# EDGAR Filing Document

**Accession Number:** 0001814067
**File Stem:** 0001213900-26-055168
**Filing Date:** 2026-5
**Character Count:** 1198162
**Document Hash:** 5781ca4d41ecfc9f69d32002d80d2f85
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-055168.hdr.sgml**: 20260512

**ACCESSION NUMBER**: 0001213900-26-055168

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 138

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260512

**DATE AS OF CHANGE**: 20260512

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Lixiang Education Holding Co. Ltd.
- **CENTRAL INDEX KEY:** 0001814067
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-EDUCATIONAL SERVICES [8200]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 000000000

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39559
- **FILM NUMBER:** 26969663

**BUSINESS ADDRESS:**
- **STREET 1:** NO. 818 HUA YUAN STREET
- **STREET 2:** LIANDU DISTRICT
- **CITY:** LISHUI CITY. ZHEJIANG PROVINCE
- **STATE:** F4
- **ZIP:** 323000
- **BUSINESS PHONE:** 86(578)2267142

**MAIL ADDRESS:**
- **STREET 1:** NO. 818 HUA YUAN STREET
- **STREET 2:** LIANDU DISTRICT
- **CITY:** LISHUI CITY. ZHEJIANG PROVINCE
- **STATE:** F4
- **ZIP:** 323000

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Lixiang Education Holding Co . Ltd
- **DATE OF NAME CHANGE:** 20200603

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 20-F**

**(Mark One)**

☐ **REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (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: 001-39559**

**Lixiang Education Holding Co., Ltd.**

**(Exact name of Registrant as specified in its charter)**

**N/A**

**(Translation of Registrant's name into English)**

**Cayman Islands**

**(Jurisdiction of incorporation or organization)**

**No. 818 Hua Yuan Street**

**Liandu District, Lishui City, Zhejiang Province, 323000**

**People's Republic of China**

**(Address of principal executive offices)**

**Zhifu Yang, Chief Financial Officer**

**Telephone: +86-578-2267142**

**Email: irlxeh@lsmxjy.com**

**No. 818 Hua Yuan Street**

**Liandu District, Lishui City, Zhejiang Province, 323000**

**People's Republic of China**

**(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)**

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

---

| | | |
|:---|:---|:---|
| **Title of Each Class** | **Trading Symbol** | **Name of Each Exchange On Which Registered** |
| **American depositary shares, each representing one thousand Class A ordinary shares\*** | **LXEH** | **The Nasdaq Stock Market LLC**<br> **(The Nasdaq Global Market)** |
| **Class A ordinary shares, par value US$0.0001 per share\*\*** |  | **The Nasdaq Stock Market LLC**<br> **(The Nasdaq Global Market)** |

---

**\*** **Our American depositary shares to Class A ordinary shares ratio is effective as of April 20, 2026.**

**\*\*** **Not for trading, but only in connection with the listing on The Nasdaq Stock Market LLC of the American depositary shares.**

**Securities registered or to be registered pursuant to Section 12(g) of the Act:**

**None**

**(Title of Class)**

**SEC 1852 (12-23) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.**

**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 1,916,667,000 ordinary shares outstanding, par value of US$0.0001 per share, including 1,871,667,000 Class A ordinary shares and 45,000,000 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

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 the definitions 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 ☒ <br> 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. ☐ Yes ☒ No

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 Other ☐ <br> by the International Accounting Standards Board ☐

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

**Table of Contents**

---

| | |
|:---|:---|
|  | **Page No.** |
| [INTRODUCTION](#a_001) | ii |
| [ENFORCEABILITY OF CIVIL LIABILITIES](#a_002) | iv |
| [FORWARD-LOOKING INFORMATION](#a_003) | v |
| [PART I](#a_004) |  |
| &nbsp;&nbsp;&nbsp;[ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](#a_005) | 1 |
| &nbsp;&nbsp;&nbsp;[ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE](#a_006) | 1 |
| &nbsp;&nbsp;&nbsp;[ITEM 3. KEY INFORMATION](#a_007) | 1 |
| &nbsp;&nbsp;&nbsp;[ITEM 4. INFORMATION ON THE COMPANY](#a_008) | 82 |
| &nbsp;&nbsp;&nbsp;[ITEM 4A. UNRESOLVED STAFF COMMENTS](#a_009) | 125 |
| &nbsp;&nbsp;&nbsp;[ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](#a_010) | 125 |
| &nbsp;&nbsp;&nbsp;[ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](#a_011) | 141 |
| &nbsp;&nbsp;&nbsp;[ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](#a_012) | 148 |
| &nbsp;&nbsp;&nbsp;[ITEM 8. FINANCIAL INFORMATION](#a_013) | 151 |
| &nbsp;&nbsp;&nbsp;[ITEM 9. THE OFFER AND LISTING](#a_014) | 152 |
| &nbsp;&nbsp;&nbsp;[ITEM 10. ADDITIONAL INFORMATION](#a_015) | 152 |
| &nbsp;&nbsp;&nbsp;[ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#a_016) | 169 |
| &nbsp;&nbsp;&nbsp;[ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](#a_017) | 169 |
| [PART II](#a_018) |  |
| &nbsp;&nbsp;&nbsp;[ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](#a_019) | 172 |
| &nbsp;&nbsp;&nbsp;[ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](#a_020) | 172 |
| &nbsp;&nbsp;&nbsp;[ITEM 15. CONTROLS AND PROCEDURES](#a_021) | 173 |
| &nbsp;&nbsp;&nbsp;[ITEM 16. \[RESERVED\]](#a_022) | 175 |
| &nbsp;&nbsp;&nbsp;[ITEM 16.A. AUDIT COMMITTEE FINANCIAL EXPERT](#a_023) | 175 |
| &nbsp;&nbsp;&nbsp;[ITEM 16.B. CODE OF ETHICS](#a_024) | 175 |
| &nbsp;&nbsp;&nbsp;[ITEM 16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES](#a_025) | 175 |
| &nbsp;&nbsp;&nbsp;[ITEM 16.D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES](#a_026) | 175 |
| &nbsp;&nbsp;&nbsp;[ITEM 16.E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS](#a_027) | 176 |
| &nbsp;&nbsp;&nbsp;[ITEM 16.F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT](#a_028) | 176 |
| &nbsp;&nbsp;&nbsp;[ITEM 16.G. CORPORATE GOVERNANCE](#a_029) | 177 |
| &nbsp;&nbsp;&nbsp;[ITEM 16.H. MINE SAFETY DISCLOSURE](#a_030) | 178 |
| &nbsp;&nbsp;&nbsp;[ITEM 16.I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](#a_031) | 178 |
| &nbsp;&nbsp;&nbsp;[ITEM 16.J. INSIDER TRADING POLICY](#a_032) | 178 |
| &nbsp;&nbsp;&nbsp;[ITEM 16.K. CYBERSECURITIES](#a_033) | 178 |
| [PART III](#a_034) |  |
| &nbsp;&nbsp;&nbsp;[ITEM 17. FINANCIAL STATEMENTS](#a_035) | 179 |
| &nbsp;&nbsp;&nbsp;[ITEM 18. FINANCIAL STATEMENTS](#a_036) | 179 |
| &nbsp;&nbsp;&nbsp;[ITEM 19. EXHIBITS](#a_037) | 179 |
| [SIGNATURES](#a_038) | 190 |

---

i

**INTRODUCTION**

In this annual report on Form 20-F, unless otherwise indicated or the context otherwise requires, references to:

● "ADRs" refer to our American depositary receipts that evidence our ADSs;

● "ADSs" refer to our American depositary shares, each of which represents one thousand Class A ordinary shares;

● "Beijing P.X." refers to Beijing Pengxiang Xinrui Education Technology Co., Ltd. (北京鹏翔新睿教育科技有限公司), a company incorporated under the laws of the PRC and a wholly-owned subsidiary of Lishui Mengxiang, formerly known as Beijing Pengxiang Tianxia Education Technology Co., Ltd. (北京鹏翔天下教育科技有限公司) prior to August 2024;

● "Beijing S.K." refers to Beijing Shangkun Education Technology Development Co., Ltd. (北京商鲲教育科技发展有限公司), a company incorporated under the laws of the PRC;

● "Beijing Xinxiang" refers to Beijing Xinxiang Future Technology Development Co., Ltd. (北京心翔未来科技发展有限公司), a company which was incorporated under the laws of the PRC with 43% equity interests held by Lishui Mengxiang, and was deregistered in June 2024;

● "Beijing R.R.Z." refers to Beijing Renrenzhen Intelligent Technology Co., Ltd. (北京人人诊智能科技有限公司), a company incorporated under the laws of the PRC holding 42% equity interests of Beijing Xinxiang until June 2024;

● "CAGR" refers to compound annual growth rate;

● "China", "mainland China" or the "PRC" refers to the People's Republic of China, excluding, for the purposes of this annual report on Form 20-F only, the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan, while the legal and operational risks associated with operating in China may also apply to operations in Hong Kong;

● "Chuangmei Weiye" refers to Beijing Chuangmei Weiye Enterprise Management Co., Ltd. (北京创美伟业企业管理有限公司), a company incorporated under the laws of the PRC and a wholly-owned subsidiary of Beijing P.X. until November 9, 2023;

● "Class A ordinary shares" refer to our Class A ordinary shares, par value US$0.0001 per share;

● "Class B ordinary shares" refer to our Class B ordinary shares, par value US$0.0001 per share;

● "Hainan Jiangcai" refers to Hainan Jiangcai Vocational Skills Training School Co., Ltd. (海南匠才职业技能培训学校有限公司), a company incorporated under the laws of the PRC and a wholly-owned subsidiary of Beijing P.X.;

● "Hangzhou Youxi" refers to Hangzhou Youxi Information Technology Co., Ltd (杭州柚溪信息技术有限公司), a company incorporated under the laws of the PRC and a wholly-owned subsidiary of Liandu WFOE;

● "Hong Kong" refers to Hong Kong Special Administrative Region of the People's Republic of China;

● "Langfang School" refers to Langfang City Rail Transit Technical School (廊坊市城轨交通技工学校), a PRC school specialized in providing vocational education;

● "Lianwai School" refers to Liandu Foreign Language School (莲都外国语学校), comprising of Baiyun Campus and Yijing Campus—Featured Division, which was historically controlled and consolidated by Liandu WFOE through a series of contractual arrangements but was deconsolidated on September 1, 2021;

● "Liandu WFOE" refers to Zhejiang Mengxiang Consultancy Services Co., Ltd. (浙江梦翔咨询服务有限公司), a wholly foreign-owned enterprise incorporated under the laws of the PRC;

ii

● "Lishui Mengxiang" refers to Zhejiang Lishui Mengxiang Education Development Co., Ltd. (浙江丽水梦翔教育发展有限公司), a company incorporated under the laws of the PRC and the sponsor of Qingtian International School (before its deconsolidation) and Lishui International School;

● "Lishui International School" refers to Lishui Overseas Chinese Senior High School (丽水市华侨高级中学), a PRC private educational school specialized in providing high school education;

● "Lixiang," "we," "us," "our company," "the Company" and "our" refer to Lixiang Education Holding Co., Ltd. (formerly known as Lianwai Education Group Limited), an exempted company incorporated in the Cayman Islands with limited liability, and its subsidiaries;

● "Macau" refers to Macau Special Administrative Region of the People's Republic of China;

● "Mengxiang Holdings" or "Controlling Shareholder" refers to, Mengxiang Holdings Limited, a British Virgin Islands company wholly-owned and controlled by Ms. Fen Ye;

● "ordinary shares" refer to our Class A ordinary shares and Class B ordinary shares;

● "Qingtian International School" refers to Qingtian Overseas Chinese Experimental High School (青田华侨实验高级中学), a PRC private educational school specialized in providing high school education, formerly known as Qingtian Overseas Chinese International School (青田县华侨国际学校) prior to February 2023;

● "RMB" and "Renminbi" refer to the legal currency of China;

● "SEC" refers to the United States Securities and Exchange Commission;

● "school year" refers to the periods from September of each calendar year to July of the following calendar year which consists of two semesters. The first semester usually commences in September of each year and ends in January of the following year, while the second semester usually commences in March and ends in July of the following year;

● "US$," "U.S. dollars," "$" and "dollars" refer to the legal currency of the United States;

● "Variable Interest Entities" or "VIEs" refer to the PRC entities of which we have power to control the management, and financial and operating policies and have the right to recognize and receive substantially all the economic benefits and in which we have an exclusive option to purchase all or part of the equity interests and all or a portion of the assets at the minimum price possible to the extent permitted by PRC law (for details regarding the changes of the VIEs, see "*Item 4. Information on the Company—A. History and Development of the Company.* ");

● "Vocational Education Services Providers" refer to Langfang School and Hainan Jiangcai;

● "Xianke" refers to Zhejiang Lishui Xianke Agricultural Products Distribution Co., Ltd. (浙江丽水鲜客农产品配送有限公司), a company incorporated under the laws of the PRC and a wholly-owned subsidiary of Liandu WFOE; and

● "Hebei Chuangxiang" refers to Hebei Chuangxiang Enterprise Management Co., Ltd.(河北创翔企业管理有限公司), a company incorporated under the laws of the PRC and a wholly-owned subsidiary of Beijing P.X.

**Exchange Rate Information**

Our and the VIEs' business is conducted in China, all of our revenue is denominated in RMB and our financial records are maintained in RMB, our functional currency. Our reporting currency is RMB and this annual report on Form 20-F contains translations of RMB into U.S. dollars solely for the convenience of the reader. The exchange rate used for translation on December 31, 2025 was US$1.00=RMB6.9931, representing the certificated exchange rate published by the Federal Reserve Board. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, or at all. The PRC government imposes controls over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign exchange and through restrictions on foreign trade.

iii

**ENFORCEABILITY OF CIVIL LIABILITIES**

**Cayman Islands**

We are incorporated under the laws of the Cayman Islands as an exempted company with limited liability. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands exempted company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws than the United States and provides significantly less protection for investors. In addition, Cayman Islands companies may not have standing to sue before the federal courts of the United States.

Our assets and operations are located in China. All of our directors, namely Ms. Fen Ye, Mr. Biao Wei, Mr. Zhaoxiang Wei, Mr. Guoliang Chen, Mr. Teck Yong Heng and Mr. Yan Kit Lee, and our officer, Mr. Zhifu Yang, reside within the PRC and Hong Kong, and a substantial portion of their assets are located outside the United States. As a result, it may be difficult for a shareholder to effect service of process upon us or these persons, or to bring actions or enforce judgments obtained in United States courts against us or them, based on the civil liability provisions of the securities laws of the United States or any state in the United States.

We have appointed Cogency Global Inc. as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

Maples and Calder (Hong Kong) LLP, or Maples, our legal counsel as to the laws of the Cayman Islands has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (1) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers that are predicated upon the civil liability provisions of the federal securities laws of the United States or the securities laws of any state in the United States, or (2) entertain original actions brought in the Cayman Islands against us or our directors or officers that are predicated upon the federal securities laws of the United States or the securities laws of any state in the United States.

Maples has informed us that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for which judgment has been given, (c) is final, (d) is not in respect of taxes, a fine or a penalty; (e) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. However, there is uncertainty with regard to Cayman Islands law on whether judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or the securities laws of any state will be determined by the courts of the Cayman Islands as penal or punitive in nature. If such a determination is made, the courts of the Cayman Islands will not recognize or enforce the judgment against a Cayman Islands company, such as our company. Because such a determination in relation to judgments obtained from U.S. courts under civil liability provisions of U.S. securities laws has not yet been made by a court of the Cayman Islands, it is uncertain whether such judgments would be enforceable in the Cayman Islands. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

**PRC**

There is uncertainty as to whether the courts of China would:

● recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or

● entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

As advised by our PRC legal counsel, Beijing DeHeng Law Offices, the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the jurisdiction where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other form of reciprocity with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States.

iv

**FORWARD-LOOKING INFORMATION**

This annual report on Form 20-F contains forward-looking statements that reflect our current expectations and views of future events. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "continue" 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:

● our goals and strategies;

● our future business development, financial condition and results of operations;

● the trends in, expected growth, market size and student enrollment in the education industry, in China;

● expected changes in our revenue, costs or expenditures;

● competition in our industry;

● relevant government policies and regulations relating to our industry;

● general economic and business conditions in China; and

● the development of COVID-19 pandemic in the PRC and globally.

We would like to caution you not to place undue reliance on these forward-looking statements and you should read these statements in conjunction with the risk factors disclosed in "*Item 3. Key Information—D. Risk Factors*." Those risks are not exhaustive. We operate in an evolving environment. New risks emerge from time to time and it is impossible for our management to predict all risk factors, nor can we assess the impact of all factors on our and the VIEs' business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in any forward-looking statement. We do not undertake any obligation to update or revise the forward-looking statements except as required under applicable law. You should read this annual report on Form 20-F and the documents that we reference in this annual report on Form 20-F completely and with the understanding that our actual future results may be materially different from what we expect.

v

**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 Corporate Structure and Contractual Arrangements with the Consolidated VIEs**

Lixiang Education Holding Co., Ltd. is a Cayman Islands holding company and not a Chinese operating company, and does not conduct operations directly. The operations in China are conducted through Liandu WFOE and its subsidiaries in which Lixiang holds equity ownership interests, and their contractual arrangements, commonly known as the VIE structure, with the VIEs incorporated in China, currently consisting of Lishui Mengxiang, Lishui International School, Beijing P.X., Langfang School, Hainan Jiangcai and Hebei Chuangxiang. Historically, the VIEs also included Qingtian International School from August 31, 2021 to December 31, 2023, Chuangmei Weiye from January 1, 2022 to November 9, 2023 and Beijing Xinxiang from January 2022 to June 2024. The VIEs are consolidated for accounting purpose only and Lixiang does not own any equity interest in the VIEs. Our corporate structure involves unique risks to investors as they are purchasing equity securities in Lixiang, the Cayman Islands holding company, and are not purchasing, and may never directly hold, equity interests in the VIEs.

PRC laws, regulations, and rules restrict and impose conditions on direct foreign investment in certain types of business, including education at the primary, middle school and high school levels, and operation of vocational schools. As we are a company incorporated in the Cayman Islands, our wholly-owned subsidiary in the PRC, Liandu WFOE, is viewed as a foreign-owned enterprise, and thus is ineligible to apply for or hold licenses to operate, or otherwise own equity interests in, primary and middle schools. Also, as neither we nor Liandu WFOE is a foreign education institution or a foreign vocational skills training institution with relevant qualifications on education services and operating high-quality education, we and Liandu WFOE are ineligible to independently or jointly invest in or operate high schools or vocational schools pursuant to the relevant laws and regulations. In response to these restrictions, the Company operates these businesses in China through the VIE structure which provides investors with exposure to foreign investment in the Chinese operating companies where Chinese law prohibits us from direct foreign investment in the operating companies.

**Contractual Arrangements with respect to Qingtian International School**

On April 20, 2022, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Lishui Mengxiang, Qingtian International School, shareholders of Lishui Mengxiang and the Council Members of Qingtian International School. On January 31, 2023, due to the change of shareholders of Lishui Mengxiang, Liandu WFOE entered into an updated series of contractual arrangements with respect to the operation of Qingtian International School. The updated series of contractual arrangements replaced the previous ones in their entirety and took effect on December 16, 2022, the same date when the shareholders of Lishui Mengxiang signed an equity transfer agreement. On January 15, 2024, Lishui Mengxiang entered into a definitive agreement to transfer 100% of the sponsorship interests of Qingtian International School to Zhejiang Lishui Qiaoxiang Education Consulting Services Co., Ltd ("Qiaoxiang Education"), an entity affiliated with Mr. Biao Wei, a director and the Chief Executive Officer of the Company, for a consideration of RMB23,161,000. On April 2, 2024, Liandu WFOE, Lishui Mengxiang, Qingtian International School, the shareholders of Lishui Mengxiang and the Council Members of Qingtian International School entered into an Acknowledgment Agreement of Contractual Agreements of Qingtian Overseas Chinese Experimental High School (the "Acknowledgment Agreement of Contractual Agreements of Qingtian Overseas Chinese Experimental High School"), pursuant to which rights and obligations under contractual arrangements with respect to Qingtian International School were actually terminated on December 31, 2023. We deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023.

Below is a summary of the material provisions of these contractual arrangements among Liandu WFOE and the shareholders of Lishui Mengxiang. For more complete information you should read these agreements in their entirety. These agreements or their forms are filed as exhibits to this annual report on Form 20-F.

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***Exclusive Call Option Agreement.*** Under the Exclusive Call Option Agreement dated January 31, 2023, Ms. Fen Ye and Ms. Hong Ye, or the shareholders of Lishui Mengxiang have irrevocably granted Liandu WFOE or its designated purchaser the exclusive right to purchase all or part of the direct and/or indirect equity interests of Lishui Mengxiang, or the Equity Call Option. The purchase price payable by Liandu WFOE or its designated purchaser in respect of the transfer of Lishui Mengxiang's direct and/or indirect equity interest or equity interests shall be at the lowest price permitted under the PRC laws and regulations. Liandu WFOE or its designated purchaser shall have the right to purchase such proportion of Lishui Mengxiang's interest in Qingtian International School and/or other equity interest of Lishui Mengxiang as it decides at any time. Qingtian International School provides high school education services, in which case the foreign investors are restricted to hold equity interests of Lishui Mengxiang, Qingtian International School's sponsor, in accordance with the current PRC laws and regulations. If and when the PRC laws and regulations allow Liandu WFOE or us to directly hold all or part of the school sponsor interests in Qingtian International School and/or all or part of other equity interests of Lishui Mengxiang and operate competent education business in the PRC, Liandu WFOE shall issue the notice of exercise of such equity call option as soon as practicable, and the percentage of interests to be purchased upon exercise of such Equity Call Option shall be no less than the maximum percentage allowed to be held by Liandu WFOE or its designated purchaser under the PRC laws and regulations. Such equity transfer price is not expressly provided for in the current PRC laws and regulations and it is uncertain whether it may be further regulated by future PRC laws and regulations. Pursuant to the Exclusive Call Option Agreement, all taxes and fees associated with the equity transfer shall be paid by Lishui Mengxiang's shareholders and/or the direct equity holders of the VIEs upon the transfer. In the absence of written consent from Liandu WFOE, except as otherwise described in the Exclusive Call Option Agreement, Lishui Mengxiang and its shareholders shall not sell, transfer, assign or otherwise dispose of or create any encumbrance on any of Lishui Mengxiang's assets, businesses or equity interests or procure separation or merge with any other entities. Furthermore, without written consent from Liandu WFOE, Lishui Mengxiang may not terminate any material contracts or enter into any other contracts which may contradict such material contracts, incur any indebtedness or provide any loan or guarantee to a third party, except as disclosed to Liandu WFOE, or alter the nature or scope of its business. The Exclusive Call Option Agreement will remain in force during the operation term of VIEs and any periods that are renewable pursuant to the PRC laws, and will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities of VIEs in accordance with this agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or its shareholders unilaterally, but may only be terminated by Liandu WFOE after notice in advance.

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***Proxy Agreement for School's Sponsors and Council Members.*** Pursuant to the Proxy Agreement for School's Sponsors and Council Members dated January 31, 2023, Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Qingtian International School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to appoint and/or elect of council members of Qingtian International School; (b) the right to appoint and/or elect the supervisors of Qingtian International School; the right to put forward the School's mission and scope of operation;(c)the right to examine or approve the articles of association of Qingtian International School, development planning, major projects and budget for revenues and expenditures;(d) the right to supervise the performance of Qingtian International School and the achievement of the objectives set out in the bylaw;(e) the right to establish the executive school council in accordance with the authority and procedures prescribed in the bylaw of Qingtian International School and to participate in the running and management of the School;(f) the right to access the information about the operation conditions and financial conditions of Qingtian International School;(g) the right to consult the resolutions, records, financial and accounting statements and reports of the school council meetings in accordance with the PRC laws;(h) the right to obtain reasonable returns from Qingtian International School's Sponsor in accordance with the PRC laws;(i) the right to obtain the remaining property of Qingtian International School after the liquidation in accordance with the PRC laws;(j) the right to transfer the interests of Qingtian International School's Sponsor in accordance with the PRC laws;(k) the right to select the profitability and non-profitability of the characteristic of Qingtian International School in accordance with the PRC laws, regulations or regulatory documents; and(l) any other rights of Qingtian International School's Sponsor provided by other applicable laws and regulations of the PRC and the articles of association of Qingtian International School (as amended from time to time).

The appointed Council Members of Qingtian International School from Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Qingtian International School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) acting as the agent of Qingtian International School's Sponsor to attend the council meeting of Qingtian International; enjoying the right to speak, propose, vote, elect and stand for election, and the right to know, propose and supervise council meeting and business activities carried out by Qingtian International School; (b) exercising the voting rights on behalf of Qingtian International School's Sponsor for all matters requiring discussion and resolution of the council; (c) proposing to convene a council meeting of Qingtian International School; (d) signing the council meeting minutes, council meeting resolutions or other legal documents that the Appointed Council Members has the right to sign as the council member of Qingtian International School; (e) instructing the legal representative, the financial, business and administrative chiefs, etc. of Qingtian International School to act in accordance with the Trustee's intention; (f) exercising other rights of the council member and council members' voting rights under the articles of association (including any other council members' voting rights as stipulated in the amended articles of association) of Qingtian International School; (g) handling legal procedures containing registration, examination and approval and license of schools at the competent departments of government; and (h) any other rights of the Council Member as pursuant to the applicable PRC laws, regulations and the articles of association (as amended from time to time) of Qingtian International School. In addition, each of Lishui Mengxiang and the Council Members of Qingtian International School have irrevocably agreed that (i) Liandu WFOE may delegate its rights under the Proxy Agreement for School's Sponsors and Council Members to the directors of Liandu WFOE or its designated person, without prior notice to or approval by Lishui Mengxiang and the Council Members of Qingtian International School; and (ii) any person as successor of civil rights of Liandu WFOE or liquidator by reason of subdivision, merger, liquidation of Liandu WFOE or other circumstances shall have authority to replace Liandu WFOE to exercise all rights under the Proxy Agreement for School's Sponsors and Council Members.

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***Proxy Agreement for Shareholders.*** Pursuant to the Proxy Agreement for Shareholders dated January 31, 2023, each shareholder of Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as the shareholder to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to attend the shareholders' meeting of our school acting as WFOE's nominee; (b) the right to vote on behalf of the sponsors for all matters requiring discussion and resolution of the shareholders' meeting; (c) the right to sign the shareholders' minutes, resolutions or other legal documents; (d) the right to indicate the directors, the legal representative, etc. to act in accordance with WFOE's intention; (e) the right to handle legal procedures containing registration, examination and approval and license of schools at the competent departments of governments; (f) the right to decide to transfer or otherwise dispose of the equity of our school; (g) any other shareholder rights as pursuant to the applicable PRC laws, regulations and our school's articles of association as amended from time to time.

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***Business Cooperation Agreement*.** Pursuant to the Business Cooperation Agreement dated January 31, 2023, Liandu WFOE shall provide technical services, management support and consulting services necessary for the private education business, and in return, the VIEs shall make payments accordingly. In particular, such services include but not limited to developing curriculum, conducting market research and offering management and marketing advice, providing technology services, providing public relations services, providing support for teacher hiring and training and providing other services that the VIEs may need from time to time. Without the prior consent of Liandu WFOE, none of the VIEs may accept such services provided by any third party. As part of the business cooperative agreement, VIEs and the shareholders of Lishui Mengxiang agree that they will not take any actions except as otherwise described in the Business Cooperation Agreement, such as incurring indebtedness, disposing of material assets, materially changing the scope or nature of the business of the VIEs, disposing of their equity interests in the VIEs, or paying dividends or other similar payments to the sponsors or the shareholders VIEs in the absence of written consent from Liandu WFOE. The aforementioned agreements will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities held by Nominee Shareholders in accordance with the Exclusive Call Option Agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by VIEs or the shareholders, but may only be terminated by Liandu WFOE after notice in advance.

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***Exclusive Technical Service and Business Consulting Agreement.*** Pursuant to the Exclusive Technical Service and Business Consulting Agreement dated January 31, 2023, Liandu WFOE agreed to provide exclusive technical services to Qingtian International School and Qingtian International School's sponsor, Lishui Mengxiang. Furthermore, Liandu WFOE agreed to provide exclusive business consultancy services to Qingtian International School and Qingtian International School's sponsor. In consideration of the technical and business consultancy services provided by Liandu WFOE, Qingtian International School and Qingtian International School's sponsor agreed to pay Liandu WFOE a service fee withdrawn from their respective amount of surplus from operations after deducting all costs, expenses, taxes, losses (if required by the law) and the legally development fund of the respective school (if required by the law) and other costs and funds that shall be retained at Qingtian International School in accordance with applicable PRC laws. Liandu WFOE has the right (but not the obligation) to adjust the amount of such service fee by reference to the actual services provided and the actual business operations and needs of Qingtian International School and Qingtian International School's sponsor, provided that any adjusted amount shall not exceed the amount mentioned above. Qingtian International School and Qingtian International School's sponsor do not have any right to make any such adjustment. Unless otherwise prescribed under the PRC laws and regulations, Liandu WFOE shall have exclusive proprietary rights to any technology and intellectual property developed and materials prepared in the course of the provision of research and development, technical support and services by Liandu WFOE to Qingtian International School and Qingtian International School's sponsor, and any intellectual property in the products developed, including any other rights derived thereunder, in the course of performance of obligations under the Exclusive Technical Service and Business Consulting Agreement and/or any other agreements entered into between Liandu WFOE and the VIEs.

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***Equity Pledge Agreement***. Pursuant to the Equity Pledge Agreement dated January 31, 2023, the shareholders unconditionally and irrevocably pledged all of their equity interests in Lishui Mengxiang to Liandu WFOE to guarantee performance of the obligations of the VIEs under the Exclusive Call Option Agreement, Business Cooperation Agreement, Exclusive Technical Service and Business Consulting Agreement, Proxy Agreement for Shareholders, Proxy Agreement for School's Sponsors and Council Members and Loan Agreement, each as described above the shareholders of Lishui Mengxiang agreed that without prior written consent of the PRC WFOE, they shall not transfer or dispose of the pledged equity interests, or create or allow any encumbrance on the pledged equity interests. Unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or the shareholders of Lishui Mengxiang unilaterally, but may only be terminated by the Liandu WFOE after notice in advance. The equity pledge agreement remains in full force and effect until all of the obligations under the contractual arrangements have been duly performed or the guaranteed debts are duly paid. The pledge of equity interests in Lishui Mengxiang has been duly registered with the local branch of SAIC and is effective upon such registration.

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***Acknowledge Agreement.*** Pursuant to the Acknowledgment Agreement of Contractual Agreements of Qingtian Overseas Chinese Experimental High School dated April 2, 2024, the rights and obligations under the Business Cooperation Agreement, the Exclusive Technical Service and Business Consulting Agreement, the Exclusive Call Option Agreement, the Proxy Agreement for School's Sponsor and Council Members and the Loan Agreement relating to Qingtian International School and the Council Members thereunder were actually terminated on December 31, 2023.

**Contractual Arrangements with respect to Langfang School**

On March 28, 2023, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Beijing P.X. and Langfang School, shareholders of Beijing P.X. and the Council Members of Langfang School. The series of contractual arrangements became effective on January 1, 2022. Below is a summary of the material provisions of these contractual arrangements among Liandu WFOE and the shareholders of Beijing P.X. For more complete information you should read these agreements in their entirety. These agreements or their forms are filed as exhibits to this annual report on Form 20-F.

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***Exclusive Call Option Agreement.*** Under the Exclusive Call Option Agreement dated March 28, 2023, Ms. Fen Ye, Ms. Hong Ye, and Lishui Mengxiang, or the shareholders of Beijing P.X. have irrevocably granted Liandu WFOE or its designated purchaser the exclusive right to purchase all or part of the direct and/or indirect equity interests of Beijing P.X. and Langfang School, or the Equity Call Option. The purchase price payable by Liandu WFOE or its designated purchaser in respect of the transfer of above equity interests shall be at the lowest price permitted under the PRC laws and regulations. Liandu WFOE or its designated purchaser shall have the right to purchase such proportion of Beijing P.X.'s interest in Langfang School and/or other equity interest of Beijing P.X. as it decides at any time. Langfang School provides vocational school education services, in which case the foreign investors shall be a foreign education institution or a foreign vocational skills training institution with relevant qualifications on education services and operating high-quality education in accordance with the current PRC laws and regulations. If and when the PRC laws and regulations allow Liandu WFOE or us to directly hold all or part of the school sponsor interests in Langfang School and/or all or part of other equity interests of Beijing P.X. and operate competent education business in the PRC, Liandu WFOE shall issue the notice of exercise of such equity call option as soon as practicable, and the percentage of interests to be purchased upon exercise of such Equity Call Option shall be no less than the maximum percentage allowed to be held by Liandu WFOE or its designated purchaser under the PRC laws and regulations. Such equity transfer price is not expressly provided for in the current PRC laws and regulations and it is uncertain whether it may be further regulated by future PRC laws and regulations. Pursuant to the Exclusive Call Option Agreement, all taxes and fees associated with the equity transfer shall be paid by Beijing P.X.'s shareholders upon the transfer. In the absence of written consent from Liandu WFOE, except as otherwise described in the Exclusive Call Option Agreement, Beijing P.X. and its shareholders shall not sell, transfer, assign or otherwise dispose of or create any encumbrance on any of Langfang School's assets, businesses or equity interests or procure separation or merge with any other entities. Furthermore, without written consent from Liandu WFOE, Langfang School may not terminate any material contracts or enter into any other contracts which may contradict such material contracts, incur any indebtedness or provide any loan or guarantee to a third party, except as disclosed to Liandu WFOE, or alter the nature or scope of its business. The Exclusive Call Option Agreement will remain in force during the operation term of Beijing P.X. and Langfang School and any periods that are renewable pursuant to the PRC laws, and will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities of Beijing P.X. and Langfang School in accordance with this agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by Langfang School, Beijing P.X. or its shareholders unilaterally, but may only be terminated by Liandu WFOE after notice in advance.

***Proxy Agreement for School's Sponsors and Council Members.*** Pursuant to the Proxy Agreement for School's Sponsors and Council Members dated March 28, 2023, Beijing P.X. has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Langfang School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to appoint and/or elect of council members of Langfang School; (b) the right to appoint and/or elect the supervisors of Langfang School; the right to put forward the School's mission and scope of operation;(c)the right to examine or approve the articles of association of Langfang School, development planning, major projects and budget for revenues and expenditures;(d) the right to supervise the performance of Langfang School and the achievement of the objectives set out in the bylaw;(e) the right to establish the executive school council in accordance with the authority and procedures prescribed in the bylaw of Langfang School and to participate in the running and management of the School;(f) the right to access the information about the operation conditions and financial conditions of Langfang School;(g) the right to consult the resolutions, records, financial and accounting statements and reports of the school council meetings in accordance with the PRC laws;(h) the right to obtain reasonable returns from Langfang School's Sponsor in accordance with the PRC laws;(i) the right to obtain the remaining property of Langfang School after the liquidation in accordance with the PRC laws;(j) the right to transfer the interests of Langfang School's Sponsor in accordance with the PRC laws;(k) the right to select the profitability and non-profitability of the characteristic of Langfang School in accordance with the PRC laws, regulations or regulatory documents; and(l) any other rights of Langfang School's Sponsor provided by other applicable laws and regulations of the PRC and the articles of association of Langfang School (as amended from time to time).

The appointed Council Members of Langfang School from Beijing P.X. has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Langfang School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) acting as the agent of Langfang School's Sponsor to attend the council meeting of Langfang School; enjoying the right to speak, propose, vote, elect and stand for election, and the right to know, propose and supervise council meeting and business activities carried out by Langfang School; (b) exercising the voting rights on behalf of Langfang School's Sponsor for all matters requiring discussion and resolution of the council; (c) proposing to convene a council meeting of Langfang School; (d) signing the council meeting minutes, council meeting resolutions or other legal documents that the Appointed Council Members has the right to sign as the council member of Langfang School; (e) exercising other rights of the council member and council members' voting rights under the articles of association (including any other council members' voting rights as stipulated in the amended articles of association) of Langfang School; (f) handling legal procedures containing registration, examination and approval and license of school at the competent departments of government; and (g) any other rights of the Council Member as pursuant to the applicable PRC laws, regulations and the articles of association (as amended from time to time) of Langfang School. In addition, each of Beijing P.X. and the Council Members of Langfang School have irrevocably agreed that (i) Liandu WFOE may delegate its rights under the Proxy Agreement for School's Sponsors and Council Members to the directors of Liandu WFOE or its designated person, without prior notice to or approval by Beijing P.X. and the Council Members of Langfang School; and (ii) any person as successor of civil rights of Liandu WFOE or liquidator by reason of subdivision, merger, liquidation of Liandu WFOE or other circumstances shall have authority to replace Liandu WFOE to exercise all rights under the Proxy Agreement for School's Sponsors and Council Members.

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***Proxy Agreement for Shareholders.*** Pursuant to the Proxy Agreement for Shareholders dated March 28, 2023, Lishui Mengxiang, the shareholder of Beijing P.X. has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as the shareholder to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to attend the shareholders' meeting of Beijing P.X. acting as WFOE's nominee; (b) the right to vote on behalf of Lishui Mengxiang for all matters requiring discussion and resolution of the shareholders' meeting; (c) the right to sign the shareholders' minutes, resolutions or other legal documents; (d) the right to indicate the directors, the legal representative, etc. to act in accordance with WFOE's intention; (e) the right to handle legal procedures containing registration, examination and approval and license of Beijing P.X. at the competent departments of governments; (f) the right to decide to transfer or otherwise dispose of the equity of Beijing P.X.; (g) any other shareholder's rights as pursuant to the applicable PRC laws, regulations and articles of association of Beijing P.X. as amended from time to time.

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***Business Cooperation Agreement*.** Pursuant to the Business Cooperation Agreement dated March 28, 2023, Liandu WFOE shall provide technical services, management support and consulting services necessary for the private education business, and in return, Beijing P.X. and Langfang School shall make payments accordingly. In particular, such services include but not limited to developing curriculum, conducting market research and offering management and marketing advice, providing technology services, providing public relations services, providing support for teacher hiring and training and providing other services that Beijing P.X. and Langfang School may need from time to time. Without the prior consent of Liandu WFOE, none of Beijing P.X. and Langfang School may accept such services provided by any third party. As part of the business cooperative agreement, Beijing P.X., Langfang School and the shareholders of Beijing P.X. agree that they will not take any actions except as otherwise described in the Business Cooperation Agreement, such as incurring indebtedness, disposing of material assets, materially changing the scope or nature of the business of Langfang School, disposing of their equity interests in the Langfang School, or paying dividends or other similar payments to Beijing P.X. or the shareholders of Beijing P.X. in the absence of written consent from Liandu WFOE. The aforementioned agreements will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities held by Nominee Shareholders in accordance with the Exclusive Call Option Agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by Beijing P.X., Langfang School or the shareholders of Beijing P.X., but may only be terminated by Liandu WFOE after notice in advance.

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***Exclusive Technical Service and Business Consulting Agreement.*** Pursuant to the Exclusive Technical Service and Business Consulting Agreement dated March 28, 2023, Liandu WFOE agreed to provide exclusive technical services to Langfang School and Beijing P.X. Furthermore, Liandu WFOE agreed to provide exclusive business consultancy services to Langfang School and Beijing P.X. In consideration of the technical and business consultancy services provided by Liandu WFOE, Langfang School and Beijing P.X. agreed to pay Liandu WFOE a service fee withdrawn from their respective amount of surplus from operations after deducting all costs, expenses, taxes, losses (if required by the law) and the legally development fund (if required by the law) and other costs and funds that shall be retained at Langfang School in accordance with applicable PRC laws. Liandu WFOE has the right (but not the obligation) to adjust the amount of such service fee by reference to the actual services provided and the actual business operations and needs of Langfang School and Beijing P.X., provided that any adjusted amount shall not exceed the amount mentioned above. Langfang School and Beijing P.X. do not have any right to make any such adjustment. Unless otherwise prescribed under the PRC laws and regulations, Liandu WFOE shall have exclusive proprietary rights to any technology and intellectual property developed and materials prepared in the course of the provision of research and development, technical support and services by Liandu WFOE to Langfang School and Beijing P.X., and any intellectual property in the products developed, including any other rights derived thereunder, in the course of performance of obligations under the Exclusive Technical Service and Business Consulting Agreement and/or any other agreements entered into between Liandu WFOE, Langfang School and Beijing P.X..

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***Equity Pledge Agreement***. Pursuant to the Equity Pledge Agreement dated March 28, 2023, the shareholders unconditionally and irrevocably pledged all of their equity interests in Beijing P.X. to Liandu WFOE to guarantee performance of the obligations of Langfang School and Beijing P.X. under the Exclusive Call Option Agreement, Business Cooperation Agreement, Exclusive Technical Service and Business Consulting Agreement, Proxy Agreement for Shareholders, Proxy Agreement for School's Sponsors and Council Members and Loan Agreement, each as described above the shareholders of Beijing P.X. agreed that without prior written consent of the WFOE, they shall not transfer or dispose of the pledged equity interests, or create or allow any encumbrance on the pledged equity interests. Unless otherwise stipulated by laws, this agreement may not be terminated by Beijing P.X. or the shareholders of Beijing P.X. unilaterally, but may only be terminated by the Liandu WFOE after notice in advance. The equity pledge agreement remains in full force and effect until all of the obligations under the contractual arrangements have been duly performed or the guaranteed debts are duly paid. The pledge of equity interests in Beijing P.X. has been duly registered with the local branch of PRC State Administration of Market Regulation, or SAMR and is effective upon such registration.

**Contractual Arrangements with respect to Lishui International School**

On April 2, 2024, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Lishui Mengxiang, Lishui International School, shareholders of Lishui Mengxiang and the Council Members of Lishui International School. The series of contractual arrangements became effective on June 25, 2023. Below is a summary of the material provisions of these contractual arrangements among Liandu WFOE and the shareholders of Lishui Mengxiang. For more complete information you should read these agreements in their entirety. These agreements or their forms are filed as exhibits to this annual report on Form 20-F.

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***Exclusive Call Option Agreement.*** Under the Exclusive Call Option Agreement dated April 2, 2024, Ms. Fen Ye and Ms. Hong Ye, or the shareholders of Lishui Mengxiang have irrevocably granted Liandu WFOE or its designated purchaser the exclusive right to purchase all or part of the direct and/or indirect equity interests of Lishui Mengxiang, or the Equity Call Option. The purchase price payable by Liandu WFOE or its designated purchaser in respect of the transfer of Lishui Mengxiang's direct and/or indirect equity interest or equity interests shall be at the lowest price permitted under the PRC laws and regulations. Liandu WFOE or its designated purchaser shall have the right to purchase such proportion of Lishui Mengxiang's interest in Lishui International School and/or other equity interest of Lishui Mengxiang as it decides at any time. Lishui International School provides high school education services, in which case the foreign investors are restricted to hold equity interests of Lishui Mengxiang, Lishui International School's sponsor, in accordance with the current PRC laws and regulations. If and when the PRC laws and regulations allow Liandu WFOE or us to directly hold all or part of the school sponsor interests in Lishui International School and/or all or part of other equity interests of Lishui Mengxiang and operate competent education business in the PRC, Liandu WFOE shall issue the notice of exercise of such equity call option as soon as practicable, and the percentage of interests to be purchased upon exercise of such Equity Call Option shall be no less than the maximum percentage allowed to be held by Liandu WFOE or its designated purchaser under the PRC laws and regulations. Such equity transfer price is not expressly provided for in the current PRC laws and regulations and it is uncertain whether it may be further regulated by future PRC laws and regulations. Pursuant to the Exclusive Call Option Agreement, all taxes and fees associated with the equity transfer shall be paid by Lishui Mengxiang's shareholders and/or the direct equity holders of the VIEs upon the transfer. In the absence of written consent from Liandu WFOE, except as otherwise described in the Exclusive Call Option Agreement, Lishui Mengxiang and its shareholders shall not sell, transfer, assign or otherwise dispose of or create any encumbrance on any of Lishui Mengxiang's assets, businesses or equity interests or procure separation or merge with any other entities. Furthermore, without written consent from Liandu WFOE, Lishui Mengxiang may not terminate any material contracts or enter into any other contracts which may contradict such material contracts, incur any indebtedness or provide any loan or guarantee to a third party, except as disclosed to Liandu WFOE, or alter the nature or scope of its business. The Exclusive Call Option Agreement will remain in force during the operation term of VIEs and any periods that are renewable pursuant to the PRC laws, and will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities of VIEs in accordance with this agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or its shareholders unilaterally, but may only be terminated by Liandu WFOE after notice in advance.

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***Proxy Agreement for School's Sponsors and Council Members.*** Pursuant to the Proxy Agreement for School's Sponsors and Council Members dated April 2, 2024, Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Lishui International School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to appoint and/or elect of council members of Lishui International School; (b) the right to appoint and/or elect the supervisors of Lishui International School; the right to put forward the School's mission and scope of operation;(c)the right to examine or approve the articles of association of Lishui International School, development planning, major projects and budget for revenues and expenditures;(d) the right to supervise the performance of Lishui International School and the achievement of the objectives set out in the bylaw;(e) the right to establish the executive school council in accordance with the authority and procedures prescribed in the bylaw of Lishui International School and to participate in the running and management of the School;(f) the right to access the information about the operation conditions and financial conditions of Lishui International School;(g) the right to consult the resolutions, records, financial and accounting statements and reports of the school council meetings in accordance with the PRC laws;(h) the right to use the remaining property of the school after the liquidation for running other non-profit schools continuously in accordance with the PRC laws;(i) the right to transfer the interests of Lishui International School's sponsor in accordance with the PRC laws; and (j) any other rights of Lishui International School's Sponsor provided by other applicable laws and regulations of the PRC and the articles of association of Lishui International School (as amended from time to time).

The appointed Council Members of Lishui International School from Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Lishui International School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) acting as the agent of Lishui International School's Sponsor to attend the council meeting of Lishui International School; enjoying the right to speak, propose, vote, elect and stand for election, and the right to know, propose and supervise council meeting and business activities carried out by Lishui International School; (b) exercising the voting rights on behalf of Lishui International School's Sponsor for all matters requiring discussion and resolution of the council; (c) proposing to convene a council meeting of Lishui International School; (d) signing the council meeting minutes, council meeting resolutions or other legal documents that the Appointed Council Members has the right to sign as the council member of Lishui International School; (e) instructing the legal representative, the financial, business and administrative chiefs, etc. of Lishui International School to act in accordance with the Trustee's intention; (f) exercising other rights of the council member and council members' voting rights under the articles of association (including any other council members' voting rights as stipulated in the amended articles of association) of Lishui International School; (g) handling legal procedures containing registration, examination and approval and license of schools at the competent departments of government; and (h) any other rights of the Council Member as pursuant to the applicable PRC laws, regulations and the articles of association (as amended from time to time) of Lishui International School. In addition, each of Lishui Mengxiang and the Council Members of Lishui International School have irrevocably agreed that (i) Liandu WFOE may delegate its rights under the Proxy Agreement for School's Sponsors and Council Members to the directors of Liandu WFOE or its designated person, without prior notice to or approval by Lishui Mengxiang and the Council Members of Lishui International School; and (ii) any person as successor of civil rights of Liandu WFOE or liquidator by reason of subdivision, merger, liquidation of Liandu WFOE or other circumstances shall have authority to replace Liandu WFOE to exercise all rights under the Proxy Agreement for School's Sponsors and Council Members.

 ****

***Proxy Agreement for Shareholders.*** Pursuant to the Proxy Agreement for Shareholders dated April 2, 2024, each shareholder of Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as the shareholder to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to attend the shareholders' meeting of our school acting as WFOE's nominee; (b) the right to vote on behalf of the sponsors for all matters requiring discussion and resolution of the shareholders' meeting; (c) the right to sign the shareholders' minutes, resolutions or other legal documents; (d) the right to indicate the directors, the legal representative, etc. to act in accordance with WFOE's intention; (e) the right to handle legal procedures containing registration, examination and approval and license of schools at the competent departments of governments; (f) the right to decide to transfer or otherwise dispose of the equity of our school; (g) any other shareholder rights as pursuant to the applicable PRC laws, regulations and our school's articles of association as amended from time to time.

 ****

***Business Cooperation Agreement*.** Pursuant to the Business Cooperation Agreement dated April 2, 2024, Liandu WFOE shall provide technical services, management support and consulting services necessary for the private education business, and in return, the VIEs shall make payments accordingly. In particular, such services include but not limited to developing curriculum, conducting market research and offering management and marketing advice, providing technology services, providing public relations services, providing support for teacher hiring and training and providing other services that the VIEs may need from time to time. Without the prior consent of Liandu WFOE, none of the VIEs may accept such services provided by any third party. As part of the business cooperative agreement, VIEs and the shareholders of Lishui Mengxiang agree that they will not take any actions except as otherwise described in the Business Cooperation Agreement, such as incurring indebtedness, disposing of material assets, materially changing the scope or nature of the business of the VIEs, disposing of their equity interests in the VIEs, or paying dividends or other similar payments to the sponsors or the shareholders VIEs in the absence of written consent from Liandu WFOE. The aforementioned agreements will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities held by Nominee Shareholders in accordance with the Exclusive Call Option Agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by VIEs or the shareholders, but may only be terminated by Liandu WFOE after notice in advance.

 ****

***Exclusive Technical Service and Business Consulting Agreement.*** Pursuant to the Exclusive Technical Service and Business Consulting Agreement dated April 2, 2024, Liandu WFOE agreed to provide exclusive technical services to Lishui International School and Lishui International School's sponsor, Lishui Mengxiang. Furthermore, Liandu WFOE agreed to provide exclusive business consultancy services to Lishui International School and Lishui International School's sponsor. In consideration of the technical and business consultancy services provided by Liandu WFOE, Lishui International School and Lishui International School's sponsor agreed to pay Liandu WFOE a service fee withdrawn from their respective amount of surplus from operations after deducting all costs, expenses, taxes, losses (if required by the law) and the legally development fund of the respective school (if required by the law) and other costs and funds that shall be retained at Lishui International School in accordance with applicable PRC laws. Liandu WFOE has the right (but not the obligation) to adjust the amount of such service fee by reference to the actual services provided and the actual business operations and needs of Lishui International School and Lishui International School's sponsor, provided that any adjusted amount shall not exceed the amount mentioned above. Lishui International School and Lishui International School's sponsor do not have any right to make any such adjustment. Unless otherwise prescribed under the PRC laws and regulations, Liandu WFOE shall have exclusive proprietary rights to any technology and intellectual property developed and materials prepared in the course of the provision of research and development, technical support and services by Liandu WFOE to Lishui International School and Lishui International School's sponsor, and any intellectual property in the products developed, including any other rights derived thereunder, in the course of performance of obligations under the Exclusive Technical Service and Business Consulting Agreement and/or any other agreements entered into between Liandu WFOE and the VIEs.

