# EDGAR Filing Document

**Accession Number:** 0001768259
**File Stem:** 0001193125-26-168211
**Filing Date:** 2026-4
**Character Count:** 1009443
**Document Hash:** fe1cd84b414e41d2489ebd7b567e6605
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-26-168211.hdr.sgml**: 20260422

**ACCESSION NUMBER**: 0001193125-26-168211

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 130

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260422

**DATE AS OF CHANGE**: 20260422

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Gaotu Techedu Inc.
- **CENTRAL INDEX KEY:** 0001768259
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-EDUCATIONAL SERVICES [8200]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38923
- **FILM NUMBER:** 26881218

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 5F, GIENTECH BUILDING, 17 EAST ZONE
- **STREET 2:** 10 XIBEIWANG EAST ROAD, HAIDIAN
- **CITY:** BEIJING
- **PROVINCE COUNTRY:** F4
- **ZIP:** 100193
- **BUSINESS PHONE:** 861082826826

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 5F, GIENTECH BUILDING, 17 EAST ZONE
- **STREET 2:** 10 XIBEIWANG EAST ROAD, HAIDIAN
- **CITY:** BEIJING
- **PROVINCE COUNTRY:** F4
- **ZIP:** 100193

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** GSX Techedu Inc.
- **DATE OF NAME CHANGE:** 20190215

?xml version='1.0' encoding='ASCII'? 20-F

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549**

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**FORM** 20-F

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**(Mark One)**

☐ **REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the fiscal year ended** December 31**,** 2025**.**

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

☐ **SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**Date of event requiring this shell company report**

**For the transition period from to** 

**Commission file number:** 001-38923

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Gaotu Techedu Inc.**(Exact name of Registrant as specified in its charter)**

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**N/A (Translation of Registrant's name into English)**

Cayman Islands**(Jurisdiction of incorporation or organization)**

5F, Gientech Building**,** 17 East Zone,

10 Xibeiwang East RoadHaidian District, Beijing 100193People's Republic of China**(Address of principal executive offices)**

Nan Shen**, Chief Financial Officer E-mail:** shennan@gaotu.cn5F, Gientech Building**,** 17 East Zone,

10 Xibeiwang East RoadHaidian District, Beijing 100193People's Republic of China **Telephone: +**86 10 8282-6826**(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)**

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**Securities registered or to be registered pursuant to Section 12(b) of the Act.**

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Title of each class** | &nbsp;&nbsp;**Trading Symbol(s)** | &nbsp;&nbsp;**Name of each exchange on which registered** |
| &nbsp;&nbsp;American Depositary Shares, every three<br>representing two Class A ordinary shares, par <br>value US$0.0001 per share | &nbsp;&nbsp;GOTU | &nbsp;&nbsp;New York Stock Exchange |
| &nbsp;&nbsp;Class A ordinary shares,<br>par value US$0.0001 per share**\*** |  | &nbsp;&nbsp;New York Stock Exchange |

---

(1)\*Not for trading, but only in connection with the listing on the New York Stock Exchange of our American depositary shares, every three American depositary shares representing two Class A ordinary shares.

**Securities registered or to be registered pursuant to Section 12(g) of the Act. None (Title of Class)**

**Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None (Title of Class)**

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

As of December 31, 2025, there were 159,979,164 ordinary shares outstanding, being the sum of 86,673,876 Class A ordinary shares and 73,305,288 Class B ordinary shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ &nbsp;&nbsp;&nbsp;&nbsp;Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No

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**TABLE OF CONTENTS**

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| | | | |
|:---|:---|:---|:---|
| [<u>INTRODUCTION</u>](#introduction) | [<u>INTRODUCTION</u>](#introduction) | [<u>INTRODUCTION</u>](#introduction) | 5 |
| [<u>FORWARD-LOOKING INFORMATION</u>](#forward_looking_statements) | [<u>FORWARD-LOOKING INFORMATION</u>](#forward_looking_statements) | [<u>FORWARD-LOOKING INFORMATION</u>](#forward_looking_statements) | 6 |
| [<u>PART I</u>](#part_i). | [<u>PART I</u>](#part_i). | [<u>PART I</u>](#part_i). | 7 |
|  | ITEM 1. | [<u>IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</u>](#item_1_identity_of_directors) | 7 |
|  | ITEM 2. | [<u>OFFER STATISTICS AND EXPECTED TIMETABLE</u>](#item_2_offer_statistics_and_expected) | 7 |
|  | ITEM 3. | [<u>KEY INFORMATION</u>](#item_3_key_information) | 7 |
|  | ITEM 4. | [<u>INFORMATION ON THE COMPANY</u>](#item_4_information_on_the_company) | 71 |
|  | ITEM 4A. | [<u>UNRESOLVED STAFF COMMENTS</u>](#item_4a_unresolved_staff_comments) | 111 |
|  | ITEM 5. | [<u>OPERATING AND FINANCIAL REVIEW AND PROSPECTS</u>](#item_5_operating_and_financial_review) | 112 |
|  | ITEM 6. | [<u>DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</u>](#item_6_directors_senior_management) | 124 |
|  | ITEM 7. | [<u>MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</u>](#item_7_major_shareholders_related_party) | 131 |
|  | ITEM 8. | [<u>FINANCIAL INFORMATION</u>](#item_8_financial_information) | 132 |
|  | ITEM 9. | [<u>THE OFFER AND LISTING</u>](#item_9_the_offer_and_listing) | 133 |
|  | ITEM 10. | [<u>ADDITIONAL INFORMATION</u>](#item_10_additional_information) | 133 |
|  | ITEM 11. | [<u>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</u>](#item_11_quantitative_and_qualitative_dis) | 148 |
|  | ITEM 12. | [<u>DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</u>](#item_12_description_of_securities_other) | 149 |
| [<u>PART II</u>](#part_ii). | [<u>PART II</u>](#part_ii). | [<u>PART II</u>](#part_ii). | 150 |
|  | ITEM 13. | [<u>DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</u>](#item_13_defaults_dividend_arrearages) | 150 |
|  | ITEM 14. | [<u>MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</u>](#item_14_material_modifications) | 151 |
|  | ITEM 15. | [<u>CONTROLS AND PROCEDURES</u>](#item_15_controls_and_procedures) | 151 |
|  | ITEM 16A. | [<u>AUDIT COMMITTEE FINANCIAL EXPERT</u>](#item_16a_audit_committee_financialexpert) | 153 |
|  | ITEM 16B. | [<u>CODE OF ETHICS</u>](#item_16b_code_of_ethics) | 153 |
|  | ITEM 16C. | [<u>PRINCIPAL ACCOUNTANT FEES AND SERVICES</u>](#item_16c_principal_accounting_fees) | 153 |
|  | ITEM 16D. | [<u>EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</u>](#item_16d_exemptions_from_the_listing) | 153 |
|  | ITEM 16E. | [<u>PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS</u>](#item_16e_purchases_of_equity_securities) | 154 |
|  | ITEM 16F. | [<u>CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT</u>](#item_16f_change_in_registrants_certify) | 154 |
|  | ITEM 16G. | [<u>CORPORATE GOVERNANCE</u>](#item_16g_corporate_governance) | 155 |
|  | ITEM 16H. | [<u>MINE SAFETY DISCLOSURE</u>](#item_16h_mine_safety_disclosure) | 155 |
|  | ITEM 16I. | [<u>DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS</u>](#item_16i_disclosure_regarding_foreign) | 155 |
|  | ITEM 16J. | [<u>INSIDER TRADING POLICIES</u>](#item_16j_insider_trading_policies) | 155 |
|  | ITEM 16K. | [<u>CYBERSECURITY</u>](#item_16k_cybersecurity) | 156 |
| [<u>PART III</u>](#part_iii). | [<u>PART III</u>](#part_iii). | [<u>PART III</u>](#part_iii). | 156 |
|  | ITEM 17. | [<u>FINANCIAL STATEMENTS</u>](#item_17_financial_statements) | 156 |
|  | ITEM 18. | [<u>FINANCIAL STATEMENTS</u>](#item_18_financial_statements) | 156 |
|  | ITEM 19. | [<u>EXHIBITS</u>](#item_19_exhibits) | 157 |

---

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**INTRODUCTION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise indicated and except where the context otherwise requires, references in this annual report to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"ADRs" are to the American depositary receipts that may evidence the ADSs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"ADSs" are to the American depositary shares, every three of which represent two Class A ordinary shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"Beijing Lexuebang" are to Beijing Lexuebang Network Technology Co., Ltd.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"Beijing Yuexuebang" are to Beijing Yuexuebang Network Technology Co., Ltd.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"Class A ordinary shares" are to our Class A ordinary shares, par value US$0.0001 per share;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"Class B ordinary shares" are to our Class B ordinary shares, par value US$0.0001 per share;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"gross billings" for a specific period are to the total amount of cash received for the sale of course offerings, net of the total amount of refunds in such period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"Gaotu," "we," "us," "our company" and "our" are to Gaotu Techedu Inc., our Cayman Islands holding company and its subsidiaries, and in the context of describing our operations and consolidated financial information,the VIEs (as defined below) and their subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"NYSE" are to the New York Stock Exchange;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"paid courses" are to our courses that are charged not less than RMB99.00 per course in fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"paid course enrollments" for a certain period are to the cumulative number of paid courses enrolled in and paid for by our students, including multiple paid courses enrolled in and paid for by the same student;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"RMB" and "Renminbi" are to the legal currency of mainland China;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"US$," "U.S. dollars," "$," and "dollars" are to the legal currency of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"VIEs" are to Gaotu Education Technology Group Co., Ltd., or Beijing Gaotu, and Shanghai Duwen Education Technology Co., Ltd., or Shanghai Duwen. Beijing Gaotu is formerly known as Beijing BaiJia Technology Co., Ltd., or Beijing BaiJia Hulian Technology Co., Ltd. The VIEs are domestic companies incorporated in mainland China in which we do not have any equity ownership but whose financial results have been consolidated into our consolidated financial statements based solely on contractual arrangements in accordance with U.S. GAAP. See "Item 4. Information on the Company—C. Organizational Structure" for an illustrative diagram of our corporate structure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"WFOEs" are to Beijing Lexuebang, Beijing Yuexuebang and Wuhan Yuexuebang, which are wholly foreign owned entities under PRC law; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"Wuhan Yuexuebang" are to Wuhan Yuexuebang Network Technology Co., Ltd.

We present our financial results in RMB. We make no representation that any RMB or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or RMB, as the case may be, at any particular rate, or at all. The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign exchange and through restrictions on foreign trade. This annual report contains translations of certain foreign currency amounts into U.S. dollars for the convenience of the reader. Unless otherwise stated, all translations of Renminbi into U.S. dollars were made at the rate at RMB6.9931 to US$1.0000, the exchange rate as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System in effect as of December 31, 2025.

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**FORWARD-LOOKING INFORMATION**

This annual report contains forward-looking statements that involve risks and uncertainties. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigations Reform Act of 1995.

You can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "likely to" or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, but are not limited to, statements about:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•government policies and regulations relating to our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our goals and strategies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our ability to retain and increase the number of students and expand our service offerings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our future business development, financial condition and results of operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•expected changes in our revenues, costs or expenditures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•competition in our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•general economic and business conditions globally and in China; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•assumptions underlying or related to any of the foregoing.

You should read this annual report and the documents that we refer to in this annual report and have filed as exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect. Other sections of this annual report discuss factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements

You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

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**PART I.**

**ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not applicable.

**ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE**

Not applicable.

**ITEM 3. KEY INFORMATION**

**Our Holding Company Structure and Contractual Arrangements with the VIEs** 

Gaotu Techedu Inc. is not an operating company in mainland China but a Cayman Islands holding company with operations primarily conducted through (i) our subsidiaries incorporated in mainland China, or mainland China subsidiaries, and (ii) contractual arrangements with the VIEs and their subsidiaries based in mainland China. The following diagram illustrates our corporate structure, including our principal subsidiaries, the VIEs and their principal subsidiaries, as of the date of this annual report:

![img107030679_0.jpg](img107030679_0.jpg)

![img107030679_1.jpg](img107030679_1.jpg)

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Notes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Shareholders of Beijing Gaotu and their respective shareholdings in Beijing Gaotu and relationship with our company are Larry Xiangdong Chen (98.28%), chairman of our board of directors and our chief executive officer, and Bin Luo (1.72%), our employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Shareholders of Shanghai Duwen and their respective shareholdings in Shanghai Duwen and relationship with our company are Guo Shuai (70%) and Huang Ruonan (30%), both are our consultants.

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Gaotu Techedu Inc. is a Cayman Islands holding company with operations primarily conducted through (i) its mainland China subsidiaries and (ii) the VIEs, namely Beijing Gaotu and Shanghai Duwen, and their subsidiaries based in mainland China. By purchasing the ADSs, investors are purchasing interests in our Cayman Islands holding company, as opposed to interests in our mainland China subsidiaries or the VIEs and their subsidiaries based in mainland China. The VIE structure involves unique risks to investors of our Cayman Islands holding company. See "Item 3. Key Information—D. Risk Factors—Risks Related to our Corporate Structure" for more details. The laws and regulations of mainland China prohibit, restrict or impose conditions on foreign direct investment in operating companies of certain industries. As of the date of this annual report, in terms of our operating entities, based on the opinion of our PRC counsel, Tian Yuan Law Firm, pursuant to the Special Administrative Measures (Negative List) for the Access of Foreign Investment, or the Negative List, (i) foreign investors cannot make direct investment in the VIEs because the VIEs engage in audio and video services in mainland China, and (ii) foreign investors are restricted from owning more than 50% of the equity interests in each of the VIEs and Shanghai Gaotu YunJi Education Technology Co., Ltd., or Shanghai Gaotu, one of the subsidiaries of Beijing Gaotu, because the VIEs and Shanghai Gaotu engage in internet content business, value-added telecommunication-based online marketing business and mobile application distribution business in mainland China. Accordingly, we operate these businesses in mainland China through the VIEs, and such structures are used to provide investors with exposure to foreign investment in the VIEs and Shanghai Gaotu where laws and regulations in China mainland prohibit direct foreign investment in the VIEs and restrict direct foreign investment from constituting more than 50% of the equity interests in Shanghai Gaotu, and rely on contractual arrangements among our mainland China subsidiaries, the VIEs and their shareholders to control the business operations of the VIEs and their subsidiaries, including Shanghai Gaotu. The VIEs are consolidated for accounting purposes, but are not entities in which our Cayman Islands holding company, or our investors, own equity. Revenues contributed by the VIEs accounted for 100%, 99.99% and 99.66% of our total revenues for the years ended December 31, 2023, 2024 and 2025, respectively. As used in this annual report, "we," "us," "our company," "our," or "Gaotu" refers to Gaotu Techedu Inc., its subsidiaries, and, in the context of describing our operations and consolidated financial information, the VIEs and their subsidiaries. Investors in our ADSs are not purchasing equity interest in the VIEs in mainland China, but instead are purchasing equity interest in a holding company incorporated in the Cayman Islands, and may never directly hold equity interests in the VIEs in mainland China.

Our subsidiaries, each of the VIEs and their shareholders have entered into a series of contractual agreements. These contractual arrangements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•enable us to receive the economic benefits that could potentially be significant to the VIEs in consideration for the services provided by our subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•effectively assigned all of the voting rights underlying the nominee shareholders' equity interest in the VIEs to us; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•enable us to hold an exclusive option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by the laws of mainland China.

A series of contractual agreements, including equity interest pledge agreement, exclusive call option agreement, exclusive management services and business cooperation agreement, powers of attorney and spousal consent letters, have been entered into by and among our subsidiaries, the VIEs and their shareholders. For more details of these contractual arrangements, see "Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with the VIEs and Their Shareholders." Terms contained in each set of contractual arrangements with the VIEs and their shareholders are substantially similar. Despite the lack of legal majority ownership, our Cayman Islands holding company is considered the primary beneficiary of the VIEs and consolidates the VIEs and their subsidiaries as required by Accounting Standards Codification Topic 810, Consolidation. Accordingly, we treat the VIEs as consolidated entities under the accounting principles generally accepted in the United States, or U.S. GAAP, and we consolidate the financial results of the VIEs in our consolidated financial statements in accordance with U.S. GAAP. Neither Gaotu Techedu Inc. nor its investors has an equity ownership in, direct foreign investment in, or control through such ownership or investment of, the VIEs, and the contractual arrangements are not equivalent to an equity ownership in the business of the VIEs.

The following is a summary of the currently effective contractual arrangements by and among Beijing Lexuebang, Wuhan Yuexuebang and Beijing Yuexuebang, which we refer to collectively as the WFOEs, and Beijing Gaotu and its shareholders.

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***Equity Interest Pledge Agreement.*** Under the equity interest pledge agreement among the WFOEs, Beijing Gaotu and its shareholders, the Beijing Gaotu's shareholders pledged all of their equity interests of Beijing Gaotu to the WFOEs as security for performance of the obligations of Beijing Gaotu and its shareholders under the exclusive call option agreement, the exclusive management services and business cooperation agreement and the powers of attorney. If any of the specified events of default occurs, the WFOEs may exercise the right to enforce the pledge immediately. The WFOEs may transfer all or any of its rights and obligations under the equity interest pledge agreement to its designee(s) at any time. The agreement will remain in effect until the fulfillment of all the obligations under the exclusive call option agreement, the exclusive management services and business cooperation agreement and the powers of attorney. We have registered the equity interest pledge under the equity interest pledge agreement in relation to Beijing Gaotu with the relevant office of the State Administration for Market Regulation, or the SAMR, in accordance with the PRC Civil Code.

***Exclusive Management Services and Business Cooperation Agreement.*** Pursuant to the exclusive management services and business cooperation agreement among the WFOEs, Beijing Gaotu and the shareholders of Beijing Gaotu, the WFOEs has the exclusive right to provide or designate any third-party to provide, among other things, education management consultancy services, permission of intellectual property rights, technological support and business support to Beijing Gaotu and its subsidiaries. In exchange, Beijing Gaotu and its subsidiaries pay service fees to the WFOEs in an amount determined by the WFOEs in its sole discretion. Without the prior written consent of the WFOEs, Beijing Gaotu and its subsidiaries cannot accept services provided by or establish similar cooperation relationship with any third-party. The WFOEs own the exclusive intellectual property rights created as a result of the performance of this agreement unless otherwise provided by the laws or regulations of mainland China. The agreement will remain effective unless unanimously agreed by the parties concerned or unilaterally terminated by the WFOEs with a written notice. Unless otherwise required by applicable laws of mainland China, Beijing Gaotu and its shareholders do not have any right to terminate the agreement.

***Exclusive Call Option Agreement.*** Under the exclusive call option agreement among the WFOEs, Beijing Gaotu and its shareholders, each of the shareholders of Beijing Gaotu irrevocably granted the WFOEs a right to purchase, or designate a third-party to purchase, all or any part of their equity interests in Beijing Gaotu at a purchase price equal to the lowest price permissible by the then-applicable laws and regulations of mainland China at WFOEs' sole and absolute discretion to the extent permitted by the laws of mainland China. The shareholders of Beijing Gaotu shall promptly give all considerations they received from the exercise of the options to the WFOEs or its designee(s). Beijing Gaotu and its shareholders covenant that, without the WFOEs' prior written consent, they will not, among other things, (i) create any pledge or encumbrance on their equity interests in Beijing Gaotu; (ii) transfer or otherwise dispose of their equity interests in Beijing Gaotu; (iii) change Beijing Gaotu's registered capital; (iv) amend Beijing Gaotu's articles of association; (v) sell, transfer, license or otherwise dispose of any of Beijing Gaotu's assets or allow any encumbrance of any assets, except for the disposal or the encumbrances of the assets that are treated as necessary for their daily business operations with the value of the assets involved in a single transaction not exceeding RMB100,000; (vi) cause Beijing Gaotu to enter into any major contracts or terminate any material contracts to which Beijing Gaotu is a party; (vii) declare or distribute dividends; (viii) terminate, liquidate or dissolve Beijing Gaotu; or (ix) allow Beijing Gaotu to incur, inherit, guarantee or permit any debts, except for those payables incurred in the ordinary or usual course of business but not incurred by way of borrowing. The agreement will remain effective until terminated by the WFOEs at its discretion or the entire equity interests in Beijing Gaotuhave been transferred to the WFOEs or its designee(s).

***Powers of Attorney.*** Pursuant to the powers of attorney executed by Beijing Gaotu's shareholders, each of them irrevocably authorized the WFOEs or its designee(s) to act on their respective behalf as exclusive agent and attorney, to the extent permitted by law, with respect to all rights of shareholders concerning all the equity interest held by each of them in Beijing Gaotu, including but not limited to proposing to convene or attend shareholder meetings, signing the resolutions and minutes of such meetings, exercising all the rights as shareholders (including but not limited to voting rights, nomination rights, appointment rights, the right to receive dividends and the right to sell, transfer, pledge or dispose of all the equity held in part or in whole).

***Spousal Consent Letters.*** Pursuant to the spousal consent letters executed by the spouses of certain shareholders of Beijing Gaotu, the signing spouses unconditionally and irrevocably agreed that the equity interest in Beijing Gaotu held by and registered in the name of their spouses be disposed of in accordance with the exclusive call option agreement, the exclusive management services and business cooperation agreement, the equity interest pledge agreement and the powers of attorney described above, and that their spouses may perform, amend or terminate such agreements without their additional consent. Additionally, the signing spouses agreed not to assert any rights over the equity interest in Beijing Gaotu held by their spouses. In addition, in the event that the signing spouses obtains any equity interest in Beijing Gaotu held by their spouses for any reason, they agree to be bound by and sign any legal documents substantially similar to the contractual arrangements described above, as may be amended from time to time.

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Beijing Lexuebang, Shanghai Duwen and its shareholders have also entered into a series of contractual arrangements similar to the contractual arrangements described above.

However, the contractual arrangements may not be as effective as direct ownership in providing us with control over the VIEs and we may incur substantial costs to enforce the terms of the arrangements. As such, the VIE structure involves unique risks to investors of our Cayman Islands holding company. In addition, uncertainties in the legal system of mainland China may limit our ability, as a Cayman Islands holding company, to enforce these contractual arrangements. Meanwhile, there are very few precedents as to how contractual arrangements in the context of a VIE should be interpreted or enforced by the courts of mainland China. Should legal actions become necessary, we cannot guarantee that the court will rule in favor of the enforceability of the VIE contractual arrangements. In the event we are unable to enforce these contractual arrangements, or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to exercise the voting rights in the VIEs that these contractual arrangements assigned to us, and our ability to conduct our business may be materially adversely affected. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIEs and their shareholders for our business operations, which may not be as effective as direct ownership in providing operational control" and "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—The shareholders of the VIEs may have actual or potential conflicts of interest with us, which may materially and adversely affect our business and financial condition."

There are also uncertainties regarding the interpretation and application of current and future laws, regulations and rules of mainland China regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the VIEs and their nominee shareholders. It is uncertain whether any new laws or regulations of mainland China relating to variable interest entity structures will be adopted or if adopted, what they would provide. If we or the VIEs are found to be in violation of any existing or future laws or regulations of mainland China, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. If the PRC government deems that our contractual arrangements with the VIEs do not comply with regulatory restrictions of mainland China on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. Since administrative and court authorities of mainland China have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy. Our Cayman Islands holding company, our mainland China subsidiaries and VIEs, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a whole. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with mainland China's regulations relating to the relevant industries, or if the determinations, changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIEs that conduct our operations, our securities may decline in value or become worthless" and "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance, business, financial condition and results of operations."

Our corporate structure is subject to risks associated with our contractual arrangements with the VIEs. Our company and its investors may never have a direct ownership interest in the businesses that are conducted by the VIEs. Uncertainties in the legal system of mainland China could limit our ability to enforce these contractual arrangements, and these contractual arrangements have not been tested in a court of law. If the PRC government finds that the agreements that establish the structure for operating our business in mainland China do not comply with the laws and regulations of mainland China, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we and the VIEs could be subject to severe penalties or be forced to relinquish our interests in those operations. This would result in the VIEs being deconsolidated. The necessary licenses to conduct business in mainland China are held by the VIEs and some of their subsidiaries. Almost all of our revenues are generated by the VIEs and their subsidiaries. An event that results in the deconsolidation of the VIEs would have a material effect on our operations and result in the value of the securities of our company diminish substantially or even become worthless. Our company, our mainland China subsidiaries and VIEs, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial performance of the VIEs and our company as a whole. Gaotu Techedu Inc. may not be able to repay its indebtedness, and the Class A ordinary shares or ADSs of our company may decline in value or become worthless, if we are unable to assert our contractual control rights over the assets of our mainland China subsidiaries and VIEs that conduct all or substantially all of our operations. For a detailed description of the risks associated with our corporate structure, please refer to risks disclosed under "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure."

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**Other Risks related to Our PRC Operations**

We face various legal and operational risks and uncertainties associated with being based in or having our operations in China, and we are subject to complex and evolving laws and regulations of mainland China. For example, we face risks associated with regulatory approvals, the use of the VIE structure, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy. These risks could result in a material adverse change in our operations and the value of our ADSs, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline or become worthless. For a detailed description of risks related to doing business in China, "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China."

PRC government's significant authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, mainland China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. Implementation of industry-wide regulations, including data security or anti-monopoly related regulations, in this nature may cause the value of such securities to significantly decline or become worthless. For more details, see "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The PRC government's significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs."

Risks and uncertainties arising from the legal system in mainland China, including risks and uncertainties regarding the enforcement of laws and that rules and regulations in the mainland China can change quickly with little advance notice, could result in a material adverse change in our operations and the value of our ADSs. For more details, see "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the legal system of mainland China could adversely affect us."

**The Holding Foreign Companies Accountable Act**

Pursuant to the Holding Foreign Companies Accountable Act, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023 signed into law on December 29, 2022, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States. On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, including our auditor. In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA because we filed an annual report on Form 20-F for the year ended December 31, 2021. 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. As of the date of this annual report, the PCAOB has not issued any new determination that it is unable to inspect or investigate completely registered public accounting firms headquartered in any jurisdiction. For this reason, we do not expect to be identified so after we file this annual report on Form 20-F for the fiscal year ended December 31, 2025. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the Securities and Exchange Commission, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCAA. 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—Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment."

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**Cash Flows through Our Organization**

Gaotu Techedu Inc. is a holding company with no material operations of its own. We conduct our operations primarily through our mainland China subsidiaries, the VIEs and their subsidiaries in mainland China. As a result, Gaotu Techedu Inc.'s ability to pay dividends depends upon dividends paid by our mainland China subsidiaries. If our existing mainland China subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, current regulations of mainland China permit our mainland China subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with mainland China's accounting standards and regulations. Furthermore, each of our mainland China subsidiaries and the 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. These reserves are not distributable as cash dividends. Our subsidiaries' ability to distribute dividends is based upon their distributable earnings.

We have established stringent controls and procedures for cash flows within our organization. Each transfer of cash between our Cayman Islands holding company and subsidiaries, the VIEs or the subsidiaries of the VIEs is subject to internal approval. The controls and procedures on cash transfers in the policy adhere to applicable regulatory requirements and is not contractual in nature. For the applicable regulatory requirements, see "Item 4. Information on the Company—B. Business Overview—Government Regulations—Regulation Related to Foreign Exchange." The cash inflows of the Cayman Islands holding company were primarily generated from the proceeds we received from our public offerings of ordinary shares and other financing activities. For the years ended December 31, 2023, 2024 and 2025, the Cayman Islands holding company did not provide capital contributions to our subsidiaries. For the years ended December 31, 2023, 2024 and 2025, the Cayman Islands holding company provided loans of RMB250.7 million, RMB74.2 million and RMB372.8 million (US$53.3 million), respectively, to our subsidiaries, and received repayments of RMB402.8 million, RMB325.5 million and RMB641.0 million (US$91.7 million), respectively. For the years ended December 31, 2023, 2024 and 2025, the VIEs did not receive, or repay any loans provided by the Cayman Islands holding company. For the years ended December 31, 2023, 2024 and 2025, no assets other than cash were transferred between our Cayman Islands holding company and subsidiaries, the VIEs or their subsidiaries, no subsidiaries paid dividends or made other distributions to the holding company, and no dividends or distributions were paid or made to U.S. investors. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. See the condensed consolidating schedule for the VIEs and other entities in "—Financial Information Related to the VIEs" and our audited consolidated financial statements and their related notes included in this annual report beginning on page F-1."

Pursuant to the Exclusive Management Services and Business Cooperation Agreement between the WFOEs, the VIEs and their shareholders, the amount of service fee and payment method should be determined by the WFOEs in its sole discretion. Under this agreement, for the years ended December 31, 2023, 2024 and 2025, the WFOEs charged RMB125.7 million, RMB145.7 million and RMB136.3 million (US$19.5 million) service fees from the VIEs, respectively. We plan to continue to determine the amount of service fee and payment method with the VIEs and their shareholders based on our evaluation of their working capital needs, and settle fees under the contractual arrangements accordingly in the future.

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As a Cayman Islands holding company, we may receive dividends from our mainland China subsidiaries. Under the Enterprise Income Tax Law of the PRC, and related regulations, dividends, interests, rent or royalties payable by a foreign-invested enterprise, such as our mainland China subsidiaries, to any of its foreign non-resident enterprise investors, and proceeds from any such foreign enterprise investor's disposition of assets (after deducting the net value of such assets) are subject to a 10% withholding tax, unless the foreign enterprise investor's jurisdiction of incorporation has a tax treaty with mainland China that provides for a reduced rate of withholding tax. The Cayman Islands, where Gaotu Techedu Inc., the direct parent company of the WFOEs, is incorporated, does not have such a tax treaty with mainland China. Hong Kong has a tax arrangement with mainland China that provides for a 5% withholding tax on dividends subject to certain conditions and requirements, such as the requirement that the Hong Kong resident enterprise own at least 25% of the mainland China enterprise distributing the dividend at all times within the 12-month period immediately preceding the distribution of dividends and be a "beneficial owner" of the dividends. For example, BaiJiaHuLian HK Holdings Limited, or BaiJiaHuLian HK, which directly owns Beijing Lexuebang, is incorporated in Hong Kong. However, if BaiJiaHuLian HK is not considered to qualify for any conditions and requirements under applicable tax circulars, and such dividends would be subject to withholding tax at a rate of 10%. If our mainland China subsidiaries declare and distribute profits to us, such payments will be subject to withholding tax, which will increase our tax liability and reduce the amount of cash available to our company. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—We may rely on dividends paid by our mainland China subsidiaries to fund cash and financing requirements. Any limitation on the ability of our mainland China subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of our ADSs and our ordinary shares." for more details. If our holding company in the Cayman Islands or any of our subsidiaries outside of mainland China were deemed to be a "resident enterprise" under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See "Item 3. Key Information—D. 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-domestic shareholders or the ADS holders."

For purposes of illustration, the following discussion reflects the hypothetical taxes that might be required to be paid within mainland China, assuming that: (i) we have taxable earnings, and (ii) we determine to pay dividends in the future.

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| | |
|:---|:---|
|  | Tax calculation<sup>(1)</sup> |
| Hypothetical pre-tax earnings<sup>(2)</sup> | 100% |
| Tax on earnings at statutory rate of 25%<sup>(3)</sup> | (25%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net earnings available for distribution | 75% |
| &nbsp;&nbsp;&nbsp;&nbsp;Withholding tax at standard rate of 10%<sup>(4)</sup> | (7.5%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net distribution to Parent/Shareholders | 67.5% |

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Notes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For purposes of this example, the tax calculation has been simplified. The hypothetical book pre-tax earnings amount, not considering timing differences, is assumed to equal taxable income in mainland China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Under the terms of VIE agreements, our mainland China subsidiaries may charge the VIEs for services provided to the VIEs. These service fees shall be recognized as expenses of the VIEs, with a corresponding amount as service income by our mainland China subsidiaries and eliminate in consolidation. For income tax purposes, our mainland China subsidiaries and VIEs files income tax returns on a separate company basis. The service fees paid are recognized as a tax deduction by the VIEs and as income by our mainland China subsidiaries and are tax neutral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Certain of our subsidiaries and VIEs qualifies for a 15% preferential income tax rate in mainland China. However, such rate is subject to qualification, is temporary in nature, and may not be available in a future period when distributions are paid. For purposes of this hypothetical example, the table above reflects a maximum tax scenario under which the full statutory rate would be effective.

(4)The PRC Enterprise Income Tax Law and related regulations impose a withholding income tax of 10% on dividends distributed by a foreign invested enterprise to its immediate holding company outside of mainland China. A lower withholding income tax rate of 5% is applied if the foreign invested enterprise's immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with mainland China, subject to a qualification review at the time of the distribution. For purposes of this hypothetical example, the table above assumes a maximum tax scenario under which the full withholding tax would be applied.

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The table above has been prepared under the assumption that all profits of the VIEs will be distributed as fees to our mainland China subsidiaries under tax neutral contractual arrangements. If, in the future, the accumulated earnings of the VIEs exceed the service fees paid to our mainland China subsidiaries (or if the current and contemplated fee structure between the intercompany entities is determined to be non-substantive and disallowed by Chinese tax authorities), the VIEs could make a non-deductible transfer to our mainland China subsidiaries for the amounts of the stranded cash in the VIEs. This would result in such transfer being non-deductible expenses for the VIEs but still taxable income for the mainland China subsidiaries. Our management believes that there is only a remote possibility that this scenario would happen.

In addition, our mainland China subsidiaries, the VIEs and their subsidiaries generate their revenue primarily in Renminbi, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of our mainland China subsidiaries to pay dividends to us. There is no assurance that the mainland China government will not intervene in or impose restrictions on the ability of Gaotu Techedu Inc., its subsidiaries, the VIEs and their subsidiaries to transfer cash or assets. To the extent cash or assets in the business is in mainland China or a mainland China entity, the funds or assets may not be available to fund operations or for other use outside of mainland China due to interventions in or the imposition of restrictions and limitations on the ability of Gaotu Techedu Inc., its subsidiaries, or the VIEs and their subsidiaries by the mainland China government to transfer cash or assets. As of the date of this annual report, there is no equivalent or similar restriction or limitation in Hong Kong on cash or assets transfers in, or out of, our Hong Kong entities. However, if restrictions or limitations were to become applicable to cash or assets transfers in and out of Hong Kong entities in the future, the funds or assets in our Hong Kong entities may not be available to fund operations or for other use outside of Hong Kong. For more details, see "Item 3. Key Information—D. Risk Factors—Summary of Risk Factors—Risks Related to Our Corporate Structure," "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—We may rely on dividends paid by our mainland China subsidiaries to fund cash and financing requirements. Any limitation on the ability of our mainland China subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of our ADSs and our ordinary shares" and "Item 3. Key Information—D. 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 making loans to or make additional capital contributions to our mainland China subsidiaries and VIEs, which could materially and adversely affect our liquidity and our ability to fund and expand our business."

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**Permissions Required from the PRC Authorities for Our Operations**

We conduct our business primarily through our subsidiaries and the VIEs in mainland China. Our operations in mainland China are governed by laws and regulations of mainland China. As of the date of this annual report, except for issues with respect to the License for Online Transmission of Audio-Visual Programs, the Online Publishing Services Permit, the Permit for Publication, Printing, Reproduction, Importation or Distribution and the filing of certain educational apps regarding a few of our online apps, based on the opinion of our PRC legal counsel, Tian Yuan Law Firm, we believe our mainland China subsidiaries, the VIEs and their subsidiaries have obtained all the requisite permissions and approvals from the PRC government authorities for the business operations of our holding company, its subsidiaries and the VIEs in mainland China, including, among others, the Value-added Telecommunications Business Operation Licenses for information services via internet, known as ICP Licenses, the Permit for Production and Operation of Radio and TV Programs, the Internet Culture Business Operating License, the Private School Operating Permits regarding academic and non-academic tutoring services, the filings of educational apps pursuant to Opinions on Guiding and Regulating the Orderly and Healthy Development of Educational Mobile Apps for certain of our major products, the Travel Agency Operation Permit and Permits for Operating Publications. For issues with respect to the License for Online Transmission of Audio-Visual Programs, the Online Publishing Services Permit, the Permit for Publication, Printing, Reproduction, Importation or Distribution and the filings of educational apps, see "—D. Risk Factors—Risks Related to Our Business and Industry—We face uncertainties with respect to the development of regulatory requirements on operating licenses and permits for our education services in mainland China. Failure to obtain or renew requested licenses or permits in a timely manner or obtain newly required ones due to adverse changes in regulations or policies could have a material adverse impact on our business, financial condition and results of operations." Our mainland China subsidiaries, the VIEs and their subsidiaries have not been denied for any permission or approval from any PRC government authority with respect to the operation of our business. As of the date of this annual report, under current PRC laws, regulations and rules, based on the opinion of our PRC counsel, Tian Yuan Law Firm, we, our mainland China subsidiaries, the VIEs and their subsidiaries are not required to obtain permissions from the China Securities Regulatory Commission, or the CSRC, or go through cybersecurity review by the Cyberspace Administration of China, or the CAC, or obtain permission or approval from other PRC government authorities with respect to the operation of our business, except for the permissions or approvals listed above that have been obtained and issues with respect to the License for Online Transmission of Audio-Visual Programs and the Online Publishing Services Permit, the Permit for Publication, Printing, Reproduction, Importation or Distribution and the filing of certain educational apps regarding our online apps. However, given the uncertainties of interpretation and implementation of laws and regulations and the enforcement practice by the government authorities, we may be required to obtain additional licenses, permits, filings or approvals for the functions and services of our platform at the present stage or in the future. If we, our mainland China subsidiaries, the VIEs and their subsidiaries (i) do not receive or maintain any necessary permissions or approvals from PRC authorities to operate business or offer securities, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) if applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, we cannot assure you that we will be able to obtain the necessary permissions or approvals in a timely manner, or at all, and such approvals may be rescinded even if obtained. Any such circumstance could subject us to penalties, including fines, suspension of business and revocation of required licenses, significantly limit or completely hinder our ability to continue to offer securities to investors, and cause the value of such securities to significantly decline or become worthless.

For more detailed information, see "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We face uncertainties with respect to the development of regulatory requirements on operating licenses and permits for our education services in mainland China. Failure to obtain or renew requested licenses or permits in a timely manner or obtain newly required ones due to adverse changes in regulations or policies could have a material adverse impact on our business, financial condition and results of operations" and "—D. Risk Factors—Risks Related to Our Business and Industry—Our business is subject to complex and evolving laws and regulations of mainland China regarding cybersecurity, information security, privacy and data protection. Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business."

Based on the opinion of our PRC counsel, Tian Yuan Law Firm, under current PRC laws, regulations and regulatory rules, we, our mainland China subsidiaries, the VIEs and their subsidiaries may be required to obtain permissions from the CSRC, and may be required to go through cybersecurity review by the CAC, in connection with any future offering and listing in an overseas market. As of the date of this annual report, we have not been subject to any cybersecurity review made by the CAC.

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The Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, pursuant to which (i) a major PRC operating entity designated by us may be required to be file with the CSRC, in connection with any follow-on offering and other certain activities as required by the Trial Measures; and (ii) we may be required to report relevant information to the CSRC after the occurrence of certain events. On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that prior to the effectiveness of the Trial Measures, domestic companies that have already completed the overseas offering and listing are not required to complete the filing procedure at the current stage, but shall complete the filing procedure upon the occurrence of certain matters, such as follow-on offering of securities, as required in the Trial Measures. Therefore, based on the opinion of our PRC counsel, Tian Yuan Law Firm, under the Trial Measures, we are not required to file to the CSRC of our previous offering and listing on the NYSE, but could be subject to the filing and reporting requirements to the CSRC with respect to future offerings and occurrence of certain events. If we fail to complete the filing procedures or conceals any material fact or falsifies any major content in its filing documents for any follow-on offering and other certain activities as required by the Trial Measures, we may be subject to administrative penalties, such as order to rectify, warnings, fines or other actions that may materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our ADSs. For more detailed information, see "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The filing with the CSRC may be required in connection with our future follow-on offerings and the occurrence of certain activities under the laws of mainland China, and we cannot predict whether we will be able to complete such filing" and "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Our business is subject to complex and evolving laws and regulations of mainland China regarding cybersecurity, information security, privacy and data protection. Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business."

**A. [Reserved]**

**Selected Consolidated Financial Data** 

The following selected consolidated statements of operations for the years ended December 31, 2023, 2024 and 2025 and selected consolidated balance sheet data as of December 31, 2024 and 2025 and selected consolidated cash flows data for the years ended December 31, 2023, 2024 and 2025 have been derived from our audited consolidated financial statements included in this annual report beginning on page F-1. The following selected consolidated statement of operations for the years ended December 31, 2021 and 2022, selected consolidated balance sheet data as of December 31, 2021, 2022 and 2023, and selected consolidated cash flows data for the years ended December 31, 2021 and 2022 have been derived from our audited consolidated financial statements that are not included in this annual report. Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP. Despite the lack of legal majority ownership, our Cayman Islands holding company is considered the primary beneficiary of the VIEs and their subsidiaries and consolidates the VIEs and their subsidiaries as required by Accounting Standards Codification topic 810, Consolidation. Accordingly, we treat the VIEs and their subsidiaries as our consolidated entities under U.S. GAAP and we consolidate the financial results of the VIEs and their subsidiaries in our consolidated financial statements in accordance with U.S. GAAP. Our historical results for any period are not necessarily indicative of results to be expected for any future period. The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by reference to, our audited consolidated financial statements and related notes and "Item 5. Operating and Financial Review and Prospects" below. Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP.

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2021** | **2022** | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **US$** |
|  | **(in thousands, except for share amounts and per share data)** | **(in thousands, except for share amounts and per share data)** | **(in thousands, except for share amounts and per share data)** | **(in thousands, except for share amounts and per share data)** | **(in thousands, except for share amounts and per share data)** | **(in thousands, except for share amounts and per share data)** |
| **Selected Consolidated Statements of Operations** |  |  |  |  |  |  |
| **Net revenues** | **6561747** | **2498214** | **2960813** | **4553556** | **6146772** | **878977** |
| Cost of revenues<sup>(1)</sup> | (2397604) | (701050) | (790207) | (1454917) | (2001693) | (286238) |
| **Gross profit** | **4164143** | **1797164** | **2170606** | **3098639** | **4145079** | **592739** |
| Operating expenses |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling expenses <sup>(1)</sup> | (5129267) | (1179760) | (1501200) | (2963736) | (3289064) | (470330) |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development expenses <sup>(1)</sup> | (1252877) | (445117) | (462043) | (648063) | (626947) | (89652) |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses <sup>(1)</sup> | (720253) | (290339) | (356369) | (668673) | (732234) | (104708) |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment loss on long-lived assets | (52544) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment loss on goodwill | (43300) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposal loss on assets | (146245) |  |  |  |  |  |
| **Total operating expenses** | **(7344486)** | **(1915216)** | **(2319612)** | **(4280472)** | **(4648245)** | **(664690)** |
| **Loss from operations** | **(3180343)** | **(118052)** | **(149006)** | **(1181833)** | **(503166)** | **(71951)** |
| Interest income | 31460 | 21370 | 75829 | 70384 | 39919 | 5708 |
| Realized gains from investments | 65763 | 42264 | 31230 | 25302 | 34065 | 4871 |
| Other income, net | 20906 | 51885 | 54471 | 45825 | 101764 | 14552 |
| **(Loss)/income before provision for income tax and <br> share of results of equity investees** | **(3062214)** | **(2533)** | **12524** | **(1040322)** | **(327418)** | **(46820)** |
| Income tax (expenses)/benefits | (40949) | 15705 | (10657) | (8632) | 4111 | 588 |
| Share of results of equity investees | (302) |  | (9165) |  |  |  |
| **Net (loss)/income** | **(3103465)** | **13172** | **(7298)** | **(1048954)** | **(323307)** | **(46232)** |
| **Net (loss)/income attributable to Gaotu Techedu Inc.'s<br> ordinary shareholders** | **(3103465)** | **13172** | **(7298)** | **(1048954)** | **(323307)** | **(46232)** |
| **Net (loss)/income per ordinary share** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | (18.17) | 0.08 | (0.04) | (6.12) | (1.98) | (0.28) |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | (18.17) | 0.07 | (0.04) | (6.12) | (1.98) | (0.28) |
| **Weighted average shares used in net (loss)/income<br> per share** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 170790979 | 172254080 | 173725790 | 171412125 | 163118684 | 163118684 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 170790979 | 175991484 | 173725790 | 171412125 | 163118684 | 163118684 |

---

------

Note:

(1)Share-based compensation expenses are in cost of revenues and operating expenses as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2021** | **2022** | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Share-based compensation expenses** |  |  |  |  |  |  |
| Cost of revenues | 118145 | 42490 | 12959 | 7003 | 5641 | 807 |
| Selling expenses | 44402 | 6659 | 8603 | 9267 | 5748 | 822 |
| Research and development expenses | 130620 | 39172 | 17012 | 8942 | 7795 | 1115 |
| General and administrative expenses | 52092 | 34333 | 19779 | 28005 | 20034 | 2864 |
| **Total** | **345259** | **122654** | **58353** | **53217** | **39218** | **5608** |

---

------

The following table presents our selected consolidated balance sheets data as of December 31, 2021, 2022, 2023, 2024 and 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2021** | **2022** | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Cash and cash equivalents | 728934 | 819911 | 636052 | 1321118 | 596195 | 85255 |
| Restricted cash | 168189 | 22 | 33901 | 5222 | 115828 | 16563 |
| Short-term investments | 2774000 | 2923864 | 2253910 | 1845242 | 2708788 | 387352 |
| **Total current assets** | **3936786** | **4166477** | **3586707** | **3639812** | **3980540** | **569210** |
| Long-term investments |  |  | 1029632 | 922740 | 551641 | 78884 |
| **Total assets** | **5024666** | **4876175** | **5413309** | **5828077** | **6199686** | **886544** |
| Current liabilities | 1760268 | 1609222 | 1973284 | 3260603 | 4245487 | 607097 |
| **Total liabilities** | **2143724** | **1780346** | **2307044** | **3894613** | **4945941** | **707260** |
| **Total shareholders' equity** | **2880942** | **3095829** | **3106265** | **1933464** | **1253745** | **179284** |

---

The following table presents our selected consolidated cash flow data for the years ended December 31, 2021, 2022, 2023, 2024 and 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2021** | **2022** | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Selected Consolidated Cash Flow Data:** |  |  |  |  |  |  |
| Net cash (used in)/generated from operating activities | (4185807) | 54545 | 353697 | 258007 | 416094 | 59501 |
| Net cash generated from/(used in) investing activities | 4812502 | (158385) | (423978) | 620821 | (818783) | (117084) |
| Net cash used in financing activities | (100614) |  | (90480) | (205302) | (214140) | (30622) |
| Effect of exchange rate changes | 15818 | 26650 | 10781 | (17139) | 2512 | 359 |
| **Net increase/(decrease) in cash, cash equivalents and restricted cash** | **541899** | **(77190)** | **(149980)** | **656387** | **(614317)** | **(87846)** |
| **Cash, cash equivalents and restricted cash at beginning of year** | **355224** | **897123** | **819933** | **669953** | **1326340** | **189664** |
| **Cash, cash equivalents and restricted cash at end of year** | **897123** | **819933** | **669953** | **1326340** | **712023** | **101818** |

---

**Financial Information Related to the VIEs** 

The following tables present the condensed consolidating schedule of financial position for the VIEs and other entities as of the dates presented.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"Gaotu Techedu Inc." is our Cayman Islands holding company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"Other Subsidiaries" refer to the sum of BaiJiaHuLian HK, Higgz, Hita HK, Shanghai Chuxuebang, Chengdu Yuexuebang, Wuhan Lexuebang, Beijing Xizhi, and Zhengzhou Xiangcheng.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•"VIEs and VIEs' Subsidiaries" refer to the sum of Beijing Gaotu, Shanghai Duwen and all of their subsidiaries in mainland China.

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***Selected Condensed Consolidated Statements of Comprehensive Income Information*** 

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** | **For the year ended December 31, 2025** |
|  | **Gaotu<br>Techedu<br>Inc.** | **Other<br>subsidiaries** | **WFOEs** | **VIEs and<br>VIEs'<br>Subsidiaries** | **Elimination** | **Consolidated<br>Totals** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Third-party revenues** | **—** | **130** | **2829** | **876018** | **—** | **878977** |
| **Inter-company revenues** | **—** | **(688)** | **167874** | **3921** | **(171107)** | **—** |
| **Total costs and expenses** | **(1660)** | **(9533)** | **(171550)** | **(939292)** | **171107** | **(950928)** |
| (Loss)/income from subsidiaries and VIEs | (57396) | (48746) | (49747) |  | 155889 |  |
| Income from non-operations | 12824 | 1335 | 1827 | 9145 |  | 25131 |
| **(Loss)/income before income tax expenses** | **(46232)** | **(57502)** | **(48767)** | **(50208)** | **155889** | **(46820)** |
| Income tax benefits |  | 106 | 21 | 461 |  | 588 |
| **Net (loss)/income** | **(46232)** | **(57396)** | **(48746)** | **(49747)** | **155889** | **(46232)** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** | **For the year ended December 31, 2024** |
|  | **Gaotu<br>Techedu<br>Inc.** | **Other<br>subsidiaries** | **WFOEs** | **VIEs and<br>VIEs'<br>Subsidiaries** | **Elimination** | **Consolidated<br>Totals** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Third-party revenues** |  | 40 | **47** | **623748** | **—** | **623835** |
| **Inter-company revenues** |  |  | **164584** | **7604** | **(172188)** | **—** |
| **Total costs and expenses** | **(2716)** | **(736)** | **(161041)** | **(793440)** | **172188** | **(785745)** |
| (Loss)/income from subsidiaries and VIEs | (144077) | (143392) | (151809) | **—** | 439278 |  |
| Income from non-operations | 3087 | 13 | 4735 | 11552 |  | 19387 |
| **(Loss)/income before income tax expenses** | **(143706)** | **(144075)** | **(143484)** | **(150536)** | **439278** | **(142523)** |
| Income tax (expenses)/benefits |  | (2) | 92 | (1273) |  | (1183) |
| **Net (loss)/income** | **(143706)** | **(144077)** | **(143392)** | **(151809)** | **439278** | **(143706)** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** | **For the year ended December 31, 2023** |
|  | **Gaotu<br>Techedu<br>Inc.** | **Other<br>subsidiaries** | **WFOEs** | **VIEs and<br>VIEs'<br>Subsidiaries** | **Elimination** | **Consolidated<br>Totals** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Third-party revenues** |  |  | **—** | **417022** | **—** | **417022** |
| **Inter-company revenues** |  | 4 | **134290** | **18861** | **(153155)** | **—** |
| **Total costs and expenses** | **(1194)** | **221** | **(112734)** | **(477457)** | **153155** | **(438009)** |
| (Loss)/income from subsidiaries and VIEs | (4002) | (2479) | (31454) | **—** | 37935 |  |
| Income/(loss) from non-operations | 4168 | (1748) | 7308 | 13023 |  | 22751 |
| **(Loss)/income before income tax expenses** | **(1028)** | **(4002)** | **(2590)** | **(28551)** | **37935** | **1764** |
| Share of results of equity investees |  |  |  | (1291) |  | (1291) |
| Income tax benefits/(expenses) |  |  | 111 | (1612) |  | (1501) |
| **Net (loss)/income** | **(1028)** | **(4002)** | **(2479)** | **(31454)** | **37935** | **(1028)** |

---

------

***Selected Condensed Consolidated Balance Sheets Data*** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** |
|  | **Gaotu<br>Techedu<br>Inc.** | **Other<br>subsidiaries** | **WFOEs** | **VIEs and<br>VIEs'<br>Subsidiaries** | **Elimination** | **Consolidated<br>Totals** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Cash and cash equivalents | 5824 | 1498 | 4295 | 73638 |  | 85255 |
| Restricted cash |  |  |  | 16563 |  | 16563 |
| Short-term investments | 75895 | 10431 | 3104 | 297922 |  | 387352 |
| Inventory |  |  |  | 7858 |  | 7858 |
| Amounts due from subsidiaries and VIEs, current portion | 844379 | 127962 | 576773 | 12910 | (1562024) |  |
| Prepaid expenses and other current assets | 10331 | (17) | 4693 | 57175 |  | 72182 |
| **Total current assets** | **936429** | **139874** | **588865** | **466066** | **(1562024)** | **569210** |
| Operating lease right-of-use assets |  |  | 3985 | 64183 |  | 68168 |
| Property, equipment and software, net |  |  | 6903 | 137401 |  | 144304 |
| Land use rights |  |  |  | 11169 |  | 11169 |
| Long-term investments | 48717 | 20959 |  | 9208 |  | 78884 |
| Investments in subsidiaries and VIEs |  |  |  |  |  |  |
| Rental deposit |  | 6 | 1839 | 5190 |  | 7035 |
| Amounts due from subsidiaries and VIEs, non-current portion |  | 47942 |  |  | (47942) |  |
| Other non-current assets |  | 5208 | 25 | 2541 |  | 7774 |
| **Total non-current assets** | **48717** | **74115** | **12752** | **229692** | **(47942)** | **317334** |
| **TOTAL ASSETS** | **985146** | **213989** | **601617** | **695758** | **(1609966)** | **886544** |
| Short-term borrowings |  |  |  | 14300 |  | 14300 |
| Accrued expenses and other current liabilities | 10908 | 628 | 46478 | 161842 |  | 219856 |
| Amounts due to related party |  |  |  | 25991 |  | 25991 |
| Amounts due to subsidiaries and VIEs | 17054 | 852522 | 129918 | 562542 | (1562036) |  |
| Deferred revenue, current portion |  | 14 | 139 | 327216 |  | 327369 |
| Operating lease liabilities, current portion |  |  | 1065 | 18484 |  | 19549 |
| Income tax payable |  |  | 7 | 25 |  | 32 |
| **Total current liabilities** | **27962** | **853164** | **177607** | **1110400** | **(1562036)** | **607097** |
| Deferred revenue, non-current portion |  |  |  | 39556 |  | 39556 |
| Operating lease liabilities, non-current portion |  |  | 967 | 44321 |  | 45288 |
| Deferred tax liabilities |  |  |  | 10760 |  | 10760 |
| Deficit of investments in subsidiaries and VIEs | 777900 | 133417 | 556460 |  | (1467777) |  |
| Long-term borrowings |  |  |  | 4559 |  | 4559 |
| Other long-term payables |  |  |  | 42622 | (42622) |  |
| **Total non-current liabilities** | **777900** | **133417** | **557427** | **141818** | **(1510399)** | **100163** |
| **TOTAL LIABILITIES** | **805862** | **986581** | **735034** | **1252218** | **(3072435)** | **707260** |
| **TOTAL SHAREHOLDERS' EQUITY/(DEFICIT)** | **179284** | **(772592)** | **(133417)** | **(556460)** | **1462469** | **179284** |

---

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---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **Gaotu<br>Techedu<br>Inc.** | **Other<br>subsidiaries** | **WFOEs** | **VIEs and<br>VIEs'<br>Subsidiaries** | **Elimination** | **Consolidated<br>Totals** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Cash and cash equivalents | 30238 | 6490 | 76245 | 68019 |  | 180992 |
| Restricted cash |  |  |  | 715 |  | 715 |
| Short-term investments | 70780 |  | 100722 | 81295 |  | 252797 |
| Inventory |  |  |  | 4987 |  | 4987 |
| Amounts due from subsidiaries and VIEs, current portion | 881917 | 77183 | 489189 | 92277 | (1540566) |  |
| Prepaid expenses and other current assets | 249 | 4 | 5506 | 53706 | (305) | 59160 |
| **Total current assets** | **983184** | **83677** | **671662** | **300999** | **(1540871)** | **498651** |
| Operating lease right-of-use assets |  |  | 5947 | 63046 |  | 68993 |
| Property, equipment and software, net |  |  | 6521 | 85301 |  | 91822 |
| Land use rights |  |  |  | 3529 |  | 3529 |
| Long-term investments | 23855 |  | 2883 | 99677 |  | 126415 |
| Investments in subsidiaries and VIEs |  | 17638 |  |  | (17638) |  |
| Rental deposit |  |  | 1664 | 4615 |  | 6279 |
| Amounts due from subsidiaries and VIEs, non-current portion |  | 61500 |  |  | (61500) |  |
| Other non-current assets |  |  | 48 | 2704 |  | 2752 |
| **Total non-current assets** | **23855** | **79138** | **17063** | **258872** | **(79138)** | **299790** |
| **TOTAL ASSETS** | **1007039** | **162815** | **688725** | **559871** | **(1620009)** | **798441** |
| Accrued expenses and other current liabilities | 792 | 80 | 58798 | 111227 | (305) | 170592 |
| Amounts due to subsidiaries and VIEs | 14807 | 882331 | 119174 | 524255 | (1540567) |  |
| Deferred revenue, current portion |  |  |  | 255791 |  | 255791 |
| Operating lease liabilities, current portion |  |  | 4544 | 15682 |  | 20226 |
| Income tax payable |  | 1 | 8 | 82 |  | 91 |
| **Total current liabilities** | **15599** | **882412** | **182524** | **907037** | **(1540872)** | **446700** |
| Deferred revenue, non-current portion |  |  |  | 29975 |  | 29975 |
| Operating lease liabilities, non-current portion |  |  | 1007 | 46204 |  | 47211 |
| Deferred tax liabilities |  |  | 39 | 9634 |  | 9673 |
| Deficit of investments in subsidiaries and VIEs | 726558 |  | 487517 |  | (1214075) |  |
| Other long-term payables |  |  |  | 54538 | (54538) |  |
| **Total non-current liabilities** | **726558** | **—** | **488563** | **140351** | **(1268613)** | **86859** |
| **TOTAL LIABILITIES** | **742157** | **882412** | **671087** | **1047388** | **(2809485)** | **533559** |
| **TOTAL SHAREHOLDERS' EQUITY/(DEFICIT)** | **264882** | **(719597)** | **17638** | **(487517)** | **1189476** | **264882** |

---

------

***Selected Condensed Consolidated Cash Flows Data*** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2025** | **For the Year Ended December 31, 2025** | **For the Year Ended December 31, 2025** | **For the Year Ended December 31, 2025** | **For the Year Ended December 31, 2025** | **For the Year Ended December 31, 2025** |
|  | **Gaotu<br>Techedu<br>Inc.** | **Other<br>Subsidiaries** | **WFOEs** | **VIEs and<br>VIEs'<br>Subsidiaries** | **Elimination** | **Consolidated<br>Totals** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Net cash generated from/(used in) operating activities** | **4816** | **7504** | **(160199)** | **207380** | **—** | **59501** |
| Investments in subsidiaries and VIEs |  |  |  |  |  |  |
| Loans to subsidiaries and VIEs | (53309) | (96649) |  |  | 149958 |  |
| Repayment from subsidiaries and VIEs | 91662 | 56960 |  |  | (148622) |  |
| Other investing investments | (25735) | 71303 | (8823) | (153829) |  | (117084) |
| **Net cash generated from/(used in) investing activities** | **12618** | **31614** | **(8823)** | **(153829)** | **1336** | **(117084)** |
| Capital contribution from parent company |  |  |  |  |  |  |
| Loans from parent company |  | 53309 | 96649 |  | (149958) |  |
| Repayment to parent company |  | (90070) | (1592) | (56960) | 148622 |  |
| Other financing activities | (49100) |  |  | 18478 |  | (30622) |
| **Net cash (used in)/generated from financing activities** | **(49100)** | **(36761)** | **95057** | **(38482)** | **(1336)** | **(30622)** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** |
|  | **Gaotu<br>Techedu<br>Inc.** | **Other<br>Subsidiaries** | **WFOEs** | **VIEs and<br>VIEs'<br>Subsidiaries** | **Elimination** | **Consolidated<br>Totals** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Net cash (used in)/generated from operating activities** | **(1674)** | **2170** | **(133350)** | **168201** | **—** | **35347** |
| Investments in subsidiaries and VIEs |  |  |  |  |  |  |
| Loans to subsidiaries and VIEs | (10172) |  |  |  | 10172 |  |
| Repayment from subsidiaries and VIEs | 44589 | 32918 |  |  | (77507) |  |
| Other investing investments | 12660 | (35) | (50372) | 122799 |  | 85052 |
| **Net cash generated from/(used in) investing activities** | **47077** | **32883** | **(50372)** | **122799** | **(67335)** | **85052** |
| Capital contribution from parent company |  |  |  |  |  |  |
| Loans from parent company |  | 10172 |  |  | (10172) |  |
| Repayment to parent company |  | (44589) | (4044) | (28874) | 77507 |  |
| Other financing activities | (28126) |  |  |  |  | (28126) |
| **Net cash (used in)/generated from financing activities** | **(28126)** | **(34417)** | **(4044)** | **(28874)** | **67335** | **(28126)** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** |
|  | **Gaotu<br>Techedu<br>Inc.** | **Other<br>Subsidiaries** | **WFOEs** | **VIEs and<br>VIEs'<br>Subsidiaries** | **Elimination** | **Consolidated<br>Totals** |
|  | **US$** | **US$** | **US$** | **US$** | **US$** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Net cash generated from/(used in) operating activities** | **2053** | **2508** | **(84322)** | **129578** | **—** | **49817** |
| Investments in subsidiaries and VIEs |  |  |  |  |  |  |
| Loans to subsidiaries and VIEs | (35317) | (1403) |  |  | 36720 |  |
| Repayment from subsidiaries and VIEs | 56733 | 409 |  |  | (57142) |  |
| Other investing investments | 4303 | 26352 | 72678 | (163049) |  | (59716) |
| **Net cash generated from/(used in) investing activities** | **25719** | **25358** | **72678** | **(163049)** | **(20422)** | **(59716)** |
| Capital contribution from parent company |  |  |  |  |  |  |
| Loans from parent company |  | 35317 |  | 1403 | (36720) |  |
| Repayment to parent company |  | (56733) | (409) |  | 57142 |  |
| Other financing activities | (12744) |  |  |  |  | (12744) |
| **Net cash (used in)/generated from financing activities** | **(12744)** | **(21416)** | **(409)** | **1403** | **20422** | **(12744)** |

---

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**B. Capitalization and Indebtedness**

Not Applicable.

**C. Reasons for the Offer and Use of Proceeds**

Not Applicable.

**D. Risk Factors** 

**Summary of Risk Factors** 

An investment in our ADSs or Class A ordinary shares involves significant risks. Below is a summary of material risks we face, organized under relevant headings. These risks are discussed more fully in "Item 3. Key Information—D. Risk Factors."

***Risks Related to Our Business and Industry*** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Significant risks exist in relation to the interpretation and implementation of, or proposed changes to, the laws, regulations and policies of mainland China regarding the private education industry. In particular, our compliance with the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education and the implementation measures issued thereunder by the government authorities of mainland China has materially and adversely affected and will materially and adversely affect our business, financial condition, results of operations and prospect. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Significant risks exist in relation to the interpretation and implementation of, or proposed changes to, the laws, regulations and policies of mainland China regarding the private education industry. In particular, our compliance with the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education and the implementation measures issued thereunder by the PRC government authorities has materially and adversely affected and will materially and adversely affect our business, financial condition, results of operations and prospect."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The cessation of compulsory education academic subject tutoring services has materially and adversely affected and will materially and adversely affect our business, financial condition, results of operations and prospect. Failure to effectively and efficiently manage changes of our existing and new business may materially and adversely affect our ability to capitalize on new business opportunities. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—The cessation of compulsory education academic subject tutoring services has materially and adversely affected and will materially and adversely affect our business, financial condition, results of operations and prospect. Failure to effectively and efficiently manage changes of our existing and new business may materially and adversely affect our ability to capitalize on new business opportunities."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If we fail to successfully execute our business strategies, we may not able to attract students to purchase our existing and new course packages outside of compulsory education academic subject tutoring services, and our business and prospects will be materially and adversely affected. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—If we fail to successfully execute our business strategies, we may not able to attract students to purchase our existing and new course packages outside of compulsory education academic subject tutoring services, and our business and prospects will be materially and adversely affected."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We have incurred net losses in the past, and the cessation of compulsory education academic subject tutoring services have had and will continue to have a material adverse impact on our revenues. As a result, we may not remain profitable or increase profitability in the future. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We have incurred net losses in the past, and the cessation of compulsory education academic subject tutoring services have had and will continue to have a material adverse impact on our revenues. As a result, we may not remain profitable or increase profitability in the future."

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We have a limited operating history with our current business model, which makes it difficult to predict our prospects and our business and financial performance. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We have a limited operating history with our current business model, which makes it difficult to predict our prospects and our business and financial performance."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We are facing new risks and challenges related to the operations of our offline learning centers, which may adversely affect our business and results of operations. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We are facing new risks and challenges related to the operations of our offline learning centers, which may adversely affect our business and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If we are not able to continue to engage, train and retain high quality teaching staff, we may not be able to maintain consistent teaching quality, and our business, financial condition and results of operations may be materially and adversely affected. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—If we are not able to continue to engage, train and retain high quality teaching staff, we may not be able to maintain consistent teaching quality, and our business, financial condition and results of operations may be materially and adversely affected."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our business is subject to complex and evolving laws and regulations of mainland China regarding cybersecurity, information security, privacy and data protection. Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Our business is subject to complex and evolving laws and regulations of mainland China regarding cybersecurity, information security, privacy and data protection. Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our business depends on our "Gaotu" brand. The recognition of our brand may be adversely affected by any negative publicity concerning us and our business, shareholders, affiliates, directors, officers, teaching staff and other employees, as well as the industry in which we operate, regardless of its accuracy, that could harm our reputation and business. If we are not able to maintain and enhance our brand, our business and operating results may be harmed.

***Risks Related to Our Corporate Structure***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We are a Cayman Islands holding company with no equity ownership in the VIEs and we conduct our operations in China primarily through (i) our subsidiaries in China, (ii) the VIEs with which we have contractual arrangements, and (iii) the subsidiaries of the VIEs. Investors thus are not purchasing direct equity interests in our operating entities in China but instead are purchasing equity interests in a Cayman Islands holding company. Our holding company, our PRC subsidiaries, the VIEs and their subsidiaries, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of our contractual arrangements with our consolidated affiliated entities and, consequently, significantly affect the financial performance of the VIEs and our company as a whole. For a detailed description of the risks associated with our corporate structure, please refer to the risks disclosed under "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure. "

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with mainland China's regulations relating to the relevant industries, or if the determinations, changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIEs that conduct our operations, our securities may decline in value or become worthless. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with mainland China's regulations relating to the relevant industries, or if the determinations, changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIEs that conduct our operations, our securities may decline in value or become worthless."

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We rely on contractual arrangements with the VIEs and their shareholders for our business operations, which may not be as effective as direct ownership in providing operational control. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIEs and their shareholders for our business operations, which may not be as effective as direct ownership in providing operational control."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Any failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may rely on dividends paid by our mainland China subsidiaries to fund cash and financing requirements, which are subject to restrictions and limitations by laws and regulations of mainland China. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—We may rely on dividends paid by our mainland China subsidiaries to fund cash and financing requirements. Any limitation on the ability of our mainland China subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of our ADSs and our ordinary shares."

***Risks Related to Doing Business in China***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Uncertainties with respect to the legal system of mainland China could adversely affect us. As the legal system of mainland China is evolving, laws, regulations and rules in mainland China may change quickly with little advance notice and enforcement of these laws, regulations and rules involves uncertainties. See "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the legal system of mainland China could adversely affect us."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Changes in China's economic, political or social conditions or government policies could have a material adverse effect on our business and operations. See "Item 3. Key Information—D. Risk Factors—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."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We conduct our business primarily in mainland China, and our operations in mainland China are governed by the laws and regulations of mainland China. The PRC government may intervene or influence our operations at any time. The PRC government may take regulatory actions to exert more oversight and control over offerings conducted overseas and/or foreign investment in mainland China-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. See "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The PRC government's significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The filing with the CSRC may be required in connection with our future follow-on offerings and the occurrence of certain activities under the laws of mainland China, and we cannot predict whether we will be able to complete such filing. See "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The filing with the CSRC may be required in connection with our future follow-on offerings and the occurrence of certain activities under the laws of mainland China, and we cannot predict whether we will be able to complete such filing."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•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. 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."

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment. See "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China. 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***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The trading price of our ADSs is likely to be volatile, which could result in substantial losses to investors. See "Item 3. Key Information—D. Risk Factors—Risks Related to the ADSs—The trading price of our ADSs is likely to be volatile, which could result in substantial losses to investors."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If we fail to meet NYSE's continued listing requirements, our ADSs could be subject to delisting, which may significantly reduce the liquidity of our ADSs and cause further declines to the market price of our ADSs. See "Item 3. Key Information—D. Risk Factors—Risks Related to the ADSs—If we fail to meet NYSE's minimum share price and other continued listing requirements, our ADSs could be subject to delisting, which may significantly reduce the liquidity of our ADSs and cause further declines to the market price of our ADSs."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our ADSs and trading volume could decline. See "Item 3. Key Information—D. Risk Factors—Risks Related to the ADSs—If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our ADSs and trading volume could decline."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The sale or perceived availability for sale of substantial amounts of the ADSs could adversely affect their market price. See "Item 3. Key Information—D. Risk Factors—Risks Related to the ADSs—The sale or perceived availability for sale of substantial amounts of the ADSs could adversely affect their market price."

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**Risks Related to Our Business and Industry** 

***Significant risks exist in relation to the interpretation and implementation of, or proposed changes to, the laws, regulations and policies of mainland China regarding the private education industry. In particular, our compliance with the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education and the implementation measures issued thereunder by the PRC government authorities has materially and adversely affected and will materially and adversely affect our business, financial condition, results of operations and prospect.***

The private education industry in mainland China, especially the after-school tutoring sector, has experienced intense scrutiny and has been subject to significant regulatory changes. In particular, the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education jointly promulgated by the General Office of the State Council and the General Office of the Central Committee of the Communist Party of China on July 24, 2021, or the Alleviating Burden Opinion, set out a series of operating requirements on after-school tutoring institutions, including, among other things, (i) local government authorities shall no longer approve any new after-school tutoring institutions providing tutoring services on academic subjects for students in compulsory education, known as Academic AST Institutions, and all the existing Academic AST Institutions shall be registered as non-profit, and local government authorities shall no longer approve any new after-school tutoring institutions providing tutoring services on academic subjects for pre-school-age children and students in grade ten to twelve; (ii) online Academic AST Institutions that have filed with the local education administration authorities will be subject to review and re-approval procedures by competent government authorities, and any failure to obtain such approval will result in the cancellation of its previous filing and ICP license; (iii) Academic AST Institutions are prohibited from raising funds by listing on stock markets or conducting any capitalization activities and listed companies are prohibited from investing in Academic AST Institutions through capital markets fund raising activities, or acquiring assets of Academic AST Institutions by paying cash or issuing securities; and (iv) foreign capital is prohibited from controlling or participating in any Academic AST Institutions through mergers and acquisitions, entrusted operation, joining franchise or variable interest entities. The Alleviating Burden Opinion further provides that administration and supervision over academic subjects tutoring institutions for students on grade ten to twelve shall be implemented by reference to the applicable provisions of the Alleviating Burden Opinion. On February 8, 2022, the Ministry of Education issued the Key Points of Workstreams of the year 2022 on its public website, indicating that the requirements for academic subjects tutoring for students on grade ten to twelve shall strictly refer to the requirements implemented to academic subjects tutoring for students in compulsory education. See "Item 4. Information on the Company—B. Business Overview—Government Regulations—Regulation Related to Private Education—Regulation Related to After-School Tutoring" for more details.

In recent years, PRC governmental authorities published a series of regulations, rules and policies to implement the Alleviating Burden Opinion. On August 18, 2021, the Beijing Municipality Government and the Beijing Municipal Committee of the Communist Party of China jointly published the full text of the Beijing Municipality's Measures to Further Reduce the Burden of Homework and After-School Tutoring on Students in Compulsory Education in Beijing. On August 2, 2021, the Guangdong Education Bureau issued the Circular on Reducing the Burden of After-School Tutoring on Students in Compulsory Education. On September 7, 2021, the Ministry of Education published on its official website that the Ministry of Education, together with two other government authorities, issued a circular requiring all Academic AST Institutions to complete registration as non-profit by the end of 2021, and all Academic AST Institutions shall, before completing such registration, suspend enrollment of students and charging fees. Moreover, the Ministry of Education and other governmental authorities further issued an announcement to regulate non-academic subjects after-school tutoring in March 2022 and the Opinions on Regulation of Non-Academic After-School Tutoring for Primary and Secondary School Students in November 2022. On February 8, 2024, the Ministry of Education issued the Administrative Regulations on Off-campus Tutoring (Draft for Comments) and the public comment period of the draft administrative regulations ended on March 8, 2024. As of the date of this annual report, these draft administrative regulations have not come into effect. See "Item 4. Information on the Company—B. Business Overview—Government Regulations—Regulation Related to Private Education—Regulation Related to After-School Tutoring" for more details.

We have closely monitored the evolving regulatory environment and made efforts to seek guidance from and cooperate with the government authorities to comply with these regulations, rules and policies. Among other things, we have ceased offering and will not offer compulsory education academic subject tutoring services since the end of 2021.

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Our business, financial condition, results of operations and prospect have been and will be materially and adversely affected by the actions we have taken to date and consider taking to be in compliance with the Alleviating Burden Opinion and its implementation measures. We are committed to complying with all applicable laws and regulations of mainland China, including the Alleviating Burden Opinion and related regulations, rules and policies. In addition to the cessation of compulsory education academic subject tutoring services, we have taken other actions to restructure our business and operations, including closing of some of our operating centers and implementing staff optimization plans, to maintain our continued operations. We will continue to seek guidance from and cooperate with government authorities in mainland China in connection with our efforts to comply with the policy directives of the Alleviating Burden Opinion and related regulations, rules and policies. We will further adjust our business operations as required. However, due to the complexity and evolving regulatory environment, we cannot assure you that our operations would be in full compliance with applicable laws, regulations and policies, including the Alleviating Burden Opinion and its implementation measures, and the related regulations, rules and policies, in a timely manner, or at all. We may become subject to fines or other penalties or be required to terminate certain operations, in which case our business, financial condition and results of operations could be materially and adversely affected further. In addition, we may incur material impairment and severance charges resulting from termination of leases, dismissal of employees and other actions we take in light of the latest regulatory developments, which may have material adverse impact on our financial condition, results of operations and prospect.

***The cessation of compulsory education academic subject tutoring services have materially and adversely affected and will materially and adversely affect our business, financial condition, results of operations and prospect. Failure to effectively and efficiently manage changes of our existing and new business may materially and adversely affect our ability to capitalize on new business opportunities.***

In light of recent regulatory developments in mainland China, in addition to the cessation of our compulsory education academic subject tutoring services, we have made and will continue to make changes to our existing business and execute new business strategy we decide to pursue. Learning services are still our most important business and main source of income. This part of business mainly includes traditional learning services, non-academic tutoring services, and college student and adult education services. In addition, educational content and digitalized learning products are complementary to learning services, primarily consisting of content products and auxiliary learning tools. We have diligently designed and developed educational products tailored to students' individual learning needs. By sparking students' interest in learning, we aim to strengthen their fundamental critical thinking skills and learning abilities. Furthermore, we assist them in cultivating healthy study habits and self-motivation. By diversifying our educational products and learning service formats, we have created a comprehensive product matrix that caters to users' diverse and personalized learning requirements.

We have also been rolling out face-to-face learning services and personalized learning experiences through our learning centers across the country and offering comprehensive educational programs and services to students across China. These new business directions have resulted, and will continue to result, in substantial demands on our management, faculty and operational, technological and other resources. Our expanded course offerings and education services also place significant demands on us to maintain the consistency of our teaching quality and our culture to ensure that our brand does not suffer as a result of any decreases, whether actual or perceived, in our teaching quality. To manage and support changes in our business and our future growth strategy, we must continue to improve our existing operational, administrative and technological systems and our financial and management controls, and recruit, train and retain additional qualified teachers, management personnel and other administrative and sales and marketing personnel, particularly as we enter into new areas. We also need to continue to develop, adapt or enhance number and quality of our course offerings in these new areas. We cannot assure you that we will be able to effectively and efficiently manage our operations, recruit and retain qualified teachers and management personnel and integrate new businesses into our operations. Any failure to effectively and efficiently manage changes of our business may materially and adversely affect our ability to capitalize on new business opportunities, which in turn may have a material adverse impact on our financial condition and results of operations.

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***If we fail to successfully execute our business strategies, we may not able to attract students to purchase our existing and new course packages outside of compulsory education academic subject tutoring services, and our business and prospects will be materially and adversely affected.***

Following the cessation of compulsory education academic subject tutoring services, we have shifted our business strategies to expand our course and service offerings into new areas, grow our network of offline learning centers, and update and expand the content of our existing course, services and products in a cost-effective and timely manner. Our ability to attract students to purchase our course packages for either online or offline courses outside of compulsory education academic subject tutoring services is critical to maintaining our continued operations. This in turn will depend on several factors, including our ability to continue to develop, adapt or enhance number and quality of our course offerings in these new areas to respond to regulatory developments and evolving demands of our existing or prospective students, engage, train and retain high quality teaching staff in support of new course offerings, and effectively market our course offerings and enhance our brand awareness to a broader base of prospective students. The expansion of our course and education service offerings may not succeed due to evolving government regulations, competition, failure to effectively market our new courses, services and products and maintain their quality and consistency, or other factors. In addition, we may be unable to identify new areas with sufficient growth potential to expand our course offerings, and demand for our courses, services and products may not increase as rapidly as we expect. Furthermore, we may be unable to develop or license additional content on commercially reasonable terms and in a timely manner, or at all, to keep pace with changes in regulatory developments and market demands. If we fail to successfully execute our business strategies, we may not be able to continue to attract students to enroll in our courses without a significant decrease in course fees, and our business and prospects may be materially and adversely affected.

