350.8 million for the year ended December 31, 2023 to RMB329.4 million for the year ended December 31, 2024, representing a decrease of 6.1%, primarily due to the following: General and administrative expenses Our general and administrative expenses decreased by 20.4% from RMB108.4 million for the year ended December 31, 2023 to RMB86.3 million for the year ended December 31, 2024, which was primarily due to (i) a decrease of RMB17.2 million in Certified Career Resources Planner Certificate user support operation expenses as the user number increased and more experts from various industries were invited to maintain activity level of users; (ii) a decrease in allowance of credit losses of RMB15.3 million; and offset by an increase in professional expenses of RMB10.9 million regarding the compliance service as a listed company.
The cash and cash equivalents and restricted cash disaggregated by currency denomination are as follows: As of December 31, 2023 As of December 31, 2024 Amount RMB equivalent Amount RMB equivalent (In thousands) Cash, cash equivalents and restricted cash: RMB 30,014 30,014 6,802 6,802 USD - 2 1,961 14,312 HKD 118 107 9,859 9,266 Restricted cash: USD 14 100 - - RMB - - 1,281 1,281 Total 30,223 31,661 77 We believe our current working capital is sufficient to support our operations for the next twelve months.
The cash and cash equivalents and restricted cash disaggregated by currency denomination are as follows: As of December 31, 2024 As of December 31, 2025 Amount RMB equivalent Amount RMB equivalent (In thousands) Cash, cash equivalents and restricted cash: RMB 6,802 6,802 17,334 17,334 USD 1,961 14,312 1,420 9,932 HKD 9,859 9,266 3,382 3,039 Restricted cash: USD - - - - RMB 1,281 1,281 - - Total 31,661 30,305 We believe our current working capital is sufficient to support our operations for the next twelve months.
We recognized allowance of credit losses of RMB0.1 million, RMB11.5 million and reversal of credit losses of RMB3.6 million (US$0.5 million) for accounts receivable for the years ended December 31, 2022, 2023 and 2024.
We recognized allowance of expected credit losses of RMB11.5 million, reversal of expected credit losses of RMB3.6 million, and an allowance of expected credit losses of RMB1.8 million (US$0.3 million) for accounts receivable for the years ended December 31, 2023, 2024 and 2025.
For the year ended December 31, 2023, our net cash provided by financing activities was RMB29.4 million, which was primarily attributable to proceeds from proceeds from short-term borrowings of RMB63.3 million, and offset by repayments of short-term borrowings of RMB29.8 million, and payment for deferred offering cost of RMB4.0 million.
For the year ended December 31, 2023, our net cash provided by financing activities was RMB29.4 million, which was primarily attributable to proceeds from proceeds from short-term borrowings of RMB63.3 million, and offset by repayments of short-term borrowings of RMB29.8 million, and payment for deferred offering cost of RMB4.0 million. 81 Contingencies From time to time, we may become involved in litigation relating to claims arising in the ordinary course of the business.
The decrease was mainly due to the reduced client demand for information technology services under the uncertainty of economic. 71 Cost of revenues Our cost of revenues decreased by approximately RMB349.4 million, or 33.1%, from RMB1,055.4 million for the year ended December 31, 2023 to RMB706.0 million (US$96.7 million) for the year ended December 31, 2024, which was mainly in line with the decrease of revenues.
Cost of revenues Our cost of revenues decreased by approximately RMB349.4 million, or 33.1%, from RMB1,055.4 million for the year ended December 31, 2023 to RMB706.0 million for the year ended December 31, 2024, which was mainly in line with the decrease of revenues.
The following table sets forth the components of operating expenses, in absolute amounts and as a percentage of our total net revenues for the periods indicated: For the years ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (In thousands, except percentages) Operating expenses Selling and marketing expenses 55,974 7.3 84,917 5.8 74,514 10,208 7.0 General and administrative expenses 47,733 6.2 108,376 7.4 86,261 11,818 8.1 Research and development expenses 79,868 10.4 157,543 10.7 168,616 23,100 15.9 Total operating expenses 183,575 23.9 350,836 23.9 329,391 45,126 31.0 Selling and marketing expenses Our selling and marketing expenses mainly consist of advertising expenses and market promotion expenses for promotional activities that directly contribute to new user growth and acquisition of customer leads.
The following table sets forth the components of operating expenses, in absolute amounts and as a percentage of our total revenues for the periods indicated: For the Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB US$ % (In thousands, except percentages) Operating expenses Selling and marketing expenses 84,917 5.8 74,514 7.0 65,776 9,406 6.3 General and administrative expenses 108,376 7.4 86,261 8.1 91,150 13,034 8.7 Research and development expenses 157,543 10.7 168,616 15.9 175,434 25,087 16.8 Total operating expenses 350,836 23.9 329,391 31.0 332,360 47,527 31.8 70 Selling and marketing expenses Our selling and marketing expenses mainly consist of advertising expenses and market promotion expenses for promotional activities that directly contribute to new user growth and acquisition of customer leads.
The following table sets forth the breakdown of our gross profit and gross profit margin by revenue streams for the periods indicated: For the years ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (In thousands, except percentages) Gross profits: Recruitment service 96,323 23.3 145,659 22.1 83,426 11,429 38.6 Outsourcing service 100,928 33.4 237,483 33.3 255,133 34,953 32.5 Others 17,947 34.8 35,410 35.1 18,843 2,581 30.3 Total gross profits 215,198 28.1 418,552 28.4 357,402 48,963 33.6 Operating expenses Our operating expenses include general and administrative expenses, research and development expenses and selling and marketing expenses.
The following table sets forth the breakdown of our gross profit and gross profit margin by revenue streams for the periods indicated: For the Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB US$ % (In thousands, except percentages) Gross profits: Recruitment service 145,659 22.1 83,426 38.6 44,922 6,424 4.3 Outsourcing service 237,483 33.3 255,133 32.5 295,727 42,288 28.4 Others 35,410 35.1 18,843 30.3 11,393 1,629 1.1 Total gross profits 418,552 28.4 357,402 33.6 352,042 50,341 33.8 Operating expenses Our operating expenses include general and administrative expenses, research and development expenses and selling and marketing expenses.
Allocation of the transaction price to the performance obligations in the contract; and 5. Recognition of the revenue when, or as, a performance obligation is satisfied. Recruitment services Recruitment services consist of flexible employment recruitment services and permanent employment recruitment services.
Recognition of the revenue when, or as, a performance obligation is satisfied. 85 Recruitment services Recruitment services consist of flexible employment recruitment services and permanent employment recruitment services.
In utilizing the proceeds of Initial Public Offering, we, as an offshore holding company, are permitted under PRC laws and regulations to provide funding to our PRC subsidiaries, which are treated as “foreign-invested enterprises” under PRC laws, through loans or capital contributions.
None of our subsidiaries has made any dividend payment or distribution to the holding company as of the date this annual report, and they have no plans to make any distribution or dividend payment to the holding company in the near future. 82 In utilizing the proceeds of Initial Public Offering, we, as an offshore holding company, are permitted under PRC laws and regulations to provide funding to our PRC subsidiaries, which are treated as “foreign-invested enterprises” under PRC laws, through loans or capital contributions.
