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What changed in uCloudlink Group Inc.'s 20-F — 2024 vs 2025

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Paragraph-level year-over-year comparison of uCloudlink Group Inc.'s 2024 and 2025 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+686 added−679 removedSource: 20-F (2026-03-27) vs 20-F (2025-03-27)

Top changes in uCloudlink Group Inc.'s 2025 20-F

686 paragraphs added · 679 removed · 554 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

249 edited+65 added−66 removed626 unchanged
Biggest changeIf the PRC government finds that our use of the relevant approval for value-added telecommunications business do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to penalties or be forced to relinquish our interests in those operations.
Biggest changeWe have limited ability to monitor or control the actions of our business partners and any reputational damage, regulatory action, or negative publicity affecting a partner could materially and adversely impact our own business, financial condition, and reputation by association. 26 If the PRC government finds that the conduct of our value-added telecommunications business does not comply with the terms of our licenses and approvals or applicable PRC laws and regulations, or if these regulations or the interpretation of these regulations change in the future, we could be subject to penalties or be forced to relinquish our interests in those operations.
Risk Factors—Risks Related to Doing Business in China—The approval and/or other requirements of the CSRC, the Cyberspace Administration of China, or other PRC governmental authorities may be required in connection with an offering under the rules, regulations or policies of mainland China, and, if required, we cannot predict whether or how soon we will be able to obtain such approval, and, even if we obtain such approval, the approval could be rescinded.
Risk Factors—Risks Related to Doing Business in China—The approval and/or other requirements of the CSRC, the Cyberspace Administration of China, or other PRC governmental authorities may be required in connection with an offering under the rules, regulations or policies of mainland China, and, if required, we cannot predict whether or how soon we will be able to obtain such approval, and, even if we obtain such approval, the approval could be rescinded.
Risk Factors—Risks Related to Doing Business in China—The approval and/or other requirements of the CSRC, the Cyberspace Administration of China, or other PRC governmental authorities may be required in connection with an offering under the rules, regulations or policies of mainland China, and, if required, we cannot predict whether or how soon we will be able to obtain such approval, and, even if we obtain such approval, the approval could be rescinded.
Risk Factors—Risks Related to Doing Business in China—The approval and/or other requirements of the CSRC, the Cyberspace Administration of China, or other PRC governmental authorities may be required in connection with an offering under the rules, regulations or policies of mainland China, and, if required, we cannot predict whether or how soon we will be able to obtain such approval, and, even if we obtain such approval, the approval could be rescinded.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government determines that the contractual arrangements with the former VIEs structure did not comply with the regulations of mainland China, or if these regulations change or are interpreted differently in the future, our shares and/or ADSs may decline in value or become worthless if we are deemed to be unable to assert our contractual control rights over the assets of the former VIEs.” Risks Related to Doing Business in China We and the former VIEs face risks and uncertainties related to doing business in China in general, including, but not limited to, the following: ● Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government determines that the contractual arrangements with the former VIEs structure did not comply with the regulations of mainland China, or if these regulations change or are interpreted differently in the future, our shares and/or ADSs may decline in value or become worthless if we are deemed to be unable to assert our contractual control rights over the assets of the former VIEs.” Risks Related to Doing Business in China We face risks and uncertainties related to doing business in China in general, including, but not limited to, the following: ● Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations.
Risk Factors—Risks Related to Doing Business in China—The approval and/or other requirements of the CSRC, the Cyberspace Administration of China, or other PRC governmental authorities may be required in connection with an offering under the rules, regulations or policies of mainland China, and, if required, we cannot predict whether or how soon we will be able to obtain such approval, and, even if we obtain such approval, the approval could be rescinded.
Risk Factors—Risks Related to Doing Business in China—The approval and/or other requirements of the CSRC, the Cyberspace Administration of China, or other PRC governmental authorities may be required in connection with an offering under the rules, regulations or policies of mainland China, and, if required, we cannot predict whether or how soon we will be able to obtain such approval, and, even if we obtain such approval, the approval could be rescinded.
While our uCloudlink cloud SIM platform and our SIM card allocation algorithm significantly increase the efficiency and utilization rate of the SIM cards, our ability to accurately forecast demand for our services could be affected by many factors, including specific events at a location, sales promotions by us or our distribution partners, and unanticipated changes in general market and economic conditions, among others.
While our uCloudlink cloud SIM platform and our SIM card allocation algorithm significantly increase the efficiency and utilization rate of SIM cards, our ability to accurately forecast demand for our services could be affected by many factors, including specific events at a location, sales promotions by us or our distribution partners, and unanticipated changes in general market and economic conditions, among others.
If we fail to accurately forecast user demand, we may experience shortage of network coverage or data traffic, limiting or interrupting the service to our users, and the users will lose confidence in our services. As market competition for products or services similar to ours intensifies, it could become more difficult to forecast demand.
If we fail to accurately forecast user demand, we may experience shortage of network coverage or data traffic, limiting or interrupting the service to our users, and our users will lose confidence in our services. As market competition for products or services similar to ours intensifies, it could become more difficult to forecast demand.
On February 24, 2023, the CSRC jointly with other governmental authorities, promulgated the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises, which took effect on March 31, 2023.
On February 24, 2023, the CSRC jointly with other governmental authorities, promulgated the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises, which took effect on March 31, 2023.
If such documents or materials contain any state secrets or government authorities work secrets, domestic companies must obtain the approval from competent governmental authorities according to the applicable laws, and file with the secrecy administrative department at the same level with the approving governmental authority.
If such documents or materials contain any state secrets or government authorities work secrets, domestic companies must obtain the approval from competent governmental authorities according to the applicable laws, and file with the secrecy administrative department at the same level with the approving governmental authority.
Under these measures, rules, notes and notices, domestic enterprises conducting overseas securities offering and listing, either directly or indirectly, shall complete filings with the CSRC pursuant to these measures’ requirements within three working days following the submission of an application for initial public offering or listing.
Under these measures, rules, notes and notices, domestic enterprises conducting overseas securities offering and listing, either directly or indirectly, shall complete filings with the CSRC pursuant to these measures’ requirements within three working days following the submission of an application for initial public offering or listing.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
Our current auditor is a Singapore-based accounting firm that is registered with the PCAOB and can be inspected by the PCAOB with the last inspection on September 27, 2024.
Our current auditor is a Singapore-based accounting firm that is registered with the PCAOB and can be inspected by the PCAOB with the last inspection on September 27, 2024.
Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
In addition to the above factors, the price and trading volume of the ADSs may be highly volatile due to multiple factors, including the following: ● regulatory developments affecting us or our industry, users, suppliers or third-party sellers; ● announcements of studies and reports relating to the quality of our product and service offerings or those of our competitors; ● changes in the economic performance or market valuations of other players in the industry; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; ● conditions in the mobile data connectivity service market; ● announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● fluctuations of exchange rates between the RMB and the U.S. dollar; ● litigation or other legal proceedings involving us; ● detrimental negative publicity about us or our industry; ● release or expiry of lock-up or other transfer restrictions on our issued and outstanding shares or ADSs; and ● sales or perceived potential sales of additional ordinary shares or ADSs.
In addition to the above factors, the price and trading volume of the ADSs may be highly volatile due to multiple factors, including the following: ● regulatory developments affecting us or our industry, users, suppliers or third-party sellers; ● announcements of studies and reports relating to the quality of our product and service offerings or those of our competitors; ● changes in the economic performance or market valuations of other players in the industry; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; ● conditions in the mobile data connectivity service market; ● announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● fluctuations of exchange rates between the RMB and the U.S. dollar; 52 ● litigation or other legal proceedings involving us; ● detrimental negative publicity about us or our industry; ● release or expiry of lock-up or other transfer restrictions on our issued and outstanding shares or ADSs; and ● sales or perceived potential sales of additional ordinary shares or ADSs.
Some of these risks and uncertainties relate to our ability to: ● maintain our market share; ● successfully expand into new businesses and explore additional monetization opportunities, such as mobile data connectivity services for local users such as GlocalMe Inside ; ● offer attractive, useful and innovative products and services to attract and retain a larger user base; ● upgrade our technology to support increased traffic and expanded product and service offerings; ● further enhance our brand; ● respond to competitive market conditions; 32 ● respond to evolving user preferences or industry changes; ● respond to changes in the regulatory environment and manage legal risks, including those associated with intellectual property rights; ● maintain effective control of our costs and expenses; ● execute our strategic investments and acquisitions and post-acquisition integrations effectively; and ● build profitable operations in new markets we have entered into.
Some of these risks and uncertainties relate to our ability to: ● maintain our market share; ● successfully expand into new businesses and explore additional monetization opportunities, such as mobile data connectivity services for local users such as GlocalMe Inside ; ● offer attractive, useful and innovative products and services to attract and retain a larger user base; ● upgrade our technology to support increased traffic and expanded product and service offerings; ● further enhance our brand; ● respond to competitive market conditions; ● respond to evolving user preferences or industry changes; ● respond to changes in the regulatory environment and manage legal risks, including those associated with intellectual property rights; ● maintain effective control of our costs and expenses; ● execute our strategic investments and acquisitions and post-acquisition integrations effectively; and ● build profitable operations in new markets we have entered into.
Risk Factors—Risks Related to Our Business and Industry—If our expansions into new businesses do not achieve the expected results, our future results of operations and growth prospects may be materially and adversely affected.” 12 Risks Related to Our Corporate Structure We and the former VIEs face risks and uncertainties related to the former corporate structure, including, but not limited to, the following: ● If the PRC government determines that the contractual arrangements with the former VIEs structure did not comply with the regulations of mainland China, or if these regulations change or are interpreted differently in the future, our shares and/or ADSs may decline in value or become worthless if we are deemed to be unable to assert our contractual control rights over the assets of the former VIEs.
Risk Factors—Risks Related to Our Business and Industry—If our expansions into new businesses do not achieve the expected results, our future results of operations and growth prospects may be materially and adversely affected.” Risks Related to Our Corporate Structure We face risks and uncertainties related to the former corporate structure, including, but not limited to, the following: ● If the PRC government determines that the contractual arrangements with the former VIEs structure did not comply with the regulations of mainland China, or if these regulations change or are interpreted differently in the future, our shares and/or ADSs may decline in value or become worthless if we are deemed to be unable to assert our contractual control rights over the assets of the former VIEs.
Risk Factors—Risks Related to The ADSs—Our dual class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.” Risks Related to Our Business and Industry We depend on network operators for their wireless networks, infrastructures and data traffic, and any disruptions of or limitations on our use of such networks, infrastructures and data traffic may adversely affect our business and financial results.
Risk Factors—Risks Related to The ADSs—Our dual class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.” 10 Risks Related to Our Business and Industry We depend on network operators for their wireless networks, infrastructures and data traffic, and any disruptions of or limitations on our use of such networks, infrastructures and data traffic may adversely affect our business and financial results.
We have notified all domestic residents or entities of mainland China who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being domestic residents of mainland China to complete the foreign exchange registrations, among which, some domestic residents are in the process of updating their registrations required in connection with our recent corporate restructuring, furthermore, the foreign exchange registrations of several domestic residents are yet to be completed, and there is no assurance that they will complete the registrations finally, or at all.
We have notified all domestic residents or entities of mainland China who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being domestic residents of mainland China to complete the foreign exchange registrations, among which, some domestic residents are in the process of updating their registrations required in connection with our corporate restructuring, furthermore, the foreign exchange registrations of several domestic residents are yet to be completed, and there is no assurance that they will complete the registrations finally, or at all.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government determines that the contractual arrangements with the former VIEs structure did not comply with the regulations of mainland China, or if these regulations change or are interpreted differently in the future, our shares and/or ADSs may decline in value or become worthless if we are deemed to be unable to assert our contractual control rights over the assets of the former VIEs.” Our historical corporate structure is subject to risks associated with our contractual arrangements with the former VIEs.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government determines that the contractual arrangements with the former VIEs structure did not comply with the regulations of mainland China, or if these regulations change or are interpreted differently in the future, our shares and/or ADSs may decline in value or become worthless if we are deemed to be unable to assert our contractual control rights over the assets of the former VIEs.” Our historical corporate structure is subject to risks associated with our previous contractual arrangements with the former VIEs.
We face a number of risks associated with expanding our business internationally that could negatively impact our results of operations, including: ● compliance with foreign laws, including more stringent laws in foreign jurisdictions relating to the privacy and protection of third-party data; ● regulatory requirements governing the provision of communication services in foreign jurisdictions; ● competition from companies with international operations, including large international competitors and entrenched local companies; ● to the extent we choose to make acquisitions to enable our international expansion efforts, the identification of suitable acquisition targets in the markets into which we want to expand; ● difficulties in protecting intellectual property rights in international jurisdictions; ● political and economic instability in some overseas markets; 30 ● difficulties in recruiting and managing local employees in overseas operations with different cultural backgrounds; ● currency fluctuations and exchange rates; ● tariffs, quotas, customs, import or export restrictions and other trade barriers, trade sanctions or anti-dumping measures; and ● potentially adverse tax consequences or an inability to realize tax benefits.
We face a number of risks associated with expanding our business internationally that could negatively impact our results of operations, including: ● compliance with foreign laws, including more stringent laws in foreign jurisdictions relating to the privacy and protection of third-party data; ● regulatory requirements governing the provision of communication services in foreign jurisdictions; ● competition from companies with international operations, including large international competitors and entrenched local companies; ● to the extent we choose to make acquisitions to enable our international expansion efforts, the identification of suitable acquisition targets in the markets into which we want to expand; ● difficulties in protecting intellectual property rights in international jurisdictions; ● political and economic instability in some overseas markets; ● difficulties in recruiting, integrating and managing local employees in overseas operations with different cultural backgrounds; ● currency fluctuations and exchange rates; ● tariffs, quotas, customs, import or export restrictions and other trade barriers, trade sanctions or anti-dumping measures; and ● potentially adverse tax consequences or an inability to realize tax benefits.
Business Overview—Regulation—Mainland China—Regulations Related to Foreign Exchange—Regulations on Stock Incentive Plans.” 49 The State Administration of Taxation has issued certain circulars concerning employee share options and restricted shares. Under these circulars, our employees working in mainland China who exercise or transfer share options or are granted restricted shares will be subject to mainland China’s individual income tax.
Business Overview—Regulation—Mainland China—Regulations Related to Foreign Exchange—Regulations on Stock Incentive Plans.” The State Administration of Taxation has issued certain circulars concerning employee share options and restricted shares. Under these circulars, our employees working in mainland China who exercise or transfer share options or are granted restricted shares will be subject to mainland China’s individual income tax.
Any failure to obtain or delay in obtaining such approval for this offering, or a rescission of obtained approval, would subject us to sanctions imposed by the CSRC or other PRC government authorities.” ● The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs.
Any failure to obtain or delay in obtaining such approval for this offering, or a rescission of obtained approval, would subject us to sanctions imposed by the CSRC or other PRC government authorities.” 9 ● The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs.
These policies may restrict our ability to implement our investment strategy and could adversely affect our business and prospects. 21 Measures such as these could deter suppliers in the United States and/or other countries that impose export controls and other restrictions from providing technologies and products to, making investments in, or otherwise engaging in transactions with Chinese companies.
These policies may restrict our ability to implement our investment strategy and could adversely affect our business and prospects. Measures such as these could deter suppliers in the United States and/or other countries that impose export controls and other restrictions from providing technologies and products to, making investments in, or otherwise engaging in transactions with Chinese companies.
Quantitative and Qualitative Disclosures About Market Risk.” We may enter into foreign exchange derivatives transactions and incur relevant costs from time to time to manage our exposure to exchange rate risk. Such derivatives transactions while intended to be non-speculative, are designed to protect us against increases or decreases in exchange rates, but not both.
Quantitative and Qualitative Disclosures About Market Risk.” 33 We may enter into foreign exchange derivatives transactions and incur relevant costs from time to time to manage our exposure to exchange rate risk. Such derivatives transactions while intended to be non-speculative, are designed to protect us against increases or decreases in exchange rates, but not both.
A more consolidated telecommunications market in a region may also partially negate the demand for our mobile data connectivity service as resources are combined and fewer negotiations are needed among the operators for network sharing or roaming. We incurred losses in the past, and we may not be able to maintain profitability in the future.
A more consolidated telecommunications market in a region may also partially negate the demand for our mobile data connectivity service as resources are combined and fewer negotiations are needed among the operators for network sharing or roaming. 11 We incurred losses in the past, and we may not be able to maintain profitability in the future.
These measures also restrict the ability of U.S. persons to provide “support” for semiconductor manufacturing and related activities in China and may seriously affect the ability of Chinese companies to purchase or obtain certain semiconductor manufacturing equipment or advanced chips. The United States has also taken efforts to limit U.S. investment in China. On October 28, 2024, the U.S.
These measures also restrict the ability of U.S. persons to provide “support” for semiconductor manufacturing and related activities in China and may seriously affect the ability of Chinese companies to purchase or obtain certain semiconductor manufacturing equipment or advanced chips. 19 The United States has also taken efforts to limit U.S. investment in China. On October 28, 2024, the U.S.
According to these provisions, domestic companies, whether offering and listing securities overseas directly or indirectly, must strictly abide the applicable laws and regulations when providing or publicly disclosing, either directly or through their overseas listed entities, documents and materials to securities services providers such as securities companies and accounting firms or overseas regulators in the process of their overseas offering and listing.
According to these provisions, domestic companies, whether offering and listing securities overseas directly or indirectly, must strictly abide by the applicable laws and regulations when providing or publicly disclosing, either directly or through their overseas listed entities, documents and materials to securities services providers such as securities companies and accounting firms or overseas regulators in the process of their overseas offering and listing.
For instance, if we fail to accurately declare the value of imported goods due to misclassification, undervaluation or incorrect application of preferential trade agreements, we may be required by the customs authority to fully settle the underpaid duties and pay late payment fees or additional penalties. We are subject to inventory risks.
For instance, if we fail to accurately declare the value of imported goods due to misclassification, undervaluation or incorrect application of preferential trade agreements, we may be required by the customs authority to fully settle the underpaid duties and pay late payment fees or additional penalties. 30 We are subject to inventory risks.
Any future cyber-attacks, data breaches, or security incidents may have a material adverse effect on our business, financial condition, and operating results. Our products and services may experience quality problems from time to time, which could result in decreased sales, adversely affect our results of operations and harm our reputation.
Any future cyber-attacks, data breaches, or security incidents may have a material adverse effect on our business, financial condition, and operating results. 34 Our products and services may experience quality problems from time to time, which could result in decreased sales, adversely affect our results of operations and harm our reputation.
According to these provisions, domestic companies, whether offering and listing securities overseas directly or indirectly, must strictly abide the applicable laws and regulations when providing or publicly disclosing, either directly or through their overseas listed entities, documents and materials to securities services providers such as securities companies and accounting firms or overseas regulators in the process of their overseas offering and listing.
According to these provisions, domestic companies, whether offering and listing securities overseas directly or indirectly, must strictly abide by the applicable laws and regulations when providing or publicly disclosing, either directly or through their overseas listed entities, documents and materials to securities services providers such as securities companies and accounting firms or overseas regulators in the process of their overseas offering and listing.
Our PRC counsel, has advised us that, based on its understanding of the current laws and regulations of mainland China, we will not be required to submit an application to the CSRC for the approval under the M&A Rules for an offering because (i) the CSRC currently has not issued any definitive rule or interpretation concerning whether our offerings are subject to this regulation; and (ii) we did not acquire any equity interests or assets of a “domestic company” as such terms are defined under the M&A Rules. 41 However, our PRC counsel has further advised us that there remains some uncertainty as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering, and its opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules.
Our PRC counsel, has advised us that, based on its understanding of the current laws and regulations of mainland China, we will not be required to submit an application to the CSRC for the approval under the M&A Rules for an offering because (i) the CSRC currently has not issued any definitive rule or interpretation concerning whether our offerings are subject to this regulation; and (ii) we did not acquire any equity interests or assets of a “domestic company” as such terms are defined under the M&A Rules. 40 However, our PRC counsel has further advised us that there remains some uncertainty as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering, and its opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules.
If any disputes arise between any of our executives or key personnel and us, we cannot assure you of the extent to which any of these agreements may be enforced. We rely on highly skilled personnel. If we are unable to retain or motivate them or hire additional qualified personnel, we may not be able to grow effectively.
If any disputes arise between any of our executives or key personnel and us, we cannot assure you of the extent to which any of these agreements may be enforced. 35 We rely on highly skilled personnel. If we are unable to retain or motivate them or hire additional qualified personnel, we may not be able to grow effectively.
Though the failure to register leasehold interests may not void the respective lease agreement, it may expose us to potential warnings and penalties up to RMB10,000 per unregistered leased property. 46 Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
Though the failure to register leasehold interests may not void the respective lease agreement, it may expose us to potential warnings and penalties up to RMB10,000 per unregistered leased property. Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
Business Overview—Regulation—Mainland China—Regulations Related to Internet Information Security and Personal Information Protection.” Pursuant to the Measures for Cybersecurity Review, critical information infrastructure operators that purchase network products and services and data processing operators engaging in data processing activities that affect or may affect national security must be subject to the cybersecurity review.
Business Overview—Regulation—Mainland China—Regulations Related to Internet Information Security and Personal Information Protection.” 24 Pursuant to the Measures for Cybersecurity Review, critical information infrastructure operators that purchase network products and services and data processing operators engaging in data processing activities that affect or may affect national security must be subject to the cybersecurity review.
This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects. Any failure to comply with mainland China’s regulations regarding the registration requirements for employee stock incentive plans may subject the plan participants or us to fines and other legal or administrative sanctions.
This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects. 48 Any failure to comply with mainland China’s regulations regarding the registration requirements for employee stock incentive plans may subject the plan participants or us to fines and other legal or administrative sanctions.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” 13 Risks Related to The ADSs Risks and uncertainties related to our ADSs include, but are not limited to, the following: ● The trading price of the ADSs may be volatile, which could result in substantial losses to you.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” Risks Related to The ADSs Risks and uncertainties related to our ADSs include, but are not limited to, the following: ● The trading price of the ADSs may be volatile, which could result in substantial losses to you.