In addition, as many of these course offerings are in areas new to us and our teaching staff, we may not be able to meet our students' expectations in terms of academic performance due to a variety of reasons, many of which are outside of our control. We may face student dissatisfaction due to our students' perceptions of our failure to help them achieve their anticipated educational goals, our students' overall dissatisfaction with the quality of our education content offerings and our teaching staff, as well as changing views of the value of the diplomas, degrees and qualifications they are pursuing through taking our courses. We must also manage our growth while maintaining consistent and high teaching quality, and respond effectively to competitive pressures. If we are unable to attract students to purchase our course packages without a significant decrease in course fees, our gross billings and net revenues may decline, which may have a material adverse effect on our business, financial condition and results of operations.

Furthermore, we are subject to risks associated with other aspects of our business operations. For example, we offer various educational content and learning products to our students such as books. However, the books we sell may inadvertently contain content that infringes upon third-party intellectual property rights without our knowledge, including unauthorized use of copyrighted material, plagiarism, or unlicensed reproductions. Such infringement claims could result in legal disputes, financial penalties, and reputational damage to us. In addition, we participate in and conduct live streaming activities to promote our courses and service offerings. Any failure to comply with third-party platform policies and regulations regarding hosts and content could lead to adverse consequences. Any inappropriate remarks, misleading claims, or non-compliant sales practices by hosts during such live streaming activities could result in temporary or permanent suspension of our accounts, fines, or mandatory business rectification, adversely affecting our business operations. We also organize research and study programs aiming to provide participants the opportunities to visit and study at overseas educational institutions, which may involve travel arrangements subject to seasonal travel price fluctuations, which could increase our operational costs and reduce profitability. We may also encounter unforeseen events such as political unrest, protests, natural disasters, or disease outbreaks, leading to cancellations, delays, or additional safety measures for such programs that could result in financial losses or reputational harm. Any of these events could adversely affecting our business, financial condition and results of operations.

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***We have incurred net losses in the past, and the cessation of compulsory education academic subject tutoring services have had and will continue to have a material adverse impact on our revenues. As a result, we may not remain profitable or increase profitability in the future.***

We recorded a net loss of RMB323.3 million (US$46.2 million) in 2025, compared to a net loss of RMB1,049.0 million in 2024 and a net loss of RMB7.3 million in 2023. The cessation of compulsory education academic subject tutoring services has materially and adversely affected and will materially and adversely affect our financial condition and results of operations. We may incur net losses in the future while exploring new business strategies, and we cannot assure you that we will be able to consistently generate net profits or positive cash flow from operating activities in the future. Our ability to maintain profitability will depend in large part on our ability to maintain or increase our operating margin, either by growing our revenues at a rate faster than our costs and operating expenses increase, or by reducing our costs and operating expenses as a percentage of our net revenues. Accordingly, we intend to continue to invest in developing new course offerings and digital products to attract new students and strengthen our technologies and data analytics capabilities to enhance student experience. As a result of the foregoing, we may not be profitable or increase our profitability in the future.

***We have a limited operating history with our current business model, which makes it difficult to predict our prospects and our business and financial performance.***

We have a short operating history with our current business model focusing on providing online and offline live classes. We transitioned from a membership-based service platform connecting teaching staff and students to our current business model in March 2017. Our limited history of operating under the current business model may not serve as an adequate basis for evaluating our prospect and operating results, including gross billings, net revenues, cash flows and operating margins. We have encountered, and may continue to encounter in the future, risks, challenges and uncertainties associated with operating an internet-based education business in an evolving regulatory landscape, such as changing and expanding our education content offering in compliance with regulatory developments, building and managing reliable and secure IT systems and infrastructure, and engaging, training and retaining high quality employees such as our teaching staff and IT support staff. Our offline learning centers also introduce additional challenges related to local regulations, staffing and operational management. There are no guarantees that we will be able to effectively address these risks and uncertainties, or at all. If we do not manage these risks successfully, our operating and financial results may differ materially from our expectations and our business and financial performance may suffer.

***We are facing new risks and challenges related to the operations of our offline learning centers, which may adversely affect our business and results of operations.***

We are facing new risks and challenges related to the operations of our offline learning centers. Each geographic region in China has distinct educational needs, consumer preferences, and competitive landscapes. As a result, we may need to adapt our course offerings, curricula, teaching methods, and pricing strategies to meet local market demands. Additionally, different provinces and cities in China impose varying regulations on private education institutions. Navigating these local regulatory environments requires considerable resources and may delay or hinder our expansion in certain areas.

Establishing each new learning center necessitates significant upfront capital, which can strain our financial resources and limit our ability to expand rapidly. To remain competitive and compliant with evolving educational standards, we must also invest continuously in maintaining and upgrading our facilities. These recurring expenses, including regular renovations and technology updates, could pressure our profit margins. As we grow our network of learning centers nationwide, the capital needed for new locations may outpace our revenue growth, potentially straining our cash flow and requiring additional financing. Furthermore, if we are unable to maintain consistent, high-quality teaching across all centers due to a shortage of experienced local instructors, our brand reputation may suffer. This could hinder our ability to attract students, materially and adversely affecting our business and future prospects.

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***If we are not able to continue to engage, train and retain high quality teaching staff, we may not be able to maintain consistent teaching quality, and our business, financial condition and results of operations may be materially and adversely affected.***

We have adopted a dual-teacher system, comprised of high quality instructors and professional tutors. Our teaching staff is critical to the learning experience of our students and our reputation. We seek to engage high quality teaching staff with strong educational background and teaching skills. We must provide competitive pay and offer attractive career development opportunities to attract and retain them. We must also provide ongoing training to our teaching staff to ensure that they stay abreast of changes in course materials, student demands and other changes and trends necessary to teach effectively. Furthermore, as we continue to develop new education content, we may continue to engage additional high quality teaching staff with appropriate skill sets or backgrounds to deliver instructions effectively. We cannot guarantee that we will be able to engage and train such teaching staff quickly, or at all. Furthermore, given other potential more attractive opportunities for our quality teaching staff, over time some of them may choose to leave us. Departure of quality teaching staff may reduce the attractiveness of our course offerings and negatively impact our paid course enrollments. Furthermore, in the event such quality teaching staff join our competitors, students may decide to follow such quality teaching staff and enroll in their courses offered through other education companies, which may further weaken our competitive position in the industry. Although we have not experienced major difficulties in engaging, training or retaining high quality teaching staff in the past, we may not always be able to engage, train and retain enough high-quality teaching staff to keep pace with our growth while maintaining consistent education quality. We may also face significant competition in engaging high quality teaching staff from our competitors or from other opportunities that are perceived as more desirable. A shortage of high-quality teaching staff, a decrease in the quality of our teaching staff's performance, whether actual or perceived, or a significant increase in the cost to engage or retain high quality teaching staff would have a material adverse effect on our business, financial condition and results of operations.

***Our business is subject to complex and evolving laws and regulations of mainland China regarding cybersecurity, information security, privacy and data protection. Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.*** 

Our business generates and processes a large quantity of data. We face risks inherent in handling and protecting large volume of data. In particular, we face a number of challenges relating to data from transactions and other activities on our platforms, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•addressing concerns related to privacy and sharing, safety, security and other factors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•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 general, we expect that data security, cybersecurity and data protection compliance will receive greater attention and focus from regulators, as well as attract continued or greater public scrutiny and attention going forward, which could increase our compliance costs and subject us to heightened risks and challenges associated with data security, cybersecurity and data protection. If we are unable to manage these risks, we could become subject to penalties, including fines, suspension of business and revocation of required licenses, and our reputation and results of operations could be materially and adversely affected.

The mainland China's regulatory and enforcement regime with regard to data security, cybersecurity and data protection is evolving and may be subject to different interpretations or significant changes. Moreover, different PRC regulatory bodies, including the Standing Committee of the National People's Congress, the Ministry of Industry and Information Technology, or the MIIT, the CAC, the Ministry of Public Security and the SAMR, have enforced data security, cybersecurity, privacy and protections laws and regulations with varying standards and applications. See "Item 4. Information on the Company—B. Business Overview—Government Regulations—Regulation Related to Cybersecurity, Data Security, and Personal Information Protection." The following are examples of certain recent regulatory activities in this area in mainland China:

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*<u>Data Security and Cybersecurity</u>*

In June 2021, the Standing Committee of the National People's Congress promulgated the PRC Data Security Law, which took effect in September 2021. The PRC Data Security Law, among other things, provides for security review procedure for data-related activities that may affect national security. In July 2021, the State Council promulgated the Regulations on Protection of Critical Information Infrastructure, which became effective on September 1, 2021. Pursuant to this regulation, critical information infrastructure means key network facilities or information systems of critical industries or sectors, such as public communication and information service, energy, transportation, water conservation, finance, public services, e-government affairs and national defense science, the damage, malfunction or data leakage of which may seriously endanger national security, people's livelihoods and the public interest. In December 2021, the CAC, together with other authorities, jointly promulgated the Revised Cybersecurity Review Measures, which became effective on February 15, 2022 and replaced its predecessor regulation. Pursuant to the Revised Cybersecurity Review Measures, critical information infrastructure operators that procure internet products and services, and operators of network platforms conducting data processing activities must be subject to the cybersecurity review if their activities affect or may affect national security. The Revised Cybersecurity Review Measures further stipulate that network platform operators that hold personal information of over one million users shall apply with the Cybersecurity Review Office for a cybersecurity review before any initial public offering at a foreign stock exchange. On September 24, 2024, the CAC published the Regulations on the Network Data Security which came into force as from January 1, 2025. The Regulations on the Network Data Security require that if a network data processor carries out network data processing activities that affects or may affect national security, it shall conduct a national security review in accordance with relevant state regulations, and emphasized special protection of important data. Important data refers to data in a specific field, a specific group, a specific region, or of a certain precision and scale, which, once tampered with, damaged, leaked, or illegally accessed or illegally utilized, may directly jeopardize national security, economic operation, social stability, public health and safety. In addition, the Regulations on the Network Data Security require that data processors that process "important data" must conduct an annual data security risk assessment, and submit the assessment report of the preceding year to the municipal cybersecurity department. Since the Regulations on the Network Data Security are still relatively new, substantial uncertainties exist with respect to the interpretation, implementation, including the standards for determining activities that "affects or may affect national security" and how they will affect us.

On October 28, 2025, the Standing Committee of the National People's Congress adopted the Decision of the Standing Committee of the National People's Congress on Amending the PRC Cybersecurity Law. The revised RPC Cybersecurity Law came into force on January 1, 2026. The key amendments to the newly revised PRC Cybersecurity Law include: a material increase in the maximum number of fines for violations; the introduction of hierarchical and tiered penalties; the addition of new enforcement measures such as ordering the suspension or shutdown of applications; and the inclusion of regulatory requirements applicable to artificial intelligence for the first time. The revised RPC Cybersecurity Law also further refines provisions related to personal information protection and data security, and aligns with and complements the Personal Information Protection Law and the Data Security Law of the People's Republic of China. Based on the facts that, (i) the Revised Cybersecurity Review Measures, the Regulations on the Network Data Security and the Revised PRC Cybersecurity Law were newly adopted, and the implementation and interpretation of these are subject to uncertainties, and (ii) we have not been involved in any investigations on cybersecurity review made by the CAC on such basis, nor have we received any material inquiries, notices, warnings, or sanctions from any competent regulatory authorities of mainland China related to cybersecurity, data security and personal data protection, we believe, as of the date of this annual report, we are in compliance with the existing laws and regulations of mainland China on cybersecurity, data security and personal data protection issued by the CAC in all material respects.

*<u>Personal Information and Privacy</u>*

The Anti-monopoly Guidelines for the Platform Economy Sector published by the Anti-monopoly Committee of the State Council, effective on February 7, 2021, prohibits collection of user information through coercive means by online platforms operators.

In August 2021, the Standing Committee of the National People's Congress promulgated the PRC Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection and took effect on November 1, 2021. We update our privacy policies from time to time to meet the latest regulatory requirements of PRC government authorities and adopt technical measures to protect data and ensure cybersecurity in a systematic way. Nonetheless, the PRC Personal Information Protection Law elevates the protection requirements for personal information processing, and many specific requirements of this law remain to be clarified by the CAC, other regulatory authorities, and courts in practice. We may be required to make further adjustments to our business practices to comply with the personal information protection laws and regulations.

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Many of the data-related legislations are relatively new and certain concepts thereunder remain subject to interpretation by the regulators. If any data that we possess belongs to data categories that are subject to heightened scrutiny, we may be required to adopt stricter measures for protection and management of such data. The Revised Cybersecurity Review Measures, the Regulations on the Network Data Security and the Revised PRC Cybersecurity Law remain unclear on whether the requirements will be applicable to companies that are already listed in the United States, such as us, if we were to pursue another listing outside of mainland China. We cannot predict the impact of the Revised Cybersecurity Review Measures, the Regulations on the Network Data Security and the Revised PRC Cybersecurity Law, if any, at this stage, and we will closely monitor and assess any development in the rule-making process. If the aforementioned laws and regulation mandate clearance of cybersecurity review and other specific actions to be taken by issuers like us, we face uncertainties as to whether these additional procedures can be completed by us timely, or at all, which may delay or disallow our future listings (should we decide to pursue them), subject us to government enforcement actions and investigations, fines, penalties, suspension of our non-compliant operations, or removal of our apps from the application stores, and materially and adversely affect our business and results of operations. As of the date of this annual report, we have not been involved in any formal investigations on cybersecurity review made by the CAC on such basis.

In general, compliance with the existing laws and regulations of mainland China, as well as additional laws and regulations that PRC regulatory bodies may enact in the future, related to data security and personal information protection, may be costly and result in additional expenses to us, and subject us to negative publicity, which could harm our reputation and business operations. There are also uncertainties with respect to how such laws and regulations will be implemented and interpreted in practice.

***Our business depends on our "Gaotu" brand. The recognition of our brand may be adversely affected by any negative publicity concerning us and our business, shareholders, affiliates, directors, officers, teaching staff and other employees, as well as the industry in which we operate, regardless of its accuracy, that could harm our reputation and business. If we are not able to maintain and enhance our brand, our business and operating results may be harmed.*** 

We believe that the market recognition of our "Gaotu" brand has significantly contributed to the success of our business and that maintaining and enhancing our brand recognition is critical to sustaining our competitive advantages. Negative publicity about us and our business, shareholders, affiliates, directors, officers, teaching staff and other employees, as well as the industry in which we operate, can harm the recognition of our brand. Negative publicity, regardless of merits, could be related to a wide variety of matters, including but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•alleged misconduct or other improper activities committed by our students or our directors, officers, teaching staff and other employees, including misrepresentation made by our employees to potential students during sales and marketing activities, and other fraudulent activities to artificially inflate the popularity of our services or course offerings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•false or malicious allegations or rumors about us or our directors, shareholders, affiliates, officers, and teaching staff and other employees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•complaints by our students about our education services and sales and marketing activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•complaints about the truthfulness or authenticity of the advertisements for our course offerings or services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•refund disputes of course fees between us and our students or administrative penalties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•employment-related claims relating to alleged employment discrimination, wage and hour violations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•governmental and regulatory investigations or penalties resulting from our failure to comply with applicable laws and regulations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•governmental or regulatory penalties imposed on our shareholders for any misconduct, whether or not it involves us or our business operations.

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In addition to traditional media, there has been an increasing use of social media platforms and similar devices in China, including instant messaging applications, social media platforms and other forms of internet-based communications that provide individuals with access to a broad audience of consumers and other interested persons. The availability of information on instant messaging applications and social media platforms is virtually immediate as is its impact without affording us an opportunity for redress or correction. The opportunity for dissemination of information, including inaccurate information, is seemingly limitless and readily available. Information concerning our company, shareholders, affiliates, directors, officers, teaching staff and other employees, may be posted on such platforms at any time. The risks associated with any such negative publicity or incorrect information cannot be completely eliminated or mitigated and may materially harm the recognition of our brand, our reputation, business, financial condition and results of operations.

***We may not be able to maintain our course fee level.*** 

Our results of operations are affected by the pricing of our education services. We determine our course fees primarily based on the demand for our educational programs, the cost of our operations, the course fees charged by our competitors, our pricing strategy to gain market share and general economic conditions in the PRC. In addition, PRC government may issue government-guided pricing mechanism which may impose limits on the course fees we may charge for our educational programs in the future. We will adjust our pricing if we receive specific government instructions to comply with these new regulations. Such pricing mechanism will also cause our gross and net margin to decline. Further, as we continue to shift our focus on college student and adult education, business related to overseas study, non-academic tutoring, educational content and digitalized learning products, our new course offerings and product and service offerings may not have the same margins as we had in the past. We cannot assure you that we would be able to maintain our course fee level, and our course fees could continue to decline in the future due to these factors.

***We face significant competition in each part of our current and future course and service offerings, which could divert students to our competitors, lead to pricing pressure and loss of market shares, and significantly reduce our net revenues.*** 

The private education industry in China is rapidly evolving, highly fragmented and competitive, and we expect competition in this sector to persist and intensify. We face competition in each part of our current and future course and service offerings from other educational service providers, as we continue to restructure our core business and explore new opportunities after the cessation of compulsory education academic subject tutoring services.

Some of our current or future competitors may have longer operating histories, greater brand recognition, or greater financial, technical or marketing resources than we do. We compete with these education service providers across a range of factors, including, among others, high quality instructors in the education industry, technology infrastructure and data analytics capabilities, quality of our education services and students' learning experience, brand recognition and scope of our course offerings. Our competitors may adopt similar curricula and marketing approaches, with different pricing and service packages that may have greater appeal than our offerings. In addition, some of our competitors may have more resources than we do and may be able to devote greater resources than we can to the development and promotion of their services and respond more quickly than we can to the changes in student preferences, testing materials, admission standards, market needs or new technologies. If we reduce course fees or increase spending in response to competition in order to retain or attract students and high quality teaching staff, or pursue new market opportunities, our net revenues may decrease, and our costs and expenses may increase as a result of such actions which may adversely affect our operating margins. If we are unable to successfully compete for students, maintain or increase our level of course fees, attract and retain competent teaching staff or other key personnel, maintain our competitiveness in terms of the quality of our education services in a cost-effective manner, our net revenues may be materially and adversely affected.

***Techniques employed by short sellers may drive down the market price of our listed securities.***

Short selling is the practice of selling securities that a seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. Short sellers hope to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as short sellers expect to pay less in that purchase than they received in the sale. As it is in short sellers' interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.

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Public companies listed in the United States that have substantially all of their operations in China have been the subject of short selling. Such short selling was often driven by short seller reports, which often were based on allegations including inadequacies in internal control and/or corporate governance or a lack of adherence thereto and accounting irregularities and mistakes. As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.

We have been, and continue to be, the subject of unfavorable allegations made by short sellers. See "Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings" for more information about short seller reports published against us and the related SEC investigation and class action lawsuit. In May 2020 and April 2021, Muddy Waters and Grizzly Report separately published short seller reports against us, which caused temporary fluctuations in the price of our ADSs following these reports. Any such allegations may be followed by periods of instability in the market price of our ADSs and negative publicity. Regardless of whether such allegations are proven to be true or untrue, we may have to expend a significant amount of resources to investigate such allegations and/or defend ourselves, including in connection with class actions or regulatory enforcement actions derivative of such allegations. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short sellers by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming, and could divert management's attention from the day-to-day operations of our company. Even if such allegations are ultimately proven to be groundless, allegations against us could negatively impact the market price of our securities and our business operations.

***We face uncertainties with respect to the development of regulatory requirements on operating licenses and permits for our education services in mainland China. Failure to obtain or renew requested licenses or permits in a timely manner or obtain newly required ones due to adverse changes in regulations or policies could have a material adverse impact on our business, financial condition and results of operations.***

The internet industry and education industry in mainland China are highly regulated by the PRC government. As an internet-based education service provider, we are required to obtain and maintain all necessary approvals, licenses or permits applicable to our business operations and make all necessary registration and filings for our education services in mainland China, and we may be required to apply for and obtain additional licenses or permits for our operations as the interpretation and implementation of current laws and regulations of mainland China are still evolving, and new laws and regulations may also be promulgated.

For example, applicable laws and regulations of mainland China require any entity engaged in certain audio-visual program services via the internet to hold a License for Online Transmission of Audio-visual Programs, or complete the registration procedures with the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT (currently known as National Radio and Television Administration) or its local bureaus. As of the date of this annual report, only wholly state-owned or state-controlled enterprises are eligible to apply for the License for Online Transmission of Audio-Visual Programs. We offer certain online courses on our platforms in live-streaming format and we also offer video recordings of live streaming courses and certain other audio-video contents on our online platforms to our learners. Due to the significant uncertainty regarding the scope of audio-visual program services, we may be required to obtain a License for Online Transmission of Audio-Visual Programs or to complete the required registration. However, we may not be able to obtain the license as we are not a wholly state-owned or state-controlled entity. If this were to occur, we may be subject to penalties, fines, legal sanctions or an order to suspend the provision of our relevant services. In addition, as of the date of this annual report, there are no implementation rules, explicit interpretation from government authorities or prevailing enforcement practice deeming the provision of our educational content to our students through our online platform as "online publishing" which requires an Online Publishing Service Permit. See "Item 4. Information on the Company—B. Business Overview—Government Regulations." However, there is no assurance that local PRC authorities will not adopt different enforcement practice, or any PRC government will not issue more explicit interpretation and rules or promulgate new laws and regulations from time to time to further regulate the online education industry, which may subject us to additional licensing requirements to continue to operate our business. As of the date of this annual report, no material fines or other penalties have been imposed on us for failure to obtain such additional licenses, permits or recordation, including, among other things, License for Online Transmission of Audio-Visual Programs and Online Publishing Services Permit.

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Pursuant to the Alleviating Burden Opinion and the Opinion on Supervising After-School Tutoring Institutions, or the State Council Circular 80, institutions providing after-school tutoring services on academic subjects shall obtain the private school operating permit. The State Council Circular 80 and the Amended Implementation Rules further require the learning centers of a training school providing after-school tutoring services to make filings with the relevant education authorities. Due to the complex and evolving regulatory environment of the after-school tutoring industry, we cannot assure you that we have obtained and maintained all requisite private school operation permits and filings for all of our tutoring institutions and learning centers. However, there is also no assurance that we will be able to update or renew the existing permits and filings on a timely basis, or at all. We may be subject to fines, confiscation of the gains derived from our noncompliant operations, or suspension of our operations, for any non-compliance incidents occurred from time to time, which may materially and adversely affect our business and results of operations. For example, in October 2024, certain governmental authorities imposed an aggregate amount of approximately RMB150,000 of fines on two of our academic tutoring institutions in Jinan, Shandong Province for lack of private school operating permit. In 2025, certain governmental authorities imposed an aggregate amount of approximately RMB90,000 of fines on three of our offline tutoring institutions in Tianjin, Shandong and Anhui for a lack of private school operating permits. In addition, according to a Notice published on the official website of Haidian District, Beijing in October 2025, Beijing GaoTuYunJi Education Technology Co., Ltd, or Beijing GaoTuYunJi, which do not hold a Private School Operation Permit, was found to have conducted offline after-school tutoring services on academic subjects. The Alleviating Burden Supervision Office of Beijing Haidian District ordered the suspension of the tutoring activities, required Beijing GaoTuYunJi to refund the relevant tuition fees, dismantle tutoring facilities. The Haidian District Market Supervision Administration will conduct further investigation in accordance with applicable regulations. As of the date of this annual report, we have not received any administrative penalty decision or notice of fine from the relevant authorities in connection with the foregoing matter. Furthermore, the Alleviating Burden Opinion further provides that administration and supervision over academic subjects tutoring institutions for students in grade ten to twelve shall be implemented by reference to the relevant provisions of the Alleviating Burden Opinion, however, it remains uncertain as to how and to what extent the administration over academic subjects tutoring institutions for students in grade ten to twelve will be implemented by reference of the Alleviating Burden Opinion. Therefore, we cannot assure you that we would not be required to take further actions, including obtaining operation permits, regarding our academic tutoring services for students in grade ten to twelve to comply with the Alleviating Burden Opinion and its implementation measures.

Pursuant to PRC laws and regulations related to publication, the publication and sale of our content products, such as books, require government approval and permit. We currently hold various Permits for Operating Publications through the VIEs and their subsidiaries. Our subsidiaries offer teaching handouts and other materials to our students. It is uncertain whether printing and providing teaching handouts and other materials to our students would be deemed publishing activities. If the National Press and Publication Administration or its local branches or other competent authorities deem such activities as publishing, such activities may be deemed as publishing activities without a Permit for Publication, Printing, Reproduction, Importation or Distribution or other illegal publishing activities, and we may become subject to penalties, fines, legal sanctions, confiscation of the gains derived from our non-compliant activities and tools and equipment for such activities, or an order suspending our printing and providing of teaching handouts and other materials to our students. For example, in 2024 and 2025, certain governmental authorities imposed an aggregate amount of approximately RMB53,000 of fines on certain of our subsidiaries, including two of our subsidiaries in Beijing and one subsidiary in Chengdu, for engaging in illegal publication.

On August 10, 2019, the Ministry of Education, jointly with certain other PRC government authorities, issued Opinions on Guiding and Regulating the Orderly and Healthy Development of Educational Mobile Apps, which require filings with the competent provincial regulatory authorities for education for mobile apps that provide services for school teaching and management, student learning and student life, or home-school interactions, with school faculty, students or parents as the main users, and with education or learning as the main application scenarios. On November 11, 2019, the Ministry of Education issued the Management Rules on Filing of Educational Mobile Apps, which supplement the filing requirements for such apps. As of the date of this annual report, we have completed the filings of educational apps for all of our major products, with a few other products in process or in preparation for filing. Any failure to complete the required filings of educational apps may result in our relevant online apps being blacklisted or removed from the app stores by the competent government authority, and we may be prohibited from submitting any such filings for six months following the determination.

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There can be no assurance that once required, we will be able to obtain all the required approvals, licenses, permits and complete all necessary filings, record renewals and registrations on a timely basis for our education services, given the significant amount of discretion the PRC authorities may have in interpreting, implementing and enforcing rules and regulations, as well as other factors beyond our control and anticipation. We may develop new business lines or change the operations of certain of our current business in mainland China, which may require us to obtain additional licenses, approvals, permits, registrations and filings while there can be no assurance that we are able to successfully obtain such licenses, approvals, permits, registrations and filings in a timely manner or at all. If we fail to obtain required permits in a timely manner or obtain or renew any permits and certificates, or fail to complete the necessary filings, record renewals or registrations on a timely basis, we may be subject to fines, confiscation of the gains derived from our non-compliant operations, suspension of our non-compliant operations or claims for compensation of any economic loss suffered by our students or other relevant parties, which may materially and adversely affect our business operation. In addition, there can be no assurance that we will be able to maintain our existing licenses, approvals, registrations or permits necessary to provide our current services in mainland China, renew any of them when their current term expires, or update existing licenses or obtain additional licenses, approvals, permits, registrations or filings necessary for our business expansion from time to time. If we fail to do so, our business, financial condition and operational results may be materially and adversely affected."

***Refunds or potential refund disputes of our course fees may negatively affect our cash flows, financial condition, and reputation.***

For our courses, we offer refunds for any remaining classes in a course to students who withdraw from the course. The refund is equal to the amount related to the undelivered classes. The number of refund requests and the amount of refunds could be affected by a number of factors, many of which are beyond our control. These factors include, without limitation to, student dissatisfaction with our teaching quality and our education content offerings, privacy concerns relating to our online platforms, negative publicity regarding us or education in general, and any change or development in applicable laws and regulations with respect to fees and tuitions charged by education service providers like us. Any refund payments that we may be required to make to our students, as well as the expenses we could incur for processing refunds and resolving refund disputes, could be substantial and could adversely affect our business operations and financial condition. A high volume of refunds and refund disputes may also generate negative publicity that could harm our reputation.

***Failure to control rental costs, obtain leases at desired locations at reasonable prices or protect our leasehold interests could materially and adversely affect our business.***

Our learning centers and offices are mainly located on leased premises. The lease term generally ranges from 0.2 to 7.2 years and the lease agreements are renewable upon mutual consent at the end of the applicable lease period. We may not be able to obtain new leases at desirable locations or renew our existing leases on acceptable terms or at all, which could adversely affect our business. We may have to relocate our operations for various other reasons, including increasing rentals, failure in passing the fire inspection in certain locations, the violation of the prescribed usage of the properties we use, and the early termination of our lease agreements under applicable PRC laws and regulations.

In addition, a few of our lessors have not been able to provide us with copies of title certificates or other evidentiary documents to prove that they have authorization to lease the properties to us. Our business and legal teams follow an internal procedure to identify and assess risks when leasing properties in the normal course of business, and a final business decision would be made after our analysis of the likely impact of the defects on the leasehold interests and the value of the properties to our expansion plan. However, there is no assurance that our decision would always lead to the favorable outcome we expected to achieve. If any of our leases are terminated as a result of challenges by third parties or government authorities for lack of title certificates or proof of authorization to lease, we do not expect to be subject to any fines or penalties but we may be forced to relocate the affected learning centers and incur additional expenses relating to such relocation. Furthermore, a few of our lessors have mortgaged the properties that we are renting. In the event that these properties are foreclosed on due to the lessors' failure to perform their obligations to the creditors, we may not be able to continue to use such leased properties and may incur additional expenses for relocation.

In addition, we have not registered some of our lease agreements with the relevant PRC governmental authorities as required by relevant PRC law. While the lack of registration would not affect the validity and enforceability of the lease agreements pursuant to the Civil Code, we may be required by the relevant governmental authorities to complete such registration, or otherwise be subject to fines ranging from RMB1,000 to RMB10,000 for each lease agreement that has not been registered.

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According to the PRC fire safety laws and regulations, construction and renovation of buildings are subject to fire control approvals or fire control filings. A portion of the properties we use do not fully comply with the fire control approval or fire control filing requirements primarily because we have a colossal network of learning centers and offices and different local authorities may have different practices in enforcing the regulatory requirements. We also cannot assure you that the properties we lease in the future would fully comply with the relevant fire control laws and regulations. If our use of the properties is challenged by relevant government authorities for lack of fire control procedures, we may be subject to fines and may need to relocate our operations to other locations, which would incur additional expenses. If we fail to find suitable replacement sites in a timely manner or on terms acceptable to us, our business and results of operations could be materially and adversely affected. As of the date of this annual report, we were not asked to relocate by any competent authority for lack of fire control procedures. To prevent the reoccurrence of such non-compliances, we have formulated management measures on property leasing which require our learning centers to investigate the fire control procedure status of a property and evaluate its fire control risk before leasing it, and complete the subsequent fire control procedures if required. For existing leased properties lacking fire control procedures, we also encourage our learning centers to voluntarily relocate when condition permits to reduce our compliant risk.

***Accidents or injuries suffered by our students or other people caused by us, or perceived to be caused by us, may adversely affect our reputation, subject us to liability and cause us to incur substantial costs.***

We have a large number of students and their parents on our premises to attend classes and/or use our facilities, and they may suffer accidents or injuries or other harm on our premises, including those caused by or otherwise arising from the actions of our employees or independent contractors. Although we have enhanced preventive measures to avoid similar incidents, we cannot assure you that there will be no similar incidents in the future.

In the event of accidents or injuries or other harm caused or perceived to be caused by us, our facilities and/or services may be perceived to be unsafe, which may discourage prospective students and customers from using our services. Although we carry certain liability insurance policies for our students and their parents, they may not be sufficient to cover all the compensation or even applicable to the accidents or injuries occurred. We could also face claims alleging that we should be liable for the accidents or injuries, or that we were negligent and provided inadequate supervision to our employees or independent contractors and therefore should be held jointly liable for harm caused by them. A material liability claim against us or any of our employees or independent contractors could adversely affect our reputation, customer enrollment and revenues. Even if unsuccessful, such a claim could create unfavorable publicity, cause us to incur substantial expenses and divert the time and attention of our management.

***Any significant disruption to or failures of our information technology systems, including events beyond our control, could reduce student satisfaction and could harm our reputation and cause our education services to be less attractive to our students.***

The performance and reliability of our information technology system is critical to our operations and reputation. Our network infrastructure is currently deployed and our data is currently mainly maintained through a third-party cloud computing service provider in mainland China. Our operations depend on the service provider's ability to protect its and our system in its facilities against events such as damage or interruption from natural disasters, power or telecommunications failures, air quality issues, environmental conditions, computer viruses or attempts to harm our systems, criminal acts and similar events, which events are beyond our control. If our arrangement with such service provider is terminated or if there is a lapse of service or damage to their facilities, we could experience interruptions in our service. Any interruptions in the accessibility of or deterioration it the quality of access to our system could reduce students' satisfaction and result in reduction in the number of students using our services, which would reduce the attractiveness of our education content offering services.

In addition, we rely on third-party mobile app distribution channels, to distribute our mobile apps to students. As such, the promotion, distribution and operation of our mobile apps are subject to such distribution channels' standard terms and policies for app developers, which are subject to the interpretation of, and frequent changes by, these distribution channels. If Apple's App Store or any other major distribution channel interprets or changes its standard terms and conditions in a manner that is detrimental to us in the future, or terminate its existing relationship with us, our business, financial condition and results of operations may be materially and adversely affected.

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***If we fail to adopt new technologies that are important to our business, our competitive position and ability to generate revenues may be materially and adversely affected. Our introduction and use of AI may present business, compliance, and reputational challenges which could materially and adversely affect our business, financial condition, and results of operations.***

The technology used in internet and value-added telecommunications services in general, and in education services in particular, may evolve and change over time. As a data-driven education company, we must anticipate and adapt to such technological changes and adopt new technologies in a timely fashion. If we fail to do so, our market share and our business development could suffer, which in turn would have a material and adverse effect on our financial condition and results of operations. If we are unsuccessful in addressing any of the risks relating to failure to adopt new technologies, our business may be materially and adversely affected.

We have incorporated and utilize, and expect to continue to incorporate and utilize, third-party AI models in our learning services and content solutions, as well as in our AI-powered platform innovations and features. While our use of AI applications are primarily focused on improving internal operational efficiency, this incorporation of AI in our business and operations may become more significant over time. As with most emerging technologies, AI comes with its own set of risks and challenges that could affect its adoption and our business.

The regulatory and legal framework on AI is constantly evolving. However, since these laws and regulations are still relatively new and significant uncertainties remain with respect to their interpretation and implementation, the integration of AI technologies introduces risks related to data privacy, security, and regulatory compliance. Any failure to adequately address these concerns could result in legal liabilities, reputational damage, or financial penalties, which could negatively impact our business and financial performance.

***Our failure to protect our intellectual property rights may undermine our competitive position, and litigation to protect our intellectual property rights or defend against third-party allegations of infringement may be costly and ineffective.***

We believe that our copyrights, trademarks and other intellectual property are essential to our success. We have devoted considerable time and energy to the development and improvement of our websites, mobile apps, our system infrastructure and our course materials.

We rely primarily on copyrights, trademarks, trade secrets and other contractual restrictions for the protection of the intellectual property used in our business. Nevertheless, these provide only limited protection and the actions we take to protect our intellectual property rights may not be adequate. Our trade secrets may become known or be independently discovered by our competitors. Third parties may in the future pirate our course materials and may infringe upon or misappropriate our other intellectual property. Infringement upon or the misappropriation of, our proprietary technologies or other intellectual property could have a material adverse effect on our business, financial condition or results of operations. Although we have taken measures to monitoring and policing the unauthorized use of our copyrighted course materials, policing the unauthorized use of intellectual property rights can be difficult and expensive. In addition, we and our instructors whom we have signed exclusive contracts with and engage in content development may be deemed to have joint ownership over intellectual properties relating to our course content. Our instructors may continue to use these course content if they resign with us and join our competitors, which may negatively impact the attractiveness of our courses to prospective students and parents. Although we have entered into agreements with certain instructors to prohibit them from using our course content without our prior consent, we cannot ensure compliance of instructors with such agreement.

Also, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others. Such litigation may be costly and divert management's attention away from our business. An adverse determination in any such litigation would impair our intellectual property rights and may harm our business, prospects and reputation. The legal regime relating to the recognition and enforcement of intellectual property rights in mainland China is particularly limited, and does not protect intellectual property rights to the same extent as federal and state laws in the United States. Legal proceedings to enforce our intellectual property in mainland China may progress slowly, during which time infringement may continue largely unimpeded. Enforcement of judgments in mainland China is uncertain, and even if we are successful in litigation, it may not provide us with an effective remedy. In addition, we have no insurance coverage against litigation costs and would have to bear all costs arising from such litigation to the extent we are unable to recover them from other parties. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

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***We have been and may again be subject to legal proceedings, claims and investigations in the ordinary course of business, including for allegations relating to our public disclosures and our alleged infringement of intellectual property rights of third parties. If the outcomes of these proceedings, claims and investigations are adverse to us, our business, results of operations and financial condition could be materially and adversely affected.*** 

We have and may continue to be involved in legal proceedings, claims and government investigations that have arisen in the ordinary course of our business and have not yet been fully resolved, including allegations against us relating to our public disclosures and our alleged infringement of third-party's copyrights or other intellectual property rights. New legal proceedings, claims and investigations may arise in the future. The existence of litigation, claims, investigations and proceedings may harm our reputation, business and adversely affect the trading price of our ADSs.

For example, the SEC's Division of Enforcement sought the production of certain financial and operating records dating from January 1, 2017 following a number of short-seller reports about us from approximately early- to mid-2020. The SEC notified us, by letter dated October 19, 2022, that the SEC had concluded its investigation into our Company and that, based on the information that the SEC had as of the date of its letter, the SEC did not intend to recommend an enforcement action against us. See "Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings" for securities lawsuits involving our company.

We have been, and are now subject to allegations on the grounds of intellectual property rights infringement and other legal theories based on the content of the materials that we or our teaching staff distribute or use in our business operation. We may encounter disputes from time to time over rights and obligations concerning intellectual property and other legal rights, in particular third-party's copyrights that may be infringed by us or our teaching staff in our business operation, and we may not prevail in those disputes.

Regardless of the merit of particular claims, legal proceedings and investigations may result in reputational harm or loss of goodwill associated with our brand and be expensive, time consuming, disruptive to our operations and distracting to management. If a lawsuit against us is successful, we may be required to pay substantial damages and/or enter into royalty or license agreements that may not be based upon commercially reasonable terms, or we may be unable to enter into such agreements at all. We may also lose, or be limited in, the rights to offer some of our programs, parts of our platform and products or be required to make changes to our course materials or platform. As a result, the scope of our course materials could be reduced, which could adversely affect the effectiveness of our curriculum, limit our ability to attract new students, harm our reputation and have a material adverse effect on our results of operations and financial condition.

***If our security measures are breached or failed and result in unauthorized disclosure or unintended leakage of data, we could lose existing students, fail to attract new students and be exposed to protracted and costly litigation.***

Maintaining platform security is of critical importance to us because we store and transmit proprietary and confidential information, which includes proprietary and confidential student, parent and teaching staff information, such as names, addresses, ID card number, bank account number and other personal information, which is primarily stored in our digital database. To ensure the confidentiality and integrity of our data, we maintain a comprehensive and rigorous data security program. For example, we anonymize and encrypt confidential personal information and take other technological measures to ensure the secure processing, transmission and usage of data. See "Item 4. Information on the Company—B. Business Overview—Data Privacy and Security." These measures, however, may not be as effective as we anticipate. If our security measures are breached or fail and result in unauthorized disclosure or unintended leakage of data, third parties may receive or be able to access student, parent, teaching staff and other records, which could subject us to liabilities, interrupt our business and adversely impact our reputation. Furthermore, we currently face certain legal obligations regarding the manner in which we treat such information. Increased regulation of data utilization practices, including self-regulation or findings under existing laws that limit our ability to collect, transfer and use data, could have an adverse effect on our business. If we were to disclose data about our students, parents and teaching staff in a manner that was objectionable to them, our business reputation could be adversely affected, and we could face potential legal claims that could impact our operating results. Failure to comply with these obligations could subject us to liability, and to the extent that we need to alter our business model or practices to adapt to these obligations, we could incur additional expenses.

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Any of these issues could harm our reputation, adversely affect our ability to attract and enroll prospective students, cause prospective students not to enroll or stay enrolled, or subject us to third-party lawsuits, regulatory fines or other action or liability. Further, any reputational damage resulting from breach of our security measures could create distrust of our company by prospective students or investors. We may be required to expend significant additional resources to protect us against the threat of security measures breaches or to alleviate problems caused by such disruptions or breaches.

***Failure to adequately and promptly respond to changes in examination systems, admission standards, test materials, teaching methods and regulation changes in the PRC could render our courses and services less attractive to students.***

In mainland China, professional school admissions and professional certification programs rely heavily on examination results, and students' performance in these exams is critical to their education and future employment prospects. It is therefore common for adult students to take professional education courses to pursue higher education or employment opportunities by improving their test performance. Professional school admissions and professional certification programs undergo continuous changes, in terms of subject and skill focus, question type, examination format and the manner in which the processes are administered. We are therefore required to continually update and enhance our course materials and teaching methods. Any failure to respond to the changes in a timely and cost-effective manner will adversely impact the marketability of our services and products, which would have a material adverse effect on our business, financial condition and results of operations.

***We may not be able to timely develop our education content offerings in a cost-effective manner to make them appealing to existing and prospective students, or at all.***

Our educational content development team works closely with our instructors on developing, updating and improving our course materials to stay abreast of the latest educational trends in their respective subject areas. In particular, in light of recent regulatory developments in mainland China, we have ceased offering compulsory education academic subject tutoring services. Currently, our focus is on offering and developing traditional learning services, non-academic tutoring services, and college student and adult education services, as well as educational content and digitalized learning products. The adjustments, updates and expansions of our existing education content offerings and the development of new course materials may not be accepted by existing or prospective students. Even if we are able to develop acceptable new course materials, we may not be able to introduce them as quickly as students require or as quickly as our competitors introduce competing offerings. Furthermore, offering new courses materials or upgrading existing ones has required and may continue to require us to commit significant resources and make significant investments in educational content development. If we are unsuccessful in pursuing educational content development and upgrading opportunities due to the financial constraints, failure to attract educational content development professionals or qualified instructors, or other factors, our ability to attract and retain students could be impaired and our financial results could suffer.

***We cannot assure you that we will not be subject to liability claims for any inappropriate or illegal content in our education content offerings, which could cause us to incur legal costs and damages our reputation.***

We implement strict monitoring procedures to remove inappropriate or illegal content. However, we cannot assure you that there will be no inappropriate or illegal materials included in our education contents. In addition, our quiz questions designed internally based on our understanding of the relevant examination requirements may be investigated by the regulatory authorities. Therefore, we may face civil, administrative or criminal liability if an individual or corporate, governmental or other entity believes that our education content offering violates any laws, regulations or governmental policies or infringes upon its legal rights. Even if such a claim were not successful, defending such a claim may cause us to incur substantial costs. Moreover, any accusation of inappropriate or illegal content in our education content offerings could lead to significant negative publicity, which could harm our reputation and future business prospects.

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***If our senior management and other key personnel is unable to work together effectively or efficiently or if we lose their services, our business may be severely affected.***

The continued services of our senior management and other key personnel is important to our continued success. In particular, we rely on the expertise and experience of Mr. Larry Xiangdong Chen, our founder, chairman and CEO. We also rely on the experience and services from other senior management. If they cannot work together effectively or efficiently, our business may be severely disrupted. If one or more of our senior management were unable or unwilling to continue in their present positions, we might not be able to replace them easily or at all, and our business, financial condition and results of operations may be materially and adversely affected. If any of our senior management joins a competitor or forms a competing business, we may lose students, teaching staff, and other key professionals and staff members. Our senior management has entered into employment agreements with us which contain confidentiality clauses, as well as standalone confidentiality and non-compete agreements. However, if any dispute arises between our senior management and us, we may have to incur substantial costs and expenses in order to enforce such agreements in mainland China or we may be unable to enforce them at all.

***If we are not able to improve or maintain our sales and marketing efficiency, our business and results of operations may be materially and adversely affected.***

As we shift our strategies in selling and marketing spending due to the impact of the Alleviating Burden Opinion and related regulations, rules and policies, we have reduced our brand advertisement and promotional course spending. As a result, we have seen significant decrease in our selling expenses in the fourth quarter of 2021. However, selling expenses still represented a significant portion of our operating expenses. Our sales and marketing activities may not be well received by students and may not result in the levels of sales that we anticipate and our trial courses may not be attractive to our prospective students. For example, if our students attending trial courses do not purchase our standard courses, our business and results of operations may be materially and adversely affected. Furthermore, we may not be able to maintain or improve our operational efficiency. We also may not be able to retain or recruit experienced sales staff, or to efficiently train junior sales staff. In addition, marketing and branding approaches and tools in the education market in mainland China are evolving. This further requires us to enhance our marketing and branding approaches and experiment with new methods to keep pace with industry developments and student preferences. Failure to refine our existing marketing and branding approaches or to introduce new marketing and branding approaches in a cost-effective manner may reduce our market share, cause our revenues to decline and negatively impact our operating margins.

***Our advertising content may subject us to penalties and other administrative actions.***

Under the advertising laws and regulations of mainland China, we are obligated to monitor our advertising content to ensure that such content is true and accurate and in full compliance with applicable laws and regulations. Violation of these laws and regulations may subject us to penalties, including fines, confiscation of our advertising income, orders to cease dissemination of the advertisements and orders to publish an announcement correcting the misleading information. In circumstances involving serious violations by us, PRC governmental authorities may force us to terminate our advertising operations or revoke our licenses. See "Item 4. Information on the Company—B. Business Overview—Government Regulations—Regulation Related to Advertising."

We use customer management tools with automatic message sending and receiving functions to automatically distribute promotion-related information to our users. While these customer management tools play an important role in our advertising content, they may subject us to violations and penalties under the Anti-Unfair Competition Law of the PRC.

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While we have made significant efforts to ensure that our advertisements are in full compliance with applicable laws and regulations of mainland China, we cannot assure you that all the content contained in such advertisements is in compliance with applicable laws, regulations and regulatory requirements, especially given the potential changes in the interpretation of these laws and regulations of mainland China. Our failure to comply with the existing and future laws, regulations and regulatory requirements may subject us to fines, penalties, rectifications and other regulatory measures. In April 2021, due to the way we represented our teachers and courses in certain advertisements and the way we displayed promotional prices for certain of our courses in our mobile app, we were found by PRC regulatory authorities to have violated the Price Law of the PRC and advertising laws and regulations, and we were consequently warned and imposed fines totaling RMB0.7 million. Further, despite any contractual safeguard, the advertising agencies we have worked with or will work with are not fully under our control, and they have committed and may again commit misconducts or otherwise produce subpar advertising content that give rise to false advertisement claims. In April 2021, we were fined approximately RMB262 thousand by the governmental authority for such misleading content in our advertisement. In January 2025, due to the QR codes we displayed in our published reference books, which will redirect to the online shop of our digitalized learning products, we were found by PRC regulatory authorities to have violated the Advertisement Law for distributing advertisement through products related to students, and we were consequently rectified and imposed a fine of RMB50,000. Any violations of applicable advertising laws and regulations of mainland China in the future may subject us to administrative actions or even penalties, and our reputation may be harmed as a result, which may negatively affect our business, financial condition, results of operations and prospects.

***We are subject to third-party payment processing-related risks.***

We accept payments through major third-party online payment channels in China, as well as bank transfers for our customers. We may also be susceptible to fraud, user data leakage and other illegal activities in connection with the various payment methods we offer. In addition, our business depends on the billing, payment and escrow systems of the third-party payment service providers to maintain accurate records of payments by customers and collect such payments. If the quality, utility, convenience or attractiveness of these payment processing and escrow services declines, or if we have to change the pattern of using these payment services for any reason, the attractiveness of our company could be materially and adversely affected. We are also subject to various rules, regulations and requirements, regulatory or otherwise, governing electronic funds transfers which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and become unable to accept the current online payments solutions from our customers, and our business, financial condition and results of operations could be materially and adversely affected. Business involving online payment services is subject to a number of risks that could materially and adversely affect third-party online payment service providers' ability to provide payment processing and escrow services to us, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•dissatisfaction with these online payment services or decreased use of their services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increasing competition, including from other established Chinese internet companies, payment service providers and companies engaged in other financial technology services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes to rules or practices applicable to payment systems that link to third-party online payment service providers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•breach of customers' personal information and concerns over the use and security of information collected from buyers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•service outages, system failures or failures to effectively scale the system to handle large and growing transaction volumes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increasing costs to third-party online payment service providers, including fees charged by banks to process transactions through online payment channels, which would also increase our costs of revenues; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•failure to manage funds accurately or loss of funds, whether due to employee fraud, security breaches, technical errors or otherwise.

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***Our brand image, business and results of operations may be adversely impacted by students and employees' misconduct, improper activities and misuse of our platform, many of which are beyond our control.***

We allow teaching staff to engage in real-time communication with our students. Our courses undergo multiple rounds of internal review and pilot testing before being broadly released. Our tutors and quality assurance team monitor our live courses, chat messages and other content on our platform to ensure that we are able to identify content that may be deemed inappropriate or violation of laws, regulations and government policies. When any inappropriate or illegal content is identified, we promptly remove the content. However, since we have limited control over the real-time and offline behavior of our students, teaching staff, to the extent any improper behavior is associated with our platforms, our ability to protect our brand image and reputation may be limited. In addition, if any of our students, teaching staff suffer or allege to have suffered physical, financial or emotional harm following contact initiated on our platform, we may face civil lawsuits or other liabilities initiated by the affected student, teaching staff, or governmental or regulatory actions against us. In response to allegations of illegal or inappropriate activities conducted on our platform or any negative media coverage about us, PRC governmental authorities may intervene and hold us liable for non-compliance with laws and regulations concerning the dissemination of information on the internet and subject us to administrative penalties or other sanctions, such as requiring us to restrict or discontinue some of the features and services provided on our platform. As a result, our business may suffer and our brand image, student base, results of operations and financial condition may be materially and adversely affected.

We are exposed to the risk of other types of employee fraud or other misconduct. Other types of employee misconduct include intentionally failing to comply with government regulations, engaging in unauthorized activities and misrepresentation to our prospective students during marketing activities, which could harm our reputation. It is not always possible to deter employee misconduct, and the precautions we take to prevent and detect this activity may not be effective in controlling unknown or unmanaged risks or losses, which could harm our business, financial condition and results of operations.

***We face risks related to natural and other disasters, including outbreaks of health epidemics (such as the COVID-19 pandemic) or severe weather conditions, and other extraordinary events, which could significantly disrupt our operations.***

China has experienced significant natural disasters, including earthquakes, extreme weather conditions, as well as health scares related to epidemic diseases, and any similar event could materially impact our business in the future. If a disaster or other disruption were to occur in the future that affects the regions where we operate our business, our operations could be materially and adversely affected due to loss of personnel and damages to property.

In addition, our business could be affected by public health epidemics and other public safety concerns, such as the COVID-19 pandemic, H1N1 flu, H7N9 flu, avian influenza, severe acute respiratory syndrome or SARS, Zika virus, Ebola virus or other epidemics. If any of our employees is suspected of having contracted a contagious disease, we may be required to apply quarantines or suspend our operations. Furthermore, any future outbreak may restrict economic activities in affected regions, resulting in reduced business volume, temporary closure of our offices or otherwise disrupt our business operations and adversely affect our results of operations.

***Increasing focus with respect to environmental, social and governance matters may impose additional costs on us or expose us to additional risks. Failure to adapt to or comply with the evolving expectations and standards on environmental, social and governance matters from investors and the PRC government may adversely affect our business, financial condition and results of operation.***

The PRC government and public advocacy groups have been increasingly focused on environment, social and governance, or ESG, issues in recent years, making our business more sensitive to ESG issues and changes in governmental policies and laws and regulations associated with environment protection and other ESG-related matters. Investor advocacy groups, certain institutional investors, investment funds, and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments. Regardless of the industry, increased focus from investors and the PRC government on ESG and similar matters may hinder access to capital, as investors may decide to reallocate capital or to not commit capital as a result of their assessment of a company's ESG practices. Any ESG concern or issue could increase our regulatory compliance costs. If we do not adapt to or comply with the evolving expectations and standards on ESG matters from investors and the PRC government or are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage and the business, financial condition, and the price of our ADSs could be materially and adversely affected.

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***We may not be able to achieve the benefits we expect from recent and future investments and acquisitions.***

We have made and may continue to make equity investments or acquisition in additional businesses that complement our existing business. We may not be able to successfully integrate acquired businesses and we may not have control over the businesses or operations of our minority equity investments, the value of which may decline over time. As a result, our business and results of operations could be harmed. In addition, if the businesses we acquire or invest in do not subsequently generate the anticipated financial performance or if any goodwill impairment test triggering event occurs, we may need to revalue or write down the value of goodwill and other intangible assets in connection with such acquisitions or investments, which would harm our results of operations. In addition, we may be unable to identify appropriate acquisition or strategic investment targets when it is necessary or desirable to make such acquisition or investment to remain competitive or to expand our business. Even if we identify an appropriate acquisition or investment target, we may not be able to negotiate the terms of the acquisition or investment successfully, finance the proposed transaction or integrate the relevant businesses into our existing business and operations. Furthermore, as we often do not have control over the companies in which we only have minority stake, we cannot ensure that these companies will always comply with applicable laws and regulations in their business operations. Material non-compliance by our investees may cause substantial harms to our reputations and the value of our investment.

***We have granted, and expect to continue to grant, share-based awards under our share incentive plan, which may result in increased share-based compensation expenses.***

We have granted options and restricted share units, and recorded RMB58.4 million, RMB53.2 million and RMB39.2 million (US$5.6 million)in 2023, 2024 and 2025, respectively, in share-based compensation expenses in relation to such share-based award grants. We expect to continue to grant awards under our share incentive plan, which we believe is of significant importance to our ability to attract and retain key personnel and employees. As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations.

***If we cannot maintain our corporate culture, we could lose the innovation, collaboration and focus that contribute to our business.***

We believe that a critical component of our success is our corporate culture, which fosters innovations and has roots in a deep understanding of our students and the evolving education industry in China. We may find it difficult to maintain these valuable aspects of our corporate culture. Any failure to preserve our culture could undermine our reputation in the marketplace and negatively impact our ability to attract and retain employees and students, which would in turn jeopardize our future success.

***We have limited business insurance coverage, which could expose us to significant costs and business disruption.***

Insurance companies in mainland China currently do not offer as extensive an array of insurance products as insurance companies in more developed economies. We maintain certain public liability insurance and property insurance policies covering equipment and facilities for injuries, death or losses due to fire, earthquake, flood or any other disaster. Consistent with customary industry practice in mainland China, we do not maintain business interruption insurance, nor do we maintain key-man life insurance. We have determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. Any uninsured business disruptions may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our results of operations and financial condition.

***If we fail to maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud, and investor confidence and the market price of our ADSs may be adversely impacted.***

We are subject to reporting obligations under the U.S. securities laws. We are subject to the Sarbanes-Oxley Act of 2002. We must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting in our Form 20-F filings, as required by Section 404 of the Sarbanes-Oxley Act. In addition, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting.

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Our management has concluded that our internal controls over financial reporting were effective as of December 31, 2024. Our independent registered public accounting firm has issued an attestation report, which has concluded that our internal control over financial reporting was effective in all material aspects as of December 31, 2024. See "Item 15. Controls and Procedures." However, if we fail to maintain effective internal controls over financial reporting in the future, our management and our independent registered public accounting firm may not be able to conclude that we have effective internal controls over financial reporting at a reasonable assurance level. This could result in a loss of investor confidence in the reliability of our financial conditions which in turn could negatively impact the trading price of our ADSs and result in lawsuits being filed against us by our shareholders or otherwise harm our reputation. Furthermore, we have incurred and anticipate that we will continue to incur considerable costs and use significant management time and other resources in an effort to comply with Section 404 and other requirements of the Sarbanes-Oxley Act.

***We may need additional capital, and financing may not be available on terms acceptable to us, or at all.*** 

We believe that our current cash and cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs for the near future. We may, however, require additional cash resources to finance our future developments, including our new business initiatives and any investments or acquisitions we may decide to pursue. The amount and timing of such additional financing needs will vary principally depending on the timing of new business developments, investments and/or acquisitions, and the amount of cash flow from our operations. If our existing cash resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could result in additional dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•investors' perception of, and demand for, securities of educational service providers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•conditions of the U.S. and other capital markets in which we may seek to raise funds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•our future results of operations, financial condition and cash flows;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PRC governmental regulation of foreign investment in education in China;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•economic, political and other conditions in China; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•PRC governmental policies relating to foreign currency borrowings.

We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all, especially in the event of a severe and prolonged economic recession globally or in the jurisdictions where we operate. If we fail to raise additional funds, we may need to reduce our growth to a level that can be supported by our cash flow. Without additional capital, we may not be able to develop and grow new businesses, acquire necessary technologies, products or businesses, hire, train and retain teachers and other employees, market our programs, services and products, or respond to competitive pressures or unanticipated capital requirements.

***Our business is subject to fluctuations caused by seasonality or other factors beyond our control, which may cause our operating results to fluctuate from quarter to quarter. This may result in volatility and adversely affect the price of our common shares and ADSs.*** 

We have experienced, and expect to continue to experience, seasonal fluctuations in our revenues and results of operations, primarily due to seasonal changes in student enrollments in educational business and some other services. Our test preparation courses tend to have the highest revenue in our first fiscal quarter, which runs from June 1 to August 31 of each year, primarily because a significant number of students enroll in our courses during summer vacation to prepare for admissions and assessment tests. However, our expenses vary, and certain of our expenses do not necessarily correspond with changes in our student enrollments and revenues. For example, we make investments in marketing and promotion, teacher recruitment and training, and product development throughout the year and we pay rent for our facilities based on the terms of the lease agreements. In addition, other factors beyond our control, including health epidemics and special events that take place during a quarter when our student enrollment would normally be high, may have a negative impact on our student enrollments. For example, the COVID-19 pandemic since the beginning of 2020 had adversely affected our financial and operating results in the third and fourth fiscal quarters of 2020. We expect quarterly fluctuations in our revenues and results of operations to continue. These fluctuations could result in volatility and adversely affect the price of our common shares and ADSs. As our revenues grow, these seasonal fluctuations may become more pronounced.

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***A severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and financial condition.***

The global macroeconomic environment still faces numerous challenges. The growth rate of the Chinese economy has been slowing since 2010 and the Chinese population began to decline in 2022. The Federal Reserve and other central banks outside of China have raised interest rates. The Russia-Ukraine conflict, the Hamas-Israel conflict, the conflict in the Persian Gulf and surrounding areas as far west as Israel and Lebanon, and the restrictions at various times on shipping through the straits of Hormuz and the Red Sea have heightened geopolitical tensions across the world. The impact of the regional conflicts has contributed to increases in food and energy prices and thus to inflation more generally. There have also been concerns about the relationship between China and other countries which may potentially have economic effects. In particular, there is significant uncertainty about the future relationship between the United States and China with respect to a wide range of issues including trade policies, treaties, government regulations and tariffs. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition.

***The current tensions in international trade and rising political tensions, may adversely impact our business, financial condition, and results of operations.***

There have been heightened tensions in international economic relations in recent years and these tensions may continue to escalate in the future. These tensions have resulted in changes in international trade policies and, as they further escalate, may result in additional barriers to trade. For example, the tensions between the United States and China in recent years have led to additional, or higher tariffs imposed by the United States on products imported from China and restrictions on the sale of certain products into the United States. China has responded by imposing, and proposing to impose additional, or higher tariffs on products imported from the United States, among other measures. In addition, international political tensions have escalated and continue to be subject to uncertainties with respect to a wide range of issues. As we work with a wide range of business partners in different countries in the world, should any of our major business partners become subject to sanctions or restrictions by the U.S. government, our business may be adversely affected. The U.S. government has also adopted measures aiming to prohibit or restrict U.S. investment in China-associated companies that operate in certain industries. Rising political tensions could reduce levels of trades, investments, technological exchanges, and other economic activities, which would materially and adversely affect the global economic conditions and the stability of global financial markets. These developments may also lead to increased compliance costs, operational disruptions, and potential constraints on our access to capital markets. Any further escalation of international tensions may have a negative impact on the general, economic, political, and social conditions of the countries where we operate and, in turn, adversely impact our business, financial condition, and results of operations.

In addition, the U.S. government has imposed, and may continue to impose, restrictions to limit the entry of certain Chinese students to pursue academic studies in the United States. Such events may discourage students from studying in the United States and elsewhere outside of China and may also make it more difficult for Chinese students to obtain visas to study abroad. While we do not believe that the U.S.-China geopolitical tension will likely cause a material adverse impact on our business in the short term, further developments in the longer term could cause declines in the student enrollments for our overseas test preparation and English language training courses and overseas study related services and could have an adverse effect on our overall business and results of operations.

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***Our operations depend on the performance of the internet infrastructure and telecommunications networks in mainland China.***

The successful operation of our business depends on the performance of the internet infrastructure and telecommunications networks in mainland China. Almost all access to the internet is maintained through state-owned telecommunications operators under the administrative control and regulatory supervision of the MIIT. Moreover, we have entered into contracts with various subsidiaries of a limited number of telecommunications service providers at provincial level and rely on them to provide us with data communications capacity through local telecommunications lines. We have limited access to alternative networks or services in the event of disruptions, failures or other problems with China's internet infrastructure or the telecommunications networks provided by telecommunications service providers. We regularly serve a large number of students. With the expansion of our business, we may be required to upgrade our technology and infrastructure to keep up with the increasing traffic on our online platform. However, we have no control over the costs of the services provided by telecommunications service providers. If the prices we pay for telecommunications and internet services rise significantly, our results of operations may be materially and adversely affected. If internet access fees or other charges to internet users increase, our user traffic may decline and our business may be harmed.

**Risks Related to Our Corporate Structure**

***If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with mainland China's regulations relating to the relevant industries, or if the determinations, changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIEs that conduct our operations, our securities may decline in value or become worthless.***

Foreign ownership in entities that provide value-added telecommunication services (except for e-commerce, domestic multi-party communications, store-and-forward and call center), such as provision of internet video, is subject to restrictions under current laws and regulations of mainland China. Specifically, foreign ownership of an internet information service provider may not exceed 50%. We are an exempted company incorporated in the Cayman Islands. The WFOEs are our mainland China subsidiaries and foreign-invested enterprises under the laws of mainland China. To comply with the laws and regulations of mainland China, we conduct our business in mainland China primarily through the VIEs and their subsidiaries, based on a series of contractual arrangements by and among the WFOEs, the VIEs and their shareholders. For a description of these contractual arrangements, see "Item 4. Information on the Company—C. Organizational Structure." As a result of these contractual arrangements, the shareholders of the VIEs effectively assigned all of their voting rights and economic interests underlying their equity interest in the VIEs to us, which gives us the power to direct the activities that most significantly impact the VIEs' economic performance. We consolidate financial results of the VIEs and their subsidiaries into our consolidated financial statements based solely on contractual arrangements in accordance with U.S. GAAP. The VIEs hold the licenses, approvals and key assets that are essential for our operations. However, investors in our ADSs are not purchasing equity interest in the VIEs in mainland China but instead are purchasing equity interest in a Cayman Islands holding company with no equity ownership in the VIEs, and our ADSs may decline in value or become worthless if we are unable to assert our contractual control rights over the assets of the VIEs which contributed approximate 100% of our revenues in 2025.

In the opinion of our PRC counsel, Tian Yuan Law Firm, as of the date of this annual report, (i) the ownership structure of the VIEs and the WFOEs in mainland China does not result in any violation of the laws and regulations of mainland China currently in effect; and (ii) the contractual arrangements among the WFOEs, the VIEs and their shareholders are valid and legally binding upon each party to such arrangement and are enforceable against each party thereto in accordance with their terms, and will not result in any violation of the laws or regulations of mainland China currently in effect. However, we have been further advised by our PRC counsel that the interpretation and application of current and future laws and regulations of mainland China are subject to changes. Thus, the PRC government may ultimately take a view contrary to the opinion of our PRC counsel. If the PRC government otherwise find that we are in violation of any existing or future laws or regulations of mainland China or lack the necessary permits or licenses to operate our business, the governmental authorities would have broad discretion in dealing with such violation, including, without limitation:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•revoking the business licenses and/or operating licenses of such entities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•imposing fines on us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•confiscating any of our income that they deem to be obtained through illegal operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•discontinuing or placing restrictions or onerous conditions on our operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•placing restrictions on our right to collect revenues; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•shutting down our servers or blocking our apps and websites.

If the government of mainland China deems that our contractual arrangements with the VIEs do not comply with regulatory restrictions of mainland China on foreign investment in the relevant industries, or if the determinations, changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIEs that conduct our operations, our securities may decline in value or become worthless. Any of these events could cause significant disruption to our business operations and severely damage our reputation, subject us to severe penalties or cause us to be forced to relinquish our interests in those operations, which would in turn materially and adversely affect our business, financial condition and results of operations. If occurrences of any of these events results in our inability to direct the activities of the VIEs in mainland China that most significantly impact its economic performance, and/or our failure to receive the economic benefits from the VIEs, we may not be able to consolidate its financial results in our consolidated financial statements in accordance with U.S. GAAP. This could result in a loss of investor confidence in the reliability of our financial conditions, which in turn could cause our ordinary shares and ADSs to decline in value or become worthless.

***We rely on contractual arrangements with the VIEs and their shareholders for our business operations, which may not be as effective as direct ownership in providing operational control.***

We have relied and expect to continue to rely on contractual arrangements with the VIEs, and their shareholders to operate our business in mainland China. These contractual arrangements may not be as effective as direct ownership in providing us with control over the VIEs. For example, the VIEs and their shareholders could breach their contractual arrangements with us by, among other things, failing to conduct the operations of the VIEs in an acceptable manner or taking other actions that are detrimental to our interests.

If we had direct ownership of the VIEs in mainland China, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIEs, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current contractual arrangements, we rely on the performance by the VIEs and their shareholders of their obligations under the contracts for our business operations. The shareholders of the VIEs may not act in the best interests of our company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate certain portion of our business through the contractual arrangements with the VIEs. If any dispute relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of laws of mainland China, arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the legal system of mainland China. See "—Any failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business." Meanwhile, there are very few precedents as to how contractual arrangements in the context of a consolidated affiliated entity should be interpreted or enforced by the courts of mainland China. Should legal actions become necessary, we cannot guarantee that the court will rule in favor of the enforceability of the consolidated affiliated entity contractual arrangements. In the event we are unable to enforce these contractual arrangements, or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to exercise the voting rights in the VIEs that these contractual arrangements assigned to us, and our ability to conduct our business may be materially adversely affected. Therefore, our contractual arrangements with the VIEs may not be as effective in ensuring our control over the relevant portion of our business operations as direct ownership would be.

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***Any failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.***

If the VIEs or their shareholders fail to perform their respective obligations under the contractual arrangements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. We may also have to rely on legal remedies under the laws of mainland China, including seeking specific performance or injunctive relief, and contractual remedies, which we cannot assure you will be sufficient or effective under the laws of mainland China. For example, if the shareholders of the VIEs were to refuse to transfer their equity interests in the VIEs to us or our designee if we exercise the purchase option pursuant to these contractual arrangements, or if they were otherwise to act in bad faith toward us, then we may have to take legal actions to compel them to perform their contractual obligations.

All the agreements under our contractual arrangements are governed by the laws of mainland China and provide for the resolution of disputes through arbitration in mainland China. Accordingly, these contracts would be interpreted in accordance with the laws of mainland China and any disputes would be resolved in accordance with the legal procedures of mainland China. However, uncertainties in the legal system of mainland China could limit our ability to enforce these contractual arrangements. Meanwhile, there are very few precedents and little formal guidance as to how contractual arrangements in the context of a consolidated variable interest entity should be interpreted or enforced under the laws of mainland China. There remain uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary. In addition, under the laws of mainland China, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in the courts of mainland China through arbitration award recognition proceedings, which would require additional expenses and delay. In the event we are unable to enforce these contractual arrangements, or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to exercise the voting rights in the VIEs that these contractual arrangements assigned to us, and our ability to conduct our business may be negatively affected. See "—Risks Related to Doing Business in China—Uncertainties with respect to the legal system of mainland China could adversely affect us."

***The shareholders of the VIEs may have actual or potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.***

The shareholders of the VIEs may have actual or potential conflicts of interest with us. These shareholders may breach, or cause the VIEs to breach, or refuse to renew, the existing contractual arrangements we have with them and the VIEs, which would have a material and adverse effect on our ability to effectively control the VIEs and receive economic benefits from it. For example, the shareholders may be able to cause our agreements with the VIEs to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis. We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the best interests of our company or such conflicts will be resolved in our favor. Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and our company. If we cannot resolve any conflict of interest or dispute between us and these shareholders, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.

***Contractual arrangements in relation to the VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that we or the VIEs owes additional taxes, which could negatively affect our financial condition and the value of your investment.***

Under the applicable laws and regulations of mainland China, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities. We could face material and adverse tax consequences if the PRC tax authorities determine that the contractual arrangements in relation to our contractual arrangements with the VIEs were not entered into on an arm's length basis in such a way as to result in an impermissible reduction in taxes under the applicable laws of mainland China, rules and regulations, and adjust income of the VIEs in the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by the VIEs for mainland China tax purposes, which could in turn increase its tax liabilities without reducing our mainland China subsidiaries' tax expenses. In addition, the PRC tax authorities may impose late payment fees and other penalties on the VIEs for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if the VIEs' tax liabilities increase or if it is required to pay late payment fees and other penalties.

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***We may lose the ability to use and enjoy assets held by the VIEs that are material to the operation of certain portion of our business if the entity goes bankrupt or becomes subject to a dissolution or liquidation proceeding.***

As part of our contractual arrangements with the VIEs, the VIEs holds certain assets that are material to the operation of certain portion of our business, including permits, domain names and most of our IP rights. If the VIEs go bankrupt and all or part of their assets become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and results of operations. Under the contractual arrangements, the VIEs may not, in any manner, sell, transfer, mortgage or dispose of their assets or legal or beneficial interests in the business without our prior consent. If the VIEs undergoes a voluntary or involuntary liquidation proceeding, the independent third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations.

***Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance, business, financial condition and results of operations.***

On March 15, 2019, the National People's Congress promulgated the Foreign Investment Law, which came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in mainland China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The Foreign Investment Law embodies an expected regulatory trend of mainland China to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. However, uncertainties exist in relation to its interpretation and implementation, and failure to take timely and appropriate measures to cope with the regulatory-compliance challenges could result in material and adverse effect on us. For instance, though the Foreign Investment Law does not explicitly classify contractual arrangements as a form of foreign investment, it contains a catch-all provision under the definition of "foreign investment," which includes investments made by foreign investors in mainland China through means stipulated in laws or administrative regulations or other methods prescribed by the State Council. Therefore, it still leaves leeway for future laws, administrative regulations or provisions promulgated by the State Council to provide for contractual arrangements as a form of foreign investment, at which time it will be uncertain whether our contractual arrangements will be deemed to be in violation of the market access requirements for foreign investment in mainland China and if yes, how our contractual arrangements should be dealt with. In addition, if future laws, administrative regulations or provisions prescribed by the State Council mandate further actions to be taken by companies with respect to existing contractual arrangements, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. In the worst-case scenario, we may be required to unwind our existing contractual arrangements and/or dispose of the relevant business operations, which could have a material and adverse effect on our current corporate structure, corporate governance, business, financial condition and results of operations.

***It may be difficult for overseas regulators to conduct investigation or collect evidence within mainland China.***

Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in mainland China. For example, in mainland China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside mainland China. Although the PRC authorities may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of mainland China and without the consent by the Chinese securities regulatory authorities and the other competent governmental agencies, no entity or individual may provide documents or materials related to securities business overseas. In addition, the Data Security Law and the PIPL provide that no entity or individual within the territory of mainland China shall provide any foreign judicial body and law enforcement body with any data or any personal information stored within the territory of mainland China without the approval of the competent PRC governmental authority. While detailed interpretation of or implementation rules under these laws have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within mainland China, and restrictions on the provision of documents, materials, data and personal information by mainland China entities and individuals to an overseas securities regulator, foreign judicial body or foreign law enforcement body may further increase difficulties faced by you in protecting your interests.

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***We may rely on dividends paid by our mainland China subsidiaries to fund cash and financing requirements. Any limitation on the ability of our mainland China subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of our ADSs and our ordinary shares.***

We are a holding company, and we may rely on dividends to be paid by our mainland China subsidiaries for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to the holders of our ADSs and our ordinary shares and service any debt we may incur. If our mainland China subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us.

Any restriction on currency exchange may limit the ability of our mainland China subsidiaries to use their Renminbi revenues to pay dividends to us. The PRC government may continue to strengthen its capital controls and our mainland China subsidiaries' dividends and other distributions may be subject to tightened scrutiny in the future. There is no assurance that the mainland China government will not intervene in or impose restrictions on the ability of Gaotu Techedu Inc., its subsidiaries, the VIEs and their subsidiaries to transfer cash or assets. To the extent cash or assets in the business is in mainland China or a mainland China entity, the funds or assets may not be available to fund operations or for other use outside of mainland China due to interventions in or the imposition of restrictions and limitations on the ability of Gaotu Techedu Inc., its subsidiaries, or the VIEs by the mainland China government to transfer cash or assets. As of the date of this annual report, there is no equivalent or similar restriction or limitation in Hong Kong on cash or assets transfers in, or out of, our Hong Kong entities. However, if restrictions or limitations were to become applicable to cash or assets transfers in and out of Hong Kong entities in the future, the funds or assets in our Hong Kong entities may not be available to fund operations or for other use outside of Hong Kong. See "Item 3. Key Information—Cash Flows through Our Organization." Any limitation on the ability of our mainland China subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

Under the laws and regulations of mainland China, wholly foreign-owned enterprises in mainland China, such as Beijing Lexuebang, may pay dividends only out of their accumulated profits as determined in accordance with mainland China's accounting standards and regulations. In addition, a wholly foreign-owned enterprise is required to set aside at least 10% of its after-tax profits each year, after making up previous years' accumulated losses, if any, to fund certain statutory reserve funds, until the aggregate amount of such a fund reaches 50% of its registered capital. These reserve funds are not distributable as cash dividends. Any limitation on the ability of our wholly-owned mainland China subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

**Risks Related to Doing Business in China**

***Uncertainties with respect to the legal system of mainland China could adversely affect us.***

The legal system of mainland China is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. The legal system of mainland China is evolving rapidly, and the interpretations of many laws, regulations and rules may contain inconsistencies and enforcement of these laws, regulations and rules also involves uncertainties.

From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since the judicial and administrative authorities of mainland China have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to predict the outcome of a judicial or administrative proceeding than in more developed legal systems. Furthermore, the legal system of mainland China is based, in part, on government policies and internal rules, some of which are not published in a timely manner, or at all, but which may have retroactive effect. In addition, mainland China is geographically large and divided into various provinces and municipalities. As such, different regulations and policies may have different and varying applications and interpretations in different parts of mainland China. As a result, we may not always be aware of any potential violation of these policies and rules. Such unpredictability towards our contractual, property (including intellectual property) and procedural rights could adversely affect our business and impede our ability to continue our operations. Moreover, certain administrative and court proceedings in mainland China may result in substantial costs and diversion of resources and management attention.

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***Changes in China's economic, political or social conditions or government policies could have a material adverse effect on our business and operations.***

Almost all of our operations are located in mainland China. Accordingly, our results of operations, financial condition and prospects are influenced by economic, political and social conditions in China generally and by continued economic growth in China as a whole.

Although mainland China's economy has grown significantly in the past decade, growth has been uneven, both geographically and among various sectors of the economy. The Chinese government has implemented various measures to stimulate economic growth and guide the allocation of resources. Some of the government measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government regulations over capital investments or changes in tax regulations. Some of the stimulus measures designed to boost the Chinese economy may contribute to higher inflation, which could adversely affect our results of operations and financial condition. For example, certain operating costs and expenses, such as employee compensation and office operating expenses, may increase as a result of higher inflation. Additionally, because a substantial portion of our assets consists of cash and cash equivalents, restricted cash and short-term investments, high inflation could significantly reduce the value and purchasing power of these assets.

***The PRC government's significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.***

We conduct our business primarily in mainland China. Our operations in mainland China are governed by the laws and regulations of mainland China. The PRC government has significant oversight and discretion over the conduct of our business, and may intervene or influence our operations at any time, which could result in a material adverse change in our operation, and our ordinary shares and ADSs may decline in value or become worthless. The PRC government has published new policies that significantly affected certain industries, including the private education industry, and we cannot rule out the possibility that it will in the future release additional regulations or policies that directly or indirectly affect our industry or require us to seek additional permission to continue our operations, which could result in a material adverse change in our operation, and our ordinary shares and ADSs may decline in value or become worthless. Also, the PRC government has promulgated certain regulations and rules to exert more oversight and control over offerings that are conducted overseas and foreign investment in mainland China-based issuers. It is uncertain how PRC government authorities will regulate overseas listings in the future, including whether we will be required to complete filings or obtain any specific regulatory approvals from the CSRC, CAC or any other PRC government authorities for our overseas offerings. If the CSRC, CAC or other government authorities promulgate new rules or interpretations that require us to obtain their approvals for our future overseas offerings, there is no guarantee that we will be able to obtain such approvals in a timely manner, or at all, and any such approvals that are obtained could potentially be rescinded. Any such circumstance could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless. Therefore, investors of our company and our business face potential uncertainty from actions taken by the PRC government affecting our business.

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***The filing with the CSRC may be required in connection with our future follow-on offerings and the occurrence of certain activities under the laws of mainland China, and we cannot predict whether we will be able to complete such filing.***

On July 6, 2021, the PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by mainland China-based companies and proposed to take effective measures, such as promoting the construction of regulatory systems to deal with the risks and incidents faced by mainland China-based overseas-listed companies. On February 17, 2023, with the approval of the State Council, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Measures, (i) where an issuer, which is a domestic company or an overseas company determined as indirect overseas offering and listing of a domestic company, seeks for follow-on offering of securities in the same overseas market after its initial public offering, the issuer shall submit filings with the CSRC within three business days after the completion of such follow-on offering; (ii) where an issuer seeks for offering and listing of securities in other overseas market after its initial public offering, the issuer shall submit filings with the CSRC within three business days after such application is submitted; (iii) if the overseas offering and listing of the issuer is considered as indirect overseas offering and listing of a domestic company, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC; (iv) if the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (a) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer's audited consolidated financial statements for the same period; and (b) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; (v) the issuer shall report relevant information to the CSRC within three business days after the occurrence and announcement of the following events: (a) change in control of the issuer; (b) the issuer is subject to investigation, sanction and other measures imposed by the overseas securities regulatory authorities or the relevant authorities; (c) the issuer changes its listing status or the listing board; and (d) the issuer terminates the listing voluntarily or compulsorily; and (vi) the issuer shall report relevant information to the CSRC within three business days after any significant change in the main business operation of the issuer, if such change in business operation makes the issuer no longer need to comply with the filing requirements.