 ****

***Equity Pledge Agreement***. Pursuant to the Equity Pledge Agreement dated April 2, 2024, the shareholders unconditionally and irrevocably pledged all of their equity interests in Lishui Mengxiang to Liandu WFOE to guarantee performance of the obligations of the VIEs under the Exclusive Call Option Agreement, Business Cooperation Agreement, Exclusive Technical Service and Business Consulting Agreement, Proxy Agreement for Shareholders, Proxy Agreement for School's Sponsors and Council Members and Loan Agreement, each as described above the shareholders of Lishui Mengxiang agreed that without prior written consent of the PRC WFOE, they shall not transfer or dispose of the pledged equity interests, or create or allow any encumbrance on the pledged equity interests. Unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or the shareholders of Lishui Mengxiang unilaterally, but may only be terminated by the Liandu WFOE after notice in advance. The equity pledge agreement remains in full force and effect until all of the obligations under the contractual arrangements have been duly performed or the guaranteed debts are duly paid. The pledge of equity interests in Lishui Mengxiang has been duly registered with the local branch of SAIC and is effective upon such registration.

The contractual agreements are not equivalent to equity ownership in the business of the VIEs. Our control over Lishui Mengxiang and its subsidiaries, Qingtian International School (deconsolidated on December 31, 2023), Lishui International School and Langfang School, and our position of being the primary beneficiary of Lishui Mengxiang and its subsidiaries, Qingtian International School (deconsolidated on December 31, 2023), Lishui International School and Langfang School for the accounting purposes are limited to the conditions that we have met for consolidation of Lishui Mengxiang and its subsidiaries, Qingtian International School (deconsolidated on December 31, 2023), Lishui International School and Langfang School under U.S. GAAP. Such conditions include that (i) we have the power to govern the activities which most significantly impact the VIEs' economic performance, (ii) we are contractually obligated to absorb losses of the VIEs that could potentially be significant to the VIEs, and (iii) we are entitled to receive benefits from the VIEs that could potentially be significant to the VIEs. We have met such conditions for consolidation of the VIEs under U.S. GAAP through the aforementioned contractual arrangements, and as a result, we are deemed as the primary beneficiary of the VIEs, and the VIEs will be treated as our consolidated affiliated entities for accounting purposes. We have consolidated the results of the VIEs in our consolidated financial statements included elsewhere in this annual report on Form 20-F in accordance with U.S. GAAP. For a more detailed discussion of the basis of presentation of our consolidated financial statements, see "*Item 5. Operating and financial Review and Prospects—A. Operating Results—Critical Accounting Policies.*"

We could face heightened risks and substantial costs in enforcing these contractual arrangements, because, although the aforementioned contractual arrangements have been widely adopted by PRC companies listed overseas, such arrangements have not been tested in any of the PRC courts. In addition, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the contractual arrangements and the VIE structure. If the PRC government finds these contractual arrangements or the VIE structure non-compliant with the restrictions on direct foreign investment in the relevant industries, or if the relevant PRC laws, regulations, and rules or the interpretation thereof change in the future, we could be subject to severe penalties or be forced to relinquish our interests in the VIEs or forfeit our rights under the contractual arrangements. Lixiang and investors in the ADSs face uncertainty about potential future actions by the PRC government, which could affect the enforceability of our contractual arrangements, consequently, significantly affect the financial condition and results of operations. If we are unable to claim our right to control the assets of the VIEs, the ADSs may decline in value or become worthless. The PRC government could even disallow the VIE structure completely, which would likely result in a material adverse change in our operations and the ADSs may significantly decline in value or become worthless. See "*Risk Factors—Risks Relating to Our Corporate Structure.*"

For the year ended December 31, 2025, we and the VIEs have established an education services network consisting of a high school (Lishui International School), two vocational education services providers (Langfang School and Hainan Jiangcai) and a human resources and healthcare support services provider (Hebei Chuangxiang).

Lishui Mengxiang holds 100% of the sponsorship interests of Lishui International School starting from June 25, 2023. Beijing P.X., a wholly-owned subsidiary of Lishui Mengxiang, holds 100% of the sponsorship interests of Langfang School from January 1, 2022, and has two wholly-owned subsidiaries, namely Hainan Jiangcai and Hebei Chuangxiang. Historically, Lishui Mengxiang held 100% of the sponsorship interests in Qingtian International School from August 24, 2021 to December 31, 2023. Lishui Mengxiang, through its shareholding of Beijing P.X., also held 100% of the equity interests in Chuangmei Weiye from January 1, 2022 to November 9, 2023. Beijing Xinxiang was formed by Lishui Mengxiang with Beijing R.R.Z. in January 2022 and was deregistered in June 2024. For details regarding the changes of our subsidiaries and the VIEs, see "*Item 4. Information on the Company—A. History and Development of the Company.*"

Prior to August 31, 2021, the VIEs primarily operated primary and secondary school in Baiyun campus and Yijing campus—Featured Division of Lianwai School. Under the Implementation Rules for the Law for Promoting Private Education of the PRC (《中华人民共和国民办教育促进法实施条例》) for Private Education Laws, or the 2021 Implementation Rules, which took effect on September 1, 2021, social organizations and individuals are prohibited from controlling a private school that provides compulsory education by means of, among others, merger, acquisition, and contractual arrangements, and a private school providing compulsory education is prohibited from conducting transactions with its related party. In particular, the prohibition over related party transactions has significantly affected the enforceability of the exclusive management services and business cooperation agreements among Liandu WFOE and Lianwai School providing compulsory education. Therefore, we re-assessed our control over Lianwai School. Based on the relevant accounting standard in accordance with U.S. GAAP, we have concluded that we have lost control of Lianwai School since August 31, 2021, in view of the significant uncertainties and restrictions the 2021 Implementation Rules impose on our ability to direct the range of ongoing activities that would most significantly impact the returns of Lianwai School. In light of such regulatory developments, on April 20, 2022, we entered into an acknowledgment agreement of contractual agreements with Lianwai School and respective directors, to confirm all the terms of rights and obligations relating to Lianwai School and the directors appointed by the sponsor under the contractual arrangements among them, and agree among the parties that such arrangements shall have been terminated on August 31, 2021. To minimize disruptions to existing students enrolled in Lianwai School, we and the VIEs continued to offer essential services to the students. We deconsolidated Lianwai School commencing from September 1, 2021 and presented it as a discontinued operation in current and comparative period financial statements.

We and the VIEs have explored and considered business opportunities beyond high school education and taken steps to expand into online education and vocational education. In February 2021, Liandu WFOE completed the acquisition of 100% of the equity interests of Hangzhou Youxi to expand into the business of online education. In January 2022, Lishui Mengxiang formed Beijing Xinxiang with Beijing R.R.Z. to provide vocational education in the healthcare industry. To expand our and the VIEs' business into vocational education, Lishui Mengxiang entered into definitive agreements to acquire 100% of the equity interests of Beijing P.X. on January 1, 2022, which was a wholly-owned subsidiary of Beijing S.K. at the time, so that after the transaction, Lishui Mengxiang through its shareholding of Beijing P.X. would in turn hold 100% of the equity interests of Chuangmei Weiye and Hainan Jiangcai, and 100% of the sponsorship interests of Langfang School. The acquisition was completed in May 2022. As of the date of the annual report on Form 20-F, the administrative procedures with the PRC governmental authorities to amend the registration reflecting the result of the acquisition of Langfang School have not been completed due to the internal procedures of the competent authorities and we are still in the process of active communication with such local authorities. On November 5, 2023, Lishui Mengxiang elected to exercise the right to sell 100% of the equity interests of Chuangmei Weiye back to Beijing S.K. and its affiliates pursuant to that certain supplementary agreement by and among Lishui Mengxiang, Beijing S.K., certain affiliates of Beijing S.K. and Beijing P.X. dated August 20, 2023, primarily due to the substantial amount of Chuangmei Weiye's historical debts. The equity interests of Chuangmei Weiye were transferred back to Beijing S.K.'s affiliates at a price of RMB6.36 million and the transfer was completed on November 9, 2023. After the transaction, the amount of RMB6.36 million has been added to the total debts owed by Beijing S.K. to Lishui Mengxiang. On January 6, 2023, Beijing P.X established Hebei Chuangxiang, a human resources services provider for internship and employment recommendations, as its wholly-owned subsidiary to expand our human resources services business. Hebei Chuangxiang also cooperates with healthcare and elderly care enterprises to deliver daily care, specialized nursing and companion services. On March 5, 2026, Mudanjiang Chuangxiang Health Management Co., Ltd. ("Mudanjiang Chuangxiang") was incorporated in the PRC with 100% ownership by Hebei Chuangxiang.

The following diagram illustrates the corporate structure of us, our subsidiaries and the VIEs, as of the date of the annual report:

![](ea028775901_img1.jpg)

*Notes:*

(1) Lishui
 Mengxiang holds 100% of the sponsorship interests of Lishui International School. On April
 2, 2024, Liandu WFOE entered into a series of contractual arrangements with respect to the
 operation of Lishui International School, pursuant to which Lishui Mengxiang's sponsorship
 interests of Lishui International School became effective on June 25, 2023. As of September
 1, 2025, Lishui International School had four classes and five teachers in total.

(2) Beijing
 P.X. holds 100% of the sponsorship interests of Langfang School. Liandu WFOE entered into
 a series of contractual arrangements with respect to the operation of Langfang School on
 March 28, 2023. The contractual arrangements took effect on January 1, 2022. As of the date
 of the annual report, Langfang City has not released any detailed rules on classification
 registration of private schools and we have not received any relevant notice from the competent
 authorities of Langfang City since January 1, 2022 when Beijing P.X. began to hold the whole
 sponsorship interests of Langfang School. On January 6, 2023, Beijing P.X. established a
 wholly-owned subsidiary, Hebei Chuangxiang, a human resources services provider for internship
 and employment recommendations. It also cooperates with healthcare and elderly care enterprises to
deliver daily care, specialized nursing and companion services. On March 5, 2026, Mudanjiang Chuangxiang Health Management Co., Ltd. ("Mudanjiang Chuangxiang") was
incorporated in the PRC with 100% ownership by Hebei Chuangxiang.

(3) According
 to PRC laws and regulations, entities and individuals who establish private schools are commonly
 referred to as "sponsors" instead of "owners" or "shareholders."
 The economic substance of "sponsorship" with respect to private schools is substantially
 similar to that of ownership with regard to legal, regulatory and tax matters. However, the
 differences between sponsorship and equity ownership can be found in the specific provisions
 of the laws and regulations applicable to sponsors and owners, such as provisions regarding
 the right to receive returns on investment and the right to the distribution of residual
 properties upon termination and liquidation.

Investors are purchasing equity interests in Lixiang, the Cayman Islands holding company, and are not purchasing, and may never directly hold, equity interests in the VIEs. We do not have any equity interests in the VIEs. However, because of the contractual arrangements, we control the VIEs through our PRC subsidiary, Liandu WFOE, and are regarded as the primary beneficiary of the VIEs for accounting purposes under U.S. GAAP. We have consolidated the results of the VIEs in our consolidated financial statements included elsewhere in this annual report on Form 20-F in accordance with U.S. GAAP. For a more detailed discussion of the basis of presentation of our consolidated financial statements, see "*Item 5. Operating and financial Review and Prospects—A. Operating Results—Critical Accounting Policies.*"

These contractual arrangements may not be as effective in providing us with control over the VIEs as equity ownership. If we had equity ownership of the VIEs, we would be able to exercise our rights as a direct or indirect shareholder to effect changes in the board of directors of the VIEs, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level. However, as these contractual arrangements stand now, if the VIEs or their shareholders fail to perform their respective obligations under these contractual arrangements, we cannot exercise shareholders' rights to direct corporate actions as direct ownership would otherwise entail. If the parties under such contractual arrangements refuse to carry out our directions in relation to everyday business operations, we will be unable to maintain effective control over the operations of the VIEs in China under U.S. GAAP. Losing effective control over the VIEs may impair our access to their cash flow from operations, which may reduce our liquidity. If the VIEs or their respective ultimate shareholders fail to perform their obligations under our contractual arrangements, we may have to incur additional costs and expend substantial resources to enforce our contractual arrangements, temporarily or permanently lose control over our primary operations or lose access to our primary sources of revenue.

There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the contractual arrangements and the VIE structure. If the PRC government finds these contractual arrangements or the VIE structure non-compliant with the restrictions on direct foreign investment in the relevant industries, or if the relevant PRC laws, regulations, and rules or the interpretation thereof change in the future, we could be subject to severe penalties or be forced to relinquish our interests in the VIEs or forfeit our rights under the contractual arrangements. Lixiang and investors in the ADSs face uncertainty about potential future actions by the PRC government, which could affect the enforceability of our contractual arrangements, consequently, significantly affect the financial condition and results of operations. If we are unable to claim our right to control the assets of the VIEs, the ADSs may decline in value or become worthless. The PRC government could even disallow the VIE structure completely, which would likely result in a material adverse change in our operations and the ADSs may significantly decline in value or become worthless.

On June 30, 2020, the Standing Committee of the National People's Congress of the PRC (the "Standing Committee of the NPC"), promulgated the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region, or the Law of PRC on Safeguarding National Security in Hong Kong, the interpretation of which involves a degree of uncertainty. The PRC government has also announced recently that it would step up supervision of overseas listed PRC businesses, and check sources of funding for securities investment and control leverage ratios. The PRC government has also opened a probe into several U.S.-listed technology companies focusing on anti-monopoly, financial technology regulation and more recently, with the passage of the PRC Data Security Law, how companies collect, store, process and transfer personal data. Currently these laws (other than the Law of the PRC on Safeguarding National Security in Hong Kong) are expected to apply to China domestic businesses, rather than businesses in Hong Kong which operate under a different set of laws from China. However, there can be no assurance that the government of Hong Kong will not enact similar laws and regulations applicable to companies operating in Hong Kong. For example, the PRC government may pressure the government of Hong Kong to enact similar laws and regulations to those in the PRC, which may seek to exert control over offerings conducted overseas by Hong Kong companies. If any or all of the foregoing were to occur, and if our Hong Kong subsidiary elects to carry out substantive business activities in the future, it could lead to a material adverse change in our operations and limit or hinder our ability to offer securities to overseas investors or remain listed in the United States, which could cause the value of our ADSs to significantly decline or become worthless. See "*Risk Factors—Risks Relating to Doing Business in China—Implementation of the Law of the PRC on Safeguarding National Security in Hong Kong involves uncertainty, and the recent policy pronouncements by the PRC government regarding business activities of U.S.-listed PRC businesses may negatively impact Lixiang's existing and future operations in Hong Kong.*"

**2023 Private Placement**

On August 25, 2023, we entered into a share subscription agreement with each of Xiaoxiong Li, Haibin Gong, Yiqiang Dong, Huafeng Hong, Kin Mang Kung, Shulin Gong, Kim Tuk Yeung, Qunzhu Dong, Jinglong Hong and Canghai Hong (collectively, the "2023 Purchase Agreements"), pursuant to which we agreed to issue and sell to such individual investors a total of 50,000,000 ordinary shares (now redesignated as Class A ordinary shares) with a par value of US$0.0001 each of the Company, in the aggregate consideration of US$6,000,000. Additionally, we filed a registration statement with the SEC covering the resale of the ADSs representing the ordinary shares that would be issued to such investors under the 2023 Purchase Agreements. After such registration statement was declared effective by the SEC and a final prospectus in connection therewith was filed and the other conditions set forth in the Purchase Agreements were satisfied, we issued and sold the 50,000,000 ordinary shares (now redesignated as Class A ordinary shares) to be represented by ADSs to the investors and the transaction was closed on October 6, 2023.

**2023 Reverse Stock Split**

On May 3, 2023, the Company was first notified by the Nasdaq Stock Market LLC ("Nasdaq") of its failure to maintain a minimum bid price of US$1.00 per share for 30 consecutive trading days under Nasdaq Listing Rules 5450(a)(1) (the "Bid Price Rule"), and was given its first 180-day extension, or until October 30, 2023 to regain compliance. On November 30, 2023, the Company was granted an exception until January 31, 2024, to effect a reverse stock split and thereafter regain compliance with the Bid Price Rule. Effective January 3, 2024, the Company effected a 1-for-2 reverse stock split.

On January 24, 2024, the Company received a letter from the Nasdaq Hearing Panel (the "Panel"), notifying the Company that it has regained compliance with the Bid Price Rule, as required by the Panel's decision dated November 30, 2023. Accordingly, the Panel determined to continue the listing of the Company's securities on Nasdaq and this matter was closed.

**2024 Reverse Stock Split**

On May 7, 2024, the Company was notified by Nasdaq of its failure to maintain a minimum bid price of US$1.00 per share for 30 consecutive trading days under the Bid Price Rule, and was given a compliance period of 180-day extension, or until November 4, 2024 to regain compliance. Effective September 30, 2024, the Company effected a 1-for-10 reverse stock split. On October 14, 2024, the Company received a letter from the Nasdaq, notifying the Company that it had regained compliance with the Bid Price Rule and this matter was closed.

**2026 Reverse Stock Split**

On November 18, 2025, the Company was notified by Nasdaq of its failure to maintain a minimum bid price of US$1.00 per share for 30 consecutive trading days under the Bid Price Rule, and was given a compliance period of 180 calendar days, or until May 18, 2026, to regain compliance. On April 1, 2026, the Company announced its plan to change the ratio of its ADS to Class A ordinary shares from the previous ratio of one (1) ADS to one hundred (100) Class A ordinary shares to a new ratio of one (1) ADS to one thousand (1,000) Class A ordinary shares. Effective April 20, 2026, the Company effected a 1-for-10 reverse stock split.

**Variation of Share Capital**

On November 18, 2024, we held our annual general meeting and approved that the authorized share capital of the Company be increased, re-classified and re-designated as follows (together, the "Variation of Share Capital"):

&nbsp;&nbsp;&nbsp;&nbsp;(a) by the creation of an additional
 19,500,000,000 shares with a par value of US$0.0001 each to rank pari passu in all respects with the existing shares, such that following
 such increase of capital, the authorized share capital of the Company shall be US$2,000,000 divided into 20,000,000,000 shares of
 a par value of US$0.0001 each,

&nbsp;&nbsp;&nbsp;&nbsp;(b) by re-designating 19,700,000,000
 shares, including all of the then issued and outstanding shares immediately prior to the October 4, 2024 (except for those held by
 Mengxiang Holdings Limited) and certain authorized but unissued shares, as Class A ordinary shares of a par value of US$0.0001 each,

&nbsp;&nbsp;&nbsp;&nbsp;(c) by re-designating 100,000,000
 shares, including those held by Mengxiang Holdings Limited immediately prior to October 4, 2024 and certain authorized but unissued
 shares, as Class B ordinary shares of a par value of US$0.0001 each, and

&nbsp;&nbsp;&nbsp;&nbsp;(d) by re-designating 200,000,000
 authorized but unissued shares as shares of such class or classes (however designated) as the board of directors may determine in
 accordance with the third amended and restated memorandum and articles of association of the Company,

such that following Variation of Share Capital, the authorized share capital of the Company shall be US$2,000,000 divided into (i) 19,700,000,000 Class A ordinary shares of a par value of US$0.0001 each, (ii) 100,000,000 Class B ordinary shares of a par value of US$0.0001 each, and (iii) 200,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with the third amended and restated memorandum and articles of association of the Company.

**2024 Private Placement**

On November 28, 2024, we entered into a share subscription agreement with each of Jong Tchun Jin, Chong Juinn Hui, Kon Chee Thong, Ong Sin Leong, Man Ken Toh, Vun Siong Wee, Law Kok Leong, Raymond Wee Hian Sen, Chai Kueh Sin, Wong Siong Yee and Siaw Ting Liang (collectively, the "2024 Purchase Agreements"), pursuant to which we agreed to issue and sell to such individual investors a total of 1,800,000,000 Class A ordinary shares with a par value of US$0.0001 each of the Company, in the aggregate consideration of US$34,200,000. Additionally, we filed a registration statement with the SEC covering the resale of the ADSs representing the Class A ordinary shares that would be issued to such investors under the 2024 Purchase Agreements. After such registration statement was declared effective by the SEC and a final prospectus in connection therewith was filed and the other conditions set forth in the Purchase Agreements were satisfied, we issued and sold the 1,800,000,000 Class A ordinary shares to be represented by ADSs to the investors and the transaction was closed in early 2025.

**Permissions Required for Our Operations in China**

In order to conduct our and the VIEs' business and operate schools in China, we and the VIEs are required to obtain and maintain various approvals, licenses and permits and fulfill registration and filing requirements. For example, to establish and operate a high school in the PRC, we are required to obtain a private school operation permit from the local education bureau and register with competent administration authorities to obtain a business license or registration certificate. Such local regulatory authorities may also conduct annual inspection of the schools.

After consulting with our PRC legal counsel, Beijing DeHeng Law offices, we are of the view that, as of the date of the annual report, except for the circumstances which would not in the aggregate have a material adverse effect on our financial conditions, Lixiang, our PRC subsidiaries and the VIEs have received from PRC authorities requisite licenses, permissions or approvals needed to engage in the businesses currently conducted in China. Such licenses and permissions mainly include Business License, Public Institution Legal Person Certificate, Permit for Establishment of Privately-run Schools, Registration Certificate for Private Non-enterprise Entities, Labor Dispatch Operation License, Human Resources Service License and Food Operation License. The following table provides details on the aforementioned licenses and permissions held by our PRC subsidiaries and VIEs.

---

| | | | |
|:---|:---|:---|:---|
| **Company/School** | **License/Permission** | **Issuing Authority** | **Validity** |
| Liandu WFOE | Business License | Market Supervision Administration of Lishui City | Until October 9, 2068 |
| Xianke | Business License | Market Supervision Administration of Jingning Shezu Autonomous County | Long-term |
|  | Food Operation License | Market Supervision Administration of Jingning Shezu Autonomous County | Until August 24, 2025\* |
| Hangzhou Youxi | Business License | Market Supervision Administration of Hangzhou City | Long-term |
| Lishui Mengxiang | Business License | Market Supervision Administration of Lishui City | Until August 16, 2051 |
| Beijing P.X. | Business License | Market Supervision Administration of Chaoyang District, Beijing | Until December 22, 2051 |
| Hainan Jiangcai | Business License | Market Supervision Administration of Hainan Province | Long-term |
| Langfang School | Registration Certificate for Private Non-enterprise Entities | Administrative Examination and Approval Bureau of Langfang City | Until July 7, 2027 |
|  | Permit for Establishment of Privately-run Schools | Department of Human Resources and Social Security of Hebei Province | Until July, 2028 |
|  | Food Operation License | Administrative Examination and Approval Bureau of Anci District, Langfang City | Until October 15, 2027 |
| Hebei Chuangxiang | Business License | China (Hebei) Pilot Free Trade Zone Zhengding Area Management Committee | Long-term |
|  | Labor Dispatch Operation License | China (Hebei) Pilot Free Trade Zone Zhengding Area Management Committee | Until February 27, 2029 |
|  | Human Resources Service License | China (Hebei) Pilot Free Trade Zone Zhengding Area Management Committee | Until January 9, 2028 |
| Lishui International School | Social Service Institution Registration Certificate | Civil Affairs Bureau of Lishui City | Until June 24, 2028 |
|  | Permit for Establishment of Privately-run Schools | Lishui Education Bureau | Until May 31, 2026 |

---

\* Note: According to the directions of Market Supervision Administration of Jingning Shezu Autonomous County, since Xianke does not engage in the catering business and only sells pre-packaged food, it does not need to renew its food operation license.

We cannot assure you that Lixiang, our PRC subsidiaries and the VIEs are always able to successfully update or renew the licenses or permits required for the relevant business in a timely manner or that these licenses or permits are sufficient to conduct all of our and the VIEs' present or future business. As advised by our PRC legal counsel, Beijing DeHeng Law Offices, if Lixiang, our PRC subsidiaries or the VIEs (i) do not receive or maintain required permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and Lixiang, our PRC subsidiaries or the VIEs are required to obtain such permissions or approvals in the future, we could be subject to fines or legal sanctions, which may materially and adversely affect the business, financial condition and results of operations of us and the VIEs.

As of the date of the annual report on Form 20-F, the administrative procedures for changing the sponsor of Langfang School with the PRC governmental authorities, especially for renewing the Permit for Establishment of Privately-run Schools, have not been completed due to the internal procedures of the competent authorities and we and the VIEs are still in the process of active communication with such local authorities. The adjustment of the cooperation arrangement between Beijing P.X. and Hainan Communication Senior Technical School (海南省交通高级技工学校) ("Hainan Technical School") for compliance purposes has not been completed.

For risks relating to permissions and approvals required for the operations of us and the VIEs in China, see *"Risk Factors—Risks Relating to Our Business and Industry—We and the VIEs may not be able to obtain all necessary approvals, licenses and permits and to make all necessary registrations and filings for our and the VIEs' educational and other services in China."*

 ****

***Regulatory Approval from the China Securities Regulatory Commission***

As advised by our PRC legal counsel, Beijing DeHeng Law Offices, as of the date of this annual report, approvals from the China Securities Regulatory Commission, or CSRC, since we are existing listed enterprises, we are not required to fulfill the filing procedures with the CSRC for our initial public offering in 2020. However, we have completed the filing procedures with the CSRC on August 20, 2024 for our 2023 Private Placement. Besides, we have submitted the filing documents to the CSRC in respect of the 2024 Private Placement. As of the date of the annual report, we have not received any notice or determination from the CSRC confirming that we have completed our filing procedures for our 2024 Private Placement. It is uncertain whether such filing can be completed or how long it will take to complete such filing. Any delay in completing such filing procedures might affect the other filing procedures with respect to other applicable circumstances, under the Trial Measures in the future, such as the secondary listing, primary listing, spin-off listing and making overseas offering and listing anew after being delisted from an overseas exchange, which might affect our future public market financings and capital market transactions.

Beijing DeHeng Law Offices, has further advised us that there remains some uncertainty as to how the Provisions on the Merger and Acquisition of Domestic Enterprises by Foreign Investors (Revised in 2009), or the M&A Rules, will be interpreted or implemented in the context of an overseas offering and its opinions summarized above are subject to any new laws, regulations and rules or detailed implementations and interpretations in any form relating to the M&A Rules.

In addition, on February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises, or the Trial Measures, which became effective on March 31, 2023. Subsequently, the CSRC circulated a series of supporting guidance rules, the Notes on the Trial Measures, the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and the relevant CSRC Answers to Reporter Questions on the official website of CSRC, or collectively, the Guidance Rules and Notice. These new regulations propose to establish a new filing-based regime to regulate overseas offerings and listings by Chinese domestic companies.

Under the Trial Measures and the Guidance Rules and Notice, Chinese domestic companies conducting overseas securities offering and listing activities, either in direct or indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offering or listing application. Since the date of effectiveness of the Trial Measures, the domestic enterprises falling within the scope of filing that have been listed overseas or met the following circumstances are existing enterprises: before the effectiveness of the Trial Measures, the application for indirect overseas issuance and listing has been agreed by the overseas regulators or overseas stock exchanges (such as having passed the hearing on the Hong Kong market or registration become effective as agreed on the U.S. market, etc.), and it is not required to perform issuance and listing supervision procedures of the overseas regulators or overseas stock exchanges (such as rehearing on the Hong Kong market, etc.), and the overseas issuance and listing will be completed by September 30, 2023. Existing enterprises are not required to file immediately, and filing should be made as required if they involve refinancing and other filing matters.

If the CSRC or other regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals to maintain the listing status of our ADSs on the Nasdaq or to conduct offerings of securities in the future, we may be unable to obtain such approvals in a timely manner, or at all, and such approvals may be rescinded even if obtained. Any such circumstance could significantly limit or completely hinder our ability to maintain the listing status of our ADSs on the Nasdaq or continue to offer securities to investors and cause the value of our ADSs to significantly decline or be worthless.

 ****

***Regulatory Approval from the Cyberspace Administration of China***

On December 28, 2021, thirteen PRC governmental and regulatory agencies, including the Cyberspace Administration of China, or CAC, promulgated the Measures for Cyber Security Review, which further restates and expands the applicable scope of the cybersecurity review. Pursuant to the Measures for Cyber Security Review, network platform operators grasping the personal information of more than 1 million users must apply with the Cybersecurity Review Office of CAC for a cybersecurity review in order to pursue a foreign listing, and operators of critical information infrastructure purchasing network products and services and online platform operators engaging in data processing activities which affect or may affect national security of the PRC are also obligated to apply for a cybersecurity review. However, the Measures for Cyber Security Review provide no further explanation on the extent of "network platform operator", "affect or may affect national security" or "foreign" listing.

We currently have less than 200 subscribers on our digital platform such as WeChat public account. We have no registered users on our website. We only require and obtain user information after users register with us. As advised by our PRC legal counsel, Beijing DeHeng Law Offices, as of the date of this annual report, we do not need to apply for a cybersecurity review pursuant to the above regulation to maintain the listing status of our ADSs on the Nasdaq, given that (i) we are not in possession of personal information of over one million users and it is also very unlikely that it will reach such threshold in the near future; and (ii) as of the date of the annual report, we have not received any notice or determination from applicable PRC governmental authorities identifying us as a critical information infrastructure operator or an online platform operator engaging in relevant data processing activities which affect or may affect national security of the PRC.

Considering that the Measures for Cyber Security Review empower the cybersecurity review office to initiate cybersecurity review when they believe any particular data processing activities "affect or may affect national security", it is uncertain whether the competent government authorities will deem that our data processing activities may affect national security and thus initiate the cybersecurity review against our business. Although we believe we currently are not required to obtain clearance from the CAC in order to maintain the listing status of our ADSs on the Nasdaq under the Measures for Cyber Security Review or the Opinions on Strictly Cracking Down on Illegal Securities Activities, we face uncertainties as to the interpretation or implementation of such regulations or rules, and if required, whether such clearance can be timely obtained, or at all. If we were to subject to such review in order to maintain the listing status of our ADSs on the Nasdaq, during such review, we may be required to suspend our operation and experience other disruptions to our operations. Cybersecurity review could also result in negative publicity with respect to our company and diversion of our managerial and financial resources. Further, failure of cybersecurity, data privacy and data security compliance could subject us to penalties, damage our reputation and brand, and adversely harm our business and results of operations.

**The Holding Foreign Companies Accountable Act**

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.

Our financial statements contained in this annual report on Form 20-F for the fiscal years ended December 31, 2023, 2024 and 2025 have been audited by Audit Alliance LLP, an independent registered public accounting firm headquartered in Singapore and is among the public accounting firms that are registered with the Public Company Accounting Oversight Board of the United States, or the PCAOB. Such PCAOB-registered accounting firms are subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. On December 16, 2021, the PCAOB issued its determination that the PCAOB is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions, and the PCAOB included in the report of its determination a list of the accounting firms that are headquartered in the PRC or Hong Kong. This list does not include Audit Alliance LLP. As of the date of the annual report, our listing is not affected by the Holding Foreign Companies Accountable Act, or the HFCAA, and related regulations. However, the recent developments would add uncertainties to our listing and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor's audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as related to the audit of our financial statements. In the event it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of inspection could cause our securities to be delisted from the stock exchange. If, in the future, we are identified by the SEC for two consecutive years as a commission-identified issuer whose registered public accounting firm is determined by the PCAOB that it is unable to inspect or investigate completely because of a position taken by one or more authorities in China, the SEC may 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, and this ultimately could result in our ADSs being delisted.

On August 26, 2022, the PCAOB signed a statement of protocol agreement with the CSRC and the PRC Ministry of Finance, or the "Cooperative Agreement." According to the fact sheets published by the PCAOB, the PCAOB has the sole discretion in selecting the subject of its inspections and investigations without input from the Chinese authorities, and that procedures are in place to allow PCAOB inspectors and investigators to review complete audit working papers of accounting firms located in mainland China and Hong Kong.

On December 15, 2022, the PCAOB determined that it was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and vacated its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB may consider the need to issue a new determination.

**Risk Factors Summary**

An investment in our ADSs is subject to a number of risks, including risks related to our business and industry, risks related to our corporate structure, risks related to doing business in China and risks related to our ADSs. The following list summarizes some, but not all, of these risks. Please read the information in the section entitled "Risk Factors" for a more thorough description of these and other risks.

 **

***Risks Relating to Our Business and Industry***

 **

● Significant uncertainties exist in relation to the interpretation and implementation of, or proposed changes to, the PRC laws, regulations and policies regarding the private education industry. See *"Risk Factors—Risks Relating to Our Business and Industry—Significant uncertainties exist in relation to the interpretation and implementation of, or proposed changes to, the PRC laws, regulations and policies regarding the private education industry. In particular, our compliance with the 2021 Implementation Rules for Private Education Laws has materially and adversely affected and may materially and adversely affect our and the VIEs' business, financial condition, results of operations and prospect."* 

● We are in the process of filing the relevant application pursuant to the national and local regulations. See *"Risk Factors—Risks Relating to Our Business and Industry—We and the VIEs are in the process of filing the relevant application pursuant to the national and local regulations (including Zhejiang Province and Lishui City, as well as Hebei Province) of classification registration of private schools. Loss of taxes and fees may incur in the process, which may have an adverse impact on the VIEs' operations."* 

● We may not be able to successfully integrate businesses operated by Lishui International School, Vocational Education Services Providers, Chuangmei Weiye and Hebei Chuangxiang. See *"Risk Factors—Risks Relating to Our Business and Industry—We and the VIEs may not be able to successfully integrate businesses operated by Lishui International School, Vocational Education Services Providers, Chuangmei Weiye and Hebei Chuangxiang, which may cause us to lose the anticipated benefits from such business expansions and to incur significant additional expenses."* 

● 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 our auditor for two consecutive years. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment. As of the date of the annual report, our auditor is not determined by the PCAOB that it is unable to inspect or investigate completely and our listing is not affected by the Holding Foreign Companies Accountable Act and related regulations. However, we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor's audit of our financial statements. See *"Risk Factors—Risks Relating to Our Business and Industry—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 our auditor for two consecutive years. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment."* 

 ****

● We and the VIEs are and may be in the future involved in legal and other disputes and claims arising out of our and VIEs' operations from time to time. See *"Risk Factors—Risks Relating to Our Business and Industry—We and the VIEs are and may be in the future involved in legal and other disputes and claims arising out of our operations from time to time."* 

***Risks Relating to Our Corporate Structure***

● We may be subject to severe penalties if the PRC government finds that the agreements that establish the structure for operating our and the VIEs' business in China do not comply with applicable PRC laws and regulations. See *"Risk Factors—Risks Relating to Our Corporate Structure—Our and the VIEs' private education service business is subject to extensive regulation in China. We and the VIEs may be subject to severe penalties if the PRC government finds that the agreements that establish the structure for operating our and the VIEs' business in China do not comply with applicable PRC laws and regulations."* 

● Our contractual arrangements may not be as effective in providing control over the VIEs as equity ownership. See *"Risk Factors—Risks Relating to Our Corporate Structure—Our contractual arrangements may not be as effective in providing control over the VIEs as equity ownership"* and *"Risk Factors—Risks Relating to Our Corporate Structure—If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, we may be unable to assert our contractual rights over the assets of the VIEs, and our ADSs or Class A ordinary shares may decline in value or become worthless."* 

● We may have to incur additional costs and expend substantial resources to enforce our contractual arrangements. Our contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China. In the event that we are unable to enforce these contractual arrangements, we may not be able to exert effective control over the VIEs for an extended period of time or we may be permanently unable to exert control over the VIEs. See *"Risk Factors—Risks Relating to Our Corporate Structure—We may have to incur additional costs and expend substantial resources to enforce our contractual arrangements, temporarily or permanently lose control over our primary operations or lose access to our primary sources of revenue, if the VIEs or their respective ultimate shareholders fail to perform their obligations under our contractual arrangements."* 

● We rely on dividends and other payments from Liandu WFOE to pay dividends and other cash distributions to our shareholders. See *"Risk Factors—Risks Relating to Our Corporate Structure—We rely on dividends and other payments from Liandu WFOE to pay dividends and other cash distributions to our shareholders."* 

● Lishui International School, and the Vocational Education Services Providers may be subject to limitations on their ability to operate private education or make payments to related parties. See "*Risk Factors—Risks Relating to Our Corporate Structure—Lishui International School, and the Vocational Education Services Providers may be subject to limitations on their ability to operate private education or make payments to related parties.* "

***Risks Relating to Doing Business in China***

● The inherent uncertainties in the PRC legal system could materially and adversely affect us. The PRC legal system continues to evolve rapidly. The interpretations of such laws and regulations may not always be consistent, and enforcement of these laws and regulations involves significant uncertainties and can change quickly with little advance notice, any of which could limit the available legal protections. See "*Risk Factors—Risks Relating to Doing Business in China—The inherent uncertainties in the PRC legal system could materially and adversely affect us.* "

● Investors in the ADSs and the business of us and the VIEs face potential uncertainty from the PRC government's policy. Adverse changes in the PRC economic, political and social conditions as well as laws and government policies, may materially and adversely affect our and the VIEs' business, financial condition, results of operations and growth prospects. See "*Risk Factors—Risks Relating to Doing Business in China—Adverse changes in the PRC economic, political and social conditions as well as laws and government policies, may materially and adversely affect our and the VIEs' business, financial condition, results of operations and growth prospects.* "

● PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC subsidiaries or VIEs. See *"Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC subsidiaries or VIEs, which could materially and adversely affect our liquidity and our ability to fund and expand our and the VIEs' business."* 

● Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers 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 *"Risk Factors—Risks Relating to Doing Business in China—Any actions by the Chinese government, including any decision to intervene or influence the operations of our PRC subsidiaries or the VIE or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiaries or the VIE, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless.* 

● There is significant uncertainty about the application and interpretation of the Law on the Promotion of Private Education, the 2021 Implementation Rules and their detailed implementation rules and regulations. See *"Risk Factors—Risks Relating to Doing Business in China—Based on the recent development of PRC law, there is significant uncertainty about the application and interpretation of the Law on the Promotion of Private Education, the 2021 Implementation Rules and their detailed implementation rules and regulations. We and the VIEs may be subject to significant limitations on our ability to engage in the private education business, acquire private schools, or receive payments from the VIEs and may otherwise be materially and adversely affected by changes in PRC laws and regulations."* 

● To the extent cash is generated in our PRC Subsidiaries or the VIEs, and may need to be used to fund operations outside of mainland China, such funds may not be available due to limitations placed by the PRC government. Furthermore, to the extent assets (other than cash) in our or the VIEs' business are located in the PRC or held by a PRC entity, the assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of us and our subsidiaries and the VIEs to transfer assets by the PRC government. If certain PRC laws and regulations, including existing laws and regulations and those enacted or promulgated in the future were to become applicable to our Hong Kong subsidiary in the future, and to the extent cash is generated in our Hong Kong subsidiary, and to the extent assets (other than cash) in our business are located in Hong Kong or held by a Hong Kong entity and may need to be used to fund operations outside of Hong Kong, such funds or assets may not be available due to interventions in or the imposition of restrictions and limitations on the ability of us and our subsidiaries and the VIEs to transfer funds or assets by the PRC government. Furthermore, there can be no assurance that the PRC government will not intervene or impose restrictions or limitations on our ability to transfer or distribute cash within its organization, which could result in an inability or prohibition on making transfers or distributions to entities outside of mainland China and Hong Kong and adversely affect its business. See "*Risk Factors—Risks Related to Doing Business in China—Restrictions on currency exchange under PRC laws may limit our ability to convert cash derived from our operating activities into foreign currencies and may materially and adversely affect the value of your investment*."

 ****

***Risks Relating to Our ADSs***

● The trading price of our ADSs may be volatile and the voting rights of holders of our ADSs are limited by the terms of the deposit agreement. See *"Risk Factors—Risks Relating to Our ADSs—The trading price of our ADSs may be volatile, which could result in substantial losses to you," "Risk Factors—Risks Relating to Our ADSs—The voting rights of holders of our ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct how the Class A ordinary shares represented by your ADSs are voted,"* and *"Risk Factors—Risks Relating to Our ADSs—The depositary shall deem you to have instructed the depositary to give us a discretionary proxy to vote the Class A ordinary shares underlying your ADSs if you do not give timely voting instructions to the depositary to direct how the Class A ordinary shares underlying your ADSs are voted, except in limited circumstances, which could adversely affect your interests."* 

● Our dual-class share structure with different voting rights will limit our ADSs holders' rights and affect the trading price and liquidity of our ADSs. See *"Risk Factors—Risks Relating to Our ADSs—Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial," "Risk Factors—Risks Relating to Our ADSs— Our dual-class voting structure may render the ADSs representing our Class A ordinary shares ineligible for inclusion in certain stock market indices, and thus adversely affect the trading price and liquidity of the ADSs."* 

**Financial Information Related to the VIEs**

The following table presents the condensed consolidating schedule of financial position of our parent company, VIEs and their consolidated subsidiaries, Liandu WFOE that is the primary beneficiary of the VIEs, and other subsidiaries as of December 31, 2024 and 2025.

s

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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** |
| <br>**Condensed Consolidating Schedule of Financial Position** | **Parent** | **VIEs and <br> their <br> consolidated <br> subsidiaries** | **Liandu <br> WFOE which<br> is the primary <br> beneficiary of <br> the VIEs** | **Other <br> subsidiaries** | **Elimination <br> adjustment** | **Total** |
|  | | | **RMB** | **RMB** | | |
| **Assets** | | | | | | |
| Cash and cash equivalents | 215770215 | 3897892 | 854904 | 201227 |  | 220724238 |
| Inter-group balance due from VIEs and subsidiaries | 43130675 | 15356140 | 3105881 | 24159107 | (85751803) |  |
| Prepayments and other current assets |  | 4426665 | 365085 | 1054980 |  | 5846730 |
| Other current assets |  | 156770 |  |  |  | 156770 |
| Amounts due from a related party | - | 9542000 | - | - | - | 9542000 |
| **Total current assets** | 258900890 | 33379467 | 4325870 | 25415314 | (85751803) | 236269738 |
| Property and equipment, net |  | 146646206 |  | 603848 |  | 147250054 |
| Land use right |  | 33927238 |  |  |  | 33927238 |
| Other non-current assets |  | 53014362 |  | 155938 |  | 53170300 |
| Investments in subsidiaries | - | - | 3081121 | 1388736 | (4469857) | - |
| **Total non-current assets** | - | 233587806 | 3081121 | 2148522 | (4469857) | 234347592 |
| **Total assets** | 258900890 | 266967273 | 7406991 | 27563836 | (90221660) | 470617330 |
| Short-term borrowings |  | 84000000 |  |  |  | 84000000 |
| Inter-group balance due to VIEs and subsidiaries | 46586500 | 20645000 | 19805002 |  | (87036502) |  |
| Accrued liabilities and other current liabilities | 31932 | 7457837 |  |  |  | 7489769 |
| Other current liabilities |  | 19304474 | 38078 | 72096 |  | 19414648 |
| Investment deficit in subsidiaries and VIEs | 66144375 |  |  |  | (66144375) |  |
| Amounts due to a related party | - | 1817485 | - | - | - | 1817485 |
| **Total current liabilities** | 112762807 | 133224796 | 19843080 | 72096 | (153180877) | 112721902 |
| Amounts due to Affected Entity, non-current |  | 158514326 |  | 14531837 |  | 173046163 |
| Other non-current liabilities | - | 39352135 | - | - | - | 39352135 |
| **Total non-current liabilities** | - | 197866461 | - | 14531837 | - | 212398298 |
| **Total liabilities** | 112762807 | 331091257 | 19843080 | 14603933 | (153180877) | 325120200 |
| Non-controlling interests |  | (640953) |  |  |  | (640953) |
| **Total shareholders' equity/(deficit)** | 146138083 | (64123984) | (12436089) | 12959903 | 62959217 | 145497130 |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **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** |
| <br>**Condensed Consolidating Schedule of Financial Position** | **Parent** | **VIEs and<br> their<br> consolidated<br> subsidiaries** | **Liandu<br> WFOE which is the primary<br> beneficiary of<br> the VIEs** | **Other<br> subsidiaries** | **Elimination<br> adjustment** | **Total** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| **Assets** | | | | | | |
| Cash and cash equivalents | 27742 | 11699127 | 785359 | 270623 |  | 12782851 |
| Inter-group balance due from VIEs and subsidiaries | 374863600 |  | 3105881 | 25329437 | (403298918) |  |
| Prepayments and other current assets |  | 11054550 | 216917 | 1032412 |  | 12303879 |
| Other current assets |  | 164207 |  |  |  | 164207 |
| Amounts due from related party | - | 8692000 | - | 240000 | - | 8932000 |
| **Total current assets** | 374891342 | 31609884 | 4108157 | 26872472 | (403298918) | 34182937 |
| Property and equipment, net |  | 142306682 |  | 464718 |  | 142771400 |
| Land use right |  | 32980543 |  |  |  | 32980543 |
| Other non-current assets |  | 61885822 |  | 125262 |  | 62011084 |
| Investments in Equity Securities | 44974376 |  |  |  |  | 44974376 |
| Investments in subsidiaries | - | - | - | 4538519 | (4538519) | - |
| **Total non-current assets** | 44974376 | 237173047 | - | 5128499 | (4538519) | 282737403 |
| **Total assets** | 419865718 | 268782931 | 4108157 | 32000971 | (407837437) | 316920340 |
| Short-term borrowings |  | 84000000 |  |  |  | 84000000 |
| Inter-group balance due to VIEs and subsidiaries | 48001814 | 309551096 | 20055002 |  | (377607912) |  |
| Accrued liabilities and other current liabilities | 31223 | 11046243 |  | 3543 |  | 11081009 |
| Other current liabilities |  | 27374401 | 46923 | 150656 |  | 27571980 |
| Investment deficit in subsidiaries and VIEs | 218625928 |  |  |  | (218625928) |  |
| Amounts due to related party |  | 1621303 |  |  |  | 1621303 |
| Amounts due to Affected Entity, current | - | - | - | 26430695 | (26430695) | - |
| **Total current liabilities** | 266658965 | 433593043 | 20101925 | 26584894 | (622664535) | 124274292 |
| Investment deficit in subsidiaries |  |  | 1286695 |  | (1286695) |  |
| Other non-current liabilities | - | 39439295 | - | - | - | 39439295 |
| **Total non-current liabilities** | - | 39439295 | 1286695 | - | (1286695) | 39439295 |
| **Total liabilities** | 266658965 | 473032338 | 21388620 | 26584894 | (623951230) | 163713587 |
| **Total shareholders' equity/(deficit)** | 153206753 | (204249407) | (17280463) | 5416077 | 216113793 | 153206753 |

---

The following table presents the condensed consolidating schedule of results of operations and cash flows of our parent company, VIEs and their consolidated subsidiaries, Liandu WFOE that is the primary beneficiary of the VIEs, and other subsidiaries for the years ended December 31, 2023, 2024 and 2025.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **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** |
| <br>**Condensed Consolidating Schedule of Results of Operations** | **Parent** | **VIEs and <br> their <br> consolidated <br> subsidiaries** | **Liandu <br> WFOE which<br> is the primary <br> beneficiary of<br> the VIEs** | **Other <br> subsidiaries** | **Elimination <br> adjustment** | **Total** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| **Continuing operation** | | | | | | |
| Revenue |  | 48374296 | 2441120 |  |  | 50815416 |
| Cost of revenue |  | (46182644) | (662871) | (4799) |  | (46850314) |
| General and administrative expenses | (1292974) | (110694880) | (652759) | (621002) |  | (113261615) |
| Sales and marketing expenses | - | (18300) | - | - | - | (18300) |
| **(Loss)/income from operations** | (1292974) | (108521528) | 1125490 | (625801) | - | (109314813) |
| Other income, net | 336 | 8263054 | 569101 | 6693 |  | 8839184 |
| Equity in (loss)/income of subsidiaries and VIEs | (125338010) | - | (3518720) | 1824129 | 127032601 | - |
| **(Loss)/income before income tax expenses** | (126630648) | (100258474) | (1824129) | 1205021 | 127032601 | (100475629) |
| Income tax expense | - | (216120) | - | (2903456) | - | (3119576) |
| **Loss from continuing operations, net of tax** | **(126630648)** | **(100474594)** | **(1824129)** | **(1698435)** | **127032601** | **(103595205)** |
| **Loss from discontinued operations, net of tax** | **-** | **(23394661)** | **-** | **-** | **-** | **(23394661)** |
| **Net loss** | **(126630648)** | **(123869255)** | **(1824129)** | **(1698435)** | **127032601** | **(126989866)** |
| **Condensed Consolidating Schedule of Cash Flows** |  |  |  |  |  |  |
| Net cash (used in)/provided by operating activities | (42725890) | (16213871) | 283574 | (543288) |  | (59199475) |
| Net cash used in investing activities |  | (7576283) |  |  |  | (7576283) |
| Net cash provided by financing activities | 41856435 | 2227473 |  |  |  | 44083908 |
| Effect of exchange rate changes on cash and cash equivalents | 2947203 |  |  | 23350 |  | 2970553 |
| Net increase/(decrease) in cash and cash equivalents | 2077748 | (21562681) | 283574 | (519938) |  | (19721297) |
| Cash and cash equivalents at the beginning of year | 210769439 | 32873528 | 1026430 | 1601045 |  | 246270442 |
| Cash and cash equivalents of discontinued operations–beginning of year |  | 491106 |  |  |  | 491106 |
| Cash and cash equivalents at the end of year | 212847187 | 11801953 | 1310004 | 1081107 |  | 227040251 |
| Less cash and cash equivalents of discontinued operations–end of year |  |  |  |  |  |  |
| Cash and cash equivalents of continuing operations–end of year | 212847187 | 11801953 | 1310003 | 1081108 |  | 227040251 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **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** |
| <br>**Condensed Consolidating Schedule of Results of Operations** | **Parent** | **VIEs and<br> their<br> consolidated<br> subsidiaries** | **Liandu <br> WFOE which<br> is the primary<br> beneficiary of<br> the VIEs** | **Other<br> subsidiaries** | **Elimination<br> adjustment** | **Total** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Revenue |  | 32139658 | 661002 |  |  | 32800660 |
| Cost of revenue |  | (35844133) | (2810) | (4162) |  | (35851105) |
| General and administrative expenses | (2647144) | (18717355) | (577702) | (856964) |  | (22799165) |
| Sales and marketing expenses | - | (111780) | - | - | - | (111780) |
| **(Loss)/income from operations** | (2647144) | (22533610) | 80490 | (861126) | - | (25961390) |
| Other income, net | 18 | 1255874 | 1570 | 1895 |  | 1259357 |
| Equity in (loss)/income of subsidiaries and VIEs, net | (21980540) | - | (822165) | 740105 | 22062600 | - |
| **Loss before income tax expenses** | (24627666) | (21277736) | (740105) | (119126) | 22062600 | (24702033) |
| Income tax expense | - | - | - | - | - | - |
| **Net loss** | **(24627666)** | **(21277736)** | **(740105)** | **(119126)** | **22062600** | **(24702033)** |
| **Condensed Consolidating Schedule of Cash Flows** |  |  |  |  |  |  |
| Net cash used in operating activities | (861999) | (16099979) | (455100) | (904713) |  | (18321791) |
| Net cash used in investing activities |  | (554082) |  |  |  | (554082) |
| Net cash provided by financing activities |  | 8750000 |  |  |  | 8750000 |
| Effect of exchange rate changes on cash and cash equivalents | 3785027 |  |  | 24833 |  | 3809860 |
| Net increase/(decrease) in cash and cash equivalents | 2923028 | (7904061) | (455100) | (879880) |  | (6316013) |
| Cash and cash equivalents at the beginning of year | 212847187 | 11801953 | 1310004 | 1081107 |  | 227040251 |
| Cash and cash equivalents at the end of year | 215770215 | 3897892 | 854904 | 201227 |  | 220724238 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **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** |
| <br>**Condensed Consolidating Schedule of Results of Operations** | **Parent** | **VIEs and their consolidated subsidiaries** | **Liandu<br> WFOE which<br> is the primary<br> beneficiary of<br> the VIEs** | **Other<br> subsidiaries** | **Elimination<br> adjustment** | **Total** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| **Continuing operation** | | | | | | |
| Revenue |  | 30606575 |  | 226415 |  | 30832990 |
| Cost of revenue |  | (42762681) |  | (399) |  | (42763080) |
| General and administrative expenses | (2160564) | (19737374) | (478124) | (1092308) |  | (23468370) |
| Selling and marketing expenses | - | (985278) | - | - | - | (985278) |
| **Loss from operations** | (2160564) | (32878758) | (478124) | (866292) | - | (36383738) |
| Other income, net | (151) | (1260268) | 1566 | 1603 |  | (1257250) |
| Impairment loss on Investments | (83621753) |  |  |  |  | (83621753) |
| Equity in (loss)/income of subsidiaries and VIEs, net | (36121226) | - | (849096) | 1325654 | 35644668 | - |
| **(Loss)/income before income tax expenses** | (121903694) | (34139026) | (1325654) | 460965 | 35644668 | (121262741) |
| Income tax expense | - | - | - | - | - | - |
| **Net (loss)/income** | **(121903694)** | **(34139026)** | **(1325654)** | **460965** | **35644668** | **(121262741)** |
| **Condensed Consolidating Schedule of Cash Flows** |  |  |  |  |  |  |
| Net cash (used in)/provided by operating activities | (331856004) | 17518687 | (69545) | 103969 |  | (314302893) |
| Net cash used in investing activities | (128596129) | (13617452) |  |  |  | (142213581) |
| Net cash provided by financing activities | 250422660 | 3900000 |  |  |  | 254322660 |
| Effect of exchange rate changes on cash and cash equivalents | (5713000) |  |  | (34573) |  | (5747573) |
| Net (decrease)/increase in cash and cash equivalents | (215742473) | 7801235 | (69545) | 69396 |  | (207941387) |
| Cash and cash equivalents at the beginning of year | 215770215 | 3897892 | 854904 | 201227 |  | 220724238 |
| Cash and cash equivalents at the end of year | 27742 | 11699127 | 785359 | 270623 |  | 12782851 |

---

**Cash and Asset Flows through Our Organization**

The Company may (i) transfer the net proceeds into Liandu WFOE to pay in their initially subscribed registered capital, and (ii) provide loans to Liandu WFOE and the VIEs. The Company and Liandu WFOE may also establish and/or acquire new foreign-invested enterprises in China in order to facilitate our business expansion and make additional investments by the way of paying in their registered capital and providing loans to them. However, we cannot assure you that our intended investments in these entities will always succeed as we planned, or at all. According to the 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, 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. See *"Item 8. Financial Information—Dividend Policy."*

To the extent cash is generated in our PRC Subsidiaries, and may need to be used to fund operations outside of mainland China, such funds may not be available due to limitations placed by the PRC government. Furthermore, to the extent assets (other than cash) in our business are located in the PRC or held by a PRC entity, the assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of us and our subsidiaries to transfer assets by the PRC government. See *"Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—Restrictions on currency exchange under PRC laws may limit our ability to convert cash derived from our operating activities into foreign currencies and may materially and adversely affect the value of your investment."*

The cash management policies are a part of the Company's internal control procedures. The cash management policies enable the Company to formalize the procedures on the handling, depositing, receiving, safeguarding and recording of cash transfers. The cash management policies provide reasonable assurance for the consolidated financial statements, rather than imposing any restrictions or limitations on the cash transferred among the Company, its subsidiaries, the consolidated VIEs and its shareholders, as the case may be. Each cash transfer requires approval of the financial manager. Cash transfer in excess of RMB0.5 million (US$0.08 million) but less than RMB1 million (US$0.16 million) shall be reviewed and approved by the Chief Financial Officer of the Company. Cash transfer in excess of RMB1 million (US$0.16 million) shall be reviewed and approved by both Chief Financial Officer and Chief Executive Officer of the Company. For the condensed consolidating schedule and the consolidated financial statement, see "*Item 3. Key Information—Financial Information Related to the VIEs*."