Our operating performance and ability to attract new users may be adversely affected if we are unable to meet increasing demands for our services in a timely and efficient manner. 14 Negotiations with prospective and existing data traffic suppliers also require substantial time, effort and resources.
Our operating performance and ability to attract new users may be adversely affected if we are unable to meet increasing demands for our services in a timely and efficient manner. Negotiations with prospective and existing data traffic suppliers also require substantial time, effort and resources.
We operate portable Wi-Fi services through multiple channels, including multiple Roamingman e-commerce platforms, online travel agencies, airlines and other travel related companies, sells portable Wi-Fi terminals and GlocalMe Life products on online e-commerce platforms, airport-based technology retailer, as well as on in-flight magazines with support from airlines.
We operate portable Wi-Fi services through multiple channels, including multiple Roamingman e-commerce platforms, online travel agencies, airlines and other travel related companies, sells portable Wi-Fi terminals, GlocalMe Life products and SIM products on online e-commerce platforms, airport-based technology retailer, as well as on in-flight magazines with support from airlines.
Remittance of dividends by a wholly foreign-owned company out of mainland China is subject to examination by the banks designated by SAFE. Some of our mainland China subsidiaries will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds.
Remittance of dividends by a wholly foreign-owned company out of mainland China is subject to examination by the banks designated by SAFE. Our mainland China subsidiaries will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds.
Any of the foregoing could disrupt the distribution and sale of our products and services and harm our business. 35 If we are unable to take advantage of technological developments on a timely basis, we may experience a decline in demand for our products and services or face challenges in implementing or evolving our business strategy.
Any of the foregoing could disrupt the distribution and sale of our products and services and harm our business. If we are unable to take advantage of technological developments on a timely basis, we may experience a decline in demand for our products and services or face challenges in implementing or evolving our business strategy.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” Permissions Required from the PRC Authorities for Our Operations We have conducted our business in mainland China primarily through our subsidiaries and the former VIEs in mainland China.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” 3 Permissions Required from the PRC Authorities for Our Operations We have conducted our business in mainland China primarily through our subsidiaries and the former VIEs in mainland China.
In addition, our subsidiaries and the former VIEs may allocate a portion of their after-tax profits based on mainland China’s accounting standards to discretionary surplus funds at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
In addition, our subsidiaries (including the former VIEs) may allocate a portion of their after-tax profits based on mainland China’s accounting standards to discretionary surplus funds at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
As a result, our business, financial condition and results of operations may be materially and adversely affected. In addition, some of our leasehold interests in leased properties have not been registered with the PRC governmental authorities as required by laws of mainland China.
As a result, our business, financial condition and results of operations may be materially and adversely affected. 45 In addition, some of our leasehold interests in leased properties have not been registered with the PRC governmental authorities as required by laws of mainland China.
The qualification as an high and new technology enterprise is subject to annual evaluation and a three-year review by the PRC governmental authorities. In addition, Shenzhen Ucloudlink Technology Limited and Shenzhen uCloudlink enjoy other tax preferences, including the tax preference as the small and medium-sized technology-based enterprises.
The qualification as a high and new technology enterprise is subject to annual evaluation and a three-year review by the PRC governmental authorities. In addition, Shenzhen Ucloudlink Technology Limited and Shenzhen uCloudlink enjoy other tax preferences, including the tax preference as the small and medium-sized technology-based enterprises.
Controls and Procedures—Management’s Annual Report on Internal Control over Financial Reporting.” 19 However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting, and we cannot conclude that they have been fully remediated.
Controls and Procedures—Management’s Annual Report on Internal Control over Financial Reporting.” However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting, and we cannot conclude that they have been fully remediated.
Impact of Taxation on Dividends uCloudlink is incorporated in the Cayman Islands and conducts businesses in mainland China primarily through its mainland China subsidiaries and the former VIEs. Under the current laws of the Cayman Islands, uCloudlink is not subject to tax on income or capital gains.
Impact of Taxation on Dividends uCloudlink is incorporated in the Cayman Islands and conducts businesses in mainland China primarily through its mainland China subsidiaries (including the former VIEs). Under the current laws of the Cayman Islands, uCloudlink is not subject to tax on income or capital gains.
We may ultimately fail in our negotiations, resulting in costs to our business without any associated benefits. The termination or failure of renewal of our contracts with major suppliers for our data traffic can adversely affect our business and financial results.
We may ultimately fail in our negotiations, resulting in costs to our business without any associated benefits. The termination or failure of renewal of our contracts with major suppliers of our data traffic can adversely affect our business and financial results.
Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations and the enforcement of these laws, regulations and rules involves uncertainties. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general.
Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations and the enforcement of these laws, regulations and rules involves uncertainties. 43 In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general.
For our hardware terminals, such as GlocalMe Wi-Fi terminals, and GlocalMe Life accessories, we must forecast inventory needs and place orders with our contract manufacturers and component suppliers based on our estimates of future demand for particular products.
For our hardware terminals, such as GlocalMe Wi-Fi terminals, GlocalMe Life accessories, and PetPhone, we must forecast inventory needs and place orders with our contract manufacturers and component suppliers based on our estimates of future demand for particular products.
Currently, Shenzhen Ucloudlink Technology Limited and Shenzhen uCloudlink enjoy a preferential enterprise income tax rate of 15% as they are recognized as high and new technology enterprises by PRC governmental authorities. Shenzhen Ucloudlink Technology Limited and Shenzhen uCloudlink renewed the qualification as an high and new technology enterprise in October 2023.
Currently, Shenzhen Ucloudlink Technology Limited and Shenzhen uCloudlink enjoy a preferential enterprise income tax rate of 15% as they are recognized as high and new technology enterprises by PRC governmental authorities. Shenzhen Ucloudlink Technology Limited and Shenzhen uCloudlink renewed the qualification as a high and new technology enterprise in October 2023.
Any such tax may reduce the returns on your investment in the ADSs. 50 We face uncertainty with respect to indirect transfer of equity interests in mainland China resident enterprises by their non-resident holding companies.
Any such tax may reduce the returns on your investment in the ADSs. We face uncertainty with respect to indirect transfer of equity interests in mainland China resident enterprises by their non-resident holding companies.
In particular, we face a number of challenges relating to data from transactions and other activities on our platforms, including: ● protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees; 24 ● addressing concerns related to privacy and sharing, safety, security and other factors; and ● complying with applicable laws, rules and regulations relating to the collection, use, storage, transfer, disclosure and security of personal information, including any requests from regulatory and government authorities relating to these data.
In particular, we face a number of challenges relating to data from transactions and other activities on our platforms, including: ● protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees; 23 ● addressing concerns related to privacy and sharing, safety, security and other factors; and ● complying with applicable laws, rules and regulations relating to the collection, use, storage, transfer, disclosure and security of personal information, including any requests from regulatory and government authorities relating to these data.
We are subject to extensive and complex telecommunications regulations in many jurisdictions, and any change in the regulatory environment may materially impact us. In addition to mainland China, we also operate in many other jurisdictions around the world.
We are subject to extensive and complex telecommunications regulations in various jurisdictions, and any change in the regulatory environment may materially impact us. In addition to mainland China, we also operate in many other jurisdictions around the world.
Any failure to obtain or a delay in obtaining the requisite governmental approval for an offering, or a rescission of such CSRC approval if obtained by us, may subject us to sanctions imposed by the PRC regulatory authority, which could include fines and penalties on our and the former VIEs’ operations in mainland China, restrictions or limitations on our ability to pay dividends outside of mainland China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations.
Any failure to obtain or a delay in obtaining the requisite governmental approval for an offering, or a rescission of such CSRC approval if obtained by us, may subject us to sanctions imposed by the PRC regulatory authority, which could include fines and penalties on our operations in mainland China, restrictions or limitations on our ability to pay dividends outside of mainland China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations.
Developments in alternative connectivity services, improvements in the existing networks or services, or advances in existing or alternative technologies may encroach our market share, or make our technologies obsolete, thereby materially and adversely affecting the demand for our products and services.
Developments in alternative connectivity services, improvements in the existing networks or services, or advances in existing or alternative technologies may encroach on our market share, or make our technologies obsolete, thereby materially and adversely affecting the demand for our products and services.
In light of the various requirements imposed by mainland China’s regulations on loans to and direct investment in entities in mainland China by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals or filings on a timely basis, if at all, with respect to future loans by us to our mainland China subsidiaries or former VIEs or with respect to future capital contributions by us to our mainland China subsidiaries.
In light of the various requirements imposed by mainland China’s regulations on loans to and direct investment in entities in mainland China by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals or filings on a timely basis, if at all, with respect to future loans by us to our mainland China subsidiaries or with respect to future capital contributions by us to our mainland China subsidiaries.
Holders of Class B ordinary shares will continue to control the outcome of a shareholder vote (i) with respect to matters requiring an ordinary resolution which requires the affirmative vote of a simple majority of shareholder votes, to the extent that the Class B ordinary shares represent more than 6.2% of our total issued and outstanding share capital; and (ii) with respect to matters requiring a special resolution which requires the affirmative vote of no less than two-thirds of shareholder votes, to the extent that the Class B ordinary shares represent at least 11.8% of our total issued and outstanding share capital.
Holders of Class B ordinary shares will continue to control the outcome of a shareholder vote (i) with respect to matters requiring an ordinary resolution which requires the affirmative vote of a simple majority of shareholder votes, to the extent that the Class B ordinary shares represent more than 6.3% of our total issued and outstanding share capital; and (ii) with respect to matters requiring a special resolution which requires the affirmative vote of no less than two-thirds of shareholder votes, to the extent that the Class B ordinary shares represent at least 11.8% of our total issued and outstanding share capital.
We understand our business is significantly different from mobile telecommunication resale service in mainland China, including, (i) we only use our own brands to provide terminals and technology to our users, but not to resale mobile telecommunication services, and we emphasize in our users’ agreement that we only provide mobile data connectivity services, while all the data traffic are produced and provided by MNOs or MVNOs; (ii) we enable end-users to gain access to mobile data traffic without physical SIM cards by our services, but end-users do not gain access to any other mobile telecommunication services, for example, among others, voice services, short messages, through our services; (iii) MVNOs usually provide physical SIM cards with a specific phone number to users, through which users are able to get access to data traffic and voice services.
We believe our business is significantly different from mobile telecommunication resale service in mainland China, for reasons including that (i) we only use our own brands to provide terminals and technology to our users, but not to resale mobile telecommunication services, and we emphasize in our users’ agreement that we only provide mobile data connectivity services, while all the data traffic are produced and provided by MNOs or MVNOs; (ii) we enable end-users to gain access to mobile data traffic without physical SIM cards by our services, but end-users do not gain access to any other mobile telecommunication services, for example, among others, voice services, short messages, through our services; (iii) MVNOs usually provide physical SIM cards with a specific phone number to users, through which users are able to get access to data traffic and voice services.
The maximum potential penalty we may be subject to is RMB100,000 for our failure to register a service store or pick-up point as a branch company if the government authorities determine that such branch company registrations are required. 52 Risks Related to The ADSs The trading price of the ADSs may be volatile, which could result in substantial losses to you.
The maximum potential penalty we may be subject to is RMB100,000 for our failure to register a service store or pick-up point as a branch company if the government authorities determine that such branch company registrations are required. 51 Risks Related to The ADSs The trading price of the ADSs may be volatile, which could result in substantial losses to you.
In addition, any loans provided by us to our mainland China subsidiaries and the former VIEs are subject to mainland China’s regulations and foreign exchange loan registrations.
In addition, any loans provided by us to our mainland China subsidiaries (including the former VIEs) are subject to mainland China’s regulations and foreign exchange loan registrations.
Certain judgments obtained against us by our shareholders may not be enforceable. We are an exempted company incorporated under the laws of the Cayman Islands. A majority of our assets are located in mainland China and Hong Kong. All of our directors and executive officers are nationals or residents of jurisdictions other than the United States.
Certain judgments obtained against us by our shareholders may not be enforceable. We are an exempted company incorporated under the laws of the Cayman Islands. A majority of our assets are located in mainland China and Hong Kong. Most of our directors and executive officers are nationals or residents of jurisdictions other than the United States.
Failure to comply with these laws and regulations would result in claims, penalties, damages to our reputation and brand, or otherwise harm our business.” ● We are subject to extensive and complex telecommunications regulations in many jurisdictions, and any change in the regulatory environment may materially impact us. See “Item 3. Key Information—D.
Failure to comply with these laws and regulations would result in claims, penalties, damages to our reputation and brand, or otherwise harm our business.” ● We are subject to extensive and complex telecommunications regulations in various jurisdictions, and any change in the regulatory environment may materially impact us. See “Item 3. Key Information—D.
Risk Factors—Risks Related to Doing Business in China—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.” and “Item 3. Key Information—D.
Risk Factors—Risks Related to Doing Business in China—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections” and “Item 3. Key Information—D.
In addition to the usage limitation set forth in the purchase agreements, laws and regulations of mainland China also have other restrictions, and further require the MVOs and MVNOs to oversee and regulate the usage of M2M Data SIM Cards, including but not limited to prohibition of reselling M2M Data SIM Cards or using M2M Data SIM Cards for non-industry uses.
In addition to the usage limitation set forth in the purchase agreements, laws and regulations of mainland China also prescribe other restrictions, and further require MVOs and MVNOs to oversee and regulate the usage of M2M Data SIM Cards, including but not limited to prohibition of reselling M2M Data SIM Cards or using M2M Data SIM Cards for non-industry uses.
In addition, we may not prevail in litigations to enforce our intellectual property rights against unauthorized use. 23 We may be subject to intellectual property claims from time to time, which are costly to defend, could result in significant damage awards, disrupt our business operation, and could limit our ability to use certain technologies in the future.
In addition, we may not prevail in litigations to enforce our intellectual property rights against unauthorized use. 22 We may be subject to intellectual property claims from time to time, which are costly to defend, could result in significant damage awards, disrupt our business operation, and could limit our ability to use certain technologies in the future.
As a result, our shares and/or ADSs may decline in value or become worthless. 40 Risks Related to Doing Business in China Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations. Certain portion of our operations are located in China.
As a result, our shares and/or ADSs may decline in value or become worthless. 39 Risks Related to Doing Business in China Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations. Certain portion of our operations are located in China.
Substantial uncertainties still exist with respect to the interpretation and implementation of such provisions and how they will affect us. 42 On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises, which became effective on March 31, 2023.
Substantial uncertainties still exist with respect to the interpretation and implementation of such provisions and how they will affect us. 41 On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises, which became effective on March 31, 2023.
As part of our growth strategy, we enter into new markets, such as mobile data connectivity services for local users, develop new businesses, find new applications for our technologies, such as GlocalMe Life accessories and Internet-of-Things modules, which we refer to as IoT modules, and explore new monetization opportunities, such as payment services.
As part of our growth strategy, we enter into new markets, such as mobile data connectivity services for local users, develop new businesses, find new applications for our technologies, such as GlocalMe Life accessories (including PetPhone ) and Internet-of-Things modules, which we refer to as IoT modules, and explore new monetization opportunities, such as payment services.
As we continue to expand internationally, we could reduce the degree to which we are subject to seasonality in specific markets. 38 Any inability to renew our leases on favorable terms could negatively impact our financial results. We lease office space, warehouses, server rooms, data centers and counters.
As we continue to expand internationally, we could reduce the degree to which we are subject to seasonality in specific markets. 37 Any inability to renew our leases on favorable terms could negatively impact our financial results. We lease office space, warehouses, server rooms, data centers and counters.
Under the laws of mainland China, each of our subsidiaries and the former VIEs in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital.
Under the laws of mainland China, each of our subsidiaries (including the former VIEs) in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital.
A licensee is responsible for fulfilling the obligations under the Telecommunications (Registration of SIM Cards) Regulation. Certain types of SIM cards are excluded from the registration requirements. In March 2022, we launched our real name registration platform after liaising with Hong Kong Office of the Communications Authority.
A licensee is responsible for fulfilling the obligations under the Telecommunications (Registration of SIM Cards) Regulation. Certain types of SIM cards are excluded from the registration requirements. In March 2022, we launched our real name registration platform after liaising with Hong Kong Office of the Communications Authority. We comply with the Real-name Registration Program for SIM Cards in Hong Kong.
For these reasons, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2023 and do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2024.
For these reasons, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2024 and do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2025.
For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2023 and do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2024.
For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2024 and do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2025.
In addition, each of our mainland China subsidiaries and the former VIEs is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital.
In addition, each of our mainland China subsidiaries (including the former VIEs) is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital.
Risk Factors—Risks Related to Our Business and Industry—Our and the former VIEs’ business is subject to complex and evolving Chinese and international laws and regulations regarding data privacy and cybersecurity. The improper use or disclosure of data could have a material and adverse effect on our business and prospects.
Risk Factors—Risks Related to Our Business and Industry—Our business is subject to complex and evolving Chinese and international laws and regulations regarding data privacy and cybersecurity. The improper use or disclosure of data could have a material and adverse effect on our business and prospects.
Risk Factors—Risks Related to Our Business and Industry—We are subject to extensive and complex telecommunications regulations in many jurisdictions, and any change in the regulatory environment may materially impact us.” ● In connection with the audits of our consolidated financial statements included in this annual report, we and our independent registered public accounting firm identified two material weaknesses in our internal control over financial reporting.
Risk Factors—Risks Related to Our Business and Industry—We are subject to extensive and complex telecommunications regulations in various jurisdictions, and any change in the regulatory environment may materially impact us.” 8 ● In connection with the audits of our consolidated financial statements included in this annual report, we and our independent registered public accounting firm identified two material weaknesses in our internal control over financial reporting.
Any loan to be provided by us to our mainland China subsidiaries and the former VIEs with a term of one year or more must be recorded and registered with the NDRC. See “Item 4. Information on the Company—B.
Any loan to be provided by us to our mainland China subsidiaries with a term of one year or more must be recorded and registered with the NDRC. See “Item 4. Information on the Company—B.
In addition, our business may be adversely affected if certain mobile network operators restrict the data usage of SIM cards, for example, by changing infinite data packages to limited data packages, which may reduce the data available to users.
In addition, our business may be adversely affected if certain mobile network operators restrict the data usage of SIM cards, for example, by changing unlimited data packages to limited data packages, which may reduce the data available to users.
Our and the former VIEs’ business is subject to complex and evolving Chinese and international laws and regulations regarding data privacy and cybersecurity. The improper use or disclosure of data could have a material and adverse effect on our business and prospects.
Our business is subject to complex and evolving Chinese and international laws and regulations regarding data privacy and cybersecurity. The improper use or disclosure of data could have a material and adverse effect on our business and prospects.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeThough the implementation rules of the Enterprise Income Tax Law define “de facto management bodies” as “establishments that carry out substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc., of an enterprise,” the only detailed guidance currently available for the definition of “de facto management body” as well as the determination and administration of tax residency status of offshore incorporated enterprises are set forth in the Notice Regarding the Determination of Chinese-Controlled Overseas Incorporated Enterprises as Mainland China Tax Resident Enterprises on the Basis of De Facto Management Bodies, or Circular 82, promulgated by the State Administration of Taxation in April 2009 and amended on December 29, 2017, and the Administrative Measures for Enterprise Income Tax of Chinese-Controlled Overseas Incorporated Resident Enterprises (Trial Version) issued by the State Administration of Taxation in July 2011 and was last amended on June 15, 2018, or Circular 45, which provide guidance on the administration as well as the determination of the tax residency status of a Chinese-controlled offshore incorporated enterprise, defined as an enterprise that is incorporated under the law of a foreign country or territory and that has a mainland China company or mainland China corporate group as its primary controlling shareholder.
Biggest changeThough the implementation rules of the Enterprise Income Tax Law define “de facto management bodies” as “establishments that carry out substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc., of an enterprise,” the only detailed guidance currently available for the definition of “de facto management body” as well as the determination and administration of tax residency status of offshore incorporated enterprises are set forth in the Notice Regarding the Determination of Chinese-Controlled Overseas Incorporated Enterprises as Mainland China Tax Resident Enterprises on the Basis of De Facto Management Bodies, or Circular 82, promulgated by the State Administration of Taxation in April 2009 and amended on December 29, 2017, and the Administrative Measures for Enterprise Income Tax of Chinese-Controlled Overseas Incorporated Resident Enterprises (Trial Version) issued by the State Administration of Taxation in July 2011 and was last amended on June 15, 2018, or Circular 45, which provide guidance on the administration as well as the determination of the tax residency status of a Chinese-controlled offshore incorporated enterprise, defined as an enterprise that is incorporated under the law of a foreign country or territory and that has a mainland China company or mainland China corporate group as its primary controlling shareholder. 91 According to Circular 82, a mainland China-controlled offshore-incorporated enterprise will be regarded as a mainland China resident enterprise by virtue of having its “de facto management body” in mainland China and will be subject to mainland China’s enterprise income tax on its global income only if all of the following conditions are met: ● the primary location of the day-to-day operational management and the places where they perform their duties are in mainland China; ● decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval of organizations or personnel in mainland China; ● the enterprise’s primary assets, accounting books and records, company seals and board and shareholder resolutions are located or maintained in mainland China; and ● 50% or more of voting board members or senior executives habitually reside in mainland China.
We also promote our Roamingman brand with embedded advertisement in movies to reach broader consumer market. For GlocalMe portable Wi-Fi terminals, we publish advertisement on in-flight magazines with support from airlines.
We also promote our Roamingman brand with advertisement embedded in movies to reach broader consumer market. For GlocalMe portable Wi-Fi terminals, we publish advertisement on in-flight magazines with support from airlines.
If a license holder fails to comply with the requirements in the this circular and cure such non-compliance, the Ministry of Information Industry or its local counterparts have the discretion to take measures against such license holders, including revoking their licenses for value-added telecommunications services. Shenzhen uCloudlink Network Technology Co.
If a license holder fails to comply with the requirements in this circular and cure such non-compliance, the Ministry of Information Industry or its local counterparts have the discretion to take measures against such license holders, including revoking their licenses for value-added telecommunications services. Shenzhen uCloudlink Network Technology Co.