The following table sets forth a breakdown of our net revenues both in absolute amount and as a percentage of our total net revenues for the periods presented: For the years ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (In thousands, except percentages) Net revenues: Recruitment service 413,047 53.9 659,049 44.7 216,083 29,603 20.3 Outsourcing service 301,890 39.4 713,957 48.4 785,096 107,558 73.8 Others 51,634 6.7 100,952 6.9 62,230 8,525 5.9 Total revenues 766,571 100.0 1,473,958 100.0 1,063,409 145,686 100.0 Recruitment services Recruitment services consist of flexible employment recruitment services and permanent employment recruitment services.
The following table sets forth a breakdown of our revenues both in absolute amount and as a percentage of our total revenues for the periods presented: For the Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB US$ % (In thousands, except percentages) Revenues: Recruitment service 659,049 44.7 216,083 20.3 111,490 15,943 10.7 Outsourcing service 713,957 48.4 785,096 73.8 897,853 128,391 86.1 Others 100,952 6.9 62,230 5.9 32,931 4,709 3.2 Total revenues 1,473,958 100.0 1,063,409 100.0 1,042,274 149,043 100.0 Recruitment services Recruitment services consist of flexible employment recruitment services and permanent employment recruitment services.
We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Our results of operations have shown that this synergistic and thriving business model allows us to penetrate the recruitment market at scale without direct salesforce. 66 Our ability to attract, retain and connect potential job seekers cost-effectively Our operational cost is affected by the number of users on our platform and the amount of service fees we paid to flexible workers and third-party labor service companies.
Our ability to attract, retain and connect potential job seekers cost-effectively Our operational cost is affected by the number of users on our platform and the amount of service fees we paid to flexible workers and third-party labor service companies.
Cost of revenues The following table sets forth a breakdown of our cost of revenues both in absolute amount and as a percentage of our total net revenues for the periods presented: For the years ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (In thousands, except percentages) Cost of revenues: Recruitment service 316,724 41.3 513,390 34.8 132,657 18,174 12.4 Outsourcing service 200,962 26.2 476,474 32.3 529,963 72,605 49.8 Others 33,687 4.4 65,542 4.5 43,387 5,944 4.2 Total cost of revenues 551,373 71.9 1,055,406 71.6 706,007 96,723 66.4 68 Cost related to our recruitment services primarily consists of service fees paid to flexible workers, talent scouts, and other third-party service providers involved in the service process.
Other services We launched other services as value-added services in August 2021, which is to provide information technology services and training services for corporate customers. 69 Cost of revenues The following table sets forth a breakdown of our cost of revenues both in absolute amount and as a percentage of our total revenues for the periods presented: For the Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB US$ % (In thousands, except percentages) Cost of revenues: Recruitment service 513,390 34.8 132,657 12.4 66,568 9,519 6.4 Outsourcing service 476,474 32.3 529,963 49.8 602,126 86,103 57.7 Others 65,542 4.5 43,387 4.2 21,538 3,080 2.1 Total cost of revenues 1,055,406 71.6 706,007 66.4 690,232 98,702 66.2 Cost related to our recruitment services primarily consists of service fees paid to flexible workers, talent scouts, and other third-party service providers involved in the service process.
Results of Operations For the years ended December 31, 2023 and 2024 The following tables set forth a summary of our consolidated results of operations, in absolute amount and as a percentage of our net revenues for the years ended December 31, 2023 and 2024.
Financial expenses mainly consist of interest income and expense, bank charges and exchange gain or loss. Results of Operations For the years ended December 31, 2024 and 2025 The following tables set forth a summary of our consolidated results of operations, in absolute amount and as a percentage of our revenues for the years ended December 31, 2024 and 2025.
Our working capital was approximately RMB125.9 million (US$17.2 million) as of December 31, 2024.
Our working capital was approximately RMB85.5 million (US$12.2 million) as of December 31, 2025.
Customers generally make the payment within one or two months after monthly reconciliation of service considerations with us.
The contract payment is not subject to any variable consideration, refund, cancellation, or termination provision. Customers generally make the payment within one or two months after monthly reconciliation of service considerations with us.
Net revenues from other services decreased by RMB38.7 million, or 38.4%, from RMB101.0 million for the year ended December 31, 2023 to RMB62.2million (US$8.5 million) for the year ended December 31, 2024.
Revenues from other services decreased by RMB38.7 million, or 38.4%, from RMB101.0 million for the year ended December 31, 2023 to RMB62.2million for the year ended December 31, 2024. The decrease was mainly due to the reduced client demand for information technology services under the uncertainty of economic.
Our financial expenses, changed from RMB0.9 million for the year ended December 31, 2023 to RMB1.6 million (US$0.2 million) for the year ended December 31, 2024 primarily due to the increased bank interest expenses. 73 Income taxes Our income tax benefits were RMB7.9 million and RMB10.2 million (US$1.4 million) for the years ended December 31, 2023 and 2024, respectively.
Financial expenses mainly consist of interest income and expense, bank charges and exchange gain or loss. Our financial expenses, changed from RMB0.9 million for the year ended December 31, 2023 to RMB1.6 million (US$0.2 million) for the year ended December 31, 2024 primarily due to the increased bank interest expenses.
According to the relevant PRC regulations on foreign-invested enterprises in China, capital contributions to our PRC subsidiaries are subject to the registration with State Administration for Market Regulation in its local branches, and registration with a local bank authorized by SAFE. 81 To remit the proceeds of the offering, we must take the steps legally required under the PRC laws, for example, we will open a special foreign exchange account for capital account transactions, remit the offering proceeds into such special foreign exchange account and apply for settlement of the foreign exchange.
According to the relevant PRC regulations on foreign-invested enterprises in China, capital contributions to our PRC subsidiaries are subject to the registration with State Administration for Market Regulation in its local branches, and registration with a local bank authorized by SAFE.
Outsourcing services We derive net revenues from service fees paid by corporate customers for providing overall outsourcing solutions, mostly IT-related services, based on their specific requirements. Other services We launched other services as value-added services in August 2021, which is to provide information technology services and training services for corporate customers.
Outsourcing services We derive revenues from service fees paid by corporate customers for providing overall outsourcing solutions, mostly IT-related services, based on their specific requirements.
Information technology services include data collection and analysis, marketing channel optimization and other information technology services altogether that could contribute to customers’ business development. Training services are mainly to provide training courses and career-related certification programs for platform users to help them realize professional developments.
Other services We also provide information technology services to corporate customers and training services to platform users. Information technology services include data collection and analysis, marketing channel optimization and other information technology services altogether that could contribute to customers’ business development.
Contractual Obligations Payments due by period Total Within one year Within 1-3 years Total Within one year Within 1-3 years (In RMB thousands) (In USD thousands) Bank borrowings 67,470 67,470 - 9,243 9,243 - Operating lease payment 573 473 100 79 65 14 Total 68,043 67,943 100 9,322 9,308 14 Other than as shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2024.
Contractual Obligations Payments due by period Total Within one year Within 1-3 years Total Within one year Within 1-3 years (In RMB thousands) (In USD thousands) Bank borrowings 94,861 94,681 - 13,565 13,565 - Lease commitment 144 144 - 20 20 - Total 95,005 95,005 - 13,585 13,585 - Other than as shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2025.