The Company may plan to utilize part of the proceeds from our initial public offering by way of paying in the initially subscribed registered capital of Liandu WFOE. The amount of funds in the form of capital contribution into Liandu WFOE and other PRC subsidiaries the Company or Liandu WFOE may establish in the future is subject to the amount of their initially subscribed registered capital. Currently, the initially subscribed registered capital of Liandu WFOE is US$1 million which will be fully paid before the deadline prescribed in its articles of association. If the initially subscribed registered capital is not sufficient to allow our intended capital injection, under the current PRC laws and regulation, Liandu WFOE may increase the registered capital and complete the relevant procedures which include (i) altering our registration with local branch of the State Administration for Industry and Commerce of the PRC, or the SAIC, and (ii) filing the alteration report to local counterparts of the Ministry of Commerce of the PRC, or the MOFCOM. In addition, capital contribution to the schools must be approved by the Ministry of Civil Affairs of the PRC or the MCA or their respective local counterparts.

The Company may also plan to provide loans to Liandu WFOE and Lishui Mengxiang. According to the current PRC laws and regulations, the maximum amount of the loans provided to a PRC enterprise is up to 3 times (or the prevailing statutory multiples) of the borrower's net assets set out in its latest audited financial statement. As a result, the loans that the Company may provide to Liandu WFOE and Lishui Mengxiang are in an amount of up to 2 times (or the prevailing statutory multiples) of their respective net assets set out in their latest audited financial statements. Liandu WFOE and Lishui Mengxiang are required to file the information of their cross-border financing arrangements with local branch of the State Administration of Foreign Exchange of the PRC, or the SAFE, after the loan agreements are signed and before three working days prior to the fund withdrawal. In addition, for loans carrying a term of more than one year, Liandu WFOE and Lishui Mengxiang may be required to complete the relevant filing and registration formalities to the National Development and Reform Commission of the PRC, or the NDRC. Currently, the Company's business operation is conducted through Liandu WFOE's contractual arrangements with the VIEs and Liandu WFOE does not engage in its own business. As such, Liandu WFOE's current net assets are in close approximation to its paid-up registered capital. Pursuant to the relevant PRC laws and regulations, the estimated amount of loans the Company will provide to Liandu WFOE will be approximately US$30 million which is 2 times of its current enlarged registered capital, assuming that Liandu WFOE's net assets set out in its latest audited financial statements equals to its paid-up registered capital at the time when the loans are made.

For the years ended December 31, 2023, 2024 and 2025, the cash flows that have occurred between the Company, the VIEs and their consolidated subsidiaries, Liandu WFOE which is the primary beneficiary of the VIEs, and other subsidiaries are summarized as the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended <br> December 31,** | **For the years ended <br> December 31,** | **For the years ended <br> December 31,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Cash transfer from Liandu WFOE to VIEs and their consolidated subsidiaries | 15800000 |  | 20000000 |
| Cash transfer from VIEs and their consolidated subsidiaries to Liandu WFOE | 15550000 |  | 20250000 |
| Cash paid by Lianwai School to other subsidiaries for sofeware service |  |  | 120000 |
| Cash transfer from other subsidiaries to VIEs and their consolidated subsidiaries | 650000 | 100000 |  |
| Cash transfer from VIEs and their consolidated subsidiaries to other subsidiaries | 20150000 |  | 3890000 |
| Cash transfer from other subsidiaries to parent company |  |  | 290000 |

---

From January 1, 2026 to the date of this annual report, cash is transferred among the Company, Liandu WFOE, the VIEs and their consolidated subsidiaries, in the following manners: (i) VIEs and their consolidated subsidiaries provided a total of RMB100,000 in cash to other subsidiaries ; (ii) other subsidiaries provided a total of RMB300,000 in cash to the Company; (iii) VIEs and their consolidated subsidiaries provided a total of RMB1,000,000 in cash to Liandu WFOE and (iv) other subsidiaries provided a total of RMB500,000 in cash to VIEs and their consolidated subsidiaries. The aforementioned cash transfers were generally for working capital purpose among the Liandu WFOE, VIEs and their consolidated subsidiaries, and other subsidiaries.

As of the date of the annual report, other than the cash transfer described hereto, there were no transfer of other assets between the Company, Liandu WFOE, VIEs and their consolidated subsidiaries have never made any dividends or distributions to Lixiang. Similarly, the Company has not declared or made any dividend or other distribution to its shareholders, including U.S. investors to date. Furthermore, the Company, Liandu WFOE, the VIEs and their consolidated subsidiaries have not any plan to pay any dividends in cash in the foreseeable future. The service fees and expenses owed under the VIEs agreements would be settled by VIEs to Liandu WFOE through negotiation.

The Company, Liandu WFOE, the VIEs and their consolidated subsidiaries maintained cash management policies that dictate the purpose, amount, appropriate internal control procedures on the handling, depositing, receiving, transferring, safeguarding, and documentation and recording of cash transfers. Subject to the amounts of cash transfer and the nature of the use of funds, requisite internal approval shall be obtained prior to each cash transfer. Specifically, all transactions require the approval of the financial manager. As for the large quantity transactions, the Chief Financial Officer and Chief Executive Officer are required to conduct regular review and approve.

In considering any distribution of the earnings of the subsidiaries to their respective holding companies, we must consider their respective financial conditions before making a decision. There are no other significant restrictions and limitations on our ability to distribute earnings from our businesses, including our subsidiaries and the VIEs, to the holding company and U.S. investors or our ability to settle amounts owed. Except the aforementioned restrictions on our PRC Subsidiaries, there are no significant restrictions on foreign exchange or our ability to transfer cash between entities within our group, across borders, or to U.S. investors.

**Restrictions and Limitations on Transfer of Cash and dividend distribution**

The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. The majority of our and the VIEs' income is received in Renminbi and shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from SAFE as long as certain procedural requirements are met. Approval from appropriate government authorities is required if Renminbi is converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders.

Our cash dividends, if any, will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax.

Relevant PRC laws and regulations permit the PRC companies to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Additionally, the Company's PRC subsidiaries and the VIEs can only distribute dividends upon approval of the shareholders after they have met the PRC requirements for appropriation to the statutory reserves, subject to further restrictions applicable to non-profit private schools. Under PRC laws, rules and regulations, each of our subsidiaries incorporated in China is required to set aside at least 10% of its after-tax profits each year, after making up for previous years' accumulated losses, if any, to fund certain statutory reserves, until the aggregate amount of such fund reaches 50% of its registered capital.

As a result of these and other restrictions under the PRC laws and regulations, the PRC subsidiaries and the VIEs are restricted to transfer a portion of their net assets to the Company either in the form of dividends, loans or advances. Even though the Company currently does not require any such dividends, loans or advances from the PRC subsidiaries and the VIEs for working capital and other funding purposes, the Company may in the future require additional cash resources from its PRC subsidiaries and the VIEs due to changes in business conditions, to fund future acquisitions and developments, or merely declare and pay dividends to or distributions to the Company's shareholders. There are currently no restrictions on foreign exchange and our ability to transfer cash among our Company and our principal subsidiaries and the consolidated VIEs, as applicable, or to investors.

In addition, in recent years, the PRC government has adopted a number of policies to regulate the collection of education fees and related party transactions by private education institutions. If, in the future, the relevant PRC government authorities tighten control on fee collection and related party transactions or promulgate stricter laws and regulations governing private education, the VIEs' ability to negotiate service prices and make payment of service fees to the Liandu WFOE may be affected.

**A. Selected Financial Data**

The following summary consolidated statements of operations and comprehensive loss for the fiscal years ended December 31, 2023, 2024 and 2025 and summary consolidated balance sheets as of December 31, 2024 and 2025 have been derived from our audited consolidated financial statements included in this annual report on Form 20-F beginning on page F-1. Our consolidated financial statements are prepared and presented in accordance with the generally accepted accounting principles in the United States of America, or US GAAP. Our historical results are not necessarily indicative of results expected for future periods. 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 the related notes and "*Item 5. Operating and Financial Review and Prospects*" below.

The following table presents our summary consolidated statements of operations and comprehensive loss for the fiscal years ended December 31, 2023, 2024 and 2025.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$** |
| **Net revenues:** |  |  |  |  |
| Revenue from third parties | 50061131 | 32046375 | 30229432 | 4322751 |
| Revenue from a related party | 754285 | 754285 | 603558 | 86308 |
| **Total net revenues** | **50815416** | **32800660** | **30832990** | **4409059** |
| Cost of revenues | (46850314) | (35851105) | (42763080) | (6115039) |
| **Gross profit/(loss)** | **3965102** | **(3050445)** | **(11930090)** | **(1705980)** |
| **Operating expenses:** |  |  |  |  |
| General and administrative expenses | (25445401) | (22799165) | (23468370) | (3355932) |
| Selling and marketing expenses | (18300) | (111780) | (985278) | (140893) |
| Impairment loss on goodwill | (22677921) |  |  |  |
| Expected credit loss for receivables and other assets | (65138293) | - | - | - |
| **Total operating expenses** | **(113279915)** | **(22910945)** | **(24453648)** | **(3496825)** |
| **Operating loss** | **(109314813)** | **(25961390)** | **(36383738)** | **(5202805)** |
| Interest expense | (3634721) | (2860956) | (3456630) | (494292) |
| Impairment loss on Investments |  |  | (83621753) | (11957752) |
| Interest income | 134011 | 289865 | 9301 | 1330 |
| Other income, net | 12339894 | 3830448 | 2190079 | 313177 |
| **Loss before income tax expense** | **(100475629)** | **(24702033)** | **(121262741)** | **(17340342)** |
| Income tax expenses | (3119576) | - | - | - |
| **Loss from continuing operations, net of tax** | **(103595205)** | **(24702033)** | **(121262741)** | **(17340342)** |
| **Loss from discontinued operation, net of tax** | **(23394661)** | **-** | **-** | **-** |
| **Net loss** | **(126989866)** | **(24702033)** | **(121262741)** | **(17340342)** |
| **Net loss attributable to Lixiang Education Holding Co., Ltd. shareholders** | **(126630648)** | **(24627666)** | **(121903694)** | **(17431997)** |
| **Net (loss)/income attributable to non-controlling interests** | **(359218)** | **(74367)** | **640953** | **91655** |
| **Other comprehensive income/(loss):** |  |  |  |  |
| Foreign currency translation adjustment, net of nil tax | 2970553 | 3809859 | (5747573) | (821892) |
| **Comprehensive loss** | **(124019313)** | **(20892174)** | **(127010314)** | **(18162234)** |
| Total comprehensive (loss)/income attributable to non-controlling interests | (359218) | (74367) | 640953 | 91655 |
| **Total comprehensive loss attributable to Lixiang Education Holding Co., Ltd. shareholders** | (123660095) | (20817807) | (127651267) | (18253889) |
| Loss per ordinary share attributable to Lixiang Education Holding Co., Ltd. shareholders from continuing operations | (1.32) | (0.21) | (0.06) | (0.01) |
| **—Basic and diluted** |  |  |  |  |
| Loss per ordinary share attributable to Lixiang Education Holding Co., Ltd. shareholders from discontinued operation | (0.30) |  |  |  |
| **—Basic and diluted** |  |  |  |  |
| Weighted average number of ordinary shares outstanding | 78584808 | 116667000 | 1911667000 | 1911667000 |

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The following table presents our summary consolidated balance sheet data as of December 31, 2024 and 2025.

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| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **US$** |
| **Selected Consolidated Balance Sheet Data** |  |  |  |
| Cash and cash equivalents | 220724238 | 12782851 | 1827923 |
| **TOTAL ASSETS** | 470617330 | 316920340 | 45319005 |
| **TOTAL LIABILITIES** | 325120200 | 163713587 | 23410731 |
| Class A ordinary shares (USD$0.0001 par value; 19,700,000,000 shares authorized, 71,667,000 and 1,871,667,000 shares issued and outstanding as of December 31, 2024 and 2025, respectively) | 50584 | 1368598 | 195707 |
| Class B ordinary shares (USD$0.0001 par value; 100,000,000 shares authorized, 45,000,000 and 45,000,000 shares issued and outstanding as of December 31, 2024 and 2025, respectively) | 30508 | 30508 | 4363 |
| **TOTAL SHAREHOLDERS' EQUITY** | 145497130 | 153206753 | 21908274 |

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**B. Capitalization and Indebtedness**

Not applicable.

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

Not applicable.

**D. Risk Factors**

An investment in our ADSs involves a number of risks, including risks relating to our business and industry, risks relating to our corporate structure, risks relating to doing business in China and risks relating to our ADSs. A description of factors that could materially affect our and the VIEs' business, financial condition or operating results is provided below.

**Risks Relating to Our Business and Industry**

 ****

***Significant uncertainties exist in relation to the interpretation and implementation of, or proposed changes to, the PRC laws, regulations and policies regarding the private education industry. In particular, our compliance with the 2021 Implementation Rules for Private Education Laws has materially and adversely affected and may materially and adversely affect our and the VIEs' business, financial condition, results of operations and prospect.***

The private education industry in the PRC is subject to various laws and regulations including among others the amended Law for Promoting Private Education of the PRC, or the Promotion Law, promulgated in December 2002, which are subject to changes to accommodate the development of the education industry, in particular, the private education industry from time to time. On November 7, 2016, the Decision of the Standing Committee of the National People's Congress on Amending the Private Education Promotion Law of the PRC, or the Decision, amended the Promotion Law. On December 29, 2018, the Promotion Law was further amended. Under the Decision and the current Promotion Law, private schools may be established as non-profit or for-profit entities. The sponsor of a non-profit private school shall not receive proceeds from the running of the school and the cash surplus of the school shall be retained for the running of the school, while the sponsor of a for-profit private school may gain proceeds from the running of the school, and the cash surplus of the school may be distributed in accordance with applicable PRC laws.

The Opinions on Further Strengthening and Regulating the Administration of Education Fees, or the Education Fees Opinions, which were issued on August 17, 2020 by the relevant authorities, reiterate the provision from the Decision that the sponsors of non-profit privately-run schools shall not gain proceeds from the running of schools. The Education Fees Opinions further underline that the sponsors of non-profit privately-run schools and non-profit privately-run sino-foreign cooperative educators shall be prohibited from obtaining proceeds from the running of schools such as tuition income, distributing school balances (residual assets) or transferring proceeds from the running of schools through related-party transactions or affiliated parties or other means.

On April 7, 2021, the State Council promulgated the 2021 Implementation Rules for Private Education Laws, which became effective on September 1, 2021. The 2021 Implementation Rules impose restrictions on the operation and management of private schools and the capital operation of private education. Pursuant to the 2021 Implementation Rules, (i) foreign-invested enterprises established in China and social organizations whose actual controllers are foreign parties shall not sponsor, participate in or actually control private schools that provide compulsory education; (ii) social organizations or individuals shall not control any private school that provides compulsory education or any non-profit private school that provides pre-school education by means of merger, acquisition, contractual arrangements, etc.; (iii) private schools providing compulsory education shall not conduct any transaction with any interested related party; and (iv) for any change of school sponsor of a private school, an alteration agreement shall be entered into but shall not involve the legal property of the school, nor shall it affect the development of the school, or damage the rights and interests of teachers and students; the existing school sponsor may, in accordance with its lawful rights and interests, enter into agreements with the successional school sponsor to stipulate the income from the alteration.

The 2021 Implementation Rules have had significant impacts on our and the VIEs' business operations and our results of operations. As a result of the effectiveness of the 2021 Implementation Rules, we have lost control over Lianwai School which primarily provides primary and middle education to the students. We had ceased to recognize revenues for all activities related to Lianwai School and had discontinued all business activities with Lianwai School by August 31, 2021. We deconsolidated Lianwai School commencing from September 1, 2021 and presented it as a discontinued operation in current and comparative period financial statements. To minimize disruptions to existing students enrolled in Lianwai School, we and the VIEs continued to offer essential services to the students. As a result, our and the VIEs' ability to engage in the private not-for-profit education in China has been materially and adversely affected, and we cannot assure you that we will be able to restore such ability, which could materially and adversely affect our and the VIEs' business, prospects, results of operations and financial condition. We and the VIEs have established an education services network through Liandu WFOE and its subsidiaries in which Lixiang holds equity ownership interests, and their contractual arrangements, commonly known as the VIE structure, with the VIEs incorporated in China. For details regarding the changes of our subsidiaries and the VIEs, see "*Item 4. Information on the Company—A. History and Development of the Company.*"

There are substantial uncertainties regarding the interpretation and application of the Decision, the current Promotion Law, the Education Fees Opinions and the 2021 Implementation Rules, which affect or may affect Lishui International School, the Vocational Education Services Providers, or our industry as a whole. Such uncertainties include, among others:

●  ***Uncertainties with respect to liquidation*** 

According to the Decision, upon liquidation of for-profit private schools, school sponsors can obtain the schools' remaining assets after the settlement of the schools' indebtedness. The Decision also states that, a private school established before the promulgation of this Decision registered as non-profit, shall give appropriate compensation out of the remains to the sponsors after its property is liquidated, at its termination, based on their applications and by taking into full account of the circumstances. After that, the remaining assets shall be used for the operation of other non-profit private schools. The Decision is silent on how or by whom the aforesaid rest of the remaining assets of a liquidated non-profit private school shall be dominated or disposed of. Accordingly, we may not be able to transfer all or part of the remaining assets and residual interests of our school to Liandu WFOE upon their liquidation. As a result, our and the VIEs' business, our financial position and the market price of our shares may be materially and adversely affected.

●  ***Uncertainties with respect to school fees*** 

According to the Decision, the fees charged by private schools shall be determined in accordance with costs and market demand. The level of fees charged by for-profit private schools is determined by the schools at their discretion, while the level of fees charged by non-profit private schools shall be regulated by the relevant local government authorities. The 2021 Implementation Rules state that the people's governments of provinces, autonomous regions and municipalities directly under the Central Government may set a ceiling for the fees charged by non-profit private schools that the government-run schools participate in the establishment thereof, that use state-owned assets, or that receive government subsidies per student. There is uncertainty as to whether there will be any material adverse impact on the fees charged by non-profit private schools generally or our school. We and the VIEs may not be able to maintain our current tuition and boarding fees, and may not be able to raise any of such fees at our desired rates, times and places or at all in the future. As a result, our and the VIEs' business, our financial position and the market price of our shares may be materially and adversely affected.

●  ***Uncertainties with respect to supporting measures*** 

According to the Decision and the 2021 Implementation Rules, additional supportive measures will be provided for private schools. Non-profit private schools will enjoy more supportive measures than for-profit private schools, such as government subsidies, fund awards and incentive donations. Non-profit private schools will enjoy the same preferential tax policies as public schools, while for-profit private schools will not be expected to enjoy the same preferential tax policies as public schools or non-profit private schools. The Decision does not specify whether and how existing schools that choose to become for-profit private schools will be required to pay additional taxes during the transition process. As the relevant PRC tax laws have not been amended to distinguish between non-profit and for-profit private schools, there is currently uncertainty as to whether the tax treatments will change after the 2021 Implementation Rules became effective. According to the Decision and the 2021 Implementation Rules, non-profit private schools will enjoy the same treatment as public schools with respect to the supply of land, which will be supplied by the government through allocation or other means, and for-profit private schools are not expected to enjoy the same treatment as public schools and non-profit private schools. There is uncertainty as to whether and how our schools will be able to benefit from any of such additional supporting measures as contemplated or at all. We cannot assure you that the tax and other treatments will not change or that they apply or continue to apply to our school after the 2021 Implementation Rules became effective.

●  ***Uncertainties with respect to transactions with related parties*** 

According to the 2021 Implementation Rules, private schools providing compulsory education shall not conduct any transaction with any interested related party. Where any other private school conducts any transaction with any interested related party, it shall follow the principles of openness, fairness and impartiality, fix the price reasonably and regulate the decision-making, and shall not damage the state interests, the interests of the school or the rights and interests of the teachers and students. Private schools shall establish an information disclosure system for their transactions with interested related parties. The departments of education, human resources and social security, finance and other relevant departments shall strengthen the supervision over the agreements entered into by and between non-profit private schools and their interested related parties and review related-party transactions on an annual basis. The interested related parties as mentioned in the preceding paragraph refer to the founder, actual controller, principal, members of the council, director, supervisor, financial person-in-charge and other persons of a private school, and any organization or individual that has the relationship of mutual control and influence with the above-mentioned organization or individual, which may lead to the transfer of the interests of the private school.

Further, the founder or actual controller, any member of the decision-making body or supervisory body of a private school conducting related-party transactions with a private school providing compulsory education, or conducting related-party transactions with any other private school, thus damaging the interests of the State, of the school or of the teachers and students, shall be ordered by the relevant authorities to make corrections within a time limit, and the illegal gains, if any, shall be confiscated after the fees collected are returned; if the circumstances are serious the offender shall not become the founder or actual controller, a member of the decision-making body or supervisory body of another private school within one to five years; if the circumstances are especially serious with adverse social impact, the offender shall not become the founder, actual controller or a member of the decision-making body or supervisory body of another private school permanently.

After the 2021 Implementation Rules took effect, we have terminated the contractual arrangements with Lianwai School. To minimize disruptions to existing students enrolled in Lianwai School, we and the VIEs continued to offer essential services to Lianwai School without recognizing any revenue. Meanwhile, we deconsolidated Lianwai School commencing from September 1, 2021 and presented it as a discontinued operation in current and comparative period financial statements. We have not received income from such transactions since September 1, 2021, which had a material adverse impact on our income. In order to support the daily operation of Lianwai School, we and the VIEs continue to provide Lianwai School with premises and other related facilities and services. The estimated annual expenses for providing these premises, facilities and services are approximately RMB 30 million. We have been unable to receive any revenue for providing these premises, facilities and services since the 2021 Implementation Rules came into effect. Lishui Mengxiang is no longer defined as an affiliated entity of Lianwai School.

Furthermore, our contractual arrangements may be regarded as related party transactions of the VIEs, and we may incur substantial compliance costs for establishing disclosure mechanisms and undergoing review by the relevant government authorities. Such process may not be in our control and may be highly complicated and burdensome and may divert management attention. Government authorities may, during their review process, compel us to make modifications to our contractual arrangements for whatever reason, which may in turn adversely affect the operation of our contractual arrangements. Government authorities may find that one or more agreements underlying our contractual arrangements do not comply with applicable PRC laws and regulations and may subject us to severe penalties, resulting in material adverse impact on our operation and financial condition.

Tuition and boarding fees are a significant part of our schools' revenue whilst we rely on contractual arrangements to obtain further related service revenue from the school. If any law and regulation that may be promulgated in the future further defines the contractual arrangements, including ours, as related-party transactions transferring proceeds from the running of schools, we may not obtain the service revenue under our contractual arrangements that is funded by proceeds from the running of schools. As of the date of the annual report, however, we are not aware of any official administrative or judicial declaration on, or interpretation of, the Education Fees Opinions, especially as applied to contractual or other similar arrangements under which we operate. We are also not aware of when official administrative or judicial declaration or interpretation on that matter will be released, if at all, and we cannot assure you that the Education Fees Opinions will not be interpreted, or further laws and regulations will not be promulgated, in a way that would affect or impair our ability to retain the tuition and boarding fees under the contractual arrangements in the future. Our and the VIEs' business, financial condition and results of operations would be materially and adversely affected if we are unable to obtain any or all of the tuition and boarding fees to be paid by our schools under the contractual arrangements.

The local governments and their education authorities will generally issue detailed rules, guidelines or opinions on the interpretation, application and implementation of the upper-level laws after they come into effect, and the local government and education authorities in Zhejiang Province (in the case of Lishui International School) and Hebei Province (in the case of Langfang School) have not yet issued such rules, guidelines or opinions on the interpretation, application and implementation of the 2021 Implementation Rules as of the date of this annual report on Form 20-F. We have been closely monitoring the developments of the 2021 Implementation Rules and are carefully evaluating the possible impact of the 2021 Implementation Rules on our and the VIEs' business development and financial performance. There is no expected timeline for the local government and education authorities to release such rules, guidelines or opinions. We are also proactively seeking guidance from and cooperating with the local governments and their education authorities in connection with our efforts to comply with the 2021 Implementation Rules and any related rules and regulations.

We cannot assure you that we will always be deemed to be in compliance with the new laws and regulations, interpretation of which may remain uncertain and relevant PRC government authorities may take a different view or change their policy in the future, or that we will be able to efficiently change our and the VIEs' business practice in line with the new regulatory environment. Any such failure could materially and adversely affect our and the VIEs' business, financial condition and results of operations.

***We and the VIEs are in the process of filing the relevant application pursuant to the national and local regulations (including Zhejiang Province and Lishui City, as well as Hebei Province) of classification registration of private schools. Loss of taxes and fees may incur in the process, which may have an adverse impact on the VIEs' operations.***

According to the Implementation Rules on Classification Registration of Private Schools (the "Classification Registration Rules"), which was issued jointly by the MOE, the Ministry of Human Resources and Social Security of the People's Republic of China or the MOHRSS, the MCA, the State Commission Office of Public Sectors Reform and the SAMR, and became effective on December 30, 2016, if an existing private school chooses to register as a non-profit private school, it shall amend its articles of association in accordance with laws, continue its school operation, and complete the new registration formalities. If an existing private school chooses to register as a for-profit private school, it shall make financial settlement, clarify the ownership of the schools' land, buildings and accumulations with the consent of the relevant departments of the people's governments at or below the provincial level, pay relevant taxes and fees, obtain new school permits, carry out their re-registration and continue their school operation. The provincial people's government is responsible for formulating the detailed measures on the alteration registration of the private schools in accordance with national laws and the local situation.

On April 4, 2018, eight departments of Zhejiang Province including the Department of Education of Zhejiang Province promulgated the Implementation Measures for Existing Private Schools to Change Registration Status, or the Zhejiang Implementation Measures, which took effect on June 1, 2018 and applies to all private schools established before November 7, 2016. According to the Zhejiang Implementation Measures, (i) any existing private school which chooses to register as a non-profit private school shall amend and file its articles of association and complete the corresponding registration accordingly, and (ii) any existing private school that chooses to register as a for-profit private school, shall obtain a new Permit for Operating a Private School and be re-registered so as to continue its operation after completing its financial clearance and settlement, clarifying its ownership of assets, and paying relevant taxes and fees.

On June 16, 2021, Lishui Municipal Education Bureau, Lishui Municipal Human Resources and Social Security Bureau, Office for Public Sector Reform Commission of Lishui, Lishui Municipal Civil Affairs Bureau and Lishui Municipal Market Supervision Administration jointly promulgated the Administrative Measures for Classification Registration of Private Schools in Lishui, which took effect on the same day. According to the Administrative Measures, where an existing private school opts to be registered as a for-profit private school, it shall make financial settlement, and the ownership of the land, school buildings, school-running accumulation and other property shall be clarified by the relevant departments of the government of the jurisdiction and the relevant agencies according to law. The school shall pay the relevant taxes and fees, go through the formalities for a new permit for the establishment of the school and make a new registration. The school may continue running during the process of the liquidation, re-handling of the permit for the establishment of the school and registration as a legal person.

On November 22, 2021, Lishui Education Bureau promulgated the Work Plan for Classified Registration and Administration of Existing Private Schools (Kindergartens) of Lishui City, which stipulates that they shall adhere to the principles of voluntary selection, smooth classification, public welfare orientation, and compliance with laws and regulations, and strive to complete the classified registration of existing private schools by December 30, 2022. The Plan also provides a schedule for arranging the classified registration tasks, from January to October in 2022, the classified registration of the existing private schools providing compulsory education, private kindergartens and private schools providing senior high school education shall be completed.

The main registration procedures for non-profit private schools are selected as follows: (i) schools shall file an application for classified registration; (ii) the approval authority shall conduct verification and replacement of the certificate; (iii) the articles of association shall be ratified (filed for the record); and (iv) schools shall apply for registration as a legal person. In addition, the main registration procedures for for-profit private schools are selected as follows: (i) sponsors make a pre-application for classified registration; (ii) schools make financial settlement; (iii) sponsors apply for the pre-registration of corporate names; (iv) sponsors make a formal application for classified registration; (v) certificates are replaced upon the approval authorities; (vi) schools apply for the registration of legal persons; (vii) schools complete the amendment registration of assets; (viii) private non-enterprise entities apply for deregistration with the original registration authorities. See "*Item 4. Information on the Company—B. Business Overview—Regulation—Implementing Rules on Classification Registration of Private Schools*" for details.

On January 9, 2018, five departments of Hebei Province including the Department of Education of Hebei Province issued the Implementation Measures for the Classification Registration of Private Schools in Hebei Province, which came into effect on the same day. The measures provide that (i) private schools can choose to be registered as non-private schools or for-profit schools, and those engaging in compulsory education shall not be registered as for-profit schools; (ii) if a private school has chosen to be classified and registered as a non-profit private school, it shall no longer be converted to a for-profit private school; while if it has chosen to be classified and registered as a for-profit private school, it may be converted to a non-profit private school by application by its sponsor(s) and changing the registration of its legal entity; (iii) existing private schools shall complete the classification and registration within a five-year transition period ending on September 1, 2022, and before the classification and registration, they shall be managed as their originally-registered legal entity; (iv) if an existing private school chooses to be classified and registered as a non-profit private school, it shall amend its constitution in accordance with the laws, continue its operation, and re-register with the appropriate authorities or civil affairs department; and (v) if an existing private school chooses to be classified and registered as a for-profit private school, it shall conduct financial liquidation, clarify the property rights for land(s), school building(s), school accumulation and pay relevant taxes and fees, renew the Permit for Establishment of Privately-run Schools, re-register with the appropriate authorities, and continue its operation.

As of the date of the annual report, Langfang City has not released any detailed rules on classification registration of private schools and we have not received any relevant notice from the competent authorities of Langfang City since January 1, 2022 when Beijing P.X. began to hold the whole sponsorship interests of Langfang School.

Lishui International School is not subject to the risk of loss of taxes and fees that may incur in the process of filing the relevant application pursuant to the national and local regulations (including Zhejiang Province and Lishui City) on the classification registration of private schools. Lishui International School has already been registered as a non-profit private school at the time of its establishment and is in compliance with the Classification Registration Rules, and therefore is not required to take extra steps of registration.

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***We and the VIEs may be unable to maintain or raise the tuition, meal and accommodation service fees as planned.***

We derive the majority of our revenue from tuition, meal and accommodation service fees. We determine the rates of the tuition or other fees for our schools primarily based on limits, guidelines and requirements set by the authorities and commercial considerations such as the demand for our and the VIEs' educational programs, cost of revenues, the tuition charged by our competitors, our pricing strategy, the economic conditions of Lishui City, Zhejiang Province (in the case of Lishui International School) and Langfang City, Hebei Province (in the case of Langfang School), and the general economic conditions in China.

Any increase in the tuition and accommodation service fees charged at our schools are subject to regulatory approval. Moreover, the Decision sets out certain specific requirements with respect to the level of fees charged by non-profit private schools. Therefore, we may face the risks that we can only maintain our current tuition and accommodation service fees, and may not be able to raise any of such fees for our schools at our desired rates, times and places or at all in the future.

Even if our intended rates of tuition and other fees are approved by the authority, we may fail to attract sufficient prospective students to apply for our schools at those levels. As a result, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***Our and the VIEs' business depends on the market recognition of our brand and reputation that we and the VIEs may not be able to maintain.***

The success of our and the VIEs' business has depended and will continue to depend on our and the VIEs' brand and reputation. Our and the VIEs' brand and reputation may be affected by a number of factors, including student and parent satisfaction rates, teaching quality, our students' academic performances and test scores, campus accidents, scandals involving our schools, negative publicity and failure to pass governmental inspections. Some of these factors are beyond our control. In addition, as we and the VIEs continue to grow in size, expand our programs and extend our geographic reach, it may become difficult to maintain quality and consistency in the services we and the VIEs offer, which may lead to diminishing confidence in our and the VIEs' brand name and negatively affect our reputation. If our brand or reputation is damaged or negatively affected, students' and parents' interest in our schools may decrease and our and the VIEs' business, financial condition and results of operations could be materially and adversely affected.

We have developed our student base primarily through word-of-mouth referrals. However, we cannot assure you that our marketing efforts will be successful or sufficient in further promoting our brand and reputation to help us maintain or increase student enrollment. Moreover, there can be no assurance that our brand and reputation will hold sufficient market recognition in the geographic areas where we plan to acquire or establish schools. If we and the VIEs are unable to further enhance the market recognition of our brand and reputation, or if we are required to incur excessive marketing expenses to promote our brand and reputation, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***We may fail to continue to recruit and retain students in our school.***

The success of our and the VIEs' business depends on the number of students enrolled in our school and in any school we and the VIEs may acquire or establish in the future. Our ability to attract and retain students depends on several factors, including the ability to:

● enhance existing programs to respond to market changes and the demands of students and parents;

● develop new programs or schools that appeal to students;

● maintain and improve our reputation for providing high quality private education;

● maintain and improve the academic and non-academic performance of our students;

● recruit and retain qualified teachers;

● manage our growth while maintaining the consistency of our teaching quality;

● expand our student capacity;

● effectively market our schools and programs to prospective students; and

● respond to the increasing competition in the market.

Qingtian International School and Lishui International School are both educational institutions specialized in providing high school education to students as overseas Chinese returnees. On August 18, 2021, Lishui Mengxiang entered into a sponsorship interests transfer agreement with Qingtian Zhongyi Education Investment in respect of the acquisition of 100% of the sponsorship interests of Qingtian International School, for a total consideration of RMB23 million. On August 24, 2021, the alteration registration of Qingtian International School was completed and Lishui Mengxiang started to hold 100% of the sponsorship interests of Qingtian International School. The transaction was closed in November 2021. Qingtian International School had 491 students enrolled and recorded a utilization rate of 60.6% as of September 1, 2023. We deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023.

Lishui International School was established in June 2023 and started to enroll student in September 2023. Lishui International School had 97 students as of September 1, 2025 and it recorded a utilization rate of approximately 71.8% as of September 1, 2025.

Langfang School is a provincial private vocational school approved by the Human Resources and Social Security Department of Hebei Province, integrating academic education and vocational education. Lishui Mengxiang acquired Langfang School in January 2022 and began to hold 100% of the sponsorship interests in Langfang School on January 1, 2022. Langfang School had 660 students enrolled as of September 1, 2025.

We and the VIEs cooperate with Hainan Technical School, a reputable vocational education school in Haikou City, Hainan Province, through Hainan Jiangcai, a subsidiary of Beijing P.X., to jointly design and develop curriculum programs based on the prevalent market trends and employer preferences. Hainan Jiangcai (through its cooperator Hainan Technical School) had 510 students enrolled as of September 1, 2025.

If Lishui International School, Langfang School and Hainan Technical School are unable to attract and retain students to fully utilize the campuses, they may record lower operation efficiency and we may be unable to benefit from the acquisitions. As a result, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***Our students' academic performance may fall and satisfaction with our and the VIEs' educational services may otherwise decline.***

Our students' academic performance may be affected by various factors, including teaching method and materials, personal efforts, learning environment, pressure and family influence, some of which may be beyond our control. If their academic performance fall or do not improve as expected, our students may be unable to achieve the test scores necessary for their desired progressions and satisfaction with our and the VIEs' educational services may decline. Satisfaction with our and the VIEs' educational services may also decline due to negative publicity on our schools, directors or management, lack of qualified teachers, unsatisfactory learning environment or other factors, which may result in, among others, a decrease in word-of-mouth referrals and reputation, students' withdrawal from our schools and decreased application for our schools. If our student retention rate decreases substantially or if we otherwise fail to continue to attract and admit students due to decreased students' or parents' satisfaction with our and the VIEs' educational services, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***We and the VIEs may fail to continue to attract and retain qualified and committed teachers and other school personnel.***

We and the VIEs rely substantially on our teachers for the provision of educational services to our students. The teachers are critical to maintaining the quality of our programs and upholding our brand and reputation. We must continue to attract qualified teachers who are committed to teaching. We and the VIEs face competition from public schools, other private education providers and other institutions for high quality candidates and may have to incur additional costs for our recruitment efforts. We and the VIEs may not be able to recruit enough teachers to keep pace with the growth of our student enrollment while maintaining consistent teaching quality and the overall quality of our and the VIEs' education programs. In addition, criteria such as dedication, capability and loyalty are difficult to ascertain during the recruitment process and we and the VIEs may fail to identify and select the desired candidates.

Furthermore, we and the VIEs may be unable to retain high quality teachers or have to incur significant expenditures for our retention efforts. Teachers may be dissatisfied with their workload, compensation, benefits, career path or working environment, which may disrupt our school operations and teaching activities, adversely affect our reputation and damage our ability to attract and retain teachers and students. Similarly, other school personnel such as administrators, counselors and financial staff also play an important role in the efficient and smooth running of our schools. There is no guarantee that we and the VIEs can recruit and retain quality personnel to perform these functions in the future without incurring significant costs or at all. If we and the VIEs are unable to attract and retain qualified and committed teachers and other school personnel at reasonable costs or at all, or if there is a significant decrease in teaching quality or educational experiences in our schools due to lack of qualified teachers or other school personnel, or if our teachers or other school personnel take disruptive actions to express their dissatisfaction with our school or us, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***We and the VIEs face intense competition in the education industry and we and the VIEs may fail to compete effectively.***

The education sector in China is rapidly evolving, highly fragmented and competitive and we expect competition in this sector to persist and intensify. In the geographic market in which we and the VIEs operate the schools, we and the VIEs compete with public schools and other private schools that offer high school education and vocational education. We and the VIEs compete with these schools across a range of factors, including program and curriculum offerings, tuition level, school location and premises, qualified teachers and other key personnel.

Our competitors that are private schools may offer similar or superior educational programs, with different pricing and service packages that are more appealing than those offered at our school. Some of our competitors that are private schools may have more resources than us and may be able to devote greater resources than we and the VIEs can to the development and promotion of their schools and respond more quickly than we and the VIEs can to changes in student demands, testing materials, admissions standards, market needs or new technology. Our competitors that are public schools may have access to resources that may not be available to private schools and may be able to offer quality educational programs at lower prices than Lishui International School and Langfang School. According to the Frost & Sullivan report, tuition charged by public schools is generally lower than tuition charged by private schools, especially premium private schools. In addition, the PRC public education system continues to improve in terms of resources, admission policies and teaching quality and approaches. If public schools relax their admission limitations, offer more diversified curriculum, upgrade their campus facilities or reforms the exam-oriented education approach, they may become more attractive to students, which may lead to increased competition in the education industry.

As a result, we and the VIEs may be required to reduce tuition or increase spending in order to retain or attract students or pursue new market opportunities. If we and the VIEs are unable to successfully retain and attract students, maintain or increase our tuition level, recruit and retain qualified teachers or other key personnel, enhance the quality of our and the VIEs' educational services or control competition costs, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***We and the VIEs may not be able to obtain all necessary approvals, licenses and permits and to make all necessary registrations and filings for our and the VIEs' educational and other services in China.***

In order to conduct our and the VIEs' business and operate schools in China, we and the VIEs are required to obtain and maintain various approvals, licenses and permits and fulfill registration and filing requirements. For example, to establish and operate a high school or a vocational school in the PRC, we are required to obtain a private school operation permit from the local departments of education, human resources and social security, and register with competent administration authorities to obtain a business license or registration certificate. Such local regulatory authorities may also conduct annual inspection of the schools. After consulting with our PRC legal counsel, Beijing DeHeng Law offices, we are of the view that, as of the date of the annual report, except for the circumstances which would not in the aggregate have a material adverse effect on our financial conditions, Lixiang, our PRC subsidiaries and the VIEs have received from PRC authorities requisite licenses, permissions or approvals needed to engage in the businesses currently conducted in China.

We cannot assure you that Lixiang, our PRC subsidiaries and the VIEs are always able to successfully update or renew the licenses or permits required for the relevant business in a timely manner or that these licenses or permits are sufficient to conduct all of our and the VIEs' present or future business. As advised by our PRC legal counsel, Beijing DeHeng Law Offices, if Lixiang, our PRC subsidiaries or the VIEs (i) do not receive or maintain required permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and Lixiang, our PRC subsidiaries or the VIEs are required to obtain such permissions or approvals in the future, we could be subject to fines or legal sanctions, which may materially and adversely affect the business, financial condition and results of operations of us and the VIEs.

As of the date of the annual report on Form 20-F, the administrative procedures for changing the sponsor of Langfang School with the PRC governmental authorities, especially for renewing the Permit for Establishment of Privately-run Schools, have not been completed due to the internal procedures of the competent authorities and we and the VIEs are still in the process of active communication with such local authorities. If the above administrative procedures cannot be completed, Langfang School might be determined as changing its sponsor without authorization according to the Promotion Law and the 2021 Implementation Rules by the competent authorities, and thus Langfang School, the sponsor and actual controller and members of decision-making institution or supervisory institution of Langfang School shall be subject to administrative punishment. For Langfang School, any unlawful earning shall be confiscated, and if the circumstances are serious, it shall be ordered to stop enrolling students and its business license shall be revoked. In addition, since the former sponsor is still a Langfang School's registered sponsor with the relevant authorities, if it exercises the rights and interests of sponsor in accordance with relevant laws, regulations and the filed articles of association of Langfang School, the normal operation and management of Langfang School may be affected. The aforesaid rights and interests of the registered sponsor include knowing the operation and financial status of Langfang School, recommending council members and supervisors, and consulting the meeting minutes of the council and the financial/accounting statements of Langfang School. Although we believe that we can currently exert sufficient control over Langfang School, however, if the above situation occurs, we will have to spend additional time and cost to eliminate the relevant adverse effects.

As of the date of this annual report, the adjustment of the cooperation arrangement between Beijing P.X. and Hainan Technical School for compliance purposes has not been completed. We and the VIEs cooperate with Hainan Technical School, a reputable vocational education school in Haikou City, Hainan Province, through Hainan Jiangcai, a subsidiary of Beijing P.X., to jointly design and develop curriculum programs based on the prevalent market trends and employer preferences. According to the cooperation arrangement made prior to the acquisition of Beijing P.X., Hainan Jiangcai would designate their staffs to teach courses in Hainan Technical School, and the tuition, accommodation and miscellaneous fees paid by the students would be charged by Beijing P.X. on behalf of Hainan Technical School and then transferred back to Hainan Technical School after deducting the service fees payable to Beijing P.X. However, as stipulated in relevant regulations, teachers shall be directly recruited by Hainan Technical School, and the tuition, accommodation and miscellaneous fees shall also be directly charged by Hainan Technical School. To comply with the relevant regulations, Beijing P.X. has deliberated with Hainan Technical School for the adjustment of the cooperation, while the parties have not yet agreed on any specific and detailed adjustment plans as of the date of this annual report. Beijing P.X. and Hainan Technical School may be ordered to return the tuition, accommodation and miscellaneous fees and be imposed fines, and the revenue from the cooperation may be adversely affected.

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***We and the VIEs may not be able to successfully integrate businesses operated by Lishui International School, Vocational Education Services Providers, Chuangmei Weiye and Hebei Chuangxiang, which may cause us to lose the anticipated benefits from such business expansions and to incur significant additional expenses.***

We and the VIEs plan to expand the business and school network by entering into cooperation with third-party school sponsors to establish new schools, in addition to establishing new schools ourselves or acquiring existing schools. We believe we will face challenges in running the newly established school and integrating business operations and management philosophies of the schools we and the VIEs acquired. We and the VIEs may not be able to successfully integrate businesses operated by Lishui International School, Vocational Education Services Providers, Chuangmei Weiye and Hebei Chuangxiang, and we may not realize the expected benefits or synergies of the business expansion to the extent, or in the timeframe we anticipated, which may have a material adverse effect on our and the VIEs' business, financial condition and results of operations.

We consider the benefits of our prospective acquisitions will mainly hinge on our ability to effectively and timely integrate the management, operations and personnel of these schools. The integration of the schools we and the VIEs acquire may be a complex, time-consuming and costly process that without proper arrangement and implementation, could seriously interfere with our and the VIEs' business operations and damage our reputation. Our Directors consider the main challenges involved in integrating acquired entities to include the following:

● retaining qualified teaching staff of any acquired school;

● consolidating the educational services offered by the acquired school;

● complying with the regulatory requirements;

● the acquired schools having a culture that may be adverse to change and may not be receptive to our and the VIEs' educational values and methods;

● integrating educational and administrative systems;

● minimizing disruptions to existing students' curricula and ensuring their ability to progress through the applicable education programs is not hindered as a result of the acquisition;

● ensuring and illustrating to our students and their parents that the new acquisitions will not result in any adverse changes to our established brand image, reputation, service quality or standards; and

● minimizing the diversion of our management's attention from its on-going business concerns

***The operations of Lishui International School are subject to general conditions and the education industry of Lishui City and/or Zhejiang Province, while the operation of Langfang School is subject to general conditions and the education industry of Langfang City and/or Hebei Province.***

Lishui International School and its operations are currently located in Lishui City, Zhejiang Province. According to the latest census report of Zhejiang Province, the population of Lishui City and Zhejiang Province in 2025 was 2.5 million and 66.7 million, respectively. If Lishui City or Zhejiang Province experiences an event that materially and adversely affects its education industry, such as an economic downturn, a natural disaster or an outbreak of a contagious disease, or if any governmental authorities governing Lishui City or Zhejiang Province adopt regulations that place additional restrictions or burdens on Lishui International School or on the education industry in general, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

Langfang School and its operations are currently located in Langfang City, Hebei Province. According to the latest census report of Hebei Province, the population of Langfang City and Hebei Province in 2025 was 5.5 million and 73.8 million, respectively. If Langfang City or Hebei Province experiences an event that materially and adversely affects its education industry, such as an economic downturn, a natural disaster or an outbreak of a contagious disease, or if any governmental authorities governing Langfang City or Hebei Province adopt regulations that place additional restrictions or burdens on Langfang School or on the education industry in general, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

In addition, given that we and the VIEs mainly offer the education services at Lishui International School and Langfang School, any material negative development with respect to Lishui International School or Langfang School could have a material adverse effect on our and the VIEs' business, financial condition and results of operations as a whole.

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***Misconduct of students and employees and improper activities and any negative publicity concerning our schools, our Company, our Controlling Shareholder, our directors or our employees may adversely affect us.***

Misconduct of students and employees and improper activities may adversely affect our brand image, business and results of operations. In addition, any negative publicity concerning our school, our Company, our controlling shareholder, our directors, our employees or any of them, even if untrue, may damage our brand image and reputation, deter prospective students and teachers and take up excessive time of our management and other resources. As a result, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***The operations of Lishui International School depend on their abilities to promptly and adequately respond to changes in admission requirements for higher-level education, testing materials and technologies.***

Our high school students in Lishui International School are subject to the National Joint Entrance Examination for overseas Chinese students. The admission scores for the various college schools in China usually change from year to year and so do the admission requirements for overseas universities. Testing materials may also change in terms of focus areas, format and the manner in which such tests are administered. The new examination syllabus implemented in 2021 has greatly reduced the difficulty of the examination. These changes require us to continually update and enhance the courses we and the VIEs offer and to continually train our students to take standardized tests so as to maximize their performance on these tests. In order to enable our students to get admission to the prestigious colleges in China, Lishui International School is required to offer not only the ordinary PRC high school curriculum program but also the courses designed for the National Joint Entrance Examination for overseas Chinese students. If Lishui International School fail to adequately prepare its students for admission tests in the everyday classroom teaching and any test preparation courses they offer, their students' admissions rates to PRC colleges may decrease and their programs and services may become less attractive to students. Furthermore, if we and the VIEs fail to timely develop and introduce new education services and programs in Lishui International School based on the changing education and test standards in China and abroad, our ability to attract and retain students may decrease. As a result, our reputation, business, financial condition and results of operations may be materially and adversely affected.