Risk Factors—Risks Related to Doing Business in China—The M&A Rules and certain other mainland China’s regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in mainland China.” 92 Regulations on Anti-Monopoly The Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress on August 30, 2007, which was last amended on June 24, 2022 and became effective on August 1, 2022, and the Provisions on the Review of Concentrations of Undertakings promulgated by the State Administration for Market Regulation on March 10, 2023, which became effective on April 15, 2023, require that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the State Administration for Market Regulation before they can be completed.
Risk Factors—Risks Related to Doing Business in China—The M&A Rules and certain other mainland China’s regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in mainland China.” Regulations on Anti-Monopoly The Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress on August 30, 2007, which was last amended on June 24, 2022 and became effective on August 1, 2022, and the Provisions on the Review of Concentrations of Undertakings promulgated by the State Administration for Market Regulation on March 10, 2023, which became effective on April 15, 2023, require that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the State Administration for Market Regulation before they can be completed.
There are several classes of Services-Based Operator services. ● A “Class 1 service” is an internal telecommunications service (a) for carrying real-time voice communications which may be integrated with other types of communications; (b) which is capable of allowing customers to make and receive calls to and from parties assigned with numbers from the numbering plan of Hong Kong; (c) to which customers are assigned with numbers from the numbering plan of Hong Kong; and (d) which is not a “Class 2 service.” ● A “Class 2 service” is an internal telecommunications service:- (a) for carrying real-time voice communications which may be integrated with other types of communications; (b) which is capable of allowing customers to make and receive calls to and from parties assigned with numbers from the numbering plan of Hong Kong; and (c) where the customers are assigned with numbers from the numbering plan of Hong Kong, in the provision of service – (i) the licensee (and where appropriate its agents, contractors and resellers) in all promotion, marketing or advertising materials concerning such service declares the service as a “Class 2 service”; or (ii) the licensee, in lieu of (i), complies with such conditions as may be specified by the Communications Authority in a direction that may be issued by the Communications Authority. ● A “Class 3 service” is a non-facility based public telecommunications service.
There are several classes of Services-Based Operator services. ● A “Class 1 service” is an internal telecommunications service (a) for carrying real-time voice communications which may be integrated with other types of communications; (b) which is capable of allowing customers to make and receive calls to and from parties assigned with numbers from the numbering plan of Hong Kong; (c) to which customers are assigned with numbers from the numbering plan of Hong Kong; and (d) which is not a “Class 2 service.” ● A “Class 2 service” is an internal telecommunications service:- (a) for carrying real-time voice communications which may be integrated with other types of communications; 96 (b) which is capable of allowing customers to make and receive calls to and from parties assigned with numbers from the numbering plan of Hong Kong; and (c) where the customers are assigned with numbers from the numbering plan of Hong Kong, in the provision of service – (i) the licensee (and where appropriate its agents, contractors and resellers) in all promotion, marketing or advertising materials concerning such service declares the service as a “Class 2 service”; or (ii) the licensee, in lieu of (i), complies with such conditions as may be specified by the Communications Authority in a direction that may be issued by the Communications Authority. ● A “Class 3 service” is a non-facility based public telecommunications service.
Business Overview—Data Privacy and Security.” Ninth Amendment to the Criminal Law of the PRC Pursuant to the Ninth Amendment to the Criminal Law issued by the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any network service provider that fails to fulfill the obligations related to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (1) any large-scale dissemination of illegal information; (2) any severe effect due to the leakage of users’ personal information; (3) any serious loss of evidence of criminal activities; or (4) other severe situations, and any individual or entity that (1) sells or provides personal information to others unlawfully or (2) illegally obtains any personal information will be subject to criminal liability in severe situations.
Business Overview—Data Privacy and Security.” 87 Ninth Amendment to the Criminal Law of the PRC Pursuant to the Ninth Amendment to the Criminal Law issued by the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any network service provider that fails to fulfill the obligations related to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (1) any large-scale dissemination of illegal information; (2) any severe effect due to the leakage of users’ personal information; (3) any serious loss of evidence of criminal activities; or (4) other severe situations, and any individual or entity that (1) sells or provides personal information to others unlawfully or (2) illegally obtains any personal information will be subject to criminal liability in severe situations.
The main hardware terminals we offer include portable Wi-Fi terminals, smartphones and smart-hardware products for international and local mobile data connectivity services. We also provide business solutions using multiple types of terminals to enterprise customers, as well as other value-added services to our business partners. 67 Our cloud SIM platform readily supports traffic from 5G networks.
The main hardware terminals we offer include portable Wi-Fi terminals, smartphones and smart-hardware products for international and local mobile data connectivity services. We also provide business solutions using multiple types of terminals to enterprise customers, as well as other value-added services to our business partners. Our cloud SIM platform readily supports traffic from 5G networks.
We offer customer support powered by AI-driven PaaS/SaaS solution for global users in Chinese, English, Japanese and Cantonese. Users may contact customer support directly from GlocalMe Connect app anytime to report issues and voluntarily provide feedback on our products and services, which help us improve our current business or develop and launch new services.
We offer customer support powered by AI-driven PaaS/SaaS solution for global users in Chinese, English, and Japanese. Users may contact customer support directly from GlocalMe Connect app anytime to report issues and voluntarily provide feedback on our products and services, which help us improve our current business or develop and launch new services.
We are developing additional customization features so that users may personalize and purchase data plans based on their needs. Such flexibility will enable more reasonable cost for users and increase our network operation efficiency. 72 Manufacturing and Supply of Components To produce our hardware terminals that incorporate our mobile data connectivity services, we rely on our manufacturing partners.
We are developing additional customization features so that users may personalize and purchase data plans based on their needs. Such flexibility will enable more reasonable cost for users and increase our network operation efficiency. Manufacturing and Supply of Components To produce our hardware terminals that incorporate our mobile data connectivity services, we rely on our manufacturing partners.
All parties agreed to terminate the business operation agreement, equity interest pledge agreement, exclusive technology consulting and services agreement, and option agreement that are dated on July 10, 2019, once the termination agreement comes into effect. 98 We believe that the Restructuring did not affect our uCloudlink 1.0 international data connectivity services in mainland China.
All parties agreed to terminate the business operation agreement, equity interest pledge agreement, exclusive technology consulting and services agreement, and option agreement that are dated on July 10, 2019, once the termination agreement comes into effect. We believe that the Restructuring did not affect our uCloudlink 1.0 international data connectivity services in mainland China.
To provide data handling services which involve operation of telecommunications business, data handlers in the field of industry and information technology shall obtain a telecommunications business permit in accordance with the provisions of relevant laws and administrative regulations. On September 24, 2024, the State Council published the Regulations on Network Data Security Administration, which became effective on January 1, 2025.
To provide data handling services which involve operation of telecommunications business, data handlers in the field of industry and information technology shall obtain a telecommunications business permit in accordance with the provisions of relevant laws and administrative regulations. 84 On September 24, 2024, the State Council published the Regulations on Network Data Security Administration, which became effective on January 1, 2025.
Organizational Structure The chart below summarizes our corporate structure and identifies our principal subsidiaries as of the date of this annual report: Note: (1) Through contractual arrangements, one of our employees holds the equity interest in the entity on behalf of us, and we have consolidated its financial results in our consolidated financial statements in accordance with U.S. GAAP.
Organizational Structure The chart below summarizes our corporate structure and identifies our principal subsidiaries as of the date of this annual report: Note: (1) Through contractual arrangements, one of our employees holds the equity interest in the entity on behalf of us, and we have consolidated its financial results in our consolidated financial statements in accordance with U.S.
Business partners may access to a dashboard through ucloudlink.com . Our distributed SIM card pool includes distributed SIM banks that may be operated by our business partners locally to maintain and manage their SIM cards, which will be dispatched through our cloud SIM platform. Our business partners include MNOs, MVNOs, portable Wi-Fi rental companies, and smartphone and smart-hardware companies.
Business partners may access to a dashboard through ucloudlink.com . 72 Our distributed SIM card pool includes distributed SIM banks that may be operated by our business partners locally to maintain and manage their SIM cards, which will be dispatched through our cloud SIM platform. Our business partners include MNOs, MVNOs, portable Wi-Fi rental companies, and smartphone and smart-hardware companies.
The price of the daily service fee depends on the countries and regions the users plan to visit. 68 Direct Sales We also directly sell our GlocalMe Wi-Fi terminals to enterprise and retail customers through online and offline channels in multiple countries and regions, such as China, Japan, Europe and the United States.
The price of the daily service fee depends on the countries and regions the users plan to visit. Direct Sales We also directly sell our GlocalMe Wi-Fi terminals to enterprise and retail customers through online and offline channels in multiple countries and regions, such as China, Japan, Europe and the United States.
Therefore, we initiated the Restructuring to adjust our local business in mainland China and unwind the aforementioned contractual arrangements so that the former VIEs become wholly-owned subsidiaries of Shenzhen Ucloudlink Technology Limited. In 2022, the equity of the former VIEs was transferred to Shenzhen Ucloudlink Technology Limited, and the original VIE agreements were terminated.
Therefore, we initiated the Restructuring to adjust our local business in mainland China and unwind the aforementioned contractual arrangements so that the former VIEs would become wholly-owned subsidiaries of Shenzhen Ucloudlink Technology Limited. In 2022, the equity of the former VIEs was transferred to Shenzhen Ucloudlink Technology Limited, and the original VIE agreements were terminated.
Local SIM banks can also host a large number of data SIM cards, which can be physical SIM cards or e-SIM, and may be managed by our business partners directly. For example, a MNO or MVNO from whom we procure data may operate a local SIM bank and manage the data plans and SIM cards more efficiently.
Local SIM banks can also host a large number of data SIM cards, which can be physical SIM cards or e-SIM, and may be managed by our business partners directly. For example, an MNO or MVNO from whom we procure data may operate a local SIM bank and manage the data plans and SIM cards more efficiently.
Further, in the case of other loss or damage, a person cannot so exclude or restrict his/her/its liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness with regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made. 95 Laws and Regulations Related to Privacy Protection The Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong), covers any data that relates directly or indirectly to a living individual, from which it is practicable for the identity of the individual to be directly or indirectly ascertained, and exists in a form in which access or processing of the data is practicable.
Further, in the case of other loss or damage, a person cannot so exclude or restrict his/her/its liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness with regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made. 98 Laws and Regulations Related to Privacy Protection The Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong), covers any data that relates directly or indirectly to a living individual, from which it is practicable for the identity of the individual to be directly or indirectly ascertained, and exists in a form in which access or processing of the data is practicable.
Under the current tax regime, starting from the year of assessment 2018/2019 onwards the following two-tiered rates of profits tax shall apply: 8.25% on assessable profits up to HK$2.0 million; and 16.5% on any part of assessable profits over HK$2.0 million. C.
Under the current tax regime, starting from the year of assessment 2018/2019 onwards the following two-tiered rates of profits tax shall apply: 8.25% on assessable profits up to HK$2.0 million; and 16.5% on any part of assessable profits over HK$2.0 million. 99 C.
Our business partners can also management their business via our PaaS and SaaS platform to provide better AI-driven PaaS/SaaS solutions to their end-users, including connectivity management, terminal management, terminal rental and sales, customer service systems (CRM), and big data analysis. 66 Big Data and Advanced Algorithms .
Our business partners can also management their business via our PaaS and SaaS platform to provide better AI-driven PaaS/SaaS solutions to their end-users, including connectivity management, terminal management, terminal rental and sales, customer service systems (CRM), and big data analysis. Big Data and Advanced Algorithms .
We also believe providing direct contact with our business partners is an effective way to demonstrate the advantages of our products and providing a high-quality sales and after-sales support experience is critical to attracting new and retaining existing business partners.
We also believe maintaining direct contact with our business partners is an effective way to demonstrate the advantages of our products and providing a high-quality sales and after-sales support experience is critical to attracting new and retaining existing business partners.
The liberalized sectors cover Internet data centers (IDC), content distribution networks (CDN), Internet access services (ISP), online data processing and transaction processing, information release platforms and delivery services (excluding Internet news information, online publishing, online audio-visual services, and Internet-based cultural businesses) within information services, and information protection and processing services. 79 Regulations Related to Mobile Data Traffic Service Mobile Telecommunication Business Resale Measures on Further Encouraging and Channeling Private Capital into Telecommunications Industry, promulgated and effective on June 27, 2012, lay down the legal landscape for the MVNOs.
The liberalized sectors cover Internet data centers (IDC), content distribution networks (CDN), Internet access services (ISP), online data processing and transaction processing, information release platforms and delivery services (excluding Internet news information, online publishing, online audio-visual services, and Internet-based cultural businesses) within information services, and information protection and processing services. 81 Regulations Related to Mobile Data Traffic Service Mobile Telecommunication Business Resale Measures on Further Encouraging and Channeling Private Capital into Telecommunications Industry, promulgated and effective on June 27, 2012, lay down the legal landscape for the MVNOs.
In addition, we conduct our business through the following entities: primarily for marketing and sales: ● UCLOUDLINK (UK) CO. LTD in the UK in October 2014; ● Ucloudlink (America), Ltd. in the United States in August 2016; ● UCLOUDLINK (SINGAPORE) PTE. LTD. in Singapore in May 2017; ● UCLOUDLINK SDN.
In addition, we conduct our business through the following entities: primarily for marketing and sales: ● UCLOUDLINK (UK) CO. LTD in the UK in October 2014; ● Ucloudlink (America), Ltd. in the United States in August 2016; ● UCLOUDLINK (SINGAPORE) PTE. LTD. in Singapore in May 2017; 60 ● UCLOUDLINK SDN.
Our business partners can also manage their business via our PaaS and SaaS to provide better services to their end-users, including connectivity management, terminal management, terminal rental and sales, customer service systems (CRM), and big data analysis. ● Stage 3 - PaaS/SaaS Platform based connectivity ecosystem : With extensive experience at serving our business partners across the globe, our core cloud SIM technology, hyper-connectivity technology and architecture became more mature and comprehensive, and we are able to open up our proprietary platform and software to our business partners to support their operations.
Our business partners can also manage their business via our PaaS and SaaS to provide better services to their end-users, including connectivity management, terminal management, terminal rental and sales, customer service systems (CRM), and big data analysis. ● Stage 3 - PaaS/SaaS Platform based connectivity ecosystem : With extensive experience in serving our business partners across the globe, our core cloud SIM technology, hyper-connectivity technology and architecture became more mature and comprehensive, and we are able to open up our proprietary platform and software to our business partners to support their operations.
Risk Factors—Risks Related to Our Business and Industry—We depend on network operators for their wireless networks, infrastructures and data traffic, and any disruptions of or limitations on our use of such networks, infrastructures and data traffic may adversely affect our business and financial results.” As we have aggregated mobile data traffic allowances from 391 MNOs, we possess bargaining power during the negotiation due to competition among MNOs and sometimes offer bidding process to purchase data with better price and terms.
Risk Factors—Risks Related to Our Business and Industry—We depend on network operators for their wireless networks, infrastructures and data traffic, and any disruptions of or limitations on our use of such networks, infrastructures and data traffic may adversely affect our business and financial results.” As we have aggregated mobile data traffic allowances from 398 MNOs, we possess bargaining power during the negotiation due to competition among MNOs and sometimes offer bidding process to purchase data with better price and terms.
We also generate revenue when users purchase additional data package through our products. Users may purchase our terminals on online e-commerce platforms such as Amazon, TikTok, JD and T-mall.
We also generate revenue when users purchase additional data package through our products. Users may purchase our terminals on online e-commerce platforms such as Amazon, Chewy, TikTok, JD and T-mall.
In October 2023, we piloted our eSIM solution to adapt to the growing trend of eSIM development. Our solution accommodates a wide range of mobile devices, including those that do not natively support eSIM.
In 2023, we piloted our eSIM solution to adapt to the growing trend of eSIM development. Our solution accommodates a wide range of mobile devices, including those that do not natively support eSIM.
If an internet information service provider violates these measures, the Ministry of Public Security and the local security bureaus may revoke its operating license and shut down its websites. 81 (ii) Decision on Strengthening Network Information Protection PRC government authorities have enacted laws and regulations on internet use to protect personal information from any unauthorized disclosure.
If an internet information service provider violates these measures, the Ministry of Public Security and the local security bureaus may revoke its operating license and shut down its websites. 83 (ii) Decision on Strengthening Network Information Protection PRC government authorities have enacted laws and regulations on internet use to protect personal information from any unauthorized disclosure.
Users may purchase local data packages and international data packages and manage their terminals through our GlocalMe apps. Supported by our broad network coverage and powerful cloud SIM platform, we have introduced a range of compatible terminals, including portable Wi-Fi terminals, GlocalMe Inside embedded smartphones and other smart-hardware products such as IoT terminals.
Users may purchase local data packages and international data packages and manage their terminals through our GlocalMe apps. Supported by our broad network coverage and powerful cloud SIM platform, we have introduced a range of compatible terminals, including portable Wi-Fi terminals, GlocalMe Life products, PetPhone , GlocalMe Inside embedded smartphones and other smart-hardware products such as IoT terminals.
Since 2021, in order to elevate our local service brand GlocalMe , we have enhanced our e-commerce exposure in key markets such as the United States, Europe and Southeast Asia, optimized our websites and streamlined our sales team. Cooperation with Business Partners We have collaborated with business partners to provide access to our portable Wi-Fi solutions in other countries.
In order to elevate our local service brand GlocalMe , we have enhanced our e-commerce exposure in key markets such as the United States, Europe and Southeast Asia, optimized our websites and streamlined our sales team. Cooperation with Business Partners We have collaborated with business partners to provide access to our portable Wi-Fi solutions in other countries.
The regulations require that foreign-invested value-added telecommunications enterprises in mainland China to be established as Sino-foreign equity joint ventures and the foreign investors may acquire up to 50% of the equity interests in such joint ventures. In addition, the major foreign investor, as defined therein, is required to demonstrate a good track record and experience in operating value-added telecommunications businesses.
The regulations require that foreign-invested VATEs in mainland China to be established as Sino-foreign equity joint ventures and the foreign investors may acquire up to 50% of the equity interests in such joint ventures. In addition, the major foreign investor, as defined therein, is required to demonstrate a good track record and experience in operating value-added telecommunications businesses.
We believe that we are strategically positioned in global mobile data connectivity services industry and we compete with others based on the following factors: (1) strong relationships with business partners around the globe to expand our product penetration; (2) advanced cloud SIM technology, hyper-connectivity technology and architecture that deliver high quality mobile data connectivity experience to end users; (3) innovative GlocalMe Inside solutions that bring new opportunities to the hardware terminal value chain; and (4) experience and track record of success in the telecommunications business.
We believe that we are strategically positioned in global mobile data connectivity services industry and we compete with others based on the following factors: (1) strong relationships with business partners around the globe to expand our product penetration; (2) advanced cloud SIM technology, hyper-connectivity technology, pioneer positioning technologies and architecture that deliver high quality mobile data connectivity experience to end users; (3) innovative GlocalMe Inside solutions that bring new opportunities to the hardware terminal value chain; and (4) experience and track record of success in the telecommunications business.
By giving users access to our distributed SIM card pool, we free users from this exclusivity, and give them the freedom to access the mobile networks of other MNOs without physically changing SIM cards wherever they are in the world as long as it is one of the 163 countries and regions we cover.
By giving users access to our distributed SIM card pool, we free users from this exclusivity, and give them the freedom to access the mobile networks of other MNOs without physically changing SIM cards wherever they are in the world as long as it is one of the 167 countries and regions we cover.
Under uCloudlink 1.0 model, most of the smart terminals are portable Wi-Fi terminals for international roaming purposes. Under uCloudlink 2.0 model, most terminals are smartphones with GlocalMe Inside implementation, through which users can enjoy both local and international mobile data connectivity services. See “—Our Products and Services.” GlocalMe Connect and Other Apps .
Under uCloudlink 1.0 model, most of the smart terminals are portable Wi-Fi terminals for international roaming purposes. Under uCloudlink 2.0 model, most terminals are smartphones with GlocalMe Inside implementation, through which users can enjoy both local and international mobile data connectivity services. See “—Our Products and Services.” GlocalMe IoT and Other Apps .
While we create unique values to and collaborate with MNOs and MVNOs, who are important participants on our mobile data traffic sharing marketplace.
We create unique values to and collaborate with MNOs and MVNOs, who are important participants on our mobile data traffic sharing marketplace.
As of December 31, 2024, our technology team had a total of approximately 160 engineers, primarily focusing on the development of cloud SIM technology and our architecture, firmware and software development, big data analysis and hardware development. Data Privacy and Security We are committed to protecting information security of all users and business partners within our cloud SIM architecture.
As of December 31, 2025, our technology team had a total of approximately 160 engineers, primarily focusing on the development of cloud SIM technology and our architecture, firmware and software development, big data analysis and hardware development. Data Privacy and Security We are committed to protecting information security of all users and business partners within our cloud SIM architecture.
On January 11, 2017, the People’s Bank of China promulgated the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing, or Notice No. 9. Pursuant to Notice No. 9, foreign-invested enterprises might adopt the currently valid foreign debt management mechanism, or the mechanism as provided in the notice at their own discretions.
On January 12, 2017, the People’s Bank of China promulgated the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing, or Notice No. 9. Pursuant to Notice No. 9, foreign-invested enterprises might adopt the currently valid foreign debt management mechanism, or the mechanism as provided in the notice at their own discretions.
We are cooperating with business partners in various aspects of IoT applications. 69 We unveiled the CloudSIM Kit all-in-one IoT solution in March 2025. Our CloudSIM Kit is a plug-and-play IoT solution designed to deliver instant global full-speed 4G and 5G connectivity for IoT and smart devices.
We are cooperating with business partners in various aspects of IoT applications. We unveiled the CloudSIM Kit all-in-one IoT solution in 2025. Our CloudSIM Kit is a plug-and-play IoT solution designed to deliver instant global full-speed 4G and 5G connectivity for IoT and smart devices.