Therefore, our PRC subsidiaries will need to convert any capital contributions or loans from U.S. dollars into Renminbi in accordance with applicable PRC laws and regulations. 78 Cash Flows For the years ended December 31, 2022, 2023 and 2024 For the years ended December 31, Variances 2022 2023 2024 Amount Percentage RMB RMB RMB US$ RMB % (In thousands, except for percentages) Net cash (used in)/provided by operating activities (15,120 ) (36,408 ) 20,186 2,767 56,594 (155.4 ) Net cash provided by /(used in) investing activities 16,819 (12,097 ) (79,948 ) (10,953 ) (67,851 ) 560.9 Net cash provided by financing activities 3,418 29,422 60,746 8,322 31,324 106.5 Effect of exchange rate changes on cash, cash equivalents and restricted cash 148 (8 ) 454 60 462 (5,775.0 ) Net increase/(decrease) in cash, cash equivalents and restricted cash: 5,265 (19,091 ) 1,438 196 20,529 (107.5 ) Cash, cash equivalents and restricted cash at the beginning of year 44,049 49,314 30,223 4,141 (19,091 ) (38.7 ) Cash, cash equivalents and restricted cash at the end of year 49,314 30,223 31,661 4,337 1,438 4.8 Operating activities For the year ended December 31, 2024, our net cash provided by operating activities was RMB20.2 million (US$2.8 million), which was primarily attributable to (i) net income of RMB40.1 million (US$5.5 million), primarily adjusted for depreciation of software and equipment of RMB8.5 million (US$1.2 million), reversal of credit losses of RMB3.6 million (US$0.5 million), gain on disposal of subsidiaries of RMB1.0 million(US$0.1 million), and amortization of right-of-use assets of RMB0.3 million (US$0.05 million); (ii) an increase of accounts payable of RMB12.1 million (US$1.7 million) due to the extension of payment term; and (iii) an increase of contract liabilities of RMB2.4 million (US$0.3 million) due to less recognition of contract obligation with advance payments, offset by (i) a net increase in accounts receivable of RMB28.6 million(US$3.9 million), primarily due from two major customers with longer credit term granted to secure closer long-term cooperations, and (ii) a net increase in deferred tax assets of RMB10.2 million (US$1.4 million) as we expanded R&D investment for new products, which further increased the net operating losses carrying forward.
Cash Flows For the years ended December 31, 2023, 2024 and 2025 For the Year Ended December 31, Variances 2023 2024 2025 Amount Percentage RMB RMB RMB US$ RMB % (In thousands, except for percentages) Net cash (used in)/provided by operating activities (36,408 ) 20,186 35,461 5,070 15,276 75.7 Net cash used in investing activities (12,097 ) (79,948 ) (107,266 ) (15,339 ) (27,318 ) (34.2 ) Net cash provided by financing activities 29,422 60,746 71,576 10,235 10,830 17.8 Effect of exchange rate changes on cash, cash equivalents and restricted cash (8 ) 454 (1,127 ) (159 ) 1,581 348.2 Net (decrease)/increase in cash, cash equivalents and restricted cash: (19,091 ) 1,438 (1,356 ) (193 ) (2,793 ) (194.4 ) Cash, cash equivalents and restricted cash at the beginning of year 49,314 30,223 31,661 4,527 1,438 4.8 Cash, cash equivalents and restricted cash at the end of year 30,223 31,661 30,305 4,334 (1,355 ) (4.3 ) Operating activities For the year ended December 31, 2025, our net cash provided by operating activities was RMB35.5 million (US$5.1 million), which was primarily attributable to (i) net income of RMB9.9 million (US$1.4 million), primarily adjusted for depreciation of software and equipment of RMB13.3 million (US$1.9 million), and provision of expected credit losses of RMB1.8 million (US$0.3 million); (ii) an increase in prepaid expenses and other current assets of RMB1.1 million (US$0.2 million), primarily due to increased upfront payments to suppliers to secure necessary service resources; and offset by (iii) a net decrease in accounts receivable of RMB28.6 million (US$4.1 million), primarily due to our enhanced collection efforts and improved receivable turnover; (iv) a decrease in accounts payable of RMB11.3 million (US$1.6 million) due to the timing of vendor settlements; (v) a decrease in contract liabilities of RMB13.1 million (US$1.9 million) due to the recognition of revenue upon the satisfaction of performance obligations for which advance payments had been received. 80 For the year ended December 31, 2024, our net cash provided by operating activities was RMB20.2 million, which was primarily attributable to (i) net income of RMB40.1 million, primarily adjusted for depreciation of software and equipment of RMB8.5 million, reversal of expected credit losses of RMB3.6 million, gain on dissolution of subsidiaries of RMB1.0 million, and amortization of right-of-use assets of RMB0.3 million; (ii) an increase of accounts payable of RMB12.1 million due to the extension of payment term; and (iii) an increase of contract liabilities of RMB2.4 million due to less recognition of contract obligation with advance payments, offset by (i) a net increase in accounts receivable of RMB28.6 million, primarily due from two major customers with longer credit term granted to secure closer long-term cooperations, and (ii) a net increase in deferred tax assets of RMB10.2 million as we expanded R&D investment for new products, which further increased the net operating losses carrying forward.
Continued investment in our technology infrastructure and professional talents We continue to invest in our proprietary platforms, including Star Career and Columbus , to accommodate the expanded scope and heightened complexity of our operations.
We expect to achieve greater operating leverage and increase the productivity of our personnel, allowing us to acquire customers and suppliers more cost-effectively and achieve higher operational efficiency. 68 Continued investment in our technology infrastructure and professional talents We continue to invest in our proprietary platforms, including Star Career and Columbus , to accommodate the expanded scope and heightened complexity of our operations.
Valuation allowance of deferred tax assets Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
If the remaining useful lives of software are revised, it is accounted for as a change in estimate and the remaining unamortized cost of the underlying asset is amortized prospectively over the updated remaining useful life. 87 Valuation allowance of deferred tax assets Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Accurate matching results allow us to attract more users and accumulate more data, which in turn improve the matching efficiency and optimize the user experience, creating a positive feedback loop.
Accurate matching results allow us to attract more users and accumulate more data, which in turn improve the matching efficiency and optimize the user experience, creating a positive feedback loop. Our results of operations have shown that this synergistic and thriving business model allows us to penetrate the recruitment market at scale without direct salesforce.
The statutory limit for the total amount of foreign debts of a foreign-invested company, based on its discretionary application, is either the difference between the amount of total investment and the amount of registered capital or three times of the amount of the net assets of such foreign- invested company.
The statutory limit for the total amount of foreign debts of a foreign-invested company, based on its discretionary application, is either the difference between the amount of total investment and the amount of registered capital or three times of the amount of the net assets of such foreign-invested company. 79 We are permitted under PRC laws and regulations to provide funding to our PRC subsidiary only through loans or capital contributions, and only if we satisfy the applicable government registration and approval requirements.
Cost related to outsourcing services increased by approximately RMB275.5 million, or 137.1%, from RMB201.0 million for the year ended December 31, 2022 to RMB476.5 million for the year ended December 31, 2023, primarily attributable to the increase in cost paid to workers and third-party services providers engaged in the solution process, generally in line with our revenue growth in outsourcing services.