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***If we are not able to continually tailor our vocational education programs to market demand and enhance our courses to adequately and promptly respond to developments in the labor market, our courses may become less attractive to students.***

New trends in the economy of China and rapid developments in the industries may change the type of skills required for vocational school graduates in the labor market. This requires us to continually develop, update and enhance our vocational education programs and course materials to adapt to the needs of the labor market in China. We may be unable to update our courses in a timely and cost-effective manner, or at all, to keep pace with changes in market requirements. Any inability to track and respond to these changes in a cost-effective and timely manner or to tailor our vocational education programs to the market demand in China would render our programs less attractive to students, which may materially and adversely affect our reputation and ability to continue to attract students and cause us to lose market share.

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***We and the VIEs may not be able to successfully implement our business strategies.***

Our business strategies include organic growth, strategic alliance with reputable education institutes, acquiring and establishing schools. We may not succeed in implementing our business strategies due to a number of factors, including the following:

● we may lose government support in Zhejiang Province, Hebei Province, Hainan Province or other places to which we plan to expand our operation;

● we may not be able to admit all qualified students who would like to enroll in our schools due to the capacity constraints of our school facilities;

● we may fail to identify cities with sufficient growth potential in which to acquire or establish schools;

● we may have limited access to capital resources or may have to rely on the shareholders' guarantee in obtaining bank facilities;

● we may fail to acquire or lease suitable land sites in the cities to which we plan to expand our operations;

● we may fail to effectively market our schools or brand in new markets or promote ourselves in existing markets;

● we may not be able to replicate our successful growth model in new markets;

● we may not be able to effectively integrate any future acquisitions into our operations;

● we may fail to obtain the requisite licenses and permits from the authorities necessary to acquire or establish schools at our desired locations;

● we may not be able to continue to enhance our course materials or adapt our course materials to changing student needs and teaching methods;

● we may fail to follow the expected timetable with respect to the development of our schools; and

● we may fail to achieve the benefits we expect from our expansion.

If we fail to successfully execute our growth strategies, we may not be able to maintain our growth rate and our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***We historically recorded net current liabilities.***

As of December 31, 2024 and 2025, we had net current assets of RMB124 million and net current liabilities of RMB90 million, respectively. We cannot assure you that we will not experience periods of net current liabilities in the future. We may record net current liabilities in future periods as we continue to expand. A net current liabilities position could expose us to liquidity risks, constrain our operational flexibility and adversely affect our ability to obtain financing and expand our and the VIEs' business. There can be no assurance that we will always be able to generate sufficient cash flow from our operations or obtain necessary funding to meet our future financial needs, including repaying our loans upon maturity and finance our capital commitments. If we fail to meet our financial obligations, our and the VIEs' business, liquidity, financial position and prospects could be materially and adversely affected.

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***We face risks related to health epidemics, natural disasters or terrorist attacks in China.***

We and the VIEs offer accommodation service to students of Lishui International School, Langfang School and Hainan Technical School. Lishui International School also provides on-campus or nearby off-site accommodation to our teachers and staff. The boarding and accommodation arrangements make our students, teachers and staff vulnerable to outbreaks of health epidemics such as the COVID-19 virus, H1N1 flu virus, avian influenza and severe acute respiratory syndrome, or SARS, and Influenza A virus, such as H5N1 subtype and H5N2 subtype flu viruses, natural disasters, such as earthquakes, floods, landslides, as well as terrorist attacks, other acts of violence or war or social instability, especially when such health epidemics, natural disasters or terrorist attacks take place in our schools or in or near the regions where our schools are located. As a result, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

Since the worldwide outbreak of the COVID-19 pandemic in early 2020, all sectors have been severely affected with no exception to the education industry. In early 2021, WHO announced the variants of the coronavirus causing COVID-19 were discovered in Denmark, the United Kingdom, South Africa and Japan subsequently, which is considered highly contagious and may pose a serious public health threat. To respond to the continuing impact and recurrence of COVID-19 pandemic, the PRC government has imposed various strict measures with the aim to contain the virus and restore the business operation in an orderly manner including, but not limited to, mandatory vaccination requirements, travel restrictions, mandatory quarantine requirements, and postponed resumption of business operations. However, the relaxation of the restrictions on economic and social life may lead to development of new cases, which may result in the reimposition of further restrictions. The Baiyun Campus, Yijing Campus—Featured Division resumed normal operation from April 2020. No students withdrew from our schools due to the COVID-19 outbreak. We and the VIEs have taken a series of measures in response to the outbreak to protect our employees, students and teachers in the reopened campuses after the closedown in early 2020, including, among others, checking the temperature of our students, procurement and provision of hand sanitizers and other protective equipment for our employees. The campuses remained in normal operation during 2021, and the students and teachers continued with their on-campus courses in 2021. In 2022, the pandemic situation and the COVID-19 policies in China was changing. In December 2022, the PRC government shifted its COVID-19 policies and eased the pandemic restrictions, which was companioned with a large number of people getting infected of COVID in a short time. To cope with the policy shift and to protect our students and teachers' health, Qingtian International School stopped on-campus teaching activities and provided off-campus online courses for two weeks in December 2022. Besides, Langfang School provided online courses from March 7, 2022 to June 24, 2022 in the spring semester, and continued the online courses from September 2, 2022 to December 23, 2022 in the fall semester. During the online courses periods, the campus of Langfang School was insulated from the outside and adopted daily disinfection measures. The above online courses are conducted through certain online courses platforms, and are the substitute for on-campus courses in the pandemic situation. Thus, the online courses are distinguished from the online education service which shall be defined as a value-added telecom service, and therefore do not need extra permissions for its operation. Nevertheless, as the students' enrollment is conducted and the tuition is charged on a semester basis, the COVID-19 outbreak did not have a material long-term impact on our and the VIEs' financial condition and operation. Although most of the COVID-19 related restrictions previously imposed by the PRC government were lifted in 2023, any future outbreak of public health epidemics may restrict economic activities in affected regions, resulting in reduced business volume, disrupt our and the VIEs' business operations and adversely affect our results of operations.

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***We and the VIEs are subject to extensive governmental approvals and compliance requirements for the construction and development of school and in relation to the land and buildings that we and the VIEs own.***

For campuses and school facilities constructed and developed for our school, we and the VIEs must obtain various permits, certificates and other approvals from the relevant authorities at various stages of property development, including the land use right certificates, planning permits, construction permits, certificates for passing environmental assessments, certificates for passing fire control assessments, certificates for passing construction completion inspections and building ownership certificates.

In the event that if we and the VIEs lose the rights to any of our land or buildings, uses of such land or buildings may be limited, or we may be forced to relocate and incur additional costs, which may result in disruptions to the operations of our schools and materially and adversely affect our and the VIEs' business, financial condition and results of operations. In addition, we and the VIEs may in the future encounter problems in obtaining the relevant permits, certificates and approvals for the construction and development of our schools, which may negatively affect our growth strategies. As a result, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***Capacity constraints of our school facilities could cause us to lose students to our competitors.***

The educational facilities of our school are limited in space and size which is also subject to regulatory approval from the competent departments in charge of urban and rural planning. We and the VIEs may not be able to admit all qualified students who would like to enroll in our school due to the capacity constraints of our current school facilities. As of September 1, 2025, there were 97,660 and 510 students enrolled in Lishui International School, Langfang School, and Hainan Jiangcai (through its cooperator Hainan Technical School). None of Lishui International School, Langfang School, and Hainan Technical School had a lack of capacity for enrolling students as of September 1, 2025. We and the VIEs may not be able to expand our capacity at our current campus unless we and the VIEs relocate to other facilities in the local area with more space. If we and the VIEs fail to expand our capacity as quickly as the demand for our services grows, or if we and the VIEs otherwise fail to grow by acquiring or establishing schools and campuses, we and the VIEs could lose potential students to competitors, and our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***Our historical financial and operating results may not be indicative of our future performance and our financial and operating results may be difficult to forecast.***

Our financial and operating results may not meet the expectations of public market analysts or investors, which could cause the price of our ADSs to decline. Our revenue, expenses and operating results may vary from year to year in response to a variety of factors beyond our control, including:

● our ability to increase student enrollment in our schools and raise tuitions fees;

● general economic conditions and regulations or government actions pertaining to the provision of private educational services in China;

● shifts in consumer attitude toward private secondary education and vocational education in China;

● our ability to control cost of revenues, in particular salary and welfare relating to teachers and other costs; and

● non-recurring charges incurred in connection with acquisitions or other extraordinary transactions or unexpected circumstances.

Due to these factors, we believe that year-to-year comparisons of our operating results may not be indicative of our future performance and you should not rely on them to predict the future performance of our ADSs.

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***Accidents or injuries suffered by our students, employees or other people at our schools may adversely affect our reputation and subject us to liability.***

There are inherent risks of accidents or injuries in schools. We and the VIEs could be held liable in the event of personal injuries, disease, fires or other accidents suffered by students, employees or other people that occur at our school. Although we and the VIEs designate certain staff members in each of our and the VIEs' campuses to be in charge of student health and security, in the event of personal injuries, disease, food poisoning, fires or other accidents suffered by our students, employees or other people on our campuses, we and the VIEs may face claims for damages and our school may be perceived unsafe by prospective parents and students.

Claims against us arising from injuries incurred or claimed to have incurred on our campuses may adversely affect our reputation, subject us to significant amounts of damages, divert management's attention and other resources or increase our insurance costs. As a result, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***We and the VIEs are and may be in the future involved in legal and other disputes and claims arising out of our operations from time to time.***

We and the VIEs are and may be in the future involved in disputes with and subject to claims by parents and students, teachers and other school personnel, our suppliers, construction companies, third-party sub-contractors and other parties involved in our and the VIEs' business.

On October 12, 2023, Langfang School received a court notice from the People's Court of Anci District, Langfang City, Hebei Province that Hebei Technical College of Petroleum Profession (河北石油职业技术学院), as the plaintiff, had filed a complaint in relation to its contractual dispute against Langfang School and Beijing S.K.'s affiliates, and the first-instance judgment of the court ruled that Langfang School should, within ten days after the effectiveness of the judgment, pay the plaintiff overdue rental expenses of RMB25,235,000 for the period from January 1, 2022 to August 31, 2023, and continue to pay rent for the period from September 1, 2023 to the date when the lease is terminated. Langfang School filed for a second-instance lawsuit on December 19, 2023. On April 19, 2024, Langfang School received the final judgment that it would not need to pay rental expenses for the period from January 1, 2022 to August 31, 2023 or the period after September 1, 2023, but should vacate the premises in relation to the dispute by July 30, 2024. To continue using the premises and facilities, Langfang School entered into a cooperation agreement with Hebei Petroleum College on July 31, 2024, in which it was agreed that Langfang School could continue to use the facilities of the southern campus of Hebei Petroleum College for operating vocational education, for six years from July 31, 2024 to July 30, 2030, and Langfang School would pay Hebei Petroleum College RMB11,000,000 each year, subject to certain fees adjustment arrangements.

On December 18, 2023, Lishui Mengxiang, as applicant, filed an arbitration application against Beijing S.K. and its affiliates, as respondents in relation to the breach of the investment cooperation agreement entered into between the two parties on July 27, 2021 and a series of investment supplemental agreement entered into between the two parties during 2022 and 2023. The main arbitration claim was to request the respondents to pay the contracted amount of RMB72.41 million and liquidated damages of RMB20 million. On April 3, 2025, the Beijing Arbitration Commission rendered a final award granting the applicant's main arbitration claim. As of the date of this annual report, Lishui Mengxiang has applied for enforcement of the arbitration award but has not yet received the aforementioned amount. See "*Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings.*"

There can be no assurance that favorable judgments will be obtained in the above or any future legal and other proceedings, and even if favorable judgments are obtained, legal or other proceedings involving us and the VIEs may, among others, incur significant costs, divert management's attention and other resources, negatively affect our and the VIEs' business operations, cause negative publicity against us or damage our reputation. As a result, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***We and the VIEs may lose the services of our executive directors, officers and other key personnel.***

Our future success depends heavily upon the continuing services of our executive directors and officers and in particular, Mr. Biao Wei and Ms. Fen Ye, who have been our leaders since our inception. If one or more of our executive directors, officers or other key personnel are unable or unwilling to continue in their present positions, we and the VIEs may not be able to replace them easily or at all and our and the VIEs' business may be disrupted and our financial condition and results of operations may be materially and adversely affected. Competition for experienced executive directors or management personnel in the private education sector is intense, the pool of qualified candidates is very limited and we and the VIEs may not be able to retain the services of our executive directors or officers or key personnel, or attract and retain high-quality executive directors or officers or key personnel in the future. In addition, if any member of our executive directors or officers or any other key personnel joins a competitor or forms a competing company, we and the VIEs may lose teachers, students and staff members. As a result, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

Each of our executive officers has entered into an employment contract and certain executive officers and/or key employees have entered into confidentiality agreements with us. The employment contracts and confidentiality agreements are governed by PRC laws and any disputes would be resolved in accordance with PRC legal procedures. The legal uncertainties in the PRC legal system could limit our ability to enforce these agreements. For example, prior court decisions may be cited for reference but not necessary and have limited precedential value in the PRC and the PRC arbitration tribunals and courts have significant discretion in interpreting, implementing or enforcing relevant PRC laws. It is thus difficult to predict the outcome of any arbitration awards or court proceedings or gage the level of legal protection that such awards or proceedings may provide. Accordingly, if any disputes arise between any of our senior executives or key personnel and us, it may be difficult to enforce these agreements against these individuals. As a result, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

***We have identified material weaknesses in our internal control over financial reporting. If our remediation of the material weaknesses is not effective, or we fail to develop and maintain effective internal controls over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.***

We are subject to reporting obligations under the U.S. securities laws. Section 404 of the Sarbanes-Oxley Act of 2002 (the "**Sarbanes-Oxley Act**") requires that we include a management report on such company's internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ended December 31, 2021. Our management has concluded that the material weaknesses identified for the year ended December 31, 2020 has been remediated, the internal control over financial reporting was effective as of December 31, 2023 and 2024. However, in the course of auditing our consolidated financial statements for the financial statements included elsewhere in this annual report for the fiscal year ended December 31, 2025, we identified two material weaknesses in our internal control over financial reporting. See "*Item 15. Controls and Procedures*."

As defined in the standards established by the PCAOB, a "material weakness" is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified for the fiscal year ended December 31, 2025 relate to (i) the lack of sufficient and competent accounting staff and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements; and (ii) lack of robust and formal period-end financial reporting policies and procedures in place to address complex U.S. GAAP technical accounting and the SEC reporting requirements.

In response to the material weaknesses identified, we are in the process of implementing a number of measures to address the material weaknesses identified, including but not limited to:

● develop and implement a comprehensive set of processes and internal controls to timely and appropriately identify, analyze, and record transactions that may be subject to complex U.S. GAAP accounting treatment;

● hire additional accounting staff members with U.S. GAAP and SEC reporting experiences to implement the abovementioned financial reporting procedures and internal controls to ensure the consolidated financial statements and related disclosures under U.S. GAAP and SEC reporting requirements are prepared appropriately on a timely basis; and

● establish an ongoing training program to provide sufficient and appropriate trainings for accounting and financial reporting personnel, including trainings related to U.S. GAAP and SEC reporting requirements.

We believe the measures described above should remediate the material weaknesses identified and strengthen our internal control over financial reporting. The remediation initiatives outlined above are estimated to take place over the next 12 to 18 months, and we can offer no assurance that these initiatives will ultimately have the intended effects. We do not believe that the remediation of these material weaknesses will result in significant incremental cost. However, we cannot assure you that we will not identify additional material weaknesses or significant deficiencies in the future. Another significant financial reporting failure or material weakness in internal control over financial reporting could result in substantial cost to remediate and could cause a loss of investor confidence and decline in the market price of our ADSs. In addition, if we are unable to meet the requirements of Section 404 of the Sarbanes-Oxley Act, our ADSs may not be able to remain listed on the Nasdaq Global Market.

Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, as we are a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading price of our shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal control for purposes of identifying and reporting material weaknesses and other control deficiencies in our internal control over financial reporting. Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional deficiencies may have been identified.

We are a public company in the United States subject to the Sarbanes-Oxley Act. Section 404 of the Sarbanes-Oxley Act requires that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F. This annual report on Form 20-F does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC where domestic and foreign registrants that are non-accelerated filers, which we are, are not required to provide the auditor attestation report.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

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***Failure to develop appropriate internal control and management structures in line with our rapid growth could result in a material adverse effect on our and the VIEs' business, prospects, financial condition and results of operations.***

Our and the VIEs' business and operations have been expanding rapidly. Significant management resources must be expanded to develop and implement appropriate and effective internal control, risk monitoring and management systems which are in line with our growth. These systems are critical to ensure our compliance with the relevant laws and regulations on an on-going basis, effective business operations and our future development. Historically, our and the VIEs' business operations were subject to certain legal risks due to insufficient internal control measures. These miscellaneous fees were mainly fees incurred from medical care and purchase of learning materials. The teachers then immediately transferred all amounts collected to our schools' accounts. Since June 2020, we have ceased such payment collection arrangement through teachers and no warnings or penalties were imposed upon us by the relevant authorities. However, if we fail to effectively implement our internal control measures and if we fail to allocate appropriate management resources, we may not be able to identify compliance issues, administrative oversight, unfavorable business trends or other risks that could materially and adversely affect our and the VIEs' business, prospects, financial condition and results of operations.

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***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 our auditor for two consecutive years. 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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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 (the "2021 Determination").

In March 2022, the SEC issued its first "Conclusive list of issuers identified under the HFCAA". The identified issuers in the list are subject to the delisting provisions if they remain on the list for two consecutive years.

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.

Even so, the SEC still included the issuers to the "Conclusive list of issuers identified under the HFCAA" if the issuers filed an annual report with an audit report issued by a registered public accounting firm headquartered in mainland China and Hong Kong prior to the PCAOB's decision to vacate its 2021 Determination. Additionally, each identified issuer that is on the conclusive list must comply with the HFCAA's submission and disclosure requirements for the year that it is identified. As of the date of this prospectus, more than 170 public companies have been listed in as issuers identified under the HFCAA. More recently, on February 21, 2025, the United States President Donald Trump issued the America First Investment Policy to provide guidance on investment oversight. The policy includes directives to, among other things, determine if adequate financial auditing standards are upheld for companies covered by the HFCAA.

Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. Any lack of access to the PCAOB inspection in mainland China and Hong Kong may prevent the PCAOB from fully evaluating audits and quality control procedures of the auditors based there. As a result, the investors may be deprived of the benefits of such PCAOB inspection. 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 may be identified as a commission-identified issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.

Our current auditor Audit Alliance LLP is located in Singapore and is registered with the PCAOB. Audit Alliance LLP 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. As of the date of the annual report, Audit Alliance LLP is not subject to the 2021 Determinations announced by the PCAOB and our listing is not affected by the HFCAA and related regulations. If, in the future, we are identified by the SEC for two consecutive years as a commission-identified issuer whose registered public accounting firm is determined by the PCAOB that it is unable to inspect or investigate completely because of a position taken by one or more authorities in China, the SEC may 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, and this ultimately could result in our ADSs being delisted.

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***There can be no assurance that our ADSs will continue to be listed on Nasdaq or, if listed, that we will be able to comply with the continued listing standards of Nasdaq, which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions.***

To continue listing our Class A ordinary shares on Nasdaq, we are required to demonstrate compliance with Nasdaq's continued listing requirements. On May 3, 2023, the Company was notified by Nasdaq of its failure to maintain a minimum bid price of $1.00 per share for 30 consecutive trading days under the Bid Price Rule and its failure to maintain a minimum market value of publicly held shares ("MVPHS") of US$5 million for continued listing on the Nasdaq Global Market under Listing Rule 5450(b)(1)(C), respectively. The Company was given its first 180-day extension, or until October 30, 2023 to regain compliance. On November 2, 2023, we received a letter from the Staff of the Listing Qualifications Department of Nasdaq notifying the Company that since our listed securities did not have a closing bid price of at least US$1.00 for a minimum of 10 consecutive business days during the 180 calendar days ended October 30, 2023, the Company has not regained compliance with Nasdaq Listing Rule 5450(a)(1), which requires listed securities to maintain a minimum bid price of US$1.00 per share. As described in the letter, the Company's listed securities are subject to delisting from the Nasdaq Global Market unless the Company timely submit an application to transfer its securities to the Nasdaq Capital Market, or requests a hearing before the Panel. On November 30, 2023, the Company received a letter from the Panel, indicating the Panel's decision to grant an exception period until January 31, 2024 (the "Exception Period"), for the Company to effect the reverse stock split and thereafter regain compliance with the Bid Price Rule, subject to the terms that (1) on or before November 30, 2023, the Company shall obtain its board of directors' approval for a reverse stock split at a ratio that is sufficient to regain and maintain long term compliance with the Bid Price Rule, and the Company shall provide an update to the Panel on the reverse stock split approval on December 1, 2023; (2) on or before January 5, 2024, the Company shall effect a reverse stock split and, thereafter, maintain a $1 closing bid price for a minimum of ten consecutive business days; and (3) on or before January 31, 2024, the Company shall have demonstrated compliance with the Bid Price Rule, by evidencing a closing bid price of US$1.00 or more per share for a minimum of ten consecutive trading sessions. On November 30, 2023, the Company obtained its board of directors' approval to amend the ratio of ADS representing its ordinary shares (now redesignated as Class A ordinary shares) ("ADS Ratio") from one (1) ADS representing five (5) ordinary share (now redesignated as Class A ordinary shares) to one (1) ADS representing fifty (50) ordinary shares (now redesignated as Class A ordinary shares), and provided an update to the Panel on the ADS Ratio change approval on December 1, 2023. On December 15, 2023, the Company announced that it planned to change its ADS Ratio, par value US$0.0001 per share, from the current ADS Ratio of one (1) ADS to five (5) ordinary shares (now redesignated as Class A ordinary shares) to a new ADS Ratio of one (1) ADS to ten (10) ordinary shares (now redesignated as Class A ordinary shares) (the "ADS Ratio Change"). Effective January 3, 2024, the Company effected a 1-for-2 reverse stock split. On January 24, 2024, the Company received a letter from the Panel, notifying the Company that it had regained compliance with the Bid Price Rule, as required by the Panel's decision dated November 30, 2023. Accordingly, the Panel had determined to continue the listing of the Company's securities on the Nasdaq and the matter was closed.

On May 7, 2024, the Company was again notified by Nasdaq of its failure to maintain a minimum bid price of US$1.00 per share for 30 consecutive trading days under the Bid Price Rule, and was given a compliance period of 180-day extension, or until November 4, 2024 to regain compliance. Effective September 30, 2024, the Company effected a 1-for-10 reverse stock split, to change to a new ADS Ratio of one (1) ADS to one hundred (100) Class A ordinary shares. On October 14, 2024, the Company received a letter from the Nasdaq, notifying the Company that it had regained compliance with the Bid Price Rule and this matter was closed.

On August 29, 2024, the Company was again notified by Nasdaq of its failure to maintain the MVPHS of US$5 million for 30 consecutive trading days for continued listing on the Nasdaq Global Market under Listing Rule 5450(b)(1)(C), and was given 180 calendar days, or until February 25, 2025 to regain compliance. On February 27, 2025, the Company received a letter from the staff of Nasdaq notifying the Company that it had regained compliance with the MVPHS requirement under Listing Rule 5450(b)(1)(C).

On November 18, 2025, the Company was again notified by Nasdaq of its failure to maintain a minimum bid price of US$1.00 per share for 30 consecutive trading days under the Bid Price Rule, and was given a compliance period of 180-day extension, or until May 18, 2026 to regain compliance. Effective April 20, 2026, the Company effected a 1-for-10 reverse stock split, to change the ratio of its ADS to Class A ordinary shares from the previous ratio of one (1) ADS to one hundred (100) Class A ordinary shares to a new ratio of one (1) ADS to one thousand (1,000) Class A ordinary shares. The Company intended to actively monitor the closing bid price of its securities between November 18, 2025 and May 18, 2026.

On February 9, 2026, the Company was again notified by Nasdaq of its failure to maintain the MVPHS of US$5 million for 30 consecutive trading days for continued listing on the Nasdaq Global Market under Listing Rule 5450(b)(1)(C), and was given 180 calendar days, or until August 10, 2026 to regain compliance. The Company intends to actively monitor its market value of publicly held shares between February 9, 2026 and August 10, 2026.

We cannot assure you that we will be able to meet Nasdaq's other continued listing standards. If our ADSs are delisted by Nasdaq, and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, then we could face significant material adverse consequences, including:

● less liquid trading market for our securities;

● more limited market quotations for our securities;

● determination that our ADSs are a "penny stock" that requires brokers to adhere to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary trading market for our securities;

● more limited research coverage by stock analysts;

● loss of reputation; and

● more difficult and more expensive equity financings in the future.

***Our and the VIEs' business, financial performance and results of operations could be adversely affected by the deterioration of the relation between China and the United States and global geopolitical relations.***

The relation between China and the United States is constantly changing. There has been a "trade war" between the two countries during recent years, the United States imposed additional import tariffs on specified products imported from China. As a result, China has responded by imposing retaliatory tariffs on goods exported from the United States. Tensions exist in other areas such as political, social and health issues, including the disagreements in relation to the COVID-19 pandemic. In light of the ongoing tensions between China and the United States, including the recent increase of tariff between the two countries in 2025, there is a risk that our and the VIEs' business and our listing status may be adversely affected by trade restrictions, sanctions and other policies that may be implemented. As we and the VIEs operate in China, any deterioration in political or trade relations might cause a public perception in the United States or elsewhere that might cause our and the VIEs' education services to become less attractive. The United States lawmakers have introduced several bills intended to protect American investments in Chinese companies. The PWG criticized China's failure to uphold international commitment to transparency and called for recommendations to protect U.S. investors from China's failure to allow audits of U.S.-listed Chinese companies. The PWG may impact U.S.-listed Chinese companies if strict compliance with audit requirements and U.S. law or new listing rules or governance standards were imposed. Furthermore, there have been media reports on deliberations within the U.S. government regarding potentially limiting or restricting China-based companies from accessing U.S. capital markets. If any such deliberations were to materialize, the resulting legislation may have a material and adverse impact on the performance of the stocks of the China-based issuers listed in the United States. From October 1, 2025 to November 12, 2025, the federal government of the United States was in a shutdown as Congress failed to pass appropriations legislation for the 2026 fiscal year. In addition, the United States government funding of the SEC and other government agencies on which we may rely, is subject to the political process, including executive and congressional priorities, which is inherently fluid and unpredictable. Future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

In addition, political tensions between the United States and China have escalated due to, among other things, trade disputes, the COVID-19 outbreak, tensions over Taiwan, legislation passed by the U.S. Senate banning all imports from Xinjiang, sanctions imposed by the U.S. Department of Treasury on certain officials of Xinjiang's regional government, the Hong Kong Special Administrative Region and the central government of the PRC and the executive orders issued by former U.S. President Joe Biden in June 2021 that barring American investment into Chinese firms with purported ties to defense or surveillance technology sectors, which was expanded on an earlier investment blacklist issued by U.S. President Donald J. Trump in his first presidency. Under President Donald J. Trump's administration, causes of US-China friction remains. Starting from February 2025, the U.S. government imposed a series of tariff increases on imports from China. Following the announcement by President Trump on April 9, 2025, the tariffs on imports from China have been raised to 145%. In response to the multiple rounds of tariff increases by the U.S. government, China also announced several rounds of retaliatory tariffs on goods imported from the U.S., raising the rate to 125%. Rising political tensions between China and the U.S. could reduce levels of trades, investments, technological exchanges and other economic activities between the two major economies, which would have a material adverse effect on global economic conditions and the stability of global financial markets. Ongoing political tensions could reduce levels of trades, investments, technological exchanges and other economic activities between the two major economies, which would have a material adverse effect on global economic conditions and the stability of global financial markets. Any of these factors could have a material adverse effect on our and the VIEs' business, prospects, financial condition and results of operations.

Changes in political conditions and changes in the state of China-U.S. relations are difficult to predict and could adversely affect our and the VIEs' business, operating results and financial condition. We cannot predict what effect any changes in China-U.S. relations may have on our ability to access capital or effectively operate our and the VIEs' business in China. Moreover, any political or trade controversies between the United States and China, whether or not directly related to our and the VIEs' business, could cause investors to be unwilling to hold or buy our ADSs and consequently cause the trading price of our ADSs to decline.

Recently there have been heightened tensions in geopolitical relations, not only between the United States and China, but also globally, such as the conflicts involving Russia, Ukraine, Gaza, Iran and the Middle East more broadly, and the accompanying international response including economic sanctions, have been disruptive to the world economy, with increased volatility in global financial and commodity markets, including higher oil and gasoline prices, disruption to international trade and financial markets, all of which have a trickle-down effect on supply chains. There is substantial uncertainty about the extent to which these conflicts will continue to impact economic and financial affairs, as the numerous issues arising from the conflicts are in flux and there is the potential for escalation of the conflicts globally. Although we do not have operations in these areas, there is no guarantee that these global tensions, sanctions, or potential retaliatory trade measures will not further reduce levels of international trade and investment or cause disruptions in global economy. Such developments could have a material adverse effect on our business and results of operations.

***The enforcement of the PRC Labor Contract Law and other labor-related regulations in the PRC may adversely affect our and the VIEs' business and results of operations.***

The Standing Committee of the NPC 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, except where an employee under a fixed-term labor contract, an employer is obligated to sign a permanent labor contract with any employee who has worked for the employer for more than 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. 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. As of December 31, 2025, we and the VIEs had made social insurance contribution for the PRC-based employees based on the relevant PRC laws and regulations and practical measures. If we and the VIEs fail to, or are deemed to have failed to, make adequate social insurance and housing fund contributions in the future, we and the VIEs may be required to make supplemental contributions and/or subject to overdue fees and/or fines and our and the VIEs' business, financial condition and results of operations may be adversely affected. See "*Item 4. Information on the Company—B. Business Overview—Regulation—PRC Laws and Regulations Relating to Labor Protection.*"

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 and the VIEs' employment practices may not be at all times be deemed in compliance with the regulations. As a result, we and the VIEs could be subject to penalties or incur significant liabilities in connection with labor disputes or investigations.

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***The increases in labor costs in the PRC may adversely affect our and the VIEs' business and results of operations and we may face labor and employment related disputes and regulatory penalties.***

China's economy has experienced increases in labor costs in recent years and the overall economy and the average wages in China are expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our employee costs, including salaries and welfare, will continue to increase. Unless we are able to pass on these increased labor costs to our students and their parents by increasing tuition, meal and accommodation service fees, our profitability and results of operations may be materially and adversely affected.

In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits to designated government agencies for the benefit of our employees. Compared with its predecessors, the current Labor Contract Law of the PRC imposes stricter requirements on employers in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees' probation and unilaterally terminating labor contracts, further increasing our labor-related costs such as limiting our ability to terminate employment of some of our employees or otherwise change our employment or labor practices in a cost-effective manner. In addition, as the interpretation and implementation of labor-related laws and regulations are still developing, we cannot assure you that our employment practices have been or will at all times be deemed in compliance with the labor-related laws and regulations in China. If we are subject to severe penalties in connection with labor disputes or government investigations, our and the VIEs' business, financial condition and results of operations will be adversely affected.

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***Seasonal and other fluctuations in our results of operations could adversely affect the trading price of the ADSs.***

Our net revenue and results of operations normally fluctuate from quarter to quarter as a result of seasonal variations in our and the VIEs' business. Our students and their parents typically pay the tuition and other fees prior to the commencement of a semester, and we recognize revenues from the delivery of education services on a straight-line basis over the semester. The fluctuations may result in volatility or have an adverse effect on the market price of the ADSs. In addition, comparisons of our operating results between different periods within a single financial year, or between the same periods in different financial years, may not be meaningful and should not be relied upon as good indicators of our performance.

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***We have limited insurance coverage.***

We maintain various insurance policies to safeguard against certain risks and unexpected events, such as school liability insurance, student personal accident insurance and property insurance for vehicles. However, our insurance may not be sufficient in terms of amounts and scope. If we were held liable for amounts and claims exceeding the scope or amounts covered by our insurance policies, or suffered losses from incidents for which we do not currently maintain any insurance, we may be required to pay significant damages or suffer significant loss without being able to recover all or part of the amounts from insurance companies, and our and the VIEs' business, results of operations and financial condition may be materially and adversely affected. In addition, we do not have any business disruption insurances to cover losses caused by natural disasters or catastrophic events, which may significantly disrupt our and the VIEs' business operations and incur substantial costs on us, and may materially and adversely affect our and the VIEs' business, financial condition and results of operations.

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***We and the VIEs may not be able to adequately protect our intellectual property rights.***

As of December 31, 2025, we had 46 and two registered trademarks in the PRC and Hong Kong, respectively. As of December 31, 2025, we and the VIEs had no trademarks pending registration in the PRC or Hong Kong. We and the VIEs obtained five computer software copyrights through the acquisition of Hangzhou Youxi by Liandu WFOE in February 2021. We believe our and the VIEs' trademarks and other intellectual properties are competitive advantages and are important to our success to date and our future prospects. We have been investing resources to develop our own intellectual properties and we take prudent steps to protect our intellectual properties and know-how. However, the steps we have taken to protect our intellectual property rights may not prevent the misappropriation of our proprietary information or deter independent development of similar technologies by others and halt any copycat attempts.

In addition, the legal regime governing intellectual property in China is still evolving and the level of protection of intellectual property rights and know-how in China may differ from those in other more developed jurisdictions. Accordingly, protection of intellectual property rights in China might not be as effective as in the United States or other western countries. Furthermore, policing unauthorized use of proprietary technology is difficult and expensive, and we might need to resort to litigation to enforce or defend our intellectual property rights or to determine the enforceability, scope and validity of our proprietary rights or those of others. Such litigation and an adverse determination in any such litigation, if any, could result in substantial costs and the diversion of resources and management's attention.

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***We and the VIEs may be subject to intellectual property infringement claims and our brand and reputation may be negatively affected.***

From time to time, we and the VIEs could face allegations of trademark, copyright, patent and other intellectual property rights infringement of third parties. Such allegations of intellectual property right infringements could come from our competitors and third parties which operate in other industries. In the event that we or the VIEs are sued by the intellectual property owners or licensees, or we or the VIEs receive a cease and desist letter or a court order regarding alleged infringements, we and the VIEs may have to discontinue to use the brand name and may be subject to claims or other financial losses. In the event that any lawsuit is filed against us and the VIEs and such claims were to prevail, it could have an adverse effect on our and the VIEs' business, financial conditions and results of operations. In addition, we and the VIEs will have to invest in additional resources in establishing new brand names, which may take time and cause us significant costs and efforts, which in turn affects our ability to develop and grow.

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***Capacity constraints or system disruptions to our computers or network, any cybersecurity incidents, or any unauthorized disclosure or manipulation of sensitive information relating to our students and teachers may expose us to litigation and damages or may adversely affect the reputation of our schools.***

We and the VIEs possess sensitive and private information about our students and teachers, such as names, addresses, contact numbers, ID numbers and exam scores of our students. We and the VIEs store these sensitive data primarily in computers located in our school offices. If any sensitive and private data about our students and teachers was lost, damaged or leaked due to capacity constraints or system disruptions to our computers or network, was obtained, disclosed or manipulated by unauthorized third parties through cybersecurity breaches to the computers or network of our schools or our providers, or was negligently misappropriated or disclosed by our staff, we and the VIEs may be sued and held liable for damages, which may incur significant costs, negatively affect our reputation and divert management attention and other resources. As a result, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

**Risks Relating to Our Corporate Structure**

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***Our and the VIEs' private education service business is subject to extensive regulation in China. We and the VIEs may be subject to severe penalties if the PRC government finds that the agreements that establish the structure for operating our and the VIEs' business in China do not comply with applicable PRC laws and regulations.***

Our and the VIEs' private education service business is subject to extensive regulations in China. The PRC government regulates various aspects of our and the VIEs' business and operations, such as curriculum content, education materials, standards of school operations, student recruitment activities, tuition and other fees. The laws and regulations applicable to the private education sector are subject to frequent changes, and new laws and regulations may be adopted, some of which may have a negative effect on our and the VIEs' business, either retrospectively or prospectively.

We are a Cayman Islands company and thus, we are classified as a foreign enterprise under the PRC laws. Foreign investment in the education industry in China is extensively regulated and subject to various restrictions. Under the Special Administrative Measures for Foreign Investment Access (Negative List) (2021), or the 2021 Special Administrative Measures, high school is restricted industries for foreign investors, and foreign investors are only allowed to invest in such industries in cooperative ways with domestic investors, provided that domestic investors play a dominant role in such cooperation. Furthermore, under the Implementation Opinions of the MOE on Encouraging and Guiding the Entry of Private Capital in the Field of Education and Promoting the Healthy Development of Private Education, which was issued by the MOE on June 18, 2012, the foreign portion of the total investment in a Sino-foreign joint venture high school should be below 50%. According to Regulations of the People's Republic of China on Establishment and Operation of Sino-Foreign Cooperative Educational Institutions issued by the State Council on March 2, 2019, the foreign investor that participates in the establishment of a Sino-foreign cooperative educational institution shall be a foreign educational institution that possesses the relevant credentials and teaching quality. In addition, pursuant to the Sino-foreign Vocational Skills Training Measures, the foreign investor in a Sino-foreign technical school must be a foreign education institution or a foreign vocational skills training institution with relevant qualifications on education services and operating high-quality education. See "*Item 4. Information on the Company—B. Business Overview—Regulation—Regulations on Sino-Foreign Cooperation in operating school*" for details.

Although foreign investment in high schools and vocational schools is not prohibited, based on the operation experience, our subsidiary Liandu WFOE in China is still ineligible to independently or jointly invest and operate high schools and vocational schools, including Langfang School. To comply with PRC laws and regulations, our wholly-owned subsidiary, Liandu WFOE, has entered into a series of contractual arrangements with the VIEs, pursuant to which we are regarded as the primary beneficiary of the VIEs in accordance with U.S. GAAP. For a description of these contractual arrangements, see "*Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements.*" If the contractual arrangements that establish the structure for operating our and the VIEs' business in China are found to violate any PRC laws or regulations in the future or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities, including the Ministry of Education of People's Republic of China, or the MOE, which regulates the education industry, the Ministry of Commerce, or MOFCOM, which regulates the foreign investment in China, and the Civil Affairs Bureau, which regulates the registration of schools in China, would have broad discretion in dealing with such violations, including:

● revoking the business and operating licenses of our PRC subsidiaries or VIEs;

● discontinuing or restricting the operations of any related-party transactions among Liandu WFOE or VIEs;

● imposing fines or other requirements with which we or Liandu WFOE or VIEs may not be able to comply;

● requiring us to restructure our operations in such a way as to compel us to establish new entities, re-apply for the necessary licenses or relocate our and the VIEs' businesses, staff and assets;

● imposing additional conditions or requirements with which we may not be able to comply; or

● restricting the use of proceeds from our additional public offering or financing to finance our and the VIEs' business and operations in China.

As of the date of the annual report, similar ownership structure and contractual arrangements have been used by many China-based companies listed overseas, including a number of education companies listed in the United States. To our knowledge, none of the fines or punishments listed above has been imposed on any of these public companies, including companies in the education industry. However, we cannot assure you that such fines or punishments will not be imposed on us or any other companies in the future. If any of the above fines or punishments is imposed on us, our and the VIEs' business, financial condition and results of operations could be materially and adversely affected. If any of these penalties results in our inability to direct the activities of the VIEs and their respective subsidiaries that most significantly impact their economic performance, and/or our failure to receive the economic benefits from the VIEs and their respective subsidiaries, we may not be able to consolidate the VIEs and their respective subsidiaries in our financial statements in accordance with U.S. GAAP. However, we do not believe that such actions would result in the liquidation or dissolution of our company, our wholly-owned subsidiaries in China or the VIEs or their respective subsidiaries.

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***Uncertainties exist with respect to the interpretation and implementation of the newly enacted Foreign Investment Law of the People's Republic of China and how it may affect 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 of PRC or the Foreign Investment Law, which came into effect on January 1, 2020 and replaced the Law of the PRC on Chinese-Foreign Equity Joint Ventures, the Law of the PRC on Chinese-Foreign Contractual Joint Ventures, and the Wholly Foreign-invested Enterprise Law. The Foreign Investment Law embodies an expected PRC regulatory trend 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. For instance, the Foreign Investment Law does not explicitly classify contractual arrangements as a form of foreign investment.

Conducting operations through contractual arrangements has been adopted by many PRC-based companies, and has been adopted by our Company to establish control of the VIEs. Since the Foreign Investment Law is relatively new, uncertainties still 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, although the Foreign Investment Law does not explicitly classify contractual arrangement as a form of foreign investment, it still leaves a leeway for future laws and if future laws, administrative regulations or provisions stipulates contractual arrangements as a way of foreign investment, then whether our contractual arrangements will be recognized as foreign investment, whether our contractual arrangements will be deemed to be in violation of the foreign investment access requirements and how our contractual arrangements will be handled are uncertain. In the extreme case-scenario, we may be required to unwind the contractual arrangements and/or dispose relevant business operations, which could have a material and adverse effect on our and the VIEs' business, financial condition and result of operations.

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***Our contractual arrangements may not be as effective in providing control over the VIEs as equity ownership.***

We have relied and expect to continue to rely on our contractual arrangements to operate private education businesses in China. These contractual arrangements may not be as effective in providing us with control over the VIEs as equity ownership. If we had equity ownership of the VIEs, we would be able to exercise our rights as a direct or indirect shareholder to effect changes in the board of directors of the VIEs, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level. However, as these contractual arrangements stand now, if the VIEs or their shareholders fail to perform their respective obligations under these contractual arrangements, we cannot exercise shareholders' rights to direct corporate actions as direct ownership would otherwise entail. If the parties under such contractual arrangements refuse to carry out our directions in relation to everyday business operations, we will be unable to maintain effective control over the operations of our schools in China. If we were to lose effective control over the VIEs, certain negative consequences would result, including our being unable to consolidate the financial results of the VIEs with our financial results. Given that we derived substantially all of our revenue from the VIEs for 2023, 2024 and 2025 and substantially all of our assets are held by the VIEs (including our permits and licenses, real estate leases, buildings and other educational facilities related to our schools), our financial position would be materially and adversely affected if we were to lose effective control over the VIEs or if our contractual arrangements are invalidated or nullified. In addition, losing effective control over the VIEs may negatively affect our operational efficiency and brand image. Further, losing effective control over the VIEs may impair our access to their cash flow from operations, which may reduce our liquidity.

In addition, if the legal structure and the contractual arrangements were found to be in violation of any existing or future PRC laws and regulations, we may be subject to fines or other legal or administrative sanctions. If government actions cause us to lose our right to direct the activities of our affiliated entities or our right to receive substantially all the economic benefits and residual returns from our affiliated entities and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of our affiliated entities.

Furthermore, we are a holding company incorporated in the Cayman Islands. As a holding company with no material operations of our own, we conduct a substantial majority of our operations through our subsidiaries established in China, the VIEs, and its subsidiaries in China. We entered into certain contractual arrangements with the VIEs through Liandu WFOE, pursuant to which we are regarded as the primary beneficiary of the VIEs in accordance with U.S. GAAP. Our ADSs listed on Nasdaq Global Market represents shares of our offshore holding company instead of shares of the VIEs or its subsidiaries in China. We may not be able to continue to satisfy the applicable requirements and rules with respect to such structure. If we are unable to satisfy the Nasdaq Global Market criteria for maintaining our listing, our securities could be subject to delisting.

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***If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, we may be unable to assert our contractual rights over the assets of the VIEs, and our ADSs or ordinary shares may decline in value or become worthless.***

Investors in the ADSs are not purchasing equity securities of our subsidiaries that have substantive business operations in China but instead are purchasing equity securities of a Cayman Islands holding company. We are a Cayman Islands holding company that conducts all of its operations and operates its business in China through its PRC subsidiaries and VIEs through contractual agreements. Such structure involves unique risks to investors in the ADSs.

Recently, the PRC government adopted a series of regulatory actions and issued statements to regulate business operations in China, including those related to VIEs and private schools, which may challenge the validity of our contractual arrangements. In the event that the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, we may be unable to assert our contractual rights over the assets of the VIEs, and our ADSs or ordinary shares may decline in value or become worthless.

Prior to August 31, 2021, we and the VIEs primarily operated primary and secondary school in Baiyun campus and Yijing campus—Featured Division of Lianwai School through a series of contractual arrangements with the VIEs. Under the 2021 Implementation Rules which took effect on September 1, 2021, social organizations and individuals are prohibited from controlling a private school that provides compulsory education by means of, among others, merger, acquisition, and contractual arrangements, and a private school providing compulsory education is prohibited from conducting transactions with its related party. In particular, the prohibition over related party transactions has significantly affected the enforceability of the exclusive management services and business cooperation agreements among Liandu WFOE and Lianwai School providing compulsory education. Therefore, we re-assessed our control over Lianwai School. Based on the relevant accounting standard in accordance with U.S. GAAP, we have concluded that we have lost control of Lianwai School since August 31, 2021, in view of the significant uncertainties and restrictions the 2021 Implementation Rules impose on our ability to direct the range of ongoing activities that would most significantly impact the returns of Lianwai School. In light of such regulatory developments, on April 20, 2022, we entered into an acknowledgment agreement of contractual agreements with Lianwai School and respective directors, to confirm all the terms of rights and obligations relating to Lianwai School and the directors appointed by the sponsor under the contractual arrangements among them, and agree among the parties that such arrangements shall have been terminated on August 31, 2021. To minimize disruptions to existing students enrolled in Lianwai School, we and the VIEs continued to offer essential services to the students. We deconsolidated Lianwai School commencing from September 1, 2021 and presented it as a discontinued operation in current and comparative period financial statements.

Meanwhile, we and the VIEs have entered into a series of contractual arrangements with Qingtian International School, Lishui International School and Langfang School. The contractual arrangements enable us to: (i) exercise effective control over the VIEs; (ii) receive substantially all of the economic benefits of the VIEs in consideration for the services provided by us; and (iii) have an exclusive option to purchase all of the equity interests in the VIEs when and to the extent permitted under PRC law. Therefore, we are able to consolidate the financial results of the VIEs in our consolidated financial statements in accordance with U.S. GAAP. However, as there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, we cannot assure you that the PRC government would agree that our corporate structure or any of the above contractual arrangements comply with current or future PRC laws or regulations. PRC laws and regulations governing the validity of these contractual arrangements are uncertain and the relevant government authorities may have broad discretion in interpreting these laws and regulations.

If such regulations change or are interpreted differently, it may result in our inability to assert contractual control over the assets of our PRC subsidiaries or the VIEs that conduct all or substantially all of our operations. In the event we are unable to enforce the Contractual Arrangements or we experience significant delays or other obstacles in the process of enforcing these Contractual Arrangements, we may not be able to exert control over the VIEs and may lose control over the assets owned by the VIEs.

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***The owners of the VIEs may have conflicts of interest with us, which may materially and adversely affect our and the VIEs' business, financial condition and results of operations.***

Our control over the VIEs is based upon the contractual arrangements with the VIEs. The beneficial owners of the VIEs and the registered shareholders are also our controlling shareholders. Any of them may potentially have conflicts of interest with us and breach any of their contracts or undertakings with us if it would further any of their own interests or if any of them otherwise acts in bad faith. We cannot assure you that when conflicts of interest arise between our Company and the beneficial owners of the VIEs, any of them will act completely in our interest or that the conflicts of interest will be resolved in our favor. In the event that such conflict of interest cannot be resolved in our favor, we may have to rely on legal proceedings which may disrupt our and the VIEs' business operations and subject us to uncertainties as to the outcome of such legal proceedings. As a result, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected.

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***We may have to incur additional costs and expend substantial resources to enforce our contractual arrangements, temporarily or permanently lose control over our primary operations or lose access to our primary sources of revenue, if the VIEs or their respective ultimate shareholders fail to perform their obligations under our contractual arrangements.***

Under the current contractual arrangements, if any of the VIEs or their ultimate shareholders fails to perform its or her respective obligations under these contractual arrangements, we may incur substantial costs and resources to enforce such arrangements and relying on legal remedies under PRC laws, including seeking specific performance or injunctive relief and claiming damages.

Since our contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China, these contracts would be interpreted in accordance with PRC laws and any disputes would be resolved in accordance with PRC legal procedures. Under PRC laws, rulings by arbitration tribunals are final and the parties to a dispute cannot appeal the arbitration award in any court based on the substance of the case. The prevailing party may enforce the arbitration award by instituting arbitration award recognition proceedings with the competent PRC court. In addition, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. In the event that we are unable to enforce these contractual arrangements, we may not be able to exert effective control over the VIEs for an extended period of time or we may be permanently unable to exert control over the VIEs.

In addition to the enforcement costs outlined above, during the course of disputes regarding such enforcement action, we may temporarily lose effective control over our schools in China, which may lead to loss of revenue or potentially lead to our having to incur additional costs and expend substantial resources to operate our and the VIEs' business in the absence of effective enforcement of these contractual arrangements. If this were to occur, our and the VIEs' business, financial condition and results of operations may be materially and adversely affected and the value of our Shareholders' investments in our Company may therefore decrease.

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***Certain terms of our contractual arrangements may not be enforceable under PRC laws.***

Our contractual arrangements provide for the resolution of disputes through arbitration in accordance with the arbitration rules of the China International Economic and Trade Arbitration Commission in Beijing. Our contractual arrangements contain provisions to the effect that the arbitral body may award remedies over the shares and/or assets of the VIEs, injunctive relief and/or winding up of the VIEs. In addition, our contractual arrangements contain provisions to the effect that courts in the Cayman Islands are empowered to grant interim remedies in support of the arbitration pending the formation of an arbitral tribunal. Under PRC laws, an arbitral body granting any injunctive relief or provisional or final liquidation order to preserve the assets of or any equity interest in Chinese legal entities in case of disputes must submit the application to the court in China. Therefore, such remedies may not be available to us, notwithstanding the relevant contractual provisions contained in our contractual arrangements. PRC laws allow an arbitral body to award the transfer of assets of or an equity interest in China in favor of an aggrieved party. In the event of non-compliance with such award, enforcement measures may be sought from the court. However, the court may or may not support the award of an arbitral body when deciding whether to take enforcement measures. Under PRC laws, courts of judicial authorities in the PRC generally would not grant injunctive relief or the winding-up order against an entity as interim remedies to preserve the assets or shares in favor of any aggrieved party. As a result, in the event that the VIEs or any of the registered shareholders breaches any of the contractual arrangements, we may not be able to obtain sufficient remedies in a timely manner, and our ability to exert effective control over the VIEs and conduct the education business could be materially and adversely affected.