On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that prior to the effectiveness of the Trial Measures, domestic companies that have already completed the overseas offering and listing are not required to complete the filing procedure at the current stage, but shall complete the filing procedure upon the occurrence of certain matters, such as follow-on offering of securities, as required in the Trial Measures. For more details, please refer to "Regulation—Regulation Related to M&A and Overseas Listings."

If we fail to complete the filing procedures or conceals or omits of any material fact or falsifies any major content in its filing documents for any follow-on offering and other certain activities as required by the Trial Measures, we may be subject to administrative penalties, such as order to rectify, warnings, fines or other actions that may have a material and adverse effect on our business, prospects, financial condition, reputation, and the trading price of our ADSs.

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***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.***

Our auditor, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The auditor is located in mainland China, a jurisdiction where the PCAOB was historically unable to conduct inspections and investigations completely before 2022. As a result, we and investors in the ADSs were deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China in the past has made it more difficult to evaluate the effectiveness of our independent registered public accounting firm's audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections. 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. However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we and investors in our ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the ADSs to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.

***Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely, affect the value of your investment.***

Pursuant to the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our shares or ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.

On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong and our auditor was subject to that determination. 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. On December 15, 2022, the PCAOB removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. As of the date of this annual report, the PCAOB has not issued any new determination that it is unable to inspect or investigate completely registered public accounting firms headquartered in any jurisdiction. For this reason, we do not expect to be identified so after we file this annual report on Form 20-F for the fiscal year ended December 31, 2025.

On December 29, 2022, the Consolidated Appropriations Act, 2023 was signed into law, which amended the HFCAA (i) to reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, and (ii) so that any foreign jurisdiction could be the reason why the PCAOB does not have complete access to inspect or investigate a company's auditors. As it was originally enacted, the HFCAA applied only if the PCAOB's inability to inspect or investigate because of a position taken by an authority in the foreign jurisdiction where the relevant public accounting firm is located. As a result of the Consolidated Appropriations Act, 2023, the HFCAA now also applies if the PCAOB's inability to inspect or investigate the relevant accounting firm is due to a position taken by an authority in any foreign jurisdiction. The denying jurisdiction does not need to be where the accounting firm is located.

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Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the Securities and Exchange Commission, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. In accordance with the HFCAA, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future. If our shares and ADSs are prohibited from trading in the United States, there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our shares will develop outside of the United States. A prohibition of being able to trade in the United States would substantially impair your ability to sell or purchase our ADSs when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our ADSs. Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.

***Litigation and negative publicity against us or surrounding China-based companies listed in the U.S. may result in increased regulatory scrutiny of us and negatively impact the trading price of our ADSs and could have a material adverse effect upon our business, including our results of operations, financial condition, cash flows and prospects.***

Adverse publicity concerning our failure or perceived failure to comply with legal and regulatory requirements, alleged accounting or financial reporting irregularities, regulatory scrutiny and further regulatory action or litigation could harm our reputation, result in our incurrence of substantial costs and distract our management's attention and cause the trading price of our ADSs and common shares to decline and fluctuate significantly. We may continue to be the target of adverse publicity and other detrimental conduct against us. Such conduct includes complaints, anonymous or otherwise, to regulatory agencies regarding our operations, revenues and regulatory compliance. Additionally, allegations against us may be posted on the internet by any person or entity which identifies itself or on an anonymous basis. We may be subject to government or regulatory investigation or inquiries as a result of such third-party conduct and may be required to incur significant time and substantial costs to defend ourselves, and there is no assurance that we will be able to conclusively refute each of the allegations within a reasonable period of time, or at all. Our reputation may also be negatively affected as a result of the public dissemination of allegations or malicious statements about us, which in turn may materially and adversely affect our business, results of operations and financial condition and the trading price of our ADSs and common shares.

Furthermore, we believe that litigation and negative publicity surrounding companies with operations in China that are listed in the U.S. have negatively impacted stock prices for such companies. Various equity-based research organizations have published reports on China-based companies, including us, after examining, among other things, their corporate governance practices, related party transactions, sales practices and financial statements that have led to special investigations and stock suspensions on national exchanges. Any similar scrutiny of us, regardless of its lack of merit, could result in a diversion of management resources and energy, potential costs to defend ourselves against rumors, decreases and volatility in the ADS trading price, and increased directors and officers insurance premiums and could have a material adverse effect upon our business, including our results of operations, financial condition, cash flows and prospects.

***Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.***

The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the People's Bank of China. The Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. The value of Renminbi against the U.S. dollar and other currencies is affected by changes in mainland China's political and economic conditions and by mainland China's foreign exchange policies, among other things. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S. dollar in the future.

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Any significant appreciation or depreciation of Renminbi may materially and adversely affect our revenues, earnings and financial position, and the value of, and any dividends payable on, our ADSs in U.S. dollars. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or the ADSs or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.

We have started to enter into hedging transactions in an effort to reduce our exposure to foreign currency exchange risk since January 2021. However, the availability and effectiveness of these hedges may be limited, and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by the exchange control regulations of mainland China that restrict our ability to convert Renminbi into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.

***Regulation and censorship of information disseminated over the internet in China may adversely affect our business and reputation and subject us to liability for information displayed on our websites.***

The PRC government has adopted regulations governing internet access and the distribution of news and other information over the internet. Under these regulations, internet content providers and internet publishers are prohibited from posting or displaying over the internet content that, among other things, violates PRC laws and regulations, impairs the national dignity of China, or is reactionary, obscene, superstitious, fraudulent or defamatory. Failure to comply with these requirements may result in the revocation of licenses to provide internet content and other relevant licenses, and the closure of the concerned websites. In the past, failure to comply with such requirements has resulted in the closure of certain websites. The website operator may also be held liable for such censored information displayed on or linked to the websites. If any of our websites and our Apps, including those used for our online education business and sale of private label products and livestreaming e-commerce business, are found to be in violation of any such requirements, we may be penalized by relevant authorities, and our operations or reputation could be adversely affected.

***Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.***

The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of mainland China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, our Cayman Islands holding company may rely on dividend payments from our mainland China subsidiaries to fund any cash and financing requirements we may have. Under existing foreign exchange regulations of mainland China, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of the State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our mainland China subsidiaries may be used to pay dividends to our company. However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of our mainland China subsidiaries and the VIEs to pay off their respective debt in a currency other than Renminbi owed to entities outside mainland China, or to make other capital expenditure payments outside mainland China in a currency other than Renminbi.

In light of the flood of capital outflows of mainland China in 2016 due to the weakening Renminbi, the PRC government has imposed more restrictive foreign exchange policies and stepped up scrutiny of major outbound capital movement including overseas direct investment. More restrictions and substantial vetting process are put in place by SAFE to regulate cross-border transactions falling under the capital account. If any of our shareholders regulated by such policies fails to satisfy the applicable overseas direct investment filing or approval requirement timely or at all, it may be subject to penalties from the PRC authorities. The PRC government may at its discretion further restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of the ADSs.

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***If our preferential tax treatments are revoked or become unavailable or if the calculation of our tax liability is successfully challenged by the PRC tax authorities, we may be required to pay tax, interest and penalties in excess of our tax provisions.***

Under the PRC Enterprise Income Tax Law and its implementation rules, the statutory enterprise income tax rate is 25%, but certain "high and new technology enterprises" are qualified for a preferential enterprise income tax rate of 15% subject to certain qualification criteria. Currently, Beijing Gaotu and Beijing Lexuebang enjoy a preferential enterprise income tax rate of 15% as they are recognized as high and new technology enterprises by PRC governmental authorities. 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, an enterprise that qualifies as a "software enterprise" established after January 1, 2011 and could qualify the conditions of software enterprises specified in the Announcement [2021] No.10 of the Ministry of Finance, the State Taxation Administration, the National Development and Reform Commission, or the NDRC, and the MIIT, is entitled to an exemption from income tax for the first two years and 50% reduction for the next three years from such entity's first profitable year. Beijing Yuexuebang has obtained the Software Enterprise Certificate and has been exempted form exemption from enterprise income tax for 2023 and 2024, enjoyed a reduced tax rate of 12.5% for 2025, and will benefit from a reduced tax rate of 12.5% from 2026 to 2027. If these entities fail to maintain their respective statuses, experiences any increase in the enterprise income tax rate, or faces any discontinuation, retroactive or future reduction or refund of any of the preferential tax treatments currently enjoyed, our business, financial condition and results of operations could be materially and adversely affected.

***The M&A Rules and certain other regulations of mainland China 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.***

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, and some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex, including requirements in some instances that the Ministry of Commerce, be notified in advance of any change-of-control transaction in which a foreign investor takes control of a domestic enterprise in mainland China. Moreover, the Anti-Monopoly Law requires that the Ministry of Commerce shall be notified in advance of any concentration of undertaking if certain thresholds are triggered. In addition, the Ministry of Commerce promulgated the Regulations on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors, which became effective in September 2011. These regulations specify that mergers and acquisitions by foreign investors that raise "national defense and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise "national security" concerns are subject to strict review by the Ministry of Commerce, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. In the future, we may grow our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other applicable rules to complete such transactions could be time consuming, and any required approval processes, including obtaining approval from the Ministry of Commerce or its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

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***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 making loans to or make additional capital contributions to our mainland China subsidiaries and consolidated VIEs, which could materially and adversely affect our liquidity and our ability to fund and expand our business.***

We are an offshore holding company conducting our operations in China through our mainland China subsidiaries, the VIEs and their subsidiaries. We may make loans to our mainland China subsidiaries, the VIEs and their subsidiaries subject to the approval from or registration with governmental authorities and limitation on amount, or we may make additional capital contributions to our mainland China subsidiaries. Any loans to our mainland China subsidiaries, which are treated as foreign-invested enterprises under the laws of mainland China, are subject to applicable foreign exchange loan registrations. In addition, a foreign invested enterprise shall use its capital pursuant to the principle of authenticity and self-use within its business scope. The capital of a foreign invested enterprise shall not be used for the following purposes: (i) directly or indirectly for payment beyond the business scope of such foreign invested enterprise or payment prohibited by laws and regulations; (ii) directly or indirectly for investment in securities unless otherwise provided by laws and regulations; (iii) the granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business scope; and (iv) paying the expenses related to the construction or purchase of real estate that is not for self-use (except for the real estate enterprises). Due to the restrictions imposed on loans in foreign currencies extended to domestic companies in mainland China, we are not likely to make such loans to the VIEs, which are domestic companies incorporated in mainland China. Further, we are not likely to finance the activities of the VIEs by means of capital contributions due to regulatory restrictions relating to foreign investment in domestic enterprises engaged in value-added telecommunication services and certain other businesses.

SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE Circular 19, effective June 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration of Foreign Exchange Businesses, and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration of Certain Capital Account Foreign Exchange Businesses. According to SAFE Circular 19, the flow and use of the RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company is regulated such that RMB capital may not be used for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment of banks loans that have been transferred to a third-party. Although SAFE Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity investments within mainland China, it also reiterates the principle that RMB converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear whether SAFE will permit such capital to be used for equity investments in mainland China in actual practice. SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or SAFE Circular 16, effective on June 9, 2016, which reiterates some of the rules set forth in SAFE Circular 19, but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to issue loans to non-associated enterprises. Violations of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold, including the net proceeds from our initial public offering, to our mainland China subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business in China. On October 23, 2019, SAFE promulgated the Notice for Further Advancing the Facilitation of Cross-border Trade and Investment, or SAFE Circular 28, which, among other things, allows all foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments in mainland China, as long as the equity investment is genuine, does not violate applicable laws, and complies with the negative list on foreign investment. On December 31, 2020, the People's Bank of China, SAFE and other government authorities jointly issued the Circular on Further Optimizing Cross-border Renminbi Policies to Support the Stabilization of Foreign Trade and Foreign Investment, or Circular 330, which, among other things, reiterates the above provisions in SAFE Circular 28. However, there remains uncertainty about how SAFE and other government authorities as well as competent banks will carry out SAFE Circular 28 and Circular 330 in practice.

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In light of the various requirements imposed by the regulations of mainland China 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 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. If we fail to complete such registrations or obtain such approvals, our ability to capitalize or otherwise fund our operations in mainland China may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

***Mainland China's regulations relating to the establishment of offshore special purpose companies by domestic residents may subject our domestic resident beneficial owners or our mainland China subsidiaries to liability or penalties, limit our ability to inject capital into our mainland China subsidiaries, limit our mainland China subsidiaries' ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.***

SAFE promulgated the Circular on Relevant Issues Relating to Domestic Resident's Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, in July 2014 that requires domestic residents or entities to register with SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing with such domestic residents or entities' legally owned assets or equity interests in domestic enterprises or offshore assets or interests. On February 13, 2015, SAFE issued the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment, which took effect on June 1, 2015, pursuant to which, the power to accept SAFE registration was delegated from local SAFE to local qualified banks where the assets or interest in the domestic entity was located. In addition, such domestic residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic information (including change of such domestic citizens or residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions.

If our shareholders who are domestic residents or entities do not complete their registration with the local SAFE branches, our mainland China subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute additional capital to our mainland China subsidiaries. Moreover, failure to comply with the SAFE registration described above could result in liability under the laws of mainland China for evasion of applicable foreign exchange restrictions.

We have used our best efforts to notify domestic residents or entities who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being domestic residents to complete the foreign exchange registrations. However, we may not be informed of the identities of all the domestic residents or entities holding direct or indirect interest in our company, nor can we compel our beneficial owners to comply with SAFE registration requirements. We cannot assure you that all shareholders or beneficial owners of ours who are domestic residents or entities, including the beneficiaries of the trust schemes directly or indirectly holding interests in our Cayman Islands holding company, have complied with, and will in the future make, obtain or update any applicable registrations or approvals required by, SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of our mainland China subsidiaries, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our mainland China subsidiaries' ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects.

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***Failure to comply with mainland China's regulations regarding the registration requirements for employee stock ownership plans or share option plans may subject the plan participants in mainland China or us to fines and other legal or administrative sanctions.***

Pursuant to SAFE Circular 37, domestic residents of mainland China who participate in share incentive plans in overseas non-publicly-listed companies due to their position as director, senior management or employees of the domestic subsidiaries of the overseas companies may submit applications to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies. Our directors, executive officers and other employees who are domestic residents and who have been granted share-based awards may follow SAFE Circular 37 to apply for the foreign exchange registration before our company becomes an overseas listed company. In February 2012, SAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly-Listed Companies, or SAFE Circular 7. Under SAFE Circular 7 and other applicable rules and regulations, domestic residents who participate in stock incentive plan in an overseas publicly-listed company are required to register with SAFE or its local branches and complete certain other procedures. Participants of a stock incentive plan who are domestic residents must retain a qualified domestic agent, which could be a subsidiary in mainland China of such overseas publicly listed company or another qualified institution selected by such mainland China subsidiary, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf of its participants. Such participants must also retain an overseas entrusted institution to handle matters in connection with their exercise of share-based awards, the purchase and sale of corresponding shares or interests and fund transfers. In addition, the domestic agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the domestic agent or the overseas entrusted institution or other material changes. We and our domestic employees who have been granted share-based awards are subject to SAFE Circular 7 and other applicable rules and regulations. Failure of our domestic share-based award holders to complete their SAFE registrations may subject these domestic residents to fines and legal sanctions and may also limit our ability to contribute additional capital into our mainland China subsidiaries, limit our mainland China subsidiaries' ability to distribute dividends to us, or otherwise materially adversely affect our business.

***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-domestic shareholders or the ADS holders.***

Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of mainland China with its "de facto management body" within mainland China is considered a "resident enterprise" and will be subject to mainland China's enterprise income tax on its global income at the rate of 25%. The implementation rules define the term "de facto management body" as the body that exercises full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise. The State Administration of Taxation issued a circular in April 2009, as last amended in December 2017, which provides certain specific criteria for determining whether the "de facto management body" of a mainland China-controlled enterprise that is incorporated offshore is located in mainland China. Although this circular only applies to offshore enterprises controlled by mainland China enterprises or mainland China enterprise groups, not those controlled by mainland China individuals or foreigners, the criteria set forth in the circular may reflect the State Administration of Taxation's general position on how the "de facto management body" text should be applied in determining the tax resident status of all offshore enterprises. According to this circular, an offshore incorporated enterprise controlled by a mainland China enterprise or a mainland China enterprise group will be regarded as a mainland China tax resident 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: (i) the primary location of the day-to-day operational management is in mainland China; (ii) decisions relating to the enterprise's financial and human resource matters are made or are subject to approval by organizations or personnel in mainland China; (iii) the enterprise's primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in mainland China; and (iv) at least 50% of voting board members or senior executives habitually reside in mainland China.

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We believe none of our entities outside of mainland China is a mainland China resident enterprise for tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "de facto management body." If the PRC tax authorities determine that Gaotu Techedu Inc. is a mainland China resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of the ADSs. In addition, non-resident enterprise shareholders (including the ADS holders) may be subject to mainland China tax at a rate of 10% on gains realized on the sale or other disposition of ADSs or ordinary shares at a rate of 10%, if such income is treated as sourced from within mainland China. Furthermore, if PRC tax authorities determine that we are a mainland China resident enterprise for enterprise income tax purposes, dividends paid to our non-domestic individual shareholders (including the ADS holders) and any gain realized on the transfer of ADSs or ordinary shares by such shareholders may be subject to mainland China tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us), if such gains are deemed to be from mainland China sources. These rates may be reduced by an applicable tax treaty, but it is unclear whether non-domestic shareholders of Gaotu Techedu Inc. would be able to claim the benefits of any tax treaties between their country of tax residence and mainland China in the event that Gaotu Techedu Inc. is treated as a mainland China resident enterprise. Any such tax may reduce the returns on your investment in the ADSs.

***We face uncertainties with respect to indirect transfer of equity interests in mainland China resident enterprises by their non-domestic holding companies.***

We face uncertainties regarding the reporting on and consequences of previous private equity financing transactions involving the transfer and exchange of shares in our company by non-resident investors. In February 2015, the State Administration of Taxation issued the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-Resident Enterprises, or Bulletin 7. Pursuant to Bulletin 7, an "indirect transfer" of domestic assets, including a transfer of equity interests in an unlisted non-domestic holding company of a mainland China resident enterprise, by non-resident enterprises may be re-characterized and treated as a direct transfer of the underlying domestic assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of mainland China's enterprise income tax. As a result, gains derived from such indirect transfer may be subject to mainland China's enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a mainland China resident enterprise. On October 17, 2017, the State Administration of Taxation issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or Bulletin 37, which came into effect on December 1, 2017, as amended. The Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax.

There is uncertainty as to the application of Bulletin 37 or previous rules under Bulletin 7. We face uncertainties on the reporting and consequences of private equity financing transactions, share exchanges or other transactions involving the transfer of shares in our company by investors that are non-resident enterprises. Our company may be subject to filing obligations or taxes if our company is the transferor in such transactions, and may be subject to withholding obligations if our company is the transferee in such transactions, under Bulletin 37 and Bulletin 7.

***The custodians or authorized users of our controlling non-tangible assets, including chops and seals, may fail to fulfill their responsibilities, or misappropriate or misuse these assets.***

Under the laws of mainland China, legal documents for corporate transactions, including agreements and contracts are executed using the chop or seal of the signing entity or with the signature of a legal representative whose designation is registered and filed with the PRC market regulation administrative authorities. In order to secure the use of our chops and seals, we have established internal control procedures and rules for using these chops and seals. In any event that the chops and seals are intended to be used, the responsible personnel will need to seek approval by authorized employees in accordance with our internal control procedures and rules. In addition, in order to maintain the physical security of our chops, we generally have them stored in secured locations accessible only to authorized employees. Although we monitor such authorized employees, the procedures may not be sufficient to prevent all instances of abuse or negligence. There is a risk that our employees may abuse their authority, for example, by entering into a contract not approved by us or seeking to gain control of one of our subsidiaries or the VIEs or their subsidiaries. If any employee obtains, misuses or misappropriates our chops and seals or other controlling non-tangible assets for whatever reason, we could experience disruption to our normal business operations. We may have to take corporate or legal action, which could involve significant time and resources to resolve and divert management from our operations.

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***Increases in labor costs and potential non-compliance with the PRC Labor Contract Law and other labor-related regulations in mainland China may adversely affect our business and results of operations.***

The economy of China has been experiencing increases in labor costs in recent years and the average wage in the mainland China is expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to our students by increasing prices for our services, our profitability and results of operations could be materially and adversely affected.

In addition, we are subject to the requirements to under various PRC laws and regulations. The Standing Committee of the National People's Congress enacted the Labor Contract Law in 2008, and amended it on December 28, 2012. The Labor Contract Law introduced specific provisions related to fixed-term employment contracts, part-time employment, probationary periods, consultation with labor unions and employee assemblies, employment without a written contract, dismissal of employees, severance, and collective bargaining to enhance previous PRC labor laws. Under the Labor Contract Law, an employer is obligated to sign an unlimited-term labor contract with any employee who has worked for the employer for ten consecutive years. Further, if an employee requests or agrees to renew a fixed-term labor contract that has already been entered into twice consecutively, the resulting contract, with certain exceptions, must have an unlimited term, subject to certain exceptions. With certain exceptions, an employer must pay severance to an employee where a labor contract is terminated or expires. In addition, the PRC governmental authorities have continued to introduce various new labor-related regulations since the effectiveness of the Labor Contract Law.

Under the PRC Social Insurance Law and the Administrative Measures on Housing Fund, employees are required to participate in pension insurance, work-related injury insurance, medical insurance, unemployment insurance, maternity insurance, and housing funds and employers are required, together with their employees or separately, to pay the social insurance premiums and housing funds for their employees. If we fail to make adequate social insurance and housing fund contributions, we may be subject to fines and legal sanctions, and our business, financial condition and results of operations may be adversely affected. See "Item 4. Information on the Company—B. Business Overview—Government Regulations—Regulation Related to Employment, Social Insurance and Housing Fund."

These laws designed to enhance labor protection tend to increase our labor costs. In addition, as the interpretation and implementation of these regulations are still evolving, our employment practices may not be at all times be deemed in compliance with the regulations. As a result, we could be subject to penalties or incur significant liabilities in connection with labor disputes or investigations.

***Failure to make adequate contributions to various employee benefits plans as required by the regulations of mainland China may subject us to penalties.***

Companies operating in mainland China are required to participate in various government-sponsored employee benefit plans, including certain social insurance and housing funds, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of employees up to a maximum amount specified by the local government from time to time at locations where our employees are based. The requirement of employee benefit plans has not been implemented consistently by the local governments in mainland China given the different levels of economic development in different locations. To efficiently administrate the contribution of employment benefit plans of our employees in some cities, we engage third-party agents to make the contribution for our employees. Our failure in making contributions to various employee benefit plans and in complying with applicable labor-related laws may subject us to late payment fees and labor disputes, and we could be required to make up the contributions for these plans as well as to pay late fees, and fines. If we are subject to late fees, fines or labor disputes in relation to the underpaid employee benefits, or are required to make up the contributions for these plans, our financial condition and results of operations may be adversely affected. In addition, to the extent that we can make a reasonable estimate of the liability arising from our failure in making full contributions to various employee benefit plans, we record a related contingent liability. However, the amount of our estimates may be inaccurate, in which case our financial condition and cash flow may be adversely affected if we were to pay late fees or fines in relation to the underpaid employee benefits.

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**Risks Related to Our ADSs** 

***The trading price of our ADSs is likely to be volatile, which could result in substantial losses to investors.***

The trading price of our ADSs has been volatile since our ADSs started to trade on the New York Stock Exchange on June 6, 2019. The trading price of our ADSs could fluctuate widely due to multiple factors, some of which are beyond our control. This may happen because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with business operations located mainly in mainland China that have listed their securities in the United States. In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile for factors specific to our own operations, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•actual or anticipated variations in our revenues, earnings, cash flow and data related to our student base or student engagement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•announcements of new product and service offerings, solutions and expansions by us or our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in financial estimates by securities analysts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•detrimental adverse publicity about us, our products and services or our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•additions or departures of key personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•actual or potential litigation or regulatory investigations.

Any of these factors may result in large and sudden changes in the volume and price at which the ADSs will trade. For example, following the announcement of the Alleviating Burden Opinion, which contains high-level directives about requirements and restrictions related to after-school tutoring services, the trading price of our ADSs declined sharply. Furthermore, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies like us. These broad market and industry fluctuations may adversely affect the market price of our ADSs. Volatility or a lack of positive performance in our ADS price may also adversely affect our ability to retain key employees, most of whom have been granted equity incentives.

In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. We have been named as a defendant in a putative shareholder class action lawsuit which could divert a significant amount of our management's attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Please see "Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings" for description of the putative shareholder class action lawsuit. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

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***If we fail to meet NYSE's minimum share price and other continued listing requirements, our ADSs could be subject to delisting, which may significantly reduce the liquidity of our ADSs and cause further declines to the market price of our ADSs.***

Our ADSs are currently listed on the NYSE. The NYSE Listed Company Manual sets forth minimum requirements that a company must meet for continued listing on the NYSE. In order to maintain its listing on the NYSE, a company must, among other things, maintain an average closing price of at least US$1.00 per share over a consecutive 30 trading-day period. On November 16, 2022, we received a written notice from the NYSE notifying us that our ADS had fallen below the NYSE's continued listing criterion of a minimum share price of US$1.00 per ADS over a 30 trading-day period. In accordance with the NYSE rules, we had a period of six months following the receipt of the notice to regain compliance with the minimum share price requirement. On January 3, 2023, the NYSE confirmed in a letter to us that the average closing price of our ADSs for the previous consecutive 30 trading-day period was above US$1.00 per ADS. Accordingly, we have regained compliance with the minimum share price requirement since January 3, 2023.

As of the date of this annual report, we are in compliance with the minimum requirements that we must meet for continued listing on the NYSE. However, there can be no assurance that we will stay compliant with the NYSE's requirements for continued listing at all times going forward. The delisting of our ADSs may significantly reduce the liquidity of our ADSs, cause further declines to the market price of our ADSs, and make it more difficult for us to obtain adequate financing to support our continued operation.

***If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our ADSs and trading volume could decline.***

The trading market for our ADSs will depend in part on the research and reports that securities or industry analysts publish about us or our business. If research analysts do not maintain adequate research coverage or if one or more of the analysts who covers us downgrades our ADSs or publishes inaccurate or unfavorable research about our business, the market price for our ADSs would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price of or trading volume for our ADSs to decline.

***The sale or perceived availability for sale of substantial amounts of the ADSs could adversely affect their market price.***

Sales of substantial amounts of the ADSs in the public market, or the perception that these sales could occur, could adversely affect the market price of the ADSs and could materially impair our ability to raise capital through equity offerings in the future. The ADSs sold in our initial public offering and follow-on offering are freely tradable without restriction or further registration under the Securities Act, and shares held by our existing shareholders may also be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities Act. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of the ADSs.

***Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.***

We have a dual-class share structure such that our ordinary shares consist of Class A ordinary shares and Class B ordinary shares(with certain shares in the authorized share capital remaining undesignated, with power for our directors to designate and issue such classes of shares as they think fit). Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to ten votes per share. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

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Mr. Larry Xiangdong Chen, our founder, chairman of board of directors and chief executive officer, beneficially owns all of our issued Class B ordinary shares. As of February 28, 2026, these Class B ordinary shares constitute 46.1% of our total issued and outstanding share capital and 89.5% of the aggregate voting power of our total issued and outstanding share capital due to the disparate voting powers associated with our dual-class share structure. As a result of the dual-class share structure and the concentration of ownership, Mr. Chen has considerable influence over matters such as decisions regarding mergers and consolidations, election of directors and other significant corporate actions. Mr. Chen may take actions that are not in the best interest of us or our other shareholders. This concentration of ownership may discourage, delay or prevent a change in control of our company, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of the ADSs. This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial.

***The dual-class structure of our ordinary shares may adversely affect the trading market for our ADSs.***

Certain shareholder advisory firms have announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500, to exclude companies with multiple classes of shares and companies whose public shareholders hold no more than 5% of total voting power from being added to such indices. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual-class structure of our ordinary shares may prevent the inclusion of our ADSs representing Class A ordinary shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for our ADSs. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our ADSs.

***Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of the ADSs for return on your investment.***

We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the ADSs as a source for any future dividend income.

Our board of directors has complete discretion as to whether to distribute dividends, subject to certain restrictions under Cayman Islands law, namely that our company may only pay dividends out of profits or share premium account, and provided always that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in the ADSs will likely depend entirely upon any future price appreciation of the ADSs. There is no guarantee that the ADSs will appreciate in value or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in the ADSs and you may even lose your entire investment in the ADSs.

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***Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares and the ADSs.***

Our memorandum and articles of association contain certain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions. These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. Our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares, in the form of ADS or otherwise. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our board of directors decides to issue preferred shares, the price of the ADSs may fall and the voting and other rights of the holders of our ordinary shares and ADSs may be materially and adversely affected.

***You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.*** 

We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against our directors, actions by our minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, with respect to Cayman Islands companies, plaintiffs may face special obstacles, including but not limited to those relating to jurisdiction and standing, in attempting to assert derivative claims in state or federal courts of the United States.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than the memorandum and articles of association, any special resolutions passed by such companies, the registers of mortgages and charges of such companies, and the names of the current directors of such companies upon the payment of a fee to the Cayman Registrar) or to obtain copies of lists of shareholders of these companies. Our directors have discretion under our articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent we choose to follow home country practices in the future, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of our board of directors or our controlling shareholders than they would as public shareholders of a company incorporated in the United States.

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***Certain judgments obtained against us by our shareholders may not be enforceable.***

We are a Cayman Islands company and substantially all of our assets are located outside of the United States. Almost all of our current operations are conducted in mainland China. In addition, all of our current directors and officers are nationals and residents of countries other than the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of mainland China may render you unable to enforce a judgment against our assets or the assets of our directors and officers.

***The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct how the Class A ordinary shares which are represented by your ADSs are voted.***

Holders of ADSs do not have the same rights as our registered shareholders. As a holder of the ADSs, you will not have any direct right to attend general meetings of our shareholders or to cast any votes at such meetings. You will only be able to exercise the voting rights which are carried by the Class A ordinary shares represented by your ADSs indirectly by giving voting instructions to the depositary in accordance with the provisions of the deposit agreement. Under the deposit agreement, you may vote only by giving voting instructions to the depositary. If we instruct the depositary to ask for your instructions, then upon receipt of your voting instructions, the depositary will try, as far as is practicable, to vote the underlying Class A ordinary shares which are represented by your ADSs in accordance with your instructions. If we do not instruct the depositary to ask for your instructions, the depositary may still vote in accordance with instructions you give, but it is not required to do so. You will not be able to directly exercise your right to vote with respect to the underlying Class A ordinary shares represented by your ADSs unless you withdraw the shares and become the registered holder of such shares prior to the record date for the general meeting. Under our currently effective third amended and restated memorandum and articles of association, the minimum notice period required to be given by our company to our registered shareholders to convene a general meeting will be ten days. When a general meeting is convened, you may not receive sufficient advance notice of the meeting to withdraw the Class A ordinary shares underlying your ADSs and become the registered holder of such shares to allow you to attend the general meeting and to vote directly with respect to any specific matter or resolution to be considered and voted upon at the general meeting. In addition, under our third amended and restated memorandum and articles of association, for the purposes of determining those shareholders who are entitled to attend and vote at any general meeting, our directors may close our register of members and/or fix in advance a record date for such meeting, and such closure of our register of members or the setting of such a record date may prevent you from withdrawing the Class A ordinary shares underlying your ADSs and becoming the registered holder of such shares prior to the record date, so that you would not be able to attend the general meeting or to vote directly. If we ask for your instructions, the depositary will notify you of the upcoming vote and will arrange to deliver our voting materials to you. We have agreed to give the depositary at least 30 days' prior notice of shareholder meetings. Nevertheless, we cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the underlying Class A ordinary shares represented by your ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise your right to direct how the Class A ordinary shares underlying your ADSs are voted and you may have no legal remedy if the Class A ordinary shares underlying your ADSs are not voted as you requested.

***You may experience dilution of your holdings due to inability to participate in rights offerings.***

We may, from time to time, distribute rights to our shareholders, including rights to acquire securities. Under the deposit agreement, the depositary will not distribute rights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt from registration under the Securities Act with respect to all holders of ADSs, or are registered under the provisions of the Securities Act. The depositary may, but is not required to, attempt to sell these undistributed rights to third parties, and may allow the rights to lapse. We may be unable to establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result.

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***You may be subject to limitations on transfer of your ADSs.***

Your ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems expedient in connection with the performance of its duties. The depositary may close its books from time to time for a number of reasons, including in connection with corporate events such as a rights offering, during which time the depositary needs to maintain an exact number of ADS holders on its books for a specified period. The depositary may also close its books in emergencies, and on weekends and public holidays. The depositary may refuse to deliver, transfer or register transfers of the ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

***ADSs holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any such action.***

The deposit agreement governing the ADSs representing our Class A ordinary shares provides that, subject to the depositary's right to require a claim to be submitted to arbitration, the federal or state courts in the City of New York have exclusive jurisdiction to hear and determine claims arising under the deposit agreement and in that regard, to the fullest extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our Class A ordinary shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws.

If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable U.S. state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of New York, which govern the deposit agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the deposit agreement and the ADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before investing in the ADSs.

If you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under U.S. federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and/or the depositary. If a lawsuit is brought against us and/or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action.

Nevertheless, if this jury trial waiver provision is not enforced, to the extent a court action proceeds, it would proceed under the terms of the deposit agreement with a jury trial. No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with the U.S. federal securities laws and the rules and regulations promulgated thereunder.

***We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.***

Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: (i) the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; (ii) the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; (iii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; (iv) the selective disclosure rules by issuers of material nonpublic information under Regulation FD; and (v) certain audit committee independence requirements in Rule 10A-3 of the Exchange Act.

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We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we publish our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the New York Stock Exchange. We furnish press releases relating to our financial results and material events to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information which would be made available to you were you investing in a U.S. domestic issuer.

***As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NYSE corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we comply fully with the NYSE corporate governance listing standards.***

As a Cayman Islands company listed on the New York Stock Exchange, we are subject to the NYSE corporate governance listing standards. However, NYSE rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the NYSE corporate governance listing standards. We relied on the exemption available to foreign private issuers for the requirement to hold an annual meeting of shareholders during each fiscal year under Section 302 of the NYSE Listed Company Manual. We followed home country practice and did not hold an annual meeting of shareholders in the fiscal year of 2024. In addition, Section 303A.12(a) of the NYSE Listed Company Manual requires each listed company's chief executive officer to certify to the NYSE each year that he or she is not aware of any violation by the company of NYSE corporate governance listing standards. We have followed our home country practice in this regard and have not in the past submitted the certification set forth in Section 303A.12(a) of the NYSE Listed Company Manual. As a result of our election to follow home country practices, our shareholders may be afforded less protection than they would otherwise enjoy under the NYSE corporate governance listing standards applicable to U.S. domestic issuers.

***We are a "controlled company" within the meaning of the New York Stock Exchange listing rules and, as a result, can rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.***

We are a "controlled company" as defined under the New York Stock Exchange listing rules because Mr. Larry Xiangdong Chen, our founder, chairman of board of directors and chief executive officer, owns more than 50% of our total voting power. For so long as we remain a controlled company under that definition, we are permitted to elect to rely, and may rely, on certain exemptions from corporate governance rules. As a result, you may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

***There can be no assurance that we will not be a passive foreign investment company for United States federal income tax purposes for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. Holders.*** 

Based upon our current and projected income and assets and the market price of our ADSs, we do not believe that we were a PFIC for the taxable year ended December 31, 2024. However, no assurance can be given that we will not be or become a PFIC for the current taxable year or any future taxable year because the determination of whether we will be or become a PFIC is a factual determination made annually that will depend, in part, upon the composition of our income and assets. Fluctuations in the market price of the ADSs may cause us to be or become a PFIC for the current or future taxable years because the value of our assets for purposes of the asset test, including the value of our goodwill and unbooked intangibles, may be determined by reference to the market price of the ADSs from time to time (which may be volatile). The market price of our ADSs may continue to fluctuate considerably and, consequently, we cannot assure you of our PFIC status for any taxable year. Furthermore, the composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets. Under circumstances where our revenue from activities that produce passive income significantly increases relative to our revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming a PFIC may substantially increase. As previously disclosed, we believed that we were a PFIC for U.S. federal income tax purposes for the taxable year ended December 31, 2023. In addition, it is possible that one or more of our subsidiaries were also PFICs for U.S. federal income tax purposes for such taxable year.

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If we or any of our subsidiaries is a PFIC for any taxable year during which a U.S. Holder (as defined in "Item 10. Additional Information—E. Taxation—United States Federal Income Tax Considerations") held an ADS or an ordinary share, such U.S. Holder may be subject to certain adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Further, if we are classified as a PFIC for any year during which a U.S. Holder holds our ADSs or ordinary shares, we will generally continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or ordinary shares, unless we were to cease to be a PFIC and such U.S. Holder were to make a "deemed sale" election with respect to the ADSs or ordinary shares. Please see the section entitled "Item 10. Additional Information—E. Taxation—United States Federal Income Tax Considerations—Passive Foreign Investment Company Considerations." U.S. Holders are urged to consult their tax advisors regarding the possible application of the PFIC rules to holder of our ADSs and ordinary shares.

**ITEM 4. INFORMATION ON THE COMPANY**

**A. History and Development of the Company**

We commenced operations in June 2014 through Beijing BaiJiaHuLian Technology Co., Ltd., which was renamed as Beijing BaiJia Technology Co., Ltd. in September 2020 and then renamed as Gaotu Education Technology Group Ltd. in July 2021, or Beijing Gaotu. Our holding company, BaiJiaHuLian Group Holdings Limited, was incorporated in August 2014 in the Cayman Islands to facilitate financing and offshore listing. In January 2019, we renamed our company as GSX Techedu Inc. In June 2021, we changed our legal name from "GSX Techedu Inc." to "Gaotu Techedu Inc.," effective June 4, 2021.

In August 2014, we established a wholly-owned subsidiary in Hong Kong, BaiJiaHuLian HK Holdings Limited. In January 2015, BaiJiaHuLian HK Holdings Limited established a wholly-owned subsidiary in mainland China, namely Beijing Lexuebang.

In April 2015, we gained control over Beijing Gaotu through Beijing Lexuebang by entering into a series of contractual arrangements with Beijing Gaotu and its shareholders. The contractual arrangements with Beijing Gaotu were subsequently amended and restated in March 2019.

On June 6, 2019, our ADSs commenced trading on the NYSE under the symbol "GSX". We raised from our initial public offering and from exercising the over-allotment option by the underwriters US$196.3 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us. On May 6, 2021, we changed our ticker symbol from "GSX" to "GOTU".

In January 2020, we completed the acquisition of Zhengzhou Kaitong Kegongmao Co., Ltd. and renamed it as Zhengzhou GaoTuYunJi Education Technology Co., Ltd., which became a subsidiary of Beijing Gaotu.

In December 2020, we raised US$870 million in net proceeds from the private placement of our newly issued Class A ordinary shares to certain investors.

In May 2025, we gained control over Shanghai Duwen through Beijing Lexuebang by entering into a series of contractual arrangements with Shanghai Duwen and its shareholders. In the same month, we completed the acquisition of 100% of equity interest of Zhengzhou Weizhen Culture Technology Co., Ltd., which became a subsidiary of Zhengzhou GaoTuYunJi Education Technology Co., Ltd.

In December 2025, we completed the acquisition of 100% of equity interest of Zhengzhou You'ai Culture Technology Co., Ltd., which became a subsidiary of Zhengzhou GaoTuYunJi Education Technology Co., Ltd.

Our principal executive offices are located at 5F, Gientech Building, 17 East Zone, 10 Xibeiwang East Road, Haidian District, Beijing 100193, People's Republic of China. Our telephone number at this address is +86 10 8282-6826. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our agent for service of process in the United States is Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711.

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All information we file with the SEC can be obtained over the internet at the SEC's website at <u>www.sec.gov</u>. You can also find information on our website <u>http://ir.gaotu.cn</u>. The information contained on our website is not a part of this annual report.

**B. Business Overview** 

**Our Mission** 

Our mission is to make learning better.

We believe education is a lifelong journey of curiosity, growth and transformation. We put learners at the heart of all we do and grow alongside them every step of the way. Staying true to this purpose, we reimagine learning with the power of technology, creating experiences that are learner-centric, AI-powered and product-led. Building on a proven track record of innovation, we continue to push technological boundaries to elevate learning, making it more accessible, engaging and effective.

**Who We Are** 

We are a leading data-driven education company focused on delivering measurable results through high-tech innovations. As the one of the few digital-native players among China's leading education companies, we deliver AI-powered, product-led learning experiences that fuse high-quality teaching with frontier technology to build motivation, engagement and long-term growth.

***What Makes Our Learning Experience Unique*** 

We are dedicated to creating learner-centric learning solutions for all demographics. We redefine the way learning is both engaging and effective by combining top-tier teachers, innovative curriculum, leading-edge technology and a product-led approach. Key elements of our solutions include:

**A mission-driven team of elite teachers.** Behind every successful learning experience is an outstanding team of teachers who are deeply committed to empowering learners and driving measurable progress. Through rigorous recruitment and professional development programs, we build a robust talent pipeline that delivers high-quality educational experiences across online and offline course offerings. Our teachers are renowned for their engaging, dynamic teaching styles, artfully blending live interactions with tiered course designs to keep learners motivated and on track.

**Proprietary curriculum innovation driving outcomes.** We develop and refine proprietary, research-backed curricula to maximize learner engagement and drive measurable learning outcomes. Using deep learning analytics and adaptive knowledge graphs, we align our courses with the developmental needs of each learner, offering a structured yet personalized learning path. Our curriculum is crafted to inspire curiosity, foster critical thinking and encourage active participation, integrating interactive teaching methods with a focus on holistic development that extends beyond learning performance.

**AI-powered, digital-native offering.** As a born-digital platform, we have evolved into an AI-driven learning platform that makes education smarter, more personalized and more scalable. AI and big data analytics are embedded into every aspect of the education experience to optimize learner engagement, teaching effectiveness and operational efficiency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*For learners:* effectiveness-focused personalization. AI-powered personalization fine-tunes content, pace and teaching delivery in real time, driving deeper engagement and tangible learning success while enhancing critical thinking, subject mastery and problem-solving skills.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*For teachers:* smarter teaching, less busywork. AI tools automate time-consuming tasks such as answering inquiries and study planning, providing real-time insights that improve teaching efficiency and allow teachers to focus on delivering personalized, high-impact learning experiences.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*For operations:* optimized growth and sustainable impact. AI analytics optimize strategies for learner acquisition, engagement and retention, enabling precise resource allocation, smarter marketing and scalable growth while preserving personal touch that drives our success.

**Product-led growth defining engagement and expansion.** We follow a proven product-led growth model that links product design directly with high-quality teaching delivery, creating impactful learning experiences that fuel organic growth. As our product matrix expands, we enrich diverse learning scenarios, boosting engagement and driving sustainable growth. By continuously refining each stage of the learning journey with real-time feedback, we elevate both learning effectiveness and learner satisfaction.

***How We Drive Scalable Growth*** 

Our success is fueled by two mutually reinforcing flywheels: the learning flywheel and the technology flywheel. These interconnected cycles create a self-sustaining loop of innovation, engagement and growth, continuously enhancing both educational outcomes and operational efficiency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Learning flywheel driving growth and scalability.* As a product-led platform, our focus on continuously improving and refining the learning experience magnifies engagement, attracting more learners to our platform. The more learners engage with our platform, the more learning scenarios and content available for us to refine our curriculum, enhance teaching quality and drive better learning effectiveness. Our elite teachers, proprietary curriculum and AI-driven personalization work together to create high-quality instruction, foster engagement and enhance learning outcomes. As our courses become more engaging and effective, learner retention increases, attracting more learners through word-of-mouth referrals. A growing learner base generates valuable data and user insights, which feed back into our system to continuously refine both our curriculum and AI models, reinforcing this cycle of growth and improvement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Technology flywheel enabling smarter operations.* AI fuels our technology efficiency by optimizing product development, marketing, learner acquisition and retention strategies. Our intelligent algorithms refine learner targeting and improve conversion rates, making sure that scalability does not come at the cost of personalization. Our operations model also optimizes cost structures, enabling us to expand efficiently and maintain high-quality services. These technological efficiencies free up resources for reinvestment in AI advancements and product innovation, further strengthening both product offerings and overall business performance.

The learning and technology flywheels are closely intertwined, propelling each other forward in a continuous cycle. By elevating learning outcomes, we draw in more learners, generating rich data that refines our AI models. This continuous flow of data enhances our technology, empowering us to fine-tune learner targeting, streamline learner acquisition and improve retention strategies. As a result, we are able to scale rapidly, with our backend processes staying agile, nimble and aligned with our high standards of performance. This virtuous loop of innovation and growth places Gaotu at the leading edge of digital education, continuously redefining what can be achieved in the era of AI-empowered learning.

**Our Technology Platform** 

Technology powers every stage of our education process from learner acquisition to success. By leveraging AI and big data analytics, we continuously enhance the learning experience and operational efficiency, creating a scalable model that drives measurable learning and business results.

Highlights of our technology platform include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*A deep data moat*. With over a decade's accumulation of online learning data, we have developed Gaotu Data Platform, a vast repository of teacher-learner interactions, learning behaviors and content feedback. We amplify the impact of our scale by continuously unlocking greater value from our data. As our data assets expand, our AI models become more precise, enabling more personalized instruction and fueling the development of new curriculum and product features that drive higher engagement and enhanced learning outcomes.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Human-AI collaboration*. We believe AI is designed to complement, not replace, human roles in learning. It works in tandem with instructors and tutors to improve teaching efficiency and enhance learner relationships. AI-powered tools, such as learner demand analysis and learner progress insights, empower teachers to improve teaching quality and deepen their expertise. By automating routine tasks such as assignment grading and conversation analysis, AI allows teachers to focus on high-impact, personalized interactions and teaching delivery.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Effectiveness-oriented solutions*. We leverage AI to deliver measurable improvements in both teaching effectiveness and operational efficiency. By automating key processes such as learner support and marketing, we have significantly reduced response times, streamlined workload distribution and optimized resource allocation. Our AI-driven personalization strategies improve learner engagement and amplify marketing impact, which lead to substantial gains in productivity and business performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Process automation for scalable operations.* We apply AI across all facets of our business operations to streamline processes and maintain a high level of personalized service. By automating key processes such as lead management, learner interactions and routine administrative tasks, we optimize resource allocation and reduce manual workloads.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*A shared, scalable infrastructure*. Our shared technology infrastructure supports all of our products and services, accelerating the development and rollout of new features. By integrating a diverse range of leading-edge AI models, we refine personalized learning experiences, optimize learning analytics and elevate operational efficiency, which further strengthens our data-driven advantage.

We have built a full-stack AI architecture spanning data, algorithms and applications, among others, enabling an end-to-end intelligent system that supports everything from data governance to business operations. By leveraging our proprietary AI tools and services and industry-leading models, we have achieved breakthroughs in conversion efficiency, learning experiences and operational productivity.

 ***Machine learning platform***. Our machine learning platform accelerates model development, training and optimization by consolidating advanced deep-learning frameworks. Leveraging our AI architecture, we have developed a suite of proprietary AI models for learning applications, significantly enhancing accuracy in tasks such as automated dialogue generation and content creation for teaching and research. These models also power features and tools such as automated question answering and AI-driven teaching assistants, providing 24/7 personalized support to both learners and teachers. With a distributed training framework, we have shortened model iteration cycles from weeks to hours, enabling parallel experimentation across all business lines. To maximize AI performance, we implement a hybrid deployment approach, integrating third-party foundation models such as DeepSeek with our domain-specific AI, which balances between broad AI capabilities and specialized performance optimized for learning.

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***AI tools and MLOps***. Our AI tools and MLOps platform transform operational workflows by automating processes to improve efficiency and scalability. AI automation has significantly reduced the need for human intervention in standardized operational tasks, such as executing standard operating procedures and lead allocation. Key AI applications implemented include intelligent learner engagement, where our AI-driven dialogue system manages a significant portion of learner inquiries, allowing teachers to focus on teaching without being interrupted by routine questions particularly during class hours. Our intelligent grading tools efficiently handle a large volume of assignments with a level of accuracy and consistency comparable to that of human teachers, thus enabling small teams to process thousands of submissions quickly and effectively. Additionally, our smart exam subject selection planner guides learners in making data-driven decisions about which subjects to focus on to maximize their chances of success. Our AI tutor mobile app, which operates without the involvement of human teachers, delivers personalized learning experiences and real-time feedback with 24/7 support. In marketing and learner acquisition, AI-driven content personalization through Q&A, intent recognition and targeted recommendations has substantially increased conversion rates and overall transaction value with enhanced marketing staff productivity.

**Our Products and Services** 

***Modes of Learning Delivery*** 

We provide a range of online and offline learning formats, supported by AI tools, to deliver an engaging and effective experience for every learner.

***Online courses***. Our online learning formats include live large classes, which combine live-streamed lectures with AI-driven personalization and a dual-teacher system, where expert instructors lead classes, and a team of trained tutors offers real-time guidance in smaller groups. Through real-time classes along with small-group tutoring, learners across different regions can access top-tier teaching, benefiting from structured coursework, dynamic engagement tools and AI-powered learning analytics that adapt to their learning needs. In addition to large classes, we offer small-group and one-on-one tutoring sessions to accommodate varying learning preferences. Small-class format fosters lively discussions and peer collaboration in a seminar-style setting, and one-on-one tutoring sessions allow instructors to customize lessons based on each learner's progress, learning style and learning goals. Our AI tutor further supports both instructors and tutors by promptly answering learner queries, offering instant explanations on difficult concepts and assisting with assignments at any time, which creates a fully rounded, human-AI-driven learning journey.

***Offline courses***. Expanding upon our online offerings, we are growing our nationwide network of learning centers across China to provide face-to-face learning opportunities and more localized educational experiences. Our learning centers cater to learners who value in-person teaching, offering a supportive environment for direct interaction with instructors and peer collaboration. To meet the diverse educational needs and preferences of learners across different regions, we continuously adapt our curriculum, teaching methods and pricing strategies to align with local market conditions.

***AI-powered applications***. We aspire to make our AI-powered applications a go-to resource for interactive and on-the-go learning, delivering bite-sized, on-demand educational content that fits into learners' daily schedules. Among these applications are *Xiaotu Wenwen* (小途问问), an AI-driven Q&A tool that uses multimodal interactions to provide instant answers to learning questions and personalize content recommendations, and *Maodou Loves Poems* (毛豆爱古诗), an immersive learning tool for ancient Chinese poetry combining animated explanations and intelligent recitation assessments with voice interactions and gamified challenges to engage young learners in adaptive learning. Designed with a learner-first approach, these applications provide intuitive access to AI-enhanced courses, intelligent practice exercises, real-time tutor support and personalized learning recommendations. Using big data analytics and adaptive learning pathways, our AI tools tailor to each learner's pace, strengthen weak areas and improve retention through gamified challenges, progress tracking and an interactive learning community where learners connect, share insights and exchange experiences. Additionally, our AI-powered applications feature pop culture collaborations and celebrity-led courses that attract and inspire learners, ranging from an eight-minute lesson to a deep dive into complex topics.

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***Content Offerings*** 

We offer a variety of courses for learners of different ages, covering a wide spectrum of topics. Our services primarily focus on learning services and educational content & digitalized learning products. All our course content is developed in-house to provide high quality and effective education experience for learners. Our teachers use our standardized curriculum for each course to ensure a seamless and effective learning experience for learners of different levels and backgrounds.

*Learning Services* 

Learning services mainly include traditional learning services, non-academic tutoring services and college student and adult education services, each designed to meet distinct learning needs:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Traditional learning services.* Our traditional learning services focus on traditional online non-compulsory academic subject tutoring services. We provide a comprehensive set of course offerings that covers core academic subjects, including mathematics, English, Chinese, physics, chemistry, biology, history, geography and political science for learners to improve specific capabilities and achieve better grades in examinations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Non-academic tutoring services.* We provide a range of courses to nurture personal interests and intellectual curiosity. Our non-academic offerings include adolescent development, Cambridge English, international competitions and international examinations. These course offerings are constructive in encouraging learners to think critically, developing their learning skills and exploring a variety of fields beyond traditional academics. We are also actively expanding and refining these non-academic tutoring courses to meet the evolving needs of our growing learner base.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*College student and adult education services.* We support adult learners and college students with courses to advance their academic and professional paths. Our professional courses cater to college students and adults preparing for qualification exams, such as teacher certification, equipping them with the skills necessary to enhance their careers. Additionally, we offer admission courses to help learners excel in entrance exams and interviews for postgraduate programs, civil service exams and more. We also provide specialized English courses focused on improving key language skills, such as grammar, vocabulary and speaking, all of which are essential for career growth. For those pursuing studies abroad, we offer consulting services to guide learners through the application process, as well as exam preparation courses such as IELTS and TOEFL to support their international goals.

*Educational Content & Digitalized Learning Products* 

Educational content & digitalized learning products mainly include content products, such as books and digitalized auxiliary learning tools. We are continuously improving our educational products by utilizing the expertise of our instructors and content team alongside AI and data analytics, through capabilities such as content generation and graphical learning maps.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Educational content.* Our in-house content development team designs all course materials, including course outlines, interactive courseware, practice exercises and lesson notes, to provide a smooth and effective learning experience for our learners. We have also published certain reference book, such as Chinese dictionaries and exam question compilations for the college entrance exam.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•*Digitalized learning products.* We are actively expanding and upgrading our suite of education-focused digital products and solutions, which include AI-powered tools such as reading apps for young learners that provide real-time pronunciation correction and enhance reading comprehension. Additionally, we offer AI-based writing assessment tools that offer instant feedback to help learners improve their writing skills. We are also actively exploring the integration of intelligent hardware, such as learning pen and tablet devices for exam preparation, into our learning solutions, which we believe will further enhance the interactivity and personalization of the learning process.

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**Our Instructor and Tutor Talent** 

***Our Instructors*** 

We are committed to developing and maintaining a team of high-quality instructors. We believe our instructors' teaching capabilities, experience and proven track record fundamentally differentiate us from our competitors. As of December 31, 2025, we had 4,989 instructors, including 2,576 full-time instructors and 2,413 contract instructors.

We primarily seek qualified instructors who have extensive teaching experience and a strong reputation from other education institutions. We have adopted a quantitative approach to comprehensively assess candidates nationwide based on a wide set of criteria.

*Recruitment* 

Leveraging our management team's deep experience in the education sector, we have been able to accurately identify and effectively recruit and retain high quality instructors across our course offerings. We have a team of highly experienced recruitment personnel to seek qualified instructors across mainland China. We attract applicants through various online career platforms, and we regularly participate in job fairs. Prospective candidates must go through our rigorous interview process, including resume screening, in-person interviews, and demo courses.

*Training and Supervision* 

All newly hired instructors are required to undergo standardized training to improve their skills in delivering courses to learners. Our instructors are required to continue to participate in periodic training programs that focus on education content, teaching skills and techniques, teaching performance, and our corporate culture and values.

We have a quality assurance team that monitors the performance of our instructors for each course and generates analysis reports for the supervisor in the relevant subject area. Our instructors regularly receive constructive feedback on their courses from their supervisor. Our quality assurance team evaluates instructors' performance based on an integrated, standardized evaluation system, including presentation skills, teaching process, course content and reactions to any emergent events. We provide personalized training programs for each instructor to address particular areas for improvement based on feedback from learners and our quality assurance team.

*Evaluation and Compensation* 

We adopt a comprehensive set of key performance indicators and qualitative factors to evaluate instructor performance, including, among others, learner retention, teaching capability, and dedication. Our instructors' promotion is largely based on these key performance indicators and qualitative factors. To incentivize our instructors, we offer competitive performance-based bonuses based on learner and/or learner parent satisfaction.

***Our Tutors*** 

We have a team of passionate and well-qualified tutors that are essential to our business. We have developed methods for hiring, training and retaining qualified tutors, which include a rigorous recruiting process, periodic training in teaching methods and skills, school culture and philosophy. Our tutors provide learning guidance and daily support to learners throughout the entire duration of a course. As of December 31, 2025, we had 5,323 tutors, including 3,928 full-time tutors and 1,395 contract tutors.

Our tutors' responsibilities typically include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•interacting with learners frequently to monitor learners' learning progress and facilitate an engaging learning environment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•responding to learners' queries, correcting learners' post-class exercises in a timely manner after submission and providing prompt and personalized feedback to learners;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•cooperating with instructors to improve learner satisfaction and learner retention; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•offering additional services such as study planning, family education support and emotional guidance to help learners maintain a balanced approach to their studies and navigate any personal or learning challenges that may arise.

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*Recruitment* 

Leveraging our extensive experience in the private education sector, we have been able to effectively recruit and retain high quality tutors across our course offerings. We primarily seek tutor candidates from recent graduates of reputable universities in China who have demonstrated proficiency in the relevant subjects, a strong sense of responsibility, as well as good communication skills and learning capabilities. We hold recruiting events at universities across mainland China to seek qualified candidates. We have entered into cooperation arrangements with universities in mainland China, through which we promote our job offerings to and accept applications from their students. We also partner with universities in mainland China to provide internship and graduate programs, cultivating a sustainable talent pipeline for our tutor team. In addition, we also attract outstanding experienced applicants through various online career websites and regularly participate in job fairs to hire qualified candidates with one to two years of work experience.

*Training* 

We provide our newly hired tutors with an orientation program to introduce their workflow and job responsibilities. To ensure our tutors will continue to engage and build relationships with learners, we have developed systematic on-the-job training programs covering four specific areas: corporate culture and tutor responsibilities, standardized workflow practices, personal capabilities development, management skills. Our tutors are required to attentively reach out to learners at each stage of their learning process based on our standardized workflow provided in our training programs. We also train our tutors to identify signs of learning challenges of learners and provide emotional support to learners to help cope with the challenging aspects of their studies. We have an on-going review mechanism to assess our tutors' job performance.

*Evaluation and Compensation* 

We use various key performance indicators to measure the performance of our tutors, which include, among others, learner retention, exercise completion, and learner satisfaction. Learners may provide feedback on the quality of our tutors anytime. Our tutors' compensation consists of base salary and performance-based bonuses determined by learner retention and class and exercise completion.

**Educational Content Development** 

***Content Development Team*** 

In addition to our skilled instructors, we have a dedicated team focused on developing high-quality educational content that supports our teaching efforts. As of December 31, 2025, we had a content development team of 726 professionals, who focus on the following three areas:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Proprietary course curriculum and educational content. Our content development team is responsible for designing, updating and refining our course syllabi and materials to stay aligned with the latest trends and advancements in each subject area. This approach ensures that learners have access to up-to-date, high-quality content, fostering engagement, supporting skill development, and empowering them to apply knowledge effectively in real-world contexts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Enhancing course materials for learning. To maximize the effectiveness of our online learning courses, our content development team collaborates closely with instructors to ensure that course materials are delivered in the most engaging and impactful way. While instructors maintain the flexibility to tailor their lessons, the team uses data analytics and best practice insights to guide instructors on how to best utilize course materials for optimal learning outcomes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Designing and presenting course materials. Learners receive both physical copies and digital materials that are carefully curated to support their educational journey. Our content development team works on refining the layout and structure to ensure that the materials are not only functional but also enhance the overall learning experience. In addition, the team is consistently incorporating AI features into our products, such as reading apps for young learners that provide real-time pronunciation correction and elevate reading comprehension.

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***Content Development Process*** 

We design and develop substantially all of our course materials in-house, including course outlines, interactive courseware, practice exercises and lesson notes, to ensure a seamless and effective learning experience for our learners. We maintain a strict process for creating new course materials. Before new course material is officially applied, the drafts, along with the accompanying practice exercises, typically undergo multiple rounds of internal review. We generally pilot test new courses for up to six to twelve months before they are broadly released. We regularly update our course materials to stay abreast of the latest trends in their respective subject areas. We also develop and update curricula and course materials tailored for classes of varying difficulty levels to address diverse educational requirements and needs of our learners at different levels.

We believe comprehensive quiz banks and exercises are important to enhance learners' learning effectiveness. We offer learners pre-class and in-class quizzes and exercises to help them better assess their learning outcomes and identify areas for improvement. Our tutors monitor learning performance in these quizzes and exercises and report to our content development team, who will update our quiz banks and exercises catering to learner needs as well as identify weaknesses in the educational content and make timely adjustments.

**Course Fees** 

Our course fees are generally collected in full upon enrollment. We accept payments through major third-party online payment channels in mainland China.

For our courses, we allow learners to withdraw from the enrolled courses at any time and receive refunds for the undelivered classes.

**Sales and Marketing** 

***Marketing Channels*** 

***Sales Process*** 

We have formulated an effective and systematic sales conversion standard operating procedure designed to optimize the effectiveness of each step of a prospective learner's interaction with our platform, from content creation, content distribution, sales leads acquisition, to paid enrollment conversion and retention. We believe our sales efficiency relies on the multistage amplification of each of our sales links. Through AI-driven sales lead tracking, we closely monitor the conversion of each sales link to measure our sales effectiveness and continually optimize at each stage.

*Content Generation and Distribution* 

We have a dedicated learner growth team who produces highly informative marketing content generally in the format of featured articles and short-form videos on parent-child relationships, book list recommendation, and skill set knowledge, among others. Our promotional content is generally distributed through major social media platforms in mainland China to access targeted audiences.

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*Online Promotional Programs* 

The sales leads generated by our various marketing channels are directed to our sales team. Our sales team encourage prospective learners to sign up for promotional classes offered at a discount or for free. We devote significant resources to our trial programs as they make a great contribution to our new paid course enrollments.

Our lower priced promotional program provides a carefully designed curriculum featuring a series of trial courses throughout a three-to-six-day period. The trial courses follow a similar format and are delivered by the same high-quality instructors as our standard courses. Our instructors devote a significant amount of time to preparing these course materials in advance. We staff each class with the same high-quality tutors as in our standard courses to assist with learners' daily study. Our lower priced promotional program creates an immersive experience for prospective learners to understand the effectiveness of our superior teaching quality.

The tutors promote our standard courses to prospective learners throughout the lower priced promotional program and continue to follow up with them after the lower priced promotional program. Our instructors also promote our paid courses when delivering courses in the lower priced promotional program. We believe their promotion, combined with prospective learners' immersive experience of our courses, has served as an effective way to convert sales leads to paid course enrollments.

*Offline Promotional Initiatives* 

We employ a variety of offline promotional initiatives to engage potential learners and strengthen brand presence, which include hosting expert lectures featuring renowned teachers and top achievers. We also partner with major schools to offer public classes to connect with target audiences directly. Additionally, we set up promotion points in communities and bookstores, offering free trial classes and distributing materials to convert prospects into active learners. Our offline educational salons provide a platform for parents to interact with experts on topics such as learning planning, which help us build trust and facilitate course enrollments.

*Localized Promotional Events* 

Our localized promotional events engage with communities and strengthen regional connections. We partner with local education influencers, including bloggers and parent group leaders, to reach target audiences through live streams and product reviews. We also organize region-specific lectures featuring renowned local teachers. To enhance trust in second- and third-tier cities, we set up offline experience centers and collaborate with local tutoring institutions. Additionally, we customize our marketing materials, using dialect-specific content in areas such as Guangdong and Sichuan to better resonate with local parents.

**Data Privacy and Security** 

We are committed to protecting our learners' personal information and privacy. We have established and implemented a strict platform-wide policy on data collection, processing and usage. To ensure the confidentiality and integrity of our data, we maintain a comprehensive and rigorous data security program. We anonymize and encrypt confidential personal information and take other technological measures to ensure secure processing, transmission and usage of data. We have also established stringent internal protocols under which we grant classified access to confidential personal data only to limited employees with strictly defined and layered access authority. We strictly control and manage the use of data within our various teams. Our back-end security system is capable of handling malicious attacks to safeguard the security of our operations and to protect the privacy of our learners.

**Content Moderation** 

Our courses undergo multiple rounds of internal review and pilot testing before being broadly released. Our tutors and quality assurance team monitor our live courses, chat messages and other content on our platform to ensure that we are able to identify content that may be deemed inappropriate or in violation of laws, regulations and government policies. When any inappropriate or illegal content is identified, we promptly remove the content.

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**Competition** 

The education service market in mainland China is fragmented. We face competition in each topic of our course offerings from other educational service providers, such as TAL Education Group, New Oriental Education & Technology Group Inc. and some private companies.

We compete primarily on the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•quality of education services and learners' learning experience;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the quality of teaching staff;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•technology infrastructure and data analytics capabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•brand recognition; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•scope of course offerings.

We believe that we are well-positioned to effectively compete with our peers with respect to the factors listed above. However, some of our current or future competitors may have longer operating histories, greater brand recognition, or greater financial, technical or marketing resources than we do. For a discussion of risks relating to competition, see "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We face significant competition in each part of our current and future course and service offerings, which could divert learners to our competitors, lead to pricing pressure and loss of market shares, and significantly reduce our net revenues."

**Intellectual Property** 

Our trademarks, copyrights, domain names, trade secrets and other intellectual property rights distinguish our courses and services from those of our competitors and contribute to our ability to compete in our target markets. We rely on a combination of copyright and trademark law, trade secret protection and confidentiality agreements with employees to protect our intellectual property rights. In addition, under the employment agreements we enter into with our employees, they acknowledge that the intellectual property made by them in connection with their employment with us is our property. We also regularly monitor any infringement or misappropriation of our intellectual property rights.

As of the date of this annual report, we have registered 425 domain names relating to our business, 221 software copyrights, 56 work copyrights, 123 patents and 1,096 trademarks in mainland China.

**Insurance** 

We maintain public liability insurance and property insurance policies covering learners, equipment and facilities for injuries, death or losses due to fire, earthquake, flood or any other disaster. Consistent with customary industry practice in mainland China, we do not maintain business interruption insurance, nor do we maintain key-man life insurance.

**Regulations** 

This section sets forth a summary of the most significant rules and regulations that affect our business activities in China or the rights of our shareholders to receive dividends and other distributions from us.

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***Regulation Related to Private Education***

*Education Law of the PRC* 

The PRC Education Law, sets forth provisions relating to the fundamental education systems of mainland China, including a school system of pre-school education, primary education, secondary education and higher education, a system of nine-year compulsory education and a system of education certificates. The Education Law stipulates that in principle, enterprises, institutions, social organizations and individuals are encouraged to operate schools and other types of educational organizations in accordance with the laws and regulations of mainland China.

*The Law for Promoting Private Education*

On December 28, 2002, the Standing Committee of the National People's Congress promulgated the Law for Promoting Private Education, which was last amended on December 29, 2018 with such amendment effective on the same date. Under the amended Law for Promoting Private Education, sponsors of private schools may choose to establish non-profit or for-profit private schools at their own discretion, and the private schools shall obtain a private school operating permit issued by government authorities and registered with registration authorities.

*Amended Implementation Rules for the Law for Promoting Private Education*

On April 7, 2021, the State Council promulgated the Amended Implementation Rules for the Law for Promoting Private Education, which became effective on September 1, 2021. The amended implementation rules provide, among others, that online education activities using internet technology are encouraged by the regulatory authorities and shall comply with laws and regulations related to internet management. A private school engaging in online education activities using internet technology shall obtain the private school operating permit. It shall also establish and implement internet security management systems and take technical security measures. Upon discovery of any information whose release or transmission is prohibited by applicable laws or regulations, the private school shall immediately cease the transmission of that information and take further remedial actions, such as deleting that information, to prevent it from spreading. Records pertaining to the situation shall be kept and reported to the appropriate authorities.

*Regulation Related to After-School Tutoring*

The State Council issued an Opinion on Supervising After-School Tutoring Institutions on August 22, 2018, or the State Council Circular 80, which provided various guidance on regulating after-school tutoring institutions that target primary and secondary school students. The State Council Circular 80 provides for the conditions for approval and registration of after-school tutoring institutions, and requires relevant governmental authorities to tighten regulations on after-school tutoring institutions. The State Council Circular 80 specifies operating requirements that after-school tutoring institutions must meet. Such requirements include, among other things, that after-school tutoring institutions (i) have fixed training premises that conform to specified safety criteria, with an average area per student of no less than three square meters during the applicable training period; (ii) comply with relevant fire safety, environmental protection, hygiene, food operation and other specified requirements; (iii) purchase personal safety insurance for students to reduce safety risks; and (iv) not hire teachers who are working concurrently in primary or secondary schools, and teachers tutoring in academic subjects such as English are required to have the corresponding teaching qualifications. After-school tutoring institutions are prohibited from carrying out training that goes beyond the school syllabus, training in advance of the corresponding school schedule and any training activities linked with student admission, nor shall they organize any level test, rank examination or competition on academic subjects for primary and secondary students. According to State Council Circular 80, extracurricular training institutions are also required to disclose and file relevant information, including their training content, schedule, targeted students and school timetable to the relevant education authority, and their training classes may not end later than 8:30 p.m. each day. After-school tutoring institutions can only collect in advance fees for courses spanning three months or shorter. Additionally, State Council Circular 80 requests that competent local authorities formulate relevant local standards for after-school tutoring institutions within their administrative area.

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On August 10, 2019, the Ministry of Education, jointly with certain other PRC government authorities, issued Opinions on Guiding and Regulating the Orderly and Healthy Development of Educational Mobile Apps, which require filings with the competent provincial regulatory authorities for education for mobile apps that provide services for school teaching and management, student learning and student life, or home-school interactions, with school faculty, students or parents as the main users, and with education or learning as the main application scenarios. These opinions also require, among others, that: (i) before such filing, the app's provider must have obtained an ICP License or completed an ICP License filing and obtained the certificate and grade evaluation report for graded protection of cybersecurity; (ii) such apps whose main users are under the age of 18 must limit the users' usage time, specify the range of suitable ages, and strictly monitor contents; (iii) before such an app is introduced as a mandatory app to students, the app must be approved by the applicable school through collective decision-making process and be filed with the competent education authority; and (iv) apps adopted by education authorities and schools as their uniformly used teaching or management tools may not charge the students or parents any fees, and may not offer any commercial advertisements or games. On November 11, 2019, the Ministry of Education issued the Management Rules on Filing of Educational Mobile Apps, which supplement the filing requirements for such apps.

On September 19, 2019, the Ministry of Education, jointly with certain other government authorities, issued the Guidance Opinions on Promoting the Healthy Development of Online Education, which provide, among others, that (i) social forces are encouraged to establish online education institutions, develop online education resources, and provide high quality education services; and (ii) an online education negative list shall be promulgated and industries not included in the negative list are open for all types of entities to enter into.

On November 27, 2020, the Ministry of Education and the Office of the Central Cyberspace Affairs Commission jointly promulgated the Notice on Further Strengthening the Standardized Management of Online Course Platforms for Minors. The notice emphasizes that local cyberspace authorities and education authorities shall regularly organize screening of the training platforms for minors and take measures such as suspending or removing training platforms or requiring training platforms to rectify within a given time limit. After such rectification is completed, the education authorities will review the filings.

On June 10, 2020, the General Office of the Ministry of Education and the General Office of the SAMR promulgated the Notice on Issuing the Form of Service Contract for After-school Training Provided to Primary and Secondary School Students, which requires the local competent regulatory authorities to guide the relevant parties to use the form of service contract for after-school training activities provided to primary and secondary school students. The form of service contract covers the obligations and rights of parties involved in the after-school training, including detailed provisions on training fees, refund arrangement and default liabilities. On September 27, 2021, the General Office of the Ministry of Education and the General Office of the SAMR promulgated the Notice on Issuing the Form of Service Contract for After-school Training Provided to Primary and Secondary School Students, which further revised the form of service contract for after-school training.

On December 29, 2006, the Standing Committee of the National People's Congress promulgated the Law for Protection of Minors, which was most recently amended on April 26, 2024 and became effective on the same date. According to the amended Law for Protection of Minors, online education products and services which are targeted at minors shall not include any links to online games or push any advertisements and other information irrelevant to teaching. In addition, schools shall not use public holidays, weekends, winter and summer break periods to organize students in primary and secondary schools to take lessons collectively, which will aggregate students' burden of study, and after-school tutoring service providers may not provide primary school curriculum education to the preschool-aged minors. On October 16, 2023, the State Council promulgated the Regulation of Online Protection of Minors, which provides that, providers of online education network products and services targeting minors shall provide corresponding products and services based on minors' physical and mental development characteristics and cognitive abilities at different age stages, in accordance with laws, administrative regulations or provisions promulgated by the State Council.

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On July 24, 2021, the General Office of the State Council and the General Office of the Central Committee of the Communist Party of China jointly promulgated the Alleviating Burden Opinion, which provides that, among other things, (i) local government authorities shall no longer approve new after-school tutoring institutions providing tutoring services on academic subjects for students in compulsory education, and the existing after-school tutoring institutions providing tutoring services on academic subjects shall be registered as non-profit; (ii) online Academic AST Institutions that have filed with the local education administration authorities providing tutoring services on academic subjects shall be subject to review and re-approval procedures by competent government authorities, and any failure to obtain such approval will result in the cancellation of its previous filing and ICP license; (iii) Academic AST Institutions are prohibited from raising funds by listing on stock markets or conducting any capitalization activities and listed companies are prohibited from investing in Academic AST Institutions through capital markets fund raising activities, or acquiring assets of Academic AST Institutions by paying cash or issuing securities; and (iv) foreign capital is prohibited from controlling or participating in any Academic AST Institutions through mergers and acquisitions, entrusted operation, joining franchise or variable interest entities.

Any violation of the foregoing shall be rectified. Moreover, the Alleviating Burden Opinion specifies a series of operating requirements that after-school tutoring institutions must meet, including, among other things, (i) no advertisements for after-school tutoring shall be published or broadcasted in the network platforms and billboards displayed in the mainstream media, new media, public place and residential areas; (ii) the provision of overseas education courses is strictly prohibited; (iii) fees charged for academic subjects tutoring in compulsory education shall be included into government-guided price management, and excessive high fees and excessive profit-seeking behaviors will be suppressed; (iv) government authorities will implement risk management and control for the pre-collection of fees by after-school tutoring institutions with requirements such as setting up third-party custodians and risk reserves, and strengthen supervision over loans regarding tutoring services; (v) online tutoring for preschool-age children is prohibited, and offline academic subjects (including foreign language) tutoring services for preschool-age children is also strictly prohibited; (vi) no more approval of new after-school tutoring institutions providing tutoring services on academic subjects for pre-school-age children and students on grade ten to twelve will be granted; and (vii) administration and supervision over academic subjects tutoring institutions for students on grade ten to twelve shall be implemented by reference to the applicable provisions of the Alleviating Burden Opinion.

In addition, the Alleviating Burden Opinion also requires that local government authorities shall clarify the competent authorities for administering the non-academic after-school tutoring institutions, by classifying sports, culture and art, science and technology and other non-academic subjects, formulate standards among different classification of non-academic tutoring and conduct strict examination before granting permission. As of the date of this annual report, certain local government authorities have promulgated rules that require non-academic tutoring service providers in areas such as art, music, physics, among others, to obtain private school operating permit.

On July 28, 2021, the General Office of the Ministry of Education promulgated the Notice on Further Clarifying the Scope of Academic Subjects and Non-Academic Subjects of After-School Tutoring in the Compulsory Education, which specifies that according to the national curriculum on compulsory education, when after-school institutions carry out tutoring, morality and rule of law, Chinese, history, geography, mathematics, foreign language (including English, Japanese, Russian), physics, chemistry and biology are classified as academic subjects, while sports (or sports and health), art (or music, art), and comprehensive practical activities (including information technology education, labor and technology education) are classified as non-academic subjects.

On August 2, 2021, the Guangdong Education Bureau issued the Circular on Reducing the Burden of After-School Tutoring on Students in Compulsory Education to implement the Alleviating Burden Opinion. This circular stipulates requirements on Academic AST Institutions, including but not limited to license requirements, tutoring service requirements, advertisement regulations and fee regulations.

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On August 18, 2021, the Beijing Municipality Government and the Beijing Municipal Committee of the Communist Party of China jointly published the full text of the Beijing Municipality's Measures to Further Reduce the Burden of Homework and After-School Tutoring on Students in Compulsory Education in Beijing to implement the Alleviating Burden Opinion. These measures provide, among others, that (i) no new Academic AST Institutions will be approved, while existing Academic AST Institutions will be subject to review and re-registration aimed at reducing their numbers by phases; the remaining Academic AST Institutions shall all be registered as non-profit; (ii) online Academic AST Institutions previously filed with the local education administration authorities will be subject to review and re-approval; the registration and ICP license of any disqualifying online Academic AST Institutions will be rescinded; (iii) Academic AST Institutions are prohibited from (a) offering classes over contents outside of or in advance of the school curriculum, (b) offering classes based on any foreign curriculum, (c) soliciting and recruiting school teacher by offering excessive compensation, or (d) employing foreign personnel abroad to carry out training activities; non-Academic AST Institutions providers are prohibited from offering tutoring services on academic subjects; (iv) prices for Academic AST Institutions will need to follow the guidelines from the government to prevent any excessive charging or excessive profit-seeking activity; and (v) Academic AST Institutions are prohibited from financing by way of listing its securities or conducting other capital market activities; listed companies may not invest in Academic AST Institutions through capital markets fundraising activities, and may not acquire assets of Academic AST Institutions by paying cash or issuing securities; foreign capital is prohibited from controlling or participating in Academic AST Institutions through merger and acquisitions, entrusted operations, joining franchise or using variable interest entities.