Cost related to outsourcing services increased by approximately RMB72.2 million, or 13.6%, from RMB530.0 million for the year ended December 31, 2024 to RMB602.1 million (US$86.1 million) for the year ended December 31, 2025, primarily attributable to the higher service costs, including compensation for project-based personnel and fees paid to third-party providers engaged in the solution process, generally in line with our revenue growth in outsourcing services.
Customers generally make the payment within one or two months upon the successful delivery of IT projects and acceptance. We do not have an enforcement right to payment for services provided to date if the projects eventually fail. Except for this, the contract payment is not subject to any variable consideration, refund, cancellation, or termination provision.
We do not have an enforcement right to payment for services provided to date if the projects eventually fail. Except for this, the contract payment is not subject to any variable consideration, refund, cancellation, or termination provision. We recognize revenue at a point in time when the outsourcing services, mostly IT projects, are successfully completed, delivered and accepted by customers.
This increase was primarily attributable to the increase of recognized of deferred tax assets for net operating loss carry forward due to the additional deduction of research and development expenses.
Income taxes Our income tax benefits were RMB7.9 million and RMB10.2 million (US$1.4 million) for the years ended December 31, 2023 and 2024, respectively. This increase was primarily attributable to the increase of recognized deferred tax assets for net operating loss carry forward due to the additional deduction of research and development expenses.
The Group’s subsidiaries, Lucas Group China Limited (“Lucas China”) and Luogaoshi Technology (Beiijng) Co., Ltd. were approved as a HNTE and is entitled to a reduced income tax rate of 15% beginning from October 2017 and November 2018, respectively, and renewing the HNTE in December 2020 and December 2021, respectively. Lucas China renewed its HNTE in November 2023.
Certain of our PRC subsidiaries, including Lucas Group China Limited, or Lucas China and Luogaoshi Technology (Beiijng) Co., Ltd. were approved as a HNTE and have enjoyed a reduced income tax rate of 15% since October 2017 and November 2018, respectively, and their HNTE certificates were recently renewed in November 2023 and December 2024, respectively.
For the years ended December 31, 2022 and 2023 The following tables set forth a summary of our consolidated results of operations, in absolute amount and as a percentage of our net revenues for the years ended December 31, 2022 and 2023.
Net income As a result of the foregoing, our net income decreased by RMB30.2 million, from RMB40.1 million for the year ended December 31, 2024 to RMB9.9 million (US$1.4 million) for the year ended December 31, 2025. 74 For the years ended December 31, 2023 and 2024 The following tables set forth a summary of our consolidated results of operations, in absolute amount and as a percentage of our revenues for the years ended December 31, 2023 and 2024.
We will continue to seek to optimize the cost structure of our company to control the relative level of general and administrative expenses as a percentage of our net revenues. 69 Research and development expenses Our research and development expenses mainly consist of (i) payroll expenses, (ii) technologies service expenses related to platform development and data analysis to support our business operations, and (iii) other expenses related to research and development functions.
Research and development expenses Our research and development expenses mainly consist of (i) payroll expenses, (ii) technologies service expenses related to platform development and data analysis to support our business operations, and (iii) other expenses related to research and development functions.
Our ability to maintain and improve the functionality of our technology infrastructure in line with our business scale will be a key driver for our sustainable growth. 67 Key Components of Our Results of Operations Net revenues We generate revenues from (i) recruitment services including flexible employment recruitment services and permanent employment recruitment services, (ii) outsourcing services, and (iii) other services including information technology services and training services.
Key Components of Our Results of Operations Revenues We generate revenues from (i) recruitment services including flexible employment recruitment services and permanent employment recruitment services, (ii) outsourcing services, and (iii) other services including information technology services and training services.
Our other non-operating income, net increased from approximately RMB4.1 million for the year ended December 31, 2022 to approximately RMB3.5 million for the year ended December 31, 2023, which was primarily attributable to the increased additional VAT deduction. Financial expenses mainly consist of interest income and expense, bank charges and exchange gain or loss.
Our other non-operating income decreased by 251.0% from other non-operating income, net of 3.5 million for the year ended December 31, 2024 to other non-operating expenses, net of RMB5.3 million (US$0.8 million) for the year ended December 31, 2025. Financial expenses mainly consist of interest income and expenses, bank charges and exchange gain or loss.
We also continue to invest in talents, particularly experienced marketing personnel, research and development engineers and other tech-related talents to support our market expansion strategies.
We also continue to invest in talents, particularly experienced marketing personnel, research and development engineers and other tech-related talents to support our market expansion strategies. Our ability to maintain and improve the functionality of our technology infrastructure in line with our business scale will be a key driver for our sustainable growth.
We identify only one performance obligation to provide those services and recognize revenue over time based on the amount of a fixed total price, or a fixed unit price times key performance indicators or hours charged. 85 The contract payment is not subject to any variable consideration, refund, cancellation, or termination provision.
Training services are mainly to provide training courses and career-related certification programs for platform users to help them realize professional developments. We identify only one performance obligation to provide those services and recognize revenue over time based on the amount of a fixed total price, or a fixed unit price times key performance indicators or hours charged.
Net income As a result of the foregoing, our net income decreased by RMB38.1 million, from RMB78.2 million for the year ended December 31, 2023 to RMB40.1 million (US$5.5 million) for the year ended December 31, 2024.
Other income/(expenses), net Total other income (expenses), net decreased by 476.5% from total other income, net of RMB1.9 million for the year ended December 31, 2024 to total other expenses, net of RMB7.2 million (US$1.0 million) for the year ended December 31, 2025.
We will continue to make capital expenditures to meet the expected growth of our business. 80 Off-Balance Sheet Commitments and Arrangements We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties.
Off-Balance Sheet Commitments and Arrangements We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements.
Capital Expenditures We made capital expenditures of RMB13.7 million, RMB12.1 million and RMB44.7 million (US$6.1 million) for the years ended December 31, 2022, 2023 and 2024, respectively. Our capital expenditures consisted primarily of expenditures related to software and equipment to support our platform-based operation. We plan to fund our future capital expenditures with our existing cash balance.
Our capital expenditures consisted primarily of expenditures related to software and equipment to support our platform-based operation. We plan to fund our future capital expenditures with our existing cash balance. We will continue to make capital expenditures to meet the expected growth of our business.
For the year ended December 31, 2022, our net cash provided by investing activities was RMB16.8 million, which was primarily attributable to sales of short-term investments of RMB82.3 million, offset by (i) purchases of short-term investment of RMB52.2 million and (ii) purchase of software and equipment of RMB13.7 million.
Investing activities For the year ended December 31, 2025, our net cash used in investing activities was RMB107.3 million (US$15.3 million), which was primarily due to (i) purchase of software and equipment of RMB83.2 million (US$11.9 million); (ii) purchase of research development of RMB2.3 million (US$0.3 million); (iii) purchase of short-term investment of RMB2.1 million (US$0.3 million); and (iv) deposit for investment in a partnership entity of RMB19.7 million (US$2.8 million).

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Item 6. [Reserved]

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

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The audit committee is responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; 91 ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; and ● reporting regularly to the board of directors.
The audit committee is responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; and ● reporting regularly to the board of directors.
From 2006 to 2013, he worked as the senior research and development manager and senior engineer in Feinno Communication Tech Co., Ltd, in charge of developing Fetion, an instant message service product developed by the company. Mr. Tang received a bachelor’s degree in Information Technology at Beijing University of Aeronautics and Astronautics in 2005. 88 Dr.