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***Our exercise of the option to acquire school sponsor's interests in Lishui International School and Langfang School may be subject to certain limitations and we may incur substantial costs and spend significant resources to enforce the option under the contractual arrangements.***

We may incur substantial costs on our part to exercise the option to acquire the school sponsor's interests in Lishui International School and Langfang School. Pursuant to the Exclusive Call Option Agreements, if and when the PRC laws and regulations permit foreign investors to directly hold part or all of the equity interests of the VIEs and to engage in the restricted and prohibited business, Liandu WFOE or its designated purchaser may, at its discretion, purchase all or part of the direct and/or indirect equity interests (including the interests in Lishui International School) held by Lishui Mengxiang's shareholders, or purchase all or part of the direct and/or indirect equity interests (including the interests in Langfang School) held by Beijing P.X.'s shareholders at the minimum price permitted by PRC laws and regulations, and the percentage of equity interests to be purchased by Liandu WFOE or its designated purchaser shall be no less than the maximum limit permitted by the PRC laws and regulations in relation to the equity held by foreign investors. Such equity transfer price is not expressly provided for in the current PRC laws and regulations and it is uncertain whether it may be further regulated by future PRC laws and regulations. As a result, the estimated costs associated with the purchase of the equity interests in the VIEs cannot be ascertained as of the date of the annual report.

Pursuant to the Exclusive Call Option Agreement with respect to Lishui International School, Lishui Mengxiang's shareholders have irrevocably undertaken that if the purchase price is determined at an amount exceeding RMB0, the difference shall be compensated fully by Lishui Mengxiang's shareholders to Liandu WFOE or its designated entity. In the event that Liandu WFOE or its designated party acquires the equity interests of Lishui Mengxiang or Lishui International School and the relevant PRC authorities determine that the purchase price for acquiring such interests in Lishui International School is below market value, the respective equity holder(s), Lishui Mengxiang's shareholders or Lishui Mengxiang, may be required to pay taxes with reference to the market value such that the amount of tax may be substantial. However, pursuant to the Exclusive Call Option Agreement, all taxes and fees associated with the equity transfer shall be paid by Lishui Mengxiang's shareholders and/or the direct equity holders of the VIEs upon the transfer. We will determine the purchase target after due consideration of the said tax duties and fees before exercising the call option. In the event that Lishui Mengxiang is deemed as the direct interest holder, it may be subject to such tax. Furthermore, the PRC tax authorities may impose late payment penalties on Lishui Mengxiang for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if Lishui Mengxiang's tax liabilities increase or if it is required to pay late payment fees and other penalties.

Pursuant to the Exclusive Call Option Agreement with respect to Langfang School, Beijing P.X.'s shareholders have irrevocably undertaken that if the purchase price is determined at an amount exceeding RMB0, the difference shall be compensated fully by Beijing P.X.'s shareholders to Liandu WFOE or its designated entity. In the event that Liandu WFOE or its designated party acquires the equity interests of Beijing P.X. or Langfang School and the relevant PRC authorities determine that the purchase price for acquiring such interests in Langfang School is below market value, the respective equity holder(s), Beijing P.X.'s shareholders or Beijing P.X., may be required to pay taxes with reference to the market value such that the amount of tax may be substantial. However, pursuant to the Exclusive Call Option Agreement, all taxes and fees associated with the equity transfer shall be paid by Beijing P.X.'s shareholders and/or the direct equity holders of Beijing P.X. and Langfang School upon the transfer. We will determine the purchase target after due consideration of the said tax duties and fees before exercising the call option. In the event that Beijing P.X. is deemed as the direct interest holder, it may be subject to such tax. Furthermore, the PRC tax authorities may impose late payment penalties on Beijing P.X. for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if Beijing P.X.'s tax liabilities increase or if it is required to pay late payment fees and other penalties.

The rights and obligations under the Exclusive Call Option Agreement with respect to Qingtian International School were actually terminated on December 31, 2023 pursuant the Acknowledgment Agreement of Contractual Agreements of Qingtian Overseas Chinese Experimental High School dated April 2, 2024. See "*Item 3. Key Information—Contractual Agreements with respect to Qingtian International School.*"

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***Our contractual arrangements may be subject to scrutiny by the PRC tax authorities, which may impose late payment fees and other penalties on us.***

Under PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities. We and the VIEs could face material and adverse tax consequences if the PRC tax authorities determine that the Business Cooperation Agreement and Exclusive Technical Service and Business Consulting Agreement entered into, among others, the VIEs and Liandu WFOE does not represent an arm's-length price and adjust any of those entities' income in the form of a transfer pricing adjustment. A transfer pricing adjustment could increase our tax liabilities. In addition, PRC tax authorities may form the view that our subsidiaries or the VIEs have improperly minimized their tax obligations and we and the VIEs may not be able to rectify any such incident within the limited timeline required by PRC tax authorities. As a result, PRC tax authorities may impose late payment fees and other penalties on us for under-paid taxes, which may materially and adversely affect our and the VIEs' business, financial condition and results of operations.

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***Certain lease agreements of our leased properties have not been registered with the relevant PRC government authorities as required by PRC law, which may expose us to potential fines.***

According to the applicable PRC laws, parties to a lease agreement are required to file the lease agreements for registration and obtain property leasing filing certificates for their leases. As of the date of the annual report, we and the VIEs have entered into certain lease agreements with third-party landlords for using the school buildings, facilities and dormitories and have not registered any lease agreements under which we and the VIEs are tenant. The failure to register the lease agreements will not affect the validity of such agreements. However, we and the VIEs may be required by relevant government authorities to file the lease agreements to complete the registration formalities and may be subject to a fine for non-registration within the prescribed time limit, which may range from RMB1,000 to RMB10,000 per lease agreement. The imposition of the above fines could require us to make additional efforts and/or incur additional expenses, any of which could adversely affect our and the VIEs' business, financial condition and results of operations. The registration of these lease agreements to which we and the VIEs are a party requires additional steps to be taken by the respective other parties to the lease agreement which are beyond our control. We and the VIEs cannot assure you that the other parties to our lease agreements will be cooperative or that we and the VIEs can complete the registration of these lease agreements and any other lease agreements that we and the VIEs may enter into in the future.

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***We rely on dividends and other payments from Liandu WFOE to pay dividends and other cash distributions to our shareholders***

Our Company is a holding company and our ability to pay dividends and other cash distributions to our Shareholders, service any debt we may incur and meet our other cash requirements depends significantly on our ability to receive dividends and other distributions from Liandu WFOE. The amount of dividends paid to us by Liandu WFOE depends solely on the service fees paid to Liandu WFOE from the VIEs. However, there are restrictions under PRC laws for the payment of dividends to us by Liandu WFOE. For example, relevant PRC laws and regulations permit payments of dividends by Liandu WFOE only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC laws and regulations, Liandu WFOE is required to set aside at least 10% of its after-tax profits based on the PRC accounting standards each year to fund a statutory reserve, until the accumulated amount of such reserve has exceeded 50% of its registered capital. Consequently, Liandu WFOE is restricted in its ability to transfer a portion of its net assets to us or any of our other subsidiaries in the form of dividends, loans or advances. The foregoing restrictions on the ability of Liandu WFOE to pay dividends to us and the limitations on the ability of VIEs to pay service fees to Liandu WFOE could materially and adversely limit our ability to borrow money outside of China or pay dividends to holders of our shares.

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***Lishui International School, and the Vocational Education Services Providers may be subject to limitations on their ability to operate private education or make payments to related parties.***

Before the promulgation of the Decision in 2016, the principal regulations governing private education in China are the Promotion Law and the Regulations on the Implementation of the Non-State Education Promotion Law of the PRC. Under these regulations, a private school may elect to be a school that does not require reasonable returns or a school that requires reasonable returns. A private school that does not require reasonable returns cannot distribute dividends to its school sponsors. A private school whose school sponsor requires reasonable returns must consider factors such as items and criteria for the school's fees, the ratio of the funds used for education-related activities to the total fees collected, the school's operational level and educational quality when determining the percentage of the school's net income that would be distributed as reasonable returns. However, the Promotion Law in force at the time did not provide a formula or guidelines for determining what constitutes a "reasonable return". PRC laws and regulations require a private school the school sponsor of which requires reasonable returns to make an annual appropriation of 25% of its after-tax income to its development fund prior to payments of reasonable returns, while in the case of a private school that does not require reasonable returns, this amount is at least 25% of the annual increase in the net assets of the school, if any. Such appropriations are required to be used for the construction or maintenance of the school or for the procurement or upgrading of educational equipment. Furthermore, none of the current PRC laws and regulations set forth any requirements or restrictions on a private school's ability to operate its education business that differ based on whether such school's sponsor requires reasonable returns.

On September 1, 2017, the Decision became effective. According to the Decision, private schools can be established as non-profit or for-profit entities, with the exception of schools providing compulsory education, which can only be established as non-profit entities. According to the Decision, there is no longer a distinction between schools of which the school sponsors require reasonable returns and schools of which the school sponsors do not require reasonable returns. The sponsor of a non-profit private-run school shall not gain proceeds from school running, and the cash surplus of the school shall be used for school running. There are uncertainties involved in interpreting and implementing the Decision with respect to various aspects of the operations of a private school. Therefore, we cannot assure that the detailed rules and regulations to be promulgated by local governmental authorities would not impose restrictions on the VIEs' ability to operate private schools or to make payments to Liandu WFOE under the contractual arrangements, which may have a material adverse impact on our and the VIEs' business operations and prospects.

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***We may lose the ability to use and enjoy certain important assets, which could reduce the size of our operations, impair our ability to generate revenue and materially affect the market price of our shares, if any of the VIEs becomes the subject of a bankruptcy or liquidation proceeding.***

We and the VIEs currently operate in China through the contractual arrangements. As part of these arrangements, the VIEs hold a majority of the assets that are important to the operation of our and the VIEs' business, including operating permits and licenses and other educational facilities related to our schools. Under the contractual arrangements, Ms. Fen Ye and Ms. Hong Ye may not unilaterally, without our consent, decide to voluntarily liquidate the VIEs.

If any of these entities goes bankrupt and all or part of their assets become subject to liens or rights of third-party creditors, we and the VIEs may be unable to continue some or all of the business activities, which could materially and adversely affect our and the VIEs' business, financial condition, results of operations and price of our shares. If any of the VIEs undergoes a voluntary or involuntary liquidation proceeding, its shareholders or unrelated third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our and the VIEs' business.

**Risks Relating to Doing Business in China**

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***Adverse changes in the PRC economic, political and social conditions as well as laws and government policies, may materially and adversely affect our and the VIEs' business, financial condition, results of operations and growth prospects.***

COVID-19 pandemic had a severe and negative impact on the Chinese and the global economy since 2019. Whether this will lead to a prolonged downturn in the economy is still unknown. Even before the outbreak of the COVID-19, the global macroeconomic environment was facing numerous challenges.

The economic, political and social conditions in the PRC differ from those in more developed countries in many respects, including structure, government involvement, level of development, growth rate, control of foreign exchange, capital reinvestment, allocation of resources, rate of inflation and trade balance position. Before the adoption of its reform and opening up policies in 1978, the PRC was primarily a planned economy. In recent years, the PRC government has been reforming the PRC economic system and government structure. For example, the PRC government has implemented economic reform and measures emphasizing the utilization of market forces in the development of the PRC economy in the past four decades. These reforms have resulted in significant economic growth and social prospects. Economic reform measures, however, may be adjusted, modified or applied inconsistently from industry to industry or across different regions of the country.

We cannot predict whether the resulting changes will have any adverse effect on our current or future business, financial condition or results of operations and the VIEs. Despite these economic reforms and measures, the PRC government continues to play a significant role in regulating industrial development, allocation of natural and other resources, production, pricing and management of currency, and there can be no assurance that the PRC government will continue to pursue a policy of economic reform or that the direction of reform will continue to be market friendly.

Our ability to successfully expand our and the VIEs' business operations in the PRC depends on a number of factors, including macro-economic and other market conditions, and credit availability from lending institutions. Stricter credit or lending policies in the PRC may affect our customers' consumer credit or consumer banking business, and may also affect our ability to obtain external financing, which may reduce our ability to implement our expansion strategies. We cannot assure you that the PRC government will not implement any additional measures to tighten credit or lending standards, or that, if any such measure is implemented, it will not adversely affect our future results of operations or profitability.

Demand for our and the VIEs' services and our business, financial condition and results of operations may be materially and adversely affected by the following factors:

● political instability or changes in social conditions of the PRC;

● changes in laws, regulations, and administrative directives or the interpretation thereof;

● measures which may be introduced to control inflation or deflation; and

● changes in the rate or method of taxation.

These factors are affected by a number of variables which are beyond our control.

***The inherent uncertainties in the PRC legal system could materially and adversely affect us.***

Since 1979, newly introduced PRC laws and regulations have significantly enhanced the protections of interest relating to foreign investments in China. However, since these laws and regulations are relatively new and the PRC legal system continues to evolve rapidly, the interpretations of such laws and regulations may not always be consistent, and enforcement of these laws and regulations involves significant uncertainties, any of which could limit the available legal protections.

In addition, the PRC administrative and judicial authorities have significant discretion in interpreting, implementing or enforcing statutory rules and contractual terms, and it may be difficult to predict the outcome of administrative and judicial proceedings and the level of legal protection we and the VIEs may enjoy in the PRC. These uncertainties may affect our decisions on the policies and actions to be taken to comply with PRC laws and regulations, and may affect our ability to enforce our contractual or tort rights. In addition, the regulatory uncertainties may be exploited through unmerited legal actions or threats in an attempt to extract payments or benefits from us. Such uncertainties may therefore increase our operating expenses and costs, and materially and adversely affect our and the VIEs' business and results of operations.

In particular, PRC laws and regulations regarding the private fundamental education industry have been rapidly evolving in recent years. The relevant PRC government authorities may promulgate new laws and regulations or materialize draft laws and regulations or consultation papers regulating the private fundamental education industry in the future which may impose limitations and restrictions on our and the VIEs' business operation. Moreover, developments in the private fundamental education industry may lead to changes in PRC laws, regulations and policies or in the interpretation and application of existing laws, regulations and policies that may impose limitations and restrictions on the private fundamental education market players, including us, which could materially and adversely affect our and the VIEs' business and operations.

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***You may face difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in this annual report on Form 20-F based on foreign laws.***

We are an exempted company with limited liability incorporated under the laws of the Cayman Islands. We and the VIEs conduct business in China, and our assets are located in China. In addition, most of our senior executive officers are PRC nationals and they have lived in China for a significant portion of time. As a result, it may be difficult or impossible for you to bring an action against us or against our management named in this annual report on Form 20-F 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 as it may be difficult for our shareholders to effect service of process upon us or those persons inside China. Furthermore, China does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the Cayman Islands and many other countries and regions. Therefore, recognition and enforcement in China of judgments of a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult or impossible. Even if you are successful in bringing an action of this kind, the laws of China may render you unable to enforce a judgment against our assets or the assets of our directors and officers.

Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for which judgment has been given, (c) is final, (d) is not in respect of taxes, a fine or a penalty, (e) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. However, there is uncertainty with regard to Cayman Islands law on whether judgments of courts of the United States predicated upon the civil liability provisions of the securities laws of the United States or any State will be determined by the courts of the Cayman Islands as penal or punitive in nature. If such a determination is made, the courts of the Cayman Islands will not recognize or enforce the judgment against a Cayman Islands company, such as our company. Because such a determination in relation to judgments obtained from U.S. courts under civil liability provisions of U.S. securities laws has not yet been made by a court of the Cayman Islands, it is uncertain whether such judgments would be enforceable in the Cayman Islands. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other form of reciprocity with the United States or the Cayman Islands that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not ratify and enforce a foreign judgment or ruling against us or our directors and officers if they deemed that the basic principle of the laws of the PRC or the sovereignty, security or public interest of the State is violated. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States or the Cayman Islands.

Furthermore, as a matter of law or practicality, it is generally difficult to pursue shareholder claims including securities law class actions and fraud claims in China, which are contrarily common in the United States. For example, you may experience significant legal and practical obstacles to obtaining necessary information for shareholder investigations or litigations outside China or with respect to foreign entities. Although the local authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, so far, no such cooperation has been established with the United States securities regulatory authorities. In addition, Article 177 of the PRC Securities Law which became effective in March 2020 promulgated that no overseas securities regulator is allowed to conduct investigation or evidence collection activities directly in the PRC. Therefore, without approval from the competent PRC securities regulators and relevant authorities, no organization or individual may provide documents and materials relating to the securities activities to overseas entities. While detailed interpretation of or implementation rules under Article 177 has yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase the difficulties you face in protecting your interests.

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***PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC subsidiaries or VIEs, which could materially and adversely affect our liquidity and our ability to fund and expand our and the VIEs' business.***

We may (i) transfer the net proceeds into Liandu WFOE to pay in their initially subscribed registered capital, and (ii) provide loans to Liandu WFOE and the VIEs. We may also establish and/or acquire new foreign-invested enterprises in China, pay in their registered capital and provide loans to them.

We plan to utilize part of the proceeds from our initial public offering by way of paying in the initially subscribed registered capital of Liandu WFOE. The amount of funds in the form of capital contribution into Liandu WFOE and other PRC subsidiaries we establish in the future is subject to the amount of their initially subscribed registered capital. Currently, the initially subscribed registered capital of Liandu WFOE is US$1 million which will be fully paid before the deadline prescribed in its articles of association. If the initially subscribed registered capital is not sufficient to allow our intended capital injection, under the current PRC laws and regulation, we may increase the registered capital and complete the relevant procedures which include (i) altering our registration with local SAIC, and (ii) filing the alteration report to local counterparts of the Ministry of Commerce of the PRC, or the MOFCOM. In addition, capital contribution to our schools must be approved by the Ministry of Civil Affairs of the PRC or the MCA or their respective local counterparts. As of the date of the annual report, we have not increased, and plan to increase, the registered capital of Liandu WFOE to approximately US$15 million.

We also plan to provide loans to Liandu WFOE and Lishui Mengxiang. According to the current PRC laws and regulations, the maximum amount of the loans provided to a PRC enterprise is up to three times (or the prevailing statutory multiples) of the borrower's net assets set out in its latest audited financial statement. As a result, the loans we may provide to Liandu WFOE and Lishui Mengxiang are in an amount of up to two times (or the prevailing statutory multiples) of their respective net assets set out in their latest audited financial statements. Liandu WFOE and Lishui Mengxiang are required to file the information of their cross-border financing arrangements with local SAFE after the loan agreements are signed and before three working days prior to the fund withdrawal. In addition, for loans carrying a term of more than one year, Liandu WFOE and Lishui Mengxiang may be required to complete the relevant filing and registration formalities to the NDRC. Currently, the Company's business operation is conducted through Liandu WFOE's contractual arrangements with the VIEs and Liandu WFOE does not engage in its own business. As such, Liandu WFOE's current net assets are in close approximation to its paid-up registered capital. Pursuant to the relevant PRC laws and regulations, the estimated amount of loans we will provide to Liandu WFOE will be approximately US$30 million which is 2 times of its current enlarged registered capital, assuming that Liandu WFOE's net assets set out in its latest audited financial statements equals to its paid-up registered capital at the time when the loans are made.

Moreover, we intend to establish new foreign-invested enterprises in order to facilitate our and the VIEs' business expansion and make additional investments in the manners described above. However, we cannot assure you that our intended investments to these entities will always succeed as we planned, or at all.

On March 30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises, or Circular 19. 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. According to the Notice of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, or Circular 28, promulgated on October 23, 2019 by SAFE, restrictions on the domestic equity investment by non-investment foreign-funded enterprises with their capital funds have been canceled. Non-investment foreign-funded enterprises are allowed to make domestic equity investment with their capital funds in accordance with the law on the premise that the existing Negative List for foreign investment access are not violated and the projects invested thereby in China are true and compliant. However, SAFE and competent banks may have different interpretations of SAFE Circular 28, resulting in uncertainties in practice.

The aforementioned existing restrictions and future restrictions may significantly limit our ability to transfer the net proceeds from our initial public offering or any other offering of additional equity securities to Liandu WFOE or the VIEs or invest in or acquire any other companies in the PRC.

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***Restrictions on currency exchange under PRC laws may limit our ability to convert cash derived from our operating activities into foreign currencies and may materially and adversely affect the value of your investment.***

The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We and the VIEs receive our revenue in Renminbi. Under our current corporate structure, our income is primarily derived from dividend payments from Liandu WFOE. Shortages in the availability of foreign currency may restrict the ability of Liandu WFOE to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, conversion of Renminbi is permitted, without prior approval from the SAFE, for current account transactions, including profit distributions, interest payments and expenditures from trade-related transactions, as long as certain procedural requirements are complied with. However, any existing and future restrictions on currency exchange in China may limit our ability to convert cash derived from our operating activities into foreign currencies to fund expenditures denominated in foreign currencies. If the foreign exchange restrictions in China prevent us from obtaining U.S. dollars or other foreign currencies as required, we may not be able to pay dividends in U.S. dollars or other foreign currencies to our Shareholders.

To the extent cash is generated in our PRC Subsidiaries or the VIEs, and may need to be used to fund operations outside of mainland China, such funds may not be available due to limitations placed by the PRC government. Furthermore, to the extent assets (other than cash) in our or the VIEs' business are located in the PRC or held by a PRC entity, the assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of us and our subsidiaries and the VIEs to transfer assets by the PRC government. If certain PRC laws and regulations, including existing laws and regulations and those enacted or promulgated in the future were to become applicable to our Hong Kong Subsidiary in the future, and to the extent cash is generated in our Hong Kong Subsidiary, and to the extent assets (other than cash) in our business are located in Hong Kong or held by a Hong Kong entity and may need to be used to fund operations outside of Hong Kong, such funds or assets may not be available due to interventions in or the imposition of restrictions and limitations on the ability of us and our subsidiaries and the VIEs to transfer funds or assets by the PRC government. Furthermore, there can be no assurance that the PRC government will not intervene or impose restrictions or limitations on our ability to transfer or distribute cash within its organization, which could result in an inability or prohibition on making transfers or distributions to entities outside of mainland China and Hong Kong and adversely affect its business. Saved as the foregoing limitations imposed by the PRC government as described hereto, there are currently no limitations on our or our subsidiaries' ability to transfer cash to investors.

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***If we are classified as a PRC resident enterprise for PRC income tax purpose, holders of our shares may be subject to a PRC withholding tax upon the dividends payable by us and upon gain from the sale of our shares.***

Under the PRC Enterprise Income Tax Law and its implementing regulations, an enterprise established outside China with its "de facto management body" within China is considered a "resident enterprise" in China and will be subject to the PRC enterprise income tax at the rate of 25% on its worldwide income. The tax authority will normally review factors such as the routine operation of the organizational body that effectively manages the enterprise's production and business operations, locations of personnel holding decision-making power, location of finance and accounting functions and properties of the enterprise. The Enterprise Income Tax Law's implementation regulations define the term "de facto management bodies" as "establishments that carry out substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc. of an enterprise." The State Administration of Taxation issued the Notice of the State Administration of Taxation on Issues about the Determination of Chinese-Controlled Enterprises Registered Abroad as Resident Enterprises on the Basis of Their Body of Actual Management, or the SAT Circular 82, on April 22, 2009. SAT Circular 82 provides certain specific criteria for determining whether the "de facto management body" of a Chinese-controlled offshore incorporated enterprise is located inside China, stating that only a company meeting all the criteria would be deemed having its de factor management body inside China.

One of the criteria is that a company's major assets, accounting books and minutes and files of its board and shareholders' meetings are located or kept in the PRC. In addition, the SAT issued a bulletin on July 27, 2011, effective on September 1, 2011, providing more guidance on the implementation of SAT Circular 82. This bulletin clarifies matters including residence status determination, post determination administration and competent tax authorities. Although both SAT Circular 82 and the bulletin only apply to offshore enterprises controlled by PRC enterprises and there are currently no further detailed rules or precedents applicable to us governing the procedures and specific criteria for determining "de facto management body" for companies like ours, the determination criteria set forth in SAT Circular 82 and the bulletin may reflect the SAT's general position on how the "de facto management body" test should be applied in determining the tax residency status of offshore enterprises and how the administration measures should be implemented with respect to such enterprises, regardless of whether they are controlled by PRC enterprises or PRC individuals.

As all of our management members are based in China, it remains unclear how the tax residency rule will apply to our case. We do not believe that our Company, or any of our offshore subsidiaries, should be qualified as a "resident enterprise" as each of our offshore holding entities is a company incorporated outside the PRC and we are not an offshore enterprise controlled by PRC domestic enterprises. As holding companies, each of these entities' corporate documents, minutes and files of the board and shareholders' meetings are located and kept outside of the PRC. Therefore, we believe that none of our offshore holding entities should be treated as a "resident enterprise" with its "de facto management bodies" located within China as defined by the relevant regulations for PRC EIT purposes. However, as the tax resident status of an enterprise is subject to determination by the PRC tax authorities, there are uncertainties and risks associated with this issue.

Under the Enterprise Income Tax Law and the Regulation on the Implementation of the Enterprise Income Tax Law, the non-resident enterprise as the shareholder of the PRC resident enterprise will be subject to a 10% (or 20% for an individual shareholder pursuant to the Individual Income Tax Law) withholding tax upon dividends received from the PRC resident enterprise and on gain recognized with respect to the sale of shares of the resident enterprise. Accordingly, if we are treated as a PRC resident enterprise, our shareholders that are non-resident enterprises, including the holders of the ADSs, may be subject to a 10% withholding tax upon dividends received from us and on gain recognized with respect to the sale of our shares, unless such withholding tax is reduced by an applicable income tax treaty between China and the jurisdiction of the shareholder. Any such tax may reduce the returns on your investment in our shares.

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***We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.***

On February 3, 2015, the SAT issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or SAT Bulletin 7. SAT Bulletin 7 extends its tax jurisdiction to transactions involving the transfer of PRC taxable assets through offshore transfer of a foreign intermediate holding company. In addition, SAT Bulletin 7 has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. SAT Bulletin 7 also brings challenges to both foreign transferor and transferee, or other person who is obligated to pay for the transfer, of taxable assets. On October 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding at Source of Income Tax of Non-resident Enterprise, or SAT Bulletin 37, which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax. Where a non-resident enterprise transfers its taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an Indirect Transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the relevant tax authority. 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 PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes which is not related to a PRC establishment or place of business of a non-resident enterprise, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

We and the VIEs face uncertainties as to the reporting and other implications of certain future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries and investments. Our company may be subject to filing obligations or taxed if our company is transferor in such transactions, and may be subject to withholding obligations if our company is transferee in such transactions, under SAT Bulletin 7 and/or SAT Bulletin 37. For transfer of shares in our company by investors who are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under SAT Bulletin 7 and/or SAT Bulletin 37. As a result, we and the VIEs may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request the relevant transferors from whom we and the VIEs purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

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***Fluctuations in exchange rates may result in foreign currency exchange losses and may have a material adverse effect on your investment.***

The value of the Renminbi against the U.S. dollar and other currencies is affected by changes in China's political and economic conditions and China's foreign exchange policies, among other things. In 2005, the PRC government changed its decades-old policy of pegging the value of the Renminbi to the U.S. dollar, and the Renminbi appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between Renminbi and the U.S. dollar remained within a narrow band. Since June 2010, Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system and 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 affect the exchange rate between Renminbi and the U.S. dollar in the future.

Significant revaluation of the Renminbi may have a material and adverse effect on your investment. For example, to the extent that we need to convert U.S. dollars we receive from our initial public offering into Renminbi for our operations, appreciation of the Renminbi 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.

Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any material hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, 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 PRC exchange control regulations that restrict our ability to convert Renminbi into foreign currency.

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***The preferential tax and other treatments contemplated by us may change or may become unavailable.***

The 2021 Implementation Rules state that private schools enjoy preferential taxation policies, in particular, non-profit private schools enjoy the same preferential taxation policies with those for government-run schools. However, Langfang School no longer enjoy the previous preferential policies on enterprise income tax since 2022, and the other preferential taxation policies shall remain unchanged for the time being. We cannot assure you that the preferential tax and other treatments contemplated by us will not change or that they will apply or continue to apply to Langfang School. The uncertainty in securing such preferential tax treatments could affect our results of operations. See "*Item 10. Additional Information—E. Taxation—People's Republic of China Taxation.*"

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

The SAFE promulgated the Circular on the Management of Offshore Investment and Financing and Round Trip Investment By Domestic Residents through Special Purpose Vehicles, or SAFE Circular 37, in July 2014 that requires PRC residents or entities to register with SAFE or its local branch prior to making capital contribution in a special purpose vehicle in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing with such PRC residents or entities' legally owned assets or equity interests in domestic enterprises or offshore assets or interests. On February 13, 2015, SAFE issued Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies, or Circular 13, which 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 PRC residents or entities must update such registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic information (including change of such PRC citizens or residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions. Chinese residents may undertake subsequent operations (including repatriation of profits and dividends) upon completion of such registration change formalities.

Ms. Fen Ye, Ms. Hong Ye and Ms. Fang Ye who are known to us as being PRC residents have completed the initial foreign exchange registrations as required by SAFE Circular 37 and Circular 13. The formalities for updating the registration to reflect the share transfer from Ms. Fang Ye to Ms. Fen Ye has been submitted to the qualified bank, and the amendment registration has been completed. However, we cannot assure you that all existing and future shareholders or beneficial owners of ours who are PRC residents or entities will be able to update and/or obtain 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 Liandu WFOE, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit Liandu WFOE's ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our and the VIEs' business and prospects.

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***If there are any failures in complying with PRC regulations with respect to the registration requirements for employee stock incentive plans, the PRC plan participants or we may be subject to fines and other legal or administrative sanctions.***

We, the VIEs and our and the VIEs' directors, senior management and other employees who are PRC residents that have been granted options will be subject to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, or SAFE Circular 7, issued by SAFE in February 2012, according to which, employees, directors, supervisors and other management members participating in any stock incentive plan of an overseas publicly listed company who are PRC residents are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and complete certain other procedures. See "*Item 4. Information on the Company—B. Business Overview—Regulation—PRC Laws and Regulations Relating to Foreign Investment in Education—Regulations on Stock Incentive Plans.*"

We will try our best efforts to comply with these requirements upon the granting of the options under our 2020 Equity Incentive Plan. However, we cannot assure you that they can successfully register with SAFE in full compliance with the rules. If the participants or we fail to complete the SAFE registrations, the participants or we may be subject to fines and legal sanctions. It will adversely affect our ability to pay under the share incentive plans or receive dividends or sales proceeds related thereto, or our ability to contribute additional capital into our wholly-foreign owned enterprises in China and limit our wholly-foreign owned enterprises' ability to distribute dividends to us. Uncertainties also exist in our ability to adopt additional share incentive plans for our directors and employees under PRC law because of the regulatory restrictions.

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***Any actions by the Chinese government, including any decision to intervene or influence the operations of our PRC subsidiaries or the VIE or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiaries or the VIE, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless.***

The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. The ability of our subsidiaries and the VIEs to operate in China may be impaired by changes in its laws and regulations, including those relating to education, taxation, land use rights, foreign investment limitations, and other matters.

The central or local governments of China may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure that our PRC subsidiaries and the VIEs comply with such regulations or interpretations. As such, our PRC subsidiaries and the VIEs may be subject to various government actions and regulatory interference in the provinces in which they operate. They could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. They may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.

On February 17, 2023, the CSRC issued the Trial Measures, which became effective on March 31, 2023. On the same date, the CSRC circulated the Guidance Rules and Notice. These new regulations propose to establish a new filing-based regime to regulate overseas offerings and listings by Chinese domestic companies.

Under the Trial Measures and the Guidance Rules and Notice, domestic companies conducting overseas securities offering and listing activities, either in direct or indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application. Since the date of effectiveness of the Trial Measures, the domestic enterprises falling within the scope of filing that have been listed overseas or met the following circumstances are existing enterprises: before the effectiveness of the Trial Measures, the application for indirect overseas issuance and listing has been agreed by the overseas regulators or overseas stock exchanges (such as having passed the hearing on the Hong Kong market or registration become effective as agreed on the U.S. market, etc.), and it is not required to perform issuance and listing supervision procedures of the overseas regulators or overseas stock exchanges (such as rehearing on the Hong Kong market, etc.), and the overseas issuance and listing will be completed by September 30, 2023. Existing enterprises are not required to file immediately, and filing should be made as required if they involve refinancing and other filing matters. In such cases, where an existing enterprise issues securities in the same overseas market after its initial public offering and listing overseas, it shall file with the CSRC within three working days of completion of issuance; where an existing enterprise issues securities in other overseas markets after its initial public offering and listing overseas, it shall file with the CSRC within three working days of submission of application documents for initial public offering and listing overseas.

As advised by our PRC legal counsel, Beijing DeHeng Law Offices, since we are existing enterprises, we are not required to fulfill the filing procedures for our initial public offering in 2020.

If the CSRC or any other PRC regulatory body subsequently implements rules that would require us to file with or obtain approvals of the CSRC or other governmental bodies for our initial public offering in 2020, we may face adverse actions or sanctions by the CSRC or other PRC regulatory agencies, which may include fines and penalties on our operations in China, limitations on our operating privileges in China, delays in or restrictions on the repatriation of the proceeds from any such offering into the PRC, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in China, or other actions that could have a material and adverse effect on our and the VIEs' business, reputation, financial condition, results of operations, prospects, as well as the trading price of the ADSs.

However, we have completed the filing procedures with the CSRC on August 20, 2024 for our 2023 Private Placement. Besides, we have submitted the filing documents to the CSRC in respect of 2024 Private Placement. As of the date of the annual report, we have not received any notice or determination from the CSRC confirming that we have completed our filing procedures for our 2024 Private Placement. It is uncertain whether such filing can be completed or how long it will take to complete such filing. Any delay in completing such filing procedures might affect the other filing procedures with respect to other applicable circumstances, under the Trial Measures in the future, such as the secondary listing, primary listing, spin-off listing and making overseas offering and listing anew after being delisted from an overseas exchange, which might affect our future public market financings and capital market transactions.

Accordingly, government actions in the future, including any decision to intervene or influence the operations of our PRC subsidiaries or the VIEs at any time, or to exert control over an offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiaries or the VIEs, may limit or completely hinder our ability to offer or continue to offer securities to investors, and/or may cause the value of such securities to significantly decline or be worthless.

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***Implementation of the Law of the PRC on Safeguarding National Security in Hong Kong involves uncertainty, and the recent policy pronouncements by the PRC government regarding business activities of U.S.-listed PRC businesses may negatively impact Lixiang's existing and future operations in Hong Kong.***

On June 30, 2020, the Standing Committee of the NPC promulgated the Law of the PRC on Safeguarding National Security in Hong Kong. The interpretation of the Law of the PRC on Safeguarding National Security in Hong Kong involves a degree of uncertainty. Recently, the PRC government announced that it would step up supervision of overseas listed PRC businesses. Under the new measures, the PRC government will enhance regulation of cross-border data flows and security, crack down on illegal activity in the securities market and punish fraudulent securities issuance, market manipulation and insider trading. The PRC government will also check sources of funding for securities investment and control leverage ratios. The PRC government has also opened a probe into several U.S.-listed technology companies focusing on anti-monopoly, financial technology regulation and more recently, with the passage of the PRC Data Security Law, how companies collect, store, process and transfer personal data. Currently these laws (other than the Law of the PRC on Safeguarding National Security in Hong Kong) are expected to apply to China domestic businesses, rather than businesses in Hong Kong which operate under a different set of laws from China. However, there can be no assurance that the government of Hong Kong will not enact similar laws and regulations applicable to companies operating in Hong Kong.

We and the VIEs conduct business operations in the PRC although we have established a subsidiary in Hong Kong, Hong Kong Mengxiang Education Development Group Limited, as a holding company to facilitate overseas securities offering. Although none of our or the VIEs' business activities appears to be within the current targeted areas of concern mentioned above by the PRC government as our Hong Kong subsidiary is a holding company with no business operations as of the date of the annual report, given the PRC government's significant oversight over the conduct of business operations in China and in Hong Kong, and in light of the PRC government's recent extension of authority not only in China but into Hong Kong, there are risks and uncertainties which we cannot foresee for the time being. For example, the PRC government may pressure the government of Hong Kong to enact similar laws and regulations to those in the PRC, which may seek to exert control over offerings conducted overseas by Hong Kong companies. If any or all of the foregoing were to occur, and if our Hong Kong subsidiary elects to carry out substantive business activities in the future, it could lead to a material adverse change in Lixiang's operations and limit or hinder our ability to offer securities to overseas investors or remain listed in the U.S., which could cause the value of our ADSs to significantly decline or become worthless.

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***Based on the recent development of PRC law, there is significant uncertainty about the application and interpretation of the Law on the Promotion of Private Education, the 2021 Implementation Rules and their detailed implementation rules and regulations. We and the VIEs may be subject to significant limitations on our ability to engage in the private education business, acquire private schools, or receive payments from the VIEs and may otherwise be materially and adversely affected by changes in PRC laws and regulations.***

Pursuant to the Law on the Promotion of Private Education, sponsors of private schools may choose to establish schools as either non-profit or for-profit schools. Sponsors are not permitted to establish for-profit schools that provide compulsory education services. Sponsors of for-profit private schools are entitled to retain the profits from their schools and any operating surplus may be allocated to the sponsors pursuant to the PRC company law and other relevant laws and regulations. Sponsors of non-profit private schools are not entitled to any distribution of profits from their schools and all revenue must be used for the operation of the schools.

As a holding company, our ability to generate profits, pay dividends and other cash distributions to our shareholders under the Law on the Promotion of Private Education, the 2021 Implementation Rules and other relevant laws and regulations are affected by many factors, including whether our schools are characterized as for-profit or non-profit schools, the profitability of our schools, and our ability to receive dividends and other distributions from our PRC subsidiary, Liandu WFOE, which in turn depends on the service fees paid to Liandu WFOE from the VIEs. Liandu WFOE has respectively entered into exclusive management services and business cooperation agreements with each of the VIEs, Ms. Fen Ye and Ms. Hong Ye, as the shareholders of the VIEs, pursuant to which Liandu WFOE has the exclusive right to provide comprehensive technical and business support services to the VIEs. As of August 2021, our right to receive the service fees from Lianwai School and other affiliated entities did not, to our knowledge, contravene any PRC laws and regulations then in force. Likewise, the payment of service fees under our contractual arrangements should not be regarded as the distribution of returns, dividends or profits to the sponsors of our schools under the PRC laws and regulations then in force.

However, according to the 2021 Implementation Rules, private schools providing compulsory education shall not conduct any transaction with any related party. As a result, the clauses or provisions of the exclusive management services and business cooperation agreements, in relation to related party transactions between Lianwai School and Liandu WFOE, are not legally enforceable since September 1, 2021. Therefore, we executed an acknowledgment agreement on April 20, 2022 to confirm all the terms of rights and obligations relating to Lianwai School and the directors appointed by the sponsor under the contractual arrangements in relation to Lianwai School, which shall be terminated on August 31, 2021. Since September 1, 2021, we have stopped transacting with Lianwai School. However, to keep Lianwai School providing compulsory education in operations, we continued to provide essential services without recognizing any revenues relating to such activities to schools providing compulsory education in our discontinued operations, which are key to the normal daily operation of it. As of the date of the annual report, schools providing compulsory education to which we continue to provide services have not received any further rectification requirements or penalty notices from the relevant competent authorities, and the possibility and impact of illegal risks are still unable to be assessed clearly. We are continuously assessing the impact of relevant regulations on our and the VIEs' business and making necessary measures and efforts to comply with the requirements under these regulations and implementations.

Furthermore, we and the VIEs entered into a series of contractual arrangements with respect to the operation of Qingtian International School, Lishui International School and Langfang School. The contractual arrangements enable us to receive substantially all of the economic benefits of the VIEs in consideration for the services provided by us. However, as there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, and we cannot assure you that the PRC government would agree that our corporate structure or any of the above contractual arrangements comply with current or future PRC laws or regulations.

In particular, the validity of our contractual arrangements may be challenged, and our corporate structure may need to be restructured to comply with the new regulations, which may be time-consuming and expensive and impose additional restrictions on our and the VIEs' business expansion and may further adversely affect our and the VIEs' business operations and results of operations. See *"—Risks Related to Our Corporate Structure—Our and the VIEs' private education service business is subject to extensive regulation in China. We and the VIEs may be subject to severe penalties if the PRC government finds that the agreements that establish the structure for operating our and the VIEs' business in China do not comply with applicable PRC laws and regulations*."

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***Our subsidiaries and affiliated entities in China are subject to restrictions on making dividends and other payments to us.***

We are a holding company and rely principally on dividends paid by our subsidiaries in China for our cash needs, including paying dividends and other cash distributions to our shareholders to the extent we choose to do so, servicing any debt we and the VIEs may incur and paying our operating expenses. The income for our PRC subsidiaries, especially Liandu WFOE, in turn depends on the service fees paid by the VIEs. Current PRC regulations permit our subsidiaries in China to pay dividends to us only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. Under the applicable requirements of PRC law, our PRC subsidiaries may only distribute dividends after they have made allowances to fund certain statutory reserves. These reserves are not distributable as cash dividends. Pursuant to the Law on the Promotion of Private Education, sponsors of for-profit private schools are entitled to retain the profits from their schools and the operating surplus may be allocated to the sponsors pursuant to the PRC company law and other relevant laws and regulations. Sponsors of non-profit private schools are not entitled to any distribution of profits from their schools and all revenue must be used for the operation of the schools. According to 2021 Implementation Rules, a non-profit private school should allocate no less than 10% of its audited annual non-restricted net asset increase, or a for-profit private school should allocate no less than 10% of its audited annual net income, to its development, respectively. In addition, prior to the specific Implementation Rules of the Law on the Promotion of Private Education being promulgated by the State Council and other relevant regulations promulgated by other local and regional governments, at the end of each fiscal year, each of our schools that are private schools in China is required to allocate a certain amount to its development fund for the construction or maintenance of the school properties or purchase or upgrade of school facilities. In particular, our schools that require reasonable returns must allocate no less than 25.0% of their annual net income, and our schools that do not require reasonable returns must allocate no less than 25.0% of their annual increase in the net assets of the school for such purposes. However, the relevant authorities have yet to promulgate any detailed implementation rules and regulations under the 2021 Implementation Rules. We remain uncertain as to the timing and substance of the rules under the Law on the Promotion of Private Education and the 2021 Implementation Rules to be promulgated, and how such rules will impact our operation. Furthermore, if our subsidiaries or the VIEs in China incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any such restrictions may materially affect such entities' ability to make dividends or make payments, in service fees or otherwise, to us, which may materially and adversely affect our and the VIEs' business, financial condition and results of operations.

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***Failure to comply with governmental regulations and other legal obligations concerning data protection and cybersecurity may materially and adversely affect our and the VIEs' business, as we and the VIEs routinely collect, store and use data during the conduct of the business.***

We and the VIEs routinely collect, store and use data during our operations. We and the VIEs are subject to PRC laws and regulations governing the collecting, storing, sharing, using, processing, disclosure and protection of data on the Internet and mobile platforms as well as cybersecurity.

The PRC Cybersecurity Law which promulgated in November 7, 2016 and became effective in June 1, 2017 provides that personal information and important data collected and generated by operators of critical information infrastructure in the course of their operations in the PRC should be stored in the PRC, and the law imposes heightened regulation and additional security obligations on operators of critical information infrastructure.

On June 10, 2021, the Standing Committee of the NPC promulgated the Data Security Law which took effect on September 1, 2021. The Data Security Law provides for data security and privacy obligations of entities and individuals carrying out data activities, prohibits entities and individuals in China from providing any foreign judicial or law enforcement authority with any data stored in China without approval from competent PRC authority, and sets forth the legal liabilities of entities and individuals found to be in violation of their data protection obligations, including rectification order, warning, fines of up to RMB10 million, suspension of relevant business, and revocation of business permits or licenses.

On August 20, 2021, the Standing Committee of the NPC adopted the Personal Information Protection Law, which came into force as of November 1, 2021. The Personal Information Protection Law includes the basic rules for personal information processing, the rules for cross-border provision of personal information, the rights of individuals in personal information processing activities, the obligations of personal information processors, and the legal responsibilities for illegal collection, processing, and use of personal information.

On December 28, 2021, thirteen PRC governmental and regulatory agencies, including the CAC published the Measures for Cyber Security Review which further restates and expands the applicable scope of the cybersecurity review. Pursuant to the Measures for Cyber Security Review, network platform operators grasping the personal information of more than 1 million users must apply with the Cybersecurity Review Office of CAC for a cybersecurity review in order to pursue a foreign listing, and operators of critical information infrastructure purchasing network products and services and online platform operators engaging in data processing activities which affect or may affect national security of the PRC are also obligated to apply for a cybersecurity review. Although the Measures for Cyber Security Review provides no further explanation on the extent of "network platform operator", "affect or may affect national security" or "foreign" listing, as advised by our PRC legal counsel, Beijing DeHeng Law Offices, as of the date of this annual report, we do not need to apply for a cybersecurity review pursuant to the above regulation to maintain the listing status of our ADSs on the Nasdaq, given that (i) we are not in possession of personal information of over one million users and it is also very unlikely that it will reach such threshold in the near future; and (ii) as of the date of the annual report, we have not received any notice or determination from applicable PRC governmental authorities identifying us as a critical information infrastructure operator or an online platform operator engaging in relevant data processing activities which affect or may affect national security of the PRC. However, we cannot guarantee that we will not be subject to cybersecurity review in the future. During such review, we and the VIEs may be required to suspend our operation experience other disruptions to our operations. Cybersecurity review could also result in negative publicity with respect to our company and diversion of our managerial and financial resources.

We and the VIEs currently have less than 200 subscribers on our digital platform such as WeChat public account. We and the VIEs have no registered users on our website. We and the VIEs only require and obtain user information after users register with us. Although we believe we and the VIEs currently are not required to obtain clearance from the CAC for our offering under the Measures for Cyber Security Review or the Opinions on Strictly Cracking Down on Illegal Securities Activities, we and the VIEs face uncertainties as to the interpretation or implementation of such regulations or rules, and if required, whether such clearance can be timely obtained, or at all.

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***The opinions recently issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council may subject us to additional compliance requirement in the future.***

The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the "Opinions on Severely Cracking Down on Illegal Securities Activities According to Law," or the "Opinions," which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. These Opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirement in the future. The official guidance to act upon, and interpretation of the Opinions, remain unclear in several respects at this time. Therefore, we cannot assure you that we and the VIEs will remain fully compliant with all new regulatory requirements of the Opinions or any future implementation rules on a timely basis, or at all.

**Risks Relating to Our ADSs**

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***The trading price of our ADSs may be volatile, which could result in substantial losses to you.***

The trading price of our ADSs has ranged from US$1.83 to US$500.8 in 2025. The trading prices of our ADSs are likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen due to broad market and industry factors, such as performance and fluctuation in the market prices or under performance or deteriorating financial results of other listed companies based in China. The securities of some of these companies have experienced significant volatility since their initial public offerings, including, in some cases, substantial price declines in the trading prices of their securities. The trading performances of other Chinese companies' securities may affect the attitudes of investors towards China-based and U.S.-listed companies, which consequently may affect the trading performance of our ADSs, regardless of our actual operating performance. In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting, corporate structure or matters of other Chinese companies may also negatively affect the attitudes of investors towards Chinese companies in general, including us, regardless of whether we and the VIEs have conducted any inappropriate activities. Furthermore, securities markets may from time to time experience significant price and volume fluctuations that are not related to our operating performance, which may have a material and adverse effect on the trading price of our ADSs.

In addition to the above factors, the price and trading volume of our ADSs may be highly volatile due to multiple factors, including the following:

● regulatory developments affecting us or our industry;

● variations in our revenue, profit, and cash flow;

● changes in the economic performance or market valuations of other education service providers;

● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results;

● changes in financial estimates by securities research analysts;

● detrimental negative publicity about us, our services, our officers, directors, Controlling Shareholder, or our industry;

● announcements by us or our competitors of new service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments;

● additions to or departures of our senior management;

● potential litigation or regulatory proceedings involving us, our officers, directors, or controlling shareholder;

● negative publicity on our direct and indirect shareholders;

● release or expiry of lock-up or other transfer restrictions on our outstanding shares or our ADSs; and

● sales or perceived potential sales of additional ordinary shares or ADSs.

Any of these factors may result in large and sudden changes in the volume and price at which our ADSs will trade.

In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we and the VIEs were involved in a class action suit, it could divert a significant amount of our management's attention and other resources from our and the VIEs' business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. 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 and the VIEs 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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***Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.***

We have established a dual-class share structure upon the approval of variation of our share capital in our annual general meeting on November 18, 2024, and our ordinary shares now consist of Class A ordinary shares and Class B ordinary shares. In respect of matters requiring the votes of shareholders, holders of Class A ordinary shares will be entitled to one vote per share, while holders of Class B ordinary shares will be entitled to 200 votes per share based on our dual-class share structure. 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.

Our chairlady of board of directors, Ms. Fen Ye, beneficially own all of our issued Class B ordinary shares. These Class B ordinary shares constitute approximately 2.35% of our total issued and outstanding share capital immediately after the completion of our 2024 Private Placement and 82.78% 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, holders of our Class B ordinary shares will have considerable influence over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. They 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 market price of our 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.

***Our dual-class voting structure may render the ADSs representing our Class A ordinary shares ineligible for inclusion in certain stock market indices, and thus adversely affect the trading price and liquidity of the ADSs.***

We cannot predict whether our dual-class share structure with different voting rights will result in a lower or more volatile market price of the ADSs, adverse publicity, or other adverse consequences. Certain index providers have announced restrictions on including companies with multi-class share structures in certain of their indices. For example, S&P Dow Jones and FTSE Russell have changed 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. As a result, our dual-class voting structure may prevent the inclusion of the ADSs representing our Class A ordinary shares in such indices, which could adversely affect the trading price and liquidity of the ADSs representing our Class A ordinary shares. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structure and our dual-class structure may cause shareholder advisory firms to publish negative commentary about our corporate governance, in which case the market price and liquidity of the ADSs could be adversely affected.

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***If securities or industry analysts do not publish or publish inaccurate or unfavorable research about our and the VIEs' business, or if they adversely change their recommendations regarding our ADSs, 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 and the VIEs' business. If research analysts do not establish and 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 and the VIEs' 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 or trading volume for our ADSs to decline.

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

Sales of substantial amounts of our ADSs in the public market, or the perception that these sales could occur, could adversely affect the market price of our ADSs and could materially impair our ability to raise capital through equity offerings in the future. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our ADSs.

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***Because the amount, timing, and whether or not we distribute dividends at all is entirely at the discretion of our board of directors, you must rely on price appreciation of our ADSs for return on your investment.***

Although we currently intend to distribute dividends in the future, the amount, timing, and whether or not we actually distribute dividends at all is entirely at the discretion of our board of directors. Our board of directors has complete discretion as to whether to distribute dividends. 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 the 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 our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, 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 our ADSs will likely depend entirely upon any future price appreciation of our ADSs. We cannot assure you that our 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 our ADSs and you may even lose your entire investment in our ADSs.