On August 25, 2021, the General Office of the Ministry of Education issued the Administrative Measures for After-School Tutoring Materials for Primary and Secondary School Students (for Trial Implementation), which provide that, among others, (i) after-school tutoring materials for primary and secondary school students and staff preparing such tutoring materials shall meet certain requirements specified in such measures, which include, among others, tutoring materials shall follow the national curriculum standard and shall not provide contents in advance of the school curriculum; (ii) after-school tutoring institutions shall establish internal management system for the tutoring materials and the staff preparing such tutoring materials; (iii) after-school tutoring institutions shall conduct internal review of the tutoring materials and the local education administrations shall conduct external review of the tutoring materials; (iv) after-school tutoring institutions may only use tutoring materials that have been internally and externally reviewed or if the materials have been officially published; (v) after school tutoring institutions shall file with the education administrations the tutoring materials and the staff preparing such materials; and (vi) after-school tutoring institutions in violation of the measures will be subject to rectification and shall not use the relevant tutoring materials during the rectification period; if the after-school tutoring institution refuses to rectify within the time limit or if the violation is severe, its private school operating permit may be revoked by the local education administration.

On September 7, 2021, the Ministry of Education published on its official website that the Ministry of Education, together with two other government authorities, issued a circular requiring all Academic AST Institutions to complete registration as non-profit by the end of 2021, and all Academic AST Institutions shall, before completing such registration, suspend enrollment of students and charging fees.

On September 9, 2021, the General Office of the Ministry of Education and the General Office of the Ministry of Human Resources and Social Security jointly issued the Administrative Measures for Practitioners of the After-School Tutoring Institutions (for Trial Implementation), which set out a series of requirements for the after-school tutoring institutions with respect to their employed teachers, research staff and teaching assistants. After-school tutoring institutions in violation of such requirements will be subject to rectification. If an after-school tutoring institution violates the requirements several times or violates several requirements, such after-school tutoring institution is prohibited from enrollment of students and shall not conduct tutoring activities during the rectification period; and if the after-school tutoring institution refuses to rectify within the time limit or if the violation is severe, its private school operating permit may be revoked by the local education administration.

On March 3, 2022, the Ministry of Education jointly with other two authorities issued the Announcement on Regulating Non-Academic Subjects After-School Tutoring, which provides that, among others, (1) the non-academic subjects after-school tutoring institutions shall have corresponding qualifications, and the practitioners shall have corresponding certifications for professional capability; (2) tutoring fee information shall be made public; (3) non-academic subjects after-school tutoring institutions shall use the form of service contract for after-school training activities provided to primary and secondary school students, and any unfair competition, monopoly or price fraud is prohibited; and (4) fees charged for non-academic subjects after-school tutoring shall be collected in such institutions' special accounts, and fees shall not be collected or disguised collected in a lump sum for more than 60 classes or three months. In addition, tutoring for primary and middle schools students shall not allow any tutoring loans made to pay tutoring fees.

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On May 27, 2022, the Ministry of Education published a notice on its website, which states that the Ministry of Education is regulating and continues to regulate the non-academic tutoring institutions, by means of examination of qualifications of institutions, regulation of fee charging and supervision of pre-paid fees. Such notice also states that as of May 15, 2022, about 88% of the non-academic tutoring institutions nationwide have implemented third-party custodians or risk reserve funds to manage the risk of pre-paid fee.

On November 21, 2022, the Chinese Ministry of Education and relevant authorities published the Opinions on Strengthening the Prevention and Administration of Invisible and Variant Tutoring on Academic Subjects, which stipulates that competent government authority will strengthen control and supervision over key locations such as commercial buildings and residential areas where there is a high incidence of illegal after-school tutoring, and institutions and individuals who engage in illegal after-school tutoring will be subject to penalties.

On November 30, 2022, the Ministry of Education and other governmental authorities published Opinions on Regulation of Non-Academic After-School Tutoring for Primary and Secondary School Students, which provide that, among others, (1) local governments shall identify corresponding competent authorities for different tutoring categories and set forth basic standards; (2) non-academic tutoring institutions shall comply with requirements relating to premise, facilities, fire safety, environment protection and food safety; (3) practitioners shall have corresponding capability or certificates for different tutoring categories, and tutoring institutions shall not solicit or recruit primary and secondary school teachers; (4) non-academic online tutoring institutions shall obtain certificates issued by provincial government authorities; (5) class times shall not conflict with the teaching time of the local primary and secondary schools, and offline after-school trainings shall end no later than 8:30 p.m. and online live trainings shall end no later than 9:00 p.m.; (6) tuition fees collected by a tutoring institution shall not be collected in a lump sum for more than 60 course sessions, or for a course length of more than three months, or for more than RMB5,000, and tutoring institutions shall open a special bank account for the tuition fees and file the account information and other required information with government authorities. In addition, any violation under such opinions of a non-academic after-school tutoring institution shall be rectified accordingly by the end of June 2023.

On March 14, 2023, the General Office of the Ministry of Education jointly with other four authorities issued the Administrative Measures for the Financial Management of After-School Tutoring Institutions, which provide that, among others, (1) tutoring pre-paid fees (including collected in cash) shall be deposited into such institution's special accounts and shall be separated from its own funds. Tutoring fees shall not be collected in such institution's other accounts or any third party's accounts; (2) after-school tutoring institutions shall not accept any tutoring fees paid by means of tutoring loans; (3) after-school tutoring institutions shall use the contract template jointly stipulated by General Office of the Ministry of Education and the SAMR for the after-school tutoring service, and clearly specify the tutoring fees, refund arrangement and dispute resolutions. After-school tutoring institutions shall offer refunds for any remaining classes in a course to students who withdraw from the course in a timely manner.

On August 23, 2023, the Ministry of Education issued Interim Measures for Administrative Penalties on Off-campus Tutoring, which became effective on October 15, 2023. These interim measures set out the general requirements for administrative penalties for illegal off-campus tutoring operated by any natural person, legal person or other organization that is offered to preschool children over 3 years of age, and primary and secondary school students. In particular, these interim measures provide that the following circumstances shall constitute illegal off-campus tutoring, and relevant natural person, legal person or other organization conducting such illegal off-campus tutoring may be subject to various administrative penalties, such as orders to rectify or cease tutoring activities, returning fees charged, revocation of operation approval, warning, criticism and fines: (i) any natural person, legal person or other organization carries out after-school tutoring without requisite private school operating permit and meets certain conditions, including having a specific tutoring facility for offline tutoring activities or a specific website or application for online tutoring activities, two or more tutoring personnel and corresponding organizational structure and division of work; (ii) any natural person, legal person or other organization carries out certain after-school academic tutoring activities in a disguised form without meeting the conditions as prescribed above but also without a private school operating permit; (iii) any after-school tutoring institution carries out after-school tutoring beyond the scope of its private school operating permit; (iv) any after-school tutoring institution carries out after-school tutoring in violation of applicable laws and regulations; (v) any after-school tutoring institution has the problem of disorganized management; and (vi) any after-school tutoring institution organizes or participates in the organization of social competitions without approval for preschool children over three years of age, and primary and secondary school students.

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On February 8, 2024, the Ministry of Education issued the Administrative Regulations on Off-campus Tutoring (Draft for Comments), which provide that, among other things, (i) off-campus tutoring institutions shall be administered by the classification of academic subjects and non-academic subjects. All off-campus tutoring institutions shall obtain corresponding off-campus tutoring operating permit while the academic off-campus tutoring institutions for students in compulsory education shall complete registration as non-profit; (ii) online off-campus tutoring institutions shall be subject to review and approval by provincial education administration authorities. For non-academic off-campus tutoring institutions, prior to the application to education administration authorities, they are required to obtain approval from corresponding competent authorities depending on the tutoring categories. Where multiple competent authorities are involved, the application shall be submitted respectively; and (iii) the income of off-campus tutoring institutions collected from financing and tutoring fees shall be mainly used for engaging in educational services, improving training conditions and guaranteeing the welfare of employees. However, unlike the Alleviating Burden Opinion and certain previous regulations implementing the Alleviating Burden Opinion, these draft administrative regulations no longer emphasize administration and supervision over academic subjects tutoring institutions for students on grade ten to twelve shall be implemented by reference to the applicable provisions of the Alleviating Burden Opinion. As of the date of this annual report, these draft administrative regulations were released for public comment only, and their respective provisions and anticipated adoption or effective date may be subject to change.

On November 11, 2024, the Guangdong Education Bureau and Guangdong Human resources and Social Security Bureau jointly issued the Standard of the Establishment of Off-campus Tutoring Institutions, specifying a series of requirements for the establishment and operation of academic off-campus tutoring institutions in Guangdong Province, with respect to their registered capitals, employed teachers, premise, facilities and fire safety measures.

On January 3, 2025, the Ministry of Education promulgated the Administrative Measures for the Application of the National Off-campus Education and Training Supervision and Service Integrated Platform, which became effective on the same date. These measures establish a nationwide platform to support the supervision of off-campus tutoring activities. Off-campus tutoring institutions are required to register with the platform, provide and update relevant information, and conduct certain operational activities through the platform, including course display, enrollment, payment and refund processing. The platform also publicly discloses information such as the "whitelist" and "blacklist" of tutoring institutions and facilitates regulatory monitoring of tutoring institutions' operations and prepaid funds.

We are closely monitoring the evolving regulatory environment and are making efforts to seek guidance from and cooperate with the government authorities to comply with these regulations and implementation measures and we have been taking necessary measures to comply with the above requirements. However, as many of these regulations for online education are relatively new and the enforcement practices are evolving, our current practice may be deemed to be not in full compliance with these requirements. For detailed discussion, please see "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Significant risks exist in relation to the interpretation and implementation of, or proposed changes to, the laws, regulations and policies of mainland China regarding the private education industry. In particular, our compliance with the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education and the implementation measures issued thereunder by the PRC government authorities has materially and adversely affected and will materially and adversely affect our business, financial condition, results of operations and prospect."

***Regulation Related to Value-added Telecommunications Services*** 

On September 25, 2000, the State Council issued the PRC Regulations on Telecommunications, as last amended on February 6, 2016, to regulate telecommunications activities in mainland China. The Regulations on Telecommunications divided the telecommunications services into two categories, namely "infrastructure telecommunications services" and "value-added telecommunications services." Pursuant to the Regulations on Telecommunications, operators of value-added telecommunications services must first obtain a Value-added Telecommunications Business Operating License from the MIIT or its provincial level counterparts. On March 1, 2009, the MIIT promulgated the Administrative Measures on Telecommunications Business Operating Licenses, which were amended on July 3, 2017 and came into effect on September 1, 2017. These measures set forth more specific provisions regarding the types of licenses required to operate value-added telecommunications services, the qualifications and procedures for obtaining such licenses and the administration and supervision of such licenses.

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The Amended Classified Catalog of Telecommunications Services (2015 Version), which took effect on June 6, 2019, defines information services as "the information services provided for users through public communications networks or internet by means of information gathering, development, processing and the construction of the information platform." Moreover, information services continue to be classified as a category of value-added telecommunications services and are clarified to include information release and delivery services, information search and query services, information community platform services, information real-time interactive services, and information protection and processing services. The Administrative Measures on Internet Information Services, promulgated by the PRC State Council on September 25, 2000, and last amended on December 6, 2024, set forth more specific rules on the provision of internet information services. According to these administrative measures, any company that engages in the provision of commercial internet information services shall obtain a sub-category Value-added Telecommunications Business Operating License for Internet Information Services, namely the ICP License, from the government authorities before providing any commercial internet information services within mainland China. Pursuant to the above-mentioned regulations, "commercial internet information services" generally refer to provision of specific information content, online advertising, web page construction and other online application services through internet for profit making purpose.

In addition to the Telecommunications Regulations and the other regulations discussed above, the provision of commercial internet information services on mobile internet applications is regulated by the Administrative Provisions on Mobile Internet Applications Information Services, which were promulgated by the CAC on June 28, 2016 and last amended on June 14, 2022. The providers of mobile internet applications are subject to requirements under these provisions, including acquiring the qualifications and complying with other requirements provided by laws and regulations and being responsible for information security. The application providers shall not compel the user to agree to the processing of personal information for any reason, and shall not refuse the user to use its basic functions and services because the user does not agree to provide non-essential personal information.

On July 21, 2023, the MIIT issued the Circular of the Ministry of Industry and Information Technology on the Record-filing of Mobile Internet Applications. According to the circular, all apps shall complete filings with the provincial communications administration of the place where the operator is located. For all apps that began to operate before July 21, 2023, the filing shall be completed by March 2024, and for all apps that began to operate after July 21, 2023, the filing shall be completed before the apps' operation. Upon receipt of the filing materials submitted by any app operator, the provincial communications administration shall process the filing within 20 working days by issuing a filing number and disclosing the filing information to the public, provided that the materials are complete and accurate; otherwise, the filing shall not be processed. If the app information is changed or deregistered, the app operator shall report for such change or withdrawal with the original filing authority.

We provide information and services to our students through our websites and mobile apps, which is classified as commercial internet information services as defined in the above provisions. To comply with the laws and regulations, Beijing Gaotu and two of its subsidiaries, Shanghai GaoTuYunJi Education Technology Co., Ltd., Beijing Xinjianzhineng Technology Co., Ltd., each currently holds a Value-added Telecommunications Business Operating License.

***Regulation Related to Foreign Investment*** 

On March 15, 2019, the National People's Congress promulgated the Foreign Investment Law, which came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in mainland China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The existing foreign-invested enterprises established prior to the effective of the Foreign Investment Law may keep their corporate forms within five years. The implementing rules of the Foreign Investment Law will be stipulated separately by State Council. Pursuant to the Foreign Investment Law, "foreign investors" mean natural person, enterprise, or other organization of a foreign country; "foreign-invested enterprises" mean any enterprise established under the laws of mainland China that is wholly or partially invested by foreign investors; "foreign investment" means any foreign investor's direct or indirect investment in mainland China, including: (i) establishing foreign invested enterprises in mainland China either individually or jointly with other investors, (ii) obtaining stock shares, stock equity, property shares, other similar interests in Chinese domestic enterprises, (iii) investing in new projects in mainland China either individually or jointly with other investors, and (iv) making investment through other means provided by laws, administrative regulations, or State Council provisions.

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The Foreign Investment Law stipulates that mainland China implements the management system of pre-establishment national treatment plus a negative list to foreign investment and the government generally will not expropriate foreign investment, except under special circumstances, in which case it will provide fair and reasonable compensation to foreign investors. Foreign investors are barred from investing in prohibited industries on the negative list and must comply with the specified requirements when investing in restricted industries on that list. When a license is required to enter a certain industry, the foreign investor must apply for one, and the government must treat the application the same as one by a domestic enterprise, except where laws or regulations provide otherwise. In addition, foreign investors or foreign invested enterprises are required to file information reports and foreign investment shall be subject to the national security review.

On December 26, 2019, the State Council promulgated the Implementation Rules of Foreign Investment Law, and became effective on January 1, 2020. The Implementation Rules of Foreign Investment Law restates certain principles of the Foreign Investment Law and further provides, among others, the existing foreign invested enterprises established prior to the effectiveness date of the pursuant to the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law may, within the five-year period following the effective date of the Foreign Investment Law, adjust their corporate form or the governing structure and complete the change in registration pursuant to the provisions of the PRC Company Law, the PRC Partnership Enterprise Law and other applicable laws and regulations, and if it fails to do so, the enterprise registration authority will not process other registration matters of the foreign invested enterprise and may publicize such non-compliance starting from January 1, 2025. On December 26, 2019, the Supreme People's Court issued an Interpretation of the Application of Foreign Investment Law, which further provides details with respects to the validity of foreign investment contracts.

For detailed discussion of the risk associated with the Foreign Investment Law, see "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance, business, financial condition and results of operations."

***Regulation Related to Foreign Investment Restrictions*** 

Investment activities in mainland China by foreign investors are principally governed by the Guiding Foreign Investment Direction, which was promulgated by the State Council in February 2002 and came into effect in April 2002, and the Negative List, which was promulgated by the Ministry of Commerce and the NDRC in September 2024 and came into effect in November 2024. The Negative List sets out the restrictive measures in a unified manner, such as the requirements on shareholding percentages and management, for the access of foreign investments, and the industries that are prohibited for foreign investment. Any field not falling in the Negative List shall be administered under the principle of equal treatment to domestic and foreign investment. According to the Negative List, the proportion of foreign investments in an entity engaging in value-added telecommunications services (except for e-commerce, domestic multi-party communications, storage-forwarding and call centers) shall not exceed 50%.

Pursuant to the Negative List, a domestic enterprise engaged in activities in any field prohibited from foreign investment under the Negative List shall be subject to review and approval by the competent authorities for overseas listing and trading of shares, and any overseas investor in the enterprise shall not participate in the operation and management of the enterprise, and the equity ratio of overseas investors in the enterprise shall be governed mutatis mutandis by the regulations on the management of domestic securities investments made by overseas investors.

Pursuant to the Regulations on Administration of Foreign-Invested Telecommunications Enterprises, which took effect on January 1, 2002 and were last amended on March 29, 2022 with effect from May 1, 2022, the foreign investor of a telecommunications enterprise is prohibited from holding more than 50% of the equity interest in a foreign-invested enterprise that provides value-added telecommunications services. Moreover, foreign investors that intend to invest in or establish a value-added telecommunications enterprise operating the value-added telecommunications business must obtain approvals from the MIIT and the Ministry of Commerce, or their authorized local counterparts, which retain considerable discretion in granting approvals.

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On July 13, 2006, the MIIT issued the Circular on Strengthening the Administration of Foreign Investment in Value-added Telecommunications Services, which requires that (i) foreign investors can only operate a telecommunications business in mainland China through establishing a telecommunications enterprise with a valid telecommunications business operation license; (ii) domestic license holders are prohibited from leasing, transferring or selling telecommunications business operation licenses to foreign investors in any form, or providing any resource, sites or facilities to foreign investors to facilitate the unlicensed operation of telecommunications business in mainland China; and (iii) all value-added telecommunications services providers should improve network and information security, enact information safety administration regulations and set up emergency plans to ensure network and information safety. The provincial communications administration bureaus, as local authorities in charge of regulating telecommunications services, may revoke the value-added telecommunications business operation licenses of those who fail to comply with the above requirements or fail to rectify such noncompliance within specified time limits.

On April 8, 2024, the MIIT promulgated the Announcement on Conducting the Pilot Program for Expanding the Opening-up of Value-added Telecom Services, or the Announcement. According to the Announcement, the pilot program will be initially conducted in the Beijing Comprehensive Demonstration Zone for Expanding the Opening-up of the Service Industry, Lingang New Area and Leading Area for Socialist Modernization Construction of the Shanghai Free Trade Zone, Hainan Free Trade Port, and Shenzhen Demonstration Zone of Socialism with Chinese Characteristics. The Announcement further specifies that in the approved pilot areas, restrictions on foreign ownership ratio will be removed for internet data centers (IDC), content delivery networks (CDN), internet service providers (ISP), online data processing and transaction processing, as well as information distribution platforms and delivery services in information services (excluding internet news information, online publishing, online audiovisual, and internet cultural operations), and information protection and processing services. The MIIT will be responsible for organizing the valuation and validation of the pilot implementation plans and conditions in these four areas, and making decisions regarding their approval. In October 2024, the MIIT officially launched the Pilot Program for Expanding the Opening-up of Value-added Telecom Services, or the Pilot Program. Given the recent enactment of the Announcement, there remains uncertainty with respect to the interpretation and practical application; given the recent launch of the Pilot Program, there remains uncertainty with respect to the process, timeframe and result of the approval.

To comply with the above foreign investment restrictions, we rely on the contractual arrangements with the VIEs to operate our business in mainland China. However, there remains uncertainty with respect to the interpretation and application of existing or future laws and regulations of mainland China on foreign investment. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with mainland China's regulations relating to the relevant industries, or if the determinations, changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIEs that conduct our operations, our securities may decline in value or become worthless."

***Regulation Related to Online Transmission of Audio-Visual Programs*** 

The SAPPRFT (currently known as National Radio and Television Administration) and the MIIT jointly promulgated the Administrative Provisions on Internet Audio-Visual Program Service, or the Audio-Visual Program Provisions, on December 20, 2007, which were last amended on August 28, 2015. Under the Audio-Visual Program Provisions, "online audio-visual program services" is defined as activities of producing, redacting and integrating audio-visual programs, providing them to the general public via internet, and providing service for other people to upload and transmit audio-visual programs, and providers of online audio-visual program services are required to obtain a License for Online Transmission of Audio-Visual Programs issued by the SAPPRFT, or complete certain registration procedures with the SAPPRFT. In general, providers of online audio-visual program services must be either state-owned or state-controlled entities, and the business to be carried out by such providers must satisfy the overall planning and guidance catalog for internet audio-visual program service determined by the SAPPRFT.

On May 21, 2008, SAPPRFT issued a Notice on Relevant Issues Concerning Application and Approval of License for the Online Transmission of Audio-Visual Programs, as amended on August 28, 2015, which sets out detailed provisions concerning the application and approval process regarding the License for Online Transmission of Audio-Visual Programs. According to the above regulations, providers of internet audio-visual program services that engaged in such services prior to the promulgation of the Audio-Visual Program Provisions are eligible to apply for the license so long as those providers did not violate the laws and regulations in the past or their violation of the laws and regulations is minor in scope and can be rectified in a timely manner and they have no records of violation during the last three months prior to the promulgation of the Audio-Visual Program Provisions.

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On March 30, 2009, SAPPRFT promulgated the Notice on Strengthening the Administration of the Content of Internet Audio-Visual Programs, which reiterates the pre-approval requirements for the audio-visual programs transmitted via the internet, including through mobile networks, where applicable, and prohibits certain types of internet audio-visual programs containing violence, pornography, gambling, terrorism, superstition or other similarly prohibited elements.

On March 10, 2017, SAPPRFT issued the Provisional Implementation of the Tentative Categories of Internet Audio-Visual Program Services, which revised the previous version issued on March 17, 2010. According to the tentative categories, there are four categories of internet audio and video programs services which are further divided into seventeen sub-categories. The third sub-category to the second category covers the making and editing of certain specialized audio-visual programs concerning, among other things, educational content, and broadcasting such content to the general public online.

We currently do not hold a License for Online Transmission of Audio-Visual Programs. As of the date of this document, only wholly state-owned or state-controlled enterprises are eligible to apply for the License for Online Transmission of Audio-Visual Programs. We offer certain online courses on our platforms in live-streaming format and we also offer video recordings of live streaming courses and certain other audio-video contents on our online platforms to our learners. Due to the significant uncertainty regarding the scope of audio-visual program services, we may be required to obtain a License for Online Transmission of Audio-Visual Programs or to complete the required registration. However, we may not be able to obtain the License for Online Transmission of Audio-Visual Programs as we are not a wholly state-owned or state-controlled entity. If this were to occur, we may be subject to penalties, fines, legal sanctions or an order to suspend the provision of our relevant services. In addition, it remains uncertain whether the PRC governmental authorities would issue more explicit interpretation and rules or promulgate new laws and regulations. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry —We face uncertainties with respect to the development of regulatory requirements on operating licenses and permits for our education services in mainland China. Failure to obtain or renew requested licenses or permits in a timely manner or obtain newly required ones due to adverse changes in regulations or policies could have a material adverse impact on our business, financial condition and results of operations."

***Regulation Related to Internet Live Streaming Services*** 

On September 2, 2016, the SAPPRFT promulgated the Notice on Strengthening the Administration of Live Streaming Services of Internet Audio-Visual Program, which provides that any entity that intends to engage in live audio-visual broadcasting of major political, military, economic, social, cultural or sport events or activities, or live audio-visual broadcasting of general social or cultural group activities, general sporting events or other organizational events, must obtain a License for Online Transmission of Audio-Visual Programs with a permitted operation scope covering the above business activities. Any entity or individual without qualification is prohibited from broadcasting live audio-visual programs involving news, variety shows, sports, interviews, commentary or other forms of programs through any online live-streaming platform or online live broadcasting booth, nor are they permitted to start a live broadcasting channel for any audio-visual programs. In addition, any entity without such license shall not operate audio-visual live streaming business and the live streaming programs provided by the qualified company shall not contain any content forbidden by laws and regulations.

On November 4, 2016, the CAC promulgated the Provisions on the Administration of Internet Live Streaming Services, effective from December 1, 2016. Under these provisions, "internet live streaming service" is defined as the activities of continuously releasing real-time information to the public on internet in such forms as videos, audios, images and texts and the "internet live streaming service provider" is defined thereunder as an operator of the platform providing internet live streaming platform services. These provisions also provide that internet live streaming service providers shall examine and verify the identity information of internet live-streaming issuers and file the identity information of the issuers with local counterparts of the CAC.

On July 12, 2017, the CAC issued a Notice on Development of the Filing Work for Enterprises Providing Internet Live Streaming Services, which provides that all the companies providing internet live streaming services shall file with the local authority since July 15, 2017, otherwise the CAC or its local counterparts may impose administrative sanctions on such companies.

Pursuant to the Circular on Tightening the Administration of Internet Live-Streaming Services jointly issued by the MIIT, the Ministry of Culture and Tourism and several other government agencies on August 1, 2018, live streaming services providers are required to file with the local public security authority within 30 days after it commences the service online.

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After consulting with the local counterparts of the CAC, we were informed that currently institutions offering education services via online-streaming like us are not required to complete the above-mentioned filings in practice.

The CAC, the National Office of Anti-Pornography and Anti-Illegal, the MIIT, the Ministry of Public Security, the Ministry of Culture, the Ministry of Commerce, the SAMR and the National Radio and Television Administration jointly issued the Circular on the Guiding Opinions on Strengthening Standardized Management of Online Live Streaming on February 9, 2021, which further states that live streaming platforms which provide online audio-visual program services must obtain the Audio-Visual Permit (or complete the registration on the National Internet Audio-visual Platforms Information Management System and complete the ICP filing procedure.

***Regulation Related to Production and Distribution of Radio and Television Programs*** 

On July 19 2004, SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, which became effective on August 20, 2004 and were last amended on June 3, 2025. These administrative measures are applicable for establishing institutions that produce and distribute radio and television programs or for the production of radio and television programs like programs with a special topic, column programs, variety shows, animated cartoons, radio plays and television dramas and for activities like transactions and agency transactions of program copyrights. Pursuant to these administrative measures, any entity that intends to produce or operate radio or television programs must first obtain the Permit for Production and Operation of Radio and TV Programs from SAPPRFT or its local branches.

We currently hold a Permit for Production and Operation of Radio and TV Programs, which remains valid until October 14, 2027.

***Regulation Related to Internet Culture Activities***

On May 10, 2003, the Ministry of Culture (currently known as Ministry of Culture and Tourism), promulgated the Interim Administrative Provisions on Internet Culture, which were last amended on December 15, 2017. These provisions require internet information services providers engaging in commercial "internet culture activities" to obtain an Internet Culture Business Operating License from the Ministry of Culture. "Internet cultural activity" is defined under these provisions as an act of providing internet cultural products and related services.

On May 14, 2019, the General Office of Ministry of Culture promulgated the Notice on Adjusting the Scope of Internet Culture Business Operating License and Further Standardize the Approval Work, which requires that online music, online shows and plays, online performances, online works of art, online cartoons, displays and games are the activities that require an Internet Culture Business Operating License.

We currently hold an Internet Culture Business Operating License, which remains valid until October 28, 2028.

***Regulation Related to Online Publishing*** 

On February 4, 2016, the SAPPRFT (currently reformed into the State Administration of Press and Publication (National Copyright Bureau) under the Propaganda Department of the Central Committee of the Communist Party of China) and the MIIT jointly issued the Administrative Provisions on Online Publishing Services, which came into effect on March 10, 2016. Under these administrative provisions, any entity providing online publishing services shall obtain an Online Publishing Services Permit. "Online publishing services" refer to the provision of online publications to the public through information networks; and "online publications" refer to digital works with publishing features such as having been edited, produced or processed and are available to the public through information networks, including: (i) written works, pictures, maps, games, cartoons, audio/video reading materials and other original digital works containing useful knowledge or ideas in the field of literature, art, science or other fields; (ii) digital works of which the content is identical to that of any published book, newspaper, periodical, audio/video product, electronic publication or the like; (iii) network literature databases or other digital works, derived from any of the aforesaid works by selection, arrangement, collection or other means; and (iv) other types of digital works as may be determined by the SAPPRFT.

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We currently do not hold an Online Publishing Service Permit. As of the date of this annual report, there has been no explicit interpretation from the governmental authorities nor is there a prevailing enforcement practice that deems the provision of our educational content to our students through our online platform as "online publishing," which would require an Online Publishing Service Permit. Nevertheless, it remains unclear whether the local PRC authorities would adopt a different practice. In addition, it remains uncertain whether the PRC governmental authorities would issue more explicit interpretation and rules or promulgate new laws and regulations. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We face uncertainties with respect to the development of regulatory requirements on operating licenses and permits for our education services in mainland China. Failure to obtain or renew requested licenses or permits in a timely manner or obtain newly required ones due to adverse changes in regulations or policies could have a material adverse impact on our business, financial condition and results of operations."

***Regulation Related to Cybersecurity, Data Security, and Personal Information Protection*** 

Pursuant to the PRC Cyber Security Law issued by the Standing Committee of the National People's Congress on November 7, 2016, effective as of June 1, 2017, "personal information" refers to all kinds of information recorded by electronic or otherwise that can be used to independently identify or be combined with other information to identify individuals' personal information including but not limited to: individuals' names, dates of birth, ID numbers, biologically identified personal information, addresses and telephone numbers, etc. The Cyber Security Law also provides that network operators shall meet their cyber security obligations and shall take technical measures and other necessary measures to protect the safety and stability of their networks. Under the PRC Cybersecurity Law, network operators are subject to various security protection-related obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internet systems; (ii) network operators shall verify users' identities before signing agreements or providing certain services such as information publishing or real-time communication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of the information collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictly preserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; and (v) network operators shall strengthen management of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, they shall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading, saving relevant records, and reporting to the governmental agencies. In addition, the PRC Cyber Security Law requires that critical information infrastructures operators generally shall store, within the territory of mainland China, the personal information and important data collected and produced during their operations in mainland China and their purchase of network products and services that affect or may affect national securities shall be subject to national cybersecurity review. On October 28, 2025, the Standing Committee of the National People's Congress adopted the Decision of the Standing Committee of the National People's Congress on Amending the PRC Cybersecurity Law. The revised RPC Cybersecurity Law came into force on January 1, 2026. The key amendments to the newly revised PRC Cybersecurity Law include: a material increase in the maximum number of fines for violations; the introduction of hierarchical and tiered penalties; the addition of new enforcement measures such as ordering the suspension or shutdown of applications; and the inclusion of regulatory requirements applicable to artificial intelligence for the first time. The revised RPC Cybersecurity Law also further refines provisions related to personal information protection and data security, and aligns with and complements the Personal Information Protection Law and the Data Security Law of the People's Republic of China.

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Pursuant to the Provisions on Internet Security Supervision and Inspection by Public Security Organs, which were 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 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. In particular, public security departments shall also carry out supervision and inspection on whether an internet service provider has taken required measures to manage information published by users, adopted proper measures to handle the published or transmitted information that is prohibited to be published or transmitted, and kept the relevant records.

In addition, the Office of the Central Cyberspace Affairs Commission, the MIIT, the Ministry of Public Security, and the SAMR jointly issued an Announcement of Launching Special Crackdown Against Illegal Collection and Use of Personal Information by Apps on January 23, 2019 to implement special rectification works against mobile Apps that collect and use personal information in violation of applicable laws and regulations, where business operators are prohibited from collecting personal information irrelevant to their services, or forcing users to give authorization in disguised manner. On November 28, 2019, the National Internet Information Office, the MIIT, the Ministry of Public Security and the SAMR further jointly issued a notice to classify and identify illegal collection and use of personal information.

On August 22, 2019, the Office of the Central Cyberspace Affairs Commission issued the Provisions on the Cyber Protection of Children's Personal Information, which took effect on October 1, 2019. The Provisions on the Cyber Protection of Children's Personal Information apply to the collection, storage, use, transfer and disclosure of the personal information of children under the age of 14 via the internet. The Provisions on the Cyber Protection of Children's Personal Information require that network operators shall establish special rules and user agreements for protection of personal information for children under the age of 14, inform their guardians in a noticeable and clear manner, and shall obtain the consent of their guardians. When obtaining the consent of their guardians, network operators shall explicitly disclose several matters, including, without limitation, the purpose, method and scope of collection, storage, use, transfer and disclosure of such personal information, and methods for correcting and deleting such personal information. Provisions on the Cyber Protection of Children's Personal Information also require that when collecting, storing, using, transferring and disclosing such personal information, network operators shall comply with certain regulatory requirements, including, without limitation, that network operators shall designate specific personnel to take charge of the protection of such personal information and shall strictly grant information access authorization for their staff to such personal information under the principle of minimal authorization.

Pursuant to the Notice on Promulgation of the Rules on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, which was promulgated by the CAC, the MIIT and certain other government authorities on March 12, 2021 and became effective on May 1, 2021, "necessary personal information" refers to the personal information necessary for ensuring the normal operation of an app's basic functional services, without which the app cannot achieve its basic functional services. For learning and education App, the basic functional services are "online tutoring, online classes, etc." and the necessary personal information is mobile phone numbers of registered users. Further, the SAMR promulgated the Measures for the Supervision and Administration of Online Transactions, which became effective from May 1, 2021. The measures require that online transaction operators shall not force customers, whether or not in a disguised manner, to consent to the collection and use of information not directly related to their business activities by means of one-off general authorization, default authorization, bundling with other authorizations, or the suspension of installation and use. Otherwise, such online transaction operator may be subject to fines and consequences under related laws and regulations, including without limitation suspension of business for rectification and revocation of permits and licenses.

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On June 10, 2021, the Standing Committee of the National People's Congress promulgated the Data Security Law, which became effective in September 2021. The Data Security Law provides for data security and privacy obligations on entities and individuals carrying out data activities and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, as well as the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, or illegally acquired or used. The appropriate level of protection measures is required to be taken for each respective category of data. For example, a processor of important data shall designate the personnel and the management body responsible for data security, carry out risk assessments for its data processing activities and file the risk assessment reports with the competent authorities. In addition, the Data Security Law provides a national security review procedure for those data activities which affect or may affect national security and imposes export restrictions on certain data and information.

On April 13, 2020, the CAC, the NDRC, and several other administrations jointly promulgated the Measures for Cybersecurity Review, which became effective on June 1, 2020. The Measures for Cybersecurity Review establish the basic framework for national security reviews of network products and services, and provide the principal provisions for undertaking cyber security reviews. In addition, on July 22, 2020, the Ministry of Public Security issued the Guiding Opinions on Implementing the Cyber Security Protection System and Critical Information Infrastructure Security Protection System to further improve the national cyber security prevention and control system. On December 28, 2021, the CAC, together with certain other PRC governmental authorities, jointly released the Revised Cybersecurity Review Measures, which took effect on February 15, 2022. Pursuant to the Revised Cybersecurity Review Measures, operators of critical information infrastructure that intend to purchase network products and services or online platform operators that are engaged in data processing activities that affect or may affect national security must apply for a cybersecurity review, and network platform operators that process personal information of more than one million users and seek to list abroad shall also apply for a cybersecurity review. The cybersecurity review will evaluate, among others, the risk of critical information infrastructure, core data, important data, or the risk of a large amount of personal information being influenced, controlled or maliciously used by foreign governments after going public, and cyber information security risk. The Revised Cybersecurity Review Measures set out certain general factors which would be the focus in assessing the national security risk during a cybersecurity review.

The Personal Information Protection Law took effect in November 2021. The Personal Information Protection Law sets forth detailed rules on processing personal information, clarifies the rights of the individuals and the obligations of the personal information processors, and further strengthens the liabilities for illegal process of personal information. In addition to other rules and principles of personal information processing, the Personal Information Protection Law specifically provides rules for processing sensitive personal information. Sensitive personal information refers to personal information that, once leaked or illegally used, could easily lead to the infringement of human dignity or harm to the personal or property safety of an individual, including biometric recognition, religious belief, specific identity, medical and health, financial account, personal whereabouts and other information of an individual, as well as any personal information of a minor under the age of 14. Only where there is a specific purpose and sufficient necessity, and under circumstances where strict protection measures are taken, may personal information processors process sensitive personal information. A personal information processor shall inform the individual of the necessity of processing such sensitive personal information and the impact thereof on the individual's rights and interests. Some information we collect, such as personal identity, location, mobile numbers and viewing histories, may be deemed to be sensitive personal information under the Personal Information Protection Law. The Personal Information Protection Law also strengthens the supervision of automatic decision making to protect the rights of individuals to obtain fair transaction terms and the supervision of mobile applications.

On January 4, 2022, the CAC published the Administrative Provisions on Internet Information Service Algorithm Recommendation on its website, which became effective on March 1, 2022 and raise certain new compliance requirements on internet information service providers using algorithm recommendation technology. Specifically, these administrative provisions require that such service providers shall provide users with options that are not specific to their personal characteristics, or provide users with convenient options to cancel algorithmic recommendation services.

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On November 25, 2022, the CAC and other authorities issued the Administrative Provisions on Deep Synthesis of Internet-based Information Services, effective from January 10, 2023. The rules define deep synthesis technologies—covering text, image, audio, video, and virtual scene generation and editing—and impose compliance obligations on service providers and technical supporters. Key requirements include implementing security management systems, user real-name authentication, enhanced content review, and rumor-refutation mechanisms. Service providers and technical supporters must ensure data security for training data. For biometric editing (e.g., facial or voice data), separate consent and security assessments for high-risk tools are required. The provisions also require implicit identifiers in all synthetic content without affecting user experience for traceability. In addition, where deep synthesis services risk causing public confusion or misunderstanding, service providers must add prominent identifiers at reasonable positions within the content to indicate its synthetic nature. Furthermore, service providers and technical supporters with public opinion or social mobilization capabilities must file algorithms with the CAC and undergo security assessments before launching new products or functions.

On July 10, 2023, the CAC and several other administrations jointly issued the Provisional Measures for the Administration of Generative Artificial Intelligence Services, effective from August 15, 2023. The Provisional Measures for the Administration of Generative Artificial Intelligence Services clarify the basic norms of generative artificial intelligence services from the aspects of content security, data security, personal information protection and service standards, among others. On March 7, 2025, the CAC and several other administrations jointly issued the Notice on Promulgation of the Measures for Labeling AI-Generated or Composed Content, effective from September 1, 2025, which provides that service providers shall add explicit identifiers (such as text prompts, corner marks, etc.) and implicit identifiers (such as file metadata, digital watermarks, etc.) to generated synthetic content including text, images, audio, and video. It also clarifies the subject responsibilities in the processes of content generation, transmission, and distribution.

On July 7, 2022, the CAC issued the Measures on Security Assessment of the Cross-border Transfer of Data, with effective from September 1, 2022. The measures provide that four types of cross-border transfers of critical data or personal data generated from or collected in the PRC should be subject to a security assessment, which include: (i) a data processor to transfer important data overseas; (ii) either a critical information infrastructure operator, or a data processor processing personal information of more than 1 million individuals, transfers personal information overseas; (iii) a data processor who has, since January 1 of the previous year, transferred personal information of more than 100,000 individuals overseas cumulatively, or transferred sensitive personal information of more than 10,000 individuals overseas cumulatively, transfers personal information overseas; or (iv) other circumstances under which security assessment of data cross-border transfer is required as prescribed by the national cyberspace administration.

On March 22, 2024, the CAC promulgated the Provisions on Promoting and Regulating Cross-border Data Flows, which became effective the same day. According to these provisions, when a data processor transfers personal information (excluding important data) abroad, it may be exempted from applying for a cross-border transfer security assessment, concluding a standard contract for personal information to be provided abroad, or passing a security certification for protection of personal information, if it satisfies any of the following conditions: (i) where it is necessary to provide personal information abroad for the purpose of concluding or performing a contract to which an individual concerned is a party, such as contract for cross-border shopping, cross-border delivery, cross-border remittance, cross-border payment, cross-border account opening, air ticket and hotel reservation, visa handling, examination services; (ii) where it is necessary to provide employees' personal information abroad for the purpose of conducting cross-border human resources management in accordance with the employment rules and regulations and collective contracts formulated in accordance with the law; (iii) where it is necessary to provide personal information abroad in an emergency to protect the life, health and property safety of a natural person; or (iv) where a data processor, other than a critical information infrastructure operator, provides abroad the personal information (excluding sensitive personal information) of not more than 100,000 persons accumulatively as of January 1 of the current year.

On September 24, 2024, the CAC published the Regulations on the Network Data Security which came into force as from January 1, 2025. The Regulations on the Network Data Security require that if a network data processor carries out network data processing activities that affects or may affect national security, it shall conduct a national security review in accordance with relevant state regulations, and emphasized special protection of important data. Important data refers to data in a specific field, a specific group, a specific region, or of a certain precision and scale, which, once tampered with, damaged, leaked, or illegally accessed or illegally utilized, may directly jeopardize national security, economic operation, social stability, public health and safety. In addition, the Regulations on the Network Data Security require that data processors that process "important data" must conduct an annual data security risk assessment, and submit the assessment report of the preceding year to the municipal cybersecurity department.

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As we provide information and services through our mobile apps and website, we are subject to these laws and regulations relating to protection of internet security and protection of privacy, and failure to comply with these laws and regulations could have a material adverse effect on us. For a detailed discussion, see "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry —Our business is subject to complex and evolving laws and regulations of mainland China regarding cybersecurity, information security, privacy and data protection. Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business."

***Regulation Related to Publishing and Publication Distribution***

The State Council promulgated the Administrative Regulations on Publication, or the Publication Regulations, which was most recently amended on December 6, 2024 and came into effect on January 20, 2025. The Publication Regulations apply to publication activities, i.e., the publishing, printing, reproducing, importation or distribution of publications, including books, newspapers, periodicals, audio-visual products and electronic publications, each of which requires approval from the relevant publication administrative authorities. According to the Publication Regulations, any entity engaging in the activities of publishing, printing, reproducing, importation or distribution of publications, shall obtain relevant permits of publishing, printing, reproducing, importation or distribution of publications.

Under the Administrative Provisions on the Publications Market, which were jointly promulgated by the SAPPRFT and the Ministry of Commerce on May 31, 2016, any enterprise or individual who engages in publication distribution activities shall obtain a Permit for Operating Publications from SAPPRFT or its local counterpart. "Publication" is defined as "books, newspapers, periodicals, audio-visual products, and electronic publications," and "distributing" is defined as "general distribution, wholesale, retail, rental, exhibition and other activities," respectively, under the administrative provisions. Without the requisite license, such entity or individual may be ordered to cease illegal acts by the competent administrative department of publication and be concurrently subject to fines. We currently hold various Permits for Operating Publications through the VIEs and their subsidiaries.

***Regulations on Tourism***

Tourism Law of the PRC, which was promulgated by the Standing Committee of the National People's Congress and last amended on October 26, 2018, provides that, among other things, (i) to engage in the businesses of outbound tourism, a travel agency shall obtain corresponding business permit, and the specific conditions shall be provided for by the State Council and (ii) when organizing an outbound touring group, or organizing or receiving an inbound touring group, a travel agency shall, in accordance with the applicable provisions, arrange for a tour leader or tour guide to accompany the touring group in the whole tour. Regulations on Travel Agencies, which were promulgated by the State Council and amended on November 29, 2020, and the implementation rules of Regulations on Travel Agencies provide that, among other things, travel agent shall mean any entity that engages in the business of attracting, organizing, and receiving tourists, providing tourism services for tourists and operating domestic, outbound or border tourism; the aforementioned business shall include but not limit to arranging for transport services, arranging for accommodation services, providing services for tour guides or team leaders, providing services of tourism consultation and tourism activities design. According to the Regulations on Travel Agencies and their implementation rules, any tourism agent that engages in the outbound tourism shall apply for a permit to engage in the outbound tourism from the administrative department of tourism under the State Council, the governments of provinces, autonomous regions or municipalities.

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***Regulation Related to Advertising*** 

All commercial advertising activities for direct or indirect introduction of products or services promoted by product business operators or service providers via a certain medium and in a certain form within the territory of mainland China are applied to PRC Advertising Law, which was promulgated by the Standing Committee of the National People's Congress on October 27, 1994 and was last amended on April 29, 2021. Pursuant to the PRC Advertising Law, advertisements must not contain, among other prohibited contents, terms such as "the state-level," "the highest grade," "the best" or other similar words. Particularly, an advertisement for education or training shall not contain any of the following items: (i) any promise relating to progression, passing examinations, or obtaining a degree or qualification certificate; (ii) any express or implied guaranteed promise relating to education or training results; or (iii) use of the names or images of research institutes, academic institutions, educational institutions, industry associations, professionals or beneficiaries for recommendation or as proof. Any data, statistics, research result, summary, quotation and other quoted information used in an advertisement shall be authentic and accurate, with the source indicated. If the quoted information is subject to a scope of application or a valid period, the scope of application or valid period shall be clearly indicated.

On February 25, 2023, the SAMR issued Administrative Measures for Internet Advertising, which became effective on May 1, 2023. According to these administrative measures, commercial advertising for direct or indirect marketing goods or services in the form of text, image, audio, video, or other means through websites, web pages, internet apps, or other internet media within the territory of mainland China is subject to the Advertising Law and these administrative measures. These administrative measures further set out requirements for internet advertising activities, including among others, (a) with regard to commodities or services ranked under competitive bidding, advertisement publishers shall mark conspicuously the word "advertisement" to distinguish them from the organic search results; (b) where an internet advertisement is published in the form of pop-up or otherwise, an advertiser and advertisement publisher shall clearly mark the closure sign to ensure the closure of the advertisement by one click; (c) where an internet advertisement is published by means of algorithmic recommendation or otherwise, the relevant rules of the algorithmic recommendation service and the record of advertisement placement shall be included in the advertisement archives; (d) an internet platform operator shall, in the process of providing internet information services, take measures to prevent and stop illegal advertisements; (e) without the consent or request of users, or with explicit refusal by users, it is not allowed to send internet advertisements to their vehicles, navigation equipment, intelligent home appliances, etc.; and (f) where the promotion of goods or services by online live streaming constitutes a commercial advertisement, a product seller or service provider shall bear the responsibilities and obligations of the advertiser in accordance with the laws. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Our advertising content may subject us to penalties and other administrative actions."

***Regulation Related to Intellectual Property Rights*** 

*Copyright and Software Registration*

The Copyright Law extends copyright protection to internet activities, products disseminated over the internet and software products. In addition, there is a voluntary registration system administered by the China Copyright Protection Center. To address the problem of copyright infringement related to the content posted or transmitted over the internet, the National Copyright Administration and the MIIT jointly promulgated the Measures for Administrative Protection of Copyright Related to Internet.

The Computer Software Protection Regulations are formulated for protecting the rights and interests of computer software copyright owners, encouraging the development and application of computer software and promoting the development of software business. In order to further implement the Computer Software Protection Regulations, the National Copyright Administration issued the Computer Software Copyright Registration Procedures, which apply to software copyright registration, license contract registration and transfer contract registration. See "Item 4. Information on the Company—B. Business Overview—Intellectual Property" for more details on the current situation of our software copyrights.

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*Patents*

Pursuant to the Patent Law, a patentable invention, utility model or design must meet three conditions, namely novelty, inventiveness and practical applicability. Patents cannot be granted for scientific discoveries, rules and methods for intellectual activities, methods used to diagnose or treat diseases, animal and plant breeds or substances obtained by means of nuclear transformation. The Patent Office under the State Intellectual Property Office is responsible for receiving, examining and approving patent applications. A patent is valid for a twenty-year term for an invention, a fifteen-year term for a design, and a ten-year term for a utility model, all starting from the application date. Except under certain specific circumstances provided by law, any third-party user must obtain consent or a proper license from the patent owner to use the patent, otherwise the use will constitute an infringement of the rights of the patent holder. See "Item 4. Information on the Company—B. Business Overview—Intellectual Property" for more details on the current situation of our patents.

*Trademark*

Trademarks are protected by the PRC Trademark Law as well as its implementation rules. The Trademark Office of National Intellectual Property Administration under the SAMR handles trademark registrations and grants a protection term of ten years to registered trademarks which may be renewed for consecutive ten-year periods upon request by the trademark owner. The PRC Trademark Law has adopted a "first-to-file" principle with respect to trademark registration. Where a trademark for which a registration has been made is identical or similar to another trademark which has already been registered or been subject to a preliminary examination and approval for use on the same kind of or similar commodities or services, the application for registration of such trademark may be rejected. Any person applying for the registration of a trademark may not prejudice the existing right first obtained by others, nor may any person register in advance a trademark that has already been used by another party and has already gained a "sufficient degree of reputation" through such party's use. See "Item 4. Information on the Company—B. Business Overview—Intellectual Property" for more details on the current situation of our trademarks.

*Domain Name*

According to the Administrative Measures on Internet Domain Names, any party that has domain name root servers, and the institution for operating domain name root servers, the domain name registry and the domain name registrar within the territory of mainland China, shall obtain a permit for this purpose from the MIIT or the communications administration of the local province, autonomous region or municipality directly under the Central Government. The registration of domain names is generally on a "first- apply-first-registration" basis and a domain name applicant will become the domain name holder upon the completion of the application procedure. See "Item 4. Information on the Company—B. Business Overview—Intellectual Property" for more details on the current situation of our domain names.

***Regulation Related to Employment, Social Insurance and Housing Fund*** 

*Employment* 

Pursuant to the PRC Labor Law and the PRC Labor Contract Law, a written labor contract shall be executed by an employer and an employee when the employment relationship is established, and an employer is under an obligation to sign an unlimited-term labor contract with any employee who has worked for the employer for ten consecutive years. Furthermore, if an employee requests or agrees to renew a fixed-term labor contract that has already been entered into twice consecutively, the resulting contract must have an unlimited term, with certain exceptions. The employer must also pay severance to an employee in nearly all instances where a labor contract, including a contract with an unlimited term, is terminated or expires. All employers must compensate their employees equal to at least the local minimum wage standards. All employers are required to establish a system for labor safety and sanitation, strictly abide by State rules and standards and provide employees with appropriate workplace safety training. In addition, the PRC government mandates that annual leave ranging from 5 to 15 days is available to nearly all employees and further require that the employer compensate an employee for any annual leave days the employee is unable to take in the amount of three times his daily salary, subject to certain exceptions. Moreover, all enterprises in mainland China are generally required to implement a standard working time system of eight hours a day and forty hours a week, and if the implementation of such standard working time system is not appropriate due to the nature of the job or the characteristics of business operation, the enterprise may implement a flexible working time system or comprehensive working time system after obtaining approvals from the authorities.

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*Social Insurance*

The Law on Social Insurance of the PRC has established social insurance systems of basic pension insurance, unemployment insurance, maternity insurance, work injury insurance and basic medical insurance, and has elaborated in detail the legal obligations and liabilities of employers who do not comply with laws and regulations on social insurance.

According to the Interim Regulations on the Collection and Payment of Social Insurance Premiums, the Regulations on Work Injury Insurance, the Regulations on Unemployment Insurance and the Trial Measures on Employee Maternity Insurance of Enterprises, enterprises in mainland China shall provide benefit plans for their employees, which include basic pension insurance, unemployment insurance, maternity insurance, work injury insurance and basic medical insurance. An enterprise must provide social insurance by going through social insurance registration with local social insurance authorities or agencies, and shall pay or withhold relevant social insurance premiums for or on behalf of employees. On July 20, 2018, the General Office of the State Council issued the Plan for Reforming the State and Local Tax Collection and Administration Systems, which stipulated that the State Administration of Taxation of the PRC becomes solely responsible for collecting social insurance premiums.

*Housing Provident Fund*

According to the Administrative Regulations on the Housing Provident Fund, housing provident fund paid and deposited both by employee themselves and their unit employer shall be owned by the employees.

A unit employer shall undertake registration of payment and deposit of the housing provident fund in the housing provident fund management center and, upon verification by the housing provident fund management center, open a housing provident fund account on behalf of its employees in a commissioned bank. Employers shall timely pay and deposit housing provident fund contributions in full amount and late or insufficient payments shall be prohibited. With respect to unit employers who violate the regulations hereinabove and fail to complete housing provident fund payment and deposit registrations or open housing provident fund accounts for their employees, such unit employers shall be ordered by the housing provident fund administration center to complete such procedures within a designated period. Those who fail to complete their registrations within the designated period shall be subject to a fine of between RMB10,000 and RMB50,000. When unit employers are in breach of these regulations and fail to pay deposit housing provident fund contributions in full amount as they fall due, the housing provident fund administration center shall order such unit employers to pay within a prescribed time limit, failing which an application may be made to a people's court for compulsory enforcement.

***Regulation Related to Foreign Exchange*** 

*Regulation on Foreign Currency Exchange* 

The principal regulations governing foreign currency exchange in mainland China are the PRC Foreign Exchange Administration Regulations. Under the Foreign Exchange Administration Regulations, Renminbi is generally freely convertible for payments of current account items, such as trade and service-related foreign exchange transactions and dividend payments, but not freely convertible for capital account items, such as direct investment, loan or investment in securities outside mainland China, unless prior approval of SAFE or its local counterparts has been obtained.

On February 13, 2015, SAFE promulgated the Notice on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies. After this notice became effective on June 1, 2015, instead of applying for approvals regarding foreign exchange registrations of foreign direct investment and overseas direct investment from SAFE, entities and individuals may apply for such foreign exchange registrations from qualified banks. The qualified banks, under the supervision of SAFE, may directly review the applications and conduct the registration.

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On March 30, 2015, SAFE promulgated the Circular on Reforming the Management Approach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise, or SAFE Circular 19. According to SAFE Circular 19, the foreign exchange capital of foreign-invested enterprises shall be subject to the Discretionary Foreign Exchange Settlement, which means that the foreign exchange capital in the capital account of a foreign-invested enterprise for which the rights and interests of monetary contribution have been confirmed by the local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) can be settled at the banks based on the actual operational needs of the foreign-invested enterprise. The proportion of Discretionary Foreign Exchange Settlement of the foreign exchange capital of a foreign-invested enterprise is temporarily set at 100%. The Renminbi converted from the foreign exchange capital will be kept in a designated account and if a foreign-invested enterprise needs to make further payment from such account, it still needs to provide supporting documents and proceed with the review process with the banks. Furthermore, SAFE Circular 19 stipulates that the use of capital by foreign-invested enterprises shall follow the principles of authenticity and self-use within the business scope of enterprises. The capital of a foreign-invested enterprise and capital in Renminbi obtained by the foreign-invested enterprise from foreign exchange settlement shall not be used for the following purposes: (i) directly or indirectly used for payments beyond the business scope of the enterprises or payments as prohibited by laws and regulations; (ii) directly or indirectly used for investment in securities unless otherwise provided by the laws and regulations; (iii) directly or indirectly used for granting entrust loans in Renminbi (unless permitted by the scope of business), repaying inter-enterprise borrowings (including advances by the third-party) or repaying the bank loans in Renminbi that have been sub-lent to third parties; or (iv) directly or indirectly used for expenses related to the purchase of real estate that is not for self-use (except for the foreign-invested real estate enterprises). Subsequently, pursuant to the Notice on Deepening the Reform of Foreign Exchange Management for cross-border Investment and financing, or the SAFE Circular 43 promulgated by SAFE on September 12, 2025, the restriction set out in item (iv) above regarding the use of settled RMB funds to purchase real estate not for self-use purposes has been removed.

On June 9, 2016, SAFE promulgated the Circular on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or SAFE Circular 16. Pursuant to SAFE Circular 16, enterprises registered in mainland China may also convert their foreign debts from foreign currency to Renminbi on a self- discretionary basis. SAFE Circular 16 provides a unified standard for the conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis which applies to all enterprises registered in mainland China. SAFE Circular 16 also reiterates the principle that Renminbi converted from foreign currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by laws of mainland China, while such converted Renminbi shall not be provided as loans to its non-affiliated entities.

On January 26, 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (ii) domestic entities shall hold income to account for previous years' losses before remitting the profits. Moreover, pursuant to this circular, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions, contracts and other proof when completing the registration procedures in connection with an outbound investment.

On October 23, 2019, SAFE promulgated the Notice for Further Advancing the Facilitation of Cross-border Trade and Investment, or SAFE Circular 28, which, among other things, allows all foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments in mainland China, as long as the equity investment is genuine, does not violate applicable laws, and complies with the negative list on foreign investment. On December 31, 2020, the People's Bank of China, SAFE and other government authorities jointly issued the Circular on Further Optimizing Cross-border Renminbi Policies to Support the Stabilization of Foreign Trade and Foreign Investment, or Circular 330, which, among other things, reiterates the above provisions in SAFE Circular 28. However, there remains uncertainty about how SAFE and other government authorities as well as competent banks will carry out SAFE Circular 28 and Circular 330 in practice.

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*Regulation on Foreign Debt*

A loan made by a foreign entity as direct or indirect shareholder in a foreign-invested enterprise is considered to be foreign debt in mainland China and is regulated by various laws and regulations, including the Regulation of the People's Republic of China on Foreign Exchange Administration, the Interim Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions, the Detailed Rules for the Implementation of Provisional Regulations on Statistics and Supervision of External Debt, and the Administrative Measures for Registration of Foreign Debts. Under these rules and regulations, a shareholder loan in the form of foreign debt made to a mainland China entity does not require the prior approval of SAFE. However, such foreign debt must be registered with and recorded by SAFE or its local branches within 15 business days after entering into the foreign debt contract. Pursuant to these rules and regulations, the aggregate of (i) the outstanding balance of foreign debts with a term not longer than one year and (ii) the accumulated amount of foreign debts with a term longer than one year of a foreign-invested enterprise shall not exceed the difference between its registered total investment and its registered capital.

On January 12, 2017, the People's Bank of China promulgated the Notice of the People's Bank of China on Full-coverage Macro-prudent Management of Cross-border Financing, or Circular 9, which sets forth an upper limit for mainland China entities, including foreign-invested enterprises and domestic-invested enterprises, regarding their foreign debts. Pursuant to Circular 9, the limit of foreign debts for enterprises shall be calculated based on the following formula: the limit of foreign debt = net assets × cross-border financing leverage ratio × macro-prudent regulation parameter. "Net assets" is calculated as the net assets value stated in the relevant entity's latest audited financial statement. The cross-border financing leverage ratio for enterprises is two. The macro-prudent regulation parameter is one. Circular 9 does not supersede the Interim Provisions on the Management of Foreign Debts, but rather serves as a supplement to it. Circular 9 provided for a one-year transitional period from its promulgation date for foreign-invested enterprises, during which period foreign-invested enterprise could choose to calculate their maximum amount of foreign debt based on either the method of calculation described in the preceding paragraph or the method of calculation described in this one. After the transition period, the maximum amount applicable to foreign-invested enterprises is to be determined by the People's Bank of China and SAFE separately. However, although the one-year transitional period ended on January 10, 2018, as of the date of this annual report, neither the People's Bank of China nor SAFE has issued any new regulations regarding the appropriate means of calculating the maximum amount of foreign debt for foreign-invested enterprises. Domestic-invested enterprises have only been subject to the limit based on net assets described in this paragraph in calculating the maximum amount of foreign debt they may hold from the date of promulgation of Circular 9. In addition, according to Circular 9, a foreign loan must be filed with SAFE through the online filing system of SAFE after the loan agreement is signed and at least three business days prior to the borrower withdraws any amount from such foreign loan. According to an announcement promulgated by the PBOC and the SAFE on July 20, 2023, the macro-prudent regulation parameter is raised to 1.5.

We may not be able to obtain these government approvals or complete such registrations on a timely basis, or at all, with respect to future foreign loans provided by us to our mainland China subsidiaries. See "Item 3. Key Information—D. 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 making loans to or make additional capital contributions to our mainland China subsidiaries and VIEs, which could materially and adversely affect our liquidity and our ability to fund and expand our business."

*Regulation on Foreign Exchange Registration of Overseas Investment by Domestic Residents*

SAFE issued SAFE Circular 37 in July 2014. SAFE Circular 37 regulates foreign exchange matters in relation to the use of special purpose vehicles by domestic residents or entities to seek offshore investment and financing or conduct round trip investment in mainland China. Under SAFE Circular 37, a special purpose vehicle refers to an offshore entity established or controlled, directly or indirectly, by domestic residents (including individuals and entities) for the purpose of seeking offshore financing or making offshore investment, using legitimate onshore or offshore assets or interests, while "round trip investment" refers to direct investment in mainland China by domestic residents through special purpose vehicles, namely, establishing foreign-invested enterprises to obtain the ownership, control rights and management rights. SAFE Circular 37 provides that, before making contribution into a special purpose vehicle, domestic residents are required to complete foreign exchange registration with SAFE or its local branch. SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment in February 2015. This notice has amended SAFE Circular 37 requiring domestic residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.

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Domestic residents who had contributed legitimate onshore or offshore interests or assets to special purpose vehicles but had not obtained registration as required before the implementation of SAFE Circular 37 must register their ownership interests or control in the special purpose vehicles with qualified banks. An amendment to the registration is required if there is a material change with respect to the special purpose vehicle registered, such as any change of basic information (including change of the domestic residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, and mergers or divisions. Failure to comply with the registration procedures set forth in SAFE Circular 37 and the subsequent notice, or making misrepresentation on or failure to disclose controllers of the foreign-invested enterprise that is established through round-trip investment, may result in restrictions being imposed on the foreign exchange activities of the relevant foreign-invested enterprise, including payment of dividends and other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may also subject relevant domestic residents or entities to penalties under the foreign exchange administration regulations of mainland China.

We cannot assure you that all shareholders or beneficial owners of ours who are domestic residents or entities, including the beneficiaries of the trust schemes directly or indirectly holding interests in our Cayman Islands holding company, have complied with, and will in the future make, obtain or update any applicable registrations or approvals required by, SAFE regulations. See "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Mainland China's regulations relating to the establishment of offshore special purpose companies by domestic residents may subject our domestic resident beneficial owners or our mainland China subsidiaries to liability or penalties, limit our ability to inject capital into our mainland China subsidiaries, limit our mainland China subsidiaries' ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us."

*Regulation Related to Stock Incentive Plans*

SAFE promulgated the Circular of the State Administration of Foreign Exchange on Issues concerning the Administration of Foreign Exchange Used for Domestic Individuals' Participation in Equity Incentive Plans of Companies Listed Overseas in February 2012. Under this circular and other applicable rules and regulations, domestic residents who participate in stock incentive plan in an overseas publicly-listed company are required to register with SAFE or its local branches and complete certain other procedures. Participants of a stock incentive plan who are domestic residents must retain a qualified domestic agent, which could be a mainland China subsidiary of the overseas publicly listed company or another qualified institution selected by the mainland China subsidiary, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf of the participants. In addition, the domestic agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the domestic agent or other material changes. The domestic agent must, on behalf of the domestic residents who have the right to exercise the employee share options, apply to SAFE or its local branches for an annual quota for the payment of foreign currencies in connection with the domestic residents' exercise of the employee share options. The foreign exchange proceeds received by the domestic residents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas listed companies must be remitted into the bank accounts in mainland China opened by the domestic agents before distribution to such domestic residents.

In addition, the State Administration of Taxation has issued certain circulars concerning employee share options or restricted shares. Under these circulars, the employees working in mainland China who exercise share options or are granted restricted shares will be subject to PRC individual income tax. The mainland China subsidiaries of such overseas listed company have obligations to file documents related to employee share options or restricted shares with tax authorities and to withhold individual income taxes of those employees who exercise their share options. If the employees fail to pay or the mainland China subsidiaries fail to withhold their income taxes according to laws and regulations, the mainland China subsidiaries may face sanctions imposed by the tax authorities or other PRC government authorities.

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***Regulation Related to Taxation*** 

*Enterprise Income Tax*

On March 16, 2007, the National People's Congress enacted the Enterprise Income Tax Law, which came into effect on January 1, 2008 and was last amended on December 29, 2018. On December 6, 2007, the State Council promulgated the Implementing Rules of the Enterprise Income Tax Law, which came into effect on January 1, 2008 and was latest amended on December 6, 2024 and came into effect on January 20, 2025. The Enterprise Income Tax Law imposes a uniform 25% enterprise income tax rate to both foreign-invested enterprises and domestic enterprises, except where tax incentives are granted to special industries and projects. Enterprises qualifying as "High and New Technology Enterprises" are entitled to a 15% enterprise income tax rate rather than the 25% uniform statutory tax rate. The preferential tax treatment continues as long as an enterprise can retain its "High and New Technology Enterprise" status.

According to the Circular on Several Policies for Further Encouraging the Development of Software Industry and Integrated Circuit Industry promulgated by the State Council in January 2011, the Circular on Policies of Enterprises Income Tax for Further Encouraging the Development of Software Industry and Integrated Circuit Industry jointly promulgated by the Ministry of Finance and the State Administration of Taxation in April 2012, and the Circular on the Enterprise Income Tax Policies for Promoting the High-quality Development of the Integrated Circuit Industry and the Software Industry jointly promulgated by the Ministry of Finance, the State Taxation Administration, the NDRC and the MIIT in November 2020, an enterprise that qualifies as a "software enterprise" established after January 1, 2011, or a software enterprise, is exempt from enterprise income tax for two years beginning in the enterprise's first profitable year followed by a tax rate of 12.5% for the succeeding three years. In December 2020, the Ministry of Finance, the State Administration of Taxation, the NDRC, and the MIIT jointly issued a circular which repealed the original preferential tax treatment applicable to certain "key software enterprise." Such circular provides that the enterprise income tax of certain "key software enterprise" would be waived for five years since its first year of making profit and it may benefit from a preferential tax rate of 10% for the following years.

Under the PRC Enterprise Income Tax Law and its implementing rules, an enterprise established outside mainland China with its "de facto management body" located in mainland China is considered a "resident enterprise," which means it can be treated as domestic enterprise for enterprise income tax purposes. A non-resident enterprise that does not have an establishment or place of business in mainland China, or has an establishment or place of business in mainland China but the income of which has no actual relationship with such establishment or place of business, shall pay enterprise income tax on its income deriving from inside mainland China at the reduced rate of enterprise income tax of 10%. Dividends generated after January 1, 2008 and payable by a foreign-invested enterprise in mainland China to its foreign enterprise investors are subject to a 10% withholding tax, unless any such foreign investor's jurisdiction of incorporation has a tax treaty with mainland China that provides for a preferential withholding arrangement.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a mainland China enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the mainland China enterprise. Pursuant to the Notice of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, a Hong Kong resident enterprise must meet the following conditions, among others, in order to apply the reduced withholding tax rate: (i) it must be a company; (ii) it must directly own the required percentage of equity interests and voting rights in the domestic resident enterprise of mainland China; and (iii) it must have directly owned such required percentage in the domestic resident enterprise of mainland China throughout the 12 months prior to receiving the dividends.

On February 3, 2015, the State Administration of Taxation issued the Announcement of the State Administration of Taxation on Several Issues Concerning the Enterprise Income Tax on Indirect Property Transfer by Non-resident Enterprises, or Bulletin *7.* Pursuant to the Bulletin 7*,* where a non-resident enterprise indirectly transfers properties such as equity in domestic resident enterprises without any justifiable business purposes and aims to avoid the payment of enterprise income tax, such indirect transfer must be reclassified as a direct transfer of equity in domestic resident enterprise. To assess whether an indirect transfer of taxable properties in mainland China has reasonable commercial purposes, all arrangements related to the indirect transfer must be considered comprehensively and factors set forth in Bulletin 7 must be comprehensively analyzed in light of the actual circumstances. In addition, Bulletin 7 has introduced safe harbors for internal group restructurings and the purchase and sale of equity securities through a public securities market.

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On October 17, 2017, the State Administration of Taxation issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, which further clarifies the practice and procedure of the withholding of non-resident enterprise income tax.

*Value-Added Tax*

Pursuant to the Provisional Regulations on PRC Value-Added Tax and its implementation regulations, unless otherwise specified by laws and regulations, any entity or individual engaged in the sales of goods, provision of processing, repairs and replacement services and importation of goods into mainland China is generally required to pay a value-added tax, or VAT, for revenues generated from sales of products, while qualified input VAT paid on taxable purchase can be offset against such output VAT. The Standing Committee of the National People's Congress published the Value-Added Tax Law of the PRC on December 25, 2024, which came into effect on January 1, 2026 and replace the Interim Regulations on Value-Added Tax of the PRC. While the Value-Added Tax Law of the PRC mainly preserves the fundamental structure of the current VAT regulations and maintains current tax rates of 13%, 9%, 6% and 0%, it further clarifies the scope of taxable services, and narrows the scope of situations deemed as taxable transactions. It also integrates non-taxable items and establishes VAT as an outside-the-price tax, with a unified 3% tax rate for simplified taxation.

In November 2011, the Ministry of Finance and the State Administration of Taxation promulgated the Pilot Plan for imposition of Value-Added Tax to Replace Business Tax. In March 2016, the Ministry of Finance and the State Administration of Taxation further promulgated the Notice on Fully Promoting the Pilot Plan for Replacing Business Tax by Value-Added Tax. Pursuant to the pilot plan and applicable notices, VAT is generally imposed in lieu of business tax in the modern service industries, including the value-added telecommunications services, on a nationwide basis. VAT of a rate of 6% applies to revenue derived from the provision of some modern services and VAT of a rate of 3% applies to small-scale taxpayer. A general VAT taxpayer is allowed to offset the qualified input VAT paid on taxable purchases against the output VAT chargeable on the modern services provided.

***Regulation Related to M&A and Overseas Listings***

On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the State Administration of Taxation, the State Administration for Industry and Commerce (currently known as the SAMR), the CSRC and SAFE jointly issued the M&A Rules, which became effective on September 8, 2006 and were amended on June 22, 2009. The M&A Rules, among other things, require that (i) mainland China entities or individuals obtain the approval of the Ministry of Commerce before they establish or control a special purpose vehicle overseas, provided that they intend to use the special purpose vehicle to acquire their equity interests in a mainland China company through a share swap for newly issued shares of the special purpose vehicle, and list their equity interests in the mainland China company overseas by listing the special purpose vehicle in an overseas market; (ii) the special purpose vehicle obtains the approval of the Ministry of Commerce before it acquires the equity interests held by the mainland China entities or mainland China individual in the mainland China company through a share swap; and (iii) the special purpose vehicle obtains CSRC approval before it lists overseas.

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The Anti-Monopoly Law promulgated by the Standing Committee of the National People's Congress on August 30, 2007 and amended on June 24, 2022 requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the Ministry of Commerce before they can be completed. In addition, on February 3, 2011, the General Office of the State Council promulgated a Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or Circular 6, which officially established a security review system for mergers and acquisitions of domestic enterprises by foreign investors. Further, on August 25, 2011, the Ministry of Commerce promulgated the Security Review Regulations to implement Circular 6. Under Circular 6, a security review is required for mergers and acquisitions by foreign investors having "national defense and security" concerns and mergers and acquisitions by which foreign investors may acquire the "de facto control" of domestic enterprises with "national security" concerns. Under these regulations, the Ministry of Commerce will focus on the substance and actual impact of the transaction when deciding whether a specific merger or acquisition is subject to security review. If the Ministry of Commerce decides that a specific merger or acquisition is subject to security review, it will submit it to the Inter-Ministerial Panel, an authority established under Circular 6 led by the NDRC, and the Ministry of Commerce under the leadership of the State Council, to carry out the security review. The regulations prohibit foreign investors from bypassing the security review by structuring transactions through trusts, indirect investments, leases, loans, control through contractual arrangements or offshore transactions. On March 10, 2023, the SAMR promulgated the Provisions on the Review of Concentrations of Undertakings, the Provisions on Prohibition of Monopoly Agreements and the Provisions on Prohibition of Abuse of Market Dominance, effective from April 15, 2023, to further implement the Anti-Monopoly Law. The Provisions on Prohibition of Monopoly Agreements were last amended on December 9, 2025, and became effective on February 1, 2026. See "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The M&A Rules and certain other regulations of mainland China 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."

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of regulatory systems will be taken to deal with the risks and incidents of China-based overseas listed companies, and cybersecurity and data privacy protection requirements and etc.

On February 17, 2023, with the approval of the State Council, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Measures, (i) where an issuer, which is a domestic company or an overseas company determined as indirect overseas offering and listing of a domestic company, seeks for follow-on offering of securities in the same overseas market after its initial public offering, the issuer shall submit filings with the CSRC within three business days after the completion of such follow-on offering; (ii) where an issuer seeks for offering and listing of securities in other overseas market after its initial public offering, the issuer shall submit filings with the CSRC within three business days after such application is submitted; (iii) if the overseas offering and listing of the issuer is considered as indirect overseas offering and listing of a domestic company, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC; (iv) if the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (a) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer's audited consolidated financial statements for the same period; (b) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; (v) the issuer shall report relevant information to the CSRC within three business days after the occurrence and announcement of the following events: (a) change in control of the issuer; (b) the issuer is subject to investigation, sanction and other measures imposed by the overseas securities regulatory authorities or the relevant authorities; (c) the issuer changes its listing status or the listing board; (d) the issuer terminates the listing voluntarily or compulsorily; (vi) the issuer shall report relevant information to the CSRC within three business days after any significant change in the main business operation of the issuer, if such change in business operation makes the issuer no longer need to comply with the filing requirements.

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On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that prior to the effectiveness of the Trial Measures, domestic companies that have already completed the overseas offering and listing are not required to complete the filing procedure at the current stage, but shall complete the filing procedure upon the occurrence of certain matters, such as follow-on offering of securities, as required in the Trial Measures.

As a supplement to the Trial Measures, the CSRC, the Ministry of Finance, the National Administration of State Secrets Protection and the National Archives Administration have jointly issued the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies on February 24, 2023, which came into effect on March 31, 2023. These provisions require that any domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide any documents and materials containing state secrets or working secrets of governmental agencies to any individuals or entities including securities companies, securities service providers and overseas regulators, shall first obtain approval from competent governmental authorities in mainland China, and shall file with the secrecy administrative department at the same level.

***Regulation Related to Anti Long-Arm Jurisdiction*** 

The Ministry of Commerce issued Provisions on the List of Unreliable Entities on September 19, 2020. Pursuant to these provisions, the working mechanism shall, according to the investigation results and by taking the following factors into comprehensive consideration, decide whether or not to include a foreign entity concerned in the list of unreliable entities, and make an announcement on such inclusion: (i) the extent of damage caused to China's sovereignty, security and development interests; (ii) the extent of the damage to the legitimate rights and interests of Chinese enterprises, other organizations or individuals; (iii) whether or not the international economic and trade rules are followed; and (iv) other factors that shall be taken into consideration. If a foreign entity is included in the list of unreliable entities, the working mechanism may decide to take one or more of the following measures: (i) restricting or prohibiting the foreign entity from engaging in import or export activities related to mainland China; (ii) restricting or prohibiting the foreign entity's investment within the territory of mainland China; (iii) restricting or prohibiting the entry of the foreign entity's relevant personnel or transport vehicles into the territory of mainland China; (iv) restricting or cancelling the work permit, stay or residence qualification of the foreign entity's relevant personnel in mainland China; (v) imposing a fine corresponding to the seriousness of the case against the foreign entity; and (vi) other necessary measures.

On January 9, 2021, the Ministry of Commerce promulgated the Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures. Pursuant to these rules, where a citizen, legal person or other organization of mainland China is prohibited or restricted by foreign legislation and other measures from engaging in normal economic, trade and related activities with a third State (or region) or its citizens, legal persons or other organizations, he/she/it shall truthfully report such matters to the competent department of commerce of the State Council within 30 days. The working mechanism takes the following factors into overall account when assessing whether there exists unjustified extra-territorial application of foreign legislation and other measures: (i) whether international law or the basic principles of international relations are violated; (ii) potential impact on China's national sovereignty, security and development interests; (iii) potential impact on the legitimate rights and interests of the citizens, legal persons or other organizations of mainland China; and (iv) other factors that shall be taken into account. If the working mechanism determine that there exists unjustified extra-territorial application of foreign legislation and other measures, the Ministry of Commerce may issue an injunction that the foreign legislation and other measures shall not be accepted, executed, or observed. A citizen, legal person or other organization in mainland China may apply for exemption from compliance with an injunction.

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**C. Organizational Structure**

The following diagram illustrates our corporate structure, including our principal subsidiaries, the VIEs and their principal subsidiaries, as of the date of this annual report:

![img107030679_2.jpg](img107030679_2.jpg)

![img107030679_3.jpg](img107030679_3.jpg)

Notes:

(1)Shareholders of Beijing Gaotu and their respective shareholdings in Beijing Gaotu and relationship with our company are Larry Xiangdong Chen (98.28%), chairman of our board of directors and our chief executive officer, and Bin Luo (1.72%), our employee.

(2)Shareholders of Shanghai Duwen and their respective shareholdings in Shanghai Duwen and relationship with our company are Guo Shuai (70%) and Huang Ruonan (30%), both are our consultants.

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**Contractual Arrangements with the VIEs and Their Shareholders**

Current laws and regulations of mainland China impose certain restrictions or prohibitions on foreign ownership of companies that engage in value-added telecommunication services and certain other businesses. We are an exempted company with limited liability incorporated in the Cayman Islands. The WFOEs are our mainland China subsidiaries and foreign-invested enterprises under the laws of mainland China. To comply with the laws and regulations of mainland China, we primarily conduct our business in mainland China through the VIEs and their subsidiaries based on a series of contractual arrangements by and among (i) the WFOEs, Beijing Gaotu and its shareholders and (ii) Beijing Lexuebang, Shanghai Duwen and its shareholders. On January 26, 2021, the WFOEs entered into a supplementary agreement with the Beijing Gaotu and its shareholders. Pursuant to the supplementary agreement, each of Wuhan Yuexuebang and Beijing Yuexuebang became a party to the original agreements, enjoyed the same rights of Beijing Lexuebang under the original agreements and jointly assume the obligations of Beijing Lexuebang thereunder. On November 30, 2024, the WFOEs entered into a Supplementary Agreement to the Exclusive Management Services and Business Cooperation Agreement with the Beijing Gaotu and its shareholders. Pursuant to the Supplementary Agreement, certain significant subsidiaries are included in the list of the subsidiaries of Beijing Gaotu attached as Appendix II of the Exclusive Management Services and Business Cooperation Agreement.