From 2006 to 2013, he worked as the senior research and development manager and senior engineer in Feinno Communication Tech Co., Ltd, in charge of developing Fetion, an instant message service product developed by the company. Mr. Tang received a bachelor’s degree in Information Technology at Beijing University of Aeronautics and Astronautics in 2005. Dr.
In fulfilling their duty of care to us, our directors must ensure compliance with our amended and restated memorandum and articles of association, as amended and restated from time to time, and the rights vested thereunder in the holders of the shares. Our Company has the right to seek damages if a duty owed by our directors is breached.
In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time, and the class rights vested thereunder in the holders of the shares. Our Company has the right to seek damages if a duty owed by our directors is breached.
Risk Factors — Risks Related to Doing Business in China — Our insurance coverage may not be adequate, which could expose us to significant costs and business disruptions.” 93 We typically enter into standard employment and confidentiality agreements with our senior management and core personnel.
Risk Factors — Risks Related to Doing Business in China — Our insurance coverage may not be adequate, which could expose us to significant costs and business disruptions.” We typically enter into standard employment and confidentiality agreements with our senior management and core personnel.
Lee received a bachelor’s degree in Chemical Engineering (Systems Process Engineering) in 1991 and a master’s degree in Civil Engineering (Environmental Modeling and Systems) in 1993, both from the University of California at Los Angeles (UCLA), and a master’s degree in Engineering and Management (Strategy in High Tech Companies) in 1995 from Stanford University. Mr.
Lee received a bachelor’s degree in Chemical Engineering (Systems Process Engineering) in 1991 and a master’s degree in Civil Engineering (Environmental Modeling and Systems) in 1993, both from the University of California at Los Angeles, and a master’s degree in Engineering and Management (Strategy in High Tech Companies) in 1995 from Stanford University. Mr.
Prior to joining Nextech, he has served as a director of channel operation in Netprinciples Software from 2001 to 2009 and as a business development manager in Digital Ventures Asia from 1999 to 2001. From 1994 to 1999, Mr. Ho served as a sales engineer in Skynet Electronics.
Prior to joining Nextech, he served as a director of channel operation in Netprinciples Software from 2001 to 2009 and as a business development manager in Digital Ventures Asia from 1999 to 2001. From 1994 to 1999, Mr. Ho served as a sales engineer in Skynet Electronics.
He received his master’s degree in Civil Engineering in 1993 from University of California, Los Angeles and his bachelor’s degree in Civil Engineering in 1991 from University of California, Irvine. Dr. Michael Carter has served as our independent director since March 2024. Dr.
He received his master’s degree in Civil Engineering in 1993 from University of California, Los Angeles and his bachelor’s degree in Civil Engineering in 1991 from University of California, Irvine. 89 Dr. Michael Carter has served as our independent director since March 2024. Dr.
Committees of the Board of Directors We have established an audit committee, a compensation committee and a nominating and corporate governance committee under the board of directors. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit Committee .
Committees of the Board of Directors We have established an audit committee, a compensation committee and a nominating and corporate governance committee under the board of directors. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. 91 Audit Committee .
Eligibility . Our employees, officers, directors and consultants are eligible to participate in the Plan. Plan Amendment or Termination . The Administrator may at any time amend, alter, suspend or terminate this Plan. As of the date of this annual report, we have not granted any awards under the 2024 Plan.
Eligibility . Our employees, officers, directors and consultants are eligible to participate in the Plan. Plan Amendment or Termination . The Administrator may at any time amend, alter, suspend or terminate this Plan. As of the date of this annual report, we have not granted any awards under the Amended and Restated 2024 Plan.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2024.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2025.
Lee worked in the U.S. for Alcatel Corporation as Director of Strategy from 2000 to 2002 and in Xylan Corporation (acquired by Alcatel) as Financial Planning Manager from 1997 to 2000. Mr. Lee holds ten U.S. patents and nine Chinese patents, all in the areas of Artificial Intelligence, Data Analytics and Blockchain. Mr.
Lee worked in the U.S. for Alcatel Corporation as Director of Strategy from 2000 to 2002 at Xylan Corporation (later acquired by Alcatel) as Financial Planning Manager from 1997 to 2000. Mr. Lee holds 11 U.S. patents and 11 Chinese patents, all in the areas of Artificial Intelligence, Data Analytics and Blockchain. Mr.
It was previously considered that a director needs not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience.
It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience.
Our officers are elected by and serve at the discretion of the board of directors. D. Employees We had 245, 361 and 319 full time employees, permanent and contractors included, respectively, as of December 31, 2022, 2023 and 2024, all of whom are based in China.
Our officers are elected by and serve at the discretion of the board of directors. D. Employees We had 361, 319 and 311 full time employees, permanent and sub-contractors included, respectively, as of December 31, 2023, 2024 and 2025, all of whom are based in China.
The nominating and corporate governance committee is responsible for, among other things: ● recommending nominees to the board of directors for election or re-election to the board of directors, or for appointment to fill any vacancy on the board of directors; ● reviewing annually with the board of directors the current composition of the board of directors with regards to characteristics such as independence, age, skills, experience and availability of service to us; ● selecting and recommending to the board of directors the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 92 Duties of Directors Directors and officers generally owe fiduciary duties to our Company, and not to our Company’s individual shareholders.
The nominating and corporate governance committee is responsible for, among other things: ● recommending nominees to the board of directors for election or re-election to the board of directors, or for appointment to fill any vacancy on the board of directors; ● reviewing annually with the board of directors the current composition of the board of directors with regards to characteristics such as independence, age, skills, experience and availability of service to us; 92 ● selecting and recommending to the board of directors the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
A director may vote with respect to any contract, proposed contract, or arrangement in which he or she is materially interested subject to the Nasdaq Stock Market Listing R ules and disqualification by the chairperson of the relevant board meeting .
A director may vote with respect to any contract, proposed contract, or arrangement in which he or she is materially interested subject to the Listing Rules of the Nasdaq and disqualification by the chairperson of the relevant board meeting .
Compensation” of this subsection for more details on options and restricted shares granted to our directors and executive officers.
See “— B. Compensation” of this subsection for more details on options and restricted shares granted to our directors and executive officers.
See Exhibit 97. 90 Outstanding Equity Awards at Fiscal Year-End We adopted our 2024 Plan in November 2024, to attract and retain best available personnel, provide additional incentives to employees, officers, directors and consultants and promote the success of our business. Set forth below is a summary of the key terms of the Plan: Authorized Shares .
See Exhibit 97. Outstanding Equity Awards at Fiscal Year-End We adopted our 2024 Plan in November 2024, to attract and retain best available personnel, provide additional incentives to employees, officers, directors and consultants and promote the success of our business.
Function As of December 31, 2024 Number % of Total Employees Research and Development 106 33.2 % Sales and Marketing 68 21.3 % Operations 126 39.5 % General Administration 19 6.0 % Total 319 100.0 % As required by regulations in China, we participate in various government statutory social security plans, including a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan, a maternity insurance plan and a housing provident fund for permanent employees.