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

Holders of our ADSs do not have the same rights as our registered shareholders. As a holder of 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 that are carried by the underlying Class A ordinary shares represented by your ADSs indirectly by giving voting instructions to the depositary in accordance with the provisions of the deposit agreement. If we instruct the depositary to ask for your instructions, then upon timely receipt of your voting instructions, the depositary will try, as far as practicable, to vote the underlying Class A ordinary shares 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 memorandum and articles of association, the minimum notice period required to be given by our company to our registered shareholders for convening a general meeting is 10 calendar 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 vote directly with respect to any specific matter or resolution to be considered and voted upon at the general meeting. In addition, under our memorandum and articles of association, for the purposes of determining those shareholders who are entitled to attend and vote at any general meeting, our directors may close our register of members and fix in advance a record date for such meeting, and such closure of our register of members or the setting of such a record date may prevent you from withdrawing the Class A ordinary shares underlying your ADSs and becoming the registered holder of such shares prior to the record date, so that you would not be able to attend the general meeting or to vote directly. 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 thirty (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.

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***The depositary shall deem you to have instructed the depositary to give us a discretionary proxy to vote the Class A ordinary shares underlying your ADSs if you do not give timely voting instructions to the depositary to direct how the Class A ordinary shares underlying your ADSs are voted, except in limited circumstances, which could adversely affect your interests.***

Under the deposit agreement for the ADSs, if you do not give timely voting instructions to the depositary to direct how the Class A ordinary shares underlying your ADSs are voted, the depositary shall deem you to have instructed the depositary to give us a discretionary proxy to vote the Class A ordinary shares underlying your ADSs at shareholders' meetings unless:

● we have instructed the depositary that we do not wish a discretionary proxy to be given;

● we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting;

● a matter to be voted on at the meeting would have a material adverse impact on shareholders; or

● the voting at the meeting is to be made on a show of hands.

The effect of this discretionary proxy is that if you do not give timely voting instructions to the depositary to direct how the Class A ordinary shares underlying your ADSs are voted, you cannot prevent the Class A ordinary shares underlying your ADSs from being voted, except under the circumstances described above. This may make it more difficult for shareholders to influence the management of our company. Holders of our ordinary shares are not subject to this discretionary proxy.

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***Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings.***

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we cannot make rights available to you in the United States unless we register both the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirement is available. Under the deposit agreement, the depositary will not make rights available to you unless both the rights and the underlying securities to be distributed to ADS holders are either registered under the Securities Act or exempt from the registration requirement under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective and we may not be able to establish a necessary exemption from registration under the Securities Act. Accordingly, you may be unable to participate in our rights offerings in the future and may experience dilution in your holdings.

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***Techniques employed by short sellers may drive down the market price of the ADSs.***

Short selling is the practice of selling securities that the 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. The short seller hopes 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 the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller's interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions 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.

Public companies that have substantially all of their operations in China have been the subject of short selling. Much of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. 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.

It is not clear what effect such negative publicity could have on us. If we were to become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. 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 seller 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 distract our management from growing our and the VIEs' business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our and the VIEs' business operations, and any investment in the ADSs could be greatly reduced or even rendered worthless.

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***You may not receive cash dividends if the depositary decides it is impractical to make them available to you.***

The depositary will pay cash distributions on the ADSs only to the extent that we decide to distribute dividends on our ordinary shares or other deposited securities. To the extent that there is a distribution, the depositary has agreed to pay you the cash dividends or other distributions it or the custodian receives on our Class A ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of Class A ordinary shares your ADSs represent. However, the depositary may, at its discretion, decide that it is inequitable or impractical to make a distribution available to any holders of ADSs. For example, the depositary may determine that it is not practicable to distribute certain property through the mail, or that the value of certain distributions may be less than the cost of mailing them. In these cases, the depositary may decide not to distribute such property to you.

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***We and the depository are entitled to amend the deposit agreement and to change the rights of ADS holders under the terms of such agreement, and we may terminate the deposit agreement, without the prior consent of the ADS holders.***

We and the depository are entitled to amend the deposit agreement and to change the rights of the ADS holders under the terms of such agreement, without the prior consent of the ADS holders. We and the depositary may agree to amend the deposit agreement in any way we decide is necessary or advantageous to us. Amendments may reflect, among other things, operational changes in the ADS program, legal developments affecting ADSs or changes in the terms of our business relationship with the depositary. In the event that the terms of an amendment are disadvantageous to ADS holders, ADS holders will only receive days' advance notice of the amendment, and no prior consent of the ADS holders is required under the deposit agreement. Furthermore, we may decide to terminate the ADS facility at any time for any reason. For example, terminations may occur when we decide to list our shares on a non-U.S. securities exchange and determine not to continue to sponsor an ADS facility or when we become the subject of a takeover or a going-private transaction. If the ADS facility is terminated, ADS holders will receive at least thirty (30) days' prior notice, but no prior consent is required from them. Under the circumstances that we decide to make an amendment to the deposit agreement that is disadvantageous to ADS holders or terminate the deposit agreement, the ADS holders may choose to sell their ADSs or surrender their ADSs and become direct holders of the underlying shares, but will have no right to any compensation whatsoever.

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***ADS 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, to the fullest extent permitted by applicable law, holders and beneficial owners of ADSs irrevocably waive the right to a jury trial of any claim that they may have against us or the depositary arising from or relating to our Class A ordinary shares, our ADSs or the deposit agreement, including any claim under the U.S. federal securities laws. The waiver continues to apply to claims that arise during the period when a holder holds the ADSs, even if the ADS holder subsequently withdraws the underlying Class A ordinary shares. However, you will not be deemed, by agreeing to the terms of the deposit agreement, to have waived our or the depositary's compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder. In fact, you cannot waive our or the depositary's compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder.

If we or the depositary opposed a demand for jury trial relying on above-mentioned jury trial waiver, it is up to the court to determine whether such waiver was enforceable considering the facts and circumstances of that case in accordance with the applicable state and federal law.

If this jury trial waiver provision is prohibited by applicable law, an action could nevertheless proceed under the terms of the deposit agreement with a jury trial. To our knowledge, the enforceability of a jury trial waiver under the federal securities laws has not been finally adjudicated by a federal court or by the United States Supreme Court. Nonetheless, we believe that a jury trial waiver provision is generally enforceable under the laws of the State of New York, which govern the deposit agreement, by a federal or state court in the City of New York. In determining whether to enforce a jury trial waiver provision, New York courts will consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party has knowingly waived any right to trial by jury. We believe that this is the case with respect to the deposit agreement and the ADSs. In addition, New York courts will not enforce a jury trial waiver provision in order to bar a viable setoff or counterclaim sounding in fraud or one which is based upon a creditor's negligence in failing to liquidate collateral upon a guarantor's demand, or in the case of an intentional tort claim, none of which we believe are applicable in the case of the deposit agreement or the ADSs. If you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary relating to the matters arising under the deposit agreement or our ADSs, including claims under federal securities laws, you or such other holder or beneficial owner may not have the right to a jury trial regarding such claims, which may limit and discourage lawsuits against us or the depositary. If a lawsuit is brought against us or the depositary according to the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may have different outcomes compared to that of a jury trial, including results that could be less favorable to the plaintiff(s) in any such action.

Moreover, as the jury trial waiver relates to claims arising out of or relating to the ADSs or the deposit agreement, we believe that, as a matter of construction of the clause, the waiver would likely continue to apply to ADS holders who withdraw the Class A ordinary shares from the ADS facility with respect to claims arising before the cancelation of the ADSs and the withdrawal of the Class A ordinary shares, and the waiver would most likely not apply to ADS holders who subsequently withdraw the Class A ordinary shares represented by ADSs from the ADS facility with respect to claims arising after the withdrawal. However, to our knowledge, there has been no case law on the applicability of the jury trial waiver to ADS holders who withdraw the Class A ordinary shares represented by the ADSs from the ADS facility.

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***ADS holders have limited choice of forum, which could limit your ability to obtain a favorable judicial forum for complaints against us, the depositary or our or the depositary's respective directors, officers or employees.***

The deposit agreement governing our ADSs provides that, (i) the deposit agreement and the ADSs will be interpreted in accordance with the laws of the State of New York, and (ii) as an owner of ADSs, you irrevocably agree that any legal action arising out of the deposit agreement and the ADSs involving us or the depositary may only be instituted in a state or federal court in the city of New York. Any person or entity purchasing or otherwise acquiring any our ADSs, whether by transfer, sale, operation of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and consented to these provisions. This choice of forum provision may increase your cost and limit your ability to bring a claim in a judicial forum that you find favorable for disputes with us, the depositary or our and the depositary's respective directors, officers or employees, which may discourage such lawsuits against us, the depositary and our and the depositary's respective directors, officers or employees. However, it is possible that a court could find such choice of forum provisions to be inapplicable or unenforceable. The enforceability of similar choice of forum provisions has been challenged in legal proceedings. It is possible that a court could find this type of provisions to be inapplicable or unenforceable.

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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 it 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.

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

As an exempted company with limited liability incorporated under the laws of the Cayman Islands, our corporate affairs are governed by our memorandum and articles of association, as amended from time to time, together with 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 the Cayman Islands law are largely governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived partly from the comparatively limited judicial precedent in the Cayman Islands and also the common law of England and Wales, whose precedents are only of persuasive but not binding authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under the 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 compared to that of 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. Moreover, a company incorporated in the Cayman Islands may not have standing to initiate a shareholder derivative action in a federal court of the United States. In addition, controlling shareholders owe a fiduciary duty to the companies they control and the minority shareholders under Delaware laws, while our Controlling Shareholder do not owe any such fiduciary duties to our company or to our minority shareholders under the Cayman Island laws. As a result, our Controlling Shareholder may exercise their powers, including the voting rights in respect of their shares, as shareholders in a manner as they think fit.

Shareholders of Cayman Islands companies like us have no general rights under the Cayman Islands law to inspect corporate records or to obtain copies of the register of members of these companies, other than the memorandum and articles of association and any special resolutions passed by such companies, and the registers of mortgages and charges of such companies. The Registrar of Companies of the Cayman Islands shall make available the list of the names of the current directors of the Company (and where applicable the current alternate directors of the Company) for inspection by any person upon payment of a fee by such person. Our directors have discretion under our memorandum and 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 our home country, the Cayman Islands are significantly different from the requirements for companies incorporated in other jurisdictions such as the United States. Currently, we will rely on home country practice with respect to our corporate governance subject to the applicable Nasdaq listing standards and the U.S. securities law, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to the domestic issuers in the United States.

In light of the above, public shareholders may experience more difficulties in protecting their interests in the face of actions taken by our management, members of our board of directors, or our Controlling Shareholder than they would as public shareholders of a company incorporated in the United States. For a discussion of the significant differences between the provisions applicable to companies incorporated in the Cayman Islands and their shareholders, and the Companies and the relevant provision in laws of the United States, see also "*Item 10. Additional Information—B. Memorandum and Articles of Association—Differences in Corporate Law*."

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***Our memorandum and articles of association provides that the courts of the Cayman Islands will be the sole and exclusive forum for a claim arising under the internal affairs doctrine, and that the U.S. federal district courts will be the exclusive forum within the United States of America for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, which could limit investors' ability to obtain a favorable judicial forum for disputes with us.***

We have adopted a forum selection provision under our memorandum and articles of association that provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum within the United States of America for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. This forum selection clause does not apply to claims under the Securities Exchange Act of 1934, which are subject to the exclusive jurisdiction of U.S. federal district courts, and it does not require investors to waive the requirements of the U.S. federal securities laws.

In addition, the forum selection provision in our memorandum and articles of association provides that the courts of the Cayman Islands shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or its members, (iii) any action asserting a claim arising pursuant to any provision of the Companies Act (As Revised) of the Cayman Islands or the memorandum and articles of association including but not limited to any purchase or acquisition of Shares, security or guarantee provided in consideration thereof, or (iv) any action asserting a claim against the Company which if brought in the United States of America would be a claim arising under the internal affairs doctrine (as such concept is recognized under the laws of the United States of America from time to time).

This forum selection provision may limit a shareholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits. Our forum selection provision seeks to reduce litigation costs and increase outcome predictability. While forum selection provisions in corporate charters and by-laws are becoming more commonplace for public companies in the United States and have been upheld by courts in certain states, it is possible that in connection with any action a court could find the forum selection provision contained in our memorandum and articles of association to be inapplicable or unenforceable in such action. If a court were to find our forum selection by-law inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions and we may not obtain the benefits of limiting jurisdiction to the courts selected. If a court were to find the forum selection provision to be inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, the Company may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our and the VIEs' business, financial condition and results of operations.

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***Our memorandum and articles of association contain anti-takeover provisions that could discourage a third party from acquiring us, which could limit our shareholders' opportunity to sell their Class A ordinary shares, including Class A ordinary shares represented by the ADSs, at a premium.***

Our memorandum and articles of association contain 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. For example, our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Class A ordinary shares, in the form of ADSs or otherwise. 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 our ADSs may fall and the voting and other rights of the holders of our Class A ordinary shares and our ADSs may be materially and adversely affected.

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***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 U.S. domestic public companies.***

Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

● the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;

● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;

● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

● the selective disclosure rules by issuers of material nonpublic information under Regulation FD.

We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a half-year basis as press releases, distributed pursuant to the rules and regulations of the Nasdaq Global Market. Press releases relating to financial results and material events will also be furnished 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 that would be made available to you were you investing in a U.S. domestic issuer.

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***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 Nasdaq Global Market listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq Global Market listing standards.***

As a Cayman Islands company listed on the Nasdaq Global Market, we are subject to the Nasdaq Global Market listing standards. However, the Nasdaq Global Market 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 Nasdaq Global Market listing standards. We have relied on and intend to continue to rely on some of these exemptions. For instance, we will not have regularly scheduled executive sessions with only independent directors each year. As a result, you may not be provided with the benefits of certain corporate governance requirements of the Nasdaq Global Market.

***As a "controlled company" under the Nasdaq Stock Market Rules, we may 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 Nasdaq Stock Market Rules. Ms. Fen Ye, chairlady of board of directors beneficially owns 2.48% of our total issued and outstanding ordinary shares, representing 82.8% of the total voting power. As a result, Ms. Fen Ye has the ability to control or significantly influence the outcome of matters requiring approval by shareholders. For so long as we remain a controlled company under that definition, we are permitted to elect to rely, and may choose to rely, on certain exemptions from corporate governance rules, including an exemption from the rule that a majority of our board of directors must be independent directors. As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. Even if we cease to be a controlled company, we may still rely on exemptions available to foreign private issuers, including being able to adopt home country practices in relation to corporate governance matters and an exemption from the rule that a majority of our board of directors must be independent directors.

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***There can be no assurance that we will not be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in the ADSs or Class A ordinary shares to significant adverse United States federal income tax consequences.***

We will be classified as a passive foreign investment company, or PFIC, for any taxable year if either (i) 75% or more of our gross income for such year consists of certain types of "passive" income, or (ii) 50% or more of the value of our assets (determined on the basis of a quarterly average) during such year produce or are held for the production of passive income, or the asset test. Although the law in this regard is not entirely clear, we treat the consolidated VIEs as being owned by us for U.S. federal income tax purposes because we control their management decisions and are entitled to substantially all of the economic benefits associated with them. As a result, we consolidate their results of operations in our consolidated U.S. GAAP financial statements. If it were determined, however, that we are not the owner of the consolidated VIEs for U.S. federal income tax purposes, we may be treated as a PFIC for the current taxable year and any subsequent taxable year.

Assuming that we are the owner of the consolidated VIEs for U.S. federal income tax purposes, and based upon our current and expected income and assets, including goodwill, we do not presently expect to be classified as a PFIC for the current taxable year and/or the foreseeable future.

While we do not expect to be a PFIC, because the value of our assets for purposes of the asset test may be determined by reference to the market price of our ADSs, fluctuations in the market price of our ADSs may cause us to become a PFIC for the current or subsequent taxable years. The determination of whether we will be or become a PFIC will also depend, in part, on the composition and classification of our income. Because there are uncertainties in the application of the relevant rules, it is possible that the IRS may challenge our classification of certain income and assets as non-passive which may result in our being or becoming a PFIC in the current or subsequent years. In addition, the composition of our income and assets will also be affected by how, and how quickly, we use our liquid assets and the cash in our initial public offering. If we determine not to deploy significant amounts of cash for active purposes, our risk of being a PFIC may substantially increase. Because there are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year.

If we are a PFIC in any taxable year, a U.S. Holder (as defined in "Item 10. Additional Information—E. Taxation—United States Federal Income Taxation") may incur significantly increased United States income tax on gain recognized on the sale or other disposition of our ADSs or Class A ordinary shares and on the receipt of distributions on our ADSs or Class A ordinary shares to the extent such gain or distribution is treated as an "excess distribution" under the United States federal income tax rules, and such holder may be subject to burdensome reporting requirements. Further, if we are a PFIC for any year during which a U.S. Holder holds our ADSs or our Class A ordinary shares, we will generally continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or our Class A ordinary shares. For more information, see "*Item 10. Additional Information—E. Taxation—United States Federal Income Taxation—Passive Foreign Investment Company Rules*."

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***We incur increased costs because of being a public company.***

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We are a public company and we incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002 and the rules subsequently implemented by the SEC and the Nasdaq Global Market contain detailed requirements concerning corporate governance practices of public companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. Our management will be required to devote substantial time and attention to our public company reporting obligations and other compliance matters.

**ITEM 4. INFORMATION ON THE COMPANY**

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

Lixiang Education Holding Co., Ltd. was incorporated as an exempted company under the laws of the Cayman Islands with limited liability in September 2018, to be our holding company. We conduct business through our PRC subsidiaries and the VIEs with which we have a series of contractual arrangements. On October 1, 2020, our ADSs commenced trading on the Nasdaq Global Market under the symbol "LXEH." We raised from our initial public offering approximately US$26.2 million in net proceeds after deducting underwriting commission and related costs and expenses.

Prior to August 31, 2021, we and the VIEs primarily operated primary and secondary school in Baiyun campus and Yijing campus—Featured Division of Lianwai School through a series of contractual arrangements between us and the VIEs. Under the 2021 Implementation Rules which took effect on September 1, 2021, social organizations and individuals are prohibited from controlling a private school that provides compulsory education by means of, among others, merger, acquisition, and contractual arrangements, and a private school providing compulsory education is prohibited from conducting transactions with its related party. In particular, the prohibition over related party transactions has significantly affected the enforceability of the exclusive management services and business cooperation agreements among Liandu WFOE and Lianwai School providing compulsory education. Therefore, we re-assessed our control over Lianwai School. Based on the relevant accounting standard in accordance with U.S. GAAP, we have concluded that we have lost control of Lianwai School since August 31, 2021, in view of the significant uncertainties and restrictions the 2021 Implementation Rules impose on our ability to direct the range of ongoing activities that would most significantly impact the returns of Lianwai School. In light of such regulatory developments, on April 20, 2022, we entered into an acknowledgment agreement of contractual agreements with Lianwai School and respective directors, to confirm all the terms of rights and obligations relating to Lianwai School and the directors appointed by the sponsor under the contractual arrangements in relation to Lianwai School, and agree among the parties that such arrangements shall have been terminated on August 31, 2021. To minimize disruptions to existing students enrolled in Lianwai School, we and the VIEs continued to offer essential services to the students. We deconsolidated Lianwai School commencing from September 1, 2021 and presented it as a discontinued operation in current and comparative period financial statements.

On August 18, 2021, Lishui Mengxiang entered into a sponsorship interests transfer agreement with Qingtian Zhongyi Education Investment in respect of the acquisition of 100% of the sponsorship interests of Qingtian International School in Lishui City, Zhejiang Province, an educational institution specialized in providing high school education to students from the families of overseas Chinese returnees, for a total consideration of RMB23 million. On August 24, 2021, the alteration registration of the sponsorship interests of Qingtian International School was completed and Lishui Mengxiang started to hold 100% of the sponsorship interests of Qingtian International School. The transaction was closed in November 2021. On April 20, 2022, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Lishui Mengxiang, Qingtian International School, shareholders of Lishui Mengxiang and the Council Members of Qingtian International School with respect to the operation of Qingtian International School. Liandu WFOE later entered into an updated series of contractual arrangements with respect to the operation of Qingtian International School on January 31, 2023, due to the change of shareholders of Lishui Mengxiang, which took effect on December 16, 2022 and replaced the previous ones in their entirety. On January 15, 2024, Lishui Mengxiang entered into a definitive agreement to transfer 100% of the sponsorship interests of Qingtian International School to Qiaoxiang Education, an entity affiliated with Mr. Biao Wei, a director and the Chief Executive Officer of the Company, for a consideration of RMB23,161,000. The transfer of the sponsorship interests has been approved by the audit committee and the board of directors of the Company. The completion of the transfer would be subject to the terms and conditions of the definitive agreement, including the registration of change of sponsorship of the school with competent authorities of Qingtian county, Zhejiang province, China. As of the date of the annual report on Form 20-F, we and the VIEs are still in the process to complete such registration. On April 2, 2024, Liandu WFOE, Lishui Mengxiang, Qingtian International School, the shareholders of Lishui Mengxiang and the Council Members of Qingtian International School entered into the Acknowledgment Agreement of Contractual Agreements of Qingtian Overseas Chinese Experimental High School, pursuant to which rights and obligations under contractual arrangements with respect to Qingtian International School were actually terminated on December 31, 2023. We deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023.

In order to fully utilize the existing educational resources and meet the demand of society for high-quality high school education, Lishui International School was established in June 2023. On April 2, 2024, Liandu WFOE entered into a series of contractual arrangements with respect to the operation of Lishui International School, pursuant to which the sponsorship of Lishui International School by Lishui Mengxiang was agreed to be effective on June 25, 2023. Lishui International School is a full-time boarding high school which provides education programs to students from the families of overseas Chinese returnees in preparation for relevant entrance exams to enter top universities in China. The school has started to enroll students in the fall of 2023.

We have also explored and considered business opportunities beyond high school education, including expansion into online education and vocational education.

In February 2021, Liandu WFOE completed the acquisition of 100% equity stake in Hangzhou Youxi, developer of five software with computer software copyright, including among others live streaming supervision system, Android live streaming system, and Apple live streaming system, etc., to expand into the business of online education. The total consideration of the acquisition was RMB300,000 in cash.

In January 2022, Lishui Mengxiang formed Beijing Xinxiang with Beijing R.R.Z. to provide vocational education in the healthcare industry, offering students training in the fields of nursing, emergency rescue and rehabilitation care. Lishui Mengxiang has made an equity capital contribution of RMB4,300,000 to Beijing Xinxiang in exchange for 43% equity interests in Beijing Xinxiang. Given that the board of directors of Beijing Xinxiang consists of five members, three of which shall be appointed by Lishui Mengxiang, we are regarded as the primary beneficiary of Beijing Xinxiang through Lishui Mengxiang under U.S. GAAP as Lishui Mengxiang holds more than half of the voting power of the board of directors of Beijing Xinxiang. Therefore, the financial statements of Beijing Xinxiang have been consolidated in our annual report since the year ended December 31, 2022. Given the relatively small scale and limited growth potential of Beijing Xinxiang, we deregistered Beijing Xinxiang in June 2024 as a part of our plan on restructuring and resources reallocation. The deregistration procedures were completed on June 17, 2024.

To expand our and the VIEs' business into vocational education, Lishui Mengxiang entered into definitive agreements to acquire 100% of the equity interests of Beijing P.X. on January 1, 2022, which was a wholly-owned subsidiary of Beijing S.K. at the time, so that after the transaction, Lishui Mengxiang through its shareholding of Beijing P.X. would in turn hold 100% of the equity interests of Chuangmei Weiye and Hainan Jiangcai, and 100% of the sponsorship interests of Langfang School. The acquisition was completed in May 2022. As of the date of the annual report on Form 20-F, the administrative procedures with the PRC governmental authorities to amend the registration reflecting the result of the acquisition of Langfang School have not been completed due to the internal procedures of the competent authorities and we and the VIEs are still in the process of active communication with such local authorities. On November 5, 2023, Lishui Mengxiang elected to exercise the right to sell 100% of the equity interests of Chuangmei Weiye back to Beijing S.K. and its affiliates pursuant to that certain supplementary agreement by and among Lishui Mengxiang, Beijing S.K., certain affiliates of Beijing S.K. and Beijing P.X. dated August 20, 2023, primarily due to the substantial amount of Chuangmei Weiye's historical debts. The equity interests of Chuangmei Weiye were transferred back to Beijing S.K. 's affiliates at a price of RMB6.36 million and the transfer was completed on November 9, 2023. After the transaction, the amount of RMB6.36 million has been added to the total debts owed by Beijing S.K. to Lishui Mengxiang. On January 6, 2023, Beijing P.X. established a wholly-owned subsidiary, Hebei Chuangxiang, a human resources services provider for internship and employment recommendations.

**B. Business Overview**

Our and the VIEs' private education services primarily consist of high school education and vocational education. For the year ended December 31, 2025, we and the VIEs have established an education services network consisting of a high school, two vocational education services providers and a human resources and healthcare support services provider, covering Zhejiang Province, Hebei Province, and Hainan Province in mainland China. The entities engaging in our main business include:

● Lishui International School, an educational institution specialized in providing high school education to students from overseas Chinese families returning to China who are commonly known as the overseas Chinese returnees;

● Langfang School and Hainan Jiangcai, vocational education services providers offering a variety of vocational education programs with the aim to help students to equip with practical vocational skill sets; and

● Hebei Chuangxiang, a human resources service provider connecting enterprises and vocational school students, providing talents to enterprises and assisting vocational schools to provide internship opportunities to their students. It also cooperates with healthcare and elderly care enterprises to deliver daily care, specialized nursing and companion services.

**Deconsolidated Primary and Middle School**

In 2003, Lianwai School was launched in Lishui City, Zhejiang Province with two campuses offering primary and middle school private education:

● Baiyun Campus offering standard PRC curriculum programs; and

● Yijing Campus—Featured Division offering featured PRC curriculum programs.

Under the 2021 Implementation Rules which took effect on September 1, 2021, social organizations and individuals are prohibited from controlling a private school that provides compulsory education by means of, among others, merger, acquisition, and contractual arrangements, and a private school providing compulsory education is prohibited from conducting transactions with its related party. In particular, the prohibition over related party transactions has significantly affected the enforceability of the exclusive management services and business cooperation agreements among Liandu WFOE and Lianwai School providing compulsory education. Therefore, we re-assessed our control over Lianwai School. Based on the relevant accounting standard in accordance with U.S. GAAP, we have concluded that we have lost control of Lianwai School since August 31, 2021, in view of the significant uncertainties and restrictions the 2021 Implementation Rules impose on our ability to direct the range of ongoing activities that would most significantly impact the returns of Lianwai School. In light of such regulatory developments, on April 20, 2022, we entered into an acknowledgment agreement of contractual agreements with Lianwai School and respective directors, to confirm all the terms of rights and obligations relating to Lianwai School and the directors appointed by the sponsor under the contractual arrangements in relation to Lianwai School, and agree among the parties that such arrangements shall have been terminated on August 31, 2021. To minimize disruptions to existing students enrolled in Lianwai School, we and the VIEs continued to offer essential services to Lianwai School without recognizing any revenue. Meanwhile, we deconsolidated Lianwai School commencing from September 1, 2021 and presented it as a discontinued operation in current and comparative period financial statements. See "*Item 5. Operating and Financial Review and Prospects—A. Operating Results*."

**Qingtian International School**

The high school curriculum programs offered at Qingtian International School are designed for students from overseas Chinese families returning to China who are commonly known as the overseas Chinese returnees.

The increasing population of overseas Chinese returnees and their immediate relatives in Zhejiang Province provides a growing opportunity in the private education industry. According to the Frost & Sullivan report, the population of overseas Chinese returnees (including Chinese returnees from Hong Kong and Macau) and their relatives residing in Zhejiang Province has increased from 1.2 million in 2014 to 1.5 million in 2019, representing a CAGR of 4.5%. It is expected that this number would continue to grow steadily at a CAGR of 4.0% from 2019 to 2024. Students as overseas Chinese returnees have the opportunity to attend the PRC Joint Recruitment Examination for overseas Chinese returnees and students in Hong Kong, Macau and Taiwan as a parallel track to the college entrance exam taken by local students, and therefore we believe our graduates who are overseas Chinese returnees have a better opportunity to attend China's top universities, which in turn enhances our and the VIEs' schools' reputation in the industry and improves our prospects.

As a boarding school specialized in providing high school education to overseas Chinese returnees, Qingtian International School provides high school education by small-class teaching method and semi-military management, enabling its students to gain admission to the most prestigious colleges and universities. Qingtian International School offers ordinary PRC high school curriculum program combined with the courses designed for the PRC Joint Recruitment Examination for overseas Chinese returnees.

As of September 1, 2023, there were 491 students in 14 classes enrolled in Qingtian International School with 100% of the students living on-campus. The school recorded a utilization rate of 60.6% with the capacity of 810 as of September 1, 2023. The school has on-campus canteen and provide dormitories for boarding students who live on-campus Sunday through Friday during school terms. The student dormitories implement comprehensive boarding rules and are under the dual supervision of teachers and counselors. The school also cooperated with Qingtian High School of Zhejiang Province ("Qingtian High School") by allowing the medical staff and mental-health counselors of Qingtian High School to handle routine medical treatments and psychological counseling for its students, and the medical staff and mental-health counselors will promptly send the students to hospitals when necessary. Students usually wear school uniforms during school year. The school arranges third-party suppliers to provide school uniform purchasing service for the convenience of parents.

Major decisions and policies concerning our school, such as principal nomination and budget planning (including tuition levels, construction of material new facilities and use of significant funds), are determined by our directors. At the same time, our finance team monitors the financial activities of our school through periodic audits from time to time. The school principal reports to our directors on school developments and major issues at least annually.

To facilitate parent-school communication and to timely obtain feedback from the students' parents, Qingtian International School sets up parents committee comprising parent-representatives from each class; and maintain active social media groups on a class-wide, grade-wide and school-wide basis. The parents committees and social media groups act as a liaison between the management of the school and parents, and encourage parents to voice their opinions about the school. The school also organizes a variety of events and activities for the students' parents. We believe these events and activities strengthened the relationship between the school and the students' parents and contributed to creating a harmonious learning environment. The school also from time to time conducts parent satisfaction survey to obtain feedback on our teaching quality.

We believe teachers are the key to the education programs and the reputation of the school. Qingtian International School employs a team of professional teachers, which enables the school to offer a variety of mandatory and elective courses and provide moral guidance to students. As of September 1, 2023, Qingtian International School had 46 teachers, with a teacher-student ratio of 1:10.67.

The teachers are employed through different channels and methods, including campus recruitment, general public recruitment, candidate self-nominations and the use of online recruiting websites. The school determines the recruitment demands before advertising for recruitment. The school screens resumés received and select appropriate candidates. The hiring decision is made based on the candidates' professional qualifications, moral qualities, professional skills, performance during trial lectures. The deliberation process involves our principals, teachers and administrative staff.

The school typically enters into one-year contracts with the newly hired teachers and will renew their contracts with longer terms only if they deliver satisfactory performance on a selective basis based on the evaluation. To uphold the school's reputation for providing high-quality education and maintain the consistency of the teaching standards, Qingtian International School monitors teaching quality through a comprehensive evaluation system. The school performs the teacher evaluations annually. The evaluations assess attendance, classroom preparation, classroom performance, teaching quality, continuing education coursework, publications and honors and awards. The school also regularly engages external consultants specializing in education to evaluate the in-class performance of the teachers as well as the curriculum taught at school. We believe the external consultants are able to provide the teachers with meaningful feedback that enable them to improve their teaching quality. All teachers in Qingtian International School have obtained the teacher's qualification license in accordance with relevant regulations.

On January 15, 2024, Lishui Mengxiang entered into a definitive agreement to transfer 100% of the sponsorship interests of Qingtian International School to Qiaoxiang Education, an entity affiliated with Mr. Biao Wei, a director and the Chief Executive Officer of the Company, for a consideration of RMB23,161,000. The transfer of the sponsorship was approved by the audit committee and the board of directors of the Company. The completion of the transfer would be subject to the terms and conditions of the definitive agreement, including the registration of change of sponsorship of the school with competent authorities of Qingtian county, Zhejiang province, China. As of the date of the annual report on Form 20-F, we and the VIEs are still in the process to complete such registration. On April 2, 2024, Liandu WFOE, Lishui Mengxiang, Qingtian International School, the shareholders of Lishui Mengxiang and the Council Members of Qingtian International School entered into the Acknowledgment Agreement of Contractual Agreements of Qingtian Overseas Chinese Experimental High School, pursuant to which rights and obligations under the contractual arrangements with respect to Qingtian International School were actually terminated on December 31, 2023. We deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023.

**Lishui International School**

Our high school curriculum programs offered at Lishui International School are designed for students from overseas Chinese families returning to China who are commonly known as overseas Chinese returnees. The increasing population of overseas Chinese returnees and their immediate relatives in Zhejiang Province provides a growing opportunity in the private education industry. Lishui International School was established in June 2023 with the purpose to fully utilize the education resources of us and the VIEs and meet the growing demand for quality high school education of the society. As a full-time boarding high school approved by the Lishui City Education Bureau, Lishui International School provides education programs for students as overseas Chinese returnees in preparation of relevant entrance exams to enter top universities in China. The school has started to enroll students in the fall of 2023.

Students as overseas Chinese returnees have the opportunity to attend the PRC Joint Recruitment Examination for overseas Chinese returnees and students in Hong Kong, Macau and Taiwan as a parallel track to the college entrance exam taken by local students and therefore we believe our graduates who are overseas Chinese returnees have a better opportunity to attend China's top universities, which in turn enhances our and the VIEs' schools' reputation in the industry and improves our prospects. Through the cooperation with and under the guidance of Jinan University in China, the school provides scientific academic planning for overseas Chinese students, preparing them to attend PRC Joint Recruitment Examination for overseas Chinese returnees and students in Hong Kong, Macau and Taiwan to gain admission to top universities in China. Considering the specific situations of students as overseas Chinese returnees, Lishui International School provides specifically designed education programs and offers three major categories of courses, namely standard exam-oriented courses, culture and history courses, and career planning courses. To offer flexibility and improve the teaching methods, Lishui International School also provides an online teaching platform which is integrated into its courses to prepare students for the PRC Joint Recruitment Examination for overseas Chinese returnees and students in Hong Kong, Macau and Taiwan.

In addition, students as overseas Chinese returnees at Lishui International School also have the opportunity to attend the Autonomous Admission Exam jointly held by Jinan University and Overseas Chinese University for students of Hong Kong, Macau, Taiwan, Overseas Chinese, and Other Foreign Students. Each student has the opportunities to take the exam twice and chooses to attend a preferred university if two admission offers are received.

As of September 1, 2025, there were 97 students in four classes enrolled in Lishui International School with 100% of the students living on-campus. The school recorded a utilization rate of 71.8% with the capacity of 135 students as of September 1, 2025. As of September 1, 2025, Lishui International School had five teachers, with a teacher-student ratio of 1:19.4.

**Vocational Education Services Providers**

We and the VIEs offer vocational education services at the Vocational Education Services Providers, namely Langfang School and Hainan Jiangcai. Langfang School and Hainan Jiangcai were acquired by Lishui Mengxiang in January 2022.

We and the VIEs take advantage of the school-operating experience and high-quality resources that the Vocational Education Services Providers accumulated in the vocational education industry in the past to teach students career-focused skill sets. We and the VIEs are moving towards the goal of becoming a leading vocational training leader and offer high-quality vocational courses to enhance students' professional skills and improve their abilities to use their knowledge in practice.

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***Langfang School***

Langfang School is a provincial private vocational school approved by the Human Resources and Social Security Department of Hebei Province, integrating academic education and vocational education. Langfang School was acquired by Lishui Mengxiang in January 2022. As of the date of the annual report, the administrative procedures with the PRC governmental authorities to amend the registration reflecting the result of the acquisition of Langfang School have not been completed due to the internal procedures of the competent authorities and we and the VIEs are still in the process of active communication with such local authorities.

Langfang School provides two parallel options for students to achieve their vocational goals or progression goals. Students can either choose the employment-oriented track to study in one of the vocational education programs and land on a job recommended by the school, or choose the progression-oriented track to study in the progression classes of the vocational education programs and attend the vocational college entrance exam.

The following table sets out the vocational education programs and the corresponding numbers of the enrolled students in Langfang School as of September 1, 2025:

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| | |
|:---|:---|
| **Vocational Education Programs in Langfang School** | **Number of<br> Student<br> Enrolled <br> as of<br> September 1,<br> 2025** |
| 3D Printing Technology Operation | 29 |
| Urban Rail Transportation Management | 12 |
| Nursing | 53 |
| Computer Operation, Maintenance and Repairment | 147 |
| Cross-border E-commerce | 21 |
| Graphic Design | 72 |
| Automobile Maintenance and Repairment | 111 |
| Railway Attendant Training | 119 |
| Unmanned Aerial Vehicle Operation | 40 |
| Preschool Teacher Training | 56 |
| **Total** | 660 |

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Langfang School hires a number of qualified and dedicated teachers. As of September 1, 2025, Langfang School had 57 teachers, with a teacher-student ratio of 1:11.58.

As of the date of this annual report, some of the teachers in Langfang School have not obtained the teacher's qualification license (教师资格证) issued by the local administrative department of education, or the vocational school teacher's license (教师上岗证) issued by the local administrative department of human resources and social security. As far as we know, the competent authorities no longer compulsorily require vocational school teachers to hold the vocational school teacher's license. We have not received any notice of warning or been subject to any penalties or disciplinary action from government authorities due to the lack of the teacher's qualification license or the vocational school teacher's license.

In 2025, Langfang school provided intensive training for a total of 210 students who registered to sit for the vocational college entrance exam held in April, and 609 students graduated from Langfang School, with 399 graduates employed after graduation and 210 students pursuing college education.

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***Hainan Jiangcai***

We and the VIEs cooperate with Hainan Technical School, a reputable vocational education school in Haikou City, Hainan Province, through Hainan Jiangcai, a subsidiary of Beijing P.X., to jointly design and develop curriculum programs based on the prevalent market trends and employer preferences.

The following table sets out the programs and the corresponding numbers of the students enrolled in the programs of Hainan Jiangcai (through its cooperator Hainan Technical School) as of September 1, 2025:

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| | |
|:---|:---|
| **Vocational Education Programs of Hainan Jiangcai** | **Number of<br> Student<br> Enrolled<br> as of<br> September 1, <br> 2025** |
| Unmanned Aerial Vehicle (Computer Operation) | 73 |
| Railway Attendant Training | 190 |
| Urban Rail Transportation Management | 247 |
| **Total** | 510 |

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Hainan Jiangcai hires a number of qualified and dedicated teachers. As of September 1, 2025, Hainan Jiangcai had 24 teachers.

In 2025, the cooperative vocational education programs of Hainan Jiangcai have 193 graduates.

**Human Resources Services Provider**

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***Chuangmei Weiye***

Chuangmei Weiye is a professional comprehensive education and human resources service provider, covering human resources (including labor dispatch, human education, agency recruitment), outsourcing vocational services, recruitment process outsourcing service, comprehensive services for flexible employment (including the services for the part-time employment, retirement re-employment, internships, and other short-term or temporary employment methods) and vocational education. Through Chuangmei Weiye, we aim to assist talents with practical skills in obtaining internship opportunities and positions in well-known companies so as to bridge the supply and demand gap between the employers and talents.

Chuangmei Weiye has five branches in Henan Province, Guangdong Province, Hainan Province, Gansu Province and Xinjiang Province, and reached strategic cooperation with many reputable companies in the industries, and has a talent pool consisting of the graduates from its cooperative vocational schools. For the fiscal year ended December 31, 2023, Chuangmei Weiye has provided human resources services to over 30 companies and over 6 schools, and assisted the vocational schools in providing internship and employment opportunities to over 1,000 students.

On November 5, 2023, Lishui Mengxiang elected to exercise the right to sell 100% of the equity interests of Chuangmei Weiye back to Beijing S.K. and its affiliates pursuant to that certain supplementary agreement by and among Lishui Mengxiang, Beijing S.K., certain affiliates of Beijing S.K. and Beijing P.X. dated August 20, 2023, primarily due to the substantial amount of Chuangmei Weiye's historical debts. The equity interests of Chuangmei Weiye were transferred back to Beijing S.K. 's affiliates at a price of RMB6.36 million and the transfer was completed on November 9, 2023. After the transaction, the amount of RMB6.36 million has been added to the total debts owed by Beijing S.K. to Lishui Mengxiang.

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***Hebei Chuangxiang***

On January 6, 2023, Beijing P.X. established Hebei Chuangxiang as its wholly-owned subsidiary to expand into the human resources services business.

Hebei Chuangxiang is a human resources services provider for internship and employment recommendations. Hebei Chuangxiang has entered into cooperation agreements with certain employers, allowing Hebei Chuangxiang to assign the students from Langfang School and Hainan Technical School as interns to these employers. In return, Hebei Chuangxiang charges labor dispatch fees from the employers based on the number of interns dispatched. For the year ended December 31, 2025, Hebei Chuangxiang provided such human resources services to 24 companies, and provided internship and employment opportunities to 259 students.

Beginning from the second half of 2024, Hebei Chuangxiang signed formal service cooperation contracts with a number of enterprises in the health and elderly care industry, providing professional healthcare support services covering basic living care, special care, companion services, etc.. A daily service fee will be charged to enterprises using such services provided by Hebei Chuangxiang based on the service period and volume.

**Intellectual Property**

As of December 31, 2025, we and the VIEs had 46 and two registered trademarks in the PRC and Hong Kong, respectively. As of December 31, 2025, we and the VIEs had no trademarks pending registration in the PRC. We obtained five computer software copyrights through the acquisition of Hangzhou Youxi by Liandu WFOE in February 2021. As our brand name is of material importance to our and the VIEs' business, we and the VIEs are working to increase, maintain and enforce our rights in our intellectual property portfolio.

**Seasonality**

Our financial performance is subject to seasonality as each of the school years includes a winter holiday between December and January and a summer holiday between July and August. Our net loss and results of operations normally fluctuate from quarter to quarter as a result of seasonal variations in our and the VIEs' education operations. See "*Item 5. Operating and Financial Review and Prospects—A. Operating Results—Seasonality.*"

**Marketing**

We and the VIEs rely primarily on our reputation as one of the leading providers of education services in Lishui City to attract high-quality students to apply for Lishui International School and do not engage in marketing and recruitment methods that require additional cost. We and the VIEs also take advantage of the school-operating experience and high-quality resources of the newly-acquired Vocational Education Services Providers in the vocational education industry to attract students. In addition, we and the VIEs enhance the public awareness of our brand name and education service offerings through word-of-mouth advertising, award and campus tours which are useful channels for prospective students and their family to learn more about our and the VIEs' capabilities and education service offerings. We and the VIEs also from time to time formulate and implement our marketing and student recruiting plans suitable for the market to promote our school, programs and us.

**Competition**

The education sector in China is growing, rapidly evolving, highly fragmented and competitive. We and the VIEs face competition for students in the geographic market in which we operate.

According to the Frost & Sullivan report, Lianwai School was one of the top ten providers of private primary and secondary school education in Zhejiang Province and the largest private primary and middle school education in Lishui City as measured by students enrolled on a monthly average basis for the 2019/2020 school year. As of the date of the annual report, we and the VIEs are still one of the pioneers in the industry to provide education services in Zhejiang Province. With a successful track record of operation, Lishui International School has gained a strong reputation in Zhejiang Province, especially in Lishui City, which in turn attracts more high-quality students and teachers and helps forming a virtuous cycle. Besides, with the acquisition of the Vocational Education Services Providers and the establishment of Hebei Chuangxiang, we extended out business layout to the vocational education services in Hebei province and Hainan province and also to human resources and healthcare support services. We could take advantage of the school-operating experience and high-quality resources that the Vocational Education Services Providers and Chuangmei Weiye accumulated in the vocational education industry and human resources services industry to attract students and help them achieve their progression and career goals.

We believe that the principal competitive factors in our relevant markets include academic performance of students, student placement and employer satisfaction with our graduates, brand and reputation, quality of educational programs, operating experience, types of educational programs, tuition, students and parent satisfaction rate, student progression rate and employment rate, and ability to attract and retain high quality teachers and staff. *See "Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—We and the VIEs face intense competition in the education industry and we and the VIEs may fail to compete effectively."*

**Regulation**

This section sets forth a summary of the most significant rules and regulations that affect our and the VIEs' business activities in China.

**PRC Laws and Regulations Relating to Foreign Investment in Education**

***Regulations on Stock Incentive Plans***

Pursuant to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of an Overseas Publicly Listed Company, or SAFE Circular 7, issued by SAFE in February 2012, directors, supervisors, senior managers and other employees participating in any stock incentive plan of an overseas listed company who are PRC citizens or who are non-PRC citizens residing in China for a continuous period of not less than one year, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and complete certain other procedures. If we fail to complete the SAFE registrations, such failure may subject us to fines and legal sanctions and may also limit our ability to contribute additional capital into our wholly foreign-owned subsidiary in China and limit such subsidiary's ability to distribute dividends to us.

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

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***The Negative List and the Encouraging Catalogue***

On December 27, 2021, the NDRC and the MOFCOM jointly issued the Special Administrative Measures for the Access of Foreign Investment (Negative List) (the "2021 Negative List") with effect from January 1, 2022. Pursuant to the 2021 Negative List, ordinary high school education are restricted industries for foreign investors, and foreign investments are only allowed to invest in ordinary high school education in cooperative ways and the domestic party shall play a dominant role in the cooperation, which means the principal or other chief executive officer of the schools shall be a PRC national and the representative of the domestic party shall account for no less than half of the total members of the board of directors, the executive council or the joint administration committee of the Sino-foreign cooperative educational institution. In addition, foreign investors are prohibited from investing in compulsory education, namely primary school to middle school. Industries not listed in these two categories are generally deemed "permitted" for foreign investment unless specifically restricted by other PRC laws. While it further provides that any domestic enterprise, which is engaged in the field of business that foreign investment is prohibited from investing as set forth in the 2021 Negative List, shall be examined and approved by the relevant state authorities before issuing shares and listing and trading abroad. Besides, any foreign investor shall not participate in the management of such domestic enterprise, and its shareholding ratio shall follow the relevant provisions regulating foreign investors' investment in domestic securities.

Furthermore, On September 6, 2024, the NDRC and the MOFCOM jointly issued the Special Administrative Measures for the Access of Foreign Investment (Negative List) (the "2024 Negative List") with effect from November 1, 2024 and replaced the 2021 Negative List. The 2024 Negative List sets out the areas where foreign investment is prohibited, and the areas where foreign investment is restricted. Prior to investing in the restricted fields in the 2024 Negative List, foreign investor shall obtain foreign investment access permit. Unless otherwise provided in other laws, a foreign investment in areas not listed on the 2024 Negative List is unconditionally permitted and shall be treated in the same manner as domestic investment. The 2024 Negative List remains unchanged.

On June 30, 2019, MOFCOM and NDRC jointly issued the Catalogue of Industries for Encouraging Foreign Investment (Edition 2019), or the Encouraging Catalogue (Edition 2019). On December 27, 2020, MOFCOM and NDRC jointly promulgated the Catalogue of Industries for Encouraging Foreign Investment (Edition 2020), or the Encouraging Catalogue (Edition 2020), which replaced the Encouraging Catalogue (Edition 2019). The latest version of the Encouraging Catalogue (Edition 2022) was issued on October 26, 2022, which took effect on January 1, 2023 and superseded the previous lists. Pursuant to the Encouraging Catalogue (Edition 2022), vocational school (including technical training schools) are encouraged industries for foreign investors.

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***Regulations on Foreign Investment***

On March 15, 2019, the Foreign Investment Law of the People's Republic of China, or the Foreign Investment Law, was formally passed by the 13th NPC and took effect as on January 1, 2020. The Foreign Investment Law has replaced the Chinese-Foreign Equity Joint Ventures Law, the Chinese-Foreign Contractual Joint Ventures Law and the Wholly Foreign-owned Enterprise Law to become the legal foundation for foreign investment in the PRC. To implement the Foreign Investment Law, the State Council promulgated the Implementing Regulations of the Foreign Investment Law, and Ministry of Commerce of the PRC, or the MOFCOM, and the State Administration for Market Regulation, or the SAMR further promulgated the Measures for Reporting of Information on Foreign Investment.

The Foreign Investment Law establishes the administration systems for foreign investment, which mainly consists of pre-establishment national treatment plus negative list, foreign investment information report system and security review system. The aforesaid systems, together with other administrative measures stipulated under the Foreign Investment Law, constitute the frame of foreign investment administration. The pre-establishment national treatment refers to granting to foreign investors and their investments, in the stage of investment access, the treatment no less favorable than that granted to domestic investors and their investments. The negative list refers to special administrative measures for access of foreign investment in specific fields as stipulated by the State and the State will give national treatment to foreign investments outside the negative list. The Foreign Investment Law further provides that foreign-invested enterprises established before the Foreign Investment Law coming into effect may retain their original form of organizations within five years after the Foreign Investment Law comes into effect.

Pursuant to the Foreign Investment Law of the PRC which took effect as on January 1, 2020, foreign investors' capital contribution, profits, capital gains, assets disposal income, intellectual property license fees, legally obtained damages or compensation, liquidation proceeds, etc., may be freely remitted into or out of China in RMB or foreign exchange according to PRC laws. Accordingly, the Company has the ability to repatriate revenues generated by the VIE businesses. However, there are restrictions under PRC laws for the payment of dividends to us by Liandu WFOE. See *"—Regulation—Regulations on Taxation in the PRC—Income Tax in relation to Dividend Distribution" and "—Regulation—PRC Laws and Regulations relating to Foreign Exchange*."

As of the date of the annual report, our and the VIEs' high school education services fall within restricted industries for foreign investors, and the VIEs' vocational school education services fall within encouraged industries for foreign investors. Although foreign investment in high schools and vocational school is not prohibited, we or Liandu WFOE is not a foreign education institution or a foreign vocational skills training institution with relevant qualifications on education services and operating high-quality education. Therefore, we conduct business operations through the Variable Interest Entities. See "*Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure*" and "*Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China*" for details.

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***Regulations on Sino-Foreign Cooperation in operating school***

Pursuant to the 2024 Negative List, ordinary high school education are restricted industries for foreign investors, and foreign investments are only allowed to invest in ordinary high school education in cooperative ways and the domestic party shall play a dominant role in the cooperation, which means the principal or other chief executive officer of the schools shall be a PRC national and the representative of the domestic party shall account for no less than half of the total members of the board of directors, the executive council or the joint administration committee of the Sino-foreign cooperative educational institution.

Sino-foreign cooperation in operating schools is specifically governed by the Regulation on Operating Sino-foreign Schools of the PRC, which was promulgated by the State Council on March 1, 2003, took effect from September 1, 2003 and recently amended on March 2, 2019, and the Implementing Rules for the Regulations on Operating Sino-foreign Schools of the PRC, or the Implementing Rules, which were issued by the Ministry of Education of the PRC, or the MOE on June 2, 2004 and became effective on July 1, 2004.