We operate our own distributed SIM banks to host a large number of local data SIM cards, which altogether enable us to provide global mobile data connectivity services in 163 countries and regions, including those countries traditionally renowned for high roaming cost.
We operate our own distributed SIM banks to host a large number of local data SIM cards, which altogether enable us to provide global mobile data connectivity services in 167 countries and regions, including those countries traditionally renowned for high roaming cost.
We plan to launch a wide range of lifestyle accessories empowered by our cloud SIM technology, and also collaborate with third-party manufacturers to support their smart devices with our connectivity capabilities. We unveiled PetPhone in March 2025, an addition to our digital ecosystem.
We plan to launch a wide range of lifestyle accessories empowered by our cloud SIM technology, and also collaborate with third-party manufacturers to support their smart devices with our connectivity capabilities. PetPhone Business We unveiled PetPhone in 2025, an addition to our digital ecosystem.
This has created great opportunities for our uCloudlink 2.0 model, which can scan for multiple mobile networks and provide better coverage, better speed and better connectivity service quality for users. 63 We have expanded the business scope of our local data connectivity service.
This has created great opportunities for our uCloudlink 2.0 model, which can scan for multiple mobile networks and provide better coverage, better speed and better connectivity service quality for users. 64 We have expanded the business scope of our local data connectivity service.
Risk Factors—Risks Related to Our Business and Industry—Our and the former VIEs’ business is subject to complex and evolving Chinese and international laws and regulations regarding data privacy and cybersecurity. The improper use or disclosure of data could have a material and adverse effect on our business and prospects.
Risk Factors—Risks Related to Our Business and Industry—Our business is subject to complex and evolving Chinese and international laws and regulations regarding data privacy and cybersecurity. The improper use or disclosure of data could have a material and adverse effect on our business and prospects.
Currently, our competitive high-speed 5G roaming solutions can not only offer extensive 5G coverage that covers 80 countries and regions, but also enhance user experience, which further expands our user base and enhances our leading position in the roaming market.
Currently, our competitive high-speed 5G roaming solutions can not only offer extensive 5G coverage that covers 90 countries and regions, but also enhance user experience, which further expands our user base and enhances our leading position in the roaming market.
Such specialization enables us and our business partners to operate more efficiently. 64 We are gradually becoming more platform-centric and elevating our data connectivity services via upgrading our PaaS/SaaS Platform during stage 1, stage 2 and stage 3 going forward.
Such specialization enables us and our business partners to operate more efficiently. 65 We are gradually becoming more platform-centric and elevating our data connectivity services via upgrading our PaaS/SaaS Platform during stage 1, stage 2 and stage 3 going forward.
Empowered by our cloud SIM architecture, our portable Wi-Fi terminals provide high-speed network connections in 163 countries and regions without the need to physically change SIM cards, supporting simultaneous connections for up to 15 devices.
Empowered by our cloud SIM architecture, our portable Wi-Fi terminals provide high-speed network connections in 167 countries and regions without the need to physically change SIM cards, supporting simultaneous connections for up to 15 devices.
Our contractual arrangements with the former VIEs and their shareholders allow us to (i) exercise effective control over the former VIEs, (ii) receive substantially all of the economic benefits of the former VIEs, and (iii) have an exclusive option to purchase or designate any third party to purchase all or part of the equity interests in and assets of the former VIEs when and to the extent permitted by the laws of mainland China.
Our previous contractual arrangements with the former VIEs and their shareholders allowed us to (i) exercise effective control over the former VIEs, (ii) receive substantially all of the economic benefits of the former VIEs, and (iii) have an exclusive option to purchase or designate any third party to purchase all or part of the equity interests in and assets of the former VIEs when and to the extent permitted by the laws of mainland China.
In July 2023, we launched GlocalMe SIM, an OTA SIM card. GlocalMe SIM is backed by our patented cloud SIM technology and allows our users and customers to freely purchase and use multiple global data plans as needed without having to change SIM card. It currently covers more than 100 travel destinations, including Japan, the United States and Australia.
In 2023, we launched GlocalMe SIM, an OTA SIM card. GlocalMe SIM is backed by our patented cloud SIM technology and allows our users and customers to freely purchase and use multiple global data plans as needed without having to change SIM card. It currently covers more than 150 travel destinations, including Japan, the United States and Australia.
Contractual Arrangements with the Former VIEs and Their Respective Shareholders We, through Beijing uCloudlink Technology Co., Ltd., had entered into a series of contractual arrangements with the former VIEs and the nominee shareholders of the former VIEs from January 2015 to March 2022.
GAAP. 100 Contractual Arrangements with the Former VIEs and Their Respective Shareholders We, through Beijing uCloudlink Technology Co., Ltd., had entered into a series of contractual arrangements with the former VIEs and the nominee shareholders of the former VIEs from January 2015 to March 2022.
A significant portion of this manufacturing is currently performed by a small number of outsourcing partners. We have master agreements with our manufacturing partners and issue purchase orders each time, with varying prices. Before engaging a manufacturing partner, we evaluate the plant’s manufacturing capabilities, including quality control system, managing mechanism and business performance.
A significant portion of this manufacturing is currently performed by a small number of outsourcing partners. We have master agreements with our manufacturing partners and issue purchase orders each time, with varying prices. Before engaging a manufacturing partner, we evaluate its manufacturing capabilities, including quality control system, managing mechanism and business performance.
We have a dedicated team of data procurement personnel to purchase global mobile data from various sources. Our data purchasing team covers 163 countries and regions, divided by geographic regions and languages. 71 We ask for quotations from MNOs and resellers in a region and specify our technical requirements to support cloud SIM technology.
We have a dedicated team of data procurement personnel to purchase global mobile data from various sources. Our data purchasing team covers 167 countries and regions, divided by geographic regions and languages. We ask for quotations from MNOs and resellers in a region and specify our technical requirements to support cloud SIM technology.
This solution would integrate Wi-Fi networks across homes, airports, offices, cafes, and more, while also being able to support in-flight Wi-Fi connectivity. Services through our Roamingman Brand Roamingman is our brand of the global portable Wi-Fi service business, primarily targeting Chinese users who are traveling abroad under uCloudlink 1.0 model. Besides China, we also operate Roamingman business in Malaysia.
This solution integrates Wi-Fi networks across homes, airports, offices, cafes, and more, while also being able to support in-flight Wi-Fi connectivity. 69 Services through our Roamingman Brand Roamingman is our brand of the global portable Wi-Fi service business, primarily targeting Chinese users who are traveling abroad under uCloudlink 1.0 model. Besides China, we also operate Roamingman business in Malaysia.
We provide high quality data connectivity services to end-users backed up by our PaaS and SaaS. ● Stage 2 - B2B2C Wholesale : Once we have proved the concept of cloud SIM, and gained tractions from the market on our product and services, we are able to attract local business partners to collaborate with us and distribute our hardware and data packages in their countries and regions.
We provide high quality data connectivity services to end-users backed up by our PaaS and SaaS. ● Stage 2 - B2B2C Wholesale : Once we have proved the concept of cloud SIM, and gained tractions in the markets of our product and services, we are able to attract local business partners to collaborate with us and distribute our hardware and data packages in their countries and regions.
We intend to protect our technology and proprietary rights vigorously. We have employed internal policies, confidentiality agreements, encryptions and data security measures to protect our proprietary rights. However, 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 have employed internal policies, confidentiality agreements, encryptions and data security measures to protect our proprietary rights. However, 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.
Data Procurement Our data sources include MNOs and their sales channels, MVNOs, and other SIM-card trading companies. We have aggregated mobile data traffic allowances from 391 MNOs in 163 countries and regions in our cloud SIM architecture. When we start to offer uCloudlink 3.0 model in the future, users will also become our suppliers of mobile data.
Data Procurement Our data sources include MNOs and their sales channels, MVNOs, and other SIM-card trading companies. We have aggregated mobile data traffic allowances from 398 MNOs in 167 countries and regions in our cloud SIM architecture. When we start to offer uCloudlink 3.0 model in the future, users will also become our suppliers of mobile data.
Apart from the mobile broadband (MBB) business opportunities such as sales of mobile Wi-Fi terminals and services through online sales and offline distribution and through our business partners, we also enhanced our local service brand as we expand our e-commerce exposure in key markets such as the United States and Europe, optimize our websites and streamline our sales team.
Apart from the GlocalMe MeowGo business opportunities such as sales of mobile Wi-Fi terminals and services through online sales and offline distribution and through our business partners, we also enhanced our local service brand as we expand our e-commerce exposure in key markets such as the United States and Europe, optimize our websites and streamline our sales team.
On December 25, 2024, the Standing Committee of the National People’s Congress promulgated the Value-Added Tax Law of the PRC, which will become effective on January 1, 2026 and replace the Provisional Regulations of the PRC on Value-Added Tax.
On December 25, 2024, the Standing Committee of the National People’s Congress promulgated the Value-Added Tax Law of the PRC, which became effective on January 1, 2026 and replace the Provisional Regulations of the PRC on Value-Added Tax.
In addition, the demand for our uCloudlink 2.0 business increased during the COVID-19 pandemic and the demand of local data connectivity services continued to be strong, primarily due to the development of our local mobile broadband (MBB) business in Japan and the expansion of GlocalMe brand in North America.
In addition, the demand for our uCloudlink 2.0 business increased during the COVID-19 pandemic and the demand of local data connectivity services continued to be strong, primarily due to the development of our local GlocalMe MeowGo business in Japan and the expansion of GlocalMe brand in North America.
We are establishing a data traffic marketplace that integrates cloud SIM technology, HyperConn ®, and AI-driven PaaS/SaaS solutions to enable efficient mobile data transactions and sharing. With the proven success of our earlier models, we believe that the success of our uCloudlink 1.0 and uCloudlink 2.0 models will pave the path for the introduction of our uCloudlink 3.0 model.
We are establishing a data traffic marketplace that integrates cloud SIM technology, HyperConn ®, positioning technologies and AI-driven PaaS/SaaS solutions to enable efficient mobile data transactions and sharing. We believe that the success of our uCloudlink 1.0 and uCloudlink 2.0 models will pave the path for the introduction of our uCloudlink 3.0 model.
Data allowance originally purchased by us, which was primarily used by users who contributed to our revenues from data connectivity services, increased from approximately 21,000 terabytes in 2022 to approximately 24,000 terabytes in 2023, and further increased to approximately 25,000 terabytes in 2024, while data originally purchased by our business partners, which was primarily used by users who did not contribute to our revenues from data connectivity services, increased from approximately 155,800 terabytes in 2022 to approximately 156,500 terabytes in 2023, and decreased to approximately 148,000 terabytes in 2024.
Data allowance originally purchased by us, which was primarily used by users who contributed to our revenues from data connectivity services, increased from approximately 24,000 terabytes in 2023 to approximately 25,000 terabytes in 2024, and further increased to approximately 28,000 terabytes in 2025, while data originally purchased by our business partners, which was primarily used by users who did not contribute to our revenues from data connectivity services, decreased from approximately 156,500 terabytes in 2023 to approximately 148,000 terabytes in 2024, and increased to approximately 155,000 terabytes in 2025.
The Inland Revenue Ordinance provides, among others, that persons, which include corporations, carrying on any trade, profession or business in Hong Kong are chargeable to tax all profits (excluding profits arising from the sale of capital assets) arising in or derived from Hong Kong from such trade, profession or business. 96 Our profits arising in or derived from Hong Kong are subject to the profits tax regime under the Inland Revenue Ordinance.
The Inland Revenue Ordinance provides, among others, that persons, which include corporations, carrying on any trade, profession or business in Hong Kong are chargeable to tax all profits (excluding profits arising from the sale of capital assets) arising in or derived from Hong Kong from such trade, profession or business.
Total data consumed through our platform were approximately 176,500, 180,000 and 172,900 terabytes in 2022, 2023 and 2024, respectively, including data consumed by users who contributed to our revenues from data connectivity services, which we procured, and data consumed by users who did not contribute to our revenues from data connectivity services, which our business partners procured.
Total data consumed through our platform were approximately 180,000, 172,900 and 184,000 terabytes in 2023, 2024 and 2025, respectively, including data consumed by users who contributed to our revenues from data connectivity services, which we procured, and data consumed by users who did not contribute to our revenues from data connectivity services, which our business partners procured.
Pursuant to the Measures for the Security Review of Foreign Investment, the NDRC and the Ministry of Commerce will establish a working mechanism office in charge of the security review of foreign investment, and any foreign investment which has or would possibly have an impact on the national security shall be subject to security review by such working mechanism office.
Pursuant to the Measures for the Security Review of Foreign Investment, the NDRC and the Ministry of Commerce has established a working mechanism office in charge of the routine security review work of foreign investment, and any foreign investment which has or would possibly have an impact on the national security shall be subject to security review by such working mechanism office.
Leveraging our innovative cloud SIM technology and architecture, we redefine the mobile data connectivity experience, allowing users to gain access to mobile data traffic allowance shared by network operators on our marketplace. We have aggregated mobile data traffic allowances from 391 MNOs in 163 countries and regions in our cloud SIM architecture as of December 31, 2024.
Leveraging our innovative cloud SIM technology and architecture, we redefine the mobile data connectivity experience, allowing users to gain access to mobile data traffic allowance shared by network operators on our marketplace. We have aggregated mobile data traffic allowances from 398 MNOs in 167 countries and regions in our cloud SIM architecture as of December 31, 2025.
In addition, the NDRC and the Ministry of Commerce promulgated the Encouraged Industry Catalogue for Foreign Investment (2022 version), which came into effect on January 1, 2023. Industries not listed in the 2024 Negative List and industries listed in the catalogue are generally open for foreign investments unless specifically restricted by other laws of mainland China.
In addition, the NDRC and the Ministry of Commerce promulgated the Encouraged Industry Catalogue for Foreign Investment (2025 version), which came into effect on February 1, 2026. Industries not listed in the 2024 Negative List and industries listed in the catalogue are generally open for foreign investments unless specifically restricted by other laws of mainland China.
On March 17, 2022, Beijing uCloudlink, Beijing Technology and its shareholders and their spouses entered into a termination agreement. All parties agreed to terminate the business operation agreement, equity interest pledge agreement, exclusive technology consulting and services agreement, option agreement, and spousal consent letters that are dated on January 27, 2015, once the termination agreement comes into effect.
All parties agreed to terminate the business operation agreement, equity interest pledge agreement, exclusive technology consulting and services agreement, option agreement, and spousal consent letters that are dated on January 27, 2015, once the termination agreement comes into effect. 101 On March 17, 2022, Beijing uCloudlink, Shenzhen uCloudlink, and Beijing Technology entered into a termination agreement.
We collaborate with our business partners and other third-party advertisement agencies to provide advertisements on our products based on our big data analysis results. These advertisements are displayed on the screens of our portable Wi-Fi terminals, GlocalMe World Phones and our GlocalMe Connect app.
We collaborate with our business partners and other third-party advertisement agencies to provide advertisements on our products based on our big data analysis results. These advertisements are displayed on the screens of our portable Wi-Fi terminals, our GlocalMe and other apps.
Pursuant to these rules and regulations, the balance of the foreign debts of a foreign invested enterprise shall not exceed the difference between the total investment and the registered capital of the foreign invested enterprise. 91 Pursuant to the Interim Provisions of the State Administration for Industry and Commerce on the Ratio of the Registered Capital to the Total Investment of a Sino-foreign Equity Joint Venture Enterprise, issued by the State Administration for Industry and Commerce on March 1, 1987, with respect to a Sino-foreign equity join venture, the registered capital shall be (i) no less than 7/10 of its total investment, if the total investment is US$3 million or under US$3 million; (ii) no less than 1/2 of its total investment, if the total investment is ranging from US$3 million to US$10 million (including US$10 million), provided that the registered capital shall not be less than US$2.1 million if the total investment is less than US$4.2 million; (iii) no less than 2/5 of its total investment, if the total investment is ranging from US$10 million to US$30 million (including US$30 million), provided that the registered capital shall not be less than US$5 million if the total investment is less than US$12.5 million; and (iv) no less than 1/3 of its total investment, if the total investment exceeds US$30 million, provided that the registered capital shall not be less than US$12 million if the total investment is less than US$36 million.
Pursuant to the Interim Provisions of the State Administration for Industry and Commerce on the Ratio of the Registered Capital to the Total Investment of a Sino-foreign Equity Joint Venture Enterprise, issued by the State Administration for Industry and Commerce on March 1, 1987, with respect to a Sino-foreign equity join venture, the registered capital shall be (i) no less than 7/10 of its total investment, if the total investment is US$3 million or under US$3 million; (ii) no less than 1/2 of its total investment, if the total investment is ranging from US$3 million to US$10 million (including US$10 million), provided that the registered capital shall not be less than US$2.1 million if the total investment is less than US$4.2 million; (iii) no less than 2/5 of its total investment, if the total investment is ranging from US$10 million to US$30 million (including US$30 million), provided that the registered capital shall not be less than US$5 million if the total investment is less than US$12.5 million; and (iv) no less than 1/3 of its total investment, if the total investment exceeds US$30 million, provided that the registered capital shall not be less than US$12 million if the total investment is less than US$36 million.
The security assessment of a cross-border data transfer shall focus on assessing the risks that may be brought about by the cross-border data transfer concerning national security, public interests, or the lawful rights and interests of individuals or organizations. 83 Regulation on the Internet Security Supervision and Inspection by Public Security Organs Pursuant to the Regulation on the Internet Security Supervision and Inspection by Public Security Organs, which was promulgated by the Ministry of Public Security on September 15, 2018 and became effective on November 1, 2018, the public security departments are authorized to carry out internet security supervision and inspection of the internet service providers from the following aspects, among others: (i) whether the internet service providers have completed the recordation formalities for online entities, and filed the basic information on and the changes of the accessing entities and users; (ii) whether they have established and implemented the cybersecurity management system and protocols, and appointed the persons responsible for cybersecurity; (iii) whether the technical measures for recording and retaining users’ registration information and weblog data are in place according to the law; (iv) whether they have taken technical measures to prevent computer viruses, network attacks and network intrusion; (v) whether they have adopted preventive measures to tackle the information that is prohibited to be issued or transmitted by the laws and administrative regulations in the public information services; (vi) whether they provide technical support and assistance as required by laws to public security departments to safeguard national security and prevent and investigate on terrorist activities and criminal activities; and (vii) whether they have fulfilled the obligations of the grade-based cybersecurity protection and other obligations prescribed by the laws and administrative regulations.
Regulation on the Internet Security Supervision and Inspection by Public Security Organs Pursuant to the Regulation on the Internet Security Supervision and Inspection by Public Security Organs, which was promulgated by the Ministry of Public Security on September 15, 2018 and became effective on November 1, 2018, the public security departments are authorized to carry out internet security supervision and inspection of the internet service providers from the following aspects, among others: (i) whether the internet service providers have completed the recordation formalities for online entities, and filed the basic information on and the changes of the accessing entities and users; (ii) whether they have established and implemented the cybersecurity management system and protocols, and appointed the persons responsible for cybersecurity; (iii) whether the technical measures for recording and retaining users’ registration information and weblog data are in place according to the law; (iv) whether they have taken technical measures to prevent computer viruses, network attacks and network intrusion; (v) whether they have adopted preventive measures to tackle the information that is prohibited to be issued or transmitted by the laws and administrative regulations in the public information services; (vi) whether they provide technical support and assistance as required by laws to public security departments to safeguard national security and prevent and investigate on terrorist activities and criminal activities; and (vii) whether they have fulfilled the obligations of the grade-based cybersecurity protection and other obligations prescribed by the laws and administrative regulations.
Cloud SIM Architecture The cloud SIM architecture mainly consists of (i) a distributed SIM card pool with data traffic purchased by us or provided by our business partners, hosted locally or remotely using SIM banks and other terminals; (ii) uCloudlink cloud SIM platform, including software and necessary infrastructures for users and business partners; and (iii) user-end terminals such as GlocalMe portable Wi-Fi terminals and smartphones, and GlocalMe Inside implementations in third-party smartphones as well as smart-hardware products.
The cloud SIM technology follows the existing telecoms technology and presents no additional security risk. 66 Cloud SIM Architecture The cloud SIM architecture mainly consists of (i) a distributed SIM card pool with data traffic purchased by us or provided by our business partners, hosted locally or remotely using SIM banks and other terminals; (ii) uCloudlink cloud SIM platform, including software and necessary infrastructures for users and business partners; and (iii) user-end terminals such as GlocalMe portable Wi-Fi terminals and smartphones, and GlocalMe Inside implementations in third-party smartphones as well as smart-hardware products.
According to the Consumer Rights and Interests Protection Law, unless otherwise provided by this law, a business that provides products or services shall, in any of the following circumstances, bear civil liability in accordance with the Product Quality Law and other laws and regulations: (i) where a defect exists in a product; (ii) where a commodity does not possess functions it is supposed to possess, and it is not declared when the product is sold; (iii) where the product standards indicated on a product or on the package of such product are not met; (iv) where the quality condition indicated by way of product description or physical sample, etc. is not met; (v) where products pronounced obsolete by formal State decrees are produced or have expired, or deteriorated commodities are sold; (vi) where a sold product is not adequate in quantity; (vii) where the service items and charges are in violation of an agreement; (viii) where demands by a consumer for repair, redoing, replacement, return, making up the quantity of a product, refund of a product purchase price or service fee or claims for compensation have been delayed deliberately or rejected without reason; or (ix) in other circumstances whereby the rights and interests of consumers, as provided by the laws and regulations of mainland China, are harmed.
According to the Consumer Rights and Interests Protection Law, unless otherwise provided by this law, a business that provides products or services shall, in any of the following circumstances, bear civil liability in accordance with the Product Quality Law and other laws and regulations: (i) where a defect exists in a product; (ii) where a commodity does not possess functions it is supposed to possess, and it is not declared when the product is sold; (iii) where the product standards indicated on a product or on the package of such product are not met; (iv) where the quality condition indicated by way of product description or physical sample, etc. is not met; (v) where products pronounced obsolete by formal State decrees are produced or have expired, or deteriorated commodities are sold; (vi) where a sold product is not adequate in quantity; (vii) where the service items and charges are in violation of an agreement; (viii) where demands by a consumer for repair, redoing, replacement, return, making up the quantity of a product, refund of a product purchase price or service fee or claims for compensation have been delayed deliberately or rejected without reason; or (ix) in other circumstances whereby the rights and interests of consumers, as provided by the laws and regulations of mainland China, are harmed. 88 The PRC Civil Code was promulgated on May 28, 2020 and came into force on January 1, 2021 to clarify tort liability, and to prevent and punish tortious conduct.