Function As of December 31, 2025 Number % of Total Employees Research and Development 110 35.4 % Sales and Marketing 60 19.3 % Operations 124 39.9 % General Administration 17 5.4 % Total 311 100.0 % 93 As required by regulations in China, we participate in various government statutory social security plans, including a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan, a maternity insurance plan and a housing provident fund for permanent employees.
Under the Plan, the maximum number of ordinary shares authorized is 11,800,000. Type of Awards . The Plan permits the awards of options, restricted shares, and local awards. Plan Administration . Our board of directors or a committee which will be constituted according to the applicable laws administers the Plan (the “Administrator”).
The Plan permits the awards of options, restricted shares, and local awards. Plan Administration . Our board of directors, chairman of the board of directors, or a committee which will be constituted according to the applicable laws administers the Plan (the “Administrator”).
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors. Our PRC subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.
Our PRC subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of the date of this annual report by: ● each of our directors and executive officers; and ● each person known to us to beneficially own more than 5% of our ordinary shares.
Share Ownership The following table sets forth information regarding the beneficial ownership of our ordinary shares as of the date of this annual report by our officers, directors, and 5% or greater beneficial owners of ordinary shares. There is no other person or group of affiliated persons known by us to beneficially own more than 5% of our ordinary shares.
Wegerer is a certified public accountant with more than ten years of financial accounting experience in China and the U.S. Before joining us, Mr. Wegerer spent 15 years working as a pioneer in digital education and PaaS industry.
D. in Computer Science from University of California at Irvine. Mr. Jeremy Wegerer has been our independent director since 2022. Mr. Wegerer is a certified public accountant with more than ten years of financial accounting experience in China and the U.S. Before joining us, Mr. Wegerer spent 15 years working as a pioneer in digital education and PaaS industry.
He worked as the director of instruction and research information systems of Stanford University from 1980 to 1989 and as the assistant professor of history at Dartmouth College from 1973 to 1980. Dr.
He worked as the director of instruction and research information systems of Stanford University from 1980 to 1989 and as the assistant professor of history at Dartmouth College from 1973 to 1980. Dr. Carter received his bachelor’s degree in History in 1968, master’s degree in History in 1971 and doctorate degree in History in 1974, all from Stanford University. B.
HTL Star Holding Limited is wholly owned by Mr. Howard Lee. The registered address of HTL Lucky Holding Limited is ICS Corporate Services (BVI) Limited, Sea Meadow House, P.O. Box 116, Road Town, Tortola, British Virgin Islands. (2) Represents 14,498,220 ordinary shares held by 51job, Inc., a Cayman Islands company.
(1) Represents 1,190,718 Class A ordinary shares held by HTL Lucky Holding Limited, a British Virgin Islands company, which is a wholly owned subsidiary of HTL Star Holding Limited. HTL Star Holding Limited is wholly owned by Mr. Howard Lee. The registered address of HTL Lucky Holding Limited is ICS Corporate Services (BVI) Limited, Sea Meadow House, P.O.
Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period.
Under these agreements, each of our executive officers is employed for a specified time period.
These ordinary shares, however, are not included in the computation of the percentage ownership of any other person. The percentage of beneficial ownership of our ordinary is based on 79,467,057 ordinary shares issued and outstanding (excluding 96,243 ordinary shares repurchased as treasury shares) as of the date of this annual report. See “— B.
These ordinary shares, however, are not included in the computation of the percentage ownership of any other person. 94 The percentage of beneficial ownership of our ordinary is based on 42,790,404 ordinary shares issued and outstanding as of the date of this annual report, comprising 42,790,404 Class A ordinary shares (excluding 2,406 repurchased as treasury shares) and nil Class B ordinary share.
Lee worked at Sun Microsystems Inc. as the general manager of Asian operations of its SUN Equity Partners Program. From 2003 to 2005, Mr. Lee worked for Alcatel Corporation as the general manager of APAC enterprise data business unit and CEO of one of its joint ventures in China, and prior to expatriating to Asia, Mr.
Lee worked for Alcatel Corporation as the general manager of APAC enterprise data business unit and chief executive officer of one of its joint ventures in China, and prior to expatriating to Asia, Mr.
Clawback Policy In April 2024, we adopted a clawback policy in compliance with the SEC rules and the Nasdaq Stock Market listing standards to recover any excess incentive-based compensation from current and former executive officers after an accounting restatement.
Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our Company. 90 Clawback Policy In April 2024, we adopted a clawback policy in compliance with the SEC rules and the Nasdaq Stock Market listing standards to recover any excess incentive-based compensation from current and former executive officers after an accounting restatement.
He is also our chief executive officer. From 2016 to present, he has been the CEO in our operating subsidiary in China, Lucas Group China Limited. From 2010 to 2016, Mr. Lee worked at Western Digital Corporation, most lately as the vice president of corporate development. From 2008 to 2010, Mr.
Howard Lee has been our chairman of the board of directors since 2022. He is also our chief executive officer. From 2016 to present, he has been the chief executive officer in our operating subsidiary in China, Lucas Group China Limited. From 2010 to 2016, Mr.
(3) Represents 5,622,947 ordinary shares held by MLT Holding Limited, a British Virgin Islands company. MLT Holding Limited is wholly owned by Ms. Luting Meng. The registered address of MLT Holding Limited is ICS Corporate Services (BVI) Limited, Sea Meadow House, P.O. Box 116, Road Town, Tortola, British Virgin Islands.
(11) Represents 3,440,000 Class A ordinary shares held by LUOTEC INFORMATION LTD, a British Virgin Islands company wholly owned by Jiping Yin. The registered address of LUOTEC INFORMATION LTD is Sea Meadow House, P.O. Box 116,Road, Town Tortola VG1110, British Virgin Islands.
He has published 45 papers in prestigious journals and presented many of them in international conferences. He holds 11 U.S. patents and nine Chinese patents. Dr.
He has published 45 papers in prestigious journals and presented many of them in international conferences. He holds 12 U.S. patents and 11 Chinese patents. Dr. Wong received his bachelor’s degree of Business Administration (with honor) from the Chinese University of Hong Kong, and his master’s degree in Business and master’s degree in Computer Science and Ph.
Unless otherwise stated, the business address for our directors and executive officers is that of our principal executive offices at Room 5A01, 4th Floor, Air China Building, Xiaoyun Road, Sanyuanqiao, Chaoyang District, Beijing 100027, China.
Unless otherwise stated, the business address for our directors and executive officers is that of our principal executive offices at Room 1109, 11/F, Tower A, Star Plaza, No. 8 Wangjing Street, Chaoyang District, Beijing 100102, China.
Directors and Executive Officers Age Position Howard Lee 56 Founder, Chairman of the Board and CEO Brian Lin 41 CFO Harry Tang 41 CTO Wang-chan Wong 70 Director Jeremy Wegerer 54 Independent Director Stanley Ho 57 Independent Director Michael Carter 79 Independent Director Mr. Howard Lee has been our chairman of the board of directors since 2022.
Directors and Executive Officers Age Position Howard Lee 57 Chairman of the Board of Directors and Chief Executive Officer Wallace Wang Leong Lee 47 Chief Financial Officer Harry Tang 42 Chief Technology Officer Wang-chan Wong, Ph. D. 71 Director Jeremy Wegerer 55 Independent Director Stanley Ho 58 Independent Director Michael Carter, Ph. D. 80 Independent Director Mr.