On May 1, 2025, Beijing Lexuebang entered into a series of contractual arrangements with Shanghai Duwen and its shareholders, Guo Shuai and Huang Ruonan, including an Exclusive Call Option Agreement, an Exclusive Management Services and Business Cooperation Agreement, an Equity Interest Pledge Agreement and Powers of Attorney. In connection with such contractual arrangements, the spouse of Guo Shuai executed a spousal consent letter.

Our contractual arrangements with the VIEs and their shareholders: (i) effectively assigned all of the voting rights underlying the nominee shareholders' equity interest in the VIEs to us, (ii) enable us to receive substantially all of the economic benefits of the VIEs, and (iii) allow us to have an exclusive call option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by the laws of mainland China.

As a result of our direct ownership in our WFOEs and the contractual arrangements with the VIEs, we are regarded as the primary beneficiary of the VIEs, and we treat the VIEs and their subsidiaries as our consolidated entities under U.S. GAAP. We have consolidated the financial results of the VIEs and their subsidiaries in our consolidated financial statements in accordance with U.S. GAAP.

The following is a summary of the currently effective contractual arrangements by and among our WFOEs, Beijing Gaotu and its shareholders.

***Agreements that effectively assigned all of the voting rights underlying the nominee shareholders' equity interest in Beijing Gaotu to us*** 

***Powers of Attorney***. Pursuant to the powers of attorney executed by Beijing Gaotu's shareholders, each of them irrevocably authorized the WFOEs or its designee(s) to act on their respective behalf as exclusive agent and attorney, to the extent permitted by law, with respect to all rights of shareholders concerning all the equity interest held by each of them in Beijing Gaotu, including but not limited to proposing to convene or attend shareholder meetings, signing the resolutions and minutes of such meetings, exercising all the rights as shareholders (including but not limited to voting rights, nomination rights, appointment rights, the right to receive dividends and the right to sell, transfer, pledge or dispose of all the equity held in part or in whole).

***Equity Interest Pledge Agreement***. Under the equity interest pledge agreement among the WFOEs, Beijing Gaotu and its shareholders, Beijing Gaotu's shareholders pledged all of their equity interests of Beijing Gaotu to the WFOEs as security for performance of the obligations of Beijing Gaotu and its shareholders under the exclusive call option agreement, the exclusive management services and business cooperation agreement and the powers of attorney. If any of the specified events of default occurs, the WFOEs may exercise the right to enforce the pledge immediately. The WFOEs may transfer all or any of its rights and obligations under the equity interest pledge agreement to its designee(s) at any time. The agreement will remain in effect until the fulfillment of all the obligations under the exclusive call option agreement, the exclusive management services and business cooperation agreement and the powers of attorney.

We have registered the equity interest pledge under the equity interest pledge agreement in relation to Beijing Gaotu with the relevant office of the SAMR in accordance with the PRC Civil Code.

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***Agreements that allow us to receive economic benefits from Beijing Gaotu***

***Exclusive Management Services and Business Cooperation Agreement***. Pursuant to the exclusive management services and business cooperation agreement among the WFOEs, Beijing Gaotu and its shareholders, the WFOEs has the exclusive right to provide or designate any third-party to provide, among other things, education management consultancy services, permission of intellectual property rights, technological support and business support to Beijing Gaotu and its subsidiaries. In exchange, Beijing Gaotu and its subsidiaries pay service fees to the WFOEs in an amount determined by the WFOEs in its sole discretion. Without the prior written consent of the WFOEs, Beijing Gaotu and its subsidiaries cannot accept services provided by or establish similar cooperation relationship with any third-party. The WFOEs owns the exclusive intellectual property rights created as a result of the performance of this agreement unless otherwise provided by the laws or regulations of mainland China. The agreement will remain effective unless unanimously agreed by the parties concerned or unilaterally terminated by the WFOEs with a written notice. Unless otherwise required by applicable laws of mainland China, Beijing Gaotu and its shareholders do not have any right to terminate the agreement.

***Agreements that provide us with the call option to purchase the equity interests in Beijing Gaotu***

***Exclusive Call Option Agreement***. Under the exclusive call option agreement among the WFOEs, Beijing Gaotu and its shareholders, each of the shareholders of Beijing Gaotu irrevocably granted the WFOEs a right to purchase, or designate a third-party to purchase, all or any part of their equity interests in Beijing Gaotu at a purchase price equal to the lowest price permissible by the then-applicable laws and regulations of mainland China at WFOEs' sole and absolute discretion to the extent permitted by the laws of mainland China. The shareholders of Beijing Gaotu shall promptly give all considerations they received from the exercise of the options to the WFOEs or its designee(s). Beijing Gaotu and its shareholders covenant that, without the WFOEs' prior written consent, they will not, among other things, (i) create any pledge or encumbrance on their equity interests in Beijing Gaotu; (ii) transfer or otherwise dispose of their equity interests in Beijing Gaotu; (iii) change Beijing Gaotu's registered capital; (iv) amend Beijing Gaotu's articles of association; (v) sell, transfer, license or otherwise dispose of any of Beijing Gaotu's assets or allow any encumbrance of any assets, except for the disposal or the encumbrances of the assets that are treated as necessary for their daily business operations with the value of the assets involved in a single transaction not exceeding RMB100,000; (vi) cause Beijing Gaotu to enter into any major contracts or terminate any material contracts to which Beijing Gaotu is a party; (vii) declare or distribute dividends; (viii) terminate, liquidate or dissolve Beijing Gaotu; or (ix) allow Beijing Gaotu to incur, inherit, guarantee or permit any debts, except for those payables incurred in the ordinary or usual course of business but not incurred by way of borrowing. The agreement will remain effective until terminated by the WFOEs at its discretion or the entire equity interests in Beijing Gaotu have been transferred to the WFOEs or its designee(s).

***Spousal Consent Letters***. Pursuant to the spousal consent letters executed by the spouses of certain shareholders of Beijing Gaotu, the signing spouses unconditionally and irrevocably agreed that the equity interest in Beijing Gaotu held by and registered in the name of their spouses be disposed of in accordance with the exclusive call option agreement, the exclusive management services and business cooperation agreement, the equity interest pledge agreement and the powers of attorney described above, and that their spouses may perform, amend or terminate such agreements without their additional consent. Additionally, the signing spouses agreed not to assert any rights over the equity interest in Beijing Gaotu held by their spouses. In addition, in the event that the signing spouses obtains any equity interest in Beijing Gaotu held by their spouses for any reason, they agree to be bound by and sign any legal documents substantially similar to the contractual arrangements described above, as may be amended from time to time.

Beijing Lexuebang, Shanghai Duwen and its shareholders have also entered into a series of contractual arrangements similar to the contractual arrangements described above. As of the date of this annual report, we have registered the equity interest pledge under the equity interest pledge agreement in relation to Shanghai Duwen with the relevant office of the SAMR in accordance with the PRC Civil Code.

In the opinion of Tian Yuan Law Firm, our PRC counsel:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the ownership structures of the VIEs and the WFOEs in mainland China are not in violation of applicable laws and regulations of mainland China currently in effect; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the contractual arrangements between the WFOEs, the VIEs and their shareholders governed by the laws of mainland China are valid, binding and enforceable, and will not result in any violation of applicable laws and regulations of mainland China currently in effect.

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However, our PRC counsel has also advised us that the interpretation and application of current and future laws and regulations of mainland China are subject to changes. Accordingly, the PRC regulatory authorities may take a view that is contrary to the opinion of our PRC counsel. It is uncertain whether any new laws or regulations of mainland China relating to variable interest entity structures will be adopted or if adopted, what they would provide. If we or the VIEs are found to be in violation of any existing or future laws or regulations of mainland China, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with mainland China's regulations relating to the relevant industries, or if the determinations, changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIEs that conduct our operations, our securities may decline in value or become worthless," "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance, business, financial condition and results of operations" and "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the legal system of mainland China could adversely affect us."

**D. Property, Plants and Equipment**

Our principal executive offices are located in Beijing, China, where we lease premises of 23,472 square meters to support our content development activities and daily operations, with lease term ranging from 2.4 to 6.1 years. In addition, we lease approximately 212,492 square meters, to support our daily operations, with lease terms ranging from 0.2 to 7.2 years in Beijing and 18 other provinces and municipalities throughout mainland China. We lease all of the facilities that we currently occupy from independent third parties.

We also own several plots of commercial real estate in the Economic Development Area of Zhengzhou, China, which we use for business operations. The commercial real estate includes eight office buildings, among which four buildings are currently in progress. These eight buildings have a combined gross floor area of 226,700 square meters. We believe that the facilities that we currently lease and the commercial real estate that we purchased in Zhengzhou, China are adequate to meet our needs for the foreseeable future.

**ITEM 4A. UNRESOLVED STAFF COMMENTS**

Not Applicable.

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**ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

*The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included in this annual report. This report contains forward-looking statements. See "Forward-Looking Information." In evaluating our business, you should carefully consider the information provided under the caption "Item 3. Key Information—D. Risk Factors" in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.*

**A. Operating Results**

**Key Factors Affecting Our Results of Operations** 

Our results of operations and financial condition are affected by the general factors driving mainland China's private education industry. We have benefited from China's overall economic growth, significant urbanization rate, and higher per capita disposable income of urban households in mainland China, which has allowed many households in mainland China to spend more on education. We have also benefited from the increasing internet penetration in mainland China. At the same time, however, our results are subject to changes in the regulatory regime governing mainland China's private education industry, particularly uncertainties relating to online education services. In particular, on July 24, 2021, the General Office of the State Council and the General Office of the Central Committee of the Communist Party of China jointly promulgated the Alleviating Burden Opinion. Among other things, the Alleviating Burden Opinion provides that (i) Academic AST Institutions are prohibited from raising funds by listing on stock markets or conducting any capitalization activities; (ii) foreign capital is prohibited from controlling or participating in any Academic AST Institutions through mergers and acquisitions, entrusted operation, joining franchise or variable interest entities; and (iii) online tutoring for preschool-age children is prohibited, and offline academic subjects (including foreign language) tutoring services for preschool-age children is also strictly prohibited. The Alleviating Burden Opinion provides that any violation of the foregoing shall be rectified. The Alleviating Burden Opinion further states that the administration and supervision over academic subjects tutoring institutions for students on grade ten to twelve shall be implemented by reference to the applicable provisions of the Alleviating Burden Opinion. See "Item 4. Information on the Company—B. Business Overview—Government Regulations—Regulation Related to Private Education" for more details. As a result, we ceased offering compulsory education academic subject tutoring services by the end of 2021, and took other measures to maintain our continued operations. Currently, our focus is on offering and developing traditional learning services, non-academic tutoring services, and college student and adult education services, as well as educational content and digitalized learning products. We are also exploring new opportunities to further enrich our business offerings as we continue to expand our student base. In addition, our new businesses may be adversely affected by fierce competition and uncertainties of the industry with respect to the development of regulatory requirements.

Our business, financial condition, results of operations and prospect have been materially and adversely affected in 2023, 2024, 2025 and subsequent periods by the actions we have taken to date to be in compliance with the Alleviating Burden Opinion and related regulations, rules and policies, as well as our new business directives in the non-compulsory education business vertical. See also "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Significant risks exist in relation to the interpretation and implementation of, or proposed changes to, the laws, regulations and policies of mainland China regarding the private education industry. In particular, our compliance with the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education and the implementation measures issued thereunder by the PRC government authorities has materially and adversely affected and will materially and adversely affect our business, financial condition, results of operations and prospect."

In addition, the PRC government regulates various other aspects of our business and operations, including the qualification, licensing or filing requirements for entities that provide education services and limitations on foreign investments in the education industry. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We face uncertainties with respect to the development of regulatory requirements on operating licenses and permits for our education services in mainland China. Failure to obtain or renew requested licenses or permits in a timely manner or obtain newly required ones due to adverse changes in regulations or policies could have a material adverse impact on our business, financial condition and results of operations."

While our business is influenced by general factors affecting the education industry in mainland China, our results of operations are also directly affected by certain company specific factors, including the following major factors:

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***Our ability to execute new business strategies and attract students to enroll in our paid courses*** 

Our net revenues primarily consist of course fees from our students. Our net revenues are primarily driven by increases and decreases in our paid course enrollments. However, in compliance with the regulation of mainland China pursuant to which tutoring services related to academic subject to students from kindergarten through grade nine are prohibited, we ceased offering compulsory education academic subject tutoring services by the end of 2021. We are exploring alternative strategic opportunities that can effectively leverage the resources and knowhow accumulated through our past compulsory education academic subject tutoring services. We have continued to operate our business outside of the compulsory education academic subject tutoring services. Currently, our focus is on offering and developing traditional learning services, non-academic tutoring services, and college student and adult education services, as well as educational content and digitalized learning products. If we fail to successfully execute our new business strategies and attract students to enroll in our courses, our financial condition and results of operations may be materially adversely affected.

We believe providing an effective learning experience is critical to attracting new students and increasing our paid course enrollments. We are committed to providing high quality course offerings to our students and will continue to enhance our students' learning experience through enriching our course offerings, enhancing our brand reputation and refining our technology. We will continue to improve our ability to convert sales leads into paid course enrollments cost-effectively.

***Our ability to maintain our course fees***

Our net revenues are also affected by the level of tuition fees we charge and average gross billing per paid course enrollment for our courses. Growth in the level of tuition fees we charge and average gross billing per paid course enrollment is dependent on our increased ability to charge premium fees for our course offerings. Our ability to charge premium pricing is affected by the quality and effectiveness of our course offerings, the overall demand for our courses, and prices and availability of competing courses. In addition, our course fee may be subject to evolving regulations, which may set a price limit on our course fees. Moreover, as we shifted our focus continue to explore new business opportunities in non-academic tutoring services, education for college students and adults, educational content and digitalized learning products, our new courses and product and service offerings may not have higher or even the same margins as we had in the past. We cannot assure you that we would be able to maintain our course fee level, and our course fees could continue to decline in the future due to these factors. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We may not be able to maintain our course fee level" for more details.

***Our ability to manage our operational efficiency***

Our operating margins depend on our ability to control our costs and realize additional operation leverage as we continue to operate. Our business changes may result in substantial demands on our management, operational, technological, financial and other resources. To manage and support our further development, we must improve our existing operational, administrative and technological systems and our financial and management controls, and recruit, train and retain additional qualified teachers and school management personnel as well as other administrative and sales and marketing personnel, particularly as we grow outside of our existing areas. We will continue to implement additional systems and measures in order to effectively manage and support our business. If we cannot achieve these improvements, our financial condition and results of operations may be materially adversely affected.

We depend on our ability to sell and market our course offerings in a cost-effective manner to maintain and improve our operating margins. Selling expenses have historically been the largest item of our total operating expenses. Our selling expenses are primarily composed of compensation to our personnel involved in sales and marketing, selling expenses relating to our online and mobile marketing, and branding expenses. Our ability to maintain or lower our selling expenses as a percentage of net revenues depends on our ability to improve sales and marketing efficiency and leverage our existing brand value and recognition of our superior teaching quality to achieve word-of-mouth referrals. We may also incur increased research and development and general and administrative expenses due to the expansion of our course offerings in new areas.

We offer most of our courses online in a live format. Our future success depends on the development and application of relevant technologies to meet our demand for sufficient network capacity and to strengthen proprietary capabilities in areas such as AI and big data analytics, all in a cost-effective manner. While we continue to focus on our technology development, we plan to devote more resources to upgrading our technology infrastructure and software upgrades to increase our operational efficiency.

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**Key Line Items and Specific Factors Affecting Our Results of Operations** 

***Net Revenues***

In 2023, 2024 and 2025, we derived substantially all of our net revenues from the course fees that we charge to our students. We generally collect course fees in advance, which we initially record as deferred revenues. We recognize revenues proportionally as the classes are delivered. The majority of our courses are typically delivered within a period from 1 month to 6 months. For some courses, we continue to provide students with 12 months to 36 months access to the pre-recorded audio-video courses after the online live courses are delivered. The related revenue for playback is recognized proportionally over the playback period. The playback revenue represents a relatively small portion of the total course fees.

The following table sets forth a breakdown of our total net revenues by amounts and percentages for the periods presented:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
| **Net revenues:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Learning services | 2872901 | 97.0 | 4419964 | 97.1 | 6039033 | 863570 | 98.2 |
| &nbsp;&nbsp;Educational content & digitalized learning products | 55980 | 1.9 | 83930 | 1.8 | 77089 | 11024 | 1.3 |
| &nbsp;&nbsp;Other revenue | 31932 | 1.1 | 49662 | 1.1 | 30650 | 4383 | 0.5 |
| **Total** | **2960813** | **100.0** | **4553556** | **100.0** | **6146772** | **878977** | **100.0** |

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Our learning services in 2023, 2024 and 2025 primarily consisted of tutoring fees from traditional learning services, non-academic tutoring services, college student and adult education services. Our educational content & digitalized learning products primarily consisted of the amount of sales in books and digitalized auxiliary learning tools. Our other revenue was primarily derived from online marketing service, intellectual properties license grant service and the rent we charged to third parties.

In compliance with the Alleviating Burden Opinion, we ceased offering compulsory education academic subject tutoring services by the end of 2021. Currently, we focus on offering traditional learning services, non-academic tutoring services, college student and adult education services, as well as educational content and digitalized learning products. The cessation of our compulsory education academic subject tutoring services has materially and adversely affected our financial condition and results of operations in 2023, 2024 and 2025, and we expect it will continue to have an adverse effect on our financial condition and results of operations in 2026 and subsequent periods.

***Cost of revenues***

Our cost of revenues primarily consists of performance-based salaries to instructors and total compensation to tutors. We recorded cost of revenues of RMB790.2 million, RMB1,454.9 million and RMB2,001.7 million (US$286.2 million) in 2023, 2024 and 2025, respectively. Our cost of revenues also includes costs for teaching materials, rental expenses for our office space, depreciation and amortization expenses, and transaction fee paid to third-party online payment channels.

***Operating expenses***

Our operating expenses consist primarily of selling expenses, and to a lesser extent, research and development expenses and general and administrative expenses.

*Selling expenses*. We recorded selling expenses of RMB1,501.2 million, RMB2,963.7 million and RMB3,289.1 million (US$470.3 million) in 2023, 2024 and 2025, respectively. Our selling expenses primarily consist of expenses relating to our marketing and brand promotion activities, compensation to our personnel involved in sales and marketing expenses and other miscellaneous expense.

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*Research and development expenses*. We recorded research and development expenses of RMB462.0 million, RMB648.1 million and RMB626.9 million (US$89.7 million) in 2023, 2024 and 2025, respectively. Research and development expenses consist primarily of compensation to our education content development personnel, and to our technology development personnel, and to a lesser extent, server and bandwidth expenses and others.

*General and administrative expenses*. We recorded general and administrative expenses of RMB356.4 million, RMB668.7 million and RMB732.2 million (US$104.7 million) in 2023, 2024 and 2025, respectively. Our general and administrative expenses consist primarily of payroll and related expenses for employees involved in general corporate functions and administrative personnel.

**Taxation**

We had income tax expenses of RMB10.7 million in 2023, income tax expenses of RMB8.6 million in 2024 and income tax benefits of RMB4.1 million (US$0.6 million) in 2025. We are subject to various rates of income tax under different jurisdictions. The following summarizes major factors affecting our applicable tax rates in Cayman Islands, Hong Kong and mainland China.

***Cayman Islands*** 

The Cayman Islands currently levies no taxes on corporations based upon profits, income, gains or appreciation. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. In addition, the Cayman Islands does not impose withholding tax on dividend payments.

***Hong Kong*** 

Under the current Hong Kong Inland Revenue Ordinance, the subsidiaries in Hong Kong are subject to profits tax at the rate of 8.25% on assessable profits up to HK$2 million; and 16.5% on any part of assessable profits over HK$2 million. To avoid abuse of the two-tiered tax regime, each group of connected entities can nominate only one Hong Kong entity to benefit from the two-tiered income tax rate. Under the Hong Kong tax laws, we are exempted from the Hong Kong income tax on our foreign-derived income. In addition, payments of dividends from our Hong Kong subsidiary to us are not subject to any Hong Kong withholding tax. No provision for Hong Kong profits tax was made as we had no estimated assessable profit that was subject to Hong Kong profits tax during 2023, 2024 and 2025.

***Mainland China*** 

Generally, our mainland China onshore subsidiaries, VIEs and their subsidiaries are subject to enterprise income tax on their taxable income in mainland China at a statutory rate of 25%. The enterprise income tax is calculated based on the entity's global income as determined under the tax laws and accounting standards of mainland China.

Beijing Gaotu was qualified as a high and new technology enterprise in August 2017, which reduced its enterprise income tax rate to 15%. Its qualification was renewed in November 2023 and it can continue to enjoy the 15% preferential tax rate until December 2026.

Beijing Lexuebang was qualified as a high and new technology enterprise during the year ended December 31, 2019. Its qualification was renewed in December 2022 and October 2025, and it can continue to enjoy the 15% preferential tax rate until 2028.

Beijing Yuexuebang has obtained a Software Enterprise Certificate in 2024 and renewed in 2025. It can be exempted from enterprise income tax for 2023 and 2024, and enjoy a reduced tax rate of 12.5% in 2025.

If our holding company in the Cayman Islands or any of our subsidiaries outside of mainland China were deemed to be a "resident enterprise" under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See "Item 3. Key Information—D. 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-domestic shareholders or the ADS holders."

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**Results of Operations** 

The following table sets forth a summary of our consolidated results of operations for the periods presented, both in absolute amount and as a percentage of our net revenues for the periods presented. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any particular period are not necessarily indicative of our future trends.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
|  | **(in thousands, except for percentage data)** | **(in thousands, except for percentage data)** | **(in thousands, except for percentage data)** | **(in thousands, except for percentage data)** | **(in thousands, except for percentage data)** | **(in thousands, except for percentage data)** | **(in thousands, except for percentage data)** |
| **Net revenues** | **2960813** | **100.0** | **4553556** | **100.0** | **6146772** | **878977** | **100.0** |
| Cost of revenues<sup>(1)</sup> | (790207) | (26.7) | (1454917) | (32.0) | (2001693) | (286238) | (32.6) |
| **Gross profit** | **2170606** | **73.3** | **3098639** | **68.0** | **4145079** | **592739** | **67.4** |
| **Operating expenses** |  |  |  |  |  |  |  |
| Selling expenses<sup>(1)</sup> | (1501200) | (50.7) | (2963736) | (65.1) | (3289064) | (470330) | (53.5) |
| Research and development<br>&nbsp;&nbsp;&nbsp;&nbsp;expenses<sup>(1)</sup> | (462043) | (15.6) | (648063) | (14.2) | (626947) | (89652) | (10.2) |
| General and administrative<br>&nbsp;&nbsp;&nbsp;&nbsp;expenses<sup>(1)</sup> | (356369) | (12.0) | (668673) | (14.7) | (732234) | (104708) | (11.9) |
| **Total operating expenses** | **(2319612)** | **(78.3)** | **(4280472)** | **(94.0)** | **(4648245)** | **(664690)** | **(75.6)** |
| **Loss from operations** | **(149006)** | **(5.0)** | **(1181833)** | **(26.0)** | **(503166)** | **(71951)** | **(8.2)** |
| Interest income | 75829 | 2.6 | 70384 | 1.5 | 39919 | 5708 | 0.6 |
| Realized gains from<br>&nbsp;&nbsp;&nbsp;&nbsp;investments | 31230 | 1.1 | 25302 | 0.6 | 34065 | 4871 | 0.6 |
| Other income, net | 54471 | 1.8 | 45825 | 1.0 | 101764 | 14552 | 1.7 |
| **Income/(loss) before provision<br>&nbsp;&nbsp;&nbsp;&nbsp;for income tax and<br> share of results of equity<br> investees** | **12524** | **0.5** | **(1040322)** | **(22.9)** | **(327418)** | **(46820)** | **(5.3)** |
| Income tax (expenses)/benefits | (10657) | (0.4) | (8632) | (0.2) | 4111 | 588 | 0.0 |
| Share of results of equity<br>&nbsp;&nbsp;&nbsp;&nbsp;investees | (9165) | (0.3) |  |  |  |  |  |
| **Net loss** | **(7298)** | **(0.2)** | **(1048954)** | **(23.1)** | **(323307)** | **(46232)** | **(5.3)** |

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Note:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Share-based compensation expenses were allocated as follows:

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---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **Share-based compensation expenses** |  |  |  |  |
| Cost of revenues | 12959 | 7003 | 5641 | 807 |
| Selling expenses | 8603 | 9267 | 5748 | 822 |
| Research and development expenses | 17012 | 8942 | 7795 | 1115 |
| General and administrative expenses | 19779 | 28005 | 20034 | 2864 |
| **Total** | **58353** | **53217** | **39218** | **5608** |

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**Year ended December 31, 2025 compared to year ended December 31, 2024**

***Revenues***

Our net revenues increased by 35.0% from RMB4,553.6 million in 2024 to RMB6,146.8 million (US$879.0 million) in 2025. This increase was primarily due to the 23.0% increase in gross billings from RMB5,612.4 million in 2024 to RMB6,903.7 million in 2025.

Net revenues from learning services increased by 36.6% from RMB4,420.0 million in 2024 to RMB6,039.0 million (US$863.6 million) in 2025. This increase was primarily due to the continuous year-over-year growth of gross billings in traditional learning services and non-academic tutoring services in 2025 as a result of our sufficient and effective response to strong market demand.

Net revenues from educational content & digitalized learning products were RMB77.1 million (US$11.0 million) in 2025, compared with that of RMB83.9 million in 2024. This decrease was primarily attributable to the decreased sales amount in books businesses.

Net revenues from other revenue were RMB30.7 million (US$4.4 million) in 2025, compared with that of RMB49.7 million in 2024, primarily attributable to the decrease in software sales revenue from a third party.

***Cost of revenues***

Our cost of revenues increased by 37.6% from RMB1,454.9 million in 2024 to RMB2,001.7 million (US$286.2 million) in 2025. This increase was primarily due to expansion of instructors and tutors workforce, higher rental cost, and increased depreciation and amortization cost.

***Gross profit***

As a result of the foregoing, our gross profit increased by 33.8% from RMB3,098.6 million in 2024 to RMB4,145.1 million (US$592.7 million) in 2025. Our gross margin decreased from 68.0% in 2024 to 67.4% in 2025.

***Operating expenses***

Our total operating expenses increased by 8.6% from RMB4,280.5 million in 2024 to RMB4,648.2 million (US$664.7 million) in 2025.

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*Selling expenses*. Our selling expenses increased by 11.0% from RMB2,963.7 million in 2024 to RMB3,289.1 million (US$470.3 million) in 2025. The increase was mainly due to the expansion of employees workforce of learning advisers and marketing personnel, as well as a higher expenditure on marketing and branding activities.

*Research and development expenses*. Our research and development expenses decreased by 3.3% from RMB648.1 million in 2024 to RMB626.9 million (US$89.7 million) in 2025, primarily due to decreases in personnel of content and technology development function.

*General and administrative expenses*. Our general and administrative expenses increased by 9.5% from RMB668.7 million in 2024 to RMB732.2 million (US$104.7 million) in 2025. This increase was primarily due to the expansion of employees workforce of general management and support personnel.

***Loss from operations***

We had loss from operations of RMB1,181.8 million in 2024 and loss from operations of RMB503.2 million (US$72.0 million) in 2025.

***Interest income & realized gains from investments***

Our interest income and realized gains from investments were RMB74.0 million (US$10.6 million) in 2025, compared with a total of RMB95.7 million in 2024. In both fiscal years, our interest income and realized gains from investments consisted primarily of interest earned from our cash and cash equivalents, short-term and long-term investments.

***Other income, net***

Other income is offset by other expenses. Other income, net increased by 122.1% from RMB45.8 million in 2024 to RMB101.8 million (US$14.6 million) in 2025, primarily due to the refund received from our ADR depositary bank in 2025.

***Income tax (expenses)/benefits***

We had income tax expenses of RMB8.6 million in 2024 and income tax benefits of RMB4.1 million (US$0.6 million) in 2025.

***Net loss***

As a result of the foregoing, we had a net loss of RMB1,049.0 million in 2024 and a net loss of RMB323.3 million (US$46.2 million) in 2025.

**Year ended December 31, 2024 compared to year ended December 31, 2023**

For a detailed description of the comparison of our operating results for the year ended December 31, 2024 to the year ended December 31, 2023, see "Item 5. Operating and Financial Review and Prospects—A. Operating Results—Results of Operations—Year Ended December 31, 2024 Compared to Year Ended December 31, 2023" of our annual report on Form 20-F filed with the Securities and Exchange Commission on April 22, 2025.

**Impact of Foreign Currency Fluctuation**

See "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment." and "Item 11. Quantitative and Qualitative Disclosures About Market Risk—Foreign Exchange Risk."

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**Impact of Governmental Policies**

Historically, we offered a comprehensive set of online courses, which primarily included compulsory education academic after-school tutoring courses covering major subjects at all grades. However, the regulatory developments relating to after-school tutoring services, including the Alleviating Burden Opinion and its implementation measures, prohibit, among other things, academic AST providers from offering classes over contents outside of or in advance of the school curriculum. See "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China" and "Item 4. Information on the Company—B. Business Overview—Government Regulations." In compliance with the Alleviating Burden Opinion, we ceased offering compulsory education academic subject tutoring services by the end of 2021. The cessation of compulsory education academic subject tutoring services and other actions we have taken to comply with the regulatory developments have materially and adversely affected and will continue to have a material adverse impact on our revenues in 2023, 2024, 2025 and subsequent periods. See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Significant risks exist in relation to the interpretation and implementation of, or proposed changes to, the laws, regulations and policies of mainland China regarding the private education industry. In particular, our compliance with the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education and the implementation measures issued thereunder by the PRC government authorities has materially and adversely affected and will materially and adversely affect our business, financial condition, results of operations and prospect" and "Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry —The cessation of the compulsory education academic subject tutoring services and other actions we have taken to comply with recent regulatory developments have materially and adversely affected and will materially and adversely affect our business, financial condition, results of operations and prospect. Failure to effectively and efficiently manage changes of our existing and new business may materially and adversely affect our ability to capitalize on new business opportunities."

**B. Liquidity and Capital Resources** 

The following table sets forth a summary of our cash flows for the periods presented:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Net cash generated from operating activities | 353697 | 258007 | 416094 | 59501 |
| Net cash (used in)/generated from investing activities | (423978) | 620821 | (818783) | (117084) |
| Net cash used in financing activities | (90480) | (205302) | (214140) | (30622) |
| Effect of exchange rate changes | 10781 | (17139) | 2512 | 359 |
| **Net (decrease)/increase in cash, cash equivalents and restricted cash** | **(149980)** | **656387** | **(614317)** | **(87846)** |
| **Cash, cash equivalents and restricted cash at the beginning of the year** | **819933** | **669953** | **1326340** | **189664** |
| **Cash, cash equivalents and restricted cash at the end of the year** | **669953** | **1326340** | **712023** | **101818** |

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Our principal source of liquidity has been cash generated from operating activities. As of December 31, 2025, we had RMB596.2 million (US$85.3 million) and RMB115.8 million (US$16.6 million) in cash and cash equivalents and restricted cash, respectively. Our cash and cash equivalents primarily consist of cash on hand and deposits which have original maturities of three months or less and are readily convertible to cash.

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As of December 31, 2025, we had RMB2,708.8 million (US$387.4 million) and RMB551.6 million (US$78.9 million) in short-term investments and long-term debt investments, respectively. Our short-term and long-term investments generally consist of investments in financial products issued by banks, which contain a fixed or variable interest rate, which were classified to short-term investments accounted for those with original maturities no longer than one year and long-term investments accounted for those with original maturities greater than one year.

As of December 31, 2025, our prepaid expenses and other current assets were RMB504.8 million (US$72.2 million). Our prepaid expenses and other current assets mainly consist of receivables from third parties, prepaid VAT and income tax, prepaid other service fees, and receivables from third-party payment platforms.

We believe that our current cash and cash equivalents and our anticipated cash flows from operations will be sufficient to meet our anticipated working capital requirements and capital expenditures for at least the next 12 months. 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. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

As of December 31, 2025, 93.3% of our cash and cash equivalents were held in mainland China, 6.6% in Hong Kong, and 0.1% in Singapore; 94.3% were denominated in Renminbi, 5.5% were denominated in U.S. dollars, 0.1% were denominated in Hong Kong dollars and 0.1% were denominated in Singapore dollars. As of December 31, 2025, 66.5% of our short-term and long-term investments were held in mainland China; 74.3% was denominated in Renminbi. As of December 31, 2025, 88.6% of our cash and cash equivalents and 65.9% of our short-term and long-term investments were held by the VIEs and their subsidiaries.

Although we consolidate the results of our VIEs and their subsidiaries, we only have access to the assets or earnings of our VIEs and their subsidiaries through our contractual arrangements with the VIEs and their shareholders. See "Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with the VIEs and Their Shareholders." For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see "—Holding Company Structure."

We may make additional capital contributions to our mainland China subsidiaries, establish new mainland China subsidiaries 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. However, most of these uses are subject to the regulations of mainland China. See "Item 3. Key Information—D. 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 making loans to or make additional capital contributions to our mainland China subsidiaries and VIEs, which could materially and adversely affect our liquidity and our ability to fund and expand our business."

Substantially all of our revenues are denominated in Renminbi. Under existing foreign exchange regulations of mainland China, Renminbi may be converted into foreign exchange for current account items, including profit distributions, interest payments and trade-and service-related foreign exchange transactions.

We expect that substantially all of our future revenues will be denominated in Renminbi. Under existing foreign exchange regulations of mainland China, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements are fulfilled. Therefore, our mainland China subsidiaries are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements. However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future.

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***Operating activities***

Net cash generated from operating activities in 2025 was RMB416.1 million (US$59.5 million), as compared to a net loss of RMB323.3 million (US$46.2 million). The difference was primarily attributable to (i) non-cash items that primarily consisted of RMB112.8 million (US$16.1 million)in depreciation of property, equipment and software and amortization of intangible assets, RMB39.2 million (US$5.6 million) in share-based compensation, and (ii) a net increase in changes in operating assets and liabilities by RMB643.3 million (US$92.0 million), which was primarily attributable to an increase of RMB480.0 million (US$68.6 million) in deferred revenue due to the course delivery, an increase of RMB281.7 million (US$40.3 million) in accrued expenses and other current liabilities, an increase of RMB85.4 million (US$12.2 million) in prepaid expenses and other current assets and an increase of RMB28.1 million (US$4.0 million) in other assets.

Net cash generated from operating activities in 2024 was RMB258.0 million, as compared to a net loss of RMB1,049.0 million. The difference was primarily attributable to (i) non-cash items that primarily consisted of RMB65.0 million in depreciation of property, equipment and software and amortization of intangible assets, RMB53.2 million in share-based compensation, and (ii) a net increase in changes in operating assets and liabilities by RMB1,193.4 million, which was primarily attributable to an increase of RMB848.3 million in deferred revenue due to the course delivery, an increase of RMB421.0 million in accrued expenses and other current liabilities, an increase of RMB67.0 million in other assets and an increase of RMB14.3 million in prepaid expenses and other current assets.

Net cash generated from operating activities in 2023 was RMB353.7 million, as compared to a net loss of RMB7.3 million. The difference was primarily attributable to (i) non-cash items that primarily consisted of RMB58.4 million in share-based compensation, RMB54.2 million in depreciation of property, equipment and software and amortization of intangible assets, and (ii) a net increase in changes in operating assets and liabilities by RMB257.5 million, which was primarily attributable to an increase of RMB278.3 million in deferred revenue due to the course delivery, an increase of RMB202.7 million in accrued expenses and other current liabilities, an increase of RMB182.6 million in prepaid expenses and other current assets, and an increase of RMB45.2 million in other assets.

***Investing activities***

Net cash used in investing activities in 2025 was RMB818.8 million (US$117.1 million), primarily due to the purchase of short-term and long-term investments of RMB14,122.5 million (US$2,019.5 million) and payment for asset acquisition and business acquisition of RMB193.3 million (US$27.6 million), partially offset by the proceeds from the maturity of short-term and long-term investments of RMB13,666.4 million (US$1,954.3 million).

Net cash generated from investing activities in 2024 was RMB620.8 million, primarily due to proceeds from the maturity of short-term and long-term investments of RMB15,427.3 million, partially offset by the purchase of short-term and long-term investments of RMB14,806.1 million.

Net cash used in investing activities in 2023 was RMB424.0 million, primarily due to the purchase of short-term and long-term investments of RMB20,428.0 million, partially offset by proceeds from the maturity of short-term and long-term investments of RMB20,145.9 million.

***Financing activities***

Net cash used in financing activities in 2025 was RMB214.1 million (US$30.6 million), primarily due to repurchase of ordinary shares of RMB343.3 million (US$49.1 million), partially offset by the net proceeds from short-term and long-term loans of RMB129.2 million (US$18.5 million).

Net cash used in financing activities in 2024 was RMB205.3 million, primarily due to repurchase of ordinary shares.

Net cash used in financing activities in 2023 was RMB90.5 million, primarily due to repurchase of ordinary shares.

***Material Cash Requirements*** 

Our material cash requirements as of December 31, 2025 and any subsequent period primarily include our capital expenditures, operating lease obligations and real estate purchase obligations.

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Our capital expenditures primarily relate to leasehold improvements, real estate purchase, and investments in computers, network equipment and software, and intangible assets. Our capital expenditures were RMB40.8 million, RMB179.9 million and RMB362.8 million (US$51.9million) in 2023, 2024 and 2025, respectively. We intend to fund our future capital expenditures with our existing cash balance, and short-term investments. We will continue to make capital expenditures to meet the expected growth of our business.

We intend to fund our existing and future material cash requirements primarily with anticipated cash flows from operations, our existing cash balance and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support the growth of our business.

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any off-balance sheet derivative instruments. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

The following table sets forth our contractual obligations by specified categories as of December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Payment Due by Period** | **Payment Due by Period** | **Payment Due by Period** | **Payment Due by Period** | **Payment Due by Period** |
|  | **Total** | **Less than 1 Year** | **1-3 Years** | **3-5 Years** | **More than 5 Years** |
|  | **(In RMB millions)** | **(In RMB millions)** | **(In RMB millions)** | **(In RMB millions)** | **(In RMB millions)** |
| Operating lease commitments<sup>(1)</sup> | 496.9 | 164.3 | 243.1 | 86.5 | 3.0 |
| Real estate purchase obligations | 181.7 | 181.7 |  |  |  |
| Total | 678.6 | 346.0 | 243.1 | 86.5 | 3.0 |

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Note:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represents minimum payments under non-cancelable operating leases related to offices.

Other than as shown above, we did not have any significant capital commitments, obligations or guarantees as of December 31, 2025.

**Holding Company Structure**

Gaotu Techedu Inc. is a holding company with no material operations of its own. We conduct our operations primarily through our mainland China subsidiaries, the VIEs and their subsidiaries in mainland China. As a result, our ability to pay dividends depends upon dividends paid by our mainland China subsidiaries. If our existing mainland China subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly foreign-owned subsidiaries in mainland China are permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with mainland China's accounting standards and regulations. Under the laws of mainland China, each of our subsidiaries and the 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 their registered capital. In addition, the VIEs may allocate a portion of its after-tax profits based on mainland China's accounting standards to a surplus fund at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. 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.

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**C. Research and Development, Patents and Licenses, etc.**

Technology is the backbone of our highly scalable business model. Our strong technological capabilities enable us to deliver a superior student experience and improve operational efficiency. Our technology team, coupled with our proprietary artificial intelligence technology and the large volume of data generated from our operations, has continued to identify opportunities for improvements in our technology infrastructure and applications. As of December 31, 2025, we had a technology research and development team of 706 professionals.

Our trademarks, copyrights, domain names, trade secrets and other intellectual property rights distinguish our courses and services from those of our competitors and contribute to our ability to compete in our target markets. For more information about our technology capabilities and our intellectual property rights, see "Item 4. Information on the Company—B. Business Overview—Technology and Infrastructure" and "—Intellectual Property."

**D. 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 effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

**E. Critical Accounting Estimates** 

We prepare our financial statements in accordance with U.S. GAAP, which requires our management to make judgment, estimates and assumptions. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and various assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements. You should read the following description of critical accounting policies, judgments and estimates in conjunction with our consolidated financial statements and other disclosures included in this annual report.

***Valuation allowance for deferred tax asset***

Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. Deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized, which can require the use of accounting estimation and the exercise of judgment. The impact of an uncertain income tax position is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. Significant judgment is required in determining the valuation allowance. In assessing the need for a valuation allowance, we consider all sources of taxable income, including projected future taxable income, reversing taxable temporary differences and ongoing tax planning strategies. If it is determined that we are able to realize deferred tax assets in excess of the net carrying value or to the extent we are unable to realize a deferred tax asset, we would adjust the valuation allowance in the period in which such a determination is made, with a corresponding increase or decrease to earnings.

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**Recently Issued Accounting Pronouncements**

A list of recent accounting pronouncements that are relevant to us is included in Note 2 to our consolidated financial statements, which are included in this annual report.

**ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

**A. Directors and Executive Officers** 

The following table sets forth information regarding our executive officers and directors as of the date of this annual report.

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| | | |
|:---|:---|:---|
| **Directors and Executive Officers** | **Age** | **Position/Title** |
| Larry Xiangdong Chen | 54 | Chairman of the Board of Directors and Chief Executive Officer |
| Jin Cui | 68 | Independent Director |
| Yiming Hu | 54 | Independent Director |
| Hao Sun | 37 | Independent Director |
| Nan Shen | 41 | Senior Vice President and Chief Financial Officer |
| Bin Luo | 43 | Senior Vice President |

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*Mr. Larry Xiangdong Chen* is our founder and has served as the chairman of our board of directors and our chief executive officer since our incorporation. Prior to founding our company, Mr. Chen served as the executive president of New Oriental Education & Technology Group Inc. (NYSE: EDU), or New Oriental Education, from November 2010 to January 2014. Mr. Chen joined New Oriental in 1999. He was promoted to be senior vice president in January 2006, and from 2001 to January 2002 he served as executive assistant to the chief executive officer of New Oriental Education. From 2002 to 2003, Mr. Chen was the president of Wuhan New Oriental School. Mr. Chen was promoted to vice president in September 2003, and in this capacity was in charge of a number of departments at New Oriental Education's headquarters, including its short-term training system, human resources, marketing and public relations and business development. Mr. Chen received his master's and Ph.D. degrees in economics from Renmin University of China. Mr. Chen completed the General Manager Program at Harvard Business School in 2005.

*Ms. Jin Cui* has served as our director since September 2021. Ms. Cui has extensive experience in public accounting. Ms. Cui served as a partner at Deloitte Beijing from 2000 to 2018 and as a partner at Zhonggongxin Certified Public Accountants from 1994 to 2000. Ms. Cui was also the chief financial officer of Youshi Contact Lens Co., Ltd. from 1991 to 1994, and had seven years of working experience at Zhonghua Certified Public Accountants. Ms. Cui received her bachelor's degree in accounting from Beijing Technology and Business University. Ms. Cui is a Certified Public Accountant in China and is among the first batch of senior members of the Chinese Institute of Certified Public Accountants.

*Mr. Yiming Hu* has served as our director since June 2019. Mr. Hu has served as the chairman of the board of directors of Dongfang Beidou Technology (Beijing) Co., Ltd., a provider of navigation and positions products, since April 2018, and has been responsible for its strategic planning, organization and implementation. From March 2006 to May 2016, Mr. Hu held various positions at Ping An Trust Co., Ltd., including serving as project manager, general manager of the Beijing branch, and general manager of the private wealth division. Before joining Ping An Trust, Mr. Hu was a researcher at the Beijing Center for International Economic Research from July 1998 to March 2006, responsible for domestic and foreign macroeconomic tracking, analysis and research. Mr. Hu received his bachelor's degree in political science and law from Xinyang Normal College in 1993 and his master's degree in international economics from Renmin University of China in 1998.

*Mr. Hao Sun* has served as our director since April 2025. Mr. Sun has also been a Tenured Professor in the Gaoling School of Artificial Intelligence at Renmin University of China since September 2025. Previously, Mr. Sun served as a Tenured Associate Professor at Renmin University of China from 2021 to 2025, following prior roles as a Tenure-Track Assistant Professor at Northeastern University in Boston from 2018 to 2021 and at the University of Pittsburgh from 2017 to 2018. Mr. Sun received his bachelor's degree in civil engineering from Hohai University in 2010, his master's and Ph.D. degrees in engineering mechanics from Columbia University in 2011 and 2014, respectively, and completed his postdoctoral training at MIT during 2014 to 2017. Mr. Sun's research focuses on interdisciplinary AI with applications spanning science, engineering, and education. Mr. Sun has authored 90 peer-reviewed publications in top-tier journals such as Nature Machine Intelligence, Nature Computational Science, and Nature Communications, as well as leading AI conferences including ICLR, ICML, NeurIPS, and KDD.

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*Ms. Nan Shen* has served as our chief financial officer since December 2018 and a senior vice president since October 2023. Ms. Shen has served as an independent director of So-Young International Inc. (NASDAQ: SY) since October 2023. Prior to joining us, Ms. Shen was the chief financial officer of China Sinoedu Co., Ltd., running its VIE in Shandong Yingcai University, from November 2017 to November 2018. Before that, Ms. Shen served multiple positions at PricewaterhouseCoopers between February 2012 to November 2017, including the last position as assurance manager. From September 2014 to July 2016, she was based in the Greater Michigan office of PricewaterhouseCoopers. Prior to February 2012, Ms. Shen was an investment manager of Dalian Port & Shipping Industry Fund, where she was also in charge of investor relations management. Ms. Shen received her bachelor's and master's degrees in financial management from Dongbei University of Finance and Economics in 2006 and 2009, respectively, and received her executive MBA degree from Tsinghua University in 2025. Ms. Shen is a certified public accountant in China.

*Mr. Bin Luo* has served as a senior vice president and the head of our college student and adult education business since October 2023. Mr. Luo joined us in 2014, at the time of our incorporation. Mr. Luo has extensive experience in education, marketing and user growth. Prior to joining us, Mr. Luo served as a senior technology manager at Baidu from 2007 to 2014. Mr. Luo received his bachelor's degree in computer science and technology and his master's degree in signal and information processing from Beijing Jiaotong University in 2003 and 2007, respectively. Mr. Luo is currently pursuing an executive MBA at China Europe International Business School.

**B. Compensation of Directors and Executive Officers**

For the fiscal year ended December 31, 2025, we paid an aggregate of approximately RMB3.3 million (US$465 thousand) and RMB2.5 million (US$360 thousand) in cash to our executive officers and non-executive directors, respectively. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers. Our mainland China subsidiaries and the 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. Under these agreements, each of our executive officers is employed for a specified time period. We may terminate employment for cause, at any time, without advance notice or remuneration, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or any crime involving moral turpitude, negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties. We may also terminate an executive officer's employment without cause upon three-month advance written notice. In such case of termination by us, we will provide severance payments to the executive officer as expressly required by applicable law of the jurisdiction where the executive officer is based. The executive officer may resign at any time with a three-month advance written notice.

Each executive officer has agreed to hold, both during and after the termination or expiry of his or her employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable law, any of our confidential information or trade secrets, any confidential information or trade secrets of our clients or prospective clients, or the confidential or proprietary information of any third-party received by us and for which we have confidential obligations. The executive officers have also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive, develop or reduce to practice during the executive officer's employment with us and to assign all right, title and interest in them to us, and assist us in obtaining and enforcing patents, copyrights and other legal rights for these inventions, designs and trade secrets.

In addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or her employment and typically for one year following the last date of employment. Specifically, each executive officer has agreed not to (i) approach our suppliers, clients, customers or contacts or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities; (ii) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise, any of our competitors, without our express consent; or (iii) seek directly or indirectly, to solicit the services of any of our employees who is employed by us on or after the date of the executive officer's termination, or in the year preceding such termination, without our express consent.

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We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.

**Share Incentive Plan**

In March 2019, our shareholders and board of directors adopted the Share Incentive Plan, which we refer to as the Plan in this annual report, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business. The maximum aggregate number of ordinary shares that may be issued pursuant to all awards under the Plan is 28,400,000 shares. The number of shares reserved increases automatically if and whenever the unissued shares reserved account for less than 1% of the total then issued and outstanding shares, so that after the increase, the shares unissued and reserved under the Plan immediately after each such increase shall equal to 5% of the then issued and outstanding shares. As of February 28, 2026, a total of 584,774 options had been granted and remained outstanding and a total of 3,258,243 restricted share units had been granted and remained outstanding, excluding awards that were exercised, forfeited or canceled after the relevant grant dates.

The following paragraphs describe the principal terms of the Plan.

*Type of Awards.* The Plan permits the awards of options, restricted share units and restricted shares.

*Plan Administration.* Our board of directors or a committee appointed by the board of directors will administer the Plan. The committee or the board of directors, as applicable, will determine the participants to receive awards, the fair market value and number of shares covered by the awards to be granted to each participant, and the terms and conditions of each award granted.

*Award Agreement.* Awards granted under the Plan are evidenced by an award agreement that sets forth the terms, conditions and limitations for each award, which may include the term of the award, restrictions on transfer of the award, and the provisions applicable in the event that the grantee's employment or service terminates.

*Eligibility.* We may grant awards to our employees, directors and consultants.

*Vesting Schedule.* In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement.

*Exercise of Awards.* The plan administrator determines the exercise or purchase price, as applicable, for each award, which is stated in the relevant award agreement. Options that are vested and exercisable will terminate if they are not exercised prior to the time as the plan administrator determines at the time of grant. However, the maximum exercisable term is 10 years from the date of grant.

*Transfer Restrictions.* Awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the Plan or the relevant award agreement or otherwise determined by the plan administrator, such as transfers by will or the laws of descent and distribution.

*Termination and Amendment of the Plan.* Unless terminated earlier, the Plan has a term of 10 years. Our board of directors has the authority to terminate, amend, suspend or modify the Plan, subject to shareholder approval to the extent necessary to comply with applicable law. However, without the prior written consent of the participant, no such action may adversely affect in any material way any outstanding award previously granted pursuant to the Plan.

Our directors and executive officers did not hold any outstanding options under the Plan as of February 28, 2026, excluding awards that were exercised, forfeited or canceled after the relevant grant dates.

As of February 28, 2026, our employees held 584,774 outstanding options with an exercise price of RMB0.01.

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The following table summarizes, as of February 28, 2026, the outstanding restricted share units granted under the Plan to our directors and executive officers, excluding awards that were exercised, forfeited or canceled after the relevant grant dates.

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Number of Ordinary Shares Underlying Restricted Share Units** | **Date of Grant** | **Date of Vest** |
| Nan Shen | 189467 | March 31, 2022 and December 31, 2022 | March 31, 2026, December 31, 2026, December 31, 2027 and December 31, 2028 |
| Bin Luo | 103333 | March 31, 2022 and December 31, 2022 | March 31, 2026, December 31, 2026, December 31, 2027 and December 31, 2028 |
| Yiming Hu | 8000 | May 1, 2023 | May 1, 2026 |
| Jin Cui | 8000 | May 1, 2023 | May 1, 2026 |

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As of February 28, 2026, our employees other than members of our directors and officers as a group held 2,949,443 outstanding restricted share units.

**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. A director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with our company is required to declare the nature of his or her interest at a meeting of our directors. A director may vote with respect to any contract, proposed contract or arrangement notwithstanding that he or she may be interested therein, and if he or she does so his or her vote shall be counted and he or she may be counted in the quorum at any meeting of our directors at which any such contract or proposed contract or arrangement is considered. Our directors may exercise all the powers of our company to borrow money, mortgage or charge its undertaking, property and uncalled capital, and to issue debentures or other securities whenever money is borrowed or as security for any debt, liability or obligation of our company or of any third-party. None of our non-executive directors has a service contract with us that provides for benefits upon termination of service.

**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. We have adopted a charter for each of the three committees. Each committee's members and functions are described below.

*Audit Committee*. Our audit committee consists of Jin Cui, Yiming Hu and Hao Sun. Jin Cui is the chairman of our audit committee. We have determined that Jin Cui, Yiming Hu and Hao Sun satisfy the "independence" requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange and Rule 10A-3 under the Exchange Act. We have determined that Jin Cui qualifies as an "audit committee financial expert." The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•reviewing with the independent auditors any audit problems or difficulties and management's response;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•discussing the annual audited financial statements with management and the independent auditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•reviewing and approving all proposed related party transactions;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•meeting separately and periodically with management and the independent auditors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Compensation Committee.* Our compensation committee consists of Jin Cui, Yiming Hu and Hao Sun. Yiming Hu is the chairman of our compensation committee. We have determined that Jin Cui, Yiming Hu and Hao Sun satisfy the "independence" requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange. The compensation committee assists the board of directors in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee is responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person's independence from management.

*Nominating and Corporate Governance Committee*. Our nominating and corporate governance committee consists of Jin Cui, Yiming Hu and Hao Sun. Hao Sun is the chairman of our nominating and corporate governance committee. We have determined that Jin Cui, Yiming Hu and Hao Sun satisfy the "independence" requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•selecting and recommending to the board nominees for election by the shareholders or appointment by the board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•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.

**Duties of Directors**

Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly, and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also owe to our company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time, and the class rights vested thereunder in the holders of the shares. In certain limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached.

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Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs. The functions and powers of our board of directors include, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•convening shareholders' annual and extraordinary general meetings and reporting its work to shareholders at such meetings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•declaring dividends and distributions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•appointing officers and determining the term of office of the officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•exercising the borrowing powers of our company and mortgaging the property of our company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•approving the transfer of shares in our company, including the registration of such shares in our share register.

**Terms of Directors and Officers**

Our directors may be elected by an ordinary resolution of our shareholders. The board of directors may, by the affirmative vote of a simple majority of the remaining directors present and voting at a board meeting, appoint any person as a director, to fill a casual vacancy on the board or as an addition to the existing board. Our directors may be removed from office by an ordinary resolution of our shareholders. The service of our independent directors may be terminated by the director or by us with a 30-day advance written notice or such other shorter period of notice as mutually agreed. A director will cease to be a director if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found by our company to be or becomes of unsound mind, (iii) resigns his or her office by notice in writing to our company; (iv) without special leave of absence from our board, is absent from three consecutive board meetings and our directors resolve that his or her office be vacated; or (v) is removed from office pursuant to any other provision of our articles of association.

Our officers are appointed by and serve at the discretion of our board of directors.

**D. Employees** 

We had 7,767 employees as of December 31, 2023, 14,381 employees as of December 31, 2024, and 17,483 employees as of December 31, 2025. All of our full-time employees are located in mainland China. The following table sets forth the number of our employees by function as of December 31, 2025:

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| | |
|:---|:---|
| **Function:** | **As of December 31, 2025** |
| Instructors\* | 2576 |
| Tutors | 3928 |
| Technology and content research and development | 1432 |
| Sales and marketing | 7762 |
| General and administrative | 1785 |
| Total | 17483 |

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Note:

\* Include full-time instructors for delivering both online (including large-class, small-class, and one-on-one tutoring sessions) and offline learning services.

Besides full-time instructors and tutors, we also engage contract instructors and tutors to deliver our courses. As of December 31, 2025, we employed 2,576 full-time instructors and had 2,413 contract instructors. Our full-time employed instructors enter into employment contracts with us and deliver online courses from our headquarters in Beijing. Our contract instructors generally enter into service contracts with us and are not required to come into our office to deliver lessons. Our 2,576 full-time employed instructors also engage in content development activities. We also had 1,395 contract tutors as of December 31, 2025. Our contract tutors enter into service contracts with us and are responsible for addressing students' in-class queries, correcting students' post-class exercises, providing support to students after class, and instilling discipline in the students to attend the classes and learn.

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We enter into employment contracts with our full-time employees which contain standard confidentiality provisions. We also enter into standalone confidentiality and non-compete agreements with our full-time employees. In addition to salaries and benefits, we provide performance-based bonuses for our full-time employees and commission-based compensation for our sales and marketing force.

As required by regulations in mainland China, we participate in various employee social security plans that are organized by municipal and provincial governments for our mainland China-based full-time employees, including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing insurance. We are required under the laws of mainland China to make contributions from time to time to employee benefit plans for our mainland China-based full-time employees at specified percentages of the salaries, bonuses and certain allowances of such employees, up to a maximum amount specified by the local governments in mainland China.

We believe that we maintain a good working relationship with our employees, and we have not experienced material labor disputes in the past. None of our employees are represented by labor unions.

**E. Share Ownership** 

Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2026:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•each of our directors and executive officers; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•each person known to us to own beneficially 5% or more of our ordinary shares.

The calculations in the table below are based on 158,969,176 ordinary shares outstanding as of February 28, 2026, comprising of 85,663,888 Class A Ordinary Shares and 73,305,288 Class B ordinary shares.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant, or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Ordinary Shares Beneficially Owned** | **Ordinary Shares Beneficially Owned** | **Ordinary Shares Beneficially Owned** | **Ordinary Shares Beneficially Owned** |
|  | **Class A Ordinary Shares** | **Class B Ordinary Shares** | **% of Total Ordinary Shares**<sup>†</sup> | **% of Aggregate Voting Power††** |
| **Directors and Executive Officers\*:** |  |  |  |  |
| Larry Xiangdong Chen<sup>(1)</sup> | 8314529 | 73305288 | 51.3% | 90.6% |
| Jin Cui<sup>(2)</sup> | 13393 |  | 0.0% | 0.0% |
| Yiming Hu<sup>(3)</sup> | 16235 |  | 0.0% | 0.0% |
| Hao Sun<sup>(4)</sup> |  |  |  |  |
| Nan Shen<sup>(5)</sup> | 530758 |  | 0.3% | 0.1% |
| Bin Luo<sup>(6)</sup> | 1739812 |  | 1.1% | 0.2% |
| All Directors and Executive Officers as a Group | 10614727 | 73305288 | 52.8% | 90.8% |
| **Principal Shareholders:** |  |  |  |  |
| Ebetter International Group Limited<sup>(1)</sup> | 800000 | 73305288 | 46.6% | 89.6% |

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Notes:

\* Except as indicated otherwise below, the business address of our directors and executive officers is 5F, Gientech Building, 17 East Zone, 10 Xibeiwang East Road, Haidian District, Beijing 100193, People's Republic of China.

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† For each person and group included in this column, percentage ownership is calculated by dividing the total number of ordinary shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of ordinary shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after February 28, 2026.

†† 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. Each holder of our Class A ordinary shares is entitled to one vote per share. Each holder of our Class B ordinary shares is entitled to ten votes per share. Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a one-for-one basis, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represents 73,305,288 Class B ordinary shares and 800,000 Class A ordinary shares held by Ebetter International Group Limited, a British Virgin Islands company, and 7,514,529 Class A ordinary shares represented by 11,271,794 ADSs held by Mr. Larry Xiangdong Chen as of March 12, 2026. Ebetter International Group Limited is ultimately owned by The Better Learner Trust, a trust established under the laws of the Cayman Islands and managed by Cantrust (Far East) Limited as the trustee. Mr. Larry Xiangdong Chen is the settlor of The Better Learner Trust, and he and his family members are the trust's beneficiaries. Under the terms of this trust, Mr. Larry Xiangdong Chen has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares of the Issuer held by Ebetter International Group Limited. Mr. Larry Xiangdong Chen is the sole director of Ebetter International Group Limited. The registered address of Ebetter International Group Limited is at the offices of OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands. The business address of Mr. Larry Xiangdong Chen is Pactera Building, 10 Xibeiwang East Road, Haidian District, Beijing 100193, People's Republic of China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Represents 13,393 Class A ordinary shares represented by 20,090 ADSs held by Ms. Jin Cui as of March 12, 2026. The business address of Ms. Jin Cui is 202, Unit 4, Building 8, No.9, Yuyuantan South Road, Haidian District, Beijing, People's Republic of China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Represents 16,235 Class A ordinary shares represented by 24,353 ADSs held by Mr. Yiming Hu as of March 12, 2026. The business address of Mr. Yiming Hu is 908, Block A, West Four Ring, Haidian District, Beijing, People's Republic of China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)The business address of Mr. Hao Sun is Office 1719, Lide Building, 59 Zhongguancun Street, Haidian District, Beijing, People's Republic of China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Represents 460,091 Class A ordinary shares represented by 690,137 ADSs held by Ms. Nan Shen as of March 12, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)Represents (i) 93,169 Class A ordinary shares represented by 139,754 ADSs held by Mr. Bin Luo and (ii) 1,609,310 Class A ordinary shares represented by 2,413,965 ADSs held by Cheer Giant Development Limited (BVI), which is beneficially owned by Mr. Bin Luo as of March 12, 2026.

As of February 28, 2026, to our knowledge, 101,174,316 of our Class A ordinary shares are held by one record holder in the United States. The holder is Deutsche Bank Trust Company Americas, the depositary of our ADR program, which holds 101,174,316 Class A ordinary shares, representing approximately 63.6% of our total outstanding shares on an as-converted basis. None of our outstanding Class B ordinary shares are held by record holders in the United States. The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.

We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

For options and restricted share units granted to our officers, directors and employees, see "—B. Compensation of Directors and Executive Officers—Share Incentive Plan."

**F. Disclosure of Registrant's Action to Recover Erroneously Awarded Compensation** 

Not applicable.

**ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS** 

**A. Major Shareholders**

See "Item 6. Directors, Senior Management and Employees—E. Share Ownership."

**B. Related Party Transactions** 

In May 2023, upon the approval of audit committee, Mr. Larry Xiangdong Chen injected capital RMB15.0 million to obtain 60% of the equity interest of Beijing GaoTuJiaPin Technology Co., Ltd, or GaoTuJiaPin. GaoTuJiaPin is a company engaged in livestreaming e-commerce, which was formerly one of Beijing Gaotu's subsidiaries. As a result of the capital injection, the Group's equity interest in GaoTuJiaPin was diluted from 100% to 40% and lost control over GaoTuJiaPin. The Group has significant influence over GaoTuJiaPin and accounts for the retained equity interest as an equity method investment in accordance with ASC 323.

Related party transaction and balance between the Group and GaoTuJiaPin were both immaterial in 2024 and 2025.

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**Contractual Arrangements with the VIEs**

See "Item 4. Information on the Company—C. Organizational Structure."

**Employment Agreements and Indemnification Agreements**

See "Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers—Employment Agreements and Indemnification Agreements."

**Share Option Grants**

See "Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers—Share Incentive Plan."

**C. Interests of Experts and Counsel**

Not applicable.

**ITEM 8. FINANCIAL INFORMATION**

**A. Consolidated Statements and Other Financial Information**

We have appended consolidated financial statements filed as part of this annual report.

**Legal Proceedings** 

In April 2020, a putative shareholder class action lawsuit was filed in the United States District Court for the District of New Jersey against our company, our chief executive officer and our chief financial officer: Wu v. GAOTU Techedu Inc., et al, No. 2:20-cv-04457-ES-CLW (filed on April 17, 2020). On November 2, 2020, lead and named plaintiffs filed—purportedly on behalf of a class of persons who allegedly suffered damages as a result of their purchases or acquisitions of our ADSs between June 6, 2019 and October 20, 2020—an amended class action complaint, which alleges that our company's public filings with the SEC contained material misstatements or omissions in violation of the federal securities laws. On February 24, 2023, the Court granted defendants' motion to dismiss, with leave to amend. On April 25, 2023, plaintiffs filed their Second Amended Complaint. Briefing on Defendant's motion to dismiss was complete on August 23, 2023. The Court denied Defendants' motion to dismiss on June 25, 2024. On March 6, 2025, defendants filed a motion to strike certain allegations in the Second Amended Complaint and requested renewal of their motion to dismiss the Second Amended Complaint. Briefing on the motion to strike is ongoing.

Separately, we and certain of our officers were named as defendants in a putative securities class action filed in federal court in December 2022, captioned Zhang v. Gaotu Techedu Inc. et al., No. 1:22-cv-07966 (U.S. District Court for the Eastern District of New York). Plaintiffs purportedly brought the case on behalf of a class of persons who purchased our ADSs between March 5, 2021 and July 23, 2021, alleged that our public filings contained misstatements and omissions in violation of the Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Plaintiffs filed the Amended Complaint on October 16, 2023. Defendants filed the motion to dismiss on March 22, 2024. Briefing on Defendants' motion to dismiss was completed on June 20, 2024. On February 6, 2025, the Court denied our motion to dismiss. Discovery is ongoing.

**Dividend Policy** 

Our board of directors has discretion on whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. In either case, all dividends are subject to certain restrictions under Cayman Islands law, namely that our company may only pay dividends out of profits or share premium account, and provided always that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business. Even if we decide to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

We do not have any present plan to pay any cash dividends on our ordinary shares in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

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We are a holding company incorporated in the Cayman Islands. We may rely on dividends from our subsidiaries in mainland China for our cash requirements, including any payment of dividends to our shareholders. Mainland China's regulations may restrict the ability of our mainland China subsidiaries to pay dividends to us. See "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may rely on dividends paid by our mainland China subsidiaries to fund cash and financing requirements. Any limitation on the ability of our mainland China subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of our ADSs and our ordinary shares."

If we pay any dividends on our ordinary shares, we will pay those dividends which are payable in respect of the Class A ordinary shares underlying the ADSs to the depositary, as the registered holder of such Class A ordinary shares, and the depositary then will pay such amounts to the ADS holders in proportion to the Class A ordinary shares underlying the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. See "Item 12. Description of Securities Other Than Equity Securities—D. American Depositary Shares." Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.

**B. Significant Changes**

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

**ITEM 9. THE OFFER AND LISTING**

**A. Offering and Listing Details.**

See "—C. Markets."

**B. Plan of Distribution**

Not applicable.

**C. Markets**

Our ADSs have been listed on the NYSE under the symbol "GSX" since June 6, 2019. On May 6, 2021, we changed our ticker symbol from "GSX" to "GOTU".

**D. Selling Shareholders**

Not applicable.

**E. Dilution**

Not applicable.

**F. Expenses of the Issue**

Not applicable.

**ITEM 10. ADDITIONAL INFORMATION** 

**A. Share Capital**

Not applicable.

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**B. Memorandum and Articles of Association** 

The following are summaries of material provisions of our currently effective third amended and restated memorandum and articles of association and of the Companies Act (As Revised) of the Cayman Islands, which we refer to as the "Companies Act" below, insofar as they relate to the material terms of our ordinary shares.

**Board of Directors**

See "Item 6. Directors, Senior Management and Employees—C. Board Practices."

**Ordinary Shares**

*General*. Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. Holders of our Class A ordinary shares and Class B ordinary shares will have the same rights except for voting and conversion rights. Our ordinary shares are issued in registered form and are issued when registered in our register of members (shareholders). We may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their shares.

*Conversion*. Class B ordinary shares may be converted into the same number of Class A ordinary shares by the holders thereof at any time, while Class A ordinary shares cannot be converted into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of Class B ordinary shares by a holder thereof to any person who is not our founder (Mr. Larry Xiangdong Chen) or an affiliate of the founder, such Class B ordinary shares shall be automatically and immediately converted into the same number of Class A ordinary shares.

*Dividends*. The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors or declared by our shareholders by ordinary resolution (provided that no dividend may be declared by our shareholders which exceeds the amount recommended by our directors). Our third amended and restated memorandum and articles of association provide that dividends may be declared and paid out of our profits, realized or unrealized, or from any reserve set aside from profits which our board of directors determine is no longer needed. Under the laws of the Cayman Islands, our company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business.

*Voting Rights*. Holders of Class A ordinary shares and Class B ordinary shares shall, at all times, vote together as one class on all matters submitted to a vote by the members at any general meeting of our company. Each Class A ordinary share shall be entitled to one vote on all matters subject to the vote at general meetings of our company, and each Class B ordinary share shall be entitled to ten votes on all matters subject to the vote at general meetings of our company. Voting at any meeting of shareholders is by show of hands unless a poll is demanded. A poll may be demanded by the chairman of such meeting or any one shareholder present in person or by proxy.

An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast at a meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast attaching to the outstanding ordinary shares at a meeting. A special resolution will be required for important matters such as a change of name or making changes to our third amended and restated memorandum and articles of association. Our shareholders may, among other things, divide or combine their shares by ordinary resolution.

*Transfer of Ordinary Shares*. Subject to the restrictions set out in our third amended and restated memorandum and articles of association as set out below, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by our board of directors.

Our board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Our board of directors may also decline to register any transfer of any ordinary share unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the instrument of transfer is in respect of only one class of ordinary shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the instrument of transfer is properly stamped, if required;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a fee of such maximum sum as the New York Stock Exchange may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If our directors refuse to register a transfer they shall, within three months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.

The registration of transfers may, after compliance with any notice required of the New York Stock Exchange, be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year as our board may determine.

*Liquidation*. On the winding up of our company, if the assets available for distribution amongst our shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst our shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders in proportion to the par value of the shares held by them.

*Calls on Shares and Forfeiture of Shares*. Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 days prior to the specified time and place of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.

*Redemption, Repurchase and Surrender of Shares*. We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders of these shares, on such terms and in such manner as may be determined by either our board of directors or by a special resolution of our shareholders. Our company may also repurchase any of our shares on such terms and in such manner as have been approved by our board of directors or by an ordinary resolution of our shareholders. Under the Companies Act, the redemption or repurchase of any share may be paid out of our Company's profits or out of the proceeds of a new issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if our company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding or (c) if the company has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.

*Variations of Rights of Shares*. If at any time, our share capital is divided into different classes or series of shares, the rights attached to any class or series of shares (unless otherwise provided by the terms of issue of the shares of that class or series), whether or not our company is being wound-up, may be materially adversely varied with the consent in writing of all the holders of the issued shares of that class or series or with the sanction of an ordinary resolution passed by a majority of the votes cast at a separate meeting of the holders of the shares of the class or series. The rights conferred upon the holders of the shares of any class issued shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu with such existing class of shares.

*Issuance of Additional Shares*. Our third amended and restated memorandum and articles of association authorize our board of directors to issue additional ordinary shares from time to time as our board of directors shall determine, to the extent of available authorized but unissued shares.

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Our third amended and restated memorandum and articles of association also authorize our board of directors to establish from time to time one or more series of preference shares and to determine, with respect to any series of preference shares, the terms and rights of that series, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the designation of the series;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the number of shares of the series;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the dividend rights, dividend rates, conversion rights, voting rights; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the rights and terms of redemption and liquidation preferences.

Our board of directors may issue preference shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of ordinary shares.

*Inspection of Books and Records*. Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records (other than copies of our memorandum and articles of association, our register of mortgages and charges, any special resolutions passed by our shareholders, and a list of the names of our current directors upon the payment of a fee to the Cayman Registrar). However, we will provide our shareholders with annual audited financial statements.

*Anti-Takeover Provisions*. Provisions of our third amended and restated memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•limit the ability of shareholders to requisition and convene general meetings of shareholders.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our third amended and restated memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the best interests of our company.

*Exempted Company*. We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except that an exempted company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•does not have to file an annual return of its shareholders with the Registrar of Companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•is not required to open its register of members for inspection;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•does not have to hold an annual general meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•may issue negotiable or bearer shares or shares with no par value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•may register as a limited duration company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•may register as a segregated portfolio company.

"Limited liability" means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

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**Registered Office and Objects**

Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other location within the Cayman Islands as our directors may from time to time decide. The objects for which our company is established are unrestricted and we have full power and authority to carry out any object not prohibited by the Companies Act or any other law of the Cayman Islands.

**Differences in Corporate Law**

The Companies Act is derived, to a large extent, from the older Companies Acts of England but does not follow recent English statutory enactments and accordingly there are significant differences between the Companies Act and the current Companies Act of England. In addition, the Companies Act differs from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

*Mergers and Similar Arrangements.* The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (i) "merger" means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (ii) a "consolidation" means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company's articles of association. The written plan of merger or consolidation must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders of that Cayman subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that member agrees otherwise. For this purpose a company is a "parent" of a subsidiary if it holds issued shares that together represent at least ninety percent (90%) of the votes at a general meeting of the subsidiary.

The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands.

Save in certain limited circumstances, a shareholder of a Cayman constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting to the merger or consolidation, provide the dissenting shareholder complies strictly with the procedures set out in the Companies Act. The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.

Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the statutory provisions as to the required majority vote have been met;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.

The Companies Act also contains a statutory power of compulsory acquisition which may facilitate the "squeeze out" of dissentient minority shareholder upon a tender offer. When a tender offer is made and accepted by holders of 90.0% of the shares affected within four months, the offer or may, within a two-month period commencing on the expiration of such four-month period, require the holders of the remaining shares to transfer such shares to the offer or on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.

If an arrangement and reconstruction by way of scheme of arrangement is thus approved and sanctioned, or if a tender offer is made and accepted in accordance with the foregoing statutory procedures, a dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

*Shareholders' Suits*. In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company, and as a general rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands court can be expected to follow and apply the common law principles (namely the rule in *Foss v. Harbottle* and the exceptions thereto) so that a non-controlling shareholder may be permitted to commence a class action against or derivative actions in the name of the company to challenge actions where:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a company acts or proposes to act illegally or ultra vires (and is therefore incapable of ratification by the shareholders);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•those who control the company are perpetrating a "fraud on the minority."

*Indemnification of Directors and Executive Officers and Limitation of Liability.* Cayman Islands law does not limit the extent to which a company's memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our third amended and restated memorandum and articles of association provide that our directors and officers shall be indemnified against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such director or officer, other than by reason of such person's own dishonesty, willful default or fraud, in or about the conduct of our company's business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we have entered into indemnification agreements with each of our directors and executive officers that will provide such persons with additional indemnification beyond that provided in our third amended and restated memorandum and articles of association.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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*Directors' Fiduciary Duties.* Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he owes the following duties to the company—a duty to act bona fide in the best interests of the company, a duty not to make a profit based on his position as director (unless the company permits him to do so), a duty not to put himself in a position where the interests of the company conflict with his personal interest or his duty to a third party, and a duty to exercise powers for the purpose for which such powers were intended. A director of a Cayman Islands company owes to the company a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.

Under our third amended and restated memorandum and articles of association, directors who are in any way, whether directly or indirectly, interested in a contract or proposed contract with our company must declare the nature of their interest at a meeting of the board of directors. Following such declaration, a director may vote in respect of any contract or proposed contract notwithstanding his interest.

*Shareholder Action by Written Consent*. Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. Cayman Islands law and our third amended and restated memorandum and articles of association provide that our shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.

*Shareholder Proposals.* Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders; provided that it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

The Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company's articles of association. Our third amended and restated memorandum and articles of association provide that, on the requisition of shareholders holding shares representing in aggregate not less than one-third (1/3) of all votes attaching to all issued and outstanding shares of our company that as at the date of the deposit of such requisition carry the right to vote at general meetings of our company, the board shall convene an extraordinary general meeting. However, our third amended and restated memorandum and articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders. As a Cayman Islands exempted company, we are not obliged by law to call shareholders' annual general meetings.

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*Cumulative Voting.* Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation's certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder's voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but our third amended and restated memorandum do not provide for cumulative voting.

*Removal of Directors.* Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the issued and outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our third amended and restated memorandum and articles of association, directors may be removed by ordinary resolution of our shareholders notwithstanding any agreement between our company and such director (but without prejudice to any claim for damages under such agreement).

*Transactions with Interested Shareholders.* The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an "interested shareholder" for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target's outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target's board of directors.

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on the minority shareholders.

*Dissolution; Winding Up*. Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation's outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by either an order of the courts of the Cayman Islands or by the board of directors.

Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.

*Variation of Rights of Shares*. Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under our third amended and restated memorandum and articles of association, we may only materially adversely vary the rights attached to any class of shares (subject to any rights or restrictions for the time being attached to any class of share) with the consent in writing of the holders of all of the issued shares of that class or with the sanction of an ordinary resolution passed by a majority of the votes cast at a separate meeting of the holders of the shares of that class.

*Amendment of Governing Documents.* Under the Delaware General Corporation Law, a corporation's governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under the Companies Act and our third amended and restated memorandum and articles of association, our memorandum and articles of association may only be amended by a special resolution of our shareholders.

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*Rights of Non-Resident or Foreign Shareholders*. There are no limitations imposed by our third amended and restated memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our third amended and restated memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.

See "Exhibit 2.4—Description of Securities" attached to this Form 20-F for more descriptions of our securities.

**C. Material Contracts**

We have not entered into any material contracts other than in the ordinary course of business and other than those described in "Item 4. Information on the Company" or elsewhere in this annual report on Form 20-F.

**D. Exchange Controls**

See "Item 4. Information on the Company—B. Business Overview—Government Regulations—Regulation Related to Foreign Exchange."

**E. Taxation**

The following summary of Cayman Islands, mainland China and U.S. federal income tax considerations of an investment in the ADSs or Class A ordinary shares is based upon laws and interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This summary does not deal with all possible tax considerations relating to an investment in the ADSs or Class A ordinary shares, such as the tax considerations under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands, the People's Republic of China and the United States. To the extent that the discussion relates to matters of Cayman Islands tax law, it represents the opinion of Maples and Calder (Hong Kong) LLP, our Cayman Islands counsel; to the extent it relates to the tax law of mainland China, it is the opinion of Tian Yuan Law Firm, our PRC counsel.

**Cayman Islands Taxation** 

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to holders of our ADSs or ordinary shares levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our ordinary shares or ADSs will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares or ADSs, nor will gains derived from the disposal of our ordinary shares or ADSs be subject to Cayman Islands income or corporation tax.

No stamp duty is payable in respect of the issue of the shares or on an instrument of transfer in respect of a share.