Labor Contract Law of the PRC and its implementation regulations The Labor Contract Law, promulgated by the Standing Committee of the National People’s Congress on June 29, 2007, effective on January 1, 2008, and amended on December 28, 2012, and the Implementation Regulations on Labor Contract Law, promulgated by the State Council and effective on September 18, 2008, regulate the relation between employers and employees and contain specific provisions involving the terms of the labor contract.
Labor safety and health facilities must comply with national standards. 90 Labor Contract Law of the PRC and its implementation regulations The Labor Contract Law, promulgated by the Standing Committee of the National People’s Congress on June 29, 2007, effective on January 1, 2008, and amended on December 28, 2012, and the Implementation Regulations on Labor Contract Law, promulgated by the State Council and effective on September 18, 2008, regulate the relation between employers and employees and contain specific provisions involving the terms of the labor contract.
Under the Circular of the State Administration of Taxation on Issues Concerning Individual Income Tax in Relation to Equity Incentives promulgated by the State Administration of Taxation and effective from August 24, 2009, overseas listed companies and their mainland China subsidiaries shall, according to the individual income tax calculation methods for “wage and salary income” and stock option income, lawfully withhold and pay individual income tax on such income.
Under the Circular of the State Administration of Taxation on Issues Concerning Individual Income Tax in Relation to Equity Incentives promulgated by the State Administration of Taxation and effective from August 24, 2009, overseas listed companies and their mainland China subsidiaries shall, according to the individual income tax calculation methods for “wage and salary income” and stock option income, lawfully withhold and pay individual income tax on such income. 93 In addition, the State Administration of Taxation has issued certain circulars concerning employee stock options and restricted shares.
Regulations on Foreign Exchange Registration of Overseas Investment by Mainland China Residents On October 21, 2005, SAFE promulgated the Circular Concerning Relevant Issues on the Foreign Exchange Administration of Raising Funds through Overseas Special Purpose Vehicle and Investing Back in China by Domestic Residents, which became effective on November 1, 2005, or SAFE Circular 75.
These reserves are not distributable as cash dividends. 92 Regulations on Foreign Exchange Registration of Overseas Investment by Mainland China Residents On October 21, 2005, SAFE promulgated the Circular Concerning Relevant Issues on the Foreign Exchange Administration of Raising Funds through Overseas Special Purpose Vehicle and Investing Back in China by Domestic Residents, which became effective on November 1, 2005, or SAFE Circular 75.
GlocalMe Mobile/Fixed Broadband Solutions We launched our GlocalMe mobile/fixed broadband solutions in 2014 as a signature solution under the uCloudlink 1.0 model, offering a range of hardware terminals, including portable Wi-Fi terminals and cloud network routers, to meet diverse connectivity needs.
GlocalMe MeowGo Solutions We launched our GlocalMe MeowGo solutions, which was previously referred to as GlocalMe mobile/fixed broadband solutions, in 2014 as a signature solution under the uCloudlink 1.0 model, offering a range of hardware terminals, including portable Wi-Fi terminals and cloud network routers, to meet diverse connectivity needs. We launched MeowGo G40 Pro and MeowGo G50 Max .
Based on the foregoing, if we provide funding to our wholly foreign-owned subsidiaries through shareholder loans, the balance of such loans shall not exceed the total investment and the registered capital of the foreign invested enterprise and we will need to register such loans with SAFE or its local branches in the event that the currently valid foreign debt management mechanism applies, or the balance of such loans shall be subject to the risk-weighted approach and the upper limit of risk-weighted outstanding cross-border financing for enterprises and we will need to file the loans with SAFE in its information system in the event that the Notice No. 9 foreign debt mechanism applies.
Enterprises shall file with SAFE in its capital item information system after entering into the cross-border financing contracts and prior to three business day before drawing any money from the foreign debts. 94 Based on the foregoing, if we provide funding to our wholly foreign-owned subsidiaries through shareholder loans, the balance of such loans shall not exceed the total investment and the registered capital of the foreign invested enterprise and we will need to register such loans with SAFE or its local branches in the event that the currently valid foreign debt management mechanism applies, or the balance of such loans shall be subject to the risk-weighted approach and the upper limit of risk-weighted outstanding cross-border financing for enterprises and we will need to file the loans with SAFE in its information system in the event that the Notice No. 9 foreign debt mechanism applies.
Accordingly, we consolidate the financial results of the former VIEs and their respective subsidiaries with our consolidated financial statements in accordance with U.S.
Accordingly, we consolidated the financial results of the former VIEs and their respective subsidiaries with our consolidated financial statements in accordance with U.S. GAAP prior to the Restructuring.
Pursuant to the business operation agreement, Shenzhen uCloudlink and Beijing Technology and its shareholders agree that to the extent permitted by law, they accept and unconditionally execute instructions from Beijing uCloudlink on business operations.
Pursuant to the business operation agreement, Shenzhen uCloudlink and Beijing Technology and its shareholders agreed that to the extent permitted by law, they accepted and unconditionally executed instructions from Beijing uCloudlink on business operations.
In 2024, average daily active terminals connected to our platform exceeded 316,600 and each of our active terminals on average used over 1,564 megabytes of mobile data per day.
In 2025, average daily active terminals connected to our platform exceeded 322,000 and each of our active terminals on average used over 1,600 megabytes of mobile data per day.
IoT Modules We offer IoT modules to meet the huge demand for mobile data from various terminals, and provide integrated network solutions to our customers. As 5G becomes more available, IoT providers will be more dependent on our cloud SIM architecture and hyper-connectivity technology.
Our business partners can also enjoy these services through our cloud SIM platform. 70 IoT Modules We offer IoT modules to meet the huge demand for mobile data from various terminals, and provide integrated network solutions to our customers. As 5G becomes more available, IoT providers will be more dependent on our cloud SIM architecture and hyper-connectivity technology.
We currently provide all of customer service by ourselves, but some of our customer service was outsourced in the past. Our business partners, such as MNOs, MVNOs, portable Wi-Fi terminal rental companies and smartphone companies and vendors, often employ their own customer service teams as the first line facing users.
We currently provide all customer service by ourselves, but some of our customer service was outsourced in the past. Our business partners, such as MNOs, MVNOs, portable Wi-Fi terminal rental companies and smartphone companies and vendors, often employ their own customer service teams as the primary interface for users. We provide additional customer service and technical support for these teams.
GAAP for the year ended December 31, 2022 in this annual report. 61 On June 9, 2020, the ADSs representing our Class A ordinary shares commenced trading on Nasdaq under the symbol “UCL.” We raised from our initial public offering US$27.6 million in net proceeds after deducting underwriting commissions and discounts and the offering expenses payable by us.
On June 9, 2020, the ADSs representing our Class A ordinary shares commenced trading on Nasdaq under the symbol “UCL.” We raised from our initial public offering US$27.6 million in net proceeds after deducting underwriting commissions and discounts and the offering expenses payable by us.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

97 edited+20 added−17 removed119 unchanged
Biggest changeFor the Year Ended December 31, 2022 2023 2024 US$ % US$ % US$ % (in thousands, except for percentages) Revenues Revenues from services 46,228 64.7 58,570 68.4 60,002 65.5 Sales of products 25,233 35.3 27,006 31.6 31,633 34.5 Total revenues 71,461 100.0 85,576 100.0 91,635 100.0 Cost of revenues Cost of services (20,346 ) (28.5 ) (24,318 ) (28.4 ) (23,503 ) (25.7 ) Cost of products sold (18,581 ) (26.0 ) (19,293 ) (22.6 ) (23,771 ) (25.9 ) Total cost of revenues (38,927 ) (54.5 ) 43,611 (51.0 ) (47,274 ) (51.6 ) Gross profit 32,534 45.5 41,965 49.0 44,361 48.4 Operating expenses: Research and development expenses (1) (8,430 ) (11.8 ) (6,456 ) (7.5 ) (6,198 ) (6.8 ) Sales and marketing expenses (1) (10,305 ) (14.4 ) (14,304 ) (16.7 ) (19,926 ) (21.7 ) General and administrative expenses (1) (18,726 ) (26.2 ) (17,118 ) (20.0 ) (15,947 ) (17.4 ) Other (expense)/income, net (14,265 ) (20.0 ) (1,500 ) (1.8 ) 2,095 2.3 (Loss)/income from operations (19,192 ) (26.9 ) 2,587 3.0 4,385 4.8 Interest income 18 0.0 70 0.1 227 0.2 Interest expenses (441 ) (0.6 ) (133 ) (0.2 ) (196 ) (0.2 ) Amortization of beneficial conversion feature (149 ) (0.2 ) — — — — (Loss)/income before income tax (19,764 ) (27.7 ) 2,524 2.9 4,416 4.8 Income tax expenses (161 ) (0.2 ) (70 ) (0.1 ) (68 ) (0.0 ) Share of profit in equity method investment, net of tax 72 0.1 357 0.5 210 0.2 Net (loss)/income (19,853 ) (27.8 ) 2,811 3.3 4,558 5.0 Note: (1) Share-based compensation was US$3.1 million, US$3.3 million and US$1.2 million in 2022, 2023 and 2024, respectively.
Biggest changeFor the Year Ended December 31, 2023 2024 2025 US$ % US$ % US$ % (in thousands, except for percentages) Revenues Revenues from services 58,570 68.4 60,002 65.5 61,060 75.0 Sales of products 27,006 31.6 31,633 34.5 20,389 25.0 Total revenues 85,576 100.0 91,635 100.0 81,449 100.0 Cost of revenues Cost of services (24,318 ) (28.4 ) (23,503 ) (25.7 ) (25,639 ) (31.5 ) Cost of products sold (19,293 ) (22.6 ) (23,771 ) (25.9 ) (13,127 ) (16.1 ) Total cost of revenues (43,611 ) (51.0 ) (47,274 ) (51.6 ) (38,766 ) (47.6 ) Gross profit 41,965 49.0 44,361 48.4 42,683 52.4 Operating expenses: Research and development expenses (1) (6,456 ) (7.5 ) (6,198 ) (6.8 ) (4,868 ) (6.0 ) Sales and marketing expenses (1) (14,304 ) (16.7 ) (19,926 ) (21.7 ) (23,986 ) (29.4 ) General and administrative expenses (1) (17,118 ) (20.0 ) (15,947 ) (17.4 ) (12,577 ) (15.4 ) Other (expense)/income, net (1,500 ) (1.8 ) 2,095 2.3 6,714 8.2 Income from operations 2,587 3.0 4,385 4.8 7,966 9.8 Interest income 70 0.1 227 0.2 68 0.1 Interest expenses (133 ) (0.2 ) (196 ) (0.2 ) (196 ) (0.2 ) Income before income tax 2,524 2.9 4,416 4.8 7,838 9.6 Income tax expenses (70 ) (0.1 ) (68 ) (0.0 ) (1,525 ) (1.9 ) Share of profit/(loss) in equity method investment, net of tax 357 0.5 210 0.2 (12 ) (0.0 ) Net income 2,811 3.3 4,558 5.0 6,301 7.7 Note: (1) Share-based compensation was US$3.3 million, US$1.2 million and US$1.0 million in 2023, 2024 and 2025, respectively.
Our data connectivity services revenues include revenues from international data connectivity services and local data connectivity services.
Data connectivity services . Our data connectivity services revenues include revenues from international data connectivity services and local data connectivity services.
For share options awarded to employees, directors and other consultants, we apply the Binominal option pricing model in determining the fair value of options granted under ASC 718. We have elected to account for forfeitures when they occur.
For share options awarded to employees, directors and other consultants, we apply the Binominal option pricing model in determining the fair value of options granted under ASC 718. We have elected to account for forfeitures when they occur.
This increase was primarily attributable to an increase in revenues from international data connectivity services from US$37.9 million in 2023 to US$39.5 million in 2024, as the recovery of international travel continues, which was partially offset by a decrease in revenues from local data connectivity services from US$8.8 million in 2023 to US$8.1 million in 2024. 105 ● Our revenues from PaaS and SaaS services increased by 8.3% from US$10.4 million in 2023 to US$11.3 million in 2024.
This increase was primarily attributable to an increase in revenues from international data connectivity services from US$37.9 million in 2023 to US$39.5 million in 2024, as the recovery of international travel continues, which was partially offset by a decrease in revenues from local data connectivity services from US$8.8 million in 2023 to US$8.1 million in 2024. ● Our revenues from PaaS and SaaS services increased by 8.3% from US$10.4 million in 2023 to US$11.3 million in 2024.
General and administrative expenses consist primarily of salaries, bonuses and benefits for employees and share-based compensation, depreciation of property and equipment, amortization of intangible assets, legal and other professional services fees, rental and other general corporate related expenses. 103 Taxation Cayman Islands The Cayman Islands currently levies no taxes on corporations based upon profits, income, gains or appreciation.
General and administrative expenses consist primarily of salaries, bonuses and benefits for employees and share-based compensation, depreciation of property and equipment, amortization of intangible assets, legal and other professional services fees, rental and other general corporate related expenses. Taxation Cayman Islands The Cayman Islands currently levies no taxes on corporations based upon profits, income, gains or appreciation.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us. 115 Holding Company Structure UCLOUDLINK GROUP INC. is a holding company with no material operations of its own.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us. Holding Company Structure UCLOUDLINK GROUP INC. is a holding company with no material operations of its own.
Sales of terminals and data related products are recognized when control of promised goods is transferred to the customers, which generally occurs upon the acceptance of the goods by the customers. For sales of Wi-Fi terminals, one gigabyte of free data connectivity service is normally included as a bundle package for the first-time purchase of the terminals.
Sales of terminals and data related products are recognized when control of promised goods is transferred to the customers, which generally occurs upon the acceptance of the goods by the customers. 113 For sales of Wi-Fi terminals, one gigabyte of free data connectivity service is normally included as a bundle package for the first-time purchase of the terminals.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Legal contingencies In the course of our business, we are subject to contingencies of legal proceedings and claims arising out of our business.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. 120 Legal contingencies In the course of our business, we are subject to contingencies of legal proceedings and claims arising out of our business.
For revenue related to the data connectivity service, revenue is recognized ratably on a straight-line basis over relevant contract period. 109 PaaS or SaaS services PaaS or SaaS mainly consist of fees generated from providing cloud SIM platform as a service to business partners and other ancillary platform services.
For revenue related to the data connectivity service, revenue is recognized ratably on a straight-line basis over relevant contract period. PaaS or SaaS services PaaS or SaaS mainly consist of fees generated from providing cloud SIM platform as a service to business partners and other ancillary platform services.
As we have accumulated a larger number of data allowance providers as our data sources, we possess increasingly stronger bargaining power during the negotiation due to competition among data allowance providers. Data allowance providers are more willing to offer us leftover data with lower price, attracted by our unique value propositions to them.
As we have accumulated a larger number of data allowance providers as our data sources, we possess increasingly stronger bargaining power during the negotiation due to competition among data allowance providers. Data allowance providers are more willing to offer us data with lower price, attracted by our unique value propositions to them.
We have conducted our operations in mainland China primarily through our mainland China subsidiaries, the former VIEs and their subsidiaries. As a result, UCLOUDLINK GROUP INC.’s ability to pay dividends depends upon dividends paid by our mainland China subsidiaries.
We have conducted our operations in mainland China primarily through our mainland China subsidiaries (including the former VIEs and their subsidiaries). As a result, UCLOUDLINK GROUP INC.’s ability to pay dividends depends upon dividends paid by our mainland China subsidiaries.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a mainland China resident enterprise for income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland-China noteholders, shareholders or ADS holders.” 104 Results of Operations The following table sets forth a summary of our consolidated results of operations for the years presented, both in absolute amount and as a percentage of our revenues for the periods presented.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a mainland China resident enterprise for income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland-China noteholders, shareholders or ADS holders.” 108 Results of Operations The following table sets forth a summary of our consolidated results of operations for the years presented, both in absolute amount and as a percentage of our revenues for the periods presented.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2025 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2026 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
We recognize revenue in accordance with ASC 606 “Revenue from Contracts with Customers” for all years presented with full retrospective method. 108 We conduct our business through various contracts with customers, including: Data connectivity services We generate international data connectivity services revenues from (i) data service fees from the use of portable Wi-Fi terminals (under our Roamingman brand), (ii) data service fees generated from sales of data connectivity services to business partners, and (iii) retail sales of data connectivity services.
We recognize revenue in accordance with ASC 606 “Revenue from Contracts with Customers” for all years presented with full retrospective method. 112 We conduct our business through various contracts with customers, including: Data connectivity services We generate international data connectivity services revenues from (i) data service fees from the use of portable Wi-Fi terminals (under our Roamingman brand), (ii) data service fees generated from sales of data connectivity services to business partners, and (iii) retail sales of data connectivity services.
Our expanding products, including our proprietary terminals and third-party devices integrated with GlocalMe Inside , enable a growing number of our customers to enjoy our services anytime and anywhere. 100 Our ability to improve operational efficiency Our ability to achieve and maintain profitability is dependent on our ability to improve our operational efficiency and reduce the total operating expenses as a percentage of our revenues.
Our expanding products, including our proprietary terminals and third-party devices integrated with GlocalMe Inside , enable a growing number of our customers to enjoy our services anytime and anywhere. 103 Our ability to improve operational efficiency Our ability to achieve and maintain profitability is dependent on our ability to improve our operational efficiency and reduce the total operating expenses as a percentage of our revenues.
We have fully repaid the loan. 111 ● In February 2023, we obtained a three-month short-term bank borrowing of RMB5.6 million (US$0.8 million) from a commercial bank, bearing interest at a rate of 5.55% per annum. As of December 31, 2023, the outstanding balance of this loan was nil.
We have fully repaid the loan. 115 ● In February 2023, we obtained a three-month short-term bank borrowing of RMB5.6 million (US$0.8 million) from a commercial bank, bearing interest at a rate of 5.55% per annum. As of December 31, 2023, the outstanding balance of this loan was nil.
We have provided a full valuation allowance for the deferred tax assets as of December 31, 2022, 2023 and 2024, as management is not able to conclude that the future realization of those net operating loss carry forwards and other deferred tax assets are more likely than not.
We have provided a full valuation allowance for the deferred tax assets as of December 31, 2023, 2024 and 2025, as management is not able to conclude that the future realization of those net operating loss carry forwards and other deferred tax assets are more likely than not.
In 2022, 2023 and 2024, we generated most of our data connectivity services revenues from our international data connectivity services under uCloudlink 1.0 model. PaaS and SaaS services . Revenues from PaaS and SaaS services mainly consist of fees generated from providing cloud SIM platform as a service to business partners and other ancillary platform services.
In 2023, 2024 and 2025, we generated most of our data connectivity services revenues from our international data connectivity services under uCloudlink 1.0 model. PaaS and SaaS services . Revenues from PaaS and SaaS services mainly consist of fees generated from providing cloud SIM platform as a service to business partners and other ancillary platform services.
We generate revenues from selling SIM cards with prepaid data packages that can be used outside of mainland China, which may effectively help us grow our user base and data usage among travelers and cross-sell our other products and services.
Sales of data related products . We generate revenues from selling SIM cards with prepaid data packages that can be used outside of mainland China, which may effectively help us grow our user base and data usage among travelers and cross-sell our other products and services.
As of December 31, 2022, 2023 and 2024, we do not believe that sufficient positive evidence exists to conclude that the recoverability of deferred tax assets is more likely than not to be realized. Consequently, we have provided full valuation allowance on the related deferred tax assets.
As of December 31, 2023, 2024 and 2025, we do not believe that sufficient positive evidence exists to conclude that the recoverability of deferred tax assets is more likely than not to be realized. Consequently, we have provided full valuation allowance on the related deferred tax assets.
Cash Requirements Our material cash requirements as of December 31, 2024 and any subsequent interim period primarily include our capital expenditures, contractual obligations and commitments. We intend to fund our existing and future material cash requirements with our existing cash balance, cash from operating activities, financing from investors and borrowing from external sources.
Cash Requirements Our material cash requirements as of December 31, 2025 and any subsequent interim period primarily include our capital expenditures, contractual obligations and commitments. We intend to fund our existing and future material cash requirements with our existing cash balance, cash from operating activities, financing from investors and borrowing from external sources.
For the years of assessment 2022/2023 and 2023/2024, our subsidiaries in Hong Kong were subject to 16.5% Hong Kong profits tax on their taxable income (on any part of assessable profits over HK$2.0 million) generated from operations in Hong Kong.
For the years of assessment 2023/2024 and 2024/2025, our subsidiaries in Hong Kong were subject to 16.5% Hong Kong profits tax on their taxable income (on any part of assessable profits over HK$2.0 million) generated from operations in Hong Kong.
In addition, our subsidiaries and the former VIEs may allocate a portion of their after-tax profits based on mainland China’s accounting standards to discretionary surplus funds at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
In addition, our subsidiaries may allocate a portion of their after-tax profits based on mainland China’s accounting standards to discretionary surplus funds at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
Risk Factors—Risks Related to Doing Business in China—Mainland China’s regulation of loans to and direct investment in mainland China entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of any financing outside mainland China to make loans to or make additional capital contributions to our mainland China subsidiaries and the former VIEs, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” Operating Activities Net cash generated from operating activities in 2024 was US$9.2 million.
Risk Factors—Risks Related to Doing Business in China—Mainland China’s regulation of loans to and direct investment in mainland China entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of any financing outside mainland China to make loans to or make additional capital contributions to our mainland China subsidiaries (including the former VIEs), which could materially and adversely affect our liquidity and our ability to fund and expand our business.” Operating Activities Net cash generated from operating activities in 2025 was US$3.2 million.
Under the laws of mainland China, each of our subsidiaries and the former VIEs in mainland China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital.