Carter received his bachelor’s degree of History in 1968, master’s degree of History in 1971 and doctoral degree of History in 1974, all from Stanford University. 89 B. Compensation For the year ended December 31, 2024, we paid an aggregate of approximately RMB1.3 million (US$0.2 million) in cash and benefits to our directors and executive officers.
Compensation For the year ended December 31, 2025, we paid an aggregate of approximately RMB 2.1 million (US$0.3 million) in cash and benefits to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Number of ordinary shares Percentage of beneficial ownership Directors and Executive Officers* Howard Lee (1) 48,555,354 61.1 % Brian Lin — — Harry Tang — — Wang-chan Wong — — Jeremy Wegerer — — Stanley Ho — — Michael Carter — — All Directors and Executive Officers as a Group 48,555,354 61.1 % Principal Shareholders: HTL Lucky Holding Limited (1) 48,555,354 61.1 % 51job, Inc.
D. — — — — Jeremy Wegerer — — — — Stanley Ho — — Michael Carter, Ph. D. — — All Directors and Executive Officers as a Group 1,190,718 — 2.802 % 2.802 % Principal Shareholders: HTL Lucky Holding Limited (1) 1,190,718 — 2.8 % 2.8 % EASY SPEED INC.
We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our Company.
We have also entered into indemnification agreements with each of our directors and executive officers.
Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Class A ordinary shares and Class B ordinary shares vote together as a single class except where required otherwise by applicable law or our amended and restated memorandum and articles of association. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Removed
Brian Lin has served as our Chief Financial Officer since March 2024. Mr. Lin is a certified public accountant in China with rich financial and accounting experiences and has served as our head of finance in Lucas Group China Limited since 2022. Prior to joining us, Mr.
Added
Lee worked at Western Digital Corporation, most lately as the vice president of corporate development. From 2008 to 2010, Mr. Lee worked at Sun Microsystems Inc. as the general manager of Asian operations of its SUN Equity Partners Program. From 2003 to 2005, Mr.
Removed
Lin was a financial director at G7 Networks Limited from 2021 to 2022, a leading SaaS company using internet of things technology in the road freight industry. From 2018 to 2021, Mr. Lin served as the vice president at Pure International Cultural Development (Beijing) Co., Ltd.
Added
Wallace Wang Leong Lee has served as our chief financial officer since December 2025. Prior to joining us, Mr. Lee served as the chief financial officer at BON Natural Life Limited (Nasdaq: BON) from April 2023 to November 2025. Mr. Lee has served in a variety of key leadership roles with companies. From February 2022 to March 2023, Mr.
Removed
From 2016 to 2018, he served as the financial director of Beijing Time Limited, a company that is a recommendation system product based on data mining that recommends valuable, personalized information to users in China.
Added
Lee served as the Vice President of Finance at Ruanyum Edi Technology, Inc. (Nasdaq: RYET). From February 2021 to January 2022, Mr. Lee served as the chief financial officer at China SXT Pharmaceuticals, Inc. (Nasdaq: SXTC). From January 2019 to April 2020, Mr. Lee served as the Finance Securities & Operation Director at Wanda Sports Group Holding Limited (Nasdaq: WSG).
Removed
From 2015 to 2016, he worked as the financial director of Beijing RTMAP Technology Co., Ltd., a company that providing technology for indoor positioning and navigation for shopping malls and airports. From 2011 to 2015, Mr.
Added
From May 2017 to December 2018, Mr. Lee served as the Finance Reporting Director at Secoo Holding Limited (OTCMKTS: SECOY). From 2012 to 2017, Mr. Lee served as the Audit Principal of the International Business Department at Beijing Yongtuo CPA Limited. He received his Bachelor of Business Administration from University of Houston in 2001. 88 Mr.
Removed
Lin worked as the CFO and general manager of the strategic investment department of HNA Culture Holding Group Co., LTD, a company that has been developing in the fields of airport and aviation media business. He also worked in PricewaterhouseCoopers Zhong Tian LLP as a junior auditor and later promoted to senior auditor and auditor manager from 2004 to 2011.
Added
On October 31, 2025, we adopted the Amended and Restated 2024 Plan, to reflect the Share Consolidation and Dual-Class Share Structure. Set forth below is a summary of the key terms of the Plan: Authorized Shares . Under the Plan, the maximum number of ordinary shares authorized is 295,000. Type of Awards .
Removed
Mr. Lin is familiar with SaaS business, media and social technology and has deep involvement of various kinds of investment and financing mergers and acquisitions. He has been a member of Chinese Institute of Certified Public Accountant since 2010. Mr. Lin received a bachelor’s degree in Accounting from Renmin University of China in 2004. Mr.
Added
Duties of Directors Under Cayman Islands law, our directors have a fiduciary duty to our company, including a duty to act bona fide in the best interests of the company, a duty not to make a profit based on his or her position as director (unless the company permits him to do so) and a duty not to put himself in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party.
Removed
Wong received his bachelor’s degree of Business Administration (with honor) from the Chinese University of Hong Kong, and his master’s degree in Business and master’s degree in Computer Science and Ph.D. in Computer Science from University of California at Irvine. Mr. Jeremy Wegerer has been our independent director since 2022. Mr.
Added
Our directors must also exercise their powers only for a proper purpose. Our directors also owe to our company a duty to act with skill and care.
Removed
Our shareholders may not have a direct cause of action against our directors. Under Cayman Islands law, our directors have a fiduciary duty to act honestly, in good faith and with a view to our best interests. Our directors also owe to our Company a duty to act with skill and care.
Added
Holders of our Class A ordinary shares are entitled to one vote per share and vote on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Holders of Class B ordinary shares are entitled to 480 votes per share at general meetings of the Company.
Removed
(2) 14,498,220 18.2 % MLT Holding Limited (3) 5,622,947 7.1 % Notes: * For each person and group included in this table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by 79,467,057, being the number of ordinary shares issued and outstanding as of the date of this annual report. ** For each person or group included in this column, percentage of total voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our ordinary shares as a single class. † Except as otherwise indicated below, the business address of our directors and executive officers is Room 5A01, 4th Floor, Air China Building, Xiaoyun Road, Sanyuanqiao, Chaoyang District, Beijing 100027, China. 94 (1) Represents 48,555,354 ordinary shares held by HTL Lucky Holding Limited, a British Virgin Islands company, which is a wholly owned subsidiary of HTL Star Holding Limited.
Added
Ordinary Shares Beneficially Owned** Class A ordinary shares Class B ordinary shares % of total ordinary shares on an as-converted basis % of aggregate voting power† Directors and Executive Officers* Howard Lee (1) 1,190,718 — 2.8 % 2.8 % Wallace Wang Leong Lee 775 — 0.002 % 0.002 % Harry Tang — — — — Wang-chan Wong, Ph.
Removed
The only natural person who has over 5% voting or dispositive power with respect to the shares held by 51job, Inc. is Mr. Rick Yan, who indirectly owns less than 10% in our Company. The registered address of 51job, Inc. is Ogier Global (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman, Cayman Islands KY1-9009.