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**Mainland China Taxation**

Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of mainland China with a "de facto management body" within mainland China is considered a resident enterprise and will be subject to the enterprise income tax at the rate of 25% on its global income. The implementation rules define the term "de facto management body" as the body that exercises full and substantial control over and overall management of the business, productions, personnel, accounts and properties of an enterprise. In April 2009, the State Administration of Taxation issued a circular, which provides certain specific criteria for determining whether the "de facto management body" of a mainland China-controlled enterprise that is incorporated offshore is located in mainland China. Although this circular only applies to offshore enterprises controlled by mainland China enterprises or mainland China enterprise groups, not those controlled by mainland China individuals or foreigners, the criteria set forth in the circular may reflect the State Administration of Taxation's general position on how the "de facto management body" test should be applied in determining the tax resident status of all offshore enterprises. According to this circular, an offshore incorporated enterprise controlled by a mainland China enterprise or a mainland China enterprise group will be regarded as a mainland China tax resident by virtue of having its "de facto management body" in mainland China only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in mainland China; (ii) decisions relating to the enterprise's financial and human resource matters are made or are subject to approval by organizations or personnel in mainland China; (iii) the enterprise's primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in mainland China; and (iv) at least 50% of voting board members or senior executives habitually reside in mainland China.

We believe that Gaotu Techedu Inc. is not a mainland China resident enterprise for tax purposes. Gaotu Techedu Inc. is not controlled by a mainland China enterprise or mainland China enterprise group, and we do not believe that Gaotu Techedu Inc. meets all of the conditions above. Gaotu Techedu Inc. is a company incorporated outside of mainland China. For the same reasons, we believe our other entities outside of mainland China are not mainland China resident enterprises either. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "de facto management body." There can be no assurance that the PRC government will ultimately take a view that is consistent with us.

If the PRC tax authorities determine that Gaotu Techedu Inc. is a mainland China resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of the ADSs. In addition, non-resident enterprise shareholders (including the ADS holders) may be subject to a 10% mainland China tax on gains realized on the sale or other disposition of ADSs or ordinary shares, if such income is treated as sourced from within mainland China. It is unclear whether our non-domestic individual shareholders (including the ADS holders) would be subject to any mainland China tax on dividends or gains obtained by such non-domestic individual shareholders in the event we are determined to be a mainland China resident enterprise. If any mainland China tax were to apply to such dividends or gains, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. It is also unclear whether non-domestic shareholders of Gaotu Techedu Inc. would be able to claim the benefits of any tax treaties between their country of tax residence and mainland China in the event that Gaotu Techedu Inc. is treated as a mainland China resident enterprise.

Provided that our Cayman Islands holding company, Gaotu Techedu Inc., is not deemed to be a mainland China resident enterprise, holders of the ADSs and ordinary shares who are not mainland China residents will not be subject to mainland China's income tax on dividends distributed by us or gains realized from the sale or other disposition of our ordinary shares or ADSs. However, under Bulletin 7 and Bulletin 37, where a non-resident enterprise conducts an "indirect transfer" by transferring taxable assets, including, in particular, equity interests in a mainland China resident enterprise, indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor, or the transferee or the mainland China entity which directly owned such taxable assets may report to the tax authority such indirect transfer. Using a "substance over form" principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring mainland China tax. As a result, gains derived from such indirect transfer may be subject to mainland China's enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a mainland China resident enterprise. We and our non-resident investors may be at risk of being required to file a return and being taxed under Bulletin 7 and Bulletin 37, and we may be required to expend valuable resources to comply with Bulletin 7 and Bulletin 37, or to establish that we should not be taxed under these circulars.

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**United States Federal Income Tax Considerations** 

The following discussion is a summary of U.S. federal income tax considerations generally applicable to the ownership and disposition of the ADSs or ordinary shares by a U.S. Holder (as defined below) that holds our ADSs or ordinary shares as "capital assets" (generally, property held for investment) under the U.S. Internal Revenue Code of 1986, as amended. This discussion is based upon existing U.S. federal tax law, which is subject to differing interpretations or change, possibly with retroactive effect. There can be no assurance that the IRS will not challenge the U.S. federal income tax treatment described below, or that, if challenged, such treatment will be sustained by a court. This discussion, moreover, does not address the U.S. federal estate, gift, and minimum tax considerations, the Medicare tax on net investment income, or any state, local and non-U.S. tax considerations, relating to the ownership or disposition of the ADSs or ordinary shares. The following summary does not address all aspects of U.S. federal income taxation that may be important to particular investors in light of their individual circumstances or to persons in special tax situations such as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•banks and other financial institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•insurance companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•pension plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•cooperatives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•regulated investment companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•real estate investment trusts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•broker-dealers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•traders that elect to use a mark-to-market method of accounting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•certain former U.S. citizens or long-term residents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•tax-exempt entities (including private foundations);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•persons liable for minimum tax;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•holders who acquire their ADSs or ordinary shares pursuant to any employee share option or otherwise as compensation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•investors that will hold their ADSs or ordinary shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction for U.S. federal income tax purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•investors that have a functional currency other than the U.S. dollar;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•persons that actually or constructively own 10% or more of our stock (by vote or value); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•partnerships or other entities taxable as partnerships for U.S. federal income tax purposes, or persons holding common stock through such entities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all of whom may be subject to tax rules that differ significantly from those discussed below.

Each U.S. Holder is urged to consult its tax advisor regarding the application of U.S. federal taxation to its particular circumstances, and the state, local, non-U.S. and other tax considerations of the ownership and disposition of the ADSs or our ordinary shares.

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***General***

For purposes of this discussion, a "U.S. Holder" is a beneficial owner of the ADSs or ordinary shares that is, for U.S. federal income tax purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•an individual who is a citizen or resident of the United States;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under the law of the United States or any state thereof or the District of Columbia;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a U.S. person under the U.S. Internal Revenue Code of 1986, as amended.

If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of the ADSs or ordinary shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partners in a partnerships holding the ADSs or ordinary shares are urged to consult their tax advisors regarding an investment in the ADSs or ordinary shares.

For U.S. federal income tax purposes, it is generally expected that a U.S. Holder of ADSs will be treated as the beneficial owner of the underlying shares represented by the ADSs. The remainder of this discussion assumes that a U.S. Holder of the ADSs will be treated in this manner. Accordingly, deposits or withdrawals of ordinary shares for ADSs will generally not be subject to U.S. federal income tax.

***Passive Foreign Investment Company Considerations***

A non-U.S. corporation, such as our company, will be classified as a PFIC, for U.S. federal income tax purposes for any taxable year, if either (i) 75% or more of its gross income for such year consists of certain types of "passive" income or (ii) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income. For this purpose, cash and assets readily convertible into cash are categorized as a passive asset and the company's goodwill and other unbooked intangibles are taken into account. Passive income generally includes, among other things, dividends, interest, rents, royalties, and gains from the disposition of passive assets. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock.

Based upon our current and projected income and assets and the market price of our ADSs, we do not believe that we were a PFIC for the taxable year ended December 31, 2025.However, no assurance can be given that we will not be or become a PFIC for the current taxable year or any future taxable year because the determination of whether we will be or become a PFIC is a factual determination made annually that will depend, in part, upon the composition of our income and assets. Fluctuations in the market price of the ADSs may cause us to be or become a PFIC for the current or future taxable years because the value of our assets for purposes of the asset test, including the value of our goodwill and unbooked intangibles, may be determined by reference to the market price of the ADSs from time to time (which may be volatile). The market price of our ADSs may continue to fluctuate considerably and, consequently, we cannot assure you of our PFIC status for any taxable year. Furthermore, the composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets. Under circumstances where our revenue from activities that produce passive income significantly increases relative to our revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming a PFIC may substantially increase. As previously disclosed, we believed that we were a PFIC for U.S. federal income tax purposes for our taxable year ended December 31, 2023. In addition, it is possible that one or more of our subsidiaries were also PFICs for U.S. federal income tax purposes for such taxable year.

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If we are classified as a PFIC for any year during which a U.S. Holder holds our ADSs or ordinary shares, we will generally continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or ordinary shares, unless we were to cease to be a PFIC and such U.S. Holder were to make a "deemed sale" election with respect to the ADSs or ordinary shares. However, if we cease to be a PFIC, provided that a U.S. Holder has not made a mark-to-market election, as described below, a U.S. Holder may avoid some of the adverse effects of the PFIC regime by making a "deemed sale" election with respect to the ADSs or ordinary shares, as applicable. If such election is made, such U.S. Holder will be deemed to have sold our ADSs or ordinary shares at their fair market values, and any gain from such deemed sale would be subject to the rules described below under "Passive Foreign Investment Company Rules." After the deemed sale election, so long as we do not become a PFIC in a subsequent taxable year, a U.S. Holder's ADSs or ordinary shares with respect to which such election was made will not be treated as shares in a PFIC, and such U.S. Holder will not be subject to the rules described below with respect to any "excess distribution" the U.S. Holder receives from us or any gain from an actual sale or other disposition of the ADSs or ordinary shares. The rules dealing with deemed sale elections are very complex. Each U.S. Holder should consult its tax advisors regarding the possibility and considerations of making a deemed sale election.

***Dividends***

Subject to the PFIC rules discussed below, any cash distributions paid on the ADSs or ordinary shares (including the amount of any mainland China tax withheld) out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles, will generally be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by the U.S. Holder, in the case of ordinary shares, or by the depositary, in the case of ADSs. Because we do not intend to determine our earnings and profits on the basis of U.S. federal income tax principles, any distribution we pay will generally be treated as a "dividend" for U.S. federal income tax purposes. Dividends received on the ADSs or ordinary shares will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from U.S. corporations.

Individuals and other non-corporate U.S. Holders will be subject to tax at the lower capital gain tax rate applicable to "qualified dividend income," provided that certain conditions are satisfied, including that (1) the ADSs or ordinary shares are readily tradable on an established securities market in the United States, or, in the event that we are deemed to be a mainland China resident enterprise under the tax law of mainland China, we are eligible for the benefit of the United States-PRC income tax treaty, or the Treaty, (2) we are neither a PFIC nor treated as such with respect to a U.S. Holder (as discussed below) for the taxable year in which the dividend is paid and the preceding taxable year, and (3) certain holding period requirements are met. Our ADSs (but not our ordinary shares) are listed on the New York Stock Exchange and is considered readily tradable on an established securities market in the United States. There can be no assurance that the ADSs will continue to be considered readily tradable on an established securities market in later years. Because the ordinary shares will not be listed on a U.S. exchange, dividends received with respect to ordinary shares that are not represented by ADSs may not be treated as qualified dividends. U.S. Holders are urged to consult their tax advisors regarding the availability of the lower rate for dividends paid with respect to the ADSs or ordinary shares.

In the event that we are deemed to be a mainland China resident enterprise under the PRC Enterprise Income Tax Law (see "Item 10. Additional Information—E. Taxation—Mainland China Taxation"), we may be eligible for the benefits of the Treaty. If we are eligible for such benefits, dividends we pay on our ordinary shares, regardless of whether such shares are represented by the ADSs, and regardless of whether the ADSs are readily tradable on an established securities market in the United States, would be eligible for the reduced rates of taxation described in the preceding paragraph.

For U.S. foreign tax credit purposes, dividends paid on the ADSs or ordinary shares generally will be treated as income from foreign sources and generally will constitute passive category income. If mainland China withholding taxes apply to dividends paid to a U.S. Holder with respect to the ADSs or ordinary shares, such U.S. Holder may be able to obtain a reduced rate of mainland China withholding taxes under the Treaty if certain requirements are met. In addition, subject to certain conditions and limitations, mainland China withholding taxes on dividends that are non-refundable under the Treaty may be treated as foreign taxes eligible for credit against a U.S. Holder's U.S. federal income tax liability. A U.S. Holder who does not elect to claim a foreign tax credit for foreign tax withheld may instead claim a deduction for U.S. federal income tax purposes, in respect of such withholding, but only for a year in which such holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex and U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

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As previously disclosed, we believed that we were a PFIC for the taxable year ended December 31, 2023, and, as discussed above, no assurances can be given with regard to our PFIC status for our current or subsequent taxable years. U.S. Holders are urged to consult their tax advisors regarding the availability of the reduced tax rate on dividends with respect to Securities under their particular circumstances.

***Sale or Other Disposition***

Subject to the PFIC rules discussed below, a U.S. Holder will generally recognize gain or loss upon the sale or other disposition of ADSs or ordinary shares in an amount equal to the difference between the amount realized upon the disposition and the holder's adjusted tax basis in such ADSs or ordinary shares. The gain or loss will generally be capital gain or loss. Individuals and other non-corporate U.S. Holders who have held the ADSs or ordinary shares for more than one year will generally be eligible for reduced tax rates. The deductibility of a capital loss may be subject to limitations. Any such gain or loss that the U.S. Holder recognizes will generally be treated as U.S. source income or loss for foreign tax credit limitation purposes, which will generally limit the availability of foreign tax credits. However, in the event we are deemed to be a mainland China resident enterprise under the PRC Enterprise Income Tax Law, we may be eligible for the benefits of the Treaty. In such event, if mainland China tax were to be imposed on any gain from the disposition of the ADSs or ordinary shares, a U.S. Holder that is eligible for the benefits of the Treaty may elect to treat such gain as mainland China source income. Pursuant to United States Treasury Regulations, however, if a U.S. Holder is not eligible for the benefits of the Treaty or does not elect to apply the Treaty, then such holder may not be able to claim a foreign tax credit arising from any mainland China tax imposed on the disposition of ADSs or ordinary shares. The rules regarding foreign tax credits and deduction of foreign taxes are complex. U.S. Holders should consult their tax advisors regarding the availability of a foreign tax credit or deduction in light of their particular circumstances, including their eligibility for benefits under the Treaty and the potential impact of the United States Treasury Regulations.

As previously disclosed, we believed that we were a PFIC for the taxable year ended December 31, 2023, and, as discussed above, no assurances can be given with regard to our PFIC status for our current or subsequent taxable years. U.S. Holders are urged to consult their tax advisors regarding the availability of the reduced tax rate on dividends with respect to Securities under their particular circumstances.

***Passive Foreign Investment Company Rules***

If we are classified as a PFIC for any taxable year during which a U.S. Holder holds the ADSs or ordinary shares, and unless the U.S. Holder makes a qualified electing fund election or a mark-to-market election (as described below), the U.S. Holder will generally be subject to special tax rules on (i) any excess distribution that we make to the U.S. Holder (which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than 125 percent of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. Holder's holding period for the ADSs or ordinary shares), and (ii) any gain realized on the sale or other disposition of ADSs or ordinary shares. Under the PFIC rules:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the excess distribution or gain will be allocated ratably over the U.S. Holder's holding period for the ADSs or ordinary shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the amount allocated to the current taxable year and any taxable years in the U.S. Holder's holding period prior to the first taxable year in which we are classified as a PFIC (each, a "pre-PFIC year"), will be taxable as ordinary income; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for that year, increased by an additional tax equal to the interest on the resulting tax deemed deferred with respect to each such taxable year.

If we are a PFIC for any taxable year during which a U.S. Holder holds the ADSs or ordinary shares and any of our subsidiaries, our consolidated VIEs or any of the subsidiaries of our consolidated VIEs is also a PFIC, or a lower-tier PFIC, such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. U.S. Holders are urged to consult their tax advisors regarding the application of the PFIC rules to any of our subsidiaries, our consolidated VIEs or any of the subsidiaries of our consolidated VIEs.

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As an alternative to the foregoing rules, a U.S. Holder of "marketable stock" (as defined below) in a PFIC may make a mark-to-market election with respect to such stock, provided that such stock is regularly traded on a qualified exchange or other market, as defined in the applicable United States Treasury regulations. For those purposes, our ADSs, but not our ordinary shares, are listed on the New York Stock Exchange, which is a qualified exchange. We anticipate that our ADSs should qualify as being regularly traded, but no assurances may be given in this regard. If a U.S. Holder makes this election with respect to the ADSs, the holder will generally (i) include as ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of ADSs held at the end of the taxable year over the adjusted tax basis of such ADSs and (ii) deduct as an ordinary loss the excess, if any, of the adjusted tax basis of the ADSs over the fair market value of such ADSs held at the end of the taxable year, but such deduction will only be allowed to the extent of the amount previously included in income as a result of the mark-to-market election. The U.S. Holder's adjusted tax basis in the ADSs would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. Holder makes a mark-to-market election in respect of the ADSs and we cease to be classified as a PFIC, the holder will not be required to take into account the gain or loss described above during any period that we are not classified as a PFIC. If a U.S. Holder makes a mark-to-market election, any gain such U.S. Holder recognizes upon the sale or other disposition of the ADSs in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as ordinary loss, but such loss will only be treated as ordinary loss to the extent of the net amount previously included in income as a result of the mark-to-market election.

The mark-to-market election is available only for "marketable stock," generally, stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter, or regularly traded, on a national securities exchange that is registered with the SEC, including the New York Stock Exchange (on which the ADSs are listed), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. Consequently, if the ADSs continue to be listed on the New York Stock Exchange and are regularly traded, we expect that the mark-to-market election would be available to U.S. Holders of the ADSs. However, there can be no assurance in this regard. Further, because a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the PFIC rules with respect to such U.S. Holder's indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.

We do not intend to provide information necessary for U.S. Holders to make qualified electing fund elections which, if available, would result in tax treatment different from (and generally less adverse than) the general tax treatment for PFICs described above.

If a U.S. Holder owns the ADSs or ordinary shares during any taxable year that we are a PFIC, the holder must generally file an annual IRS Form 8621.

The rules dealing with PFICs are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. Holders of ADSs or ordinary shares should consult their tax advisors regarding the reporting requirements that may apply and the U.S. federal income tax considerations of owning and disposing of the ADSs or ordinary shares if we are treated as a PFIC, including the possibility of making a mark-to-market election and the unavailability of the qualified electing fund election.

**THE PRECEDING DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS INTENDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE TAX ADVICE. U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSIDERATIONS OF THE OWNERSHIP AND DISPOSITION OF THE ADSS AND ORDINARY SHARES IN THEIR PARTICULAR CIRCUMSTANCES.**

**F. Dividends and Paying Agents**

Not Applicable.

**G. Statement by Experts**

Not Applicable.

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**H. Documents on Display**

We are subject to the periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers, and are required to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F within four months after the end of each fiscal year, which is December 31. All information we file with the SEC can be obtained over the internet at the SEC's website at www.sec.gov. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

We will furnish Deutsche Bank Trust Company Americas, the depositary of our ADSs, with our annual reports, which will include a review of operations and annual audited consolidated financial statements prepared in conformity with U.S. GAAP, and all notices of shareholders' meetings and other reports and communications that are made generally available to our shareholders. The depositary will make such notices, reports and communications available to holders of ADSs and, upon our request, will mail to all record holders of ADSs the information contained in any notice of a shareholders' meeting received by the depositary from us.

In accordance with NYSE Rule 203.01, we will post this annual report on our website *https://ir.gaotu.cn*. In addition, we will provide hardcopies of our annual report to shareholders, including ADS holders, free of charge upon request.

**I. Subsidiary Information**

Not applicable.

**J. Annual Report to Security Holders**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.

**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

***Foreign Exchange Risk***

All of our net revenues and expenses are denominated in RMB. We have utilized derivative financial instruments to hedge our exposure to foreign exchange risk since January 2021. Although our exposure to foreign exchange risks should be limited in general, the value of your investment in our ADSs will be affected by the exchange rate between U.S. dollar and Renminbi because the value of our business is effectively denominated in RMB, while our ADSs will be traded in U.S. dollars.

The conversion of Renminbi into other currencies, including U.S. dollars, is based on rates set by the People's Bank of China. The Renminbi has fluctuated against other currencies, at times significantly and unpredictably. The value of Renminbi against other currencies is affected by changes in China's political and economic conditions and by China's foreign exchange policies, among other things. It is difficult to predict how market forces or government policies may impact the exchange rate between Renminbi and other currencies in the future.

To the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of Renminbi against the U.S. dollar would reduce the Renminbi amount we receive from the conversion. Conversely, if we decide to convert Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs, servicing our outstanding debt, or for other business purposes, appreciation of the U.S. dollar against the Renminbi would reduce the U.S. dollar amounts available to us.

As of December 31, 2025, we had RMB-denominated cash and cash equivalents, restricted cash, short-term investments and long-term investments of RMB3,095.6 million, U.S. dollar-denominated cash and cash equivalents, short-term investments and long-term investments of US$124.8 million, Hong Kong dollar-denominated cash and cash equivalents of HK$0.7 million and Singapore dollar-denominated cash and cash equivalents of S$0.1 million. Assuming we had converted RMB3,095.6 million into U.S. dollars at the exchange rate of RMB6.9931 for US$1.0000 as of the end of 2025, our U.S. dollar cash balance would have been US$567.6 million. If the RMB had appreciated by 10% against the U.S. dollar, our U.S. dollar cash balance would have been US$611.9 million instead. Assuming we had converted US$124.8 million into RMB at the exchange rate of RMB6.9931 for US$1.0000 as of the end of 2025, our RMB cash balance would have been RMB3,969.5 million. If the RMB had appreciated by 10% against the U.S. dollar, our RMB cash balance would have been RMB3,890.2 million instead.

------

***Interest Rate Risk***

Our exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held in interest-bearing bank deposits and wealth management products. Interest-earning instruments carry a degree of interest rate risk. We have not been exposed to material risks due to changes in interest rates, and we have not used any derivative financial instruments to manage our interest risk exposure.

In the future, we may invest in interest-earning instruments. Investments in both fixed rate and floating rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall.

**ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

**A. Debt Securities** 

Not applicable.

**B. Warrants and Rights**

Not applicable.

**C. Other Securities**

Not applicable.

**D. American Depositary Shares**

**Fees and Charges Our ADS holders May Have to Pay**

As an ADS holder, you will be required to pay the following service fees to the depositary bank and certain taxes and governmental charges (in addition to any applicable fees, expenses, taxes and other governmental charges payable on the deposited securities represented by any of your ADSs):

---

| | |
|:---|:---|
| **Service** | **Fees** |
| · To any person to which ADSs are issued or to any person to which a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash) | Up to US$0.05 per ADS issued |
| · Cancellation of ADSs, including the case of termination of the deposit agreement | Up to US$0.05 per ADS cancelled |
| · Distribution of cash dividends | Up to US$0.05 per ADS held |
| · Distribution of cash entitlements (other than cash dividends) and/or cash proceeds from the sale of rights, securities and other entitlements | Up to US$0.05 per ADS held |
| · Distribution of ADSs pursuant to exercise of rights | Up to US$0.05 per ADS held |
| · Distribution of securities other than ADSs or rights to purchase additional ADSs | Up to US$0.05 per ADS held |
| · Depositary services | Up to US$0.05 per ADS held on the applicable record date(s) established by the depositary bank |

---

------

As an ADS holder, you will also be responsible to pay certain fees and expenses incurred by the depositary bank and certain taxes and governmental charges (in addition to any applicable fees, expenses, taxes and other governmental charges payable on the deposited securities represented by any of your ADSs) such as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Fees for the transfer and registration of shares charged by the registrar and transfer agent for the shares in the Cayman Islands (i.e., upon deposit and withdrawal of shares).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Expenses incurred for converting foreign currency into U.S. dollars.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Expenses for cable, telex and fax transmissions and for delivery of securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Taxes and duties upon the transfer of securities, including any applicable stamp duties, any stock transfer charges or withholding taxes (i.e., when shares are deposited or withdrawn from deposit).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Fees and expenses incurred in connection with the delivery or servicing of shares on deposit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Fees and expenses incurred in connection with complying with exchange control regulations and other regulatory requirements applicable to shares, deposited securities, ADSs and ADRs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Any applicable fees and penalties thereon.

The depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary bank by the brokers (on behalf of their clients) receiving the newly issued ADSs from the depositary bank and by the brokers (on behalf of their clients) delivering the ADSs to the depositary bank for cancellation. The brokers in turn charge these fees to their clients. Depositary fees payable in connection with distributions of cash or securities to ADS holders and the depositary services fee are charged by the depositary bank to the holders of record of ADSs as of the applicable ADS record date.

The depositary fees payable for cash distributions are generally deducted from the cash being distributed or by selling a portion of distributable property to pay the fees. In the case of distributions other than cash (i.e., share dividends, rights), the depositary bank charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated or uncertificated in direct registration), the depositary bank sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts (via DTC), the depositary bank generally collects its fees through the systems provided by DTC (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts. The brokers and custodians who hold their clients' ADSs in DTC accounts in turn charge their clients' accounts the amount of the fees paid to the depositary banks.

In the event of refusal to pay the depositary fees, the depositary bank may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder.

**Fees and Other Payments Made by the Depositary to Us**

The depositary may make payments to us or reimburse us for certain costs and expenses, by making available a portion of the ADS fees collected in respect of the ADR program or otherwise, upon such terms and conditions as we and the depositary bank agree from time to time. During the year ended December 31, 2025, we received a total of US$5.6 million after tax contribution from the depository, which was paid to us for expenses incurred in connection with the establishment and maintenance of the ADR program. The payment we received was recognized in other income.

**PART II.**

**ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

None.

------

**ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

**Material Modifications to the Rights of Security Holders**

See "Item 10. Additional Information—B. Memorandum and Articles of Association—Ordinary Shares" for a description of the rights of securities holders, which remain unchanged.

**ITEM 15. CONTROLS AND PROCEDURES**

**A. Evaluation of Disclosure Controls and Procedures**

Our management, with the participation of our chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report, as required by Rule 13a-15(b) under the Exchange Act.

Based upon that evaluation, our management has concluded that, as of December 31, 2025, our disclosure controls and procedures were effective in ensuring that the information required to be disclosed by us in the reports that we file and furnish under the Exchange Act was recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

**B. Management's Annual Report on Internal Control over Financial Reporting** 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles (GAAP) in the United States of America and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use or disposition of our company's assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules as promulgated by the Securities and Exchange Commission, our management, including our chief executive officer and chief financial officer, assessed the effectiveness of internal control over financial reporting as of December 31, 2025 using the criteria set forth in the report "Internal Control—Integrated Framework (2013)" published by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025.

------

**C. Attestation Report of the Registered Public Accounting Firm**

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**To the Shareholders and the Board of Directors of Gaotu Techedu Inc.**

**Opinion on Internal Control over Financial Reporting**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have audited the internal control over financial reporting of Gaotu Techedu Inc. and subsidiaries (the "Company") as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated April 22, 2026 expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the convenience translation of Renminbi amounts into United States dollar amounts.

**Basis for Opinion**

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

**Definition and Limitations of Internal Control over Financial Reporting**

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP

Beijing, the People's Republic of China

April 22, 2026

------

**D. Changes in Internal Control over Financial Reporting**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were no changes in our internal control over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**ITEM 16. [RESERVED]**

**ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT**

Our board of directors has determined that Jin Cui, an independent director and member of our audit committee, is an audit committee financial expert.

**ITEM 16B. CODE OF ETHICS**

Our board of directors has adopted a code of ethics that applies to all of the directors, officers and employees of us and our subsidiaries, whether they work for us on a full-time, part-time, consultative, or temporary basis. Certain provisions of the code apply specifically to our chief executive officer, chief financial officer, senior finance officer, controller, senior vice presidents, vice presidents and any other persons who perform similar functions for us. We have posted a copy of our code of business conduct and ethics on our website at https://ir.gaotu.cn/governance/documents.

**ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The following table sets forth the aggregate fees by the categories specified below in connection with certain professional services rendered by Deloitte Touche Tohmatsu Certified Public Accountants LLP (PCAOB ID: 1113), our independent registered public accounting firm, for the periods indicated. We did not pay any other fees to our auditors during the periods indicated below.

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| | | |
|:---|:---|:---|
|  | **2024** | **2025** |
|  | **RMB** | **RMB** |
|  | **(in thousands)** | **(in thousands)** |
| Audit fees <sup>(1)</sup> | 10650 | 10930 |
| Tax fees <sup>(2)</sup> | 553 | 288 |

---

------

Notes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)"Audit fees" represent the aggregate fees billed for professional services rendered by our principal auditor for the audit of our annual financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)"Tax fees" represent the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal auditor for tax compliance, tax advice, and tax planning.

The policy of our audit committee is to pre-approve all audit and non-audit services provided by Deloitte Touche Tohmatsu Certified Public Accountants LLP, including audit services and audit-related services as described above, other than those for *de minimis* services which are approved by the Audit Committee prior to the completion of the audit.

**ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

Not applicable.

------

**ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**

On November 22, 2022, our board of directors authorized a share repurchase program (the "2022 Share Repurchase Program"), under which we may repurchase up to US$30 million of our ordinary shares, including shares represented by American depositary shares, effective until November 22, 2025. In November 2023, our board of directors authorized modifications to the share repurchase program, increasing the aggregate value of shares that may be repurchased from US$30 million to US$80 million, effective until November 22, 2025. In May 2025, our board of directors authorized a new share repurchase program (the "2025 Share Repurchase Program"), under which we may repurchase up to an aggregate value of US$100 million of our shares during the three-year period beginning upon the completion of our Share Repurchase Program. In September 2025, the 2022 Share Repurchase Program was completed. As of March 31, 2026, we had cumulatively repurchased approximately 31.8 million ADSs for approximately US$95.3 million under aforesaid two share repurchase programs.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total Number of ADSs Purchased** | **Average Price Paid Per ADS** | **Total Number of ADSs Purchased as Part of the 2022 Share Repurchase Program** | **Approximate Dollar Value of ADSs that May Yet Be Purchased Under the 2022 Share Repurchase Program** |
| Apr-25 | 2097699 | 2.8 | 2097699 | 14669984 |
| May-25 | 1597359 | 3.6 | 1597359 | 8962986 |
| Jun-25 | 892713 | 3.6 | 892713 | 5585964 |
| Jul-25 | 494644 | 3.6 | 494644 | 3791745 |
| Aug-25 | 301940 | 3.6 | 301940 | 2689274 |
| Sep-25 | 724809 | 3.6 | 724809 |  |
| Total | 6109164 | 3.2 | 6109164 |  |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total Number of ADSs Purchased** | **Average Price Paid Per ADS** | **Total Number of ADSs Purchased as Part of the 2025 Share Repurchase Program** | **Approximate Dollar Value of ADSs that May Yet Be Purchased Under the 2025 Share Repurchase Program** |
| Sep-25 | 273531 | 3.6 | 273531 | 99071448 |
| Oct-25 | 800060 | 3.1 | 800060 | 96546415 |
| Nov-25 | 968619 | 2.6 | 968619 | 93979053 |
| Dec-25 | 1124617 | 2.4 | 1124617 | 91272119 |
| Jan-26 | 876115 | 2.4 | 876115 | 89123764 |
| Feb-26 | 785367 | 2.2 | 785367 | 87389968 |
| Mar-26 | 1343375 | 2.0 | 1343375 | 84667443 |
| Total | 6171684 | 2.5 | 6171684 | 84667443 |

---

Additionally, Mr. Larry Xiangdong Chen announced in November 2022 that he intended to personally purchase up to US$20 million of our shares. As of March 31, 2026, Mr. Larry Xiangdong Chen had cumulatively purchased approximately 1.4 million ADSs on the open market under this share purchase program.

Our proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. Our board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size. We plan to fund repurchases from our cash balance.

**ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT**

Not applicable.

------

**ITEM 16G. CORPORATE GOVERNANCE**

As a Cayman Islands company listed on the NYSE, we are subject to the NYSE corporate governance listing standards. However, NYSE rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the NYSE corporate governance listing standards. We relied on the exemption available to foreign private issuers for the requirement to hold an annual meeting of shareholders during each fiscal year under Section 302 of the NYSE Listed Company Manual. We followed home country practice and did not hold an annual meeting of shareholders in the fiscal year of 2025. In addition, Section 303A.12(a) of the NYSE Listed Company Manual requires each listed company's chief executive officer to certify to the NYSE each year that he or she is not aware of any violation by the company of NYSE corporate governance listing standards. We have followed our home country practice in this regard and have not in the past submitted the certification set forth in Section 303A.12(a) of the NYSE Listed Company Manual. As a result of our election to follow home country practices, our shareholders may be afforded less protection than they would otherwise enjoy under the NYSE corporate governance listing standards applicable to U.S. domestic issuers.

Furthermore, we are also permitted to rely on exemptions afforded to controlled companies. We are a "controlled company" as defined under the New York Stock Exchange listing rules because Mr. Larry Xiangdong Chen, our founder, chairman of board of directors and chief executive officer, beneficially owns all of our issued and outstanding Class B ordinary shares and is able to exercise over 50% of our total voting power. For so long as we remain a controlled company under that definition, we are permitted to elect to rely, and may rely, on certain exemptions from corporate governance rules. If we choose to rely on these exemptions in the future, our shareholders may not be afforded the same protection that they would otherwise enjoy under these exempted NYSE corporate governance listing standards.

**ITEM 16H. MINE SAFETY DISCLOSURE**

Not applicable.

**ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

**ITEM 16J. INSIDER TRADING POLICIES**

Our board of directors has established insider trading policies and procedures to provide guidance on the purchases, sales, and other dispositions of our securities by our directors, officers, employees and consultants, with the goal of promoting compliance with applicable laws, rules, regulations and the listing standards of the NYSE relating to insider trading.

The Amended and Restated Statement of Policies Governing Material, Non-Public Information and the Prevention of Insider Trading is filed as Exhibit 11.2 to this annual report on Form 20-F.

------

**ITEM 16K. CYBERSECURITY**

**Risk Management and Strategy** 

We have implemented robust processes for assessing, identifying and managing material risks from cybersecurity threats and monitoring the prevention, detection, mitigation and remediation of material cybersecurity incident. We have also integrated cybersecurity risk management into our overall enterprise risk management system.

We have developed a comprehensive cybersecurity threat defense system to address both internal and external threats. This system encompasses various levels, including network, host and application security and incorporates systematic security capabilities for threat defense, monitoring, analysis, response, deception and countermeasures. We strive to manage cybersecurity risks and protect sensitive information through various means, such as technical safeguards, procedural requirements, an intensive program of monitoring on our corporate network, continuous testing of aspects of our security posture internally and with outside vendors, a robust incident response program and regular cybersecurity awareness training for employees. Our IT department regularly monitors the performance of our app, platform and infrastructure to enable us to respond quickly to potential problems, including potential cybersecurity threats.

As of the date of this annual report, we have not experienced any material cybersecurity incidents or identified any material cybersecurity threats that have affected or are reasonably likely to materially affect us, our business strategy, results of operations or financial condition.

**Governance**

Our board of directors is responsible for overseeing our cybersecurity risk management. Our board of directors shall (i) maintain oversight of the disclosure related to cybersecurity matters in current reports or periodic reports of our company, (ii) review updates to the status of any material cybersecurity incidents or material risks from cybersecurity threats to our company, and the relevant disclosure issues, if any, presented by our chief executive officer, chief financial officer and cybersecurity officer on a quarterly basis, and (iii) review disclosure concerning cybersecurity matters in our annual report on Form 20-F presented by our chief executive officer, chief financial officer and cybersecurity officer.

At management level, our chief executive officer, chief financial officer and cybersecurity officer, which are collectively referred to as our Cybersecurity Risk Management Officers, are responsible for assessing, identifying and managing material risks from cybersecurity threats to our company and monitoring the prevention, detection, mitigation and remediation of material cybersecurity incident. Our Cybersecurity Risk Management Officers have extensive experience in cybersecurity risk management in public companies and will report to our board of directors (i) on a quarterly basis on updates to the status of any material cybersecurity incidents or material risks from cybersecurity threats to our company, and the relevant disclosure issues, if any, and (ii) on disclosure concerning cybersecurity matters in our annual report on Form 20-F. Our cybersecurity officer has extensive experience in public company compliance and cybersecurity risk management and is familiar with our company's operational and data collection practice. Our cybersecurity officer also possesses thorough knowledge of the relevant information security and data compliance regulations.

If a cybersecurity incident occurs, our Cybersecurity Risk Management Officers will promptly organize relevant personnel for internal assessment and if it is determined that the incident could potentially be a material cybersecurity event, our Cybersecurity Risk Management Officers will promptly report the incident and assessment results to our disclosure committee, our board of directors, and other members of senior management and external legal counsel, to the extent appropriate. Our Cybersecurity Risk Management Officers shall prepare disclosure material on the cybersecurity incident for review and approval by the disclosure committee and board of directors, and other members of senior management (if necessary), before it is disseminated to the public.

**PART III.**

**ITEM 17. FINANCIAL STATEMENTS**

We have elected to provide financial statements pursuant to Item 18.

**ITEM 18. FINANCIAL STATEMENTS**

The consolidated financial statements of Gaotu Techedu Inc., its subsidiaries, and the VIEs and their subsidiaries are included at the end of this annual report.

------

**ITEM 19. EXHIBITS**

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| | |
|:---|:---|
| &nbsp;&nbsp;**Exhibit Number** |  |
| &nbsp;&nbsp;1.1 | &nbsp;&nbsp;[<u>Third Amended and Restated Memorandum and Articles of Association of the Registrant (incorporated herein by reference to Exhibit 3.2 to the registration statement on Form F-1 (File No. 333-231275), as amended, initially filed with the Securities and Exchange Commission on May 8, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519140662/d709082dex32.htm) |
| &nbsp;&nbsp;2.1 | &nbsp;&nbsp;[<u>Registrant's Specimen American Depositary Receipt (included in Exhibit 2.3)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519294656/d818535dex43.htm) |
| &nbsp;&nbsp;2.2 | &nbsp;&nbsp;[<u>Registrant's Specimen Certificate for Class A Ordinary Shares (incorporated herein by reference to Exhibit 4.2 to the registration statement on Form F-1 (File No. 333-231275), as amended, initially filed with the Securities and Exchange Commission on May 8, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519140662/d709082dex42.htm) |
| &nbsp;&nbsp;2.3 | &nbsp;&nbsp;[<u>Deposit Agreement dated June 5, 2019 among the Registrant, the depositary and the holders and beneficial owners of American Depositary Shares (incorporated herein by reference to Exhibit 4.3 to the registration statement on Form S-8 (File No. 333-235314), as amended, initially filed with the Securities and Exchange Commission on December 2, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519294656/d818535dex43.htm) |
| &nbsp;&nbsp;2.4 | &nbsp;&nbsp;[<u>Description of Securities (incorporated herein by reference to Exhibit 2.5 to the annual report on Form 20-F filed by the Registrant with the Securities and Exchange Commission on April 26, 2022)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000095017022006141/gotu-ex2_5.htm) |
| &nbsp;&nbsp;4.1 | &nbsp;&nbsp;[<u>Share Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the registration statement on Form F-1 (File No. 333-231275), as amended, initially filed with the Securities and Exchange Commission on May 8, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519140662/d709082dex101.htm) |
| &nbsp;&nbsp;4.2 | &nbsp;&nbsp;[<u>Form of Indemnification Agreement between the Registrant and its directors and executive officers (incorporated herein by reference to Exhibit 10.2 to the registration statement on Form F-1 (File No. 333-231275), as amended, initially filed with the Securities and Exchange Commission on May 8, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519140662/d709082dex102.htm) |
| &nbsp;&nbsp;4.3 | &nbsp;&nbsp;[<u>Form of Employment Agreement between the Registrant and its executive officers (incorporated herein by reference to Exhibit 10.3 to the registration statement on Form F-1 (File No. 333-231275), as amended, initially filed with the Securities and Exchange Commission on May 8, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519140662/d709082dex103.htm) |
| &nbsp;&nbsp;4.4 | &nbsp;&nbsp;[<u>English translation of the executed form of the Powers of Attorney granted by shareholders of Beijing Gaotu, as currently in effect, and a schedule of all executed Powers of Attorney adopting the same form (incorporated herein by reference to Exhibit 10.4 to the registration statement on Form F-1 (File No. 333-231275), as amended, initially filed with the Securities and Exchange Commission on May 8, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519140662/d709082dex104.htm) |
| &nbsp;&nbsp;4.5 | &nbsp;&nbsp;[<u>English translation of the Equity Interest Pledge Agreement among Beijing Lexuebang, Beijing Gaotu and shareholders of Beijing Gaotu dated March 16, 2019 (incorporated herein by reference to Exhibit 10.5 to the registration statement on Form F-1 (File No. 333-231275), as amended, initially filed with the Securities and Exchange Commission on May 8, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519140662/d709082dex105.htm) |
| &nbsp;&nbsp;4.6 | &nbsp;&nbsp;[<u>English translation of the Exclusive Management Services and Business Cooperation Agreement between Beijing Lexuebang and Beijing Gaotu dated March 16, 2019 (incorporated herein by reference to Exhibit 10.6 to the registration statement on Form F-1 (File No. 333-231275), as amended, initially filed with the Securities and Exchange Commission on May 8, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519140662/d709082dex106.htm) |
| &nbsp;&nbsp;4.7 | &nbsp;&nbsp;[<u>English translation of the Exclusive Call Option Agreement among Beijing Lexuebang, Beijing Gaotu and shareholders of Beijing Gaotu dated March 16, 2019 (incorporated herein by reference to Exhibit 10.7 to the registration statement on Form F-1 (File No. 333-231275), as amended, initially filed with the Securities and Exchange Commission on May 8, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519140662/d709082dex107.htm) |
| &nbsp;&nbsp;4.8 | &nbsp;&nbsp;[<u>English translation of executed form of the Spousal Consent Letter granted by the spouse of an individual shareholder of Beijing Gaotu, as currently in effect, and a schedule of all executed Spousal Consent Letters adopting the same form (incorporated herein by reference to Exhibit 10.8 to the registration statement on Form F-1 (File No. 333-231275), as amended, initially filed with the Securities and Exchange Commission on May 8, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519140662/d709082dex108.htm) |
| &nbsp;&nbsp;4.9 | &nbsp;&nbsp;[<u>Supplementary Agreement among Beijing Lexuebang, Beijing Gaotu, shareholders of Beijing Gaotu, Beijing Yuexuebang and Wuhan Yuexuebang dated January 26, 2021 (incorporated herein by reference to Exhibit 4.10 to the annual report on Form 20-F (File No. 001-38923) filed with the SEC on April 26, 2021)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312521130440/d22444dex410.htm) |
| &nbsp;&nbsp;4.10 | &nbsp;&nbsp;[<u>English translation of the Supplementary Agreement to the Exclusive Management Services and Business</u>](https://www.sec.gov/Archives/edgar/data/1768259/000095017025056468/gotu-ex4_10.htm)<br>[<u>Cooperation Agreement between Beijing Lexuebang and Beijing Gaotu dated November 30, 2024 (incorporated herein by reference to Exhibit 4.10 to the annual report on Form 20-F (File No.001-38923) filed with the SEC on April 22, 2025)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000095017025056468/gotu-ex4_10.htm) |

---

------

---

| | |
|:---|:---|
| &nbsp;&nbsp;4.11\* | &nbsp;&nbsp;[<u>English translation of the executed form of the Powers of Attorney granted by shareholders of Shanghai Duwen, as currently in effect, and a schedule of all executed Powers of Attorney adopting the same form</u>](gotu-ex4_11.htm) |
| &nbsp;&nbsp;4.12\*<br>| &nbsp;&nbsp;[<u>English translation of the Equity Interest Pledge Agreement among Beijing Lexuebang, Shanghai Duwen and shareholders of Shanghai Duwen dated May 1, 2025</u>](gotu-ex4_12.htm) |
| &nbsp;&nbsp;4.13\* | &nbsp;&nbsp;[<u>English translation of the Exclusive Management Services and Business Cooperation Agreement between Beijing Lexuebang and Shanghai Duwen dated May 1, 2025</u>](gotu-ex4_13.htm) |
| &nbsp;&nbsp;4.14\*<br>| &nbsp;&nbsp;[<u>English translation of the Exclusive Call Option Agreement among Beijing Lexuebang, Shanghai Duwen and shareholders of Shanghai Duwen dated May 1, 2025</u>](gotu-ex4_14.htm) |
| &nbsp;&nbsp;4.15\*<br>| &nbsp;&nbsp;[<u>English translation of executed form of the Spousal Consent Letter granted by the spouse of Guo Shuai, an individual shareholder of Shanghai Duwen, as currently in effect, and a schedule of all executed Spousal Consent Letters adopting the same form</u>](gotu-ex4_15.htm) |
| &nbsp;&nbsp;8.1\* | &nbsp;&nbsp;[<u>Subsidiaries and variable interest entities of the Registrant</u>](gotu-ex8_1.htm) |
| &nbsp;&nbsp;11.1 | &nbsp;&nbsp;[<u>Code of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to the registration statement on Form F-1 (File No. 333-231275), as amended, initially filed with the Securities and Exchange Commission on May 8, 2019)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000119312519140662/d709082dex991.htm) |
| &nbsp;&nbsp;11.2 | &nbsp;&nbsp;[<u>Amended and Restated Statement of Policies Governing Material, Non-Public Information and the Prevention of Insider Trading of the Registrant (incorporated herein by reference to Exhibit 11.2 to the annual report on Form 20-F (File No. 001-38923) filed with the SEC on April 22, 2025)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000095017025056468/gotu-ex11_2.htm) |
| &nbsp;&nbsp;12.1\* | &nbsp;&nbsp;[<u>CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](gotu-ex12_1.htm) |
| &nbsp;&nbsp;12.2\* | &nbsp;&nbsp;[<u>CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](gotu-ex12_2.htm) |
| &nbsp;&nbsp;13.1\*\* | &nbsp;&nbsp;[<u>CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](gotu-ex13_1.htm) |
| &nbsp;&nbsp;13.2\*\* | &nbsp;&nbsp;[<u>CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](gotu-ex13_2.htm) |
| &nbsp;&nbsp;15.1\* | &nbsp;&nbsp;[<u>Consent of Maples and Calder (Hong Kong) LLP</u>](gotu-ex15_1.htm) |
| &nbsp;&nbsp;15.2\* | &nbsp;&nbsp;[<u>Consent of Tian Yuan Law Firm</u>](gotu-ex15_2.htm) |
| &nbsp;&nbsp;15.3\* | &nbsp;&nbsp;[<u>Consent of Deloitte Touche Tohmatsu Certified Public Accountants LLP, an independent registered public accounting firm</u>](gotu-ex15_3.htm) |
| &nbsp;&nbsp;97.1<br>| &nbsp;&nbsp;[<u>Clawback Policy of the Registrant (incorporated by reference to Exhibit 97.1 of the Registrant's Annual Report on Form 20-F (file no. 001-38923) filed with the Securities and Exchange Commission on April 25, 2024)</u>](https://www.sec.gov/Archives/edgar/data/1768259/000095017024047938/gotu-ex97_1.htm) |
| &nbsp;&nbsp;101.INS\* | &nbsp;&nbsp;XBRL Instance Document—this instance document does not appear in the Interactive Data File because its XBRL tags embedded within the Inline XBRL document |
| &nbsp;&nbsp;101.SCH<sup>\*</sup> | &nbsp;&nbsp;Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
| &nbsp;&nbsp;104\* | &nbsp;&nbsp;Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

------

\* Filed herewith.

\*\* Furnished herewith.

------

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing its annual report on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

---

| | |
|:---|:---|
| Gaotu Techedu Inc. | Gaotu Techedu Inc. |
| By: | /s/ Larry Xiangdong Chen |
| Name: | Larry Xiangdong Chen |
| Title: | Chief Executive Officer |

---

Date: April 22, 2026

------

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

---

| | |
|:---|:---|
| <u>CONTENTS</u> | <u>PAGE(S)</u> |
| [<u>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>](#report) (PCAOB ID: 1113) | 2 |
| [<u>CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2024 AND 2025</u>](#consolidated_balance_sheets) | 4 |
| [<u>CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED</u>](#consolidated_statements_operations)<br>&nbsp;&nbsp;&nbsp;&nbsp;[<u>DECEMBER 31, 2023, 2024 AND 2025</u>](#consolidated_statements_operations) | 6 |
| [<u>CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) FOR</u>](#consolidated_statements_loss)<br>&nbsp;&nbsp;&nbsp;&nbsp;[<u>THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025</u>](#consolidated_statements_loss) | 7 |
| [<u>CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' <br> EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025</u>](#consolidated_statement_equity) | 8 |
| [<u>CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED</u>](#consolidated_cash_flows)<br>&nbsp;&nbsp;&nbsp;&nbsp;[<u>DECEMBER 31, 2023, 2024 AND 2025</u>](#consolidated_cash_flows) | 9 |
| [<u>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS</u>](#notestofanancialstatements)<br>&nbsp;&nbsp;&nbsp;&nbsp;[<u>ENDED DECEMBER 31, 2023, 2024 AND 2025</u>](#notestofanancialstatements) | 11 |
| [<u>ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I</u>](#schedule1) | 61 |

---

------

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**To the Shareholders and the Board of Directors of Gaotu Techedu Inc.**

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Gaotu Techedu Inc. and its subsidiaries (the "Company") as of December 31, 2024 and 2025, the related consolidated statements of operations, comprehensive income/(loss), changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and the financial statement schedule listed in Schedule I (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 22, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

**Convenience Translation**

Our audits also comprehended the translation of Renminbi amounts into United States dollar amounts and, in our opinion, such translation has been made in conformity with the basis stated in Note 2. Such United States dollar amounts are presented solely for the convenience of readers outside the People's Republic of China.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

------

**Critical Audit Matter**

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

***Revenue recognition – Refer to Note 2 to the financial statements***

*Critical Audit Matter Description*

The revenues of the Company are primarily derived from tutoring fees that the Company charges students in advance for its learning services for the year ended December 31, 2025. The majority of the Company's revenues is derived from its online large classes learning services. The principal consideration for our determination that occurrence assertion of online large classes learning services revenues is a critical audit matter is due to a high degree of auditor effort in performing procedures related to the Company's revenue recognition of online large classes learning services.

*How the Critical Audit Matter Was Addressed in the Audit*

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process with assistant with IT professionals, including controls over order initiation, order settlement, and revenue recognition of tuition fee. These procedures also included, among others, (i) testing of revenue transactions associated with online courses, on a sample basis, by agreeing the recorded revenue to supporting documents and testing the mathematical accuracy of the revenue recorded for the pertinent period; (ii) verifying cash collections recorded within the Company's IT systems to the records of cash collections in bank statements on a sample basis.

/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP

Beijing, the People's Republic of China

April 22, 2026

We have served as the Company's auditor since 2018.

------

**GAOTU TECHEDU INC.**

**CONSOLIDATED BALANCE SHEETS**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)** 

---

| | | | |
|:---|:---|:---|:---|
|  | As of December 31, | As of December 31, | As of December 31, |
|  | 2024 | 2025 | 2025 |
|  | RMB | RMB | USD |
|  |  |  | (Note 2) |
| ASSETS |  |  |  |
| Current assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 1321118 | 596195 | 85255 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 5222 | 115828 | 16563 |
| &nbsp;&nbsp;&nbsp;&nbsp;Short-term investments (including available-for-sale debt securities<br> of RMB985,642 and RMB2,212,717 as of December 31, 2024 <br> and 2025, respectively) | 1845242 | 2708788 | 387352 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory, net | 36401 | 54950 | 7858 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets, net | 431829 | 504779 | 72182 |
| Total current assets | **3639812** | **3980540** | **569210** |
| Non-current assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease right-of-use assets | 503601 | 476705 | 68168 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property, equipment and software, net | 670237 | 1009132 | 144304 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets, net | 17984 | 42388 | 6061 |
| &nbsp;&nbsp;&nbsp;&nbsp;Land use rights, net | 25762 | 78105 | 11169 |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term investments (including available-for-sale debt securities<br> of RMB863,625 and RMB337,494 as of December 31, 2024 and <br> 2025, respectively) | 922740 | 551641 | 78884 |
| &nbsp;&nbsp;&nbsp;&nbsp;Goodwill | 331 | 11060 | 1582 |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental deposit | 45834 | 49199 | 7035 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other non-current assets | 1776 | 916 | 131 |
| TOTAL ASSETS | **5828077** | **6199686** | **886544** |
| LIABILITIES |  |  |  |
| Current liabilities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Short-term borrowings of the consolidated VIEs without recourse <br>&nbsp;&nbsp;&nbsp;&nbsp;to the Group |  | 100000 | 14300 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities (including accrued<br> expenses and other current liabilities of the consolidated VIEs<br> without recourse to the Group of RMB811,879 and RMB1,131,781 <br> as of December 31, 2024 and 2025, respectively) | 1245207 | 1537477 | 219856 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amount due to related party of the consolidated VIEs without recourse <br>&nbsp;&nbsp;&nbsp;&nbsp;to the Group |  | 181757 | 25991 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue, current portion (including current portion of <br> deferred revenue of the consolidated VIEs without recourse to the <br> Group of RMB1,867,096 and RMB2,288,255 as of December <br> 31, 2024 and December 31, 2025, respectively) | 1867096 | 2289322 | 327369 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities, current portion (including current<br> portion of operating lease liabilities of the consolidated VIEs<br> without recourse to the Group of RMB114,471 and RMB129,258<br> as of December 31, 2024 and 2025, respectively) | 147635 | 136709 | 19549 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax payable (including income tax payable of the <br> consolidated VIEs without recourse to the Group of RMB606 and <br> RMB171 as of December 31, 2024 and December 31, 2025, <br> respectively) | 665 | 222 | 32 |
| Total current liabilities | **3260603** | **4245487** | **607097** |

---

------

**GAOTU TECHEDU INC.**

**CONSOLIDATED BALANCE SHEETS - continued**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)** 

---

| | | | |
|:---|:---|:---|:---|
|  | As of December 31, | As of December 31, | As of December 31, |
|  | 2024 | 2025 | 2025 |
|  | RMB | RMB | USD |
|  |  |  | (Note 2) |
| Non-current liabilities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue, non-current portion of the consolidated<br> VIEs without recourse to the Group | 218797 | 276620 | 39556 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities, non-current portion (including<br> non-current portion of operating lease liabilities of the<br> consolidated VIEs without recourse to the Group of<br> RMB337,258 and RMB309,940 as of December 31, 2024 <br> and 2025, respectively) | 344609 | 316703 | 45288 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred tax liabilities (including deferred tax liabilities <br> of the consolidated VIEs without recourse to the Group <br> of RMB70,316 and RMB75,248 as of December 31, <br> 2024 and December 31, 2025, respectively) | 70604 | 75248 | 10760 |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term borrowings of the consolidated VIEs without <br> recourse to the Group |  | 31883 | 4559 |
| TOTAL LIABILITIES | **3894613** | **4945941** | **707260** |
| SHAREHOLDERS' EQUITY |  |  |  |
| Class A ordinary shares (par value of USD0.0001 per share;<br> 800,000,000 shares authorized as of December 31, 2024<br> and 2025; 101,974,316 shares issued as of December 31, <br> 2024 and 2025; 95,317,937 and 86,673,876 shares <br> outstanding as of December 31, 2024 and 2025) | 68 | 68 | 10 |
| Class B ordinary shares (par value of USD0.0001 per share;<br> 100,000,000 shares authorized as of December 31, 2024<br> and 2025, 73,305,288 shares issued and outstanding as of<br> December 31, 2024 and 2025) | 48 | 48 | 7 |
| Treasury stock, at cost | (242866) | (496132) | (70946) |
| Additional paid-in capital | 7991421 | 7933515 | 1134478 |
| Accumulated other comprehensive loss | (2832) | (48072) | (6874) |
| Statutory reserves | 66042 | 66042 | 9444 |
| Accumulated deficit | (5878417) | (6201724) | (886835) |
| TOTAL SHAREHOLDERS' EQUITY | **1933464** | **1253745** | **179284** |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | **5828077** | **6199686** | **886544** |

---

The accompanying notes are an integral part of the consolidated financial statements.

------

**GAOTU TECHEDU INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 | 2025 |
|  | RMB | RMB | RMB | USD |
|  |  |  |  | (Note 2) |
| Net revenues | 2960813 | 4553556 | 6146772 | 878977 |
| Cost of revenues (including share-based compensation expenses<br> of RMB12,959, RMB7,003 and RMB5,641 for the years <br> ended December 31, 2023, 2024 and 2025, respectively) | (790207) | (1454917) | (2001693) | (286238) |
| **Gross profit** | **2170606** | **3098639** | **4145079** | **592739** |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling expenses (including share-based compensation<br> expenses of RMB8,603, RMB9,267 and RMB5,748 for<br> the years ended December 31, 2023, 2024 and 2025, <br> respectively) | (1501200) | (2963736) | (3289064) | (470330) |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development expenses (including <br> share-based compensation expenses of RMB17,012,<br> RMB8,942 and RMB7,795 for the years ended<br> December 31, 2023, 2024 and 2025, respectively) | (462043) | (648063) | (626947) | (89652) |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses (including share-<br> based compensation expenses of RMB19,779,<br> RMB28,005 and RMB20,034 for the years ended<br> December 31, 2023, 2024 and 2025, respectively) | (356369) | (668673) | (732234) | (104708) |
| **Total operating expenses** | **(2319612)** | **(4280472)** | **(4648245)** | **(664690)** |
| **Loss from operations** | **(149006)** | **(1181833)** | **(503166)** | **(71951)** |
| Interest income | 75829 | 70384 | 39919 | 5708 |
| Realized gains from investments | 31230 | 25302 | 34065 | 4871 |
| Other income, net | 54471 | 45825 | 101764 | 14552 |
| **Income/(loss) before provision for income tax and<br> share of results of equity investees** | **12524** | **(1040322)** | **(327418)** | **(46820)** |
| Income tax (expenses)/benefits | (10657) | (8632) | 4111 | 588 |
| Share of results of equity investees | (9165) |  |  |  |
| **Net loss** | **(7298)** | **(1048954)** | **(323307)** | **(46232)** |
| **Net loss attributable to Gaotu Techedu Inc.'s<br> ordinary shareholders** | **(7298)** | **(1048954)** | **(323307)** | **(46232)** |
| Net loss per ordinary share |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | (0.04) | (6.12) | (1.98) | (0.28) |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | (0.04) | (6.12) | (1.98) | (0.28) |
| Net loss per ADS |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | (0.03) | (4.08) | (1.32) | (0.19) |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | (0.03) | (4.08) | (1.32) | (0.19) |
| Weighted average shares used in net loss per share |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 173725790 | 171412125 | 163118684 | 163118684 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 173725790 | 171412125 | 163118684 | 163118684 |

---

The accompanying notes are an integral part of the consolidated financial statements.

------

**GAOTU TECHEDU INC.**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 | 2025 |
|  | RMB | RMB | RMB | USD |
|  |  |  |  | (Note 2) |
| Net loss | (7298) | (1048954) | (323307) | (46232) |
| Other comprehensive loss, net of tax: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in cumulative foreign currency<br> translation adjustments | 29804 | 22894 | (42650) | (6099) |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized gains on available-for-sale<br> investments (net of tax effect of RMB6,464, <br> RMB3,251 and RMB3,252 for the years ended <br> December 31, 2023, 2024 and 2025, <br> respectively) | 25792 | 29497 | 28705 | 4105 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfer to statements of operations of realized<br> gains on available-for-sale investments (net of<br> tax effect of RMB6,487, RMB3,288 and <br> RMB2,770 for the years ended December 31, <br> 2023, 2024 and 2025, respectively) | (24743) | (22014) | (31295) | (4475) |
| **Total comprehensive income/(loss) attributable to<br> Gaotu Techedu Inc.** | **23555** | **(1018577)** | **(368547)** | **(52701)** |

---

The accompanying notes are an integral part of the consolidated financial statements.

------

**GAOTU TECHEDU INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Attributable to shareholders of the Group | Attributable to shareholders of the Group | Attributable to shareholders of the Group | Attributable to shareholders of the Group | Attributable to shareholders of the Group | Attributable to shareholders of the Group | Attributable to shareholders of the Group | Attributable to shareholders of the Group |
|  | Number of<br>ordinary<br>shares | Ordinary<br>shares | Treasury<br>stock,<br>at<br>cost | Additional<br>paid-in<br>capital | Accumulated<br>other<br>comprehensive<br>(loss)/income | Statutory<br>reserves | Accumulated<br>deficit | Total Gaotu<br>Techedu Inc.<br>shareholders' equity |
| Balance as of January 1, 2023 in RMB | **172858544** | **115** | **—** | **7915899** | **(64062)** | **40380** | **(4796503)** | **3095829** |
| Net loss |  |  |  |  |  |  | (7298) | (7298) |
| Transfer to statutory reserves |  |  |  |  |  | 9845 | (9845) |  |
| Share-based compensation |  |  |  | 58353 |  |  |  | 58353 |
| Option exercised and restricted stock units vested | 2498091 | 1 | 5314 | (5304) |  |  |  | 11 |
| Repurchase of ordinary shares | (3244745) |  | (90492) |  |  |  |  | (90492) |
| Deconsolidation of a subsidiary (Note 17) |  |  |  | 19009 |  |  |  | 19009 |
| Foreign currency translation adjustments |  |  |  |  | 29804 |  |  | 29804 |
| Unrealized gains on available-for-sale investments |  |  |  |  | 25792 |  |  | 25792 |
| Transfer to statements of operations of realized <br>gains on available-for-sale investments |  |  |  |  | (24743) |  |  | (24743) |
| **Balance as of December 31, 2023 in RMB** | **172111890** | **116** | **(85178)** | **7987957** | **(33209)** | **50225** | **(4813646)** | **3106265** |
| Net loss |  |  |  |  |  |  | (1048954) | (1048954) |
| Transfer to statutory reserves |  |  |  |  |  | 15817 | (15817) |  |
| Share-based compensation |  |  |  | 53217 |  |  |  | 53217 |
| Option exercised and restricted stock units vested | 1917933 | —<br> \* | 49753 | (49753) |  |  |  |  |
| Repurchase of ordinary shares | (5406598) |  | (207441) |  |  |  |  | (207441) |
| Foreign currency translation adjustments |  |  |  |  | 22894 |  |  | 22894 |
| Unrealized gains on available-for-sale investments |  |  |  |  | 29497 |  |  | 29497 |
| Transfer to statements of operations of realized<br>gains on available-for-sale investments |  |  |  |  | (22014) |  |  | (22014) |
| **Balance as of December 31, 2024 in RMB** | **168623225** | **116** | **(242866)** | **7991421** | **(2832)** | **66042** | **(5878417)** | **1933464** |
| Net loss |  |  |  |  |  |  | (323307) | (323307) |
| Share-based compensation |  |  |  | 39218 |  |  |  | 39218 |
| Option exercised and restricted stock units vested | 1904192 |  | 89261 | (89261) |  |  |  |  |
| Repurchase of ordinary shares | (10548253) |  | (342527) |  |  |  |  | (342527) |
| Assets acquisition (Note 3) |  |  |  | (7106) |  |  |  | (7106) |
| Business combination |  |  |  | (757) |  |  |  | (757) |
| Foreign currency translation adjustments |  |  |  |  | (42650) |  |  | (42650) |
| Unrealized gains on available-for-sale investments |  |  |  |  | 28705 |  |  | 28705 |
| Transfer to statements of operations of realized<br>gains on available-for-sale investments |  |  |  |  | (31295) |  |  | (31295) |
| **Balance as of December 31, 2025 in RMB** | **159979164** | **116** | **(496132)** | **7933515** | **(48072)** | **66042** | **(6201724)** | **1253745** |
| **Balance as of December 31, 2025 in USD (Note 2)** | **159979164** | **17** | **(70946)** | **1134478** | **(6874)** | **9444** | **(886835)** | **179284** |

---

\* Absolute value is less than RMB 1 thousand.

The accompanying notes are an integral part of the consolidated financial statements.

------

**GAOTU TECHEDU INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 | 2025 |
|  | RMB | RMB | RMB | USD |
|  |  |  |  | (Note 2) |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  |
| Net loss | (7298) | (1048954) | (323307) | (46232) |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash<br> generated from operating activities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation of property, equipment and software | 50732 | 60985 | 104076 | 14883 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible assets and land use rights | 3510 | 3986 | 8770 | 1254 |
| &nbsp;&nbsp;&nbsp;&nbsp;Share of results of equity investees | 9165 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Realized gains from investments | (31230) | (25302) | (34065) | (4871) |
| &nbsp;&nbsp;&nbsp;&nbsp;Disposal loss on assets | 2724 | 4828 | 9244 | 1322 |
| &nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation | 58353 | 53217 | 39218 | 5608 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value change of investments | (2065) | (12860) | (36838) | (5268) |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for expected credit losses | 10807 | 1800 | 1572 | 225 |
| &nbsp;&nbsp;&nbsp;&nbsp;Write-down of inventory | 1453 | 26885 | 3518 | 503 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment loss on long-lived assets |  |  | 582 | 83 |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 210018 | 421047 | 281727 | 40286 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease right-of-use assets | 41262 | 128465 | 166631 | 23828 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (41529) | (128269) | (168182) | (24050) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 278288 | 848272 | 480049 | 68646 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (182561) | (14258) | (85411) | (12214) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax payable | 2485 | (3613) | (443) | (63) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | (52244) | (66958) | (28128) | (4022) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred tax assets | 4367 | 11312 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred tax liabilities | (2540) | (2576) | (2919) | (417) |
| **Net cash generated from operating activities** | **353697** | **258007** | **416094** | **59501** |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  |
| Purchase of short-term investments | (19314820) | (14635262) | (13569433) | (1940403) |
| Proceeds from maturity of short-term investments | 20035335 | 15390281 | 13524555 | 1933986 |
| Purchase of property, equipment and software | (40800) | (178219) | (169499) | (24238) |
| Payment for asset acquisition |  | (1696) | (161062) | (23032) |
| Payment for business combination, net of cash acquired |  |  | (32220) | (4607) |
| Purchase of long-term investments | (1113179) | (170860) | (553108) | (79093) |
| Short-term loans to a third party (Note 4) | (600000) | (540000) | (293000) | (41898) |
| Repayment of short-term loans from a third party (Note 4) | 498800 | 719200 | 293000 | 41898 |
| Proceeds from redemption of long-term investments | 110594 | 37027 | 141856 | 20285 |
| Proceeds from disposal of property, equipment and software | 92 | 350 | 128 | 18 |
| **Net cash (used in)/generated from investing activities** | **(423978)** | **620821** | **(818783)** | **(117084)** |

---

------

**GAOTU TECHEDU INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS - continued**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 | 2025 |
|  | RMB | RMB | RMB | USD |
|  |  |  |  | (Note 2) |
| CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  |
| Capital contribution | 12 |  |  |  |
| Repurchase of ordinary shares | (90492) | (205302) | (343360) | (49100) |
| Proceeds from short-term loans |  |  | 102500 | 14657 |
| Proceeds from long-term loans |  |  | 29220 | 4178 |
| Repayments of short-term loans |  |  | (2500) | (357) |
| **Net cash used in financing activities** | **(90480)** | **(205302)** | **(214140)** | **(30622)** |
| Effect of exchange rate changes | 10781 | (17139) | 2512 | 359 |
| **Net (decrease)/increase in cash, cash equivalents and restricted cash** | **(149980)** | **656387** | **(614317)** | **(87846)** |
| **Cash, cash equivalents and restricted cash at beginning of the year** | **819933** | **669953** | **1326340** | **189664** |
| **Cash, cash equivalents and restricted cash at end of the year** | **669953** | **1326340** | **712023** | **101818** |
| Supplemental schedule of cash flow information |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes paid <sup>(1)</sup> | 1437 | 3293 | 691 | 99 |
| Non-cash investing and financing activity |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payables for purchase of property, equipment and<br> software | 4589 | 4938 | 191824 | 27430 |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets in exchange for new lease<br> liabilities | 156534 | 639386 | 332428 | 47537 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)For the year ended December 31, 2025, income taxes paid amounted to RMB691 in Chinese mainland, and nil in jurisdictions outside Chinese mainland.

The accompanying notes are an integral part of the consolidated financial statements.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES**

GSX Techedu Inc. was incorporated under the laws of the Cayman Islands in August 2014 and the name changed to Gaotu Techedu Inc. (the "Company" or the "Parent Company") in June 2021. The Company, its subsidiaries, the consolidated variable interest entities and variable interest entities' subsidiaries (collectively the "Group") are currently engaged in the business of providing learning services and educational content and digitalized learning products in the People's Republic of China("PRC").

Beijing BaiJiaHuLian Technology Co., Ltd was founded in June 2014, as a limited liability company in the PRC, and the name changed to Beijing BaiJia Technology Co., Ltd in September 2020 and then changed to Gaotu Education Technology Group Co., Ltd ("Beijing Gaotu") in July 2021. Shanghai Duwen Education Technology Co., Ltd ("Shanghai Duwen") was founded in January 2025, as a limited liability company in the PRC. Beijing Gaotu, Shanghai Duwen (collectively "VIEs") and their subsidiaries are primarily engaged in providing learning services and educational content and digitalized learning products in mainland China.

Current laws and regulations of mainland China impose certain restrictions or prohibitions on foreign ownership of companies that engage in value-added telecommunication services and certain other businesses. To comply with the relevant laws and regulations of mainland China, the Company operates substantially all of its business through its VIEs and their subsidiaries. On April 28, 2015, the Company, through BaiJiaHuLian HK Holdings Limited ("BaiJiaHuLian HK") and its subsidiary in mainland China, Beijing Lexuebang Network Technology Co., Ltd. ("Beijing Lexuebang"), entered into a series of contractual arrangements with Beijing Gaotu, and the shareholders of Beijing Gaotu. The series of contractual agreements include an Exclusive Management Services and Business Cooperation Agreement, an Exclusive Call Option Agreement, an Equity Pledge Agreement, Powers of Attorney, Spousal Consent Letters and Letters of Commitment (collectively the "Original Agreement"). The Original Agreements were amended in March 2019 with no significant differences. In connection with the amendment and as part of the Group's efforts to streamline the corporate structure, the Group removed six existing nominee shareholders as parties to the contractual arrangements with Beijing Gaotu and its shareholders. The rights and obligations of these nominee shareholders under these contractual arrangements have been assumed by Mr. Larry Xiangdong Chen.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES - continued**

On January 26, 2021, Beijing Lexuebang, Wuhan Yuexuebang Network Technology Co., Ltd ("Wuhan Yuexuebang") and Beijing Yuexuebang Network Technology Co., Ltd ("Beijing Yuexuebang") (collectively the "WFOEs"), entered into a supplementary agreement ("Supplementary Agreement") with Beijing Gaotu, and the shareholders of Beijing Gaotu. According to the Supplementary Agreement, each of Wuhan Yuexuebang and Beijing Yuexuebang became a party to the Original Agreement, enjoyed the same rights of Beijing Lexuebang under the Original Agreement and jointly assume the obligations of Beijing Lexuebang thereunder.

On November 30, 2024, the WFOEs entered into a Supplementary Agreement to the Exclusive Management Services and Business Cooperation Agreement with Beijing Gaotu and the shareholders of Beijing Gaotu. Pursuant to the Supplementary Agreement, certain significant subsidiaries are included in the list of the subsidiaries of Beijing Gaotu attached as Appendix II of the Exclusive Management Services and Business Cooperation Agreement.

On May 1, 2025, the Company, through BaiJiaHuLian HK and Beijing Lexuebang, entered into a series of contractual arrangements with Shanghai Duwen, and the shareholders of Shanghai Duwen. The series of contractual agreements include an Exclusive Management Services and Business Cooperation Agreement, an Exclusive Call Option Agreement, an Equity Pledge Agreement, Powers of Attorney, Spousal Consent Letters and Letters of Commitment.

The Group believes that these contractual arrangements would enable the Company to (1) have power to direct the activities that most significantly affects the economic performance of VIEs and their subsidiaries, and (2) receive the economic benefits of the VIEs and their subsidiaries that could be significant to the VIEs. Accordingly, the Company is considered the primary beneficiary of the VIEs and their subsidiaries.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued**

The Company's major subsidiaries, the VIEs and VIEs' major subsidiaries as of December 31, 2025 were as follow:

---

| | | | | |
|:---|:---|:---|:---|:---|
| Name | Later of date<br>of establishment<br>or acquisition | Place of establishment | Percentage of<br>direct or indirect<br>economic ownership | Principal activities |
| **Subsidiaries:** |  |  |  |  |
| BaiJiaHuLian HK | Aug 18, 2014 | Hong Kong, China | 100% | Holding company |
| Beijing Lexuebang | Jan 12, 2015 | Beijing, China | 100% | Education technical services |
| Wuhan Yuexuebang | May 25, 2020 | Wuhan, China | 100% | Education technical services |
| Beijing Yuexuebang | Nov 24, 2020 | Beijing, China | 100% | Education technical services |
| Chengdu Yuexuebang Network Technology Co., Ltd<br>("Chengdu Yuexuebang") | Oct 20, 2023 | Chengdu, China | 100% | Education technical services |
| Shanghai Chuxuebang Network Technology<br> Co., Ltd ("Shanghai Chuxuebang") | Feb 18, 2021 | Shanghai, China | 100% | Education technical services |
| Wuhan Lexuebang Network Technology Co., Ltd<br>("Wuhan Lexuebang") | Jan 16, 2025 | Wuhan, China | 100% | Education technical services |
| **VIEs:** |  |  |  |  |
| Beijing Gaotu | Jun 4, 2014 | Beijing, China | 100% | Education services |
| Shanghai Duwen | May 1, 2025 | Shanghai, China | 100% | Education services |
| **VIEs' major subsidiaries:** |  |  |  |  |
| Beijing GaoTuYunFan Technology Co., Ltd<br> ("GaoTuYunFan") | May 14, 2015 | Beijing, China | 100% | Education services |
| Beijing GaoTuYunJi Education Technology<br> Co., Ltd ("GaoTuYunJi") | Jul 18, 2017 | Beijing, China | 100% | Education services |
| Zhengzhou GaoTuYunJi Education<br> Technology Co., Ltd ("ZhengzhouGaoTu") | Jan 19, 2020 | Zhengzhou, China | 100% | Education services |
| Guangzhou XingHuo Online Computer <br> Technology Co., Ltd ("Guangzhou XingHuo") | Aug 18, 2022 | Guangzhou, China | 100% | Education services |
| Guangzhou GaoTu Technology Co., Ltd<br>("GuangzhouGaoTu") | Dec 9, 2022 | Guangzhou, China | 100% | Education services |
| Chengdu GaoTuXingHui Technology Training School Co., Ltd ("Chengdu Xinghui") | Mar 30, 2023 | Chengdu, China | 100% | Education services |

---

The English names above are for identification purpose only.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES - continued**

***The VIE arrangements*** 

Details of the contractual agreements are set forth below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Agreements that transfer economic benefits to the Group:

*Exclusive Management Services and Business Cooperation Agreement* 

Pursuant to the exclusive management services and business cooperation agreement among the WFOEs, the VIEs and the shareholders of the VIEs, the WFOEs has the exclusive right to provide or designate any third-party to provide, among other things, education management consultancy services, permission of intellectual property rights, technological support and business support to the VIEs and their subsidiaries. In exchange, the VIEs and their subsidiaries pay service fees to the WFOEs in an amount determined by the WFOEs in its sole discretion. Without the prior written consent of the WFOEs, the VIEs and their subsidiaries cannot accept services provided by or establish similar cooperation relationship with any third-party. The WFOEs own the exclusive intellectual property rights created as a result of the performance of this agreement unless otherwise provided by the laws or regulations of mainland China. The agreement will remain effective unless unanimously agreed by the parties concerned or unilaterally terminated by the WFOEs with a written notice. Unless otherwise required by applicable the laws of mainland China, the VIEs and their shareholders do not have any right to terminate the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Agreements that provide the Company effective control over the VIEs:

*Equity Pledge Agreement*

Under the equity interest pledge agreement among the WFOEs, the VIEs and their shareholders, the VIEs' shareholders pledged all of their equity interests of the VIEs to the WFOEs as security for performance of the obligations of the VIEs and their shareholders under the exclusive call option agreement, the exclusive management services and business cooperation agreement and the powers of attorney. If any of the specified events of default occurs, the WFOEs may exercise the right to enforce the pledge immediately. The WFOEs may transfer all or any of its rights and obligations under the equity interest pledge agreement to its designee(s) at any time. The agreement will remain in effect until the fulfillment of all the obligations under the exclusive call option agreement, the exclusive management services and business cooperation agreement and the powers of attorney.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES - continued**

***The VIE arrangements - continued***

*Exclusive Call Option Agreement* 

Under the exclusive call option agreement among the WFOEs, the VIEs and their shareholders, each of the shareholders of the VIEs irrevocably granted the WFOEs a right to purchase, or designate a third-party to purchase, all or any part of their equity interests in the VIEs at a purchase price equal to the lowest price permissible by the then-applicable laws and regulations of mainland China at the WFOEs' sole and absolute discretion to the extent permitted by the laws of mainland China. The shareholders of the VIEs shall promptly give all considerations they received from the exercise of the options to the WFOEs or its designee(s). The VIEs and their shareholders covenant that, without the WFOEs' prior written consent, they will not, among other things, (i) create any pledge or encumbrance on their equity interests in the VIEs; (ii) transfer or otherwise dispose of their equity interests in the VIEs; (iii) change the VIEs' registered capital; (iv) amend the VIEs' articles of association; (v) sell, transfer, license or otherwise dispose of any of the VIEs' assets or allow any encumbrance of any assets, except for the disposal or the encumbrances of the assets that are treated as necessary for their daily business operations with the value of the assets involved in a single transaction not exceeding RMB100; (vi) cause the VIEs to enter into any major contracts or terminate any material contracts to which one of the VIEs is a party; (vii) declare or distribute dividends; (viii) terminate, liquidate or dissolve the VIEs; or (ix) allow the VIEs to incur, inherit, guarantee or permit any debts, except for those payables incurred in the ordinary or usual course of business but not incurred by way of borrowing. The agreement will remain effective until terminated by the WFOEs at its discretion or the entire equity interests in the VIEs have been transferred to the WFOEs or its designees.

*Powers of Attorney* 

Pursuant to the powers of attorney executed by the VIEs' shareholders, each of them irrevocably authorized the WFOEs or its designee(s) to act on their respective behalf as exclusive agent and attorney, to the extent permitted by law, with respect to all rights of shareholders concerning all the equity interest held by each of them in the VIEs, including but not limited to proposing to convene or attend shareholder meetings, signing the resolutions and minutes of such meetings, exercising all the rights as shareholders (including but not limited to voting rights, nomination rights, appointment rights, the right to receive dividends and the right to sell, transfer, pledge or dispose of all the equity held in part or in whole).