Under the laws of mainland China, each of our subsidiaries in mainland China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital.
In December 2023, we fully redeemed this investment and received US$1.3 million. Our accounts receivable represent primarily accounts receivable from customers and business partners to whom we rendered services or sold products. As of December 31, 2022, 2023 and 2024, our accounts receivable, net of allowance for doubtful accounts, were US$6.0 million, US$6.5 million and US$7.9 million, respectively.
In December 2023, we fully redeemed this investment and received US$1.3 million. Our accounts receivable represent primarily accounts receivable from customers and business partners to whom we rendered services or sold products. As of December 31, 2023, 2024 and 2025, our accounts receivable, net of allowance for doubtful accounts, were US$6.5 million, US$7.9 million and US$4.4 million, respectively.
We generate revenues from selling hardware terminals, including GlocalMe portable Wi-Fi terminals, IoT modules, and other smart devices with GlocalMe Inside installed to enterprise and retail users and business partners, which is part of our strategy to drive revenues from services, including data connectivity services, PaaS and SaaS services and other services. Sales of data related products .
We generate revenues from selling hardware terminals, including GlocalMe portable Wi-Fi terminals, GlocalMe Life products, PetPhone products, IoT modules, and other smart devices with GlocalMe Inside installed to enterprise and retail users and business partners, which is part of our strategy to drive revenues from services, including data connectivity services, PaaS and SaaS services and other services.
Net cash used in investing activities in 2022 was US$0.2 million, primarily due to the purchase of property and equipment of US$0.4 million, which was partially offset by proceeds from disposal of property and equipment of US$0.3 million.
Net cash used in investing activities in 2024 was US$3.7 million, primarily due to the purchase of property and equipment of US$4.0 million, which was partially offset by proceeds from disposal of property and equipment of US$0.2 million.
The fair value of this investment was US$7.1 million, US$7.6 million and US$8.7 million as of December 31, 2022, 2023 and 2024, respectively. ● In June 2020, we made an investment in an investment product for which the underlying assets were mainly comprised of unlisted bonds and subordinated debentures for a cash consideration of US$17 million with a period of three years.
The fair value of this investment was US$7.6 million, US$8.7 million and US$13.3 million as of December 31, 2023, 2024 and 2025, respectively. ● In June 2020, we made an investment in an investment product for which the underlying assets were mainly comprised of unlisted bonds and subordinated debentures for a cash consideration of US$17 million with a period of three years.
As of December 31, 2024, the outstanding balance of this loan was RMB10.0 million (US$1.4 million). ● In December 2024, we obtained a one-year short-term bank borrowing of RMB10.0 million (US$1.4 million) from a commercial bank, bearing interest at a rate of 3.0% per annum.
As of December 31, 2025, the outstanding balance of this loan was RMB10.0 million (US$1.4 million). ● In December 2025, we obtained a one-year short-term bank borrowing of RMB10.0 million (US$1.4 million) from a commercial bank, bearing interest at a rate of 2.4% per annum.
We will continue to enhance our research and development efforts to enhance our cloud SIM technology and architecture, develop and upgrade our products and services, optimize our data traffic usage, and improve data procurement and operational efficiency. Our research and development expenses accounted for 16.3%, 16.4% and 15.5% of our total operating expenses in 2022, 2023 and 2024, respectively.
We will continue to enhance our research and development efforts to enhance our cloud SIM technology and architecture, develop and upgrade our products and services, optimize our data traffic usage, and improve data procurement and operational efficiency. Our research and development expenses accounted for 16.4%, 15.5% and 14.0% of our total operating expenses in 2023, 2024 and 2025, respectively.
Share-based compensation in 2022, 2023 and 2024 mainly includes restricted share units and share options granted to our employees, directors, and other consultants. As of December 31, 2024, there was US$0.8 million of unrecognized share-based compensation expense related to granted restricted share units and share options.
Share-based compensation in 2023, 2024 and 2025 mainly includes restricted share units and share options granted to our employees, directors, and other consultants. As of December 31, 2025, there was US$0.6 million of unrecognized share-based compensation expense related to granted restricted share units and share options.
The efficiency of data procurement will continually impact our cost of revenues and overall business performance. The mix of our product and service offerings Our gross margin is mainly affected by the mix of services and products. Our gross margin increased from 45.5% in 2022 to 49.0% in 2023, and decreased from 49.0% in 2023 to 48.4% in 2024.
The efficiency of data procurement will continually impact our cost of revenues and overall business performance. The mix of our product and service offerings Our gross margin is mainly affected by the mix of services and products. Our gross margin decreased from 49.0% in 2023 to 48.4% in 2024, and increased to 52.4% in 2025.
In 2024, we strengthened our offerings of cloud SIM technology, hyper-connectivity solutions and additional value-added services that improve user experience, including the launch of three new GlocalMe Life solutions and the growing commercial application of our GlocalMe IoT solutions. We continue to grow our GlocalMe Life solutions business and integrate cloud SIM technology and hyper-connectivity solutions into our IoT business.
In 2025, we strengthened our offerings of cloud SIM technology, hyper-connectivity solutions and additional value-added services that improve user experience, including the launch of GlocalMe Life solutions, PetPhone and the growing commercial application of our GlocalMe IoT solutions. We continue to grow our GlocalMe Life solutions business and integrate cloud SIM technology and hyper-connectivity solutions into our IoT business.
Risk Factors—Risks Related to Our Business and Industry—We may need additional capital, and financing may not be available on terms acceptable to us, or at all.” As of December 31, 2022, 2023 and 2024, we had US$11.7 million, US$7.6 million and US$8.7 million other investments, respectively.
Risk Factors—Risks Related to Our Business and Industry—We may need additional capital, and financing may not be available on terms acceptable to us, or at all.” 117 As of December 31, 2023, 2024 and 2025, we had US$7.6 million, US$8.7 million and US$13.3 million other investments, respectively.
While our business is influenced by these general factors, our results of operations are more directly affected by company specific factors, including the following major factors: ● innovative monetization models offering mobile data connectivity services; ● our ability to increase our user base and usage of our mobile data connectivity services; ● efficient data allowance procurement; ● the mix of our product and service offerings; ● our ability to improve operational efficiency; and ● penetration into international markets. 99 Innovative monetization models offering mobile data connectivity services We create and develop various monetization models as our company evolves.
While our business is influenced by these general factors, our results of operations are more directly affected by company specific factors, including the following major factors: ● innovative monetization models offering mobile data connectivity services; ● our ability to increase our user base and usage of our mobile data connectivity services; 102 ● efficient data allowance procurement; ● the mix of our product and service offerings; ● our ability to improve operational efficiency; and ● penetration into international markets.
Our services had a gross margin of 56.0%, 58.5% and 60.8% in 2022, 2023 and 2024, respectively, while our sales of products had a gross margin of 26.4%, 28.6% and 24.9% in the same periods, respectively. Our ability to increase our gross margin depends on our ability to expand services by developing innovative monetization models.
Our services had a gross margin of 58.5%, 60.8% and 58.0% in 2023, 2024 and 2025, respectively, while our sales of products had a gross margin of 28.6%, 24.9% and 35.6% in the same periods, respectively. Our ability to increase our gross margin depends on our ability to expand services by developing innovative monetization models.
Financing Activities Net cash generated from financing activities in 2024 was US$1.7 million, primarily due to proceeds from bank borrowings of US$7.0 million, which was partially offset by repayment of bank borrowings and other borrowings of US$5.3 million. 114 Net cash generated from financing activities in 2023 was US$2.5 million, primarily due to the proceeds from bank borrowings and other borrowings of US$7.9 million, which was partially offset by repayment of bank borrowings and other borrowings of US$5.4 million.
Net cash generated from financing activities in 2023 was US$2.5 million, primarily due to the proceeds from bank borrowings and other borrowings of US$7.9 million, which was partially offset by repayment of bank borrowings and other borrowings of US$5.4 million.
As of December 31, 2024, the outstanding balance of this loan was RMB12.7 million (US$1.8 million). ● In November 2024, we obtained a one-year short-term bank borrowing of RMB10.0 million (US$1.4 million) from a commercial bank, bearing interest at a rate of 3.1% per annum.
As of December 31, 2025, the outstanding balance of this loan was RMB9.0 million (US$1.3 million). ● In November 2025, we obtained a one-year short-term bank borrowing of RMB10.0 million (US$1.4 million) from a commercial bank, bearing interest at a rate of 2.7% per annum.
As of December 31, 2024, 48.9% of our cash and cash equivalents were held in mainland China. We believe that our current cash and cash equivalents, together with anticipated cash flows, will be sufficient to meet our anticipated working capital requirements and capital expenditures for at least the next 12 months.
As of December 31, 2025, 46.5% of our cash and cash equivalents were held in mainland China. We believe that our current cash and cash equivalents, together with anticipated cash flows, will be sufficient to meet our anticipated working capital requirements and capital expenditures for at least the next 12 months.
The statutory rate of 15% to 25%, depending on which entity, was applied when calculating deferred tax assets. As of December 31, 2022, 2023 and 2024, we had net operating loss carryforwards of approximately US$134.9 million, US$129.7 million and US$130.5 million, respectively, which arose from the subsidiaries and former VIE established in Hong Kong and mainland China.
The statutory rate of 15% to 25%, depending on which entity, was applied when calculating deferred tax assets. As of December 31, 2023, 2024 and 2025, we had net operating loss carryforwards of approximately US$129.7 million, US$130.5 million and US$132.4 million, respectively, which arose from the subsidiaries established in Hong Kong and mainland China.
As of December 31, 2024, the outstanding balance of this loan was RMB8.0 million (US$1.1 million). ● In November 2024, we obtained a one-year short-term bank borrowing of RMB12.7 million (US$1.8 million) from a commercial bank, bearing interest at a rate of 3.17% per annum.
As of December 31, 2024 and 2025, the outstanding balance of this loan was RMB8.0 million (US$1.1 million) and nil, respectively. We have fully repaid the loan. ● In November 2024, we obtained a one-year short-term bank borrowing of RMB12.7 million (US$1.8 million) from a commercial bank, bearing interest at a rate of 3.17% per annum.
As of December 31, 2024, the outstanding balance of this loan was RMB10.0 million (US$1.4 million). ● In December 2024, we obtained a one-year short-term bank borrowing of RMB7.3 million (US$1.0 million) from a commercial bank, bearing interest at a rate of 3.17% per annum.
As of December 31, 2024 and 2025, the outstanding balance of this loan was RMB10.0 million (US$1.4 million) and nil, respectively. We have fully repaid the loan. ● In December 2024, we obtained a one-year short-term bank borrowing of RMB7.3 million (US$1.0 million) from a commercial bank, bearing interest at a rate of 3.17% per annum.
The longest carry-over period is extended from 5 years to 10 years. As of December 31, 2024, the net operating loss carry forwards arose from Shenzhen Ucloudlink Technology Limited and Shenzhen uCloudlink will expire during the period from 2025 to 2034, if unused. 118
The longest carry-over period is extended from 5 years to 10 years. As of December 31, 2025, the net operating loss carry forwards arose from Shenzhen Ucloudlink Technology Limited and Shenzhen uCloudlink will expire during the period from 2026 to 2035, if unused. 122
As of December 31, 2024, the outstanding balance of this loan was RMB2.0 million (US$0.3 million). ● In September 2024, we obtained a one-year short-term bank borrowing of RMB8.0 million (US$1.1 million) from a commercial bank, bearing interest at a rate of 3.1% per annum.
As of December 31, 2024 and 2025, the outstanding balance of this loan was RMB2.0 million (US$0.3 million) and nil, respectively. We have fully repaid the loan. ● In September 2024, we obtained a one-year short-term bank borrowing of RMB8.0 million (US$1.1 million) from a commercial bank, bearing interest at a rate of 3.1% per annum.
Liquidity and Capital Resources The following table sets forth a summary of our cash flows for the periods presented: For the Year Ended December 31, 2022 2023 2024 US$ US$ US$ (in thousands) Net cash generated from operating activities 4,404 6,507 9,186 Net cash used in investing activities (162 ) (240 ) (3,758 ) Net cash generated from financing activities 3,540 2,509 1,732 Increase in cash, cash equivalents 7,782 8,776 7,160 Effect of exchange rates on cash and cash equivalents (729 ) (326 ) (474 ) Cash and cash equivalents at beginning of year 7,868 14,921 23,371 Cash and cash equivalents at end of year 14,921 23,371 30,057 To date, we have financed our operating and investing activities through cash generated by equity and equity-linked financing activities, including proceeds from our initial public offering, and borrowings from financial institutions.
Liquidity and Capital Resources The following table sets forth a summary of our cash flows for the periods presented: For the Year Ended December 31, 2023 2024 2025 US$ US$ US$ (in thousands) Net cash generated from operating activities 6,507 9,186 3,208 Net cash used in investing activities (240 ) (3,758 ) (1,028 ) Net cash generated from financing activities 2,509 1,732 122 Increase in cash and cash equivalents 8,776 7,160 2,302 Effect of exchange rates on cash and cash equivalents (326 ) (474 ) 472 Cash and cash equivalents at beginning of year 14,921 23,371 30,057 Cash and cash equivalents at end of year 23,371 30,057 32,831 To date, we have financed our operating and investing activities through cash generated by equity and equity-linked financing activities, including proceeds from our initial public offering, and borrowings from financial institutions.
Additionally, payments of dividends by our subsidiary incorporated in Hong Kong to the Company is not subject to any withholding tax in Hong Kong. Under the 2025-2026 Budget announced by the Financial Secretary of Hong Kong on February 26, 2025, tax reduction measures were proposed.
Additionally, payments of dividends by our subsidiary incorporated in Hong Kong to the Company is not subject to any withholding tax in Hong Kong. Under the 2026-2027 Budget announced by the Financial Secretary of Hong Kong on 25 February 2026, further tax measures were proposed.
Interest expenses We had interest expenses of US$0.4 million and US$0.1 million in 2022 and 2023. Net income/(loss) As a result of the foregoing, we had net income of US$2.8 million in 2023, compared to net loss of US$19.9 million in 2022. Critical Accounting Policies We prepare our financial statements in conformity with U.S.
Interest expenses We had interest expenses of US$0.2 million in 2024, compared to US$0.1 million in 2023. Net income As a result of the foregoing, we had net income of US$4.6 million in 2024, compared to US$2.8 million in 2023. Critical Accounting Policies We prepare our financial statements in conformity with U.S.
These measures include, without limitation, a one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2024/2025 by 100%, subject to a ceiling of HK$1,500 per case.
These measures include, without limitation: a one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2025/2026 by 100%, subject to a ceiling of HK$3,000 per case.
Sales and marketing expenses consist primarily of online and offline advertising expenses, promotion expenses, staff costs and share-based compensation, sales commissions and other related incidental expenses that are incurred to conduct the sales and marketing activities. General and administrative expenses .
Sales and marketing expenses consist primarily of online and offline advertising expenses, promotion expenses, staff costs and share-based compensation, sales commissions and other related incidental expenses that are incurred in connection with sales and marketing activities. General and administrative expenses .
In 2024, we promoted our products and services through a variety of online and offline marketing and promotional activities, as well as global exhibitions to enhance market exposure. Additionally, we made breakthroughs in developing retail channels, by signing cooperation agreements with North America’s largest airport retail channels to make our products widely available across airport retail locations in North America.
We promote our products and services through a variety of online and offline marketing and promotional activities, as well as global exhibitions to enhance market exposure. Additionally, we have signed cooperation agreements with North America’s largest airport retail channels to make our products widely available across airport retail locations in North America.
Operating expenses The following table sets forth the principal components of our operating expenses by amounts and percentages of our total operating expenses for the periods presented: For the Year Ended December 31, 2022 2023 2024 US$ % US$ % US$ % (in thousands, except for percentages) Operating expenses: Research and development expenses (8,430 ) 16.3 (6,456 ) 16.4 (6,198 ) 15.5 Sales and marketing expenses (10,305 ) 19.9 (14,304 ) 36.3 (19,926 ) 49.8 General and administrative expenses (18,726 ) 36.2 (17,118 ) 43.5 (15,947 ) 39.9 Other (expense)/income, net (14,265 ) 27.6 (1,500 ) 3.8 2,095 (5.2 ) Total operating expenses (51,726 ) 100.0 (39,378 ) 100.0 (39,976 ) 100.0 Research and Development expenses .
Operating expenses The following table sets forth the principal components of our operating expenses by amounts and percentages of our total operating expenses for the periods presented: For the Year Ended December 31, 2023 2024 2025 US$ % US$ % US$ % (in thousands, except for percentages) Operating expenses: Research and development expenses (6,456 ) 16.4 (6,198 ) 15.5 (4,868 ) 14.0 Sales and marketing expenses (14,304 ) 36.3 (19,926 ) 49.8 (23,986 ) 69.1 General and administrative expenses (17,118 ) 43.5 (15,947 ) 39.9 (12,577 ) 36.2 Other (expense)/income, net (1,500 ) 3.8 2,095 (5.2 ) 6,714 (19.3 ) Total operating expenses (39,378 ) 100.0 (39,976 ) 100.0 (34,717 ) 100.0 106 Research and Development expenses .
Our accounts payable represent primarily accounts payable to hardware suppliers and mobile data allowance providers. As of December 31, 2022, 2023 and 2024, our accounts payable were US$6.8 million, US$5.3 million and US$7.4 million, respectively. The decrease from 2022 to 2023 and the increase from 2023 to 2024 were primarily due to our payment arrangement with suppliers in 2023.
Our accounts payable represent primarily accounts payable to hardware suppliers and mobile data allowance providers. As of December 31, 2023, 2024 and 2025, our accounts payable were US$5.3 million, US$7.4 million and US$7.2 million, respectively. The increase from 2023 to 2025 was primarily due to our payment arrangements with suppliers.
Our gross profits on sales of products are US$6.6 million, US$7.7 million and US$7.9 million, corresponding to 26.4%, 28.6% and 24.9% gross margins relating to sales of products, in 2022, 2023 and 2024, respectively.
Our gross profits on sales of products were US$7.7 million, US$7.9 million and US$7.3 million, corresponding to 28.6%, 24.9% and 35.6% gross margins relating to sales of products, in 2023, 2024 and 2025, respectively.
Specifically, our gross profits on services are US$25.9 million, US$34.3 million and US$36.5 million, corresponding to 56.0%, 58.5% and 60.8% gross margins relating to services, in 2022, 2023 and 2024, respectively.
Specifically, our gross profits on services were US$34.3 million, US$36.5 million and US$35.4 million, corresponding to 58.5%, 60.8% and 58.0% gross margins relating to services, in 2023, 2024 and 2025, respectively.
We classify the share-based awards granted to employees, certain senior management, directors and other consultants as equity award, and have elected to recognize compensation expense on share-based awards with service condition on a graded vesting basis over the requisite service period, which is generally the vesting period. 110 We entered into a share restriction agreement with certain senior management and their respective wholly owned companies, which directly hold our equity interest.
We classify the share-based awards granted to employees, certain senior management, directors and other consultants as equity award, and have elected to recognize compensation expense on share-based awards with service condition on a graded vesting basis over the requisite service period, which is generally the vesting period.
The following table sets forth the components of our revenues by amounts and percentages of our total revenues for the periods presented: For the Year Ended December 31, 2022 2023 2024 US$ % US$ % US$ % (in thousands, except for percentages) Revenues: Revenues from services —Data connectivity services 35,483 49.7 46,745 54.6 47,639 52.0 International data connectivity services 28,085 39.3 37,928 44.3 39,513 43.1 Local data connectivity services 7,398 10.4 8,817 10.3 8,126 8.9 —PaaS and SaaS services 9,819 13.7 10,425 12.2 11,293 12.3 —Others 926 1.3 1,400 1.6 1,070 1.2 Revenues from services 46,228 64.7 58,570 68.4 60,002 65.5 Sales of products —Sales of terminals 21,748 30.4 24,369 28.5 22,246 24.3 —Sales of data related products 3,230 4.5 2,150 2.5 8,417 9.2 —Others 255 0.4 487 0.6 970 1.0 Sales of products 25,233 35.3 27,006 31.6 31,633 34.5 Total revenues 71,461 100.0 85,576 100.0 91,635 100.0 Revenues from services Our revenues from services mainly consist of data connectivity services, including international data connectivity services and local data connectivity services, and PaaS and SaaS services. 101 Data connectivity services .
The following table sets forth the components of our revenues by amounts and percentages of our total revenues for the periods presented: For the Year Ended December 31, 2023 2024 2025 US$ % US$ % US$ % (in thousands, except for percentages) Revenues: Revenues from services —Data connectivity services 46,745 54.6 47,639 52.0 47,810 58.7 International data connectivity services 37,928 44.3 39,513 43.1 41,113 50.5 Local data connectivity services 8,817 10.3 8,126 8.9 6,697 8.2 —PaaS and SaaS services 10,425 12.2 11,293 12.3 11,112 13.6 —Others 1,400 1.6 1,070 1.2 2,138 2.6 Revenues from services 58,570 68.4 60,002 65.5 61,060 75.0 Sales of products —Sales of terminals 24,369 28.5 22,246 24.3 19,526 24.0 —Sales of data related products 2,150 2.5 8,417 9.2 134 0.2 —Others 487 0.6 970 1.0 729 0.9 Sales of products 27,006 31.6 31,633 34.5 20,389 25.0 Total revenues 85,576 100.0 91,635 100.0 81,449 100.0 104 Revenues from services Our revenues from services mainly consist of data connectivity services, including international data connectivity services and local data connectivity services, and PaaS and SaaS services.
Net income As a result of the foregoing, we had net income of US$4.6 million in 2024, compared to US$2.8 million in 2023. 106 Year ended December 31, 2023 compared to year ended December 31, 2022 Revenues Our revenues increased by 19.8% from US$71.4 million in 2022 to US$85.6 million in 2023. Revenues from Services .
Net income As a result of the foregoing, we had net income of US$6.3 million in 2025, compared to US$4.6 million in 2024. 110 Year ended December 31, 2024 compared to year ended December 31, 2023 Revenues Our revenues increased by 7.1% from US$85.6 million in 2023 to US$91.6 million in 2024. Revenues from Services .