The Regulation on Operating Sino-foreign Schools of the PRC and the Implementing Rules apply to the activities of educational institutes established in the PRC jointly by foreign educational institutes and Chinese educational institutes, the students of which are to be recruited primarily from PRC citizens and encourage substantial cooperation between overseas educational organizations with relevant qualifications and experience in providing high-quality education, and PRC educational organizations to jointly operate various types of schools in the PRC, with such cooperation in the areas of higher education and occupational education being encouraged. The overseas educational organization must be a foreign educational institution with relevant qualification and experience at the same level and in the same category of education. It is uncertain as to what type of information (including the length and type of experience) a foreign investor must provide to the competent PRC government authority to demonstrate that it meets the qualification requirement. Sino-foreign cooperative schools are not permitted, however, to engage in compulsory education and military, police, political or other kinds of education that are of a special nature in the PRC. Any Sino-foreign cooperative school and cooperation program shall be approved by the relevant education authorities of provinces, autonomous regions or municipalities directly under PRC central governmental where the institute locates and obtain an Operation Permit for Sino-foreign Cooperation School, and a Sino-foreign cooperation school established without the above approval or permit may be prohibited by the relevant authorities, be ordered to refund the fees collected from its students and be subject to a fine of no more than RMB100,000, while a Sino-foreign cooperation program established without such approval or permit may also be banned and be ordered to refund the fees collected from its students.

The Administrative Measures for the Sino-foreign Cooperative Education on Vocational Skills Training was promulgated by the Ministry of Labor and Social Security (currently known as the MHRSS) on July 26, 2006 and came into effect on October 1, 2006 and then was amended on April 30, 2015 by the MHRSS. The Sino-foreign Vocational Skills Training Measures shall apply to the establishment, activities and management of vocational skills training institutions and educational projects initiated by Chinese educational institutions and foreign educational institutions (including vocational skills training institutions) by cooperation. Foreign educational institutions, other organizations or individuals may not independently establish the vocational skills training institutions with Chinese citizens as the main enrollment targets in the PRC, and can only establish the vocational skills training institutions in cooperation with Chinese cooperators in the form of Sino-foreign cooperation, and the cooperators of the Sino-foreign vocational skills training institutions shall meet the requirements and conditions stipulated in the Sino-Foreign Cooperation Regulation. The establishment of a Sino-foreign vocational skills training institution shall be examined and approved by the local MHRSS of the people's government of the province, autonomous region or municipality directly under the Central Government where the proposed institution is located.

On June 18, 2012, the MOE issued the Implementation Opinions of the MOE on Encouraging and Guiding the Entry of Private Capital in the Fields of Education and Promoting the Healthy Development of Private Education to encourage private investment and foreign investment in the field of education. According to these opinions, the proportion of foreign capital in a Sino-foreign education institute shall be less than 50%.

As of the date of the annual report, no implementation measures or specific guidelines are promulgated in accordance with the Regulation on Operating Sino-foreign Schools of the PRC and Implementing Rules. Further, as far as we know, relevant authorities in Zhejiang Province or Hebei Province have not approved any establishment of Sino-foreign cooperative high school or vocational school in at least past five years. Therefore, we can only consolidate Lishui International School and Langfang School through the contractual arrangements in accordance with U.S. GAAP.

**Regulations on Private Education in the PRC**

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***Education Law of the PRC***

On March 18, 1995, the National People's Congress of PRC, or the NPC enacted the Education Law of the PRC, or the Education Law, which was amended on August 27, 2009, December 27, 2015 and April 29, 2021, respectively. The Education Law sets forth provisions relating to the fundamental education systems of the PRC, including a school education system comprising pre-school education, primary education, secondary education and higher education, a system of nine-year compulsory education, a national education examination system, and a system of education certificates. The Education Law stipulates that the government formulates plans for the development of education, establishes and operates schools and other educational institution. Furthermore, it provides that in principle, enterprises, social organizations and individuals are encouraged to establish and operate schools and other types of educational institutes in accordance with PRC laws and regulations. Meanwhile, schools and other educational institutes sponsored by all or part of government financial funds and donated assets are forbidden to be established as for-profit organizations.

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***The Law for Promoting Private Education and the Implementation Rules for the Law for Promoting Private Education***

The Law for Promoting Private Education of the PRC became effective on September 1, 2003 and was amended on November 7, 2016 by the Decision of the Standing Committee of the National People's Congress on Amending the Law for Promoting Private Education of the PRC, or the Decision and amended on June 29, 2013 and December 29, 2018. The Implementation Rules for the Law for Promoting Private Education of the PRC, or the 2004 Implementation Rules became effective on April 1, 2004 and recently amended on April 7, 2021. The Law for Promoting Private Education of the PRC shall be applicable to activities conducted by public organizations or individuals, other than the organs of the state, to establish and operate schools and other institutions of education with non-governmental financial funds, which are geared to the need of society. The establishment of a private school shall meet the local need for educational development and the requirements of the Education Law and the relevant laws and regulations. A duly approved private school will be granted a Permit for Operating a Private School, after which the private school can apply for registration as a legal person and the registration authority shall handle the matter in accordance with relevant laws and regulations.

The Law for Promoting Private Education of the PRC mainly stipulates as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The sponsors of privately-run
 schools may establish non-profit or for-profit privately-run schools at their own discretion. However, they shall not establish for-profit
 privately-run schools providing compulsory education.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The sponsor of a non-profit
 privately-run school shall not gain proceeds from school running, and the cash surplus of the school shall be used for school running,
 while the sponsor of a for-profit privately-run school may gain proceeds from school running, and the cash surplus of the school
 shall be disposed of in accordance with relevant PRC laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The measures for the collection
 of fees by non-profit privately-run schools shall be formulated by the people's governments of various provinces, autonomous
 regions and centrally-administered municipalities.

However, the charging criteria of for-profit privately-run schools are subject to market regulation and shall be determined by the schools themselves.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Privately-run schools may
 enjoy the preferential taxation policies, and non-profit privately-run schools may enjoy the same preferential taxation policies
 with that for publicly-run schools.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Additional supportive measures
 are provided for private schools. Non-profit private schools will enjoy additional supportive measures, such as government subsidies,
 fund awards and donations.

Furthermore, if a private school established before the promulgation of this Decision chooses to be registered as a non-profit privately-run school and when the privately-run school is terminated, if there are remains after its property is liquidated, appropriate compensation or rewards shall be given to capital contributors based on their applications and by taking into full account the factors such as the capital contributed before the implementation of this Decision, reasonable return gained and benefits from school running, and the other property may continue to be used for the running of other non-profit schools.

The 2021 Implementation Rules was promulgated by the State Council on April 7, 2021, and came into effect on September 1, 2021. The 2021 Implementation Rules contain stricter provisions than the Draft Revision of the Regulations on the Implementation of the Law for Promoting Private Education of the PRC (the Draft for Comments) issued by the Ministry of Education of the PRC in April 2018 and the Draft Revision of the Regulations on the Implementation of the Law for Promoting Private Education of the PRC (the Draft for Examination and Approval) issued by the Ministry of Justice of the PRC on August 10, 2018. The 2021 Implementation Rules address the operation and management of private schools, especially non-profit private primary and middle schools, including: (i) foreign-invested enterprises established in China and social organizations whose actual controllers are foreign parties shall not sponsor, participate in or actually control private schools that provide compulsory education, (ii) social organizations or individuals shall not control any private school that provides compulsory education or any non-profit private school that provides pre-school education by means of merger, acquisition, contractual arrangements, etc., and (iii) private schools providing compulsory education shall not conduct any transaction with any interested related party.

In addition, the 2021 Implementation Rules also stipulate the change of school's sponsor. Where the sponsor of a privately-run school is altered, an agreement for alteration shall be concluded, but the agreement may not involve the property of the legal person of the school, affect the development of the school or damage the rights and interests of the teachers and students. The sponsor shall, according to the lawful rights and interests enjoyed by the sponsor according to law, conclude an agreement with the successor sponsor to agree on the benefits from the alteration. The alteration of the sponsor shall be subject to the consent of two-thirds or more of the members of the executive council, the board of directors or a decision-making institution of other forms for the privately-run school. Where the sponsor and actual controller of a privately-run school or any of the members of the decision-making institution or supervision institution alters the sponsor without authorization, they shall be subject to administrative punishment by the administrative department of education, the administrative department of human resources and social security or other relevant departments of the people's government at or above the county level. For a privately-run school, any unlawful earning shall be confiscated, and if the circumstances are serious, it shall be ordered to stop enrolling students and its business license shall be revoked.

On December 29, 2016, the State Council issued the Several Rules of the State Council on Encouraging the Operation of Education by Social Forces and Promoting the Healthy Development of Private Education, which aims to ease the access to the operation of private schools and encourages social forces to enter the education industry. The rules also provide that each level of the PRC government shall increase their support for the private schools in terms of financial investment, financial support, funding policy, preferential tax treatments, land policies, fee policies, autonomy operation, protection of the rights of teachers and students, etc.

On August 17, 2020, MOE, NDRC, the Ministry of Finance, and the State Administration for Industry and Commerce or the SAMR, and the General Administration of Press and Publication jointly released the Opinions on Further Strengthening and Regulating the Administration of Education Fees, or the Education Fees Opinions, effective as of the same date. The Education Fees Opinions mainly stipulate the basic principles of education fee charging, modification of the policies and the management systems of education fee charging, including the legal consequences of charging in violation of the provisions. In particular, the part of provisions on improving the governance mechanism for education fee charges stipulate that "efforts shall be made to explore the establishment of a special audit system for school fees, with the focus on the audit of non-profit privately-run schools, and the sponsors of non-profit privately-run schools and non-profit privately-run sino-foreign cooperative educators shall be prohibited from obtaining proceeds from school-running such as tuition income, distributing school balances (residual assets) or transferring proceeds from school running through related-party transactions or affiliated parties or other means." The Education Fees Opinions have not specified whether the contractual arrangements fall within the activities of transferring the school-running proceeds through related-party transactions and affiliated parties, and the Education Fees Opinions have not specified the relevant legal consequences of such activities.

For a detailed discussion on how the above laws and regulations will affect our school, see "*Item 3. Key Information—D. Risk Factors*."

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***Implementing Rules on Classification Registration of Private Schools***

According to the Implementation Rules on Classification Registration of Private Schools (the "Classification Registration Rules"), which was issued jointly by the MOE, the Ministry of Human Resources and Social Security of the People's Republic of China or the MOHRSS, the MCA, the State Commission Office of Public Sectors Reform and the SAMR, and became effective on December 30, 2016, if an existing private school chooses to register as a non-profit private school, it shall amend its articles of association in accordance with laws, continue its school operation, and complete the new registration formalities. If an existing private school chooses to register as a for-profit private school, it shall make financial settlement, clarify the ownership of the schools' lands, buildings and accumulations with the consent of the relevant departments of the people's governments at or below the provincial level, pay relevant taxes and fees, obtain new school permits, carry out their re-registration and continue their school operation. The provincial people's government is responsible for formulating the detailed measures on the alteration registration of the private schools in accordance with national laws and the local situation.

On December 26, 2017, the People's Government of Zhejiang Province promulgated the Implementation Opinions of the People's Government of Zhejiang Province on Encouraging Individual Persons or Entities to Conduct Education and Promote the Healthy Development of Private Education, or the Zhejiang Implementation Opinions, to establish a classification management system on private school. According to Zhejiang Implementation Opinions, existing private schools, which were established before November 7, 2016, shall finish the registration as non-profit or for-profit private schools by the end of 2022.

On April 4, 2018, eight departments of Zhejiang Province including the Department of Education of Zhejiang Province promulgated the Implementation Measures for Existing Private Schools to Change Registration Status, or the Zhejiang Implementation Measures, which took effect on June 1, 2018 and applies to all private schools established before November 7, 2016. According to the Zhejiang Implementation Measures, (i) any existing private school which chooses to register as a non-profit private school shall amend and file its articles of association and complete the corresponding registration accordingly, and (ii) any existing private school that chooses to register as a for-profit private school, shall obtain a new Permit for Operating a Private School and be re-registered so as to continue its operation after completing its financial clearance and settlement, clarifying its ownership of assets, and paying relevant taxes and fees.

On June 16, 2021, Lishui Municipal Education Bureau, Lishui Municipal Human Resources and Social Security Bureau, Office for Public Sector Reform Commission of Lishui, Lishui Municipal Civil Affairs Bureau and Lishui Municipal Market Supervision Administration jointly promulgated the Administrative Measures for Classification Registration of Private Schools in Lishui, which came effect on the same day.

According to the Administrative Measures, (i) the existing private schools shall continue running according to the status quo before completing the classified registration, and shall complete the classified registration according to laws and regulations by the end of 2022. Private schools providing non-diploma education and training, private schools providing pre-school education and diploma education for full-time primary and secondary schools and secondary vocational education shall, in principle, submit a written application for selection of the legal person nature of schools to the approval authority by September 31, 2021. After the approval authority receives the written application of the school, the private school that meets the statutory conditions and relevant provisions shall complete the classified registration within one year; (ii) Where an existing private school opts to be registered as a non-profit private school, its articles of association shall be amended in accordance with the law, the school may continue its running, obtain a new license for establishment of the school and complete new registration formalities; (iii) An existing private school at the non-compulsory education stage and a training institution may opt to be registered as a for-profit private school. Where a school running under the consistent system on the same campus applies for registration as a for-profit private school in the non-compulsory education stage, the school assets shall be divided for registration and the corresponding conditions for independent school running shall be met. Otherwise, the school shall be registered as a non-profit private school; (iv) Where an existing private school opts to be registered as a for-profit private school, it shall make financial settlement, and the ownership of the land, school buildings, school-running accumulation and other property shall be clarified by the relevant departments of the government of the jurisdiction and the relevant agencies according to law. The school shall pay the relevant taxes and fees, go through the formalities for a new permit for the establishment of the school and make a new registration. The school may continue running during the process of the liquidation, re-handling of the permit for the establishment of the school and registration as a legal person; and (v) When an existing private school is terminated, if there is surplus property after repayment in accordance with the Law of the People's Republic of China on the Promotion of Private Schools, the Implementation Measures for Existing Private Schools to Change Registration Status, the Measures for the Financial Settlement of Private Schools in Zhejiang Province and other regulations, certain compensation or reward (the proportion and standard shall be determined by local authorities according to relevant laws and regulations and in combination with local actual conditions) shall be given to the capital contributors according to the application of the capital contributors and in comprehensive consideration of factors such as the capital contribution made before August 31, 2017, reasonable returns obtained and school-running benefits; the remaining property shall continue to be used for running other non-profit schools.

On November 22, 2021, Lishui Education Bureau has promulgated the Work Plan for Classified Registration and Administration of Existing Private Schools (Kindergartens) of Lishui City, which stipulates that they shall adhere to the principles of voluntary selection, smooth classification, public welfare orientation, and compliance with laws and regulations, and strive to complete the classified registration of existing private schools by December 30, 2022. The Plan also provides a schedule for arranging the classified registration tasks, from January to October in 2022, the classified registration of the existing private schools providing compulsory education, private kindergartens and private schools providing senior high school education shall be completed. The main registration procedures for non-profit private schools are selected as follows: (i) schools shall file an application for classified registration; (ii) the approval authority shall conduct verification and replacement of the certificate; (iii) the articles of association shall be ratified (filed for the record); and (iv) schools shall apply for registration as a legal person. In addition, the main registration procedures for for-profit private schools are selected as follows: (i) sponsors make a pre-application for classified registration; (ii) schools make financial settlement; (iii) sponsors apply for the pre-registration of corporate names; (iv) sponsors make a formal application for classified registration; (v) certificates are replaced upon the approval authorities; (vi) schools apply for the registration of legal persons; (vii) schools complete the amendment registration of assets; (viii) private non-enterprise entities apply for deregistration with the original registration authorities.

Lishui International School has already been registered as a non-profit private school at the time of its establishment and is in compliance with the Classification Registration Rules, and therefore is not required to take extra steps of registration.

On January 9, 2018, five departments of Hebei Province including the Department of Education of Hebei Province issued the Implementation Measures for the Classification Registration of Private Schools in Hebei Province, which came into effect on the same day. The measures provide that (i) private schools can choose to be registered as non-private schools or for-profit schools, and those engaging in compulsory education shall not be registered as for-profit schools; (ii) if a private school has chosen to be classified and registered as a non-profit private school, it shall no longer be converted to a for-profit private school; while if it has chosen to be classified and registered as a for-profit private school, it may be converted to a non-profit private school by application by its sponsor(s) and changing the registration of its legal entity; (iii) existing private schools shall complete the classification and registration within a five-year transition period ending on September 1, 2022, and before the classification and registration, they shall be managed as their originally-registered legal entity; (iv) if an existing private school chooses to be classified and registered as a non-profit private school, it shall amend its constitution in accordance with the laws, continue its operation, and re-register with the appropriate authorities or civil affairs department; and (v) if an existing private school chooses to be classified and registered as a for-profit private school, it shall conduct financial liquidation, clarify the property rights for land(s), school building(s), school accumulation and pay relevant taxes and fees, renew the Permit for Establishment of Privately-run Schools, re-register with the appropriate authorities, and continue its operation.

As of the date of the annual report, Langfang City has not released any detailed rules on classification registration of private schools and we have not received any relevant notice from the competent authorities of Langfang City since January 1, 2022 when Beijing P.X. began to hold the whole sponsorship interests of Langfang School.

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***Guidelines for Further Easing the Burden of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education.***

On July 24, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly released the Guidelines for Further Easing the Burden of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education. The guidelines stipulate a series of measures on education sector reforms designed to improve education quality, ease homework burdens for students, and restrict private investment in the industry. According to the guidelines, the reforms aim to promote the healthy development of students, improve education quality, alleviate financial burdens on parents, and institute law-based governance of the education sector. They concentrate on education in core subjects, or compulsory education, which refers to grades K-9, covering the ages of approximately 6-15 years.

Pursuant to the guidelines, regional governments are no longer permitted to approve new off-campus tutoring centers providing core or compulsory education. Existing off-campus tutoring centers must be registered as non-profit institutions. Local governments must distinguish between training centers in sports, culture and art, and science and technology, and consult relevant departments to set standards for each category. The guidelines specifically ban foreign investment in such firms via mergers and acquisitions, franchise development, and variable interest entities, which are investment vehicles frequently used by foreign investors to bypass restrictions in China's education sector.

Additionally, the guidelines prohibit tutoring on weekends, public holidays, and winter and summer vacations, which are popular times for off-campus education. Tutoring centers in core education cannot go public or be listed for financing. The guidelines call for the excessive capital in training centers to be controlled, and to ensure that financing is primarily used for operational costs. The hiring of foreign teachers and other staff must be according to relevant regulations, and firms cannot hire staff based outside of the country to carry out tutoring activities.

Given that the guidelines aim at the education service providers for students at the stage of compulsory education, none of Lishui International School and Vocational Education Services Providers is involved.

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***Regulations on Non-state Public Institution***

In accordance with the provisions of the Tentative Regulations for the Registration of Public Institutions as revised by the State Council on June 27, 2004, for the purposes of these Regulations, "public institutions" refer to national social service organizations established by state organs or other organizations using state-owned assets for social welfare purposes, and engaged in education, science and technology, culture, health and other activities.

According to the Notice on Carrying out the Pilot Program for Unified Registration and Administration of Various Public Institutions issued by the Lishui People's Government on December 31, 2015, (i) all non-profit public welfare institutions with state-owned assets that comply with the provisions of the Interim Regulations on the Administration of the Registration of Public Institutions, which are established with social forces and engaged in education, culture, sports, medical treatment, elderly care (health preservation) and other activities are allowed to be registered as public institutions and shall be collectively referred to as non-state public institutions, and the registration and administration of non-state public institutions shall be temporarily conducted in education and medical services; (ii) the registered non-state public institutions shall enjoy the same treatment as the public institutions of the same category except for those in which the funds are not guaranteed and the staff are not supported by the financial resources; and (iii) the founders of the non-state public institutions shall have the property ownership of the actual capital contributions (including the amount of capital added during the existence) and assume the corresponding liability for debts; during the existence of the non-state public institutions, the assets invested in them shall not be transferred by any means; the surplus income of the non-state public institutions shall not be distributed, but the corresponding investment incentive system may be established and the specific incentive standards shall be formulated by the competent departments of the industry.

In accordance with the Interim Rules of Lishui Municipality on the Administration of Registration of Public Institutions by Non-Profit Schools Run by Social Capital issued by Lishui Municipal Education Bureau, Lishui Municipal Human Resources and Social Security Bureau and Office for Public Sector Reform Commission of Lishui on December 29, 2015, (i) a private school that is registered as a public institution shall establish a sound and effective financial supervision system and maintain normal teaching order; (ii) a public institution risk fund system shall be established for private schools, which is earmarked for the relevant expenses for returning fees, refunding fees and compensation at the time of termination (closure) of the private school; (iii) after the school reserves development fund and withdraws other relevant expenses, the school may, on the premise that there is balance of non-fiscal funds in school running, withdraw a certain proportion of funds from the balance of non-fiscal funds to reward the contributors upon research and decision made by the decision-making body of the school and approval by the administrative department of education or the administrative department of human resources and social security. The amount of annual reward shall be calculated at a rate of not more than three times of the benchmark one-year loan interest rate of banks with the accumulative capital contributions of the contributors as the base. The assessment of the accumulative capital contributions of the contributors shall be based on the capital verification certificate issued by a statutory capital verification institution.

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***Regulations on Vocational Education***

According to the Vocational Education Law of the PRC, which was promulgated by the SCNPC on May 15, 1996 and came into effect on September 1, 1996, the state encourages institutional organizations, social organizations and other social groups and individuals to operate vocational schools and vocational training institutions according to relevant provisions of the state.

Vocational school education includes primary, secondary and higher vocational school education. Primary and secondary vocational school education shall be conducted respectively by primary and secondary vocational schools. Higher vocational school education shall be conducted by higher vocational schools or by common institutions of higher learning in accordance with the actual needs and conditions. Other schools may implement vocational school education at corresponding levels in accordance with the overall planning by the education administrative department. Vocational training includes pre-employment training, training to facilitate change of occupations, apprenticeship training, on-the-job training, job-transfer training and other vocational training. All these categories of training may, in light of actual conditions, be divided into three levels: primary, secondary and higher vocational training. Vocational training is carried out by the corresponding vocational training institutions and/or vocational schools. Other schools or educational institutions may, depending on their own capabilities, carry out various forms of vocational training to meet social needs.

The MOE issued the Rules on Management of Secondary Vocational Schools on May 13, 2010, according to which, the establishment of secondary vocational schools shall be based on the standards issued by the national and provincial education administrative departments and its establishment, change and termination shall be approved by or filled with the provincial education authorities. Secondary vocational schools provide a combination of academic education and vocational training, and offer full time and part time programs. The education administrative department, the labor administrative department and other relevant departments of the State Council shall each be responsible for the work relating to vocational education within the scope of their functions and duties as specified by the State Council.

At a national conference on vocational education held in April 2021, important instructions were delivered by Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, Chinese President and chairman of the Central Military Commission, on the development of vocational education that vocational education has a promising future and great potential as China journeys toward socialist modernization. It was emphasized that more efforts will be made to optimize the positioning of vocational education, to promote integration between industry and education and cooperation between schools and enterprises, to reform training and schooling modes as well as management and support mechanisms, to promote bachelor-level vocational education and bring about a number of quality vocational education institutions and programs, to promote the integration of vocational education and regular education, to improve the adaptability of vocational education and speed up the development of the modern vocational education system so as to cultivate more high-quality technical professionals.

In April 2021, the State Council promulgated 2021 Implementation Rules, pursuant to which, various policies have been introduced to encourage the development vocational education, such as "public schools implementing vocational education can attract the capital, technology, management and other elements of enterprises to establish or participate in the establishment of for-profit private schools that implement vocational education" and "enterprises are encouraged to establish or participate in the establishment of private schools that implement vocational education in various forms, such as sole proprietorship, joint venture and cooperation".

In October 2021, the General Office of the Central Committee of CPC and the General Office of the State Council issued the Opinions on Promoting the High-Quality Development of Modern Vocational Education (the "Vocational Education Opinions"). The Vocational Education Opinions has put forward that vocational education, an important part of the national education system and human resource development, shoulders the important responsibility of training diversified talents, inheriting technical skills, and promoting employment and entrepreneurship. The Vocational Education Opinions urged that a batch of excellent secondary vocational schools and high-quality majors shall be established by greatly improving the quality of secondary vocational education, carrying out the projects of reaching the standards for secondary vocational schools, and taking such measures as consolidation, cooperation, trusteeship and group school-running. The Vocational Education Opinions also encouraged various enterprises to participate in the vocational education in line with law, vocational schools to cooperate with social capitals in jointly constructing vocational education infrastructures and practical training bases, as well as jointly constructing and sharing public practical training bases. Vocational schools shall actively attract industrial leading enterprises to be deeply involved in the specialty planning, curriculum provision, teaching material development, teaching design and teaching implementation of vocational education, to cooperate in jointly constructing new majors, developing new courses and carrying out order-to-order training.

On April 20, 2022, the SCNPC issued the revised Vocational Education Law of the PRC, which came into effect on May 1, 2022 and further encourages the development of vocational education from four aspects. Firstly, it clarifies for the first time that vocational education is of equal importance as general education; secondly, it focuses on improving the recognition of vocational education, including enhancing the social status and treatment of talents in technology and skills, and organizing vocational skills competitions and other activities; thirdly, it deepens industry-education integration and school-enterprise cooperation, including that the State encourages the development of vocational education at all levels and in all forms, promotes the diversified schooling and supports the extensive and equal participation of social forces in the vocational education, the State promotes enterprises' vital role in running vocational education, advances the in-depth participation of enterprises in vocational education, encourages enterprises to run high-quality vocational education, the implementation of enterprises' vocational education shall be included in the corporate social responsibility report, an enterprise may, by making use of its capital, technology, knowledge, facilities, equipment, place, management and other factors, sponsor or jointly sponsor vocational schools or vocational training agencies, the State encourages, guides and supports enterprises and other non-governmental sectors to sponsor vocational schools and vocational training agencies in accordance with law; and fourthly, it improves the vocational education guarantee system and measures, including that the State takes measures according to the industrial layout and the requirements of industry development, vigorously develops emerging majors required by industries such as advanced manufacturing, supports the construction of high-level vocational schools and majors, optimizes the structure of educational expenditures, adapts the vocational education expenditures to the requirements of vocational education development, and encourages fund-raising through various channels for the development of vocational education in accordance with the law.

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***Notices on Management of the Charge of Schools***

According to the Notice regarding Cancelation of the Fee Charge Permit System and Strengthening the Supervision in process and afterwards, which was issued jointly by the NDRC and the Ministry of Finance on January 9, 2015, the fee charge permit system shall be canceled nationwide from January 1, 2016. Furthermore, Zhejiang Provincial Price Bureau and Zhejiang Provincial Department of Finance issued Circular on Strengthen Supervision Cancelation of the Fee Charge Permit System in Process and afterwards on February 26, 2015, which provided more detailed supervision rules in accordance with Notice regarding Cancelation of the Fee Charge Permit System and Strengthening the Supervision in process and afterwards.

Pursuant to the Notice on Regulations Applicable to Service Charges and Fees Collected-on-behalf in the Primary and Middle Schools jointly promulgated by the NDRC and the MOE on July 23, 2010, services charges and fees collected-on-behalf should be publicly disclosed and paid on a voluntary and non-profit basis.

On January 21, 2020, the Zhejiang Provincial Development and Reform Commission, Zhejiang Provincial Department of Education, Zhejiang Provincial Department of Human Resources and Social Security and Zhejiang Provincial Market Supervision Administration promulgated the Administrative Measures for Private Education Fees, which applies to non-profit private schools for academic education in Zhejiang province. The Administrative Measures for Private Education Fees stipulate, among other provisions, that: (1) the fee policy for private primary and secondary schools is determined by governments in accordance with the direction of marketization; (2) for the convenience of students' study and life and under the precondition of students' willingness, private schools can provide services and charge service fees, or collect and pay related services fees for the third service provider, who provide services. In addition, the service fee must be charged according to the fact, be settled timely and be published regularly.

On August 17, 2020, the MOE and other four ministries and commissions promulgated the Opinions on Further Strengthening and Regulating the Administration of Education Fees, which stipulate, among other provisions, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The measures for the collection of fees by non-profit private schools shall be formulated by the people's governments of various provinces, autonomous regions and centrally-administered municipalities; the charging criteria of for-profit private schools are subject to market regulation and shall be determined by the schools themselves. The private schools established before November 7, 2016 which have not complete their registration procedures of their for-profit or non-profit statuses must be managed according to the non-profit private schools' charging policy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In addition to completing education and teaching tasks, private schools can provide related convenient services for students, and organize research trips, after-school services, social practice and other activities, but the parts of service fees borne by the students or parents must be charged based on voluntary and non-profit principles. If related services are provided by the third party outside the school, the school may collect and pay related services fees for the third service provider;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Private schools must publicize the charging items and standards in a prominent location in the school and indicate the charging items and standards in the admissions brochure and admission notice. If fees that should be publicized were actually not publicized, or the contents of the publicity are not in compliance with the related policies, students are entitled to refuse the payment of the fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Strengthen the audit for non-profit private schools, and strictly prohibit the sponsor of a non-profit private school from gaining proceeds from school running in any way.

The 2021 Implementation Rules for Private Education Laws, stipulates that a private school or the founder thereof shall not, under sponsor fee or any other item, collect or collect in disguised form any fees related to the enrollment from students or their parents. Private schools shall establish a cost accounting system for running schools, and reasonably determine the charging items and standards on the basis of the school operational costs, market demands and other factors, in compliance with the principles of fairness, lawfulness and good faith and in consideration of the economic benefits and social benefits. The people's governments of provinces, autonomous regions and municipalities directly under the Central Government may set a ceiling for the fees charged by non-profit private schools that the government-run schools participate in the establishment thereof, that use state-owned assets, or that receive government subsidies per student. Non-profit private schools shall use the account filed with the relevant competent authorities for the record when collecting fees or carrying out activities. The relevant competent authorities shall supervise the account. All the income of for-profit private schools shall be incorporated into the bank settlement account opened by the schools, and the distribution of school operating balance shall be made after the annual financial settlement. Moreover, it stipulates that a private school providing compulsory education shall not conduct any transaction with any related party. Where any other private school conducts any transaction with any related party, it shall follow the principles of openness, fairness and impartiality, fix the price reasonably and regulate the decision-making, and shall not damage the state interests, the interests of the school or the rights and interests of the teachers and students. Private school shall establish an information disclosure system for their transactions with interested related parties.

On December 5, 2022, the Development and Reform Commission of Hebei Province, the Department of Education of Hebei Province, the Department of Human Resources and Social Security of Hebei Province and the Market Supervision Administration of Hebei Province promulgated the Administrative Measures for Non-profit Private School Fees. The Measures further clarifies the service charges and in lieu of fees, standardizes the independent pricing behavior of schools, improves the refund policy of schools, and formulates fee supervision measures.

As such, these rules and regulations will impact our operation and business model from the perspective of tuition and other education-related fees.

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***Regulations on Safety and Health Protection of Schools***

Pursuant to the Food Safety Law of the People's Republic of China, amended on September 12, 2025, collective canteens of schools shall obtain food business licenses in accordance with the law and strictly abide by the relevant laws, regulations and food safety standards. Schools shall only order meals from off-site food providers that have obtained food production and business licenses and conduct inspections on the ordered food in accordance with the relevant requirements.

Pursuant to Measures for the Administration of Food Trade Licensing and Recordation promulgated on June,15 2023 and took effect on December 1 2023, a food operation license shall be obtained in accordance with the law to engage in food selling and catering services within the territory of the PRC. While a food operation license is not required in the following circumstances: (a) sales of edible agricultural products; (b) sales of only prepackaged food; (c)sales of specific total nutrient formula food within the scope of the food for special medical purposes by medical institutions or drug retailers; (d) sales of food produced by food producers which have obtained food production licenses in their production and processing locations or through the Internet; or (e) other circumstances where a Food Operation License is not required according to laws and regulations. A food trader that engages in food trade activities in different business premises shall obtain food operation licenses or undergo recordation respectively in accordance with the law.

In accordance with the Provisions on Food Safety and Nutrition and Health Management in Schools, which was promulgated on February 20, 2019 and became effective on April 1, 2019, schools shall, in accordance with the provisions of food safety laws and regulations and the requirements of the healthy China strategy, establish and improve relevant systems, implement the campus food safety responsibility, and carry out publicity and education on food safety, nutrition and health. The principal (director) responsibility system shall be practiced in the work of school food safety.

According to the Circular on Strengthening Hygiene and Epidemic Prevention and Food Hygiene and Safety of Private Schools, which was promulgated on April 29, 2006, private schools should pay high attention to and strengthen the school hygiene and epidemic prevention and the food hygiene and safety.

According to the Administrative Measures of Safety of Kindergartens, Primary and Middle School, which was promulgated on June 30, 2006 and became effective on September 1, 2006, in order to ensure the hygiene and safety of food and drink of teachers and students, schools should (i) establish a system of procurement of canteen supplies from designated suppliers, (ii) establish a system of demanding for certificate and keeping record during procurement, (iii) establish a system of retention of food for checkup and record, and (iv) examine the situation of hygiene and safety of drinking water.

Pursuant to the Circular on Further Strengthening Food Safety of School Canteens issued on August 11, 2011, school canteens are comprehensively required to carry out food safety self-inspection. Local food and drug administration at all levels are required to comprehensively strengthen supervision and inspection on food safety of school canteens before commencement of each term, and, before the commencement of every spring term and every autumn term, should consider school canteens as key point of supervision and strengthen the supervision and inspection. School food safety responsibility system should be comprehensively carried out.

According to the Law on the Protection of Minors of the PRC, of which the latest amendment took effective on April 26, 2024, schools shall establish safety system, improve safety education among the minors and adopt measures to guarantee their personal safety.

In accordance with the Regulation on Safety Management of Middle, Primary Schools and Kindergartens, which was promulgated on June 30, 2006 and became effective on September 1, 2006, schools shall be responsible for safety management and education, establish and improve internal safety management system and safety emergency response mechanism, incorporate safety education into its teaching content and carry out safety education among students.

According to the Regulation on Sanitary Work of Schools, which was promulgated on June 4, 1990 and became effective on the same day, schools shall carry out sanitary work. The main tasks of the sanitary work include monitoring health conditions of students, carrying out health education among students, helping students develop good health habits, improving health environment and health conditions for teachers and enhancing prevention and treatment of infectious disease and common diseases among students.

On January 8, 2012, the Department of Education of Zhejiang Province promulgated Opinions on Further Strengthening the Management of Primary, Middle and High School Canteens, and on May 30, 2024, the Department of Education of Zhejiang Province and five other provincial departments jointly issued Opinions on Further Strengthening the Management of Primary and Middle School Canteens (collectively the "School Canteens Opinions"). In accordance with the School Canteens Opinions, all primary schools, middle schools and high schools shall regulate the school canteens management and guarantee the food quality, health and safety of school canteens.

Pursuant to Regulations on Administration of Security Services, which issued by State Council on October 13, 2009 and became effective on January 1, 2010, which was amended on November 29, 2020 and March 29, 2022, enterprises hiring security personnel shall file with the local public security administration.

As of the date of the annual report, the schools' canteens have acquired the applicable food operation licenses. In addition, we and the VIEs have submitted the recruitment of security personnel with competent authority for record.

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***Regulations on the Operation of High Schools***

The MOE has promulgated several regulations on the operation of high schools, which mainly concern the choice of textbooks, the curriculum system and the graduation exam system. According to the Circular of the Central Office of the MOE on the Selection of the Trial Textbooks for the Curriculum of High Schools promulgated on April 26, 2005 and the Interim Measures for the Management of the Selection of the Primary and Middle School Textbooks promulgated and came into effect on September 30, 2014, the textbooks used by the primary and middle schools can only be selected from the Catalog issued by the MOE; and the provincial education authority is in charge of textbook selection within its relevant administrative jurisdiction and has the power to approve the curriculum system applied in the primary and middle schools within the province.

Further, the MOE issued the Notice on Developing Trial Curriculum System in High Schools, the Guidance on Strengthening Instruction on Developing Trial Curriculum System in High Schools, the Notice on Propelling 2006 Trial Curriculum System in High Schools and the Notice on Propelling 2007 Trial Curriculum System in High Schools from 2003 through 2007, pursuant to which the MOE developed a new curriculum system in high schools nationwide, and the implementation of such curriculum system is carried on mainly by the provincial educational authorities while the MOE mainly provides guidance to its local counterparts. Under the guidelines of the MOE and subject to approval by the respective provincial educational authorities, the high schools may adopt their own unique curriculum system.

The MOE issued the Regulations on Disciplinary Measures for Primary and Secondary School Education (Trial) on December 23, 2020 and the regulations came into effect on March 1, 2021. It stipulates the attributes, the scope of educational disciplinary measures, and corresponding rules, and requires schools and teachers to follow the legality and appropriateness when implementing educational disciplinary measures.

***Regulations on Human Resources Services***

On June 29, 2018, the State Council promulgated the Interim Regulation on Human Resources Market, which became effective on October 1, 2018. The Interim Regulation on Human Resources Market applies to job seeking, recruitment and provision of human resources services through the human resources market in the PRC, which provides that human resources service include public human resources service institutions established by the governments and for-profit human resources service institutions engaging in business activities of human resources services. A for-profit human resources service organization engaging in employment agency activities shall apply to the human resources and social security administrative authorities for administrative licensing pursuant to the law, and obtain a Human Resources Service License. For-profit human resources service institutions engaging in collection and dissemination of human resources supply and demand information, employment and entrepreneurship guidance, human resources management consulting, human resources evaluation, human resources training, undertaking outsourcing contracts of human resources services etc. shall complete filing formalities with the human resources and social security administrative authorities within 15 days from commencement of business. Where a profit-making human resource service institution establishes a branch, it shall, within 15 days from the date of completion of the industrial and commercial registration, report in writing to the administrative department of human resources and social security where the branch office locates. For-profit human resources service institutions engaging in labor dispatch business shall comply with the relevant labor dispatch provisions of the State.

***Regulations on Labor Dispatch Services***

The Measures for the Implementation of Administrative License for Labor Dispatch promulgated by the MHRSS on June 20, 2013 and became effective on July 1, 2013. Under the Measures for the Implementation of Administrative License for Labor Dispatch, the labor dispatch service provider shall apply to the human resources and social security administrative department at its domicile (hereinafter referred to as the licensing authority) for an administrative license according to law. Where a labor dispatch service provider establishes a subsidiary to operate the labor dispatch services, the subsidiary shall apply to the local licensing authority for an administrative license; if the labor dispatch service provider establishes a branch to operate the labor dispatch services, it shall report the licensing authority in writing, and the branch shall file with the local human resources and social security administrative department.

The Interim Provisions on Labor Dispatch promulgated by the MHRSS on January 24, 2014 and took effect on March 1, 2014. Under the Interim Provisions on Labor Dispatch, the labor dispatch service provider shall:(i) truthfully inform the dispatched laborer of the provisions of Article 8 of the Labor Contract Law, the rules and regulations to be observed, and the contents of the labor dispatch agreement; (ii) establish a training system to conduct onboarding knowledge and safety education training for dispatched workers; (iii) pay the labor remuneration and conduct the related treatment of the dispatched laborers in accordance with the state regulations and the labor dispatch agreement; (iv) in accordance with the provisions of the State and the labor dispatch agreement, pay social insurance premiums for the dispatched workers in accordance with the law, and handle the relevant procedures for social insurance; (v) urge the institutions that accept employment in the form of labor dispatch to provide labor protection and labor safety and sanitation conditions for the dispatched workers according to law; (vi) issue the relevant proof regarding dissolving or terminating the labor contract according to law; (vii) assist in handling disputes between dispatched laborers and the institutions that accept employment in the form of labor dispatch; (viii) conduct other matters as stipulated by laws, regulations and rules.

**PRC Laws and Regulations Relating to Property in the PRC**

On May 28, 2020, the PRC Civil Code was approved by the NPC and became effective on January 1, 2021. The Civil Code provides that non-profit legal persons established for public welfare such as schools, kindergartens and medical institutions shall not mortgage their educational facilities, health care facilities and other public welfare facilities.

According to the Civil Code, transferable fund units and equity, property right in intellectual property rights of transferable exclusive trademark rights, patent rights, copyrights, etc., existing and future accounts receivable and other property rights that can be pledged as stipulated by any law or administrative regulation may be pledged.

As of the date of the annual report, we and the VIEs have the land-use rights of eight (8) pieces of land and the property ownership of twenty-five (25) buildings legally.

**Regulations on Lease of Property**

Pursuant to the Administrative Measures for Commodity Housing Leasing promulgated on December 1, 2010 and effective as of February 1, 2011, the parties to a real estate lease shall apply for lease registration with the competent construction (real estate) departments of the municipalities directly under the Central Government, cities and counties where the housing is located within 30 days after the lease contract is signed. There will be a fine below RMB1,000 on individuals who fail to make corrections within the specified time limit, and a fine between RMB1,000 and RMB10,000 on enterprises when fail to make corrections within the specified time limit.

**Laws and Regulations Related to the Protection of Cyber Security, Data and Privacy**

The Cyber Security Law of the PRC promulgated on November 7, 2016 and came into effect on June 1, 2017, and was last amended on October 28, 2025, requires that when constructing and operating a network, or providing services through a network, technical measures and other necessary measures shall be taken in accordance with laws, administrative regulations and the compulsory requirements set forth in national standards to ensure the secure and stable operation of the network, to effectively cope with cyber security events, to prevent criminal activities committed on the network, and to protect the integrity, confidentiality and availability of network data. The Cyber Security Law emphasizes that any individuals and organizations that use networks must not endanger network security or use networks to engage in unlawful activities such as those endangering national security, economic order and social order or infringing the reputation, privacy, intellectual property rights and other lawful rights and interests of others. The Cyber Security Law has also reaffirmed certain basic principles and requirements on personal information protection previously specified in other existing laws and regulations. Any violation of the provisions and requirements under the Cyber Security Law may subject an internet service provider to rectifications, warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of qualifications, closedown of websites or even criminal liabilities.

The Data Security Law of the PRC was passed by the Standing Committee of the 13th NPC at the 29<sup>th</sup> Session on June 10, 2021 and came into effect on September 1, 2021. The Data Security Law requires the data processor to establish and improve a whole-process data security management system, organize data security education and training, and take corresponding technical measures and other necessary measures to safeguard data security. In conducting data processing activities by using the Internet or any other information network, the data processor shall perform the above data security protection obligations on the basis of the hierarchical cybersecurity protection system. Any violation of the provisions and requirements under the Data Security Law may subject a data processor to rectifications, warnings, fines, suspension of the related business, revocation of licenses or even criminal liabilities.

The Personal Information Protection Law of the PRC was passed by the Standing Committee of the 13th NPC at the 30th Session on August 20, 2021 and has come into effect on November 1, 2021. The Personal Information Protection Law reiterates the circumstances under which a personal information processor could process personal information and the requirements for such circumstances, such as when (i) the individual's consent has been obtained; (ii) the processing is necessary for the conclusion or performance of a contract to which the individual is a party; (iii) the processing is necessary to fulfill statutory duties and statutory obligations; (iv) the processing is necessary to respond to public health emergencies or protect natural persons' life, health and property safety under emergency circumstances; (v) the personal information that has been made public is processed within a reasonable scope in accordance with this Law; (vi) personal information is processed within a reasonable scope to conduct news reporting, public opinion-based supervision, and other activities in the public interest; or (vii) under any other circumstance as provided by any law or regulation. It also stipulates the obligations of a personal information processor. Any violation of the provisions and requirements under the Personal Information Protection Law may subject a personal information processor to rectifications, warnings, fines, suspension of the related business, revocation of licenses, being entered into the relevant credit record or even criminal liabilities.

On December 28, 2021, thirteen PRC governmental and regulatory agencies, including the CAC, promulgated the Measures for Cyber Security Review, which came into effect on February 15, 2022. The Measures for Cyber Security Review specifies that the procurement of network products and services by operator of critical information infrastructure and the activities of data process carried out by Internet platform operator that raise or may raise "national security" concerns are subject to strict cyber security review by Cybersecurity Review Office of CAC. Before critical information infrastructure operator purchases internet products and services, it should assess the potential risk of national security that may be caused by the use of such products and services. If such use of products and services may give raise to national security concerns, it should apply for a cyber security review by the Cyber Security Review Office and a report of analysis of the potential effect on national security shall be submitted when the application is made. In addition, Internet platform operators that possess the personal data of over one million users must apply for a review by the Cyber Security Review Office, if they plan listing of companies in foreign countries. The CAC may voluntarily conduct cyber security review if any network products and services and activities of data process affects or may affect national security. The cyber security review focuses on the assessment of risk factors include (i) the risk of critical information infrastructure being illegally controlled, interfered or destroyed as a result of the use of the products or services; (ii) the continuous harm to the business of critical information infrastructure by the interruption of provision of products or services; (iii) the security, openness, transparency, diversity of sources, reliability of supply and potential supply interruptions of products and services due to political, diplomatic or international trade issues; (iv) whether the products and services provider comply with PRC laws and regulations; (v) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, illegally utilized or exited the country; (vi) regarding to listing, there are risks of critical information infrastructure, core data, important data or a large amount of personal information being influenced, controlled or maliciously used by foreign governments, as well as network information security risks; and (vii) other factors that may endanger the security of critical information infrastructure, cyber security and data security. It may take approximately 70 business days in maximum for the general cybersecurity review upon the delivery of their applications, which may be subject to extensions for a special review.

**Legal Regulations over Intellectual Property in the PRC**

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***Copyright***

Pursuant to the Copyright Law of the PRC, or the Copyright Law which last amended on November 11, 2020 with the effective date of June 1, 2021. Copyrights include personal rights such as the right of publication and that of attribution as well as property rights such as the right of production and that of distribution. Reproducing, distributing, performing, projecting, broadcasting or compiling a work or communicating the same to the public via an information network without permission from the owner of the copyright therein, unless otherwise provided in the Copyright Law, shall constitute infringements of copyrights. The infringer shall, according to the circumstances of the case, undertake to cease the infringement, take remedial action, and offer an apology, pay damages, etc.

Furthermore, the Implementation Regulations for the Copyright Law, which was last amended on January 30, 2013 by State Council, provides more detailed implementation guidance for copyright legal regime.

As of the date of the annual report, we have five software with computer software copyright which are relevant to our future business through the ownership of Hangzhou Youxi by our wholly-owned subsidiary Liandu WFOE, including among others live streaming supervision system, Android live streaming system, and Apple live streaming system, etc.

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***Trademark***

Pursuant to the Trademark Law of the PRC, or the Trademark Law, which was revised on April 23, 2019 and with effect from November 1, 2019, the right to exclusive use of a registered trademark shall be limited to trademarks which have been approved for registration and to goods for which the use of trademark has been approved. The period of validity of a registered trademark shall be ten years, counted from the day the registration is approved. According to the Trademark Law, usage of a trademark that is identical with or similar to a registered trademark in connection with the same or similar goods without authorization of the owner of the registered trademark constitutes an infringement of the exclusive right to use a registered trademark. The infringer shall, in accordance with the regulations, undertake to cease the infringement, take remedial action, and pay damages, etc.

On August 3, 2002, the State Council promulgated the Implementation Regulations for the Trademark Law of the PRC, which was lately amended on April 29, 2014 and was issued to providing practical implementation rules of trademarks.

As of the date of the annual report, we and the VIEs lawfully hold 46 registered trademarks in the PRC.

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***Patent***

Pursuant to the Patent Law of the PRC, or the Patent Law, which was last revised on October 17, 2020 with the effective date of June 1, 2021, after the grant of the patent right for an invention or utility model, except where otherwise provided for in the Patent Law, no entity or individual may, without the authorization of the patent owner, exploit the patent, that is, make, use, offer to sell, sell or import the patented product, or use the patented process, or use, offer to sell, sell or import any product which is a direct result of the use of the patented process, for production or business purposes. And after a patent right is granted for a design, no entity or individual shall, without the permission of the patent owner, exploit the patent, that is, for production or business purposes, manufacture, offer to sell, sell, or import any product containing the patented design. Where the infringement of patent is decided, the infringer shall, in accordance with the regulations, undertake to cease the infringement, take remedial action, and pay damages, etc.

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***Domain Name***

Pursuant to the Administrative Measures for Internet Domain Names, which was promulgated by the Ministry of Industry and Information Technology of the PRC on August 24, 2017 and with effect from November 1, 2017, "domain name" shall refer to the character mark of hierarchical structure, which identifies and locates a computer on the internet and corresponds to the Internet protocol (IP) address of that computer and the principle of "first come, first serve" is followed for the domain name registration service. Domain name registrations are handled through domain name service agencies established under the relevant regulations, and the applicants become domain name holders upon successful registration.

**PRC Laws and Regulations Relating to Labor Protection**

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***Employment***

According to the Labor Law of the PRC, or the Labor Law, which was promulgated by the Standing Committee of the NPC on July 5, 1994 and became effective on January 1, 1995 and was amended on December 29, 2018, an employer shall establish a comprehensive management system to safeguard the rights of its employees, including developing and improving its labor safety and health system, stringently implementing national protocols and standards on labor safety and health, conducting labor safety and health education for workers, guarding against labor accidents and reducing occupational hazards.

The Labor Contract Law, which was promulgated by the Standing Committee of the NPC on June 29, 2007 and became effective on January 1, 2008, and was amended on December 28, 2012, and the Implementation Regulations on Labor Contract Law, which was promulgated and became effective on September 18, 2008, regulate employer and employee relations and contain specific provisions on the terms of the labor contract. Labor contracts must be made in writing. An employer and an employee may enter into a fixed-term labor contract, an un-fixed term labor contract, or a labor contract that concludes upon the completion of certain work assignments, after reaching due negotiations. An employer may legally terminate a labor contract and dismiss its employees after reaching agreement upon due negotiations with the employee or by fulfilling the statutory conditions. Labor contracts concluded prior to the enactment of the Labor Law and subsisting within the validity period thereof shall continue to be honored.

As of the date of the annual report, we and the VIEs have executed labor contracts with all of our employees in accordance with applicable PRC laws.

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***Social Insurance***

The Social Insurance Law, which was promulgated on October 28, 2010 and became effective on July 1, 2011, and was amended on December 29, 2018, has included pertinent provisions for 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 the relevant laws and regulations on social insurance.

On July 20, 2018, the General Offices of the CPC Central Committee and 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, or the SAT will become solely responsible for collecting social insurance premiums.

According to the Interim Measures for Participation in the Social Insurance System by Foreigners Working within the Territory of China (2024 Revised), which was promulgated and became effective on December 23, 2024 by the MOHRSS, employers who employ foreigners shall participate in the basic pension insurance, unemployment insurance, basic medical insurance, occupational injury insurance, and maternity leave insurance in accordance with the law, with the social insurance premiums to be contributed respectively by the employers and foreigner employees as required. In accordance with such Interim Measures, the social insurance administrative agencies shall supervise and examine the legal compliance of foreign employees and employers and the employers who do not pay social insurance premium in conformity with the laws shall be subject to the administrative provisions provided in the Social Insurance Law and the relevant regulations and rules mentioned above.

As of December 31, 2025, we and the VIEs had made social insurance contribution for the PRC-based employees based on the relevant PRC laws and regulations and practical measures.