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES - continued**

***The VIE arrangements - continued***

*Spousal Consent Letters* 

Pursuant to the spousal consent letters executed by the spouses of certain shareholders of the VIEs, the signing spouses unconditionally and irrevocably agreed that the equity interest in the VIEs held by and registered in the name of their spouses be disposed of in accordance with the exclusive call option agreement, the exclusive management services and business cooperation agreement, the equity interest pledge agreement and the powers of attorney described above, and that their spouses may perform, amend or terminate such agreements without their additional consent. Additionally, the signing spouses agreed not to assert any rights over the equity interest in the VIEs held by their spouses. In addition, in the event that the signing spouses obtains any equity interest in the VIEs held by their spouses for any reason, they agree to be bound by and sign any legal documents substantially similar to the contractual arrangements described above, as may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Risks in relation to VIE structure

The Company believes that the contractual arrangements with the VIEs and their shareholders are in compliance with existing laws and regulations of mainland China and are legally enforceable. However, the contractual arrangements are subject to risks and uncertainties, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the VIEs and their shareholders may have or develop interests that conflict with the Group's interests, which may lead them to pursue opportunities in violation of the aforementioned contractual agreements. If the Group cannot resolve any conflicts of interest or disputes between the Group and the shareholders of the VIEs, the Group would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the VIEs and their shareholders could fail to obtain the proper operating licenses or fail to comply with other regulatory requirements. As a result, the PRC government could impose fines, new requirements or other penalties on the VIEs or the Group, mandate a change in ownership structure or operations for the VIEs or the Group, restrict the VIEs' or the Group's use of financing sources or otherwise restrict the VIEs' or the Group's ability to conduct business.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES - continued**

***The VIE arrangements - continued***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•The PRC government may declare the aforementioned contractual arrangements invalid. They may modify the relevant regulations, have a different interpretation of such regulations, or otherwise determine that the Group or the VIEs have failed to comply with the legal obligations required to effectuate such contractual arrangements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•If the legal structure and contractual arrangements were found to be in violation of the laws and regulations of mainland China, the PRC government may restrict or prohibit the Group's business and operations in mainland China, and the Group could be subject to severe penalties or be forced to relinquish the company's interests in those operations.

The Group's ability to conduct its business may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Group may not be able to consolidate the VIEs and their subsidiaries in the consolidated financial statements as the Group may lose the ability to exert effective control over the VIEs and their shareholders, and the Group may lose the ability to receive economic benefits from the VIEs.

The Group's business has been directly operated by the VIEs and their subsidiaries. As of December 31, 2024 and 2025 the VIEs and their subsidiaries accounted for an aggregate of 58.56% and 77.02%, respectively, of the Group's consolidated total assets, and 87.82% and 91.49%, respectively, of the Group's consolidated total liabilities.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES - continued**

***The VIE arrangements - continued***

The following financial information of the Company's VIEs and VIEs' subsidiaries after the elimination of inter-company transactions and balances as of December 31, 2024 and 2025, and for the years ended December 31, 2023, 2024 and 2025 was included in the accompanying consolidated financial statements:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2025 |
|  | RMB | RMB |
| Cash and cash equivalents | 496489 | 514955 |
| Restricted cash | 5222 | 115828 |
| Short-term investments | 593393 | 2083401 |
| Inventory, net | 36401 | 54950 |
| Prepaid expenses and other current assets, net | 392016 | 399829 |
| **Total current assets** | **1523521** | **3168963** |
| Operating lease right-of-use assets | 460193 | 448837 |
| Property, equipment and software, net | 622641 | 960856 |
| Intangible assets, net | 17984 | 16697 |
| Land use rights, net | 25762 | 78105 |
| Long-term investments | 727571 | 64393 |
| Goodwill | 331 | 331 |
| Rental deposit | 33688 | 36297 |
| Other non-current assets | 1424 | 742 |
| **Total non-current assets** | **1889594** | **1606258** |
| **Total assets** | **3413115** | **4775221** |
| Short-term borrowings |  | 100000 |
| Accrued expenses and other current liabilities | 811879 | 1131781 |
| Amount due to related party |  | 181757 |
| Deferred revenue, current portion | 1867096 | 2288255 |
| Operating lease liabilities, current portion | 114471 | 129258 |
| Income tax payable | 606 | 171 |
| **Total current liabilities** | **2794052** | **3831222** |
| Deferred revenue, non-current portion | 218797 | 276620 |
| Operating lease liabilities, non-current portion | 337258 | 309940 |
| Deferred tax liabilities | 70316 | 75248 |
| Long-term borrowings |  | 31883 |
| **Total non-current liabilities** | **626371** | **693691** |
| **Total liabilities** | **3420423** | **4524913** |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES - continued**

***The VIE arrangements - continued***

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 |
|  | RMB | RMB | RMB |
| Net revenues | 2960813 | 4552921 | 6126081 |
| Net income | 598211 | 39838 | 717230 |
| Net cash generated from operating activities | 919990 | 1227747 | 1450232 |
| Net cash (used in)/generated from investing activities | (1157633) | 896344 | (1075743) |
| Net cash generated from financing activities |  |  | 129220 |

---

There are no consolidated VIEs' assets that are collateral for the VIEs' obligations and which can only be used to settle the VIEs' obligations. No creditors (or beneficial interest holders) of the VIEs have recourse to the general credit of the Company or any of their consolidated subsidiaries. No terms in any arrangements, considering both explicit arrangements and implicit variable interests, require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to the VIEs through loans to the shareholders of the VIEs or entrustment loans to the VIEs.

***Non-consolidated variable interest entities***

The Company holds variable interest in certain third parties but is not the primary beneficiary as it does not have the power to direct the activities that most significantly impact the economic performance of the third parties. Therefore, they are concluded as non-consolidated variable interest entities of the Company. The variable interests in the third parties companies held by the Company are in the form of loans and receivables, the size and nature of which are disclosed in Note 4(3).

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of presentation and use of estimates***

The accompanying consolidated financial statements have been prepared in accordance with the rules and regulations of the Security and Exchange Commission and accounting principles generally accepted in the United States of America ("U.S. GAAP"). These accounting principles require management to make certain estimates and assumptions that affect the amounts in the accompanying financial statements. Actual results may differ from those estimates. The Group bases its estimates on past experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Significant accounting estimates reflected in the Group's financial statements include, but are not limited to, revenue recognition, valuation allowance for deferred tax assets, impairment assessment of intangible assets and other long-lived assets, fair value assessment of certain short-term and long-term investments. Actual results may differ materially from those estimates.

***Principles of consolidation***

The accompanying consolidated financial statements include the financial information of the Group and its subsidiaries, the VIEs and the VIEs' subsidiaries. All intercompany balances and transactions were eliminated upon consolidation.

***Fair value***

Fair value is considered to be the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability.

Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows:

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Fair value - continued***

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

***Financial instruments***

The Group's financial instruments consist primarily of cash and cash equivalents, restricted cash, short-term and long-term investments accounted for term deposits, available-for-sale debt investments or elected to measure at fair value, receivables from third-party payment platforms and other liabilities.

As of December 31, 2024 and 2025, the carrying values of cash and cash equivalents, restricted cash, short-term investments, receivables from third-party payment platforms and other current liabilities approximated their fair values reported in the consolidated balance sheets due to the short-term maturities of these instruments. The fair value of the Group's long-term investments is determined based on the prevailing interest rates in the market as of December 31, 2024 and 2025.

***Foreign currency translation and transactions***

The Group's reporting currency is the Renminbi ("RMB"). The functional currency of the subsidiaries incorporated outside the mainland China is the United States dollar ("US dollar" or "US$"). The functional currency of all the other subsidiaries, the VIEs and VIEs' subsidiaries is the RMB.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Foreign currency translation and transactions - continued***

Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates. Revenues and expenses are translated using the average rate of exchange in effect during the reporting period. Translation adjustments are reported and shown as a separate component of other comprehensive loss in the consolidated statements of changes in shareholders' equity and the consolidated statements of comprehensive loss.

Transactions in currencies other than the functional currencies during the year are converted into the applicable functional currencies at the applicable rates of exchange prevailing at the dates of the transactions. Transaction gains and losses are recorded in the consolidated statements of operations.

***Convenience translation***

The Group's business is primarily conducted in China and all of the revenues are denominated in RMB. However, periodic reports made to shareholders will include current period amounts translated into US dollars using the exchange rate as of balance sheet date, for the convenience of the readers. Translations of balances in the consolidated balance sheets and the related consolidated statements of operations, comprehensive income/(loss), change in shareholders' equity and cash flows from RMB into US dollars as of and for the year ended December 31, 2025 are solely for the convenience of the readers and were calculated at the rate of USD1.00=RMB6.9931 representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 31, 2025. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at that rate on December 31, 2025, or at any other rate.

***Cash and cash equivalents*** 

Cash and cash equivalents comprise cash at banks and on hand, demand deposits and highly liquid investments, which have original maturities of three months or less when purchased and are subject to an insignificant risk of changes in value.

***Restricted cash***

Restricted cash represents the cash and cash equivalents deposited in bank accounts that are restricted as to withdrawal or for use.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Debt securities investments***

As of December 31, 2024 and 2025, the Group's debt securities include term deposits, available-for-sale investments, and investments elected to measure at fair value, which were classified to short-term investments accounted for those with original maturities no longer than one year and long-term investments accounted for those with original maturities greater than one year.

*<u>Term deposits</u>*

Term deposits represent deposits in commercial banks with original maturities of more than three months and up to one year. As of December 31, 2024 and 2025, the balances of term deposits were RMB146,928 and RMB247,038, respectively.

*<u>Available-for-sale investments</u>*

Debt securities investments that do not meet the criteria of held-to-maturity or trading securities are classified as available-for-sale investments and are reported at fair value with unrealized gains and losses recorded in accumulated other comprehensive income/(loss). Realized gains or losses on the sale of these securities are recognized under realized gains from investments in the consolidated statements of operations.

The Group evaluates each individual investment periodically for impairment. For investments where the Group does not intend to sell, the Group evaluates whether a decline in fair value is due to deterioration in credit risk. Credit-related impairment losses, not to exceed the amount that fair value is less than the amortized cost basis, are recognized through an allowance for credit losses on the consolidated balance sheet with corresponding adjustment in the consolidated statements of operations and comprehensive income. Subsequent increases in fair value due to credit improvement are recognized through reversal of the credit loss and corresponding reduction in the allowance for credit loss. Any decline in fair value that is non-credit related is recorded in accumulated other comprehensive income as a component of shareholder's equity. As of December 31, 2024 and 2025, the available-for-sale debt investments were recorded with unrealized gain amounted to RMB59,241 and RMB72,485, respectively. No impairment loss on investments was recorded during the years ended December 31, 2023, 2024 and 2025.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Debt securities investments - continued***

*<u>Investments elected to measure at fair value</u>*

The Group elects the fair value option to record wealth management products with variable interest rates involving derivatives at fair value in accordance with ASC 825 *Financial Instrument*. Changes in the fair value are recorded in other income.

***Property, equipment and software, net*** 

Property, equipment and software are stated at cost less accumulated depreciation and impairment. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, as follows:

---

| | |
|:---|:---|
| **Category** | **Estimated useful life** |
| Electronic equipment | 3 years |
| Furniture and office equipment | 3-5 years |
| Software | 2-10 years |
| Building | 35-50 years |
| Leasehold improvement | Shorter of the lease term or estimated economic life |

---

Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterment that extends the useful lives of property, equipment and software are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the assets and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statement of operations.

***Land use rights, net***

All land in mainland China is owned by the government, which, according to the relevant laws of mainland China, may grant the right to use the land for a specified period of time. Land use rights are recorded at cost and amortized on a straight line basis over the term of the land certificates, as follows:

---

| | |
|:---|:---|
| **Category** | **Estimated useful life** |
| Land use rights, net | 37-50 years |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Goodwill***

The excess of the purchase price over the fair value of net assets acquired is recorded on the consolidated balance sheets as goodwill. Goodwill is not amortized, but tested for impairment annually or more frequently if event and circumstances indicate that it might be impaired. Application of a goodwill impairment test requires significant management judgment. The judgment in estimating the fair value of reporting unit includes estimating future cash flows, determining appropriate discount rates, and making other relevant assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for the reporting unit.

As part of the annual goodwill impairment test, the Group first performs a qualitative assessment to determine whether further impairment testing is necessary. If the qualitative assessment above indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, a quantitative impairment test is performed to compare the fair value to the carrying value. An impairment charge is recorded if the carrying value exceeds the fair value. No impairment loss on goodwill was recorded during the years ended December 31, 2023, 2024 and 2025.

***Intangible assets, net***

Intangible assets are initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives. The estimated useful lives of intangible assets are as follows:

---

| | |
|:---|:---|
| **Category** | **Estimated useful life** |
| Student base | 2 years |
| Trademark | 10 years |
| License | 1.5-10 years |

---

***Impairment of long-lived assets other than goodwill***

The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the fair value of the assets. During the years ended December 31, 2023, 2024 and 2025, the Group recorded nil, nil and RMB582 of impairment losses of long-lived assets.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Short-term and long-term borrowings***

Short-term and long-term borrowings are recognized initially at fair value, net of debt discounts or premiums and debt issuance costs. Upfront issuance costs and debt discounts or premiums are recorded as a reduction of the proceeds received and the related accretion is recorded as interest expense in the consolidated income statements over the estimated term of the facilities using the effective interest method.

***Revenue recognition***

The Group recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, in accordance with ASC Topic 606 Revenue from Contracts with Customers ("Topic 606"). The Group's revenue is reported net of discount, value added tax and related surcharges.

<u>Disaggregation of revenue</u>

For the years ended December 31, 2023, 2024 and 2025, substantially all of the Group's revenues were generated in mainland China. Additionally, substantially all of the revenues for the periods were recognized from contracts with customers. The following table provides information about disaggregated revenue by types, including a reconciliation of the disaggregated revenue with the Group's reportable segment.

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 |
|  | RMB | RMB | RMB |
| Net revenues |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;- Learning services | 2872901 | 4419964 | 6039033 |
| &nbsp;&nbsp;&nbsp;&nbsp;- Educational content & digitalized learning products | 55980 | 83930 | 77089 |
| &nbsp;&nbsp;&nbsp;&nbsp;- Other revenue | 31932 | 49662 | 30650 |
| Total net revenues | 2960813 | 4553556 | 6146772 |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Revenue recognition - continued***

The primary sources of the Group's revenues are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(1) Learning Services*

The Group offers various types of integrated online and offline tutoring services covering a wide spectrum of topics and targets students from broad age groups through its diverse offerings. For online and offline tutoring services, tutoring fees are collected in advance. The Group determines that there is not a significant financing component based on the nature of the service being offered and the purpose of the payment terms. The Group charges upfront amount, not with the primary purpose of obtaining financing from the students but, instead, to maximize profitability, taking into consideration the risks associated with providing the service. The Group offers refunds for any remaining classes to students who withdraw from the course. The refund is equal to the amount related to the undelivered class. The Group determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method.

The Group's tutoring services consists of several components, including learning classes as well as other activities during the course period including teaching material, quizzes before, during and after the classes, summary of lessons after each class and interactions with both other students and instructors during the period. Different service components are highly interdependent and interrelated in the context of the contract with the tutoring services. Therefore, the Group has determined that the tutoring services represents one performance obligation. The service period for a majority of the tutoring services is less than six months.

For online tutoring services, once the tutoring services is complete, the Group also offers the customer a content playback service. In the content playback service, the customer has unlimited access to online pre-recorded audio-video courses for a specified period ranging from one to three years. No other interactions or activities are provided during the playback period. For contracts that provide both the online tutoring service and the content playback service, the Group determined that the online tutoring service and content playback service are two separate performance obligations, as these two deliverables are distinct in that customers can benefit from each service on its own and the Group's promises to deliver the services are separately identifiable from each other in the contract. The group allocates transaction price on each performance obligation using the relative stand-alone selling price. The Group determines the stand-alone selling price using an expected cost plus margin methodology. Revenue related to the online tutoring service is recognized proportionately as the classes are delivered, as the Group concluded that the delivery of each class represents a faithful depiction of when the services are provided to the students. Revenue related to the right to access the content playback is recognized proportionally over the playback period, as the Group concluded that the content playback service represents a stand ready obligation to provide the playback services and the customer simultaneously receives and consumes the benefits as the Group provides such services throughout the playback period.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Revenue recognition - continued***

For offline tutoring services, the Group does not offer the customer a content playback service. The Group has determined that the offline tutoring services represents one performance obligation. Revenue related to the offline tutoring service is recognized proportionately as the classes are delivered, as the Group concluded that the delivery of each class represents a faithful depiction of when the services are provided to the students.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(2) Educational content & digitalized learning products*

Educational content & digitalized learning products mainly include books and digitalized auxiliary learning tools, such as smart devices and translation pens.

The Group recognizes revenues when control of the educational content and digitalized learning products is transferred to the customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(3) Other revenue*

The Group leases office buildings to customers and receives a fixed quarterly rental fee over the term of the lease period. The Group classifies its lease income as other revenue and classifies such lease contracts as operating leases. The fixed rental fee is recognized evenly over the period of the lease contract on a straight-line basis.

The Group grants licenses to a third party to use its intellectual properties and the Group recognizes the income at a point in time when control of the intellectual properties' rights is transferred to the third party.

<u>Contract balances</u>

*Contract cost*

The Group elects to record the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. As of December 31, 2024 and 2025, the balance of contract cost was both nil.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Revenue recognition - continued***

*Contract and refund liabilities*

The following table provides information about the Group's contract liabilities and refund liability arising from contract with customers.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2024 | 2024 | 2025 | 2025 |
|  | RMB | RMB | RMB | RMB |
| Deferred revenue, current portion |  | 1,867,096 |  | 2,289,322 |
| Deferred revenue, non-current portion |  | 218,797 |  | 276,620 |
|  |  | 2,085,893 |  | 2,565,942 |
| Refund liability |  | 127,969 |  | 125,813 |

---

Deferred revenue primarily consists of tuition fees received from customers for which the Group's revenue recognition criteria have not been met. The deferred revenue will be recognized as revenue once the criteria for revenue recognition are met. The current portion of deferred revenue as of January 1, 2024 and January 1, 2025 were substantially all recognized as revenue during the years ended December 31, 2024 and 2025, respectively.

Refund liability represents the tutoring fee collected by the Group which it expects to refund back to its customer as a result of its refund policy. Refund liability is estimated based on the historical refund ratio for each of the type of classes provided.

The Group's remaining performance obligations represents the amount of the transaction price for which service has not been performed. As of December 31, 2025, the aggregate amount of the transaction price allocated for the remaining performance obligations amounted to RMB2,565,942. The Group expects to recognize revenue of RMB2,289,322 and RMB169,403 related the remaining performance obligations over the next 12 and 24 months, respectively, with the remainder of RMB107,217 recognized thereafter.

***Cost of revenues***

Cost of revenues mainly consists of compensations to instructors and tutors, rental expenses, depreciation of properties and equipment, teaching materials and bandwidth costs.

***Advertising expenses***

The Group expenses advertising costs as they are incurred. Total advertising expenses were RMB775,234, RMB1,565,549 and RMB1,693,744 for the years ended December 31, 2023, 2024 and 2025, respectively, and have been included as part of selling expenses.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Government subsidies***

The government subsidies provided by the local government mainly included funding to support the development of the Group. Government subsidies are recognized upon receipt as government subsidies income because the subsidies are not intended to compensate for specific expenditure and not subject to future return. For the years ended December 31, 2023, 2024 and 2025, RMB6,469, RMB34,906 and RMB30,125 were received and recognized as other income in the Group's consolidated statements of operations, respectively.

***Value added taxes ("VAT")*** 

The Group's educational services are subject to VAT at the rate of 3% for small-scale-VAT-payer entities or at the rate of 6% for general-VAT-payer entities in accordance with tax rule.

In accordance with Circular Cai Shui 2016 No. 68, the general-VAT-payers who provide non-academic education services could elect a simple VAT collection method and apply for a VAT rate of 3%. Some of the Group's subsidiaries elect to apply for a VAT rate of 3%.

The Group's revenue on sales of goods is subject to VAT at the rate of 3% for small-scale-VAT-payer entities or at the rate of 13% for general-VAT-payer entities in accordance with tax rule.

In accordance with The Ministry of Finance and State Administration of Taxation Announcement (2021 No.10), the Group's revenue on book sales enjoy exemption policy from January 1, 2021 to December 31, 2024. Based on the Announcement on Continuously Implementing Value-Added Tax Preferential Policy for Publicity and Culture (2023 No.60), the exemption period was further extended to December 31, 2027.

***Income taxes*** 

Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The impact of an uncertain income tax position is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes are classified as a component of the provisions for income taxes.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Share-based compensation*** 

The Group measures the cost of employee share options and restricted stock units ("RSUs") based on the grant date fair value of the award and recognizes compensation cost over the period during which an employee is required to provide services in exchange for the award, which generally is the vesting period. For the graded vesting share options, the Group recognizes the compensation cost over the requisite service period for each separately vesting portion of the award as if the award is, in substance, multiple awards. When no future services are required to be performed by the employee in exchange for an award of equity instruments, the cost of the award is expensed on the grant date. The Group elects to recognize forfeitures when they occur.

Cancellation of an award that is not accompanied by the concurrent grant of a replacement award or other valuable consideration shall be accounted for as a repurchase for no consideration. Accordingly, the Group recognizes any previously unrecognized compensation cost immediately at the cancellation date.

Cancellation of an award accompanied by the concurrent grant of a replacement award or other valuable consideration shall be accounted for as a modification of the terms of the cancelled award. Therefore, the Group recognizes incremental compensation cost as the excess of the fair value of the replacement award or other valuable consideration over the fair value of the cancelled award at the cancellation date.

***Comprehensive income/(loss)***

Comprehensive income/(loss) includes net income/(loss), foreign currency translation adjustments and the unrealized gains and losses on available-for-sale debt investments of the Group. Comprehensive income/(loss) is reported in the consolidated statements of comprehensive income/(loss).

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Leases***

The Group leases administrative office spaces in different cities in mainland China under operating leases. The Group determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use assets on its consolidated balance sheets at the lease commencement. As the rate implicit in the lease is not readily determinable, the Group estimates its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Group estimates its incremental borrowing rate based on an analysis of publicly traded debt securities of companies with credit and financial profiles similar to its own. The Group measures right-of-use assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Group begins recognizing operating lease expense when the lessor makes the underlying asset available to the Group. The Group's leases have remaining lease terms of up to seven years, some of which include options to extend the leases for an additional period which has to be agreed with the lessors based on mutual negotiation. After considering the factors that create an economic incentive, the Group did not include renewal option periods in the lease term for which it is not reasonably certain to exercise. When a lease is terminated before the expiration of the lease term, the Group derecognizes the right of use asset and corresponding lease liability, any difference is recognized as a gain or loss related to the termination of the lease.

For short-term leases, the Group records operating lease expense in its consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred.

When the Group is a lessor, minimum contractual rental from leases is recognized on a straight-line basis over the non-cancelable term of the lease. Straight-line rental revenue commences when the customer assumes the control of the leased office building.

***Net income/(loss) per share*** 

Basic income/(loss) per ordinary share is computed by dividing net income/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted income/(loss) per ordinary share reflect the potential dilution that would occur if securities were exercised or converted into ordinary shares. The Group had share options and RSUs, which could potentially dilute basic income per share in the future. To calculate the number of shares for diluted income per ordinary shares, the effect of the share options and unvested RSUs is computed using the treasury stock method.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Foreign currency risk***

The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the Peoples Bank of China, controls the conversion of RMB into other currencies. The value of the RMB is subject to changes in central government policies, international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The Group's cash and cash equivalents denominated in RMB amounted to RMB1,057,129 and RMB671,515 as of December 31, 2024 and 2025, respectively.

***Concentration risks***

Financial instruments that potentially expose the Group to significant concentration of credit risk primarily consist of cash and cash equivalents, restricted cash, short-term and long-term investments and receivables from third-party payment platforms. As of December 31, 2024 and 2025, substantially all of the Group's cash and cash equivalents, restricted cash, short-term and long-term investments and receivables from third-party payment platforms were deposited in financial institutions located in mainland China.

There are no revenues from customers which individually represent greater than 10% of the total net revenues for the years ended December 31, 2023, 2024 and 2025.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Recently adopted Accounting Pronouncements***

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which improves income tax disclosures. The amendments require the disclosure of specific categories in rate reconciliation and additional information for reconciling items that meet a quantitative threshold. The amendments also require disaggregated information about the amount of income taxes paid (net of refunds received), Income (or loss) from continuing operations before income tax expense (or benefit) and Income tax expense (or benefit) from continuing operations. The new guidance is required to be applied either prospectively or retrospectively. This guidance is effective for the Group's fiscal years beginning after December 15, 2024. Early adoption is permitted. Beginning January 1, 2025, the Group adopted ASU 2023-09 prospectively. The adoption impacted the income tax disclosures but did not have impact on the consolidated balance sheet, the consolidated statement of operations and the consolidated statements of cash flows. The required disclosures are included in Note 14.

***Recent issued Accounting Pronouncements not yet adopted***

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), which improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. In January 2025, the FASB issued ASU 2025-01, which clarifies the effective date of ASU 2024-03. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. This ASU should be applied either prospectively or retrospectively. The Group is currently evaluating the impact of adopting these standards.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"). This standard introduces a practical expedient that companies can choose to apply when determining allowances for credit losses. Specifically, it permits companies to assume that the current conditions as of the balance sheet remain unchanged throughout the remaining life of the asset. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, and requires prospective application. The Group is currently evaluating the impact of adopting ASU 2025-05.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued**

***Recent issued Accounting Pronouncements not yet adopted - continued***

In September 2025, the FASB issued ASU 2025-06, Intangibles: Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06). The guidance modernizes the accounting for software costs and enhances the transparency about an entity's software costs. The guidance is effective for the fiscal years beginning after December 15, 2027 and for interim periods within those fiscal years. This ASU can be applied prospectively, retrospectively, or under a modified transition approach. The Group is currently evaluating the impact of adopting ASU 2025-06.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities ("ASU 2025-10"), which provides updated guidance on how to recognize, measure, and present government grants. The ASU will be effective for annual reporting periods beginning after December 15, 2028, including interim periods within those annual reporting periods, with early adoption permitted . The Group is currently evaluating the impact of adopting ASU 2025-10.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**3. ASSETS ACQUISITION** 

The Group did not make any material asset acquisitions during the year ended December 31, 2023 and 2024.

In April 2025, the Company entered into an agreement with a related party, which was controlled by the founder and the chief executive officer ("CEO") of the Company Mr. Larry Xiangdong Chen, to acquire 100% of equity interest of Zhengzhou Weizhen Culture Technology Co., Ltd. ("Zhengzhou Weizhen") for a consideration of RMB166,000. The underlying assets of Zhengzhou Weizhen is an office building. The Company utilizes the building as a campus premise. As of December 31, 2025, the total acquisition consideration to the transferor has been fully paid.

In November 2025, the Company entered into an agreement with a related party, which was controlled by Mr. Larry Xiangdong Chen to acquire 100% of equity interest of Zhengzhou You'ai Culture Technology Co., Ltd. ("Zhengzhou You'ai") for a consideration of RMB206,600. The underlying assets of Zhengzhou You'ai are four buildings under construction, which were topped out in November 2025. The Company intends to utilize the buildings as a campus premise upon completion. As of December 31, 2025, the Group had a future obligation to the transferor related to the acquisition amounting to RMB181,736, which was disclosed as the amount due to related party in balance sheet.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**4. PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET** 

Prepaid expenses and other current assets, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2025 |
|  | RMB | RMB |
| Prepaid VAT and income tax<sup>(1)</sup> | 142178 | 152479 |
| Prepaid other service fees<sup>(2)</sup> | 119828 | 112618 |
| Receivables from third parties<sup>(3)</sup> | 159007 | 166304 |
| Staff advance | 15764 | 11308 |
| Other receivables <sup>(4)</sup> | 10628 | 74320 |
| Total | 447405 | 517029 |
| Less: Allowance for expected credit losses | (15576) | (12250) |
|  | 431829 | 504779 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Prepaid VAT and income tax mainly consist of VAT input that is expected to offset with VAT output tax or to be transferred out in the future related to 2024 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Prepaid other service fees mainly consist of prepayment of advertising fees and cloud server hosting fees. The prepayments of advertising fees and cloud server hosting fees are generally short-term in nature and are amortized over the related service period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Receivables from third parties include receivables from non-consolidated variable interest entities raised from disposal of assets and technical support services in 2022, rent and sales of inventory from 2022 to 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Other receivables include the receivable insurance recoveries from the insurer resulted from the putative securities class action filed on April 17, 2020 in the U.S. District Court for the District of New Jersey, in which the Group and certain of its officers have been named as defendants. The action alleges that the Group made false and misleading statements regarding the Group's business and operations in violation of the federal securities laws. On February 19, 2026, the Court granted preliminary approval of the settlement and set the Settlement Hearing for June 4, 2026. In accordance with the agreed settlement amount with the Plaintiffs, the Group has recognized USD9,500 receivable from the insurer and a corresponding USD9,500 payable to the Plaintiffs.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**5. PROPERTY, EQUIPMENT AND SOFTWARE, NET** 

Property, equipment and software consisted of the following:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2025 |
|  | RMB | RMB |
| Electronic equipment | 157147 | 189838 |
| Building | 489929 | 629032 |
| Leasehold improvement | 203857 | 264949 |
| Furniture and office equipment | 14298 | 24296 |
| Software | 19842 | 22388 |
| Construction in progress | 786 | 173436 |
| Total | 885859 | 1303939 |
| Less: Accumulated depreciation | (215622) | (294807) |
|  | 670237 | 1009132 |

---

Depreciation expenses were RMB50,732, RMB60,985 and RMB104,076 for the years ended December 31, 2023, 2024 and 2025, respectively. No impairment loss on property, equipment and software was recorded during the years ended December 31, 2023, 2024 and 2025.

**6. LAND USE RIGHTS, NET**

Land use rights consisted of the following:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2025 |
|  | RMB | RMB |
| Land use rights | 29788 | 84376 |
| Less: Accumulated amortization | (4026) | (6271) |
|  | 25762 | 78105 |

---

Amortization expenses for land use right were RMB805, RMB806 and RMB1,195 for the years ended December 31, 2023, 2024 and 2025. Future amortization expense is RMB1,894 for each of the next five years through December 31, 2030 and thereafter.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**7. GOODWILL**

Goodwill consisted of the following:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2025 |
|  | RMB | RMB |
| Beginning balance | 331 | 331 |
| Addition<sup>(1)</sup> |  | 10729 |
| Ending balance | 331 | 11060 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represent the goodwill resulted from business combination in 2025. The Group acquired another company for USD2,900 and RMB12,000, primarily to support its existing learning service.

**8. INTANGIBLE ASSETS, NET**

The intangible assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2025 |
|  | RMB | RMB |
| Student base | 12510 | 17910 |
| Trademark | 1675 | 1675 |
| License | 24937 | 51907 |
| Total | 39122 | 71492 |
| Less: Accumulated amortization | (11307) | (18691) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated impairment loss | (9831) | (10413) |
|  | 17984 | 42388 |

---

The Group recognized amortization expense of RMB2,705, RMB3,180 and RMB7,575 for the years ended December 31, 2023, 2024 and 2025, respectively. As of December 31, 2025, the Group expects to recognize amortization expenses of RMB12,317, RMB9,880, RMB7,963, RMB7,790 and RMB4,438 for the next five years, respectively, and nil thereafter.

The Group recorded nil, nil and RMB582 of impairment losses on intangible assets during the years ended December 31, 2023, 2024 and 2025.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES** 

The components of accrued expenses and other current liabilities were as follows:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2025 |
|  | RMB | RMB |
| Salary and welfare payable | 606098 | 707526 |
| Accrued marketing expense | 214022 | 318527 |
| Other accrued expense | 228981 | 256052 |
| Refund liability <sup>(1)</sup> | 127969 | 125813 |
| Other tax payable | 61059 | 51572 |
| Other payables <sup>(2)</sup> | 7078 | 77987 |
|  | 1245207 | 1537477 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Refund liability represents the estimated amounts of service fee received that is estimated to be refunded as described in Note 2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Other payables include payable to the plaintiffs resulted from the putative securities class action as described in Note 4(4).

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**10. SHORT-TERM AND LONG-TERM BORROWINGS**

The components of short-term and long-term borrowings were as follows:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2025 |
|  | RMB | RMB |
| Short-term borrowings<sup>(1)</sup> |  | 100000 |
| Long-term borrowings<sup>(2)</sup> |  | 31883 |
|  |  | 131883 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The short-term borrowings consisted of borrowings without collaterals from well-known financial institutions, with interest rate of 2.1% or 2.25% and will be repaid within one year. The borrowings were mainly used to supplement the Group's working capital for daily operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The long-term borrowings consisted of borrowings with collateral of RMB32,445 which comprised of land use right and are fully guaranteed by Mr. Larry Xiangdong Chen and a related party. The borrowings have an interest rate of 90 base points below loan prime rate issued by the National Interbank Funding Center on the withdraw date and will be repaid within six years. The borrowings were mainly used for buildings construction, which will be used as a campus premise upon completion.

As of December 31, 2025, the long-term borrowings will be repaid according to the following schedule:

---

| | | |
|:---|:---|:---|
|  | As of December 31, 2025 | As of December 31, 2025 |
|  | RMB | RMB |
| 2026 |  |  |
| 2027 |  | 1,594 |
| 2028 |  | 9,565 |
| 2029 |  | 6,377 |
| 2030 |  | 6,377 |
| 2031 and thereafter |  | 7,970 |
|  |  | 31,883 |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**11. FAIR VALUE MEASUREMENT**

***Measured at fair value on a recurring basis***

As of December 31, 2024 and 2025, short-term and long-term investments measured at fair value are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Fair value measurement as of December 31, 2025 | Fair value measurement as of December 31, 2025 | Fair value measurement as of December 31, 2025 | Fair value measurement as of December 31, 2025 |
|  | Quoted prices<br>in active<br>market for<br>identical<br>assets | Significant<br>other<br>observable<br>inputs | Significant<br>unobservable<br>inputs | Total |
|  | (Level 1) | (Level 2) | (Level 3) |  |
|  | RMB | RMB | RMB | RMB |
| Short-term investments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale debt investments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products |  | 2137269 | 75448 | 2212717 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments elected to measure at fair value |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products |  |  | 249033 | 249033 |
| Long-term investments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale debt investments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products |  | 62393 | 275101 | 337494 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments elected to measure at fair value |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products |  |  | 212147 | 212147 |
| Total |  | 2199662 | 811729 | 3011391 |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**11. FAIR VALUE MEASUREMENT - continued**

***Measured at fair value on a recurring basis - continued***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Fair value measurement as of December 31, 2024 | Fair value measurement as of December 31, 2024 | Fair value measurement as of December 31, 2024 | Fair value measurement as of December 31, 2024 |
|  | Quoted prices<br>in active<br>market for<br>identical<br>assets | Significant<br>other<br>observable<br>inputs | Significant<br>unobservable<br>inputs | Total |
|  | (Level 1) | (Level 2) | (Level 3) |  |
|  | RMB | RMB | RMB | RMB |
| Short-term investments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale debt investments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products | 202635 | 783007 |  | 985642 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments elected to measure at fair value |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products |  | 712672 |  | 712672 |
| Long-term investments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale debt investments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products |  | 863625 |  | 863625 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments elected to measure at fair value |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products |  | 59115 |  | 59115 |
| Total | 202635 | 2418419 |  | 2621054 |

---

The following table provides additional information about the reconciliation of the fair value measurements of assets using significant unobservable inputs (Level 3).

---

| | |
|:---|:---|
|  | Level 3 investments |
|  | RMB |
| Balance as of December 31, 2024 |  |
| Initial recognition | 2074411 |
| Unrealized gain | 24468 |
| Disposals | (1269129) |
| Foreign exchange difference | (18021) |
| Balance as of December 31, 2025 | 811729 |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**11. FAIR VALUE MEASUREMENT - continued**

***Measured at fair value on a recurring basis - continued***

The Group's available-for-sale debt investments and investments elected to measure at fair value as of December 31, 2024 and 2025 mainly consist of wealth management products purchased from banks. Those wealth management products with fair value which is determined based on the quoted market prices currently available on the website of the bank have been categorized as Level 1. Those wealth management products are valued using directly or indirectly observable inputs in the market place have been categorized as Level 2. The remaining wealth management products which are unobservable inputs to the valuation methodology have been categorized as Level 3.

A summary of available-for-sale investments during the years ended December 31, 2024 and 2025 is presented as below:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | As of December 31, 2025 | As of December 31, 2025 | As of December 31, 2025 | As of December 31, 2025 | As of December 31, 2025 |
|  | Original<br>cost | Unrealized<br>gains | Unrealized<br>loss | Provision<br>for decline<br>in value | Fair<br>value |
|  | RMB | RMB | RMB | RMB | RMB |
| Short-term investments: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale debt investments |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products | 2147254 | 65463 |  |  | 2212717 |
| Long-term investments: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale debt investments |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products | 330472 | 7022 |  |  | 337494 |
| Total | 2477726 | 72485 |  |  | 2550211 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | As of December 31, 2024 | As of December 31, 2024 | As of December 31, 2024 | As of December 31, 2024 | As of December 31, 2024 |
|  | Original<br>cost | Unrealized<br>gains | Unrealized<br>loss | Provision<br>for decline<br>in value | Fair<br>value |
|  | RMB | RMB | RMB | RMB | RMB |
| Short-term investments: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale debt investments |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products | 966011 | 19631 |  |  | 985642 |
| Long-term investments: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale debt investments |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- Wealth management products | 824015 | 39610 |  |  | 863625 |
| Total | 1790026 | 59241 |  |  | 1849267 |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**11. FAIR VALUE MEASUREMENT - continued**

***Measured at fair value on a recurring basis - continued***

For the years ended December 31, 2024 and 2025, a gain of RMB12,860 and RMB36,838 resulting from changes in fair value of the products under fair value option was recorded in other income, respectively.

As of December 31, 2025, RMB2,212,717 available-for-sale investments and RMB249,033 investments elected to measure at fair value will mature within one year, RMB337,494 available-for-sale investments and RMB214,147 investments elected to measure at fair value will mature more than one year.

***Measured at fair value on a non-recurring basis***

The Group's non-financial assets, such as property, equipment and software and acquired intangible assets, would be measured at fair value on a non-recurring basis whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Group recorded nil, nil and RMB582 of impairment losses on intangible assets during the years ended December 31, 2023, 2024 and 2025.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**12. SHARE-BASED COMPENSATION** 

***Share options***

In March 2019, the Group approved the Share Incentive Plan (the "Plan") under which the maximum aggregate number of ordinary shares that may be issued pursuant to all awards is 28,400,000 shares. The shares reserved may be increased automatically if and whenever the unissued shares reserved accounts for less than one percent (1%) of the total then issued and outstanding shares, so that after the increase, the shares unissued and reserved under the Plan immediately after each such increase shall equal to five percent (5%) of the then issued and outstanding shares.

The options will vest in accordance with the vesting schedules set out in the respective share option agreements with vesting period ranging from 0 to 10 years. The Group determined the estimated fair value of the options on the respective grant dates using the binomial option pricing model with the assistance from an independent valuation firm. The Group did not grant any share options during the years ended December 31, 2023, 2024 and 2025.

A summary of options activities during the year ended December 31, 2025 is presented below:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Number<br>of<br>options | Weighted<br>average<br>exercise<br>price | Weighted<br>average<br>grant date<br>fair value | Weighted<br>average<br>remaining<br>contractual<br>term (years) | Aggregate<br>intrinsic<br>value |
| Options outstanding at January 1, 2025 | 838694 | 0.01 | 16.06 | 4.18 | 20102 |
| Granted |  |  |  |  |  |
| Exercised | (165720) | 0.01 | 12.72 |  |  |
| Forfeited | (88200) | 0.01 | 12.72 |  |  |
| Options outstanding at December 31,<br> 2025 | 584774 | 0.01 | 17.50 | 3.24 | 14225 |
| Options vested and expected to<br> vest as of December 31, 2025 | 584774 | 0.01 | 17.50 | 3.24 | 14225 |
| Options exercisable as of December 31,<br> 2025 |  |  |  |  |  |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**12. SHARE-BASED COMPENSATION - continued**

***Share options - continued***

The total fair value of options vested during the years ended December 31, 2023, 2024 and 2025 were RMB12,071, RMB2,577 and RMB2,107 respectively. Total intrinsic value of options exercised for the years ended December 31, 2023, 2024 and 2025 were RMB41,271, RMB20,102 and RMB14,225 respectively.

The Group recognizes compensation expenses related to options over the estimated service period for each separate vesting portion of the award as if the award is in substance, multiple awards.

As of December 31, 2025, there was RMB1,731 of unrecognized compensation expenses related to options expected to be recognized over a weighted average period of 3.24 years.

***Restricted Stock Units ("RSU")***

Under the Plan, the Group granted 970,400 RSUs to employees at an exercise price of nil per share during the year ended December 31, 2025. The vesting period of these RSUs ranged from 0 to 6 years. The RSUs are not transferable and may not be sold or pledged and the holder has no voting or dividend right on the non-vested RSUs. In the event that the employment with the Group is terminated for any reason prior to vesting in the RSUs, the holder's right to the unvested RSUs will terminate immediately. The non-vested RSUs will be repurchased by the Group at no cost.

The Group recognized compensation expense over the requisite service period for each separately vesting portion of the award as if the award is in substance, multiple awards. The aggregate fair values of RSUs are measured at the fair value of the Group's ordinary shares on the grant date which were RMB39,977, RMB87,699 and RMB36,380 during the years ended December 31, 2023, 2024 and 2025, respectively.

As of December 31, 2025, there was RMB56,937 unrecognized compensation cost related to RSUs which is expected to be recognized over a weighted average vesting period of 2.32 years. The weighted average granted fair value of the RSUs granted during the years ended December 31, 2023, 2024 and 2025 was RMB28.84, RMB40.61 and RMB37.49 per RSU, respectively.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**12. SHARE-BASED COMPENSATION - continued**

***Restricted Stock Units ("RSU") - continued***

A summary of the RSUs activity during the year ended December 31, 2025 is presented below:

---

| | |
|:---|:---|
|  | RSUs |
| Unvested balance at January 1, 2025 | 4652285 |
| Granted | 970400 |
| Vested | (1738471) |
| Forfeited | (463637) |
| Unvested balance at December 31, 2025 | 3420577 |

---

The Group recognized RMB58,353, RMB53,217 and RMB39,218 of compensation expenses for all options and RSUs granted for the years ended December 31, 2023, 2024 and 2025, respectively.

**13. ORDINARY SHARES**

The ordinary shares of the Company are classified as Class A and Class B. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to ten votes and is convertible into one Class A ordinary share. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

In November 2022, the Company's board of directors authorized a share repurchase program("2022 Share Repurchase Program"), under which the Company may repurchase up to USD30,000 of its ordinary shares, including shares represented by American depositary shares, effective until November 2025. In November 2023, the Company's board of directors authorized modifications to its existing share repurchase program, by increasing the aggregate value of shares that may be repurchased from USD30,000 to USD80,000, effective until November 22, 2025.

In May 2025, the Company's board of directors authorized a new share repurchase program ("2025 Share Repurchase Program"), under which the Company may repurchase up to an aggregate value of USD100,000 of its shares during the three-year period beginning upon the completion of the Company's 2022 Share Repurchase Program. In 2025, the Company had cumulatively repurchased 10,548,253 shares for approximately USD47,493 under its existing share repurchase programs.

During the year ended December 31, 2025, the Company reissued 1,904,192 shares of treasury stock in connection with the exercise of options and the vesting of RSUs.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**14. INCOME TAXES**

The Company is incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to income or capital gains taxes. The Company's subsidiary BaiJiaHuLian HK is located in Hong Kong. From April 2018, BaiJiaHuLian HK is subject to an income tax rate of 8.25% for the first HKD2 million of assessable profit and 16.5% for profit exceeding HKD2 million. No provision for Hong Kong profits tax was made as the Group had no estimated assessable profit that was subject to Hong Kong profits tax for the years ended December 31, 2024 and 2025.

The Company's subsidiary, the VIEs and VIEs' subsidiaries, which were entities incorporated in mainland China (the "Mainland China entities"), are subject to mainland China Enterprise Income Tax ("EIT") on their taxable income in accordance with the relevant income tax laws of mainland China, which have adopted a unified income tax rate of 25% since January 1, 2008 with the following exceptions.

Beijing Gaotu qualified as a High and New Technology Enterprise (the "HNTE") from 2017 through 2022 and accordingly was entitled to the 15% preferential tax rate during the period. The HNTE qualification has been renewed in 2023 and is set to expire by 2026.

Beijing Lexuebang also qualified as a HNTE from 2019 through 2024 and accordingly was entitled to the 15% preferential tax rate during the period. The HNTE qualification has been renewed in 2025 and is set to expire by 2028.

Beijing Yuexuebang obtained the qualification of the Software Enterprise Certificate in February 2024 and renewed in 2025. Therefore, Beijing Yuexuebang adopted exemption from EIT for the years 2023 and 2024, and can enjoy a reduced tax rate of 12.5% in 2025.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**14. INCOME TAXES - continued**

Income (loss) before income taxes consists of:

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 |
|  | RMB | RMB | RMB |
| Chinese mainland | 2277 | (1040744) | (411103) |
| Non-Chinese mainland | 10247 | 422 | 83685 |
| Income/(loss) before income tax | 12524 | (1040322) | (327418) |

---

For the year ended December 31, 2025, income tax benefit amounted to RMB4,111 in Chinese mainland, and income tax expense amounted to nil in jurisdictions outside Chinese mainland.

The current and deferred components of the income tax expense appearing in the consolidated statement of operations were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 |
|  | RMB | RMB | RMB |
| Current tax (expenses)/ benefits | (8744) | 123 | 169 |
| Deferred tax (expenses)/benefits | (1913) | (8755) | 3942 |
|  | (10657) | (8632) | 4111 |

---

The principle components of deferred tax assets were as follows:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2025 |
|  | RMB | RMB |
| Deferred tax assets: |  |  |
| Deductible temporary difference related to advertising<br> expenses | 786469 | 893927 |
| Net operating loss carrying forwards | 827031 | 782319 |
| Transfer of intangible assets | 1002 | 833 |
| Accrued liabilities | 1891 | 1904 |
| Total deferred tax assets | 1616393 | 1678983 |
| Less: valuation allowance | (1616393) | (1678983) |
| Deferred tax assets, net |  |  |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**14. INCOME TAXES - continued**

The movements of valuation allowance for the years end December 31, 2023, 2024 and 2025 were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 |
|  | RMB | RMB | RMB |
| Balance at beginning of the period | 1351067 | 1397121 | 1616393 |
| Acquisitions |  |  | 49056 |
| Additions | 46054 | 219272 | 13534 |
| Balance at end of the period | 1397121 | 1616393 | 1678983 |

---

The principle components of deferred tax liabilities were as follows:

---

| | | |
|:---|:---|:---|
|  | As of December 31, | As of December 31, |
|  | 2024 | 2025 |
|  | RMB | RMB |
| Deferred tax liabilities: |  |  |
| Building and land use right | 65706 | 63906 |
| Intangible assets | 4475 | 10589 |
| Unrecognized gains of investments | 423 | 753 |
| Total deferred tax liabilities | 70604 | 75248 |

---

As of December 31, 2025, the Group had net operating loss carried forward of RMB3,941,813 from the Company's Mainland China entities, which will expire on various dates from December 31, 2025 to December 31, 2034.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**14. INCOME TAXES - continued**

The reconciliation of the effective tax rate and the statutory income tax rate applicable to operations was as follow:

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 |
|  | RMB | RMB |
| Income/(loss) before provision for income tax <br> and share of results of equity investees | 12524 | (1040322) |
| Income tax (expense)/benefits computed at an<br> applicable tax rate of 25% | (3131) | 260081 |
| Effect of permanent differences | (27346) | (34587) |
| Effect of research and development super-deduction | 44935 | 52705 |
| Effect of preferential tax rate | 17480 | (67850) |
| Effect on tax rates in different tax jurisdictions | 3459 | 291 |
| Change in valuation allowance | (46054) | (219272) |
|  | (10657) | (8632) |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**14. INCOME TAXES - continued**

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
|  | 2025 | 2025 |
|  | RMB | Percent |
| **Loss before income tax** | (327418) |  |
| **Income tax benefits at PRC statutory rate** | 81855 | 25.0% |
| **Other jurisdictions' tax effects** |  |  |
| ***&nbsp;&nbsp;&nbsp;&nbsp;Cayman Islands*** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statutory tax rate difference between PRC and other <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;jurisdictions | 19915 | 6.1% |
| ***&nbsp;&nbsp;&nbsp;&nbsp;Hong Kong*** | 1067 | 0.3% |
| ***&nbsp;&nbsp;&nbsp;&nbsp;Other foreign jurisdictions*** | (61) | 0.0% |
| **Effect of changes in tax laws or rates enacted in the current year** |  | 0.0% |
| **Effect of cross-border tax laws** |  | 0.0% |
| **Change in valuation allowance** | (13493) | (4.1)% |
| **Nontaxable or nondeductible items** |  |  |
| **&nbsp;&nbsp;&nbsp;&nbsp;Non-taxable income** |  | 0.0% |
| **&nbsp;&nbsp;&nbsp;&nbsp;Non-deductible expenses** | (4390) | (1.3)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation expenses | (2446) | (0.7)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Others | (1944) | (0.6)% |
| **Changes in unrecognized tax benefits** |  | 0.0% |
| **Other adjustments** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of preferential tax rate | (114066) | (34.9)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of research and development super-deduction | 31596 | 9.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;Others | 1688 | 0.5% |
| **Income tax benefits** | **4111** | **1.3%** |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**14. INCOME TAXES - continued**

If Beijing Gaotu, Beijing Lexuebang and Beijing Yuexuebang did not enjoy income tax preferential tax rates, tax expenses would have increased by RMB17,480 for the years ended December 31, 2023, tax benefits would decreased by RMB67,850 and RMB49,001 for the years ended December 31, 2024 and 2025, respectively. The decrease in basic and diluted net income per ordinary share was approximately RMB0.10 for the years ended December 31, 2023, the increase in basic and diluted net loss per ordinary share was RMB0.40 and RMB0.30 for the years ended December 31, 2024 and 2025, respectively.

The Group did not identify significant unrecognized tax benefits for the year ended December 31, 2025. The Group did not incur any interest and penalties related to potential underpaid income tax expenses and also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from December 31, 2025. As of December 31, 2024 and 2025, the Group did not have any significant unrecognized uncertain tax positions.

Aggregate undistributed earnings of the Company's mainland China subsidiaries and the VIEs that are available for reinvestment. Upon distribution of such earnings, the Company will be subject to mainland China EIT, the amount of which is impractical to estimate. The Company did not record any withholding tax on any of the aforementioned undistributed earnings because the relevant subsidiaries do not intend to declare dividends and the Company intends to permanently reinvest it within the mainland China. Additionally, no deferred tax liability was recorded for taxable temporary differences attributable to the undistributed earnings of VIEs because the Company believes the undistributed earnings can be distributed from the VIEs to WFOEs in a manner that would not be subject to income tax.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**15. NET LOSS PER SHARE**

The following table sets forth the computation of basic and diluted net loss per share for the periods indicated:

---

| | | | |
|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 |
|  | RMB | RMB | RMB |
| **Basic net loss per share calculation** |  |  |  |
| Numerator: |  |  |  |
| Net loss | (7298) | (1048954) | (323307) |
| Net loss attributed to ordinary shareholders<br> for computing net loss per ordinary shares<br> - basic | (7298) | (1048954) | (323307) |
| Denominator: |  |  |  |
| Weighted average ordinary shares outstanding used in<br> computing net loss per ordinary shares-basic | 173725790 | 171412125 | 163118684 |
| **Net loss per ordinary share attributable to<br> ordinary shareholders-basic** | **(0.04)** | **(6.12)** | **(1.98)** |
| **Diluted net loss per ordinary share calculation** |  |  |  |
| Denominator: |  |  |  |
| Weighted average ordinary shares basic outstanding | 173725790 | 171412125 | 163118684 |
| Effect of potentially diluted stock options |  |  |  |
| Effect of potentially diluted RSUs |  |  |  |
| Weighted average ordinary shares outstanding used in<br> computing net loss per ordinary shares-diluted | 173725790 | 171412125 | 163118684 |
| **Net loss per ordinary share attributable to<br> ordinary shareholders-diluted** | **(0.04)** | **(6.12)** | **(1.98)** |

---

For the years ended December 31, 2023, 2024 and 2025, 6,022,173, 5,480,652 and 4,005,351 potential ordinary shares in connection with RSUs and share options were excluded from the calculation of diluted net loss per ordinary share due to their anti-dilutive effect.

**16. EMPLOYEE DEFINED CONTRIBUTION PLAN** 

Full time employees of the Group in the mainland China participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund, unemployment insurance and other welfare benefits are provided to employees. Labor regulations of mainland China require that the Group's mainland China entities make contributions to the government for these benefits based on certain percentages of the employees' salaries. The Group has no legal obligation for the benefits beyond the contributions made. The total amount for such employee benefits, which was expensed as incurred, was RMB176,965, RMB372,257 and RMB360,761 for the years ended December 31, 2023, 2024 and 2025, respectively.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**17. RELATED PARTY TRANSACTION**

In May 2023, Mr. Larry Xiangdong Chen invested RMB15,000 to obtain 60% of the equity interest of Beijing GaoTuJiaPin Technology Co., Ltd ("GaoTuJiaPin"). GaoTuJiaPin is a company engaged in livestreaming e-commerce, which was formerly one of the VIEs' subsidiaries.

The transaction was accounted as a deconsolidation of the subsidiary under common control. In connection with such deconsolidation, the Company obtained a call option to purchase the 60% equity interest held by Mr. Larry Xiangdong Chen, or to designate any third parties to repurchase the 60% equity interest held by Mr. Larry Xiangdong Chen within seven months after the deconsolidation date. The call option expired in December 2023. Gains resulting from the deconsolidation amounted to RMB19,009 were recorded as contribution from shareholders in the equity.

Upon the completion of such deconsolidation, the Company no longer has control over Gaotu Jiapin, but has the ability to exercise significant influence over it and accounts for the retained equity interest as an equity method investment. The Group recorded share of loss on GaoTuJiaPin amounted to nil and nil for the years ended December 31, 2024 and 2025.

Related party transaction and balance between the Group and GaoTuJiaPin were both immaterial in 2024 and 2025. Related party transaction between the Group and Mr. Larry Xiangdong Chen incurred in 2025 were described in Note 3.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**18. LEASE**

***Operating leases***

The Group's leases consist of operating leases for administrative office spaces in different cities in mainland China. The Group determines if an arrangement is a lease at inception. Some lease agreements contain lease and non-lease components, which the Group choose to account for as separate components. The allocation of the consideration between the lease and the non-lease components is based on the relative stand-alone prices of lease components included in the lease contracts. As of December 31, 2024 and 2025, the Group had no long-term leases that were classified as a financing lease. As of December 31, 2025, the Group did not have additional operating leases that have not yet commenced.

Total operating lease expenses for the years ended December 31, 2023, 2024 and 2025 was RMB40,772, RMB153,880 and RMB183,800, and was recorded in cost of revenues, selling expenses, research and development expenses and general and administrative expense on the consolidated statements of operations. Short-term lease expenses were immaterial for the years ended December 31, 2023, 2024 and 2025.

The noncash decrease of operating lease right-of-use assets due to early terminations and modifications was RMB192,694 for the year ended December 31, 2025.

---

| | | |
|:---|:---|:---|
|  | Year ended<br>December 31, | Year ended<br>December 31, |
|  | 2024 | 2025 |
|  | RMB | RMB |
| Cash paid for amounts included in the measurement of<br> lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating cash flows from operating leases | 117774 | 171977 |
| Non-cash right-of-use assets in exchange for new lease<br> liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating leases | 639386 | 332428 |
| Weighted average remaining lease term: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating leases | 4.0 | 3.6 |
| Weighted average discount rate: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating leases | 6.8% | 5.4% |

---

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**18. LEASE - continued**

***Operating leases - continued***

The following is a maturity analysis of the annual undiscounted cash flows as of December 31, 2025:

---

| | |
|:---|:---|
|  | RMB |
| Year ending December 31, |  |
| 2026 | 164256 |
| 2027 | 137409 |
| 2028 | 105723 |
| 2029 | 66533 |
| 2030 | 19934 |
| 2031 and thereafter | 3014 |
| Less: imputed interest | (43457) |
| Total | 453412 |

---

Payments under operating leases are expensed on a straight-line basis over the periods of their respective leases. The terms of the leases do not contain rent escalation or contingent rents.

**19. CONTINGENCIES** 

From time to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. The Group records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Group reviews the need for and such liability on a regular basis.

The Group and certain of our officers were named as defendants in a putative securities class action filed in federal court in December 2022. The case was purportedly brought on behalf of a class of persons who purchased the Company's ADSs between March 5, 2021 and July 23, 2021, inclusive, and allegedly suffered damages as a result of alleged misstatements and omissions in the Company's SEC filings regarding the forthcoming Chinese regulations and their impact on the Company, in violation of the Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. As of December 31, 2025, the case is still in its preliminary stage. As the lawsuit progress or the amount of potential loss cannot be reasonably estimated, the Group did not record any liabilities pertaining to the class action lawsuit as of December 31, 2025.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**20. SEGMENT INFORMATION**

Operating segments are defined as components of an enterprise engaging in businesses activities for which separate financial information is available that is regularly evaluated by the Group's chief operating decision makers ("CODM") in deciding how to allocate resources and assess performance. The Group's CODM has been identified as the CEO. The Group is currently engaged in providing learning services and educational content & digitalized learning products. The CODM uses consolidated net income to measure segment profit or loss, allocate resources, and assess performance. As such, the Group concluded that it has one operating segment and one reporting segment. The Group operates solely in mainland China and all of the Group's long-lived assets are located in mainland China. See Note 2 for description of the Company's disaggregated revenues. Significant segment expenses are presented in the Company's consolidated statements of operations.

------

**GAOTU TECHEDU INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)**

**21. RESTRICTED NET ASSETS**

Relevant statutory laws and regulations of mainland China permit payments of dividends by the Group's mainland China subsidiaries only out of their retained earnings, if any, as determined in accordance with accounting standards and regulations of mainland China. The results of operations reflected in the financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company's subsidiaries.

In accordance with the Regulations on Enterprises with Foreign Investment of China and their articles of association, a foreign invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise's statutory accounts of mainland China, which is included in retained earnings accounts in equity section of the consolidated balance sheets. A wholly-owned foreign invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve reaches 50% of its respective registered capital based on the enterprise's statutory accounts of mainland China. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. If any mainland China subsidiary incur debt on its own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to the Group. Any limitation on the ability of the mainland China subsidiaries to distribute dividends or other payments to their respective shareholders could materially and adversely limit the ability to grow, make investments or acquisitions that could be beneficial to pay dividends.

Additionally, in accordance with the Company Law of mainland China, a domestic enterprise is required to provide statutory common reserve at least 10% of its annual after-tax profit until such reserve reaches 50% of its respective registered capital based on the enterprise's statutory accounts of mainland China. The Group's provision for the statutory common reserve is in compliance with the aforementioned requirement of the Company Law. A domestic enterprise is also required to provide for discretionary surplus reserve, at the discretion of the board of directors, from the profits determined in accordance with the enterprise's statutory accounts of mainland China. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.

Because the Group's mainland China entities can only be paid out of distributable profits reported in accordance with accounting standards of mainland China, the Group's entities in mainland China are restricted from transferring a portion of their net assets to the Company. The restricted amounts include the paid-in capital, statutory reserves and additional paid-in capital of the Group's entities in mainland China. The aggregate amount of paid-in capital, statutory reserves and additional paid-in capital, which is the amount of net assets of the Group's entities in mainland China not available for distribution, were RMB4,764,041 and RMB3,987,548 as of December 31, 2024 and 2025, respectively.

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**ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I** 

**CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY** 

**BALANCE SHEETS**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)** 

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| | | | |
|:---|:---|:---|:---|
|  | As of December 31, | As of December 31, | As of December 31, |
|  | 2024 | 2025 | 2025 |
|  | RMB | RMB | USD |
| Cash and cash equivalents | 220713 | 40725 | 5824 |
| Short-term investments | 516647 | 530738 | 75895 |
| Prepaid expenses and other current assets, net | 1816 | 72245 | 10331 |
| Amounts due from subsidiaries and VIEs | 6437387 | 5904835 | 844379 |
| **Total current assets** | **7176563** | **6548543** | **936429** |
| Long-term investments | 174122 | 340681 | 48717 |
| **TOTAL ASSETS** | **7350685** | **6889224** | **985146** |
| Accrued expenses and other current liabilities | 5778 | 76280 | 10908 |
| Amounts due to subsidiaries and VIEs | 108083 | 119257 | 17054 |
| **Total current liabilities** | **113861** | **195537** | **27962** |
| Deficit of investments in subsidiaries and VIEs | 5303360 | 5439942 | 777900 |
| **TOTAL LIABILITIES** | **5417221** | **5635479** | **805862** |
| Class A ordinary shares (par value of USD0.0001 per share;<br> 800,000,000 shares authorized as of December 31, 2024<br> and 2025; 101,974,316 shares issued as of December 31, <br> 2024 and 2025; 95,317,937 and 86,673,876 shares <br> outstanding as of December 31, 2024 and 2025) | 68 | 68 | 10 |
| Class B ordinary shares (par value of USD0.0001 per share;<br> 100,000,000 shares authorized as of December 31, 2024<br> and 2025, 73,305,288 shares issued and outstanding as of<br> December 31, 2024 and 2025) | 48 | 48 | 7 |
| Treasury stock, at cost | (242866) | (496132) | (70946) |
| Additional paid-in capital | 7991421 | 7933515 | 1134478 |
| Accumulated other comprehensive loss | (2832) | (48072) | (6874) |
| Statutory reserves | 66042 | 66042 | 9444 |
| Accumulated deficit | (5878417) | (6201724) | (886835) |
| **TOTAL SHAREHOLDERS' EQUITY** | **1933464** | **1253745** | **179284** |
| **TOTAL LIABILITIES AND TOTAL SHAREHOLDERS' EQUITY** | **7350685** | **6889224** | **985146** |

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**ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I** 

**CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY** 

**STATEMENT OF OPERATIONS**

(In thousands of RMB and USD, except for share, per **share and per ADS data, or otherwise noted)** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 | 2025 |
|  | RMB | RMB | RMB | USD |
| General and administrative expenses | (8477) | (19828) | (11612) | (1660) |
| **Total operating expenses** | **(8477)** | **(19828)** | **(11612)** | **(1660)** |
| **Loss from operations** | **(8477)** | **(19828)** | **(11612)** | **(1660)** |
| Equity in loss of subsidiaries and VIEs | (28414) | (1051659) | (401372) | (57396) |
| Income from non-operations | 29593 | 22533 | 89677 | 12824 |
| **Loss before income tax** | **(7298)** | **(1048954)** | **(323307)** | **(46232)** |
| **Net loss** | **(7298)** | **(1048954)** | **(323307)** | **(46232)** |

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**ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I** 

**CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY** 

**STATEMENT OF COMPREHENSIVE INCOME/(LOSS)**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 | 2025 |
|  | RMB | RMB | RMB | USD |
| **Net loss** | **(7298)** | **(1048954)** | **(323307)** | **(46232)** |
| Other comprehensive income/(loss), net of tax: |  |  |  |  |
| Change in cumulative foreign currency translation adjustments | 29804 | 22894 | (42650) | (6099) |
| Unrealized gains on available-for-sale investments (net of tax effect of RMB6,464, RMB3,251 and RMB3,252 for the years ended December 31, 2023, 2024 and 2025, respectively) | 25792 | 29497 | 28705 | 4105 |
| Transfer to statements of operations of realized gains on available-for-sale investments (net of tax effect of RMB6,487, RMB3,288 and RMB2,770 for the years ended December 31, 2023, 2024 and 2025, respectively) | (24743) | (22014) | (31295) | (4475) |
| **Total comprehensive income/(loss)** | **23555** | **(1018577)** | **(368547)** | **(52701)** |

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**ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I** 

**CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY** 

**STATEMENT OF CASH FLOWS**

**(In thousands of RMB and USD, except for share, per share and per ADS data, or otherwise noted)** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, | Year ended December 31, | Year ended December 31, |
|  | 2023 | 2024 | 2025 | 2025 |
|  | RMB | RMB | RMB | USD |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  |
| Net loss | (7298) | (1048954) | (323307) | (46232) |
| Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
| Equity in loss of subsidiaries and VIEs | 28414 | 1051659 | 401372 | 57396 |
| Realized gains from investments | (4946) | (7773) | (20357) | (2911) |
| Fair value change of fair value option | (5301) | (5547) | (20925) | (2992) |
| Changes in operating assets and liabilities: |  |  |  |  |
| Prepaid expenses and other current assets | 4145 | (517) | (70428) | (10072) |
| Accrued expenses and other current liabilities | (436) | (1085) | 67327 | 9627 |
| **Net cash generated from/(used in) operating activities** | **14578** | **(12217)** | **33682** | **4816** |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  |
| Loans to subsidiaries | (250744) | (74245) | (372796) | (53309) |
| Repayment from subsidiaries | 402800 | 325466 | 641002 | 91662 |
| Purchase of short-term and long-term investments | (2085667) | (1440673) | (1842375) | (263456) |
| Proceeds from redemption of short-term and long-term investments | 2116220 | 1533082 | 1662408 | 237721 |
| **Net cash generated from investing activities** | **182609** | **343630** | **88239** | **12618** |
| CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  |
| Capital contribution | 12 |  |  |  |
| Repurchase of ordinary shares | (90492) | (205302) | (343360) | (49100) |
| **Net cash used in financing activities** | **(90480)** | **(205302)** | **(343360)** | **(49100)** |
| Effect of exchange rate changes | (11982) | (3854) | 41451 | 5928 |
| **Net increase/(decrease) in cash and cash equivalents** | **94725** | **122257** | **(179988)** | **(25738)** |
| **Cash and cash equivalents at beginning of the year** | **3731** | **98456** | **220713** | **31562** |
| **Cash and cash equivalents at end of the year** | **98456** | **220713** | **40725** | **5824** |

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**ADDITIONAL INFORMATION-FINANCIAL STATEMENT SCHEDULE I** 

**CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY** 

**NOTES TO FINANCIAL STATEMENTS** 

**(In thousands of RMB and USD, except for share and per share data, or otherwise noted)** 

**1. BASIS FOR PREPARATION**

The condensed financial information of the Parent Company has been prepared using the same accounting policies as set out in the Group's consolidated financial statements except that the Parent Company used the equity method to account for investments in its subsidiaries, VIEs and VIEs' subsidiaries. The condensed financial information is provided since the restricted net assets of the Group's subsidiaries, the VIEs and the VIEs' subsidiaries were over 25% of the consolidated net assets of the Group as of December 31, 2025.

**2. INVESTMENT IN SUBSIDIARIES AND VIEs AND VIEs**' **SUBSIDIARIES**

The Parent Company and its subsidiaries, VIEs and VIEs' subsidiaries were included in the consolidated financial statements where inter-company balances and transactions were eliminated upon consolidation. For purpose of the Parent Company's stand-alone financial statements, its investments in subsidiaries, VIEs and VIEs' subsidiaries were reported using the equity method of accounting. The Parent Company's share of loss from its subsidiaries, VIEs and VIEs' subsidiaries were reported as share of loss of subsidiaries, VIEs and VIEs' subsidiaries in the accompanying Parent Company financial statements. Ordinarily under the equity method, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to RMB nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of this Schedule I, the Parent Company has continued to reflect its share, based on its proportionate interest, of the losses of subsidiaries, VIEs and VIEs' subsidiaries regardless of the carrying value of the investment even though the Parent Company is not obligated to provide continuing support or fund losses.

**3. CONVENIENCE TRANSLATION**

The Group's business is primarily conducted in mainland China and all of the revenues are denominated in RMB. However, periodic reports made to shareholders will include current period amounts translated into US dollars using the exchange rate as of balance sheet date, for the convenience of the readers. Translations of balances in the balance sheet, and the related statement of operations and cash flows from Renminbi ("RMB") into US dollars as of and for the year ended December 31, 2025 are solely for the convenience of the readers and were calculated at the rate of USD1.00=RMB6.9931, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 31, 2025. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at that rate on December 31, 2025, or at any other rate.

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## Exhibit 4.11

**Exhibit 4.11**

**Power of Attorney**

I, [Name], with identity card number of [ID Card No.], am a Chinese citizen, with domicile at [Address], and as of the date of signing this Power of Attorney hold [Percentage]% equity of Shanghai Duwen Education Technology Co., Ltd. (hereinafter referred to as the "**Company**"). In respect of the aforesaid equity, I hereby irrevocably authorize Beijing Lexuebang Network Technology Co., Ltd. (hereinafter referred to as "**WFOE**") to exercise the following rights during the validity period of this Power of Attorney in compliance with the laws and regulations of China:

I exclusively authorize WFOE or the individual(s) designated by WFOE (the "**Trustee**") on my behalf to exercise, including but not limited to, the following rights in accordance with the Trustee's own purpose:

1) Convene shareholders' meetings pursuant to the articles of association of the Company, and attend the shareholders' meetings and sign the resolutions and minutes of the relevant shareholders' meetings;

2) Exercise all my rights in the Company as a shareholder under the laws and the articles of association respectively at the shareholders' meetings, including but not limited to voting rights, nomination rights and appointment rights;

3) Submit on my behalf any documents that are necessary to submit by shareholders of the Company to the relevant competent government authorities;

4) Exercise in accordance with the laws and the articles of association the rights of receiving dividends, selling or transferring or pledging or disposing of all or part of the equity I hold in the Company, the rights of distribution of the remaining assets after liquidation of the Company, and other rights of operation of the Company;

5) Constitute a liquidation team and exercise the power entitled to the liquidation team, including but not limited to management of the assets of the Company, during the liquidation period in compliance with the laws when the Company is liquidated or dissolved;

6) Inspect the resolutions of the shareholders' meetings, the resolutions of the board of directors, records and financial accounting statements and reports of the Company in accordance with the laws; and

7) All other rights (including but not limited to all the rights under the laws and the articles of association) entitled to me as a shareholder of the Company.

Without any restriction on this authorization and within the scope of authorization, the Trustee shall have the right to sign and perform on my behalf as the contractual party the equity transfer contract stipulated in the Exclusive Call Option Agreement, and sign and perform as scheduled on my behalf as the contractual party the Equity Interest Pledge Agreement, Exclusive Call Option Agreement and Exclusive Management Services and Business Cooperation Agreement, and the supplemental agreements, appendices and/or amendments and restatement of the aforesaid agreements, as well as all the other agreements and documents to be signed by me as agreed in the aforesaid documents.

Within the validity period of this Power of Attorney and subject to the restrictions of the laws of China, I undertake to deliver free of charge to WFOE or its designated third party the received distribution of dividends, bonuses or any assets as soon as possible and no later than three (3) days from the date of receipt of such distribution of dividends, bonuses or any assets.

During the period when I am a shareholder of the Company, no matter how the equity proportion I hold in the Company is changed, this Power of Attorney shall be irrevocable and effective from the date of signing the Power of Attorney. If and only if WFOE issues me a written notice of replacing the Trustee, I shall immediately appoint the then other trustee designated by WFOE to exercise the entrusted rights under this Power of Attorney, and the new authorization shall, once made, supersede the original authorization without the requirement of my consent. In addition, I will not revoke the entrustment and authorization made to the Trustee. During the validity period of this Power of Attorney, I hereby give up all rights of exercising the power entitled to the Trustee through this Power of Attorney and no longer exercise such rights by myself. If I become a person without capacity for civil conduct or with limited capacity for civil conduct, any my successors, guardians or administrators shall continue to comply

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with the stipulation of this Power of Attorney upon inheriting or managing the shareholders' rights entitled to me as a shareholder of the Company.

I accept and bear the corresponding responsibilities for any legal consequences arising from the exercise of the aforesaid entrusted rights by the Trustee. I hereby confirm that in no event shall the Trustee be liable for or make any financial compensation whatsoever in respect of the exercise of the aforesaid entrusted rights. And I agree to indemnify WFOE, and hold it harmless, for all the loss suffered or likely to be suffered as a result of the exercise of the entrusted rights by the designated Trustee, including but not limited to litigation, recovery, arbitration, claim by any third party or any loss caused by administrative investigation or punishment of the government authorities.

I will provide full assistance to the Trustee in exercising the aforesaid entrusted rights and will procure the Company to provide full assistance, including signing in time the legal documents of shareholders' meetings or other relevant legal documents made by the Trustee if necessary (such as meeting the requirements of the government departments for examination, approval, registration and filing of the required submitted documents), as well as entitling the Trustee the rights to know about the operations, business, customers, finance, employees and other relevant information of the Company, and accessing to related information of the Company.

In case the authorization or exercise of the aforesaid entrusted rights could not be realized for any reasons (except my violation of the terms of this Power of Attorney) at any time during the validity period of this trust, all parties shall immediately seek alternatives that are the closest to the unrealized ones, and sign supplemental agreements to amend or adjust the terms of this Power of Attorney to ensure the continuous realization of the purposes of this Power of Attorney if necessary.

This Power of Attorney will be effective from the date of signature and shall, once signed, supersede any undertakings, memorandums, agreements or any other documents previously made in connection with matters of this Power of Attorney, and shall be continuously effective during the period when I hold the equity of the Company.

[The remainder of this page is intentionally left blank]

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(This page is the signature page of the Power of Attorney)

**[Name]**

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| | |
|:---|:---|
| Signature: | /s/ [Name] |

---

Date: May 1, 2025

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**Schedule of Material Differences**

One or more persons signed a power of attorney using this form. Pursuant to Instruction ii to Item 601 of Regulation S-K, the Registrant may only file this form as an exhibit with a schedule setting forth the material details in which the executed agreements differ from this form:

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| | | | | |
|:---|:---|:---|:---|:---|
| **No.** | **Name** | **ID Card No.** | **Address** | **Percentage** |
| 1. | Guo Shuai | [\*\*\*] | [\*\*\*] | 70.0 |
| 2. | Huang Ruonan | [\*\*\*] | [\*\*\*] | 30.0 |

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## Exhibit 4.12

**Exhibit 4.12**

**Equity Interest Pledge Agreement**

This Equity Interest Pledge Agreement (hereinafter referred to as the "**Agreement**") was signed by the following parties on May 1, 2025 in Beijing of the People's Republic of China:

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| | |
|:---|:---|
| Party A: | **Beijing Lexuebang Network Technology Co., Ltd.**, a wholly foreign-owned enterprise legally established and subsisting under the laws of the PRC with a unified social credit code of 911101083217069797 and a registered address of W105, 1st Floor, Building 7, East Area, Courtyard #10, Xibeiwang East Road, Haidian District, Beijing. |
| Party B: | Current Shareholders of Party C, as listed in **<u>Appendix I</u>** hereto, with their capital contribution to and ratio of capital contribution of Party C set forth in **<u>Appendix I</u>** hereto. |
| Party C: | **Shanghai Duwen Education Technology Co., Ltd.,** a limited liability company legally established and subsisting under the laws of the PRC with the unified social credit code of 91310112MAE7QHMT4C and the registered address at #2800, Wanyuan Road, Minhang District, Shanghai. |

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(Party A, Party B and Party C are individually referred to as a "**party**", collectively referred to as the "**parties**".)

Whereas:

(1) Party A, Party B and Party C have respectively signed the agreements as set out in  **<u>Appendix II</u>** to this Agreement (hereinafter collectively referred to as the "**Master Contract** "); and

(2) On the date hereof, Party B holds a total of 100% equity of Party C; Party B intends to pledge its own 100% equity of Party C to Party A unconditionally, as the guarantee for performance of all the obligations under the Master Contract by Party B, Party C and Party C's subsidiaries (hereinafter referred to as the "**Party C's subsidiaries** "). Party A also agrees to accept the above-mentioned guarantee interests (hereinafter referred to as the "**pledge** ").

In view of this, the three parties, namely Party A, Party B and Party C have, upon amicable negotiations, reached the following agreements for joint compliance:

**1.** **Pledge** 

Party B agrees to unconditionally and irrevocably pledge all of its own 100% equity of Party C (hereinafter referred to as "**pledged equity**") to Party A, as the guarantee for performance of all the obligations under the Master Contract by Party B and Party C.

**2.** **Scope of guarantee** 

The guarantee of pledged equity under this Agreement covers all the obligations of Party B and Party C under the Master Contract (including but not limited to any monies, dividends, bonuses or any assets, liquidated damages, damages due but not paid to Party A etc.) and the expenses incurred for realizing main creditor's rights and pledges, as well as all other related costs, but not limited to the amount of secured creditor's rights as recorded in the administration for industry and commerce.

**3.** **Pledge period and cancellation of the pledge** 

3.1 The pledge of equity under this Agreement has been established since its registration with the administration for industry and commerce to which Party C belongs, and terminated until all of the Master Contract has been fulfilled, lapsed or terminated (whichever is later), and all the secured debts agreed in Article 2 have been settled. All parties jointly confirm that, for the purpose of handling the industrial and commercial registration formalities for the pledge of

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equity, all parties shall submit this Agreement or an equity interest pledge contract (hereinafter referred to as the "Industrial and Commercial Registration Pledge Contract"), which is signed in the form required by the administration for industry and commerce of the place where Party C is located and truly reflects the pledge information under this Agreement. For matters not stipulated in the Industrial and Commercial Registration Pledge Contract, this Agreement shall prevail. During the term of the pledge, if Party B or Party C fails to fulfil any of its obligations under the Master Contract, or in the event of occurrence of any default as stipulated in Article 6.1 of this Agreement, Party A shall have the right but not be obliged to dispose of the pledged equity in accordance with the provisions of this Agreement.<br>

3.2 After all of the Master Contract has been fulfilled, lapsed or terminated (whichever is later), and Party B and/or Party C fully and completely fulfilled all of the contractual obligations under the Master Contract and all the secured debts agreed in Article 2 of this contract have been settled, Party A shall, at the request of Party B, terminate the pledge of equity under this Agreement, and cooperate with Party B in handling the registration cancellation of the pledge of equity registered in the register of shareholders of Party C and in the administration for industry and commerce. The expenses arising from cancellation of the pledge of equity shall be borne by Party C.