Gross profit and gross margin Our overall gross profits are US$32.5 million, US$42.0 million and US$44.4 million, representing overall gross margins of 45.5%, 49.0% and 48.4% in 2022, 2023 and 2024, respectively.
Gross profit and gross margin Our overall gross profits were US$42.0 million, US$44.4 million and US$42.7 million, representing overall gross margins of 49.0%, 48.4% and 52.4% in 2023, 2024 and 2025, respectively.
Our accounts payable turnover days decreased from 92.9 days in 2022 to 50.8 days in 2023, primarily due to our payment arrangement with suppliers in 2023, and decreased slightly to 49.3 days in 2024.
Our accounts payable turnover days decreased slightly from 50.8 days in 2023 to 49.3 days in 2024, but increased to 68.9 days in 2025, primarily due to our payment arrangements with suppliers.
As of December 31, 2024, the outstanding balance of this loan was RMB7.3 million (US$1.0 million). 112 As of December 31, 2022, 2023 and 2024, our cash and cash equivalents were US$14.9 million, US$23.4 million and US$30.1 million, respectively.
As of December 31, 2025, the outstanding balance of this loan was RMB6.0 million (US$8.5 million). As of December 31, 2023, 2024 and 2025, our cash and cash equivalents were US$23.4 million, US$30.1 million and US$32.8 million, respectively.
Basis of Consolidation The consolidated financial statements include the financial statements of us and our subsidiaries, which include the former VIEs and the WFOE over which we are the primary beneficiary. All transactions and balances among us and our subsidiaries have been eliminated upon consolidation.
Basis of Consolidation The consolidated financial statements include the financial statements of us and our subsidiaries. All transactions and balances among us and our subsidiaries have been eliminated upon consolidation.
All grants of share-based awards to employees, certain senior management and directors classified as equity awards are recognized in the financial statements based on their grant date fair values which are calculated using an option pricing model. 116 The Restricted Shares were classified as equity awards under ASC 718 and are accounted for as share-based compensation based on the grant date fair value over the vesting period using graded vesting method.
All grants of share-based awards to employees, certain senior management and directors classified as equity awards are recognized in the financial statements based on their grant date fair values which are calculated using an option pricing model.
The increase was mainly attributable to the gradual recovery of international travels. Our costs incurred from data procurement accounted for 49.4%, 47.9% and 42.7% of our total cost of revenues in 2022, 2023 and 2024, respectively. Our data sources include MNOs and their sales channels, MVNOs, and other SIM-card trading companies, covering mobile data markets in 163 countries and regions.
Our costs incurred from data procurement accounted for 47.9%, 42.7% and 55.8% of our total cost of revenues in 2023, 2024 and 2025, respectively. Our data sources include MNOs and their sales channels, MVNOs, and other SIM-card trading companies, covering mobile data markets in 167 countries and regions.
Our general and administrative expenses decreased by 6.8% from US$17.1 million in 2023 to US$15.9 million in 2024. The decrease was primarily due to decreases of US$1.6 million in share-based compensation expenses and US$0.8 million in staff costs, which was partially offset by increases of US$0.9 million in professional service fees and US$0.6 million in provision for bad debts.
The decrease was primarily due to decreases of US$1.6 million in share-based compensation expenses and US$0.8 million in staff costs, which was partially offset by increases of US$0.9 million in professional service fees and US$0.6 million in provision for bad debts. 111 Income from operations As a result of the foregoing, we had income from operations of US$4.4 million in 2024, compared to US$2.6 million in 2023.
At the same time, we provide our business partners with cloud SIM platform PaaS/SaaS and other services and generate revenue through a profit-sharing model.
We also collect revenue from data usage of our terminals and third-party terminals that use our cloud SIM technology. At the same time, we provide our business partners with cloud SIM platform PaaS/SaaS and other services and generate revenue through a profit-sharing model.
As of December 31, 2024, US$11.4 million of our cash and cash equivalents was held in U.S. dollars, US$14.9 million was held in Renminbi, US$0.6 million was held in Hong Kong dollars, US$1.4 million was held in Japanese yen, and US$1.8 million was held in other currencies.
As of December 31, 2025, US$10.4 million of our cash and cash equivalents was held in U.S. dollars, US$17.7 million was held in Renminbi, US$1.2 million was held in Hong Kong dollars, US$1.4 million was held in Japanese yen, and US$2.1 million was held in other currencies.
Net cash generated from financing activities in 2022 was US$3.5 million, primarily attributable to net proceeds from the proceeds from bank borrowings and other borrowings of US$9.7 million, and proceeds from issuance of convertible bonds of US$4.7 million, which was partially offset by repayment of bank borrowings and other borrowings of US$9.6 million, and redemption of convertible bonds of US$1.1 million.
Net cash generated from financing activities in 2024 was US$1.7 million, primarily due to proceeds from bank borrowings of US$7.0 million, which was partially offset by repayment of bank borrowings and other borrowings of US$5.3 million.
The difference between net cash generated from operating activities and net loss of US$19.9 million in the same period was primarily due to (i) US$13.0 million of losses of fair value on other investments, (ii) the decrease of US$7.7 million of accounts receivable, (iii) US$3.1 million of share-based compensation expenses, (iv) US$2.5 million of Foreign currency exchange losses, net, (v) the decrease of US$2.4 million of inventories, (vi) US$2.0 million of provision of bad debts, (vii) the decrease of US$1.8 million of Prepayments and other assets, and (viii) US$0.8 million of depreciation of property and equipment.
The difference between net cash generated from operating activities and net income of US$6.3 million in the same period was primarily due to (i) the decrease of US$6.3 million in accrued expenses, accounts payable and other liabilities, (ii) US$4.6 million of gains of fair value on other investments, and (iii) the increase of US$3.0 million in inventories, partially offset by (i) the decrease of US$3.5 in accounts receivable, (ii) US$2.7 million of depreciation of property and equipment, (iii) the decrease of US$2.7 in contract liabilities, (iv) US$1.0 million of share-based compensation expenses, and (v) US$0.8 million of provision for bad debts. 118 Net cash generated from operating activities in 2024 was US$9.2 million.
Shenzhen Ucloudlink Technology Limited and Shenzhen uCloudlink qualified as national high and new technology enterprises in 2017, which are entitled to preferential tax rate to 15%. Their high and new technology enterprises status is renewed and set to expire on October 16, 2025. In addition, Shenzhen Ucloudlink Technology Limited and Shenzhen uCloudlink enjoy other tax preferences.
Their high and new technology enterprises status is renewed and set to expire on October 16, 2026. In addition, Shenzhen Ucloudlink Technology Limited and Shenzhen uCloudlink enjoy other tax preferences.
Year ended December 31, 2024 compared to year ended December 31, 2023 Revenues Our revenues increased by 7.1% from US$85.6 million in 2023 to US$91.6 million in 2024. Revenues from Services .
Year ended December 31, 2025 compared to year ended December 31, 2024 Revenues Our revenues decreased by 11.1% from US$91.6 million in 2024 to US$81.4 million in 2025. Revenues from Services .
The growth of our user base and data usage will lead to the increased revenues from data connectivity services. Efficient data allowance procurement Efficient data procurement is a key factor for managing our cost of revenues. Our gross margin relating to data connectivity services increased from 45.8% in 2022 to 51.0% in 2023, and further to 52.9% in 2024.
The growth of our user base and data usage will lead to the increased revenues from data connectivity services. Efficient data allowance procurement Efficient data procurement is a key factor for managing our cost of revenues.
Cost of revenues The following table sets forth the components of our cost of revenues by amounts and percentages of cost of revenues for the periods presented: For the Year Ended December 31, 2022 2023 2024 US$ % US$ % US$ % (in thousands, except percentages) Cost of revenues: Cost of services (20,346 ) 52.3 (24,318 ) 55.8 (23,503 ) 49.7 Cost of products sold (18,581 ) 47.7 (19,293 ) 44.2 (23,771 ) 50.3 Total cost of revenues (38,927 ) 100.0 (43,611 ) 100.0 (47,274 ) 100.0 102 Cost of revenue consists primarily of data connectivity service costs, cost of inventory, logistics costs, depreciation and maintenance costs for equipment, product replacement costs, payment processing fees and other related incidental expenses that are directly attributable to our principal operations.
Geographic Distribution In terms of revenue contribution, mainland China, Japan, Hong Kong, Taiwan, North America, Southeast Asia and Europe are the top geographies according to the location of customers, which contributed 13.0%, 43.4%, 1.9%, 1.0%, 28.1%, 5.4% and 4.9% of our total revenues in 2023, respectively, contributed 24.0%, 47.4%, 2.2%, 1.7%, 13.8%, 4.9% and 4.5% in 2024, respectively, and contributed 31.5%, 37.8%, 5.4%, 0.9%, 13.6%, 5.2% and 4.6% in 2025, respectively. 105 Cost of revenues The following table sets forth the components of our cost of revenues by amounts and percentages of cost of revenues for the periods presented: For the Year Ended December 31, 2023 2024 2025 US$ % US$ % US$ % (in thousands, except percentages) Cost of revenues: Cost of services (24,318 ) 55.8 (23,503 ) 49.7 (25,639 ) 66.1 Cost of products sold (19,293 ) 44.2 (23,771 ) 50.3 (13,127 ) 33.9 Total cost of revenues (43,611 ) 100.0 (47,274 ) 100.0 (38,766 ) 100.0 Cost of revenue consists primarily of data connectivity service costs, cost of inventory, logistics costs, depreciation and maintenance costs for equipment, product replacement costs, payment processing fees and other related incidental expenses that are directly attributable to our principal operations.
Pursuant to the share restriction agreement, all of our ordinary shares, or restricted shares, held by certain senior management shall be subject to vesting conditions until the Restricted Shares become vested.
We entered into a share restriction agreement with certain senior management and their respective wholly owned companies, which directly hold our equity interest. Pursuant to the share restriction agreement, all of our ordinary shares, or restricted shares, held by certain senior management shall be subject to vesting conditions until the Restricted Shares become vested.
The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. See “Item 3. Key Information—D.
We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. See “Item 3. Key Information—D.
In deriving the equity value of each class of shares, we applied the option pricing method, which treats different classes of shares as call options on the total equity value, with exercise prices based on the liquidation preference or redemption amount of the relevant classes of shares.
The weighted average cost of capital was determined based on a consideration of the factors including risk-free rate, comparative industry risk, equity risk premium, company size and non-systematic risk factors. 121 In deriving the equity value of each class of shares, we applied the option pricing method, which treats different classes of shares as call options on the total equity value, with exercise prices based on the liquidation preference or redemption amount of the relevant classes of shares.
We also offer smart terminals and provide our cloud SIM architecture to business partners such as MVNOs and MNOs for them to offer global mobile data connectivity services directly to their users. We subsequently developed our uCloudlink 2.0 model, which aims to provide mobile data connectivity services to local users across different MNOs in a single country.
We offer Roamingman portable Wi-Fi services and directly sell smart terminals to provide global mobile data connectivity services. We also offer smart terminals and provide our cloud SIM architecture to business partners such as MVNOs and MNOs for them to offer global mobile data connectivity services directly to their users.
We started to conduct our business under our uCloudlink 1.0 model in 2014, which focuses on cross-border travelers that need mobile data connectivity services across different countries. We offer Roamingman portable Wi-Fi services and directly sell smart terminals to provide global mobile data connectivity services.
Innovative monetization models offering mobile data connectivity services We create and develop various monetization models as our company evolves. We started to conduct our business under our uCloudlink 1.0 model in 2014, which focuses on cross-border travelers that need mobile data connectivity services across different countries.
As of December 31, 2024, we had cash and cash equivalents of US$30.1 million and short-term investments of US$8.7 million. We may decide to enhance our liquidity position or increase our cash reserve for future investments through additional capital and finance funding. The issuance and sale of additional equity would result in further dilution to our shareholders.
We may decide to enhance our liquidity position or increase our cash reserve for future investments through additional capital and finance funding. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations.
Accounts payable turnover days for a given period are equal to average accounts payable balances at the beginning and the end of the period divided by total cost of revenues during the period and multiplied by the number of days during the period. 113 In utilizing the proceeds we received from our initial public offering, we may make additional capital contributions to our mainland China subsidiaries, establish new subsidiaries in mainland China and make capital contributions to these new mainland China subsidiaries, make loans to our mainland China subsidiaries, or acquire offshore entities with operations in mainland China in offshore transactions.
In utilizing the proceeds we received from our initial public offering, we may make additional capital contributions to our mainland China subsidiaries, establish new subsidiaries in mainland China and make capital contributions to these new mainland China subsidiaries, make loans to our mainland China subsidiaries, or acquire offshore entities with operations in mainland China in offshore transactions.

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Item 6. [Reserved]

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

41 edited+5 added−6 removed79 unchanged
Biggest changeIn July 2019, our founders and certain other members of management and beneficial owners of our company, including Chaohui Chen, Zhiping Peng, Wen Gao, Zhu Tan, Zhigang Du, Zhongqi Kuang, Shubao Pei, Xuesong Ren and Yimeng Shi, entered into a voting agreement, which provides that they shall reach a consensus before exercising their voting rights with respect to our shares.
Biggest changeThe percentage of beneficial ownership and the percentage of aggregate voting power for China International Capital Corporation Limited are calculated based on the number of our company’s total outstanding shares as of February 28, 2026 and assuming China International Capital Corporation Limited’s shareholding has not change since April 15, 2024. 132 In July 2019, our founders and certain other members of management and beneficial owners of our company, including Chaohui Chen, Zhiping Peng, Wen Gao, Zhu Tan, Zhigang Du, Zhongqi Kuang, Shubao Pei, Xuesong Ren and Yimeng Shi, entered into a voting agreement, which provided that they should reach a consensus before exercising their voting rights with respect to our shares.
Our nominating and corporate governance committee consists of Ms. Hope Ni and Prof. Ying Kong. Ms. Hope Ni is the chairperson of our nominating and corporate governance committee. Ms. Hope Ni and Prof. Ying Kong satisfy the “independence” requirements of Rule 5605 of the Nasdaq Stock Market Rules.
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of Ms. Hope Ni and Prof. Ying Kong. Ms. Hope Ni is the chairperson of our nominating and corporate governance committee. Ms. Hope Ni and Prof. Ying Kong satisfy the “independence” requirements of Rule 5605 of the Nasdaq Stock Market Rules.
The nominating and corporate governance committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
The nominating and corporate governance committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; 128 ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
Specifically, each executive officer has agreed not to (i) solicit from any customer doing business with us during the effective term of the employment agreement business of the same or of a similar nature to our business; (ii) solicit from any of our known potential customer business of the same or of a similar nature to that which has been the subject of our known written or oral bid, offer or proposal, or of substantial preparation with a view to making such a bid, proposal or offer; (iii) solicit the employment or services of, or hire or engage, any person who is known to be employed or engaged by us; or (iv) otherwise interfere with our business or accounts, including, but not limited to, with respect to any relationship or agreement between any vendor or supplier and us. 120 We have also entered into indemnification agreements with each of our directors and executive officers.
Specifically, each executive officer has agreed not to (i) solicit from any customer doing business with us during the effective term of the employment agreement business of the same or of a similar nature to our business; (ii) solicit from any of our known potential customer business of the same or of a similar nature to that which has been the subject of our known written or oral bid, offer or proposal, or of substantial preparation with a view to making such a bid, proposal or offer; (iii) solicit the employment or services of, or hire or engage, any person who is known to be employed or engaged by us; or (iv) otherwise interfere with our business or accounts, including, but not limited to, with respect to any relationship or agreement between any vendor or supplier and us. 124 We have also entered into indemnification agreements with each of our directors and executive officers.
Kong is also the chairman of the World Alliance for Low Carbon Cities. Prof. Kong received his bachelor’s degree in physics from Peking University in 1982. He received a master’s degree in public administration from the Carleton University, Canada in 1994, where he also obtained a doctorate degree in economics in 2000. Mr.
Kong is also the chairman of the World Alliance for Low Carbon Cities. Prof. Kong received his bachelor’s degree in physics from Peking University in 1982. He received a master’s degree in public administration from the Carleton University, Canada in 1994, where he also obtained a doctorate degree in economics in 2000. 123 Mr.
Shi is a licensed Certified Public Accountant in the State of Michigan of the United States. 119 Mr. Wen Gao has served as our chief strategy officer since September 2020 and served as our chief sales officer from 2014 to September 2020. Prior to joining us, Mr.
Shi is a licensed Certified Public Accountant in the State of Michigan of the United States. Mr. Wen Gao has served as our chief strategy officer since September 2020 and served as our chief sales officer from 2014 to September 2020. Prior to joining us, Mr.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares on an as-converted basis as of February 28, 2025 by: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own more than 5% of our total outstanding shares.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares on an as-converted basis as of February 28, 2026 by: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own more than 5% of our total outstanding shares.
(7) Represents 19,662,570 Class A ordinary shares beneficially owned by China International Capital Corporation Limited, a PRC company, over which China International Capital Corporation Limited has shared dispositive power as of April 15, 2024, in the form of 1,966,257 ADSs held by CICC Financial Trading Limited, a Hong Kong company.
(9) Represents 19,662,570 Class A ordinary shares beneficially owned by China International Capital Corporation Limited, a PRC company, over which China International Capital Corporation Limited has shared dispositive power as of April 15, 2024, in the form of 1,966,257 ADSs held by CICC Financial Trading Limited, a Hong Kong company.
(6) Represents (i) 26,309,700 Class A ordinary shares held by Beijing Cash Capital Venture Partners, a PRC limited liability partnership, and (ii) 11,095,880 Class A ordinary shares held by Xizang Guoke Dingyi Investment Center (Limited Partnership), a PRC limited partnership, based on the Schedule 13G filed on February 11, 2021.
(8) Represents (i) 26,309,700 Class A ordinary shares held by Beijing Cash Capital Venture Partners, a PRC limited liability partnership, and (ii) 11,095,880 Class A ordinary shares held by Xizang Guoke Dingyi Investment Center (Limited Partnership), a PRC limited partnership, based on the Schedule 13G filed on February 11, 2021.
Board Diversity Matrix (As of February 28, 2025) Country of Principal Executive Offices People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 4 123 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 3 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee.
Board Diversity Matrix (As of February 28, 2026) Country of Principal Executive Offices People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 4 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 3 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 127 Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee.
Our mainland China subsidiaries and the former VIEs 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.
Our mainland China 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.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. 124 Nominating and Corporate Governance Committee .
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
The following table summarizes, as of February 28, 2025, the number of ordinary shares underlying outstanding options that we have granted to our directors and executive officers.
The following table summarizes, as of February 28, 2026, the number of ordinary shares underlying outstanding options that we have granted to our directors and executive officers.
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. 128
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable.
The maximum aggregate number of ordinary shares that may be issued under 2018 Plan is 40,147,720 ordinary shares. As of February 28, 2025, options to purchase a total of 16,714,060 ordinary shares are outstanding under the 2018 Plan. The following paragraphs summarize the principal terms of the 2018 Plan. Type of Awards .
The maximum aggregate number of ordinary shares that may be issued under 2018 Plan is 40,147,720 ordinary shares. As of February 28, 2026, options to purchase a total of 16,729,060 ordinary shares are outstanding under the 2018 Plan. The following paragraphs summarize the principal terms of the 2018 Plan. Type of Awards .
Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors. D. Employees We had a total of 330, 393 and 404 employees as of December 31, 2022, 2023 and 2024, respectively.
Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors. D. Employees We had a total of 393, 404 and 429 employees as of December 31, 2023, 2024 and 2025, respectively.
The average age of our employees is around 35 and 75.2% of our employees have obtained bachelor’s degrees. We believe we offer our employees competitive compensation packages and an environment that encourages self-development and, as a result, have generally been able to attract and retain qualified personnel and maintain a stable core management team.
The average age of our employees is around 36 and 73.7% of our employees have obtained bachelor’s degrees. We believe we offer our employees competitive compensation packages and an environment that encourages self-development and, as a result, have generally been able to attract and retain qualified personnel and maintain a stable core management team.
As of February 28, 2025, our employees and consultants other than our directors and executive officers as a group held outstanding restricted share units equivalent to 1,038,300 ordinary shares. C. Board Practices Board of Directors Our board of directors consists of four directors. A director is not required to hold any shares in our company by way of qualification.
As of February 28, 2026, our employees and consultants other than our directors and executive officers as a group held outstanding restricted share units equivalent to 604,480 ordinary shares. C. Board Practices Board of Directors Our board of directors consists of four directors. A director is not required to hold any shares in our company by way of qualification.
Gong is a Certified Information Systems Security Professional and a member of the International Information Systems Security Certification Consortium. B. Compensation Compensation of Directors and Executive Officers In 2024, we paid an aggregate of US$1.8 million in cash to our executive officers, and paid US$110 thousand in cash to our non-executive directors.
Gong is a Certified Information Systems Security Professional and a member of the International Information Systems Security Certification Consortium. B. Compensation Compensation of Directors and Executive Officers In 2025, we paid an aggregate of US$2.3 million in cash to our executive officers, and paid US$110 thousand in cash to our non-executive directors.
Chaohui Chen, and (v) 8,576,820 Class A ordinary shares (including those in the form of ADSs) beneficially owned by certain of our current and former employees and consultants and an officer who have granted an irrevocable voting proxy for all or certain shares beneficially owned by them to Mr. Chaohui Chen.
Chaohui Chen, and (v) 7,928,670 Class A ordinary shares (including those in the form of ADSs) beneficially owned by certain of our current and former employees and consultants who have granted an irrevocable voting proxy for all or certain shares beneficially owned by them to Mr. Chaohui Chen.
(1) Represents (i) 61,346,560 Class B ordinary shares held by MediaPlay Limited, a British Virgin Islands company, (ii) 1,962,480 Class A ordinary shares held by Mr. Chaohui Chen, (iii) 950,000 Class A ordinary shares Mr.