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***Housing Fund***

According to the Regulations on the Administration of Housing Provident Fund, which was promulgated and became effective on April 3, 1999, and was amended on March 24, 2019, employers are required to contribute, on behalf of their employees, to housing provident funds. The employer shall process housing provident fund payment and deposit registrations with the housing provident fund administration center. The employer shall timely pay up and deposit housing provident fund contributions in full amount, any employer who violates the above regulations shall be fined and ordered to make good the deficit within a designed period. Those who fail to process their registrations within the designated period shall be subject to a fine ranging from RMB10,000 to RMB50,000. When companies breach these regulations and fail to pay up housing provident fund contributions in full amount as due, the housing provident fund administration center shall order such companies to pay up within a designated period, and may further apply to the People's Court for mandatory enforcement against those who still fail to comply with such order after the expiry of such period.

As of December 31, 2025, we and the VIEs had made housing fund contribution for the PRC-based employees based on the relevant PRC laws and regulations and practical measures.

**Regulations on Taxation in the PRC**

***Income Tax***

In accordance with the PRC Enterprise Income Tax Law (the "EIT Law"), which was promulgated on March 16, 2007 and amended and became effective on December 29, 2018, and the Regulation on the Implementation of Enterprise Income Tax Law of the PRC, which was promulgated on December 6, 2007 and last amended on December 6, 2024 by the State Council of PRC, enterprises are classified as either "resident enterprises" or "non-resident enterprises". A resident enterprise shall pay enterprise income tax on its income deriving from both inside and outside China at the rate of enterprise income tax of 25%. A non-resident enterprise that has an establishment or place of business in the PRC shall pay enterprise income tax on its income deriving from inside China and obtained by such establishment or place of business, and on its income which derives from outside China but has actual relationship with such establishment or place of business, at the rate of enterprise income tax of 25%. A non-resident enterprise that does not have an establishment or place of business in China, or has an establishment or place of business in China but the income has no actual relationship with such establishment or place of business, shall pay enterprise income tax on its income deriving from inside China at the reduced rate of enterprise income tax of 10%.

According to Notice of the Ministry of Finance and the State Administration of Taxation on Tax Policies Relating to Education, or the Circular 39, promulgated in February 2004, and Notice of the Ministry of Finance and the State Administration of Taxation on Issues Concerning Strengthening the Administration over the Collection of Business Tax on Educational Services, or the Circular 3, issued in January 2006, schools shall be exempt from enterprise income tax on fees they have collected upon approval and have incorporated under the fiscal budget management or the special account management of the funds outside the fiscal budget. Schools shall be exempt from enterprise income tax on the financial allocations they have received and special subsidies they have obtained from their administrative departments or institutions at higher levels.

According to the Law for Promoting Private Education and the 2021 Implementation Rules, private schools enjoy the state preferential tax policies, while non-profit private schools enjoy the same preferential tax treatment as public schools. In February 2015, the SAT issued the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or the SAT Bulletin 7 as amended in 2017. Pursuant to this bulletin, an "indirect transfer" of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. According to the SAT Bulletin 7, "PRC taxable assets" include assets attributed to an establishment in China, immovable properties located in China, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being a non-PRC resident enterprise, would be subject to PRC enterprise income taxes.

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***Income Tax in Relation to Dividend Distribution***

The PRC and the government of Hong Kong entered into the Arrangement between the Mainland of the PRC and Hong Kong for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, or the Double Tax Avoidance Arrangement on August 21, 2006. According to the Double Tax Avoidance Arrangement, if the beneficiary of the dividends is a Hong Kong resident enterprise, which directly holds no less than 25% equity interests in the aforesaid enterprise, the tax levied shall be 5% of the distributed dividends. The 10% withholding tax rate applies to dividends paid by a PRC company to a Hong Kong resident if such Hong Kong resident holds less than 25% of the equity interests in such PRC company. Pursuant to the Circular of the State Administration of Taxation on Relevant Issues relating to the Implementation of Dividend Clauses in Tax Agreements promulgated by the SAT and became effective on February 20, 2009, recipients of dividends paid by PRC resident enterprises must satisfy certain requirements in order to obtain a preferential income tax rate pursuant to a tax treaty. One such requirement is that the taxpayer must be the "beneficiary owner" of relevant dividends. In order for a corporate recipient of dividends paid by a PRC enterprise to enjoy preferential tax treatment pursuant to a tax treaty, such recipient must be the direct owner of a certain proportion of the share capital of the PRC enterprise at all times during the 12 months preceding its receipt of the dividends. Pursuant to the Announcement of State Taxation Administration on Promulgation of the Administrative Measures on Non-resident Taxpayers Enjoying Treaty Benefits, which was promulgated on October 14, 2019 and became effective on January 1, 2020, non-resident taxpayers making their own declaration shall self-assess whether they are entitled to treaty benefits and need to claim such benefits, and shall submit an "Information Report on Non-resident Taxpayers Claiming Treaty Benefits" at the time of declaration, gather and retain the relevant materials pursuant to the provisions of Article 7 of these Measures for future inspection. Furthermore, all levels of tax authorities shall, through strengthening follow-up administration for non-resident taxpayers enjoying treaty benefits, implement treaties accurately, and prevent abuse of tax treaties and tax avoidance risks.

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***Value-added Tax, or the VAT***

According to the Temporary Regulations on Value-added Tax, which was amended on November 10, 2008, February 6, 2016 and November 19, 2017 and the Detailed Implementing Rules of the Temporary Regulations on Value-added Tax, which was amended on October 28, 2011 and became effective on November 11, 2011, or collectively, the VAT Law, all taxpayers selling goods or labor services of processing, repairing and replacement, selling services, intangible assets, immovable and importation of goods within the PRC shall pay value-added tax. For general VAT taxpayer selling or importing goods other than those specifically listed in the VAT Law, the value-added tax rate is 17%. On April 4, 2018, the MOF and the SAT promulgated the Notice on Adjusting Value-added Tax Rates, which reduced the tax rates for sale, import, and export of goods.

The Value-Added Tax Law of the PRC was adopted on December 25, 2024, and became effective on January 1, 2026. At the same time, the Temporary Regulations on Value-added Tax will be repealed. This law clarifies aspects such as taxpayers, tax rates, and the calculation of the tax payable, and stipulates matters related to tax preferences and collection management to improve the value-added tax system, standardize the levy and payment process, and protect the rights and interests of taxpayers.

Furthermore, according to the Trial Scheme for the Conversion of Business Tax to Value-added Tax, which was promulgated by the MOF and the SAT, the State began to launch taxation reforms in a gradual manner with effect from January 1, 2012, whereby the collection of VAT in lieu of business tax items was implemented on a trial basis in regions showing significant radiating effects in economic development and providing outstanding reform examples, beginning with production service industries such as transportation and certain modern service industries.

In accordance with Circular on Comprehensively Promoting the Pilot Program of the Collection of Value-added Tax in Lieu of Business Tax, which was promulgated on March 23, 2016 and came into effect on May 1, 2016 and amended on March 20, 2019, upon approval of the State Council, the pilot program of the collection of VAT in lieu of business tax shall be promoted nationwide in a comprehensive manner starting from May 1, 2016, and all business tax payers engaged in the building industry, the real estate industry, the financial industry and the life service industry shall be included in the scope of the pilot program with regard to payment of value added tax instead of business tax. For general service income, the applicable VAT rate is 6%. Schools engaged in academic education are exempted from VAT on their education service.

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***Other Tax Exemptions***

According to Circular 39 and Circular 3, the real properties and land used by schools established by enterprises shall be exempt from house property tax and urban land use tax. Schools which expropriate arable land upon approval shall be exempt from arable land use tax.

**PRC Laws and Regulations Relating to Companies**

The establishment, operation and management of corporate entities in the PRC are governed by the Company Law of the PRC, or the Company Law, which was promulgated on December 29, 1993 and amended on December 25, 1999, August 28, 2004, October 27, 2005, December 28, 2013, October 26, 2018 and December 29, 2023, respectively. Under the Company Law, companies are generally classified into two categories: limited liability companies and limited companies by shares. According to the Company Law as amended in 2023, the registered capital of a limited liability company shall be the amount of capital contributions subscribed for by all its shareholders as registered with the company registration authority. The capital contributions subscribed for by all shareholders shall be fully paid within five years of formation of the company in accordance with the company's bylaw.

On July 1, 2024, the State Council promulgated the Provisions about Implementing the Registered Capital Registration Administration System in the Company Law of the People's Republic of China. According to the provisions, if the period of capital contribution of a company established before the enforcement of the Company Law exceeds the period stipulated in the Company Law, it shall be adjusted within the transitional period (July 1, 2024 to June 30, 2027).

**PRC Laws and Regulations Relating to Securities**

The revised Securities Law of the PRC, or the Securities law was passed by the 13th NPC on December 28, 2019 and took effect from March 1, 2020. The Securities Law further improves the investor protection and the information disclosure measures. According to the Securities law, the securities regulatory authority of the State Council, namely the China Securities Regulatory Commission, or the CSRC, may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region, to implement cross-border supervision and administration. Moreover, the Securities law also provides that the offering and trading of securities outside the People's Republic of China which disrupt the domestic market order of the People's Republic of China and harm the legitimate rights and interests of domestic investors shall be dealt with pursuant to the relevant provisions of this Law, and legal liability shall be pursued.

**PRC Laws and Regulations Relating to Foreign Exchange**

The principal regulation governing foreign currency exchange in China is the Foreign Exchange Administration Rules of the PRC, or the Foreign Exchange Administration Rules. The Foreign Exchange Administration Rules were promulgated by the State Council of the PRC on January 29, 1996 and with effect from April 1, 1996 and were amended on January 14, 1997 and August 5, 2008. Under these rules, 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 China, unless the prior approval of the State Administration of Foreign Exchange of the PRC, or the SAFE or its local counterparts is obtained.

Under the Foreign Exchange Administration Rules, foreign-invested enterprises in the PRC may, without the approval of the SAFE, make a payment from their foreign exchange accounts at designated foreign exchange banks for paying dividends with certain evidencing documents (board resolutions, tax certificates, etc.), or for trade and services-related foreign exchange transactions by providing commercial documents evidencing such transactions. They are also allowed to retain foreign currency (subject to a cap approval by the SAFE) to satisfy foreign exchange liabilities. In addition, foreign exchange transactions involving overseas direct investment or investment and trading in securities, derivative products abroad are subject to registration with the SAFE or its local counterparts and approval form or filling with the relevant PRC government authorities (if necessary).

According to the Circular on the Management of Offshore Investment and Financing and Round Trip Investment By Domestic Residents through Special Purpose Vehicles, or Circular 37, which was promulgated on July 4, 2014 and with effect from the same day, the domestic resident shall be required to register with the local branch of the SAFE for foreign exchange registration of overseas investments before contributing the domestic and overseas lawful assets or interests to a SPV, and to update such registration in the event of any change of basic information of the registered SPV or major change in the SPV's capital, including increases and decreases of capital, share transfers, share swaps, mergers or divisions. The SPV is defined as an "offshore enterprise directly established or indirectly controlled by the domestic resident (including domestic institution and individual resident) with their legally owned assets and equity of the domestic enterprise, or legally owned offshore assets or equity, for the purpose of investment and financing;" "Round Trip Investments" refer to "the direct investment activities carried out by a domestic resident directly or indirectly via an SPV, i.e. establishing a foreign-invested enterprise or project within the PRC through a new entity, merger or acquisition and other ways, while obtaining ownership, control, operation and management and other rights and interests." In addition, according to the procedural guidelines as attached to Circular 37, the principle of review has been changed to "the domestic individual resident is only required to register the SPV directly established or controlled (first level)."

Pursuant to Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies, or Circular 13, which was promulgated on February 13, 2015, implemented on June 1, 2015 and amended on December 30, 2019, the initial foreign exchange registration for establishing or taking control of a SPV by domestic residents can be conducted with a qualified bank, instead of the local foreign exchange bureau, and Circular 13 also simplifies some procedures relating to foreign exchange for direct investments.

On March 30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises, or Circular 19, which came into effect from June 1, 2015 and was amended on March 23, 2023. According to Circular 19, the foreign exchange capital of foreign-invested enterprises shall be subject to the Discretional Foreign Exchange Settlement. The Discretional Foreign Exchange Settlement refers to the foreign exchange capital in the capital account of a foreign-invested enterprise for which the rights and interests of monetary contribution has 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 Discretional Foreign Exchange Settlement of the foreign exchange capital of a foreign-invested enterprise is temporarily determined to be 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 go through the review process with the banks.

The SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or Circular 16 on June 9, 2016, which became effective simultaneously and was amended on December 4, 2023. Pursuant to Circular 16, enterprises registered in the PRC may also convert their foreign debts from foreign currency to Renminbi on self-discretionary basis. Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on self-discretionary basis which applies to all enterprises registered in the PRC. Circular 16 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 PRC laws or regulations, while such converted Renminbi shall not be provided as loans to its nonaffiliated entities.

As of the date of the annual report, Ms. Fen Ye, Ms. Hong Ye and Ms. Fang Ye have completed the initial foreign exchange registrations as required by SAFE Circular 37 and Circular 13. The formalities for updating the registration to reflect the share transfer from Ms. Fang Ye to Ms. Fen Ye has been submitted to the qualified bank, and the amendment registration has been completed as of the date of this annual report.

**Regulations on Loans to and Direct Investment in the PRC Entities by Offshore Holding Companies**

According to the Interim Provisions on the Management of Foreign Debts promulgated by the SAFE, the NDRC and the MOF which became effective from March 1, 2003 and was amended on July 26, 2022, loans by foreign companies to their subsidiaries in China, which accordingly are foreign-invested enterprises, are considered foreign debt, and such loans must be registered with the local branches of the SAFE. Under the provisions, the total amount of accumulated medium-term and long-term foreign debt and the balance of short-term debt borrowed by a foreign-invested enterprise is limited to the difference between the total investment and the registered capital of the foreign-invested enterprise.

On January 12, 2017, People's Bank of China (the "PBOC") issued and implemented Notice of People's Bank of China on Matters Concerning Macro-Prudential Management on All-round Cross-border Financing, or the Circular 9. A one-year transitional period was set for foreign-invested enterprises and foreign financial institutions from the date of issuance, within which the foreign-invested enterprises may choose a mode between the existing cross-border financing management mode and that prescribed in the Circular 9, and no specific new notification or rules has been issued yet regarding the selection of the two modes. According to Circular 9, the calculation of the upper limit of the risk-weighted balance for cross-border financing =the capital or the net assets × the leverage rate of cross-border financing × the macro-prudential adjustment parameters, among which, enterprises are calculated at their net assets based on the latest audited financial statements, the leverage rate for cross-border financing for enterprises is 2, and the macro-prudential adjustment parameter is 1.

On October 25, 2022, the PBOC and the SAFE issued Notice of People's Bank of China and State Administration of Foreign Exchange on the Adjustment of Macro-Prudential Adjustment Parameters for Cross-border Financing of Enterprises, and decided to raise the macro-prudential adjustment parameter for cross-border financing of enterprises from 1 to 1.25. On July 20, 2023, the PBOC and the SAFE have decided to raise the macro-prudential adjustment parameter for cross-border financings for enterprises and financial institutions from 1.25 to 1.5, which came into effective on the same date. On January 13, 2025, the PBOC and the SAFE have decided to raise the macro-prudential adjustment parameter for cross-border financings for enterprises and financial institutions from 1.5 to 1.75, which came into effect on the same date. As for Liandu WFOE and Lishui Mengxiang, the upper limit of the risk-weighted balance for cross-border financing = the net assets based on the latest audited financial statements ×2×1.75.

According to Circular 9, an enterprise shall file the information of its cross-border financing in the capital project information system with the SAFE after signing the contract and no later than three working days before the withdrawal. The enterprise, after conducting the contract filing for the cross-border financing, and the financial institution, after conducting information reporting for the cross-border financing, may carry out relevant capital settlement for the borrowers according to the withdrawal and repayment arrangement, report the relevant clearing information to the relevant systems of the PBOC and the SAFE, and complete the cross-border financing information updating. The enterprise shall also update cross-border financing and equity-related information.

Pursuant to the Administrative Measures for the Examination and Registration of Medium and Long-term Foreign Debts of Enterprises promulgated by the NDRC on January 5, 2023, which came into effect on February 10, 2023, an enterprise shall, before borrowing a foreign debt, obtain the Certificate of Examination and Registration of Foreign Debts Borrowed by Enterprises and complete examination and registration formalities. Without examination and registration, no foreign debt may be borrowed. Medium and long-term foreign debts of enterprises referred to in this measures shall mean debt instruments with a maturity of more than one year that are borrowed from overseas by enterprises within the territory of the People's Republic of China and by overseas enterprises or branches controlled by them, denominated in local or foreign currency, and of which principal is repaid with payment of interest as agreed.

According to the Notice of the State Administration of Foreign Exchange on Further Deepening Reform to Promote the Facilitation of Cross-border Trade and Investment promulgated on December 3, 2023 by the SAFE, or Circular 28, non-investment foreign-funded enterprises are allowed to make domestic equity investments with their capital funds in accordance with the law on the premise that the existing special administrative measures (negative list) for foreign investment access are not violated and the projects invested thereby in China are true and compliant.

Pursuant to the Measures on Reporting of Foreign Investment Information issued by the MOFCOM and SAIC (the renamed SAMR) on December 30, 2019, which became effective on January 1, 2020, where there is a change in information in the initial report which involves enterprise change registration or filing, the foreign investment enterprise shall submit a change report through the Enterprise Registration System at the time of completion of enterprise change registration.

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**Provisions on the Merger and Acquisition of Domestic Enterprises by Foreign Investors (Revised in 2009)**

Under the Provisions on the Merger and Acquisition of Domestic Enterprises by Foreign Investors (Revised in 2009), or the M&A Rules, a foreign investor is required to obtain necessary approvals when (i) a foreign investor acquires equity in a domestic non-foreign invested enterprise thereby converting it into a foreign-invested enterprise, or subscribes for new equity in a domestic enterprise via an increase of registered capital thereby converting it into a foreign Invested enterprise; or (ii) a foreign investor establishes a foreign-invested enterprise which purchases and operates the assets of a domestic enterprise, or which purchases the assets of a domestic enterprise and injects those assets to establish a foreign-invested enterprise. According to Article 11 of the M&A Rules, where a domestic company or enterprise, or a domestic natural person, through an overseas company established or controlled by it/him/her, acquires a domestic company which is related to or connected with it/him/her, approval from the MOFCOM is required.

Pursuant to the Measures on Reporting of Foreign Investment Information, or the Measures on Reporting came into effect from January 1, 2020, for the investment activities directly or indirectly conducted by foreign investors within the territory of China, the foreign investors or foreign-invested enterprises shall submit the investment information to the competent commercial department. Foreign investors or foreign-invested enterprises shall submit the investment information by presenting the initial report, the change report, the cancelation report and the annual report in accordance with the Measures on Reporting. Where a foreign investor establishes a foreign-invested enterprise within the territory of China, it shall submit an initial report through the enterprise registration system while applying for business establishment registration. If a foreign investor merges and acquires a domestic non-foreign-invested enterprise through the acquisition of equity in the domestic non-foreign-invested enterprise, it shall submit the initial report through the enterprise registration system while applying for change of registration of the merged enterprise.

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**Regulatory Approval from the China Securities Regulatory Commission**

On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises, or the Trial Measures, which became effective on March 31, 2023. Subsequently, the CSRC circulated a series of supporting guidance rules, the Notes on the Trial Measures, the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and the relevant CSRC Answers to Reporter Questions on the official website of CSRC, or collectively, the Guidance Rules and Notice. These new regulations propose to establish a new filing-based regime to regulate overseas offerings and listings by Chinese domestic companies.

Under the Trial Measures and the Guidance Rules and Notice, domestic companies conducting overseas securities offering and listing activities, either in direct or indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application. Since the date of effectiveness of the Trial Measures, the domestic enterprises falling within the scope of filing that have been listed overseas or met the following circumstances are existing enterprises: before the effectiveness of the Trial Measures, the application for indirect overseas issuance and listing has been agreed by the overseas regulators or overseas stock exchanges (such as having passed the hearing on the Hong Kong market or registration become effective as agreed on the U.S. market, etc.), and it is not required to perform issuance and listing supervision procedures of the overseas regulators or overseas stock exchanges (such as rehearing on the Hong Kong market, etc.), and the overseas issuance and listing will be completed by September 30, 2023. Existing enterprises are not required to file immediately, and filing should be made as required if they involve refinancing and other filing matters. In such cases, where a existing enterprise issues securities in the same overseas market after its initial public offering and listing overseas, it shall file with the CSRC within three working days of completion of issuance; where a existing enterprise issues securities in other overseas markets after its initial public offering and listing overseas, it shall file with the CSRC within three working days of submission of application documents for initial public offering and listing overseas.

**C. Organizational Structure**

The following diagram illustrates our corporate structure, including our subsidiaries and consolidated affiliated entities as of the date of the annual report:

![](ea028775901_img2.jpg)

*Notes:*

(1) Lishui
 Mengxiang holds 100% of the sponsorship interests of Lishui International School. On April
 2, 2024, Liandu WFOE entered into a series of contractual arrangements with respect to the
 operation of Lishui International School, pursuant to which Lishui Mengxiang's sponsorship
 interests of Lishui International School became effective on June 25, 2023. As of the date
 of the annual report on form 20-F, Lishui International School had four classes and five
 teachers.

(2) Beijing P.X. holds 100% of
 the sponsorship interests of Langfang School. Liandu WFOE entered into a series of contractual arrangements with respect to the
 operation of Langfang School on March 28, 2023. The contractual arrangements took effect on January 1, 2022. As of the date of the
 annual report, Langfang City has not released any detailed rules on classification registration of private schools and we have not
 received any relevant notice from the competent authorities of Langfang City since January 1, 2022 when Beijing P.X. began to hold
 the whole sponsorship interests of Langfang School. On January 6, 2023, Beijing P.X. established a wholly-owned subsidiary, Hebei
 Chuangxiang, a human resources services provider for internship and employment recommendations. Hebei Chuangxiang also cooperates
 with healthcare and elderly care enterprises to deliver daily care, specialized nursing and companion services.

(3) According
 to PRC laws and regulations, entities and individuals who establish private schools are commonly
 referred to as "sponsors" instead of "owners" or "shareholders."
 The economic substance of "sponsorship" with respect to private schools is substantially
 similar to that of ownership with regard to legal, regulatory and tax matters. However, the
 differences between sponsorship and equity ownership can be found in the specific provisions
 of the laws and regulations applicable to sponsors and owners, such as provisions regarding
 the right to receive returns on investment and the right to the distribution of residual
 properties upon termination and liquidation

Investors are purchasing equity interests in Lixiang, the Cayman Islands holding company, and are not purchasing, and may never directly hold, equity interests in the VIEs. We do not have any equity interests in the VIEs. However, because of the contractual arrangements, we control the VIEs through our PRC subsidiary, Liandu WFOE, and are regarded as the primary beneficiary of the VIEs for accounting purposes under U.S. GAAP. We have consolidated the results of the VIEs in our consolidated financial statements included elsewhere in this annual report on Form 20-F in accordance with U.S. GAAP. For a more detailed discussion of the basis of presentation of our consolidated financial statements, see "*Item 5. Operating and Financial Review and Prospects—A. Operating Results—Critical Accounting Policies*."

These contractual arrangements may not be as effective in providing us with control over the VIEs as equity ownership. If we had equity ownership of the VIEs, we would be able to exercise our rights as a direct or indirect shareholder to effect changes in the board of directors of the VIEs, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level. However, as these contractual arrangements stand now, if the VIEs or their shareholders fail to perform their respective obligations under these contractual arrangements, we cannot exercise shareholders' rights to direct corporate actions as direct ownership would otherwise entail. If the parties under such contractual arrangements refuse to carry out our directions in relation to everyday business operations, we will be unable to maintain effective control over the operations of the VIEs in China under U.S. GAAP. Losing effective control over the VIEs may impair our access to their cash flow from operations, which may reduce our liquidity. If the VIEs or their respective ultimate shareholders fail to perform their obligations under our contractual arrangements, we may have to incur additional costs and expend substantial resources to enforce our contractual arrangements, temporarily or permanently lose control over our primary operations or lose access to our primary sources of revenue.

There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the contractual arrangements and the VIE structure. If the PRC government finds these contractual arrangements or the VIE structure non-compliant with the restrictions on direct foreign investment in the relevant industries, or if the relevant PRC laws, regulations, and rules or the interpretation thereof change in the future, we could be subject to severe penalties or be forced to relinquish our interests in the VIEs or forfeit our rights under the contractual arrangements. Lixiang and investors in the ADSs face uncertainty about potential future actions by the PRC government, which could affect the enforceability of our contractual arrangements, consequently, significantly affect the financial condition and results of operations. If we are unable to claim our right to control the assets of the VIEs, the ADSs may decline in value or become worthless. The PRC government could even disallow the VIE structure completely, which would likely result in a material adverse change in our operations and the ADSs may significantly decline in value or become worthless.

**Contractual Arrangements**

Foreign ownership in the educational industry is subject to significant regulations in China, including strict licensing requirements. Specifically, foreign ownership is prohibited in compulsory education at the primary and middle school levels, and is restricted at the high school level. As we are a company incorporated in the Cayman Islands, our wholly-owned subsidiary in the PRC, Liandu WFOE, is viewed as a foreign-owned enterprise thus is ineligible to apply for and hold licenses to operate, or otherwise own equity interests in, primary and middle school campuses and to independently or jointly invest and operate high school and vocational school pursuant to the relevant laws and regulations.

Prior to August 31, 2021, we and the VIEs primarily operated primary and secondary school in Baiyun campus and Yijing campus—Featured Division of Lianwai School through a series of contractual arrangements with Lishui Mengxiang, which enabled us to (i) exercise the power over our Lishui Mengxiang and Lianwai School, (ii) have the exposure or rights to variable returns from our involvement with Lishui Mengxiang and Lianwai School, and (iii) exercise the ability to affect those returns through use of its power over Lishui Mengxiang and Lianwai School.

Under the 2021 Implementation Rules which took effect on September 1, 2021, social organizations and individuals are prohibited from controlling a private school that provides compulsory education by means of, among others, merger, acquisition, and contractual arrangements, and a private school providing compulsory education is prohibited from conducting transactions with its related party. In particular, the prohibition over related party transactions has significantly affected the enforceability of the exclusive management services and business cooperation agreements among Liandu WFOE and Lianwai School providing compulsory education. Therefore, we re-assessed our control over Lianwai School. Based on the relevant accounting standard in accordance with U.S. GAAP, we have concluded that we have lost control of Lianwai School since August 31, 2021, in view of the significant uncertainties and restrictions the 2021 Implementation Rules impose on our ability to direct the range of ongoing activities that would most significantly impact the returns of Lianwai School. In light of such regulatory developments, on April 20, 2022, we entered into an acknowledgment agreement of contractual agreements with Lianwai School and respective directors, to confirm all the terms of rights and obligations relating to Lianwai School and the directors appointed by the sponsor under the contractual arrangements among them, and agree among the parties that such arrangements shall have been terminated on August 31, 2021. To minimize disruptions to existing students enrolled in Lianwai School, we continued to offer essential services to the students. We deconsolidated Lianwai School commencing from September 1, 2021 and presented it as a discontinued operation in current and comparative period financial statements. See "*Item 5. Operating and Financial Review and Prospects—A. Operating Results*."

On April 20, 2022, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Lishui Mengxiang, Qingtian International School, shareholders of Lishui Mengxiang and the Council Members of Qingtian International School. On January 31, 2023, due to the change of shareholders of Lishui Mengxiang, Liandu WFOE entered into an updated series of contractual arrangements with respect to the operation of Qingtian International School. The updated series of contractual arrangements replaced the previous ones and took effect on December 16, 2022, the same date when the shareholders of Lishui Mengxiang signed an equity transfer agreement. On January 15, 2024, Lishui Mengxiang entered into a definitive agreement to transfer 100% of the sponsorship interests of Qingtian International School to Qiaoxiang Education, an entity affiliated with Mr. Biao Wei, a director and the Chief Executive Officer of the Company, for a consideration of RMB23,161,000. On April 2, 2024, Liandu WFOE, Lishui Mengxiang, Qingtian International School, the shareholders of Lishui Mengxiang and the Council Members of Qingtian International School entered into the Acknowledgment Agreement of Contractual Agreements of Qingtian Overseas Chinese Experimental High School, pursuant to which rights and obligations under the Business Cooperation Agreement, the Exclusive Technical Service and Business Consulting Agreement, the Exclusive Call Option Agreement, the Proxy Agreement for School's Sponsor and Council Members and the Loan Agreement relating to Qingtian International School and the Council Members thereunder were actually terminated on December 31, 2023. We deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023.

On March 28, 2023, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Beijing P.X. and Langfang School, shareholders of Beijing P.X. and the Council Members of Langfang School. The series of contractual arrangements became effective on January 1, 2022.

On April 2, 2024, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Lishui Mengxiang, Lishui International School, shareholders of Lishui Mengxiang and the Council Members of Lishui International School. The series of contractual arrangements became effective on June 25, 2023.

These contractual arrangements have enabled us to (i) exercise the power over Lishui Mengxiang, Qingtian International School, Lishui International School and Langfang School, (ii) have the exposure or rights to variable returns from our involvement with the VIEs, and (iii) exercise the ability to affect those returns through use of its power over the VIEs.

We do not have any equity interest in the VIEs. However, because of these contractual arrangements, we control the VIEs through our PRC subsidiary, Liandu WFOE. We have consolidated the results of the VIEs in our consolidated financial statements included elsewhere in this annual report on Form 20-F in accordance with U.S. GAAP. For a more detailed discussion of the basis of presentation of our consolidated financial statements, see "*Item 5. Operating and Financial Review and Prospects—A. Operating Results—Critical Accounting Policies*." For a detailed description of the risks associated with our corporate structure, see "*Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure" and "Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China.*"

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***Contractual Arrangements with respect to Qingtian International School***

Below is a summary of the material provisions of these contractual arrangements with Liandu WFOE and the shareholders of Lishui Mengxiang with respect of Qingtian International School. For more complete information you should read these agreements in their entirety.

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***Exclusive Call Option Agreement.*** Under the Exclusive Call Option Agreement dated January 31, 2023, Ms. Fen Ye and Ms. Hong Ye, or the shareholders of Lishui Mengxiang have irrevocably granted Liandu WFOE or its designated purchaser the exclusive right to purchase all or part of the direct and/or indirect equity interests of Lishui Mengxiang, or the Equity Call Option. The purchase price payable by Liandu WFOE or its designated purchaser in respect of the transfer of Lishui Mengxiang's direct and/or indirect equity interest or equity interests shall be at the lowest price permitted under the PRC laws and regulations. Liandu WFOE or its designated purchaser shall have the right to purchase such proportion of Lishui Mengxiang's interest in Qingtian International School and/or other equity interest of Lishui Mengxiang as it decides at any time. Qingtian International School provides high school education services, in which case the foreign investors are restricted to hold equity interests of Lishui Mengxiang, Qingtian International School's sponsor, in accordance with the current PRC laws and regulations. If and when the PRC laws and regulations allow Liandu WFOE or us to directly hold all or part of the school sponsor interests in Qingtian International School and/or all or part of other equity interests of Lishui Mengxiang and operate competent education business in the PRC, Liandu WFOE shall issue the notice of exercise of such equity call option as soon as practicable, and the percentage of interests to be purchased upon exercise of such Equity Call Option shall be no less than the maximum percentage allowed to be held by Liandu WFOE or its designated purchaser under the PRC laws and regulations. Such equity transfer price is not expressly provided for in the current PRC laws and regulations and it is uncertain whether it may be further regulated by future PRC laws and regulations. Pursuant to the Exclusive Call Option Agreement, all taxes and fees associated with the equity transfer shall be paid by Lishui Mengxiang's shareholders and/or the direct equity holders of the VIEs upon the transfer. In the absence of written consent from Liandu WFOE, except as otherwise described in the Exclusive Call Option Agreement, Lishui Mengxiang and its shareholders shall not sell, transfer, assign or otherwise dispose of or create any encumbrance on any of Lishui Mengxiang's assets, businesses or equity interests or procure separation or merge with any other entities. Furthermore, without written consent from Liandu WFOE, Lishui Mengxiang may not terminate any material contracts or enter into any other contracts which may contradict such material contracts, incur any indebtedness or provide any loan or guarantee to a third party, except as disclosed to Liandu WFOE, or alter the nature or scope of its business. The Exclusive Call Option Agreement will remain in force during the operation term of VIEs and any periods that are renewable pursuant to the PRC laws, and will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities of VIEs in accordance with this agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or its shareholders unilaterally, but may only be terminated by Liandu WFOE after notice in advance.

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***Proxy Agreement for School's Sponsors and Council Members.*** Pursuant to the Proxy Agreement for School's Sponsors and Council Members dated January 31, 2023, Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Qingtian International School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to appoint and/or elect of council members of Qingtian International School; (b) the right to appoint and/or elect the supervisors of Qingtian International School; the right to put forward the School's mission and scope of operation;(c)the right to examine or approve the articles of association of Qingtian International School, development planning, major projects and budget for revenues and expenditures;(d) the right to supervise the performance of Qingtian International School and the achievement of the objectives set out in the bylaw;(e) the right to establish the executive school council in accordance with the authority and procedures prescribed in the bylaw of Qingtian International School and to participate in the running and management of the School;(f) the right to access the information about the operation conditions and financial conditions of Qingtian International School;(g) the right to consult the resolutions, records, financial and accounting statements and reports of the school council meetings in accordance with the PRC laws;(h) the right to obtain reasonable returns from Qingtian International School's Sponsor in accordance with the PRC laws;(i) the right to obtain the remaining property of Qingtian International School after the liquidation in accordance with the PRC laws;(j) the right to transfer the interests of Qingtian International School's Sponsor in accordance with the PRC laws;(k) the right to select the profitability and non-profitability of the characteristic of Qingtian International School in accordance with the PRC laws, regulations or regulatory documents; and(l) any other rights of Qingtian International School's Sponsor provided by other applicable laws and regulations of the PRC and the articles of association of Qingtian International School (as amended from time to time).

The appointed Council Members of Qingtian International School from Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Qingtian International School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) acting as the agent of Qingtian International School's Sponsor to attend the council meeting of Qingtian International; enjoying the right to speak, propose, vote, elect and stand for election, and the right to know, propose and supervise council meeting and business activities carried out by Qingtian International School; (b) exercising the voting rights on behalf of Qingtian International School's Sponsor for all matters requiring discussion and resolution of the council; (c) proposing to convene a council meeting of Qingtian International School; (d) signing the council meeting minutes, council meeting resolutions or other legal documents that the Appointed Council Members has the right to sign as the council member of Qingtian International School; (e) instructing the legal representative, the financial, business and administrative chiefs, etc. of Qingtian International School to act in accordance with the Trustee's intention; (f) exercising other rights of the council member and council members' voting rights under the articles of association (including any other council members' voting rights as stipulated in the amended articles of association) of Qingtian International School; (g) handling legal procedures containing registration, examination and approval and license of schools at the competent departments of government; and (h) any other rights of the Council Member as pursuant to the applicable PRC laws, regulations and the articles of association (as amended from time to time) of Qingtian International School. In addition, each of Lishui Mengxiang and the Council Members of Qingtian International School have irrevocably agreed that (i) Liandu WFOE may delegate its rights under the Proxy Agreement for School's Sponsors and Council Members to the directors of Liandu WFOE or its designated person, without prior notice to or approval by Lishui Mengxiang and the Council Members of Qingtian International School; and (ii) any person as successor of civil rights of Liandu WFOE or liquidator by reason of subdivision, merger, liquidation of Liandu WFOE or other circumstances shall have authority to replace Liandu WFOE to exercise all rights under the Proxy Agreement for School's Sponsors and Council Members.

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***Proxy Agreement for Shareholders.*** Pursuant to the Proxy Agreement for Shareholders dated January 31, 2023, each shareholder of Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as the shareholder to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to attend the shareholders' meeting of our school acting as WFOE's nominee; (b) the right to vote on behalf of the sponsors for all matters requiring discussion and resolution of the shareholders' meeting; (c) the right to sign the shareholders' minutes, resolutions or other legal documents; (d) the right to indicate the directors, the legal representative, etc. to act in accordance with WFOE's intention; (e) the right to handle legal procedures containing registration, examination and approval and license of schools at the competent departments of governments; (f) the right to decide to transfer or otherwise dispose of the equity of our school; (g) any other shareholder rights as pursuant to the applicable PRC laws, regulations and our school's articles of association as amended from time to time.

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***Business Cooperation Agreement*.** Pursuant to the Business Cooperation Agreement dated January 31, 2023, Liandu WFOE shall provide technical services, management support and consulting services necessary for the private education business, and in return, the VIEs shall make payments accordingly. In particular, such services include but not limited to developing curriculum, conducting market research and offering management and marketing advice, providing technology services, providing public relations services, providing support for teacher hiring and training and providing other services that the VIEs may need from time to time. Without the prior consent of Liandu WFOE, none of the VIEs may accept such services provided by any third party. As part of the business cooperative agreement, VIEs and the shareholders of Lishui Mengxiang agree that they will not take any actions except as otherwise described in the Business Cooperation Agreement, such as incurring indebtedness, disposing of material assets, materially changing the scope or nature of the business of the VIEs, disposing of their equity interests in the VIEs, or paying dividends or other similar payments to the sponsors or the shareholders VIEs in the absence of written consent from Liandu WFOE. The aforementioned agreements will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities held by Nominee Shareholders in accordance with the Exclusive Call Option Agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by VIEs or the shareholders, but may only be terminated by Liandu WFOE after notice in advance.

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***Exclusive Technical Service and Business Consulting Agreement.*** Pursuant to the Exclusive Technical Service and Business Consulting Agreement dated January 31, 2023, Liandu WFOE agreed to provide exclusive technical services to Qingtian International School and Qingtian International School's sponsor, Lishui Mengxiang. Furthermore, Liandu WFOE agreed to provide exclusive business consultancy services to Qingtian International School and Qingtian International School's sponsor. In consideration of the technical and business consultancy services provided by Liandu WFOE, Qingtian International School and Qingtian International School's sponsor agreed to pay Liandu WFOE a service fee withdrawn from their respective amount of surplus from operations after deducting all costs, expenses, taxes, losses (if required by the law) and the legally development fund of the respective school (if required by the law) and other costs and funds that shall be retained at Qingtian International School in accordance with applicable PRC laws. Liandu WFOE has the right (but not the obligation) to adjust the amount of such service fee by reference to the actual services provided and the actual business operations and needs of Qingtian International School and Qingtian International School's sponsor, provided that any adjusted amount shall not exceed the amount mentioned above. Qingtian International School and Qingtian International School's sponsor do not have any right to make any such adjustment. Unless otherwise prescribed under the PRC laws and regulations, Liandu WFOE shall have exclusive proprietary rights to any technology and intellectual property developed and materials prepared in the course of the provision of research and development, technical support and services by Liandu WFOE to Qingtian International School and Qingtian International School's sponsor, and any intellectual property in the products developed, including any other rights derived thereunder, in the course of performance of obligations under the Exclusive Technical Service and Business Consulting Agreement and/or any other agreements entered into between Liandu WFOE and the VIEs.

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***Equity Pledge Agreement***. Pursuant to the Equity Pledge Agreement dated January 31, 2023, the shareholders unconditionally and irrevocably pledged all of their equity interests in Lishui Mengxiang to Liandu WFOE to guarantee performance of the obligations of the VIEs under the Exclusive Call Option Agreement, Business Cooperation Agreement, Exclusive Technical Service and Business Consulting Agreement, Proxy Agreement for Shareholders, Proxy Agreement for School's Sponsors and Council Members and Loan Agreement, each as described above the shareholders of Lishui Mengxiang agreed that without prior written consent of the PRC WFOE, they shall not transfer or dispose of the pledged equity interests, or create or allow any encumbrance on the pledged equity interests. Unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or the shareholders of Lishui Mengxiang unilaterally, but may only be terminated by the Liandu WFOE after notice in advance. The equity pledge agreement remains in full force and effect until all of the obligations under the contractual arrangements have been duly performed or the guaranteed debts are duly paid. The pledge of equity interests in Lishui Mengxiang has been duly registered with the local branch of SAIC and is effective upon such registration.

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***Acknowledge Agreement.*** Pursuant to the Acknowledgment Agreement of Contractual Agreements of Qingtian Overseas Chinese Experimental High School dated April 2, 2024, the rights and obligations under the Business Cooperation Agreement, the Exclusive Technical Service and Business Consulting Agreement, the Exclusive Call Option Agreement, the Proxy Agreement for School's Sponsor and Council Members and the Loan Agreement relating to Qingtian International School and the Council Members thereunder were actually terminated on December 31, 2023.

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***Contractual Arrangements with respect to Langfang School***

Below is a summary of the material provisions of these contractual arrangements with Liandu WFOE and the shareholders of Beijing P.X. with respect to Langfang School. For more complete information you should read these agreements in their entirety.

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***Exclusive Call Option Agreement.*** Under the Exclusive Call Option Agreement dated March 28, 2023, Ms. Fen Ye, Ms. Hong Ye, and Lishui Mengxiang, or the shareholders of Beijing P.X. have irrevocably granted Liandu WFOE or its designated purchaser the exclusive right to purchase all or part of the direct and/or indirect equity interests of Beijing P.X. and Langfang School, or the Equity Call Option. The purchase price payable by Liandu WFOE or its designated purchaser in respect of the transfer of above equity interests shall be at the lowest price permitted under the PRC laws and regulations. Liandu WFOE or its designated purchaser shall have the right to purchase such proportion of Beijing P.X.'s interest in Langfang School and/or other equity interest of Beijing P.X. as it decides at any time. Langfang School provides vocational school education services, in which case the foreign investors shall be a foreign education institution or a foreign vocational skills training institution with relevant qualifications on education services and operating high-quality educations in accordance with the current PRC laws and regulations. If and when the PRC laws and regulations allow Liandu WFOE or us to directly hold all or part of the school sponsor interests in Langfang School and/or all or part of other equity interests of Beijing P.X. and operate competent education business in the PRC, Liandu WFOE shall issue the notice of exercise of such equity call option as soon as practicable, and the percentage of interests to be purchased upon exercise of such Equity Call Option shall be no less than the maximum percentage allowed to be held by Liandu WFOE or its designated purchaser under the PRC laws and regulations. Such equity transfer price is not expressly provided for in the current PRC laws and regulations and it is uncertain whether it may be further regulated by future PRC laws and regulations. Pursuant to the Exclusive Call Option Agreement, all taxes and fees associated with the equity transfer shall be paid by Beijing P.X.'s shareholders upon the transfer. In the absence of written consent from Liandu WFOE, except as otherwise described in the Exclusive Call Option Agreement, Beijing P.X. and its shareholders shall not sell, transfer, assign or otherwise dispose of or create any encumbrance on any of Langfang School's assets, businesses or equity interests or procure separation or merge with any other entities. Furthermore, without written consent from Liandu WFOE, Langfang School may not terminate any material contracts or enter into any other contracts which may contradict such material contracts, incur any indebtedness or provide any loan or guarantee to a third party, except as disclosed to Liandu WFOE, or alter the nature or scope of its business. The Exclusive Call Option Agreement will remain in force during the operation term of Beijing P.X. and Langfang School and any periods that are renewable pursuant to the PRC laws, and will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities of Beijing P.X. and Langfang School in accordance with this agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by Langfang School, Beijing P.X. or its shareholders unilaterally, but may only be terminated by Liandu WFOE after notice in advance.

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***Proxy Agreement for School's Sponsors and Council Members.*** Pursuant to the Proxy Agreement for School's Sponsors and Council Members dated March 28, 2023, Beijing P.X. has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Langfang School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to appoint and/or elect of council members of Langfang School; (b) the right to appoint and/or elect the supervisors of Langfang School; the right to put forward the School's mission and scope of operation;(c)the right to examine or approve the articles of association of Langfang School, development planning, major projects and budget for revenues and expenditures;(d) the right to supervise the performance of Langfang School and the achievement of the objectives set out in the bylaw;(e) the right to establish the executive school council in accordance with the authority and procedures prescribed in the bylaw of Langfang School and to participate in the running and management of the School;(f) the right to access the information about the operation conditions and financial conditions of Langfang School;(g) the right to consult the resolutions, records, financial and accounting statements and reports of the school council meetings in accordance with the PRC laws;(h) the right to obtain reasonable returns from Langfang School's Sponsor in accordance with the PRC laws;(i) the right to obtain the remaining property of Langfang School after the liquidation in accordance with the PRC laws;(j) the right to transfer the interests of Langfang School's Sponsor in accordance with the PRC laws;(k) the right to select the profitability and non-profitability of the characteristic of Langfang School in accordance with the PRC laws, regulations or regulatory documents; and(l) any other rights of Langfang School's Sponsor provided by other applicable laws and regulations of the PRC and the articles of association of Langfang School (as amended from time to time).

The appointed Council Members of Langfang School from Beijing P.X. has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Langfang School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) acting as the agent of Langfang School's Sponsor to attend the council meeting of Langfang School; enjoying the right to speak, propose, vote, elect and stand for election, and the right to know, propose and supervise council meeting and business activities carried out by Langfang School; (b) exercising the voting rights on behalf of Langfang School's Sponsor for all matters requiring discussion and resolution of the council; (c) proposing to convene a council meeting of Langfang School; (d) signing the council meeting minutes, council meeting resolutions or other legal documents that the Appointed Council Members has the right to sign as the council member of Langfang School; (e) exercising other rights of the council member and council members' voting rights under the articles of association (including any other council members' voting rights as stipulated in the amended articles of association) of Langfang School; (f) handling legal procedures containing registration, examination and approval and license of school at the competent departments of government; and (g) any other rights of the Council Member as pursuant to the applicable PRC laws, regulations and the articles of association (as amended from time to time) of Langfang School. In addition, each of Beijing P.X. and the Council Members of Langfang School have irrevocably agreed that (i) Liandu WFOE may delegate its rights under the Proxy Agreement for School's Sponsors and Council Members to the directors of Liandu WFOE or its designated person, without prior notice to or approval by Beijing P.X. and the Council Members of Langfang School; and (ii) any person as successor of civil rights of Liandu WFOE or liquidator by reason of subdivision, merger, liquidation of Liandu WFOE or other circumstances shall have authority to replace Liandu WFOE to exercise all rights under the Proxy Agreement for School's Sponsors and Council Members.

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***Proxy Agreement for Shareholders.*** Pursuant to the Proxy Agreement for Shareholders dated March 28, 2023, Lishui Mengxiang, the shareholder of Beijing P.X. has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as the shareholder to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to attend the shareholders' meeting of Beijing P.X. acting as WFOE's nominee; (b) the right to vote on behalf of Lishui Mengxiang for all matters requiring discussion and resolution of the shareholders' meeting; (c) the right to sign the shareholders' minutes, resolutions or other legal documents; (d) the right to indicate the directors, the legal representative, etc. to act in accordance with WFOE's intention; (e) the right to handle legal procedures containing registration, examination and approval and license of Beijing P.X. at the competent departments of governments; (f) the right to decide to transfer or otherwise dispose of the equity of Beijing P.X.; (g) any other shareholder's rights as pursuant to the applicable PRC laws, regulations and articles of association of Beijing P.X. as amended from time to time.

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***Business Cooperation Agreement*.** Pursuant to the Business Cooperation Agreement dated March 28, 2023, Liandu WFOE shall provide technical services, management support and consulting services necessary for the private education business, and in return, Beijing P.X. and Langfang School shall make payments accordingly. In particular, such services include but not limited to developing curriculum, conducting market research and offering management and marketing advice, providing technology services, providing public relations services, providing support for teacher hiring and training and providing other services that Beijing P.X. and Langfang School may need from time to time. Without the prior consent of Liandu WFOE, none of Beijing P.X. and Langfang School may accept such services provided by any third party. As part of the business cooperative agreement, Beijing P.X., Langfang School and the shareholders of Beijing P.X. agree that they will not take any actions except as otherwise described in the Business Cooperation Agreement, such as incurring indebtedness, disposing of material assets, materially changing the scope or nature of the business of Langfang School, disposing of their equity interests in the Langfang School, or paying dividends or other similar payments to Beijing P.X. or the shareholders of Beijing P.X. in the absence of written consent from Liandu WFOE. The aforementioned agreements will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities held by Nominee Shareholders in accordance with the Exclusive Call Option Agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by Beijing P.X., Langfang School or the shareholders of Beijing P.X., but may only be terminated by Liandu WFOE after notice in advance.

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***Exclusive Technical Service and Business Consulting Agreement.*** Pursuant to the Exclusive Technical Service and Business Consulting Agreement dated March 28, 2023, Liandu WFOE agreed to provide exclusive technical services to Langfang School and Beijing P.X. Furthermore, Liandu WFOE agreed to provide exclusive business consultancy services to Langfang School and Beijing P.X.. In consideration of the technical and business consultancy services provided by Liandu WFOE, Langfang School and Beijing P.X. agreed to pay Liandu WFOE a service fee withdrawn from their respective amount of surplus from operations after deducting all costs, expenses, taxes, losses (if required by the law) and the legally development fund (if required by the law) and other costs and funds that shall be retained at Langfang School in accordance with applicable PRC laws. Liandu WFOE has the right (but not the obligation) to adjust the amount of such service fee by reference to the actual services provided and the actual business operations and needs of Langfang School and Beijing P.X., provided that any adjusted amount shall not exceed the amount mentioned above. Langfang School and Beijing P.X. do not have any right to make any such adjustment. Unless otherwise prescribed under the PRC laws and regulations, Liandu WFOE shall have exclusive proprietary rights to any technology and intellectual property developed and materials prepared in the course of the provision of research and development, technical support and services by Liandu WFOE to Langfang School and Beijing P.X., and any intellectual property in the products developed, including any other rights derived thereunder, in the course of performance of obligations under the Exclusive Technical Service and Business Consulting Agreement and/or any other agreements entered into between Liandu WFOE, Langfang School and Beijing P.X..

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***Equity Pledge Agreement***. Pursuant to the Equity Pledge Agreement dated March 28, 2023, the shareholders unconditionally and irrevocably pledged all of their equity interests in Beijing P.X. to Liandu WFOE to guarantee performance of the obligations of Langfang School and Beijing P.X. under the Exclusive Call Option Agreement, Business Cooperation Agreement, Exclusive Technical Service and Business Consulting Agreement, Proxy Agreement for Shareholders, Proxy Agreement for School's Sponsors and Council Members and Loan Agreement, each as described above the shareholders of Beijing P.X. agreed that without prior written consent of the WFOE, they shall not transfer or dispose of the pledged equity interests, or create or allow any encumbrance on the pledged equity interests. Unless otherwise stipulated by laws, this agreement may not be terminated by Beijing P.X. or the shareholders of Beijing P.X. unilaterally, but may only be terminated by the Liandu WFOE after notice in advance. The equity pledge agreement remains in full force and effect until all of the obligations under the contractual arrangements have been duly performed or the guaranteed debts are duly paid. The pledge of equity interests in Beijing P.X. has been duly registered with the local branch of SAMR and is effective upon such registration.

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***Contractual Arrangements with respect to Lishui International School***

Below is a summary of the material provisions of these contractual arrangements with Liandu WFOE and the shareholders of Lishui Mengxiang with respect to Lishui International School. For more complete information you should read these agreements in their entirety.

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***Exclusive Call Option Agreement.*** Under the Exclusive Call Option Agreement dated April 2, 2024, Ms. Fen Ye and Ms. Hong Ye, or the shareholders of Lishui Mengxiang have irrevocably granted Liandu WFOE or its designated purchaser the exclusive right