Added
(2) 3,920,000 — 9.2 % 9.2 % LEYAN MANAGEMENT LTD (3) 3,920,000 — 9.2 % 9.2 % PING CAPITAL HOLDINGS LTD (4) 3,920,000 — 9.2 % 9.2 % TAI GU INVESTMENT LTD (5) 3,920,000 — 9.2 % 9.2 % GOLD RAY VENTURES LIMITED (6) 3,520,000 — 8.2 % 8.2 % JINQUAN DEVELOPMENTS LIMITED (7) 3,520,000 — 8.2 % 8.2 % JOVIAL DAY DEVELOPMENTS LIMITED (8) 3,520,000 — 8.2 % 8.2 % CENTURION TECH HOLDINGS LIMITED (9) 3,440,000 — 8.0 % 8.0 % ETERNAL BLESSING HOLDINGS LIMITED (10) 3,440,000 — 8.0 % 8.0 % LUOTEC INFORMATION LTD (11) 3,440,000 — 8.0 % 8.0 % RAPID PROCEED LIMITED (12) 3,440,000 — 8.0 % 8.0 % Notes: * Except as otherwise indicated below, the business address of our directors and officers is Room 1109, 11/F, Tower A, Star Plaza, No. 8 Wangjing Street, Chaoyang District, Beijing 100102, China. ** Applicable percentage of ownership is based on 42,790,4 04 Class A ordinary shares (excluding 2,406 Class A ordinary shares repurchased as treasury shares) and nil Class B ordinary share outstanding as of the date of this annual report.
Removed
None of our shareholders has informed us that it is affiliated with a registered broker-dealer or is in the business of underwriting securities. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
Added
Box 116, Road Town, Tortola, British Virgin Islands. (2) Represents 3,920,000 Class A ordinary shares held by EASY SPEED INC., a British Virgin Islands company, wholly owned by Yiu Chung Au Yeung. The registered address of EASY SPEED INC. is OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands.
Added
(3) Represents 3,920,000 Class A ordinary shares held by LEYAN MANAGEMENT LTD, a British Virgin Islands company, wholly owned by Leyan Yang . The registered address of LEYAN MANAGEMENT LTD is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Torola VG1110 British Virgin Islands .
Added
(4) Represents 3,920,000 Class A ordinary shares held by PING CAPITAL HOLDINGS LTD, a British Virgin Islands company, wholly owned by Ping Hu . The registered address of PING CAPITAL HOLDINGS LTD is Craigmuir Chambers, Road Town, Tortola VG 1110 British Virgin Islands .
Added
(5) Represents 3,920,000 Class A ordinary shares held by TAI GU INVESTMENT LTD, a British Virgin Islands company, wholly owned by Zhisheng Liu . The registered address of TAI GU INVESTMENT LTD is OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands .
Added
(6) Represents 3,520,000 Class A ordinary shares held by GOLD RAY VENTURES LIMITED, a British Virgin Islands company, wholly owned by Lin Li. The registered address of GOLD RAY VENTURES LIMITED is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, BVI VG1110.
Added
(7) Represents 3,520,000 Class A ordinary shares held by JINQUAN DEVELOPMENTS LIMITED, a British Virgin Islands company, wholly owned by JianjunYang . The registered address of JINQUAN DEVELOPMENTS LIMITED is Craigmuir Chambers, Road Town, Tortola VG 1110 British Virgin Islands .
Added
(8) Represents 3,520,000 Class A ordinary shares held by JOVIAL DAY DEVELOPMENTS LIMITED, a British Virgin Islands company wholly owned by Weiqing Lu. The registered address of JOVIAL DAY DEVELOPMENTS LIMITED is 3rd Floor, J&C Building, Road Town, Tortola VG1110, British Virgin Islands.
Added
(9) Represents 3,440,000 Class A ordinary shares held by CENTURION TECH HOLDINGS LIMITED, a British Virgin Islands company wholly owned by Ruiping Yin. The registered address of CENTURION TECH HOLDINGS LIMITED is Craigmuir Chambers, Road Town, Tortola VG 1110, British Virgin Islands.
Added
(10) Represents 3,440,000 Class A ordinary shares held by ETERNAL BLESSING HOLDINGS LIMITED, a British Virgin Islands wholly owned by Haiying Wen. The registered address of ETERNAL BLESSING HOLDINGS LIMITED is Craigmuir Chambers, Road Town, Tortola VG 1110, British Virgin Islands.
Added
(12) Represents 3,440,000 Class A ordinary shares held by RAPID PROCEED LIMITED, a British Virgin Islands company wholly owned by Huoyuan Chen. The registered address of RAPID PROCEED LIMITED is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Torola VG1110, British Virgin Islands.
Added
To our knowledge, as of April 13, 2026, 163,636, or approximately 0.4% of our Class A ordinary shares were held by 403 record holders in the United States.

Item 7. Management's Discussion & Analysis

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

3 edited+0 added−0 removed1 unchanged
Howard Lee (ii) 36 618 2,300 Total 2,156 3,097 3,700 (i) As of December 31, 2022, 2023 and 2024, amounts due to Beagledata consisted of technology services fees payable of RMB2,120, RMB2,120 and RMB1,400, respectively, and contract liabilities of nil, RMB359 and nil, respectively. (ii) Amounts due to Mr. Howard Lee represented expensed paid on behalf of the Company. C.
Howard Lee (ii) 618 2,300 4,147 Total 3,097 3,700 5,547 (i) As of December 31, 2023, 2024 and 2025, amounts due to Beagledata consisted of technology services fees payable of RMB2,120, RMB1,400 and RMB1,400, respectively, and contract liabilities of RMB359, nil and nil, respectively. (ii) Amounts due to Mr. Howard Lee represented expensed paid on behalf of the Company. C.
(ii) The Company provided recruitment services to Beagledata, including flexible staffing services and permanent recruitment services for the years ended December 31, 2022, 2023 and 2024. 95 Balances with related parties: Balances with related parties consisted of the following for the periods indicated: As of December 31, 2022 2023 2024 RMB Amounts due to related parties: Beagledata (i) 2,120 2,479 1,400 Mr.
The Company did not provide any services to Beagledata for the year ended December 31, 2025. 95 Balances with related parties: Balances with related parties consisted of the following for the periods indicated: As of December 31, 2023 2024 2025 RMB Amounts due to related parties: Beagledata (i) 2,479 1,400 1,400 Mr.
Compensation — Employment Agreements and Indemnification Agreements.” Other Related Party Transactions The Company had the following significant related party transactions for the years ended December 31, 2022, 2023 and 2024: For the years ended December 31, 2022 2023 2024 RMB RMB RMB Technology services received from: Beagledata (i) 1,480 - - Recruitment services provided to: Beagledata (ii) 9,697 7,417 3,887 Outsourcing services provided to: Beagledata - 566 - (i) Beagledata provided technology services for the year ended December 31, 2022, and the Company recorded it as research and development expenses in the consolidated statements of income and comprehensive income.
Compensation — Employment Agreements and Indemnification Agreements.” Other Related Party Transactions The Company had the following significant related party transactions for the years ended December 31, 2023, 2024 and 2025: For the Year Ended December 31, 2023 2024 2025 RMB RMB RMB Recruitment services provided to: Beagledata (i) 7,417 3,887 - Outsourcing services provided to: Beagledata 566 - - (i) The Company provided recruitment services to Beagledata, including flexible staffing services and permanent recruitment services for the years ended December 31, 2023 and 2024.

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