(1) Represents (i) 61,346,560 Class B ordinary shares held by MediaPlay Limited, a British Virgin Islands company, (ii) 2,994,710 Class A ordinary shares held by Mr. Chaohui Chen, (iii) 950,000 Class A ordinary shares Mr.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register. 125 Terms of Directors and Officers Our directors may be elected by an ordinary resolution of our shareholders.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register.
The address of Mr. Yimeng Shi is Unit 2214-Rm1, 22/F, Mira Place Tower A, 132 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong. (4) Represents (i) 11,889,820 Class A ordinary shares held by Talent Wits Limited, a British Virgin Islands company, and (ii) 787,600 Class A ordinary shares held by Mr. Wen Gao.
Yimeng Shi is Unit 2214-Rm1, 22/F, Mira Place Tower A, 132 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong. (6) Represents (i) 11,889,820 Class A ordinary shares held by Talent Wits Limited, a British Virgin Islands company, and (ii) 1,142,600 Class A ordinary shares held by Mr. Wen Gao. Talent Wits Limited is wholly owned by Mr. Wen Gao.
Name Ordinary Shares Underlying Options Exercise Price (US$/Share) Date of Grant Date of Expiration Chaohui Chen * 0.5000 April 27, 2020 April 27, 2027 – April 27, 2031 Zhiping Peng * 0.5000 April 27, 2020 April 27, 2027 – April 27, 2031 Hope Ni — — — — Ying Kong — — — — Yimeng Shi * 0.5000 December 31, 2018 – April 27, 2020 April 27, 2027 – December 31, 2031 Wen Gao — — — — Zhihui Gong * 0.5000 December 31, 2018 December 31, 2030 All directors and executive officers as a group 5,700,000 0.5000 December 31, 2018 – April 27, 2020 April 27, 2027 –December 31, 2031 Note: * Less than 1% of our total ordinary shares on an as-converted basis outstanding as of the date of this annual report. 122 The following table summarizes, as of February 28, 2025, the number of outstanding restricted share units that we have granted to our directors and executive officers.
Name Ordinary Shares Underlying Options Exercise Price (US$/Share) Date of Grant Date of Expiration Chaohui Chen 950,000 0.5000 April 27, 2020 April 27, 2027 – April 27, 2031 Zhiping Peng 950,000 0.5000 April 27, 2020 April 27, 2027 – April 27, 2031 Hope Ni — — — — Ying Kong — — — — Yimeng Shi 2,700,000 0.5000 December 31, 2018 – April 27, 2020 April 27, 2027 – December 31, 2031 Wen Gao — — — — Zhihui Gong 1,100,000 0.5000 December 31, 2018 December 31, 2030 All directors and executive officers as a group 5,700,000 0.5000 December 31, 2018 – April 27, 2020 April 27, 2027 – December 31, 2031 126 The following table summarizes, as of February 28, 2025, the number of outstanding restricted share units that we have granted to our directors and executive officers.
Directors and Executive Officers Age Position/Title Chaohui Chen 57 Director and Chief Executive Officer Zhiping Peng 57 Chairman of the Board of Directors Hope Ni 52 Independent Director Ying Kong 65 Independent Director Yimeng Shi 52 Chief Financial Officer Wen Gao 55 Chief Strategy Officer Zhihui Gong 55 Chief Technology Officer Mr.
Directors and Executive Officers Age Position/Title Chaohui Chen 58 Director and Chief Executive Officer Zhiping Peng 58 Chairman of the Board of Directors Hope Ni 53 Independent Director Ying Kong 66 Independent Director Yimeng Shi 53 Chief Financial Officer Wen Gao 56 Chief Strategy Officer Zhihui Gong 56 Chief Technology Officer Mr.
(2) Represents (i) 60,726,420 Class B ordinary shares held by AlphaGo Robot Limited, a British Virgin Islands company, (ii) 1,765,580 Class A ordinary shares held by Mr. Zhiping Peng, (iii) 950,000 Class A ordinary shares Mr.
Chaohui Chen. (2) Represents (i) 60,726,420 Class B ordinary shares held by AlphaGo Robot Limited, a British Virgin Islands company, (ii) 2,686,630 Class A ordinary shares held by Mr. Zhiping Peng, (iii) 950,000 Class A ordinary shares Mr.
The calculations in the table below are based on 254,253,460 Class A ordinary shares and 122,072,980 Class B ordinary shares outstanding as of February 28, 2025. 126 Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 258,849,520 Class A ordinary shares and 122,072,980 Class B ordinary shares outstanding as of February 28, 2026. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Ni received a J.D. degree from University of Pennsylvania Law School in 1998 and a bachelor’s degree in applied economics and business management from Cornell University in 1994. Prof. Ying Kong has served as our independent director since June 2021. Prof.
Ni worked at Merrill Lynch’s investment banking division in New York. Ms. Ni received a J.D. degree from University of Pennsylvania Law School in 1998 and a bachelor’s degree in applied economics and business management from Cornell University in 1994. Prof. Ying Kong has served as our independent director since June 2021. Prof.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2024. Function Number of Employees Research and Development 160 Business Development, Sales and Marketing 169 Administration and Management 75 Total 404 Our success depends on our ability to attract, motivate, train and retain qualified personnel.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2025. Function Number of Employees Research and Development 162 Business Development, Sales and Marketing 180 Administration and Management 87 Total 429 129 Our success depends on our ability to attract, motivate, train and retain qualified personnel.
In addition, certain employees and consultants and an officer who hold share incentive awards under our share incentive plans, except those who signed the voting agreement, have granted an irrevocable voting proxy for the shares issuable to them pursuant to the awards to Mr. Chaohui Chen.
Certain current and former employees have granted an irrevocable voting proxy for all shares beneficially owned by them to Mr. Chaohui Chen. In addition, certain employees and consultants and an officer who hold share incentive awards under our share incentive plans have granted an irrevocable voting proxy for the shares issuable to them pursuant to the awards to Mr.
Chaohui Chen has the right to acquire upon exercise of options within 60 days after February 28, 2025, (iv) 348,094 ADSs, representing 3,480,940 Class A ordinary shares directly held by Mr.
Chaohui Chen has the right to acquire upon exercise of options within 60 days after February 28, 2026, (iv) 371,005 ADSs, representing 3,710,050 Class A ordinary shares directly held by Mr.
To our knowledge, as of February 28, 2025, a total of 203,742,840 Class A ordinary shares (including the 3,169,000 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our share incentive plans) were held by one record holder in the United States, representing approximately 54% of our total outstanding shares.
To our knowledge, as of February 28, 2026, a total of 209,338,610 Class A ordinary shares (including the 72,940.00 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our share incentive plans) were held by one record holder in the United States, representing approximately 55.0% of our total outstanding shares.
Class A Ordinary Shares Class B Ordinary Shares Total Ordinary Shares % of Beneficial Ownership % of Aggregate Voting Power *** Number Number Number % % Directors and Executive Officers**: Chaohui Chen (1) 14,970,240 61,346,560 76,316,800 20.2 44.8 Zhiping Peng (2) 11,432,350 60,726,420 72,158,770 19.1 44.2 Hope Ni * — * * * Ying Kong * — * * * Yimeng Shi (3) 4,552,070 — 4,552,070 1.2 0.2 Wen Gao (4) 12,677,420 — 12,677,420 3.4 0.6 Zhihui Gong * — * * * All Directors and Executive Officers as a Group (5) 43,842,080 122,072,980 165,915,060 43.4 89.7 Principal Shareholders: MediaPlay Limited (1) — 61,346,560 61,346,560 16.3 44.1 AlphaGo Robot Limited (2) — 60,726,420 60,726,420 16.1 43.7 Entities affiliated with Cash Capital (6) 37,405,580 — 37,405,580 9.9 1.8 Entities affiliated with China International Capital Corporation Limited (7) 19,662,570 — 19,662,570 5.2 0.9 Notes: * Less than 1% of our total outstanding shares. ** Except as indicated otherwise, the business address of our directors and executive officers is Unit 2214-Rm1, 22/F, Mira Place Tower A, 132 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong. *** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
Class A Ordinary Shares Class B Ordinary Shares Total Ordinary Shares % of Beneficial Ownership % of Aggregate Voting Power *** Number Number Number % % Directors and Executive Officers*: Chaohui Chen (1) 15,583,430 61,346,560 76,929,990 20.1 44.8 Zhiping Peng (2) 13,525,490 60,726,420 74,251,910 19.4 44.2 Hope Ni (3) 145,000 — 145,000 0.04 0.01 Ying Kong (4) 145,000 — 145,000 0.04 0.01 Yimeng Shi (5) 5,118,210 — 5,118,210 1.3 0.2 Wen Gao (6) 13,032,420 — 13,032,420 3.4 0.6 Zhihui Gong (7) 1,755,320 — 1,755,320 0.5 0.1 All Directors and Executive Officers as a Group 49,304,870 122,072,980 171,377,850 44.3 89.7 Principal Shareholders: MediaPlay Limited (1) — 61,346,560 61,346,560 16.1 44.0 AlphaGo Robot Limited (2) — 60,726,420 60,726,420 15.9 43.6 Entities affiliated with Cash Capital (8) 37,405,580 — 37,405,580 9.8 1.8 Entities affiliated with China International Capital Corporation Limited (9) 19,662,570 — 19,662,570 5.2 0.9 Notes: * Except as indicated otherwise, the business address of our directors and executive officers is Unit 2214-Rm1, 22/F, Mira Place Tower A, 132 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong. 130 ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
Zhiping Peng has the right to acquire upon exercise of options within 60 days after February 28, 2025, (iv) 378,527 ADSs, representing 3,785,270 Class A ordinary shares directly held by Mr.
Zhiping Peng has the right to acquire upon exercise of options within 60 days after February 28, 2026, (iv) 495,736 ADSs, representing 4,957,360 Class A ordinary shares directly held by Mr.
Name Ordinary Shares Underlying Restricted Share Unites Date of Grant Chaohui Chen * January 27, 2021 – January 31, 2025 Zhiping Peng * January 27, 2021 – January 31, 2025 Hope Ni * January 27, 2021 – May 31, 2024 Ying Kong * July 1, 2021 – May 31, 2024 Yimeng Shi * January 27, 2021 – January 31, 2025 Wen Gao * January 27, 2021 – January 31, 2025 Zhihui Gong * January 27, 2021 – January 31, 2025 All directors and executive officers as a group 6,872,870 January 27, 2021 – January 31, 2025 As of February 28, 2025, our employees and consultants other than our directors and executive officers as a group held outstanding options to purchase 11,154,060 ordinary shares, with exercise prices ranging from US$0.5 to US$0.8 per share.
Name Ordinary Shares Underlying Restricted Share Unites Date of Grant Chaohui Chen 2,545,880 August 30, 2022 – January 31, 2026 Zhiping Peng 2,268,200 August 30, 2022 – January 31, 2026 Hope Ni 85,000 August 30, 2022 – May 31, 2025 Ying Kong 85,000 August 30, 2022 – May 31, 2025 Yimeng Shi 1,337,720 August 30, 2022 – January 31, 2026 Wen Gao 832,890 August 30, 2022 – January 31, 2026 Zhihui Gong 492,170 August 30, 2022 – January 31, 2026 All directors and executive officers as a group 7,646,860 August 30, 2022 – January 31, 2026 As of February 28, 2026, our employees and consultants other than our directors and executive officers as a group held outstanding options to purchase 11,169,060 ordinary shares, with exercise prices ranging from US$0.5 to US$0.8 per share.
As of February 28, 2025, the maximum number of issuable shares under the 2019 Plan was 36,656,858, while 140,000 options had been granted and outstanding under the 2019 Plan, and 7,911,170 restricted share units had been granted and outstanding under the 2019 Plan. 121 The following paragraphs describe the principal terms of the 2019 Plan. Type of Awards .
As of February 28, 2026, the maximum number of issuable shares under the 2019 Plan was 40,436,574, while 140,000 options had been granted and outstanding under the 2019 Plan, and 8,251,340 restricted share units had been granted and outstanding under the 2019 Plan. 125 The following paragraphs describe the principal terms of the 2019 Plan. Type of Awards .
We have not set aside or accrued any amount to provide pension, retirement or other similar 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 directors and executive officers except US$514 thousand of education benefit in cash for the children of our non-independent directors and executive officers.
The registered address of AlphaGo Robot Limited is Ritter House, Wickhams Cay II, Road Town, Tortola, British Virgin Islands. 127 (3) Represents (i) 1,852,070 Class A ordinary shares held by Mr. Yimeng Shi, and (ii) 2,700,000 Class A ordinary shares Mr. Yimeng Shi has the right to acquire upon exercise of options within 60 days after February 28, 2025.
The registered address of Talent Wits Limited is Craigmuir Chambers, Road Town Tortola, VG 1110, British Virgin Islands. 131 (7) Represents (i) 655,320 Class A ordinary shares held by Mr. Zhihui Gong, and (ii) 1,100,000 Class A ordinary shares Mr. Zhihui Gong has the right to acquire upon exercise of options within 60 days after February 28, 2026.
Ni currently serves as an independent director of Zhihu Inc. (Nasdaq: ZH), Acotec Scientific Holdings Limited (HKEX: 6669), and ATA Creativity Global (Nasdaq: AACG). Prior to that, she served as an executive director of Ingdan, Inc. from 2015 to 2020, and independent director of Digital China Holdings Limited (HKEX: 0861) from 2010 to June 2014. Previously, Ms.
Ni currently serves as an independent director of Acotec Scientific Holdings Limited (HKEX: 6669), Visen Pharmaceuticals (HKEX 02561), and Zhihu Inc. (NYSE: ZH). From June 2020 to June 2022, she served as a non-executive director of Ingdan, Inc.
Ni worked as a practicing attorney at Skadden, Arps, Slate, Meagher & Flom LLP in New York and Hong Kong. Earlier in her career, Ms. Ni worked at Merrill Lynch’s investment banking division in New York. Ms.
(HKEX: 0400), previously known as Cogobuy Group, and prior to that, she served as an executive director of Ingdan, Inc. from 2015 to 2020. Previously, Ms. Ni worked as a practicing attorney at Skadden, Arps, Slate, Meagher & Flom LLP in New York and Hong Kong. Earlier in her career, Ms.
Zhiping Peng is the settlor and investment advisor of Harmony Peng Trust, and has the power to direct the disposition and voting of the shares held by Harmony Peng Trust.
Zhiping Peng is the settlor and investment advisor of Harmony Peng Trust, and has the power to direct the disposition and voting of the shares held by Harmony Peng Trust. The registered address of AlphaGo Robot Limited is Ritter House, Wickhams Cay II, Road Town, Tortola, British Virgin Islands. (3) Represents 145,000 Class A ordinary shares held by Ms.
Removed
Certain current and former employees have granted an irrevocable voting proxy for all shares beneficially owned by them to Mr. Chaohui Chen.
Added
Terms of Directors and Officers Our directors may be elected by an ordinary resolution of our shareholders.
Removed
Talent Wits Limited is wholly owned by Mr. Wen Gao. The registered address of Talent Wits Limited is Craigmuir Chambers, Road Town Tortola, VG 1110, British Virgin Islands. (5) As mentioned above, an officer has granted an irrevocable voting proxy for certain shares beneficially owned by him to Mr. Chaohui Chen.
Added
Hope Ni. The address of Ms. Hope Ni is Unit 2214-Rm1, 22/F, Mira Place Tower A, 132 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong. (4) Represents 145,000 Class A ordinary shares held by Mr. Ying Kong. The address of Mr. Ying Kong is Unit 2214-Rm1, 22/F, Mira Place Tower A, 132 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong.
Removed
These shares are not double counted when calculating the shares of all directors and executive officers as a group.
Added
(5) Represents (i) 2,418,210 Class A ordinary shares held by Mr. Yimeng Shi, and (ii) 2,700,000 Class A ordinary shares Mr. Yimeng Shi has the right to acquire upon exercise of options within 60 days after February 28, 2026. The address of Mr.
Removed
The percentage of beneficial ownership and the percentage of aggregate voting power for China International Capital Corporation Limited are calculated based on the number of our company’s total outstanding shares as of February 28, 2025 and assuming China International Capital Corporation Limited’s shareholding has not change since April 15, 2024.
Added
The address of Mr. Zhihui Gong is Unit 2214-Rm1, 22/F, Mira Place Tower A, 132 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong.
Removed
In the case of a tie, the parties to the voting agreement will vote again, and they will abide by the decision of which more than 60% of the number of parties vote in favor.
Added
The voting agreement was terminated on December 30, 2025.
Removed
The voting agreement will be terminated (i) with respect to all parties thereto, upon consent of all parties, or (ii) with respect to any party thereto, upon the time he beneficially owns less than 0.1% of the total issued and outstanding ordinary shares of our company.

Item 7. Management's Discussion & Analysis

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

7 edited+0 added−9 removed4 unchanged
Biggest changeWe have granted certain registration rights to holders of registrable securities, which include our ordinary shares issued or issuable pursuant to conversion of our preferred shares. Set forth below is a description of the registration rights granted under the shareholders agreement. Demand Registration Rights .
Biggest changeWe have granted certain registration rights to holders of registrable securities, which include our ordinary shares issued or issuable pursuant to conversion of our preferred shares. These registration rights was automatically terminated on June 13, 2025. Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation.” Share Incentive Plans See “Item 6.
As of December 31, 2022, 2023 and 2024, we owed US$1.5 million, US$1.2 million and US$49 thousand, respectively, to this company, consisting of accounts payable, deposits and advances. As of December 31, 2022, 2023 and 2024, we had US$0.7 million, US$2.9 million and US$2.0 million due from this company, respectively. Transactions with Huaxiang .
As of December 31, 2023, 2024 and 2025, we owed US$1.2 million, US$49 thousand and nil, respectively, to this company, consisting of accounts payable, deposits and advances. As of December 31, 2023, 2024 and 2025, we had US$2.9 million, US$2.0 million and US$1.7 million due from this company, respectively. Transactions with Huaxiang .
In 2022, 2023 and 2024, we recognized US$6.2 million, US$10.8 million and US$5.9 million of revenue from provision of data connectivity services, sales of terminals, sales of data related products and other services and products to this company, respectively. In 2022, 2023 and 2024, we purchased US$4 thousand, US$2 thousand and nil, respectively, of data connectivity service from this company.
In 2023, 2024 and 2025, we recognized US$10.8 million, US$5.9 million and US$8.0 million of revenue from provision of data connectivity services, sales of terminals, sales of data related products and other services and products to this company, respectively. In 2023, 2024 and 2025, we purchased US$2 thousand, nil and nil, respectively, of data connectivity service from this company.
In 2022, 2023 and 2024, we recognized US$0.3 million, US$36 thousand and US$16 thousand, respectively, of revenue from provision of sales of terminals and PaaS and SaaS services to this company. In 2022, 2023 and 2024, we purchased US$6 thousand, nil and nil, respectively, of data connectivity service from this company.
In 2023, 2024 and 2025, we recognized US$36 thousand, US$16 thousand and US$43 thousand, respectively, of revenue from provision of sales of terminals, PaaS and SaaS services, and other services to this company. In 2023, 2024 and 2025, we purchased nil, nil and nil, respectively, of data connectivity service from this company.
Compensation.” Share Incentive Plans See “Item 6. Directors, Senior Management and Employees—B. Compensation.” C. Interests of Experts and Counsel Not applicable.
Directors, Senior Management and Employees—B. Compensation.” C. Interests of Experts and Counsel Not applicable.
As of December 31, 2022, 2023 and 2024, we owed US$20 thousand, US$20 thousand and nil to this company. As of December 31, 2022, 2023 and 2024, we had US$14 thousand, US$2 thousand and US$2 thousand due from this company.
As of December 31, 2023, 2024 and 2025, we owed US$20 thousand, nil and nil to this company.
Shareholders Agreement We entered into our third amended and restated shareholders agreement on April 21, 2017 with our shareholders, which consist of holders of ordinary shares and preferred shares.
As of December 31, 2023, 2024 and 2025, we had US$2 thousand, US$2 thousand and US$0.4 thousand due from this company. 133 Shareholders Agreement We entered into our third amended and restated shareholders agreement on April 21, 2017 with our shareholders, which consist of holders of ordinary shares and preferred shares.
Removed
Holders of at least 50% of the registrable securities (including preferred shares and ordinary shares issued upon conversion of preferred shares) then outstanding have the right to demand that we file a registration statement of all registrable securities that the holders request to be registered and included in such registration by written notice.
Removed
At least 20% (or any lesser percentage in certain situations) of the registrable securities requested by the holders to be included in the underwriting and registration shall be so included.
Removed
We have the right to defer filing of a registration statement for a period of not more than 60 days for registration on Form F-3 (90 days for registration other than on Form F-3) after the receipt of the request of the initiating holders if we furnish to the holders requesting registration a certificate signed by our president or chief executive officer stating that in the good faith judgment of our board of directors, it would be materially detrimental to us and our shareholders for such registration statement to be filed at such time.
Removed
However, we cannot exercise the deferral right more than once in any twelve-month period.
Removed
We are obligated to effect no more than two demand registrations, other than demand registration to be effected pursuant to registration statement on Form F-3, for which an unlimited number of demand registrations shall be permitted so long as certain condition is met. 129 Piggyback Registration Rights .
Removed
If we propose to register for our own account any of our equity securities, or for the account of any holder (other than certain holders) of equity securities any of such holder’s equity securities, in connection with public offering of such securities (except for exempt transactions), we shall promptly give each holder written notice of such registration and, upon the written request of any holder given within 15 days after delivery of such notice, we shall use our best efforts to include in such registration any registrable securities thereby requested to be registered by such holder.
Removed
If a holder decides not to include all or any of its registrable securities in such registration by us, such holder shall nevertheless continue to have the right to include any registrable securities in any subsequent registration statement or registration statements as may be filed by us. Expenses of Registration .
Removed
We will bear all registration expenses, other than underwriting discounts and selling commissions applicable to the sale of registrable securities pursuant to the registration rights. Termination of Registration Rights .
Removed
Our shareholders’ registration rights will terminate on the earlier of (i) June 13, 2025, or (ii) with respect to any holder, the date on which such holder may sell all of such holder’s registrable securities under Rule 144 of the Securities Act in any 90-day period. Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B.