**4.** **Pledge registration and custody of pledge record** 

4.1 Party B and Party C undertake to Party A that Party B and Party C will (i) record the pledge of equity under this Agreement on the register of shareholders of Party C as set out in Appendix III at the date of signing this Agreement and deliver the register of shareholders recording the pledge of equity to Party A for its custody; (ii) within thirty (30) working days from the date of signing this Agreement or within the fastest time limit as may be practicable, file record of the registration of the aforementioned pledge of equity with the relevant industrial and commercial registration authorities, and obtain a written certificate of registration filing from such registration authorities. Subject to the other provisions of this Agreement, during the term of this Agreement, Party C's register of shareholders shall be kept by Party A or its designated officers, except for the registration and amendments necessary for the operation of Party C.

4.2 Party B and Party C further undertake that after the signing of this Agreement, Party B may increase capital contribution to Party C with the prior consent of Party A, provided that the equity arising from any increase in Party C's equity by Party B is part of the pledged equity under this Agreement. Party B and Party C are obliged to make any necessary amendments to the register of shareholders and the amount of their capital contribution in the relevant company immediately after completion of the relevant capital increase and fulfil the pledge registration procedures stipulated in Article 4.1.

4.3 All expenses and actual expenses related to this Agreement, including but not limited to registration fee, production costs, stamp duty and any other taxes, fees, etc., shall be borne by Party A in accordance with the provisions of the relevant laws and regulations.

4.4 During the period of pledge stipulated in this Agreement, Party B shall deliver the certificate of capital contribution to Party A for its custody within one week after the signing of this Agreement. Party A shall keep such document for the entire period of the pledge stipulated in this Agreement. During the period of the pledge, Party A shall have the right to receive dividends arising from the pledged equity.

**5.** **Undertaking and guarantee of Party B and Party C** 

Party B and Party C shall severally and jointly undertake and guarantee to Party A as follows:

5.1 Party B is the legal owner of the pledged equity and there is no dispute over the ownership of the relevant pledged equity that has been or may have occurred. Party B has the right to dispose of pledged shares and any part thereof, and such right of disposal shall not be restricted by any third party.

5.2 Except for this Agreement and the "Exclusive Call Option Agreement" signed by all the related parties, Party B has not set any other pledge or third party rights on the pledged shares.

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5.3 Party B and Party C fully understand the contents of this Agreement. The signing and performance of this Agreement are voluntary and all the representations are true. Party B and Party C have taken all necessary measures at Party A's reasonable request, obtained all internal authorization necessary for signing and performing this Agreement, signed all the necessary documents and obtained the consent and approval of government departments and third parties (if involved) to ensure that the pledge of equity under this Agreement is lawful and valid.

5.4 The signing, delivery and performance of this Agreement shall not (i) cause a violation of any relevant PRC law; (ii) contradict with Party C's Articles of Association or any other organizational documents; (iii) cause a breach of any contract or document to which it is a party or is bound; or cconstitute a breach of contract under any contract or document to which it is a party or is bound; (iv) cause a breach of any permission or approval granted to either party and (or) any conditions which continue to be valid; or (v) cause termination or revocation of any permission or approval granted to either party or imposition of additional conditions on either party.

5.5 During the duration of this Agreement, Party B shall not transfer the pledged equity without the prior written consent of Party A. No other person shall be authorized to exercise any rights and interests, options or other rights in connection with the pledged equity, and shall not establish or allow the existence of any third party guarantee interest in respect of the pledged equity or dispose of the pledged equity in any other manner that may affect Party A's pledge.

5.6 During the duration of this Agreement, Party B and Party C shall comply with and implement the provisions of all laws and regulations of the People's Republic of China pertaining to the pledge of rights. Upon receipt of the notice, order or recommendation issued by the relevant competent authorities on pledged equity and / or pledges under this Agreement, Party B and Party C shall present the above-mentioned notice, order or recommendation to Party A within five working days, at the same time comply with the above-mentioned notice, order or recommendation, or propose objection opinions and representation on the above-mentioned matter at Party A's reasonable request or with the written consent of Party A.

5.7 Party B and Party C will not implement, procure or permit the other party to commit any act that may derogate, endanger or otherwise impair the value of pledged equity or Party A's pledge. Party B and Party C shall notify Party A in writing within five working days from the date of knowing any event and action that may affect the value of pledged equity or Party A's pledge. Party A shall not be held accountable for any reduction in the value of pledged equity and neither Party B nor Party C shall have any right to make any claim or any request in any form against Party A.

5.8 Subject to the provisions of the relevant PRC laws and regulations, the pledge of equity under this Agreement is a continuous guarantee and will remain in full force and effect for the duration of this Agreement even if neither Party B nor Party C is insolvent, liquidated, incapacitated or has incurred any change of organization or status, or any offsetting of funds between the parties, or any other event, the pledge of equity under this Agreement will not be affected.

5.9 For the purpose of the implementation of this Agreement, Party A shall have the right to dispose of the pledged equity in the manner provided in this Agreement and Party A shall, at the time of exercising its right in accordance with the terms of this Agreement, not be subject to interruption or prejudice arising from legal proceedings made by Party B or Party C or successors of Party B or Party C, or trustees of Party B or Party C or any other person.

5.10 For the purpose of protecting or improving the guarantee provided by this Agreement for performance of the obligation under the Master Contract by Party B and Party C, Party B and Party C will sign honestly and procure other parties interested in the pledged equity to sign all rights certificates, contracts relating to the implementation of this Agreement at Party A's request, and / or perform and procure other interested parties to perform any act relating to the implementation of this Agreement at Party A's request, and facilitate the exercise of Party A's rights and authorization entitled under this Agreement.

5.11 For the purpose of protecting the interests of Party A, Party B and Party C will comply with and perform all the guarantees, undertakings, agreements, representations and conditions. Party

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B and / or Party C shall compensate Party A for any damages suffered by Party A if Party B and / or Party C fails to perform or fully perform its guarantees, undertakings, agreements, representations and conditions.

**6.** **Rights exercise events and pledge execution** 

6.1 Where any of the following events occurs (hereinafter referred to as "rights exercise events"), Party A may, in the case that the relevant PRC laws and regulations permit, opt to request Party B or Party C to forthwith and fully fulfill all of their obligations under this Agreement, and the pledge established under this Agreement can also be executed immediately:

(a) Where Party B or Party C violates any of its material obligations or undertakings and guarantee under this Agreement, or its undertakings and guarantee under this Agreement are materially untrue;

(b) Where Party B or Party C violate(s) any material obligations or undertakings and guarantee under their respective Master Contract, or its undertakings and guarantee under the Master Contract are materially untrue;

(c) Where one or more of any obligations of Party B or Party C under this Agreement or the Master Contract are deemed to be unlawful or invalid transactions;

(d) Where Party C or Party C's subsidiaries cease(s) or is / are dissolved, or is / are ordered to suspend business, dissolve or go bankrupt;

(e) Where Party B and / or Party C or Party C's subsidiaries involve(s) any dispute, litigation, arbitration, administrative proceeding or any other legal proceedings or government inquiry, action or investigation for which Party A reasonably believes to have a material adverse effect on: (i) the ability of Party B to fulfil its obligations under this Agreement or the Master Contract, or (ii) the ability of Party C to fulfil its obligations under this Agreement or the Master Contract; or

(f) Any other circumstances under which pledged equity may be disposed of under applicable laws and regulations.

6.2 Where any of the above-mentioned rights exercise events occurs, Party A or a third party designated by Party A may, in accordance with the relevant PRC laws and regulations, purchase whole or part of the pledged equity at the lowest price permitted by the laws or designate other parties to purchase whole or part of the pledged equity at the lowest price permitted by the laws, or auction or sell whole or part of the pledged equity and execute the pledge by way of priority of compensation from the proceeds from auction or sale. Party A may forthwith execute the pledge under this Agreement without first exercising any other guarantee or right, or by taking other measures or procedures against Party B and / or Party C or any other party, or by first making other default relief.

6.3 Party B and Party C shall, at the request of Party A, take all legal and appropriate actions required by Party A to ensure that Party A could execute the pledge pursuant to this Agreement. For this purpose, Party B and Party C shall sign all the documents and materials reasonably requested by Party A, and shall implement and handle all acts and matters that Party A reasonably requires.

**7.** **Transfer** 

7.1 Party B and Party C shall not be entitled to make a gift of or transfer any of their rights or obligations under this Agreement to any third party without the prior written consent of Party A, except for Party A who obtains the pledged equity directly or indirectly under the "Exclusive Call Option Agreement".

7.2 This Agreement is binding on both Party B and its successors and is valid for Party A and each successor and assignee.

7.3 Party A may at any time transfer all or any of its rights and obligations under the Master Contract to its designees (which may be natural persons / legal persons), in which case the

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assignee shall be entitled to and undertake the rights and obligations to be entitled and undertaken by Party A under this Agreement, and shall be the same as those to be entitled and undertaken by any party to this Agreement. When Party A transfers the rights and obligations under the Master Contract, at Party A's request, Party B and / or Party C or any Party C's subsidiaries shall transfer and execute the relevant agreements and documents (including but not limited to the new equity interest pledge agreement signed by the assignee of the format and content consistent to this Agreement).<br>

7.4 In case of the change of Party A to this Agreement in consequence of the above Party A's transfer, the new pledge parties shall re-sign the Equity Interest Pledge Agreement. Party B and Party C shall assist the transferee in handling all the change formalities for equity interest pledge registration (if applicable).

**8.** **Confidentiality** 

The entire terms of this Agreement and this Agreement itself are confidential. All parties shall not disclose such information to any third party other than senior officers, directors, employees, agents and professional advisers of the parties and their affiliates, except that there is a need for all parties to disclose the information or content of this document to the government, the public or shareholders in accordance with legal requirements or the requirements of the relevant securities trading institutions or to submit such document to the relevant authorities for the record.

Regardless of whether this Agreement is changed, canceled or terminated, this term is legally binding.

**9.** **Liability for default** 

9.1 Where a party fails to fulfil any of its obligations under this Agreement or any representations or guarantees of such party under this Agreement are substantially untrue or inaccurate, such Party shall be in breach of this Agreement and shall be liable in full for compensation of other Party's actual economic losses; this Article 9 shall not hinder Party A from any other rights under this Agreement.

9.2 Regardless of whether this Agreement is changed, canceled or terminated, this term is legally binding.

**10.** **Force majeure** 

A force majeure event means any event unforeseen by any party at the time of signing this Agreement that cannot be avoided, controlled and overcome (including but not limited to earthquake, typhoon, flood, fire, strike, war or riot, etc.).

In view of the fact that the force majeure event affects the performance of this Agreement, in the event of force majeure, the party shall forthwith (i) notify the remaining parties in the form of telegraph, facsimile or other electronic means and submit the written evidence of force majeure within fifteen (15) working days; (ii) take all reasonable and possible measures to eliminate or mitigate the effects of force majeure event and to resume the fulfillment of its obligations upon the elimination or mitigation of the effects of force majeure event.

**11.** **Changes in agreement parties** 

Where Party B no longer holds any shares in Party C, Party B shall automatically be deemed as Party B ceasing to be a party to this Agreement. Where any third party becomes a shareholder of Party C, Party A and Party C shall use their best endeavors to urge the third party to become one of Party B to this Agreement as soon as possible by signing the appropriate legal documents.

**12.** **Termination** 

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Party B and / or Party C shall not be entitled to terminate this Agreement under any circumstance without the written consent of Party A.

Unless this Agreement has been terminated in accordance with these terms, Party A shall, at Party B's request, lift the pledge of pledged equity under this Agreement as soon as reasonably practicable after Party B and Party C have fully and completely fulfilled all their contractual obligations and settled all the secured debts, and cooperate with Party B to cancel the registration of the pledge of equity made in the register of shareholders of Party C and handle the pledge deregistration with the relevant administration for industry and commerce.

**13.** **Supplementary provisions** 

13.1 This Agreement is governed by the laws of PRC in all respects. Any dispute that may arise during the performance of this Agreement shall be settled through amicable negotiations by all parties involved. Where the negotiation fails, either party may submit the dispute to China International Economic and Trade Arbitration Commission for arbitration in accordance with the prevailing arbitration rules of such arbitration institution. The place of arbitration is Beijing, the arbitration language is Chinese, the arbitral award is final and binding on all parties. Except for the part that is being submitted to arbitration, the rest of this Agreement shall remain in force. The validity of this Article is not subject to the impact from the change, cancellation or termination of this Agreement.

13.2 This Agreement shall enter into force on the date of signing by all parties and the pledge under this Agreement shall be established from the date on which it is registered in the administration for industry and commerce to which Party C belongs. Unless Party A executes the pledge in accordance with this Agreement within the validity period of this Agreement, this Agreement shall not be terminated until all of the Master Contract has been fulfilled, lapsed or terminated and all the secured debts agreed in Article 2 have been settled, or all parties have engaged in any written agreement to revoke this agreement (whichever is later).

13.3 All parties agree that this Agreement shall be implemented to the extent permitted by law. Where any of the terms of this Agreement or any part of a term is deemed illegal, invalid or unenforceable by any competent authority or court have jurisdiction, such unlawful, invalid or unenforceable terms shall not be prejudice to any other terms of this Agreement or other parts of such terms. Other terms or other parts of such terms shall remain in full force and each party shall use its best endeavors to amend such illegal, invalid or unenforceable terms for the purpose of achieving the original terms.

13.4 This Agreement is prepared in Chinese quadruplicate. Party A and Party B as well as Party C each own one copy respectively. The remaining original copy shall be submitted to the relevant industrial and commercial registration authorities for record filing and registration or retained by Party A. The parties hereby agree that, as required by the relevant industrial and commercial registration authority, the parties may separately enter into another agreement meeting the requirements of the industrial and commercial authority, provided that the substantive content of such agreement shall be consistent with this Agreement. Where such agreement is inconsistent with any term any condition hereof, no matter whether or not the date of such agreement is later than the date hereof, this Agreement shall prevail.

13.5 Upon signing this Agreement, it shall supersede any prior undertakings, memorandums, agreements or any other documents previously made in respect of the subject matter of this Agreement. This Agreement shall supersede the Previous Equity Interest Pledge Agreement signed by the parties and the Previous Equity Interest Pledge Agreement shall be expired upon and after the effective date hereof.

13.6 Any amendment or supplement to this Agreement must be made in writing and shall be effective only after all parties to this Agreement have signed it in effect.

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties or their authorized representative hereto as of the date first above written.

**Party A: Beijing Lexuebang Network Technology Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Authorized representative (Signature): | /s/ Luo Bin |

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/s/ Seal of Beijing Lexuebang Network Technology Co., Ltd.

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties or their authorized representative hereto as of the date first above written.

Party B:

**Guo Shuai**

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| | |
|:---|:---|
| Signature: | /s/ Guo Shuai |

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties or their authorized representative hereto as of the date first above written.

**Party B:**

**Huang Ruonan**

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| | |
|:---|:---|
| Signature: | /s/ Huang Ruonan |

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties hereto as of the date first above written.

**Party C: Shanghai Duwen Education Technology Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Authorized representative (Signature): | /s/ Huang Ruonan |

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/s/ Seal of Shanghai Duwen Education Technology Co., Ltd.

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**Appendix I Current Shareholders of Party C**

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| | | |
|:---|:---|:---|
| **Name of Shareholder** | **Capital contribution**<br>**（'0,000 RMB）** | **Ratio of capital<br>contribution** |
| &nbsp;&nbsp;&nbsp;&nbsp;Guo Shuai | 70.0 | 70.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Huang Ruonan | 30.0 | 30.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** | **100.0** | **100.0%**  |

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**Appendix II Master Contract List**

1. "Exclusive Call Option Agreement" signed on May 1, 2025 by and among Beijing Lexuebang Network Technology Co., Ltd., Guo Shuai, Huang Ruonan and Shanghai Duwen Education Technology Co., Ltd.

2. "Exclusive Management Services and Business Cooperation Agreement" signed on May 1, 2025 by and among Beijing Lexuebang Network Technology Co., Ltd., Guo Shuai, Huang Ruonan and Shanghai Duwen Education Technology Co., Ltd.

3. "Power of Attorney" issued on May 1, 2025 by Guo Shuai

4. "Power of Attorney" issued on May 1, 2025 by Huang Ruonan

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**Appendix III Register of Shareholders**

**Register of Shareholders of Shanghai Duwen Education Technology Co., Ltd.**

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| | | | |
|:---|:---|:---|:---|
| **Name of<br>shareholder** | **Capital contribution<br>('0,000 RMB)** | **Ratio of capital**<br>**contribution** | **Pledge of equity** |
| Guo Shuai | 70.0 | 70.0% | 70.0% equity have been pledged to Beijing Lexuebang Network Technology Co., Ltd. in accordance with the Equity Interest Pledge Agreement signed on May 1, 2025 by and among Beijing Lexuebang Network Technology Co., Ltd., Guo Shuai, Huang Ruonan and Shanghai Duwen Education Technology Co., Ltd. |
| Huang Ruonan | 30.0 | 30.0% | 30.0% equity have been pledged to Beijing Lexuebang Network Technology Co., Ltd. in accordance with the Equity Interest Pledge Agreement signed on May 1, 2025 by and among Beijing Lexuebang Network Technology Co., Ltd., Guo Shuai, Huang Ruonan and Shanghai Duwen Education Technology Co., Ltd. |

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(This page is the signature page of the Register of Shareholders of Shanghai Duwen Education Technology Co., Ltd.)

**Company: Shanghai Duwen Education Technology Co., Ltd.** (Seal)

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| | |
|:---|:---|
| Authorized representative (Signature): | /s/ Huang Ruonan |

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Date: May 1, 2025

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## Exhibit 4.13

**Exhibit 4.13**

**Exclusive Management Services and Business Cooperation Agreement**

This Exclusive Management Services and Business Cooperation Agreement (hereinafter referred to as the "**Agreement**") was signed by the following parties in Beijing of the People's Republic of China on May 1, 2025.

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| | |
|:---|:---|
| Party A: | **Beijing Lexuebang Network Technology Co., Ltd.**, a wholly foreign-owned enterprise legally established and subsisting under the laws of the PRC with a unified social credit code of 911101083217069797 and a registered address at #406, 4F, Building 17, East Area, Courtyard #10, Xibeiwang East Road, Haidian District, Beijing. |
| Party B: | **Shanghai Duwen Education Technology Co., Ltd.**, a limited liability company legally established and subsisting under the laws of the PRC with its unified social credit code of 91310112MAE7QHMT4C and the registered address at #2800, Wanyuan Road, Minhang District, Shanghai. |
| Party C: | Current Shareholders of Party B, as listed in **Appendix I** hereto, with their capital contribution to and ratio of capital contribution of Party B set forth in **Appendix I** hereto. |

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(Party A, Party B and Party C are referred to as a "**party**" respectively and collectively referred to as the "**parties**". "**Party B's subsidiaries**" are all the principal bodies mentioned in Appendix II to this Agreement and the institutions invested and controlled by Party B (including but not limited to the companies and relevant institutions, more than 50% investment equity of which are directly or indirectly held by Party B) updated from time to time according to this Agreement.)

Whereas:

(1) Party A is a wholly foreign-owned enterprise effectively established and lawfully subsisting under the laws of the PRC, with business scope including computer network technology development, technology transfer, technical services, technology promotion, technical consultation; enterprise management consultancy; investment consulting; technology import and export (excluding products under state-run trade management; for products subject to quota license, shall conduct application procedure in accordance with relevant regulations); educational consulting (excluding intermediary services); economic and trade consulting; sale of self-developed software products, clothing, cultural products, handicrafts, toys, jewelry, collectibles (excluding cultural relics), electronic products; conference services; organizing exhibitions and trade shows; computer system services; organizing cultural and artistic exchange activities (excluding commercial performances); intellectual property services (excluding patent agency services); cultural consulting; public relations services; health consulting and health management (excluding diagnostic and therapeutic activities requiring approval); software development; design, production, agency, and publication of advertisements; human resources services (excluding employment agency activities and labor dispatch services); retail and wholesale of publications; employment agency activities.

(2) Party B is a company with limited liability effectively established and lawfully subsisting under the laws of the PRC, mainly engaging in technical services, technology development, technology consultation, technology exchange, technology transfer, technology promotion; science popularization services; intellectual property services (excluding patent agency services); conference and exhibition services; computer system service; health consulting services (excluding medical treatment and diagnosis services); intermediary services for self-funded overseas study; leasing services (excluding licensed leasing services); human resources services (excluding career intermediary services and labor dispatch services); experiential development activities and planning; organization of cultural and artistic exchange activities; market research (excluding foreign-related market research); enterprise management consulting; copyright agent; advertising design, agency, production and release; wholesale and retail of publications and so on (hereinafter referred to as "**the Main Services** ").

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(3) Subsidiaries currently held by Party B are shown in **Appendix II**.

(4) Party C are shareholders of Party B, and hold 100% equity of Party B as of the date hereof.

(5) Party B and Party C undertake to help materializing the compliance and implementation of the terms under this Agreement by Party B's subsidiaries, and sign necessary relevant specific agreements or documents to realize the purposes of this Agreement under the request of Party A.

(6) Party A agrees to provide Party B and Party B's subsidiaries with exclusive education management consultancy, permission of intellectual property rights, technological support and business support by leveraging its advantages on talents, technology and information and Party B and Party B's subsidiaries agree to accept the relevant services provided by Party A.

The parties have reached a consensus and the following agreement:

**1.** **Provision of Service** 

1.1. According to the terms and conditions of this Agreement, Party B and Party C hereby appoint Party A as the exclusive provider of technology and service for Party B and Party B's subsidiaries during the period of this Agreement, so as to provide Party B and Party B's subsidiaries with comprehensive education management consultancy, permission of intellectual property rights, technological support and business support. Specific contents are given in **Appendix III** of this Agreement. Party B and Party B's subsidiaries are the "**service recipients** ".

Party B shall, and Party B shall guarantee to procure Part B's subsidiaries, based on actual business needs, determine the services together with Party A or the entities designated by Party A, and such services are given in **Appendix III** of this Agreement. The parties understand that the services actually provided by Party A are subject to Party A's approved business scope; and if Party B and Party B's subsidiaries require Party A to provide services beyond Party A's approved business scope, Party A shall have the right to designate third parties or within the maximum limit allowed by law to apply for expanding its business scope, and then provide services after the application has been approved.

1.2. Party B and Party C further agree that, without the prior written consent of Party A, Party B and Party C guarantee that they and their relevant institutions (including but not limited to Part B's subsidiaries) shall not directly or indirectly obtain services the same as or similar to the exclusive technology and services specified in this Agreement from any third party, and shall not establish any similar cooperation relations relating to the matters covered herein with any third party and shall promise that their relevant institutions shall not do so. Party B and Party C agree that Party A may designate other parties to provide Party B and Part B's subsidiaries with the services specified in **Appendix III** of this Agreement.

1.3. In order to ensure the normal operation of daily business of Party B and Party B's subsidiaries, Party A may (but not necessarily), based on its own judgement and Chinese laws and regulations, provide guarantee for the performance of other business contracts and agreements signed between Party B and Party B's subsidiaries and any third parties related to its business as the guarantor. Party B and Party C hereby unanimously agree and confirm that Party A shall first be appointed as the guarantor if it is necessary to provide any guarantee for the fulfilment of any contract or loan during the business operation of Party B and/or Party B's subsidiaries.

**2.** **Price and Payment Method of Services** 

2.1. Party A may, by referring to the specific service contents and objects and the income, number of students in the particular period of Party B and Party B's subsidiaries, determine by itself the price and appropriate payment methods of services, and the

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specific calculation and payment methods of service expenses are given in **Appendix III** of this Agreement.<br>

2.2. If Party A thinks that the confirmation mechanism of service prices specified in this Agreement becomes inappropriate because of some reasons and therefore shall be adjusted, Party A shall actively and honestly propose adjustment plan, so as to confirm new price standard or mechanism. If the service recipients fail to reply within seven workdays after receiving the notice of the aforesaid adjustment, it shall be deemed as having accepted the said adjustment to service price.

**3.** **Intellectual Property Rights** 

3.1. The intellectual property rights of all the achievements arising from performing this Agreement shall include but not limited to copyright, patent, the right to apply for patent, technological secrets, commercial secrets, etc., whether or not developed by Party A, and shall be the ownerships, rights and interests that are exclusively enjoyed by Party A. Party B, Party B's subsidiaries and Party C shall not enjoy any other rights that are not specified in this Agreement unless with the permission of Party A, and shall support Party A in taking all necessary measures to obtain such intellectual property rights. For the avoidance of doubt, except for the intellectual property rights that are confirmed by Party A as necessary for normal business operation of Party B or Party B's subsidiaries or shall be held by Party B or Party B's subsidiaries according to relevant domestic laws and regulations, as for the intellectual property rights that have been held or applied by Party B or Party B's subsidiaries to relevant competent authorities as of the signing date of this Agreement, the equity holders or applicants of other intellectual property rights shall, based on Party A's requirements, transfer the said intellectual property rights to Party A or Party A's related parties, and Party B or Party B's subsidiaries shall sign a transfer agreement of intellectual property rights with Party A or Party A's related parties.

3.2. If development is conducted by Party A based on the intellectual property rights of Party B or Party B's subsidiaries, Party B and Party B's relevant subsidiary shall ensure that there are not any flaw of such intellectual property rights, otherwise Party B and Party B's relevant subsidiaries shall bear the losses caused to Party A. If Party A needs to compensate any third person in this case, Party A shall have the right to, after such a compensation, claim for all the losses against Party B and/or relevant Party B's subsidiaries.

3.3. The parties agree that, regardless of whether this Agreement is changed, cancelled or terminated, these terms are binding.

**4.** **Realization of Party A's Rights** 

Whereas the provisions of Article 1 of this Agreement and in order to clarify the rights and interests of the parties, guarantee the actual performance of management services agreement provided by Party A for Party B and Party B's subsidiaries, the implementation of business services between Party A and Party B and Party B's subsidiaries, and the payment by Party B and Party B's subsidiaries for payable consideration to Party A, Party B and Party C hereby agree that, and guarantee to procure Party B to agree:

4.1. Party A shall have the right to propose suggestions or requirements regarding the daily operation, financial management and staff employment of Party B and Party B's subsidiaries, and Party B and Party B's subsidiaries shall strictly fulfil or observe the said suggestions or requirements proposed by Party A.

4.2. Party C, Party B and Party B's subsidiaries shall, according to laws and regulations and the procedures specified in the articles of association of company, select candidates designated by Party A as the directors of Party B and Party B's subsidiaries, and procure the said elected directors to select the chairman of the board of directors from the candidates recommended by Party A, and appoint the persons designated by Party A as all of the senior executives (including but not limited to principal, general manager, financial

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controller, responsible persons of respective businesses, financial management staff, financial monitoring staff and accountant) of Party B and Party B's subsidiaries.

4.3. Party C, Party B and/or Party B's subsidiaries shall, based on Party A's requirements, dismiss any directors and/or senior executives of Party B and Party B's subsidiaries, and immediately select and appoint other persons designated by Party A to assume the said positions.

4.4. In respect of the objective of Clause 4.3, Party C, Party B and Party B's subsidiaries shall, according to laws, articles of association and this Agreement, take all necessary internal or external procedures to complete the abovementioned dismissal and employment procedures.

4.5. Party A shall have the right to check the accounts of Party B and Party B's subsidiaries regularly or at any time. Party B and Party B's subsidiaries shall timely and accurately record the accounts, and shall, upon requirements of Party A, provide Party A with their accounts, audit reports, financial statements and all operation records, business contracts and financial information. During the validity period of this Agreement and on the condition of not violating applicable laws, Party B and Party B's subsidiaries shall agree to support Party A and any third party designated by Party A in auditing (including but not limited to audit of related transactions and other audits of various types), provide relevant information and data relating to operation, business, customers, finance and staff of Party B and Party B's subsidiaries for Party A and any third party designated by Party A and auditors appointed by Party A, and shall agree that Party A or any other related parties of Party A may disclose such information and data in order to meet the relevant requirements of securities regulatory authorities.

4.6. Party C hereby agrees to, on the date of signing this Agreement, present Party A with a Power of Attorney, the content and form of which satisfy Party A, and comprehensively, appropriately and completely perform the stipulation of such a Power of Attorney, including but not limited to, according to this Power of Attorney, unconditionally and irrevocably authorizing Party A or the persons ()"**trustee** ", and such a trustee shall not be Party C) designated by Party A as the representative of Party C to exercise the rights of shareholders and/or directors of Party B and Party B's subsidiaries based on the will of the trustee.

4.7. Party C confirms that it has comprehensively and clearly understood the obligations of Party B and Party B's subsidiaries under this Agreement at the time of signing this Agreement, and that it is willing to pledge the 100% equity of Party B held by it to Party A, so as to provide guarantee for the performance of all the obligations of Party B under this Agreement. The parties will sign a separate agreement on equity interest pledge.

4.8. Party B and Party C hereby agree that, and Party B and Party C guarantee to procure Party B's subsidiaries to agree, once Party A submits a written request, Party B and Party B's subsidiaries and Party C will pledge all of their receivables and/or all the other assets that are lawfully owned and may be disposed of by them as the guarantee for the payment obligation of the service expenses specified in Clause 2.1 of this Agreement, in a manner then permitted by the laws. Party B and Party C hereby agree that, and Party B and Party C guarantee to procure Party B's subsidiaries to agree, during the validity period of this Agreement, Party B and Party B's subsidiaries maintain complete business licences necessary for operation and adequate rights and qualifications to engage in the current businesses in China.

4.9. In case of liquidation or dissolution of Party B and Party B's subsidiaries for various reasons, Party C, Party B or Party B's subsidiaries shall, within the scope permitted by Chinese laws, appoint the persons recommended by Party A as the liquidation team, which takes charge of managing the property of Party B and Party B's subsidiaries. Party C, Party B and Party B's subsidiaries promise that in case of liquidation or dissolution of Party B and Party B's subsidiaries, Party C, Party B or Party B's subsidiaries shall deliver all the remaining property obtained from the liquidation of Party B and Party B's subsidiaries conducted according to Chinese laws and regulations respectively to Party A

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or the third parties designated by Party A, no matter whether the agreement specified in this article has been implemented and within the restriction of Chinese laws.

4.10. Without the prior written consent of Party A, Party B and Party B's subsidiaries are not allowed to conduct any transactions that may substantially affect their assets, obligations, rights or operation of institutions, including but not limited to:

(1) To conduct any activities beyond the normal business scope of institutions or do business not in the consistent and usual way;

(2) To lend the third parties money or assume any debts;

(3) To change or dismiss any directors or change any executives;

(4) Employ other staff or service providers with annual remuneration more than RMB 500,000;

(5) To sell to any third parties or obtain from any third parties, or otherwise deal with any assets or rights, including but not limited to any intellectual property rights;

(6) To provide guarantee for any third parties with its assets or intellectual property rights, or provide guarantee in any other forms or set any encumbrance on the assets of institutions not because of the debts of Party B and Party B's subsidiaries;

(7) To change the articles of association of institutions or change the business scope of institutions;

(8) To change the operation method, business procedures of institutions or change any major internal rules and systems of institutions;

(9) To significantly adjust its business operation models, marketing strategies, operation guidelines or customer relations;

(10) To distribute bonus and dividends in any form;

(11) To liquidate institutions and distribute the remaining assets;

(12) To transfer the rights and interests under this Agreement to any third parties;

(13) To sign any other agreements or arrangements which contradict this Agreement or may damage the rights and interests of Party A under this Agreement; and

(14) To conduct contracted operation, operation of lease, consolidation, division, joint venture, shareholding reform or other arrangements that change the operation method and equity structure, or deal with all or substantial assets or rights and interests of the institutions of Party B and Party B's subsidiaries in the form of transfer, or assignment or capital contribution at a certain price or other ways.

Moreover, Party B shall, and Party C shall, procure Party B and Party B's subsidiaries to immediately inform Party A of any situations that will or may substantially and adversely affect the businesses and operation of Party B and Party B's subsidiaries, and shall use its best endeavours to avoid the occurrence of such situations and/or the expansion of losses.

4.11. Party B hereby grants Party A an irrevocable and exclusive purchase right, pursuant to which Party A may, at its own option, purchase any partial or entire assets and businesses from Party B at the minimum price allowed by the Chinese laws within the scope permitted by the Chinese laws and regulations. The two parties will then separately sign asset or business transfer contract to specify the terms and conditions of such asset transfer.

**5.** **Validity Period and Termination Right** 

5.1. This Agreement was signed and took effect on the date set out in the first page.

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5.2. This Agreement shall be effective in the operation period of Party A, Party B and Party B's subsidiaries unless it is cancelled earlier as unanimously agreed by the parties.

5.3. The parties agree to grant Party A an option to terminate this Agreement at any time. Party A shall have the right to terminate this Agreement at any time during the performance of this Agreement by serving a written notice.

5.4. Party B and/or Party C are not allowed to terminate this Agreement under any situations without the prior written consent of Party A.

**6.** **Representations and Warranties** 

6.1. Party A makes the following representations and warranties for Party B and Party C:

(1) Party A is a wholly foreign-owned enterprise legal person lawfully established and effectively subsisting under the laws of the PRC, and has the capacity of independently undertaking civil liabilities.

(2) Party A has the full corporate powers necessary for signing and delivering this Agreement and fulfilling its obligations under this Agreement. After the signing, this Agreement shall constitute statutory, effective and binding obligations for Party A and may be enforceable based on its terms.

(3) The signing of this Agreement and Party A's fulfilment of the obligations under this Agreement will not contradict, breach or violate (i) any requirements of Party A's any business licences or articles of association; (ii) any laws, rules, ordinances, authorizations or approvals of any government agencies or departments that are applicable to Party A; and (iii) any requirements of the contracts and agreements to which Party A is the signing party or main body.

6.2. Party B makes the following representations and warranties to Party A:

(1) Party B and Party B's subsidiaries are companies with limited liability or non-governmental non-profit units (legal person) lawfully established and effectively subsisting under the laws of the PRC, and have the capacity of independently undertaking civil liabilities with its registered capital.

(2) Party B has the full authority necessary for signing and delivering this Agreement and completely fulfilling their obligations under this Agreement. After the signing, this Agreement shall constitute statutory, effective and binding obligations for Party B and may be enforceable based on its terms.

(3) The signing of this Agreement and the fulfilment by Party B of the obligations under this Agreement will not contradict, breach or violate (i) any requirements of business licences or articles of association of Party B and Party B's subsidiaries; (ii) any laws, rules, ordinances, authorizations or approvals of any government agencies or departments that are applicable to Party B and Party B's subsidiaries; and (iii) any requirements of the contracts and agreements to which Party B and Party B's subsidiaries or any of their related companies are the signing parties or main bodies.

(4) Party B and Party B's subsidiaries will, based on Party A's requirements, provide Party A with relevant information and document; assign special staff to communicate with Party A and coordinate the work, and actively support Party A's on-site investigation and data collection at Party B and Party B's subsidiaries.

(5) If necessary, Party B and Party B's subsidiaries shall provide necessary working facilities and conditions for Party A's professionals, and bear the corresponding expenditures and expenses incurred during the provision of management services by the said professionals at Party B and Party B's subsidiaries;

(6) To develop and provide the Main Services effectively, prudently and lawfully, maintain and timely update all the licences and authorizations necessary for the provision of the Main Services by Party B and Party B's subsidiaries under this Agreement, so as to maintain the validity and full legal force of such licences and

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authorizations; and establish and maintain an independent recording unit for the Main Services;

(7) To provide Party A with any technological information or other data that Party A thinks are necessary for fulfilling the obligations under this Agreement, and allow Party A to enter the relevant venues and facilities that Party A thinks are necessary for providing the services under this Agreement;

(8) Party B and Party B's subsidiaries will, based on relevant Chinese laws and regulations, conduct business operation and handle all the necessary formalities relating to the business operation, and timely provide Party A with the copies of the aforesaid licences;

(9) Party B and Party B's subsidiaries have all the permits, licences, authorizations, approvals and facilities necessary for providing the Main Services during the validity period of this Agreement, and Party B and Party B's subsidiaries guarantee that the aforesaid permits, licences, authorizations and approvals will continue to have legal force and legally valid during the entire validity period of this Agreement.

(10) To pay service expenses to Party A on time.

**7.** **Confidentiality** 

7.1. All the terms of this Agreement and this Agreement itself are both confidential, and the parties shall not disclose them to any third party, except for the disclosure to senior staff, directors, employees, agents and professional consultants that are related to this project and undertake the confidentiality obligation to the said parties or their related parties; with the exception of the disclosure of information or content of this document to government, public or shareholders and the filing of this document at relevant institutions based on the requirements of laws or relevant securities trading institutions.

7.2. This article shall still have legal force no matter whether this Agreement has been altered, cancelled or terminated.

**8.** **Liabilities for Default** 

8.1. Where a party fails to fulfil any of its obligations under this Agreement or any representations or guarantees of such party under this Agreement are substantially untrue or inaccurate, such Party shall be in breach of this Agreement and shall be liable for compensation of all losses of other parties or pay liquidated damages according to the agreement separately signed by the relevant parties.

8.2. Where Party B is deemed as having breached this Agreement according to Clause 8.1, Party B shall fully compensate Party A for any losses, damages or liabilities (including the losses and expenses arising from any lawsuit, claim for compensation or other requirements) that Party A incur or assume because of fulfilling the obligations under this Agreement or providing the services specified in this Agreement.

8.3. Regardless of whether this Agreement is changed, cancelled or terminated, these terms are legally binding.

**9.** **Force Majeure** 

A force majeure event means any event unforeseen by any party at the time of signing this Agreement that cannot be avoided, controlled and overcome (including but not limited to earthquake, typhoon, flood, fire, strike, war or riot, etc.).

In view of the fact that the force majeure event affects the performance of this Agreement, in the event of force majeure, the party shall forthwith (i) notify the remaining parties in the form of telegraph, facsimile or other electronic means and submit the written evidence of force majeure within fifteen (15) working days; (ii) take all reasonable and possible measures to eliminate or

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mitigate the effects of force majeure event and to resume the fulfillment of its obligations upon the elimination or mitigation of the effects of force majeure event.

**10.** **Transfer of Agreement and Changes to Parties of Agreement** 

10.1. Without the prior written consent of Party A, none of Party B and Party C shall have the right to transfer any of its rights and obligations under this Agreement to any third party, except for the situation that Party A directly or indirectly obtains the equity of Party B based on the Exclusive Call Option Agreement signed by Party A, Party B and Party C on May 1, 2025 (including amendments made by the parties from time to time).

10.2. Party B hereby agrees that Party A may transfer its rights and obligations under this Agreement to third parties, and Party A only needs to issue a written notice to Party B at the time of such transfer, without obtaining Party B's consent of the said transfer.

10.3. Addition of Party B's subsidiaries. In case that it is necessary to add Party B's subsidiaries at any time starting from the effective date of this Agreement, the said Party B's subsidiaries newly added shall be regarded as one of the Party B's subsidiaries specified under this Agreement. The other parties of this Agreement hereby agree with and completely accept the aforesaid arrangement.

10.4. The rights and obligations under this Agreement shall be legally binding on the transferees and successors (no matter whether the transfer of such rights and obligations are caused by acquisition, reorganization, succession, transfer or other reasons) of rights and obligations of the parties of this Agreement.

10.5. If Party C no longer holds any shares of Party B, it shall be deemed that Party C is no longer either party of this Agreement. In case that any third party becomes a shareholder of Party B, Party B and Party C shall try its best to include the said third party as one of Party C of this Agreement as soon as possible through signing appropriate legal documents.

**11.** **Supplementary Provisions** 

11.1. This Agreement shall be governed by the laws of the People's Republic of China. Any dispute that may arise during the performance of this Agreement shall be settled through amicable negotiations by all parties involved. Where the negotiation fails, either party may submit the dispute to China International Economic and Trade Arbitration Commission for arbitration in accordance with the prevailing arbitration rules of such arbitration institution. The place of arbitration is Beijing, the arbitration language is Chinese, the arbitral award is final and binding on all parties. Except for the part that is being submitted to arbitration, the rest of this Agreement shall remain in force. The validity of this Article is not subject to the impact from the change, cancellation or termination of this Agreement.

11.2. Upon signing this Agreement, it shall supersede any prior undertakings, memorandums, agreements or any other documents previously made in respect of the subject matter of this Agreement. This Agreement shall supersede the Previous Exclusive Service Agreement signed by the parties and the Previous Exclusive Service Agreement shall be expired upon and after the effective date hereof.

11.3. All parties agree that this Agreement shall be implemented to the extent permitted by law. Where any of the terms of this Agreement or any part of a term is deemed illegal, invalid or unenforceable by any competent authority or court have jurisdiction, such unlawful, invalid or unenforceable terms shall not be prejudice to any other terms of this Agreement or other parts of such terms. Other terms or other parts of such terms shall remain in full force and each party shall use its best endeavors to amend such illegal, invalid or unenforceable terms for the purpose of achieving the original terms.

11.4. The appendixes shall be an inalienable part of this Agreement and shall have the same legal effect as other parts of this Agreement.

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11.5. This Agreement is prepared in Chinese and shall be executed in quadruplicate. Each copy has the same legal effect.

[The remainder of this page is intentionally left blank]

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties or their authorized representative hereto as of the date first above written.

**Party A: Beijing Lexuebang Network Technology Co., Ltd.** (Seal)

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| | |
|:---|:---|
| Authorized representative (Signature) : | /s/ Luo Bin |

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/s/ Seal of Beijing Lexuebang Network Technology Co., Ltd.

**Party B: Shanghai Duwen Education Technology Co., Ltd.** (Seal)

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| | |
|:---|:---|
| Authorized representative <br>(Signature) : | /s/ Huang Ruonan |

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/s/ Seal of Shanghai Duwen Education Technology Co., Ltd.

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties or their authorized representative hereto as of the date first above written.

**Party C:**

**Guo Shuai**

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| | |
|:---|:---|
| Signature: | /s/ Guo Shuai |

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties or their authorized representative hereto as of the date first above written.

**Party C:**

**Huang Ruonan**

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| | |
|:---|:---|
| Signature: | /s/ Huang Ruonan |

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**Appendix I Current Shareholders of Party B**

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| | | |
|:---|:---|:---|
| **Name of Shareholder** | **Capital contribution**<br>**('0,000 RMB）** | **Ratio of capital<br>contribution** |
| &nbsp;&nbsp;&nbsp;&nbsp;Guo Shuai | 70.0 | 70.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Huang Ruonan | 30.0 | 30.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** | **100.0** | **100.0%**  |

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**Appendix II List of Party B's subsidiaries**

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| | |
|:---|:---|
|  | **Name** |
| 1. | Shanghai Changning District Duwen Training School. |

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**Appendix III Service Content, Calculation and Payment Methods of Service Expenses**

(I) List of service content

1. To provide opinions and suggestions on asset, business operation and negotiation, signing and fulfilment of significant contracts;

2. To provide services relating to short-term and medium-term market development and market plan;

3. To provide industrial market investigation, study and consulting service;

4. To provide opinions and suggestions on disposing of creditor's rights and debts;

5. To provide opinions and suggestions on M&A;

6. To provide human resources management service and pre-job training, on-site skill training;

7. To provide the authorized use of various intellectual property rights like software, trademark, domain name and technological secret;

8. To provide the R&D of educational software, educational courseware and on-line lessons and supporting services;

9. To provide consulting and training services on opening school and training courses;

10. To provide services on technological development, technological transfer and technological consultancy;

11. To provide the management and maintenance of management and service systems like human resources information management system, payment management system and internal information management system;

12. To provide development and upgrading of website, and daily maintenance, monitoring, debugging and troubleshooting of computer network equipment;

13. To provide technological consultancy and answer to the technological questions on network equipment, technological product and software proposed by the service recipients;

14. To provide public relations service;

15. To provide selling service for self-made products;

16. To provide daily maintenance for office equipment;

17. To seek and select appropriate service provider as the third party for the service recipients;

18. To provide daily management of service provider as the third party for the service recipients;

19. To provide the service recipients with consultancy service regarding overseas market; and/or

20. To provide other services that are negotiated and confirmed from time to time by Party A and the service recipients based on the business needs of the service recipients and Party A's capability of providing services.

(II) Calculation and Payment Methods of Service Expenses

1. The amount of service expenses are the balance of the total income of the service recipients minus cost, taxes and other expenses that are reserved or withdrawn according to laws and regulations. The specific amount shall be determined by Party A by referring to the following factors:

(1) Technological difficulties and complexity of services;

(2) The resources input by Party A and the time spent by Party A's staff for specific services;

(3) Specific content and commercial value of services;

(4) Market reference price of services of the same category;

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(5) Operating conditions of the service recipients.

2. Party A shall summarize the service expenses on time (the specific period shall be determined by Party A, and the service recipients shall agree with such decision) and notify the service recipients by regularly sending the account of service expenses to them. The service recipients shall remit the said service expenses to the bank account designated by Party A within 10 work days after receiving the said notice. The service recipients shall fax or mail the copy of remittance voucher to Party A within 10 workdays after the remittance.

3. Besides the service expenses, the service recipients shall bear all reasonable expenses, advance payment and expenses actually paid ()"**expenditures**") in any form that are ascribable to Party A, arising from, or relating to Party A's fulfilment or provision of services, and shall compensate Party A in respect of these expenses.

4. The service recipients shall pay the service expenses and the expenditures to be made up to Party A according to this Agreement and the supplementary agreement signed from time to time. Party A shall timely issue the invoices of corresponding service expenses and all the expenditures arising during the relevant period to the service recipients. All the payments shall be remitted to the bank account designated by Party A via remittance or other methods agreed by both parties. Both parties agree that Party A may also inform the service recipients of changing the said payment instructions from time to time.

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## Exhibit 4.14

**Exhibit 4.14**

**Exclusive Call Option Agreement**

This Exclusive Call Option Agreement (hereinafter referred to as the "**Agreement**") was signed by the following parties on May 1, 2025 in Beijing of the People's Republic of China:

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| | |
|:---|:---|
| Party A: | **Beijing Lexuebang Network Technology Co., Ltd.**, a wholly foreign-owned enterprise legally established and subsisting under the laws of the PRC with a unified social credit code of 911101083217069797 and a registered address of #406, 4F, Building 17, East Area, Courtyard #10, Xibeiwang East Road, Haidian District, Beijing. |
| Party B: | Current Shareholders of Party C, as listed in **Appendix I** hereto, with their capital contribution to and ratio of capital contribution of Party C set forth in **Appendix I** hereto. |
| Party C: | **Shanghai Duwen Education Technology Co., Ltd.**, a limited liability company legally established and subsisting under the laws of the PRC with its unified social credit code of 91310112MAE7QHMT4C and the registered address at #2800, Wanyuan Road, Minhang District, Shanghai. |

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(Party A, Party B and Party C are individually referred to as a "**party**", collectively referred to as the "**parties**".)

Whereas:

On the date hereof, Party B holds a total of 100% equity of Party C. All the above parties, upon amicable negotiations, hope to reach this Agreement in respect of the purchase by Party A or the third party designated by Party A of Party C's equity held by Party B for joint compliance.

The parties have reached a consensus and the following agreement:

**1.**  **<u>Exclusive call option</u>** 

1.1 From the date of signing this Agreement, Party A shall be entitled at any time under the following circumstances to request Party B (subject to the specific requirements of Party A) to transfer all or part of 100% equity of Party C held by Party B (hereinafter referred to as the "**subject equity**") in accordance with the consideration as stipulated in Article 3 of this Agreement. Party B shall transfer the subject equity to Party A or a third party designated by Party A at Party A's request and complete the corresponding change of industrial and commercial registration:

(1) Where the PRC laws and regulations permit Party A or a third party designated by Party A to hold all or part of the subject equity; or

(2) Any other circumstances that Party A deems appropriate or necessary as far as legally permissible under the PRC laws and regulations.

Party A's call options under this Agreement are exclusive, unconditional and irrevocable.

1.2 All parties agree to be bound by the terms and conditions of this Agreement and Party A shall be entitled, at its own discretion, to exercise all or part of the exclusive call options and acquire all or part of the subject equity without violating the then PRC laws. All parties further agree that Party A shall not be subject to any restriction on the time, method, quantity and frequency of exercising the exclusive call options as stipulated in this Agreement.

1.3 Subject to the terms and conditions of this Agreement, all parties agree that Party A may designate any third party to exercise its exclusive call option to purchase all or part of the subject equity without violating the then PRC laws. Unless expressly prohibited by PRC laws, Party B shall not refuse to transfer all or part of the subject equity to the designated third party.

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1.4 Party B shall not transfer the subject equity to any third party without the prior written consent of Party A before transferring all the subject equity to Party A or a third party designated by Party A in accordance with the provisions of this Agreement, i.e. before Party B no longer holds any equity in Party C. Except for the Equity Interest Pledge Agreement separately signed by Party A and Party B, Party B shall not pledge the subject equity to any third party or impose any encumbrance on the subject equity.

1.5 Party B agrees that before transferring the subject equity to Party A by Party B, where Party B obtains dividends, bonuses or any assets distributed from Party C, subject to the compliance with the relevant PRC laws and regulations, upon payment of the taxes as required by the relevant laws and regulations, Party B, as the shareholder of Party C, shall deliver such dividends, bonuses or any assets at no charge to Party A or a third party designated by Party A as soon as possible not later than three days from the date of receiving such distributed proceeds.

**2.**  **<u>Procedures</u>** 

2.1 Where Party A decides to exercise the exclusive call option pursuant to the provisions of Article 1.1 above, Party A shall issue a written notice (refer to the format as shown in Appendix IV to this Agreement) to Party B and state in the notice the proportion or quantity of the subject equity to be transferred, and the name and identity of the transferee. Party B and Party C shall provide all the necessary information and documents for the transfer of equity interests within seven days from the date of the notification by Party A, including but not limited to the "Equity Transfer Contract" and "Letter of Consent" signed in accordance with the format stipulated in Appendices II and III to this Agreement.

2.2 Except the notice as set forth in Article 2.1 of this Agreement, Party A shall have no other conditions or procedures precedent or incidental to the exercise of the option right to purchase the subject equity.

2.3 Party B shall instruct Party C to convene a shareholders' meeting in time. At this meeting, a resolution to approve the transfer of the subject equity to Party A and / or the appointee by Party B shall be passed.

2.4 Party B shall provide Party C with necessary and prompt coordination to assist Party C in completing the examination and approval formalities with the examination and approval authorities (if required by law) in accordance with the applicable PRC laws and completing the equity transfer formalities with the administration for industry and commerce.

2.5 The date on which the exercise of exclusive call option is completed is the date on which all transfer formalities of the entire 100% equity in Party C has been completed in accordance with this Agreement.

**3.**  **<u>Transfer price</u>** 

3.1 All parties confirm that, without violating the PRC laws and regulations, the subject equity shall be transferred at no charge or transferred at the lowest price permitted by the PRC laws and regulations. Where the subject equity is to be transferred by installments or in stages, the amount of the corresponding transfer price shall be determined based on the specific transfer time and the proportion of subject equity to be transferred.

3.2 Where the subject equity is not transferred by way of free transfer, Party B agrees that, when Party A or a third party designated by Party A exercises its rights, the entire exercise price received thereof by Party B shall be given as a gift at no charge to Party C or given as a gift in full amount to Party A or a third party designated by Party A at Party A's request.

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3.3 The taxes and expenses incurred due to the transfer of the subject equity (including the gift of the price) shall be borne by each party respectively pursuant to the law. Agreement otherwise made between the parties shall be complied with.

**4.**  **<u>Representation, guarantee and undertaking</u>** 

4.1 Each party hereby represents and assures to the other party as follows:

(1) The party has all the necessary rights, powers and authorization to sign this Agreement and fulfil all the obligations and responsibilities under this Agreement;

(2) The Party has passed all necessary internal procedures for signing, delivering and performing this Agreement and has obtained all necessary internal and external authorizations and approvals;

(3) This Agreement and each of the Equity Transfer Contracts for which the party is one of the parties, once signed, constitute or will constitute a legal, valid and binding obligation and be enforceable in accordance with its terms;

(4) Signing and performance of this Agreement shall not contravene, be in breach of or contrary to (i) any of the business licences of each party or any of the provisions of its articles of association, (ii) any laws, rules, regulations, authorizations or approvals of any government agencies or departments applicable to each party, or (iii) any of the provisions of the contracts and agreements in which each party is a signatory or principal body;

(5) Party C does not have any outstanding debts except for debts incurred in its normal course of business, and debts which has been disclosed to Party A and agreed in writing by Party A;

(6) Party C complies with all laws and regulations applicable to the acquisition of assets; and

(7) No litigation, arbitration or administrative proceedings relating to the subject equity, Party C's assets or Party C is pending or threatened.

4.2 Party B and Party C severally and jointly make further representations, guarantees and undertakings to Party A as follows:

(1) On the effective date of this Agreement, Party B is a Chinese national or an entity established and validly subsisting under the PRC laws, which legally owns the entire equity of Party C and has full and effective disposition rights over such equity. Party C's registered capital has been fully paid up. Except for the pledges as stipulated in the "Equity Interest Pledge Agreement" signed by the parties on the same date hereof and other rights agreed in writing by Party A, Party B has no mortgage, pledge, guarantee or other third party rights in the equity of Party C owned by Party B, and shall not be liable to third parties for recourse; and no third party shall be entitled to demand the allotment, issue, sale, transfer or conversion of any Party C's equity under any option, conversion option, preemptive right or other agreement in such party's favour;

(2) During the validity period of this Agreement, except for the pledges set forth in the "Equity Interest Pledge Agreement" signed by all parties on the same date hereof or with the prior written consent of Party A, Party B shall not transfer any equity of Party C to any third party or grant any options, conversion rights, pre-emptive rights to any third party or sign other agreements with third parties to allot, issue, sell, transfer or convert any of Party C's equity or to set up any collateral, pledge or other form of guarantee or other third party rights and interests to such third parties, and to ensure that Party B shall not be liable to third parties for recourse;

(3) Without the prior written consent of Party A, other party / parties shall not supplement, change or amend Party C's Articles of Association in any form, increase or decrease its / their registered capital, or otherwise change its / their registered capital structure, unless otherwise stipulated in other agreements signed by all parties or except for amendments to be made as required by laws and regulations;

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(4) Without the prior written consent of Party A, no major contract shall be signed or the scope of business operation shall be changed;

(5) Subject to the relevant PRC laws and regulations, Party B and Party C shall extend the operating period of Party C in accordance with the permitted period of operation of Party A, so as to make it equal to Party A's operating period or set and adjust the operating period of Party C at Party A's request in accordance with the requirements of PRC laws;

(6) Maintain the existence of Party C, obtain and maintain all the government permits and licences required of Party C to perform its business in accordance with sound financial and commercial standards and practices, and conduct its business and deal with its business matters in a prudent and effective manner;

(7) During the validity period of this Agreement, Party B and Party C will use their best efforts to maintain and increase the value of Party C's assets. Party B and Party C shall not terminate any material agreement to which Party C is a party or shall not enter into any agreement that would affects Party C's assets and financial position without the prior written consent of Party A;

(8) Without the prior written consent of Party A, no debts shall be incurred, inherited, guaranteed or permitted, except for those payables incurred in the ordinary or usual course of business but not incurred by way of borrowing;

(9) Party C shall not merge with any entity or acquire or make foreign investments in any entity without the prior written consent of Party A;

(10) Promptly notify Party A of all occurrences or possible occurrences of any litigation, arbitration, administrative investigation or conduct which may substantially affect Party C's assets, business or income;

(11) Without the prior written consent of Party A, no dividend shall be distributed to shareholders in any form;

(12) From the date of signing this Agreement, without the prior written consent of Party A, the party / parties shall not sell, transfer, license or otherwise dispose of any of Party C's assets at any time or allow any encumbrance of any assets, provided that Party C can prove that the disposal of the relevant assets or the encumbrances of the assets are treated as necessary for their daily business operations and the value of the assets involved in a single transaction does not exceed RMB100,000; and

(13) Unless required by the PRC laws, Party C shall not be dissolved or liquidated without the written consent of Party A. If Party C is liquidated or dissolved within the validity period of this Agreement, Party B and Party C shall appoint Party A's nominees to form a liquidation team to manage Party C's property within the scope permitted by PRC laws and regulations. Party B confirms that when Party C is liquidated or dissolved, Party B agrees to deliver all the remaining property obtained from liquidation of Party C in accordance with the PRC laws and regulations to Party A or a third party designated by Party A, regardless of whether the above-mentioned agreement of this Article is implemented or not.

**5.**  **<u>Applicable law and dispute resolution</u>** 

5.1 Applicable law

The laws of the People's Republic of China shall apply to the signing, validity, interpretation, performance, amendment and termination of this Agreement and the resolution of disputes under this Agreement.

5.2 Method of dispute resolution

Any dispute that may arise during the performance of this Agreement shall be settled through amicable negotiations by all parties involved. Where the negotiation fails, either party may submit the dispute to China International Economic and Trade Arbitration Commission for arbitration in accordance with the prevailing arbitration rules of such

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arbitration institution. The place of arbitration is Beijing, the arbitration language is Chinese, and the arbitral award is final and binding on all parties.

Except for the part that is being submitted to arbitration, the rest of this Agreement shall remain in force. The validity of this Article is not subject to the impact from the change, cancellation or termination of this Agreement.

**6.**  **<u>Liability for default</u>** 

6.1 Where a party fails to fulfil any of its obligations under this Agreement or any representations or guarantees of such party under this Agreement are substantially untrue or inaccurate, such Party shall be in breach of this Agreement and shall be liable for compensation of all losses of other parties.

6.2 Regardless of whether this Agreement is changed, cancelled or terminated, these terms are legally binding.

**7.**  **<u>Termination</u>** 

7.1 This Agreement shall enter into force on the date of signing by all parties and shall not be terminated until Party A or the third party designated by it exercises the option pursuant to the Agreement and acquires the entire 100% equity in Party C, or until 30 days after the date Party A issues a written notice to the other parties regarding the cancellation of the Agreement. Subject to the laws and regulations, when the Agreement is cancelled, Party B shall repay in full the transfer price (if any) paid by Party A or the third party designated by it.

7.2 Unless otherwise provided by laws, neither Party B nor Party C shall have the right to terminate or rescind this Agreement in any case.

**8.**  **<u>Notification</u>** 

8.1 All notices and other communications required or permitted to be made pursuant to this Agreement shall be sent either by hand or by postage prepaid registered mail, courier service or facsimile to the following address of such party. An acknowledgement receipt shall be sent for each notice via email. The date on which such notices are deemed to be validly served shall be determined as follows:

8.1.1 Notices sent by hand delivery, courier service or postage prepaid registered mail shall be deemed to be validly served on the day of delivery or rejection at the specified recipient address of the notice.

8.1.2 Notices, if sent by facsimile, shall be deemed to be validly served on the day of successful transmission (as proved by the automatically generated transmission confirmation).

8.2 For the purpose of notification, the addresses of all parties are as follows:

**Party A:**

Address: #201, 2nd Floor, Building 17, East Area, Courtyard #10, Xibeiwang East Road, Haidian District, Beijing

Recipient: Zhao Lin

Tel: [\*\*\*]

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| | |
|:---|:---|
| **Party** | **B**: |

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Address: #201, 2nd Floor, Building 17, East Area, Courtyard #10, Xibeiwang East Road, Haidian District, Beijing

Recipient: Zhao Lin

Tel: [\*\*\*]

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| | |
|:---|:---|
| **Party** | **C:** |

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Address: #201, 2nd Floor, Building 17, East Area, Courtyard #10, Xibeiwang East Road, Haidian District, Beijing

Recipient: Zhao Lin

Tel: [\*\*\*]

8.3 Any party may change the recipient address of its notice at any time by giving notice to other parties in accordance with the provisions of this Article.

**9.**  **<u>Confidentiality obligations</u>** 

All parties confirm that any oral or written information exchanged by them for the purposes of this Agreement is confidential. Each party shall keep all such information confidential and shall not disclose any relevant information to any third party without the prior written consent of the other parties, except where: (a) the public is aware of or will be aware of such information (But this is not due to public disclosure by one of the parties receiving the information); (b) information required to be disclosed by applicable laws or the rules or provisions of any stock exchange; or (c) information required to be disclosed by either party to its legal adviser or financial adviser as to the transactions stipulated under this Agreement and the legal adviser or financial adviser is also subject to the confidentiality obligations similar to the obligations set forth in this Article. The disclosure of any confidential information by a staff member or agency employed by either party shall be deemed to be such party's disclosure of such confidential information and such party shall be legally liable for any violation of this Agreement. This Article shall remain in force irrespective of whether this Agreement is terminated for any reason.

**10.**  **<u>Further assurance</u>** 

All parties agree to promptly sign documents necessary or conducive to them for the purpose of implementation of various provisions and purposes of this Agreement and take further action that is necessary or conducive to them for the purpose of implementation of various provisions and purposes of this Agreement.

**11.**  **<u>Others</u>** 

11.1 Revision, change and supplement

Any amendments, changes and supplements to this Agreement must be signed in writing by all the parties.

11.2 Title

The title of this Agreement is for readability only and shall not be used to interpret, explain or otherwise affect the meaning of the provisions of this Agreement.

11.3 Language

This Agreement is prepared in Chinese in quadruplicate. Each copy has the same legal effect.

11.4 Divisibility

In the event that one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable in any respect under any law or regulation, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any respect. All parties shall, through bona fide negotiations, seek to replace such invalid, illegal or unenforceable provisions with valid provisions permitted by laws and within the maximum extent of expectations of all parties, and the economic effect resulting from such valid provisions shall be similar to the economic effect resulting from such invalid, illegal or unenforceable provisions as much as possible.

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11.5 Successor

This Agreement shall be binding and conducive to the respective successors of the parties and to the transferee(s) permitted by such parties.

11.6 Force majeure

A force majeure event means any event unforeseen by any party at the time of signing this Agreement that cannot be avoided, controlled and overcome (including but not limited to earthquake, typhoon, flood, fire, strike, war or riot, etc.).

In view of the fact that the force majeure event affects the performance of this Agreement, in the event of force majeure, the party shall forthwith (i) notify the remaining parties in the form of telegraph, facsimile or other electronic means and submit the written evidence of force majeure within fifteen (15) working days; (ii) take all reasonable and possible measures to eliminate or mitigate the effects of force majeure event and to resume the fulfillment of its obligations upon the elimination or mitigation of the effects of force majeure event.

11.7 Abstention

Either party may abstain from voting on the terms and conditions of this Agreement but such abstention must be in writing and signed by all parties. Abstention by either party of breach of contract by the other parties under certain circumstances shall not be regarded as abstention by such party in similar case of breach of contract under other circumstances.

11.8 Remaining in force

Any obligations arising from this Agreement or expired prior to the expiry or early termination of this Agreement shall remain in force upon expiry or early termination of this Agreement.

11.9 Complete contract

Except for written amendments, supplements or changes made upon the signing of this Agreement, this Agreement, once signed, constitutes the complete agreement reached between the parties to this Agreement in respect of the transactions under this Agreement and shall supersede any and all oral or written undertakings, memorandums, agreements or any other documents previously made in respect of the subject matter of this Agreement. This Agreement shall supersede the Previous Exclusive Call Option Agreement signed by the parties and the Previous Exclusive Call Option Agreement shall be expired upon and after the effective date hereof.

(The remainder of this page is intentionally left blank)

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties or their authorized representative hereto as of the date first above written.

**Party A: Beijing Lexuebang Network Technology Co., Ltd.** (Seal)

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| | |
|:---|:---|
| Authorized representative <br>(Signature) : | /s/ Luo Bin |

---

/s/ Seal of Beijing Lexuebang Network Technology Co., Ltd.

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties or their authorized representative hereto as of the date first above written.

**Party B:**

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| | |
|:---|:---|
| **Guo Shuai** | **Guo Shuai** |
| Signature: | /s/ Guo Shuai |

---

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IN WITNESS WHEREOF, this Agreement has been executed by the Parties or their authorized representative hereto as of the date first above written.

**Party B:**

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| | |
|:---|:---|
| **Huang Ruonan** | **Huang Ruonan** |
| Signature: | /s/ Huang Ruonan |

---

------

IN WITNESS WHEREOF, this Agreement has been executed by the Parties or their authorized representative hereto as of the date first above written.

**Party C: Shanghai Duwen Education Technology Co., Ltd (Seal)**

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| | |
|:---|:---|
| Authorized representative (Signature) : | /s/ Huang Ruonan |

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/s/ Seal of Shanghai Duwen Education Technology Co., Ltd.

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**Appendix I**

**Current Shareholders of Party C**

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| | | |
|:---|:---|:---|
| **Name of Shareholder** | **Capital contribution**<br>**（'0,000 RMB）** | **Ratio of capital<br>contribution** |
| &nbsp;&nbsp;&nbsp;&nbsp;Guo Shuai | 70.0 | 70.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Huang Ruonan | 30.0 | 30.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** | **100.0** | **100.0%**  |

---

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**Appendix II**

**Equity Transfer Contract**

This Equity Transfer Contract (hereinafter referred to as "this Contract") was entered into by the following parties this day of , 20 in [ ] Municipality in China:

Transferor: [ ]

Transferee: [ ]

Upon amicable negotiations, the above two parties have reached an agreement on equity transfer as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The transferor agrees to transfer the [ ]% equity (the "subject equity") of Shanghai Duwen Education Technology Co., Ltd. held by it to the transferee in RMB Yuan, and the transferee agrees to assign such subject equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Upon completion of the transfer of the subject equity, the transferor no longer has the shareholders' rights of the subject equity and the shareholders' obligation to undertake the subject equity. The transferee has the shareholders' rights of the subject equity and the shareholders' obligation to undertake the subject equity.

3. For matters not covered in this Contract, both parties may sign a supplementary agreement.

4. This Contract shall come into effect from the date of signing by both parties.

5. This Contract is in quadruplicate. Each party holds a copy and other copies are used for industrial and commercial change.

Transferor: [ ]

Signature:

Transferee: [ ]

Signature:

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**Appendix III**

**Letter of Consent**

To: Beijing Lexuebang Network Technology Co., Ltd.

As a shareholder of Shanghai Duwen Education Technology Co., Ltd. (the "Company"), I hereby agree and confirm as follows:

1. Agree and accept all terms and conditions of the "Exclusive Call Option Agreement" signed by the Company and myself with Beijing Lexuebang Network Technology Co., Ltd. ("WFOE") this day of , 20 , and take all actions to assist WFOE in the transfer of relevant equity interests when exercising the exclusive call option over the Company's equity in WFOE pursuant to the provisions of such agreement.

2. Agree other shareholders of the Company to transfer the Company's equity held by them to WFOE or its designated third party, and I abstain from the preemptive right.

3. Agree that when other shareholders of the Company transfer the Company's equity held by them to WFOE or its designated third party, I will sign or provide the necessary documents for the purpose of the equity transfer.

Sincerely,

[ ]

Signature:

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**Appendix IV**

**Exercise Notice**

To: All shareholders of Shanghai Duwen Education Technology Co., Ltd.; and / or

Shanghai Duwen Education Technology Co., Ltd.

In view of the signing of an "Exclusive Call Option Agreement" this day of , 20 between the Company and you, it is agreed that, subject to the conditions permitted by the relevant PRC laws and regulations, you shall, pursuant to the requirements of the Company, sell to the Company or the transferee designed by the Company all or part of the equity interest in Shanghai Duwen Education Technology Co., Ltd. held by you.

Accordingly, the Company hereby issues this notice to you as follows:

The Company hereby requires the exercise of the option under the "Exclusive Call Option Agreement" for the purchase of the equity held by you, accounting for [ ]% of registered capital of Shanghai Duwen Education Technology Co., Ltd. ("equity to be transferred"), by the Company / the transferee designated by the Company at a price of RMB [ ] yuan. Please, upon receipt of this notice, immediately handle the necessary formalities for the sale of all the equity to be transferred to the Company / the transferee designated by the Company pursuant to the agreement of the "Exclusive Call Option Agreement".

Beijing Lexuebang Network Technology Co., Ltd. (Seal)

Authorized representative (Signature):

Date:

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## Exhibit 4.15

**Exhibit 4.15**

**Letter of Consent**

I, [Name of Spouse] (ID Card No: [ID Card No. of Spouse]), am the lawful spouse of [Name of Shareholder] (ID Card No: [ID Card No. of Shareholder]), and now hereby provide this Letter of Consent unconditionally and irrevocably as follows with respect to the equity of Shanghai Duwen Education Technology Co., Ltd. (the "**Company**") held by [Name of Shareholder]:

I am informed that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The entire equity held by [Name of Shareholder] in the Company will be settled in accordance with the Exclusive Call Option Agreement dated May 1, 2025, the Equity Pledge Agreement dated May 1, 2025 and the Exclusive Management Services and Business Cooperation Agreement dated May 1, 2025 signed by [Name of Shareholder], the Company, other shareholders of the Company and Beijing Lexuebang Network Technology Co., Ltd. ("**WFOE**"). Such equity is under the control of WFOE;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The entire equity held by [Name of Shareholder] in the Company will be settled in accordance with the Power of Attorney issued by [Name of Shareholder] to WFOE on May 1, 2025.

I confirm that I am aware of and agree to the signing of the aforesaid Exclusive Call Option Agreement, Equity Interest Pledge Agreement, Exclusive Management Services and Business Cooperation Agreement and Power of Attorney (hereinafter collectively referred to as the "**Transaction Documents**") by [Name of Shareholder] and the disposal of the corresponding equity of the Company in accordance with the requirements of the Transaction Documents. I undertake neither to take any action at any time to hinder the disposal of the above equity, nor to claim any rights in regard to the above equity, including but not limited to claiming that the above equity of the Company is attributed to me and [Name of Shareholder] as common property of husband and wife.

I further confirm that [Name of Shareholder] needs no further authorization or consent from me for the fulfillment of all the above Transaction Documents and the further modification or termination of any of the Transaction Documents. I undertake to sign all necessary documents and take all necessary actions to ensure that the Transaction Documents (as amended from time to time) are properly implemented.

I agree and undertake that I shall be bound by the Transaction Documents (as amended from time to time) and subject to the obligations under the Transaction Documents (as amended from time to time) as a shareholder of the Company if I, for any reason, have acquired any equity of the Company, and for this purpose, under the request of WFOE, I shall sign a series of written documents with basically the same format and content as the Transaction Documents (as amended from time to time). I further undertake and guarantee that I shall in no circumstances, whether directly or indirectly, proactively or passively, take any action or make any claim or litigation with a contradicting intention against the above arrangements.

[The remainder of this page is intentionally left blank]

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(This page is the signature page of the Letter of Consent)

**[Name of Spouse]**

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| | |
|:---|:---|
| Signature: | /s/ [Name of Spouse] |

---

Date: May 1, 2025

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**Schedule of Material Differences**

One or more persons signed a letter of consent using this form. Pursuant to Instruction ii to Item 601 of Regulation S-K, the Registrant may only file this form as an exhibit with a schedule setting forth the material details in which the executed agreements differ from this form:

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| | | | | |
|:---|:---|:---|:---|:---|
| **No.** | **Name of Spouse** | **ID Card No. of Spouse** | **Name of Shareholder** | **ID Card No. of Shareholder** |
| 1. | Zhao Tiantian | [\*\*\*] | Guo Shuai | [\*\*\*] |

---

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## Exhibit 8.1

**Exhibit 8.1**

**List of Subsidiaries and Variable Interest Entities of the Registrant** 

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| | |
|:---|:---|
| **Subsidiaries** | **Place of Incorporation** |
| BaiJiaHuLian HK Holdings Limited | Hong Kong |
| Higgz Academia Technology PTE. LTD | Singapore |
| Hita EdAi Limited | Hong Kong |
| Beijing Lexuebang Network Technology Co., Ltd | Mainland China |
| Wuhan Lexuebang Network Technology Co., Ltd | Mainland China |
| Beijing Yuexuebang Network Technology Co., Ltd | Mainland China |
| Chengdu Yuexuebang Network Technology Co., Ltd | Mainland China |
| Shanghai Chuxuebang Network Technology Co., Ltd | Mainland China |
| Wuhan Yuexuebang Network Technology Co., Ltd | Mainland China |
| Zhengzhou XiangCheng Business Management Co., Ltd | Mainland China |
| Beijing Xizhi Intelligent Technology Co., Ltd | Mainland China |
| **Consolidated Variable Interest Entities** | **Place of Incorporation** |
| Gaotu Education Technology Group Co., Ltd | Mainland, China |
| Shanghai Duwen Education Technology Co., Ltd | Mainland, China |
| **Significant Subsidiaries of Consolidated Variable Interest Entities** | **Place of Incorporation** |
| Beijing GaoTuYunFan Technology Co., Ltd | Mainland China |
| Zhengzhou GaoTuYunJi Education Technology Co., Ltd | Mainland China |
| Beijing GaoTuYunJi Education Technology Co., Ltd | Mainland China |
| Guangzhou GaoTu Technology Co., Ltd | Mainland China |
| Guangzhou XingHuo Online Computer Technology Co., Ltd | Mainland China |
| Chengdu GaoTuXingHui Technology Training School Co., Ltd | Mainland China |

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## Exhibit 12.1

**Exhibit 12.1**

**Certification by the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Larry Xiangdong Chen, certify that:

1. I have reviewed this annual report on Form 20-F of Gaotu Techedu Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

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| | |
|:---|:---|
| Date: | April 22, 2026 |
| By: | /s/ Larry Xiangdong Chen |
| Name:  | Larry Xiangdong Chen |
| Title: | Chief Executive Officer |

---

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## Exhibit 12.2

**Exhibit 12.2**

**Certification by the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Nan Shen, certify that:

1. I have reviewed this annual report on Form 20-F of Gaotu Techedu Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: | April 22, 2026 |
| By: | /s/ Nan Shen |
| Name:  | Nan Shen |
| Title: | Chief Financial Officer |

---

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## Exhibit 13.1

**Exhibit 13.1**

**Certification by the Principal Executive Officer**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

In connection with the Annual Report of Gaotu Techedu Inc. (the "Company") on Form 20-F for the year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Larry Xiangdong Chen, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: | April 22, 2026 |
| By: | /s/ Larry Xiangdong Chen |
| Name:  | Larry Xiangdong Chen |
| Title: | Chief Executive Officer |

---

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## Exhibit 13.2

**Exhibit 13.2**

**Certification by the Principal Financial Officer**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

In connection with the Annual Report of Gaotu Techedu Inc. (the "Company") on Form 20-F for the year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Nan Shen, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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| | |
|:---|:---|
| Date: | April 22, 2026 |
| By: | /s/ Nan Shen |
| Name:  | Nan Shen |
| Title: | Chief Financial Officer |

---

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## Exhibit 15.1

**Exhibit 15.1**

Gaotu Techedu Inc.

5F, Gientech Building, 17 East Zone,

10 Xibeiwang East Road

Haidian District, Beijing 100193

People's Republic of China

April 22, 2026

Dear Sir or Madam

**Gaotu Techedu Inc.**

We have acted as legal advisers as to the laws of the Cayman Islands to Gaotu Techedu Inc., an exempted limited liability company incorporated in the Cayman Islands (the "**Company**"), in connection with the filing by the Company with the United States Securities and Exchange Commission (the "**SEC**") of an annual report on Form 20-F for the year ended 31 December 2025 (the "**Annual Report**").

We hereby consent to the reference to our firm under the heading "Item 10.E. Additional Information—Taxation—Cayman Islands Taxation" in the Annual Report, and we further consent to the incorporation by reference of the summary of our opinions under these headings into the Company's registration statement on Form S-8 (File No. 333-235314) that was filed on 2 December 2019, pertaining to the Company's Share Incentive Plan.

We consent to the filing with the SEC of this consent letter as an exhibit to the Annual Report. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.

Yours faithfully

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| |
|:---|
| /s/ Maples and Calder (Hong Kong) LLP |
| &nbsp;&nbsp;&nbsp;&nbsp;Maples and Calder (Hong Kong) LLP |

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## Exhibit 15.2

**Exhibit 15.2**

April 22, 2026

Gaotu Techedu Inc. (the "Company")

5F, Gientech Building, 17 East Zone,<br>10 Xibeiwang East Road<br>Haidian District, Beijing 100193<br>People's Republic of China

Dear Sirs:

We hereby consent to the use and reference to our name and our opinions and views under the captions "Item 3. Key Information—D. Risk Factors," "Item 4. Information on the Company—C. Organizational Structure —Contractual Arrangements with the VIEs and Their Shareholders," and "Item 10. Additional Information—E. Taxation" in the Company's annual report on Form 20-F for the fiscal year ended December 31, 2025 (the "Annual Report"), and further consent to the incorporation by reference of the summary of our opinions in the Annual Report into the Company's registration statement on Form S-8 (File No. 333-235314) that was filed on December 2, 2019, pertaining to the Company's Share Incentive Plan.

We further consent to the filing of this letter as an exhibit to the Annual Report.

In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.

Sincerely yours,

/s/ Tian Yuan Law Firm

Tian Yuan Law Firm

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## Exhibit 15.3

**Exhibit 15.3**

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No.333-235314 on Form S-8 of our reports dated April 22, 2026, relating to the financial statements of Gaotu Techedu Inc. and the effectiveness of Gaotu Techedu Inc.'s internal control over financial reporting appearing in this Annual Report on Form 20-F for the year ended December 31, 2025.

/s/ Deloitte Touche Tohmatsu Certified Public Accountants LLP

Deloitte Touche Tohmatsu Certified Public Accountants LLP

Beijing, the People's Republic of China

April 22, 2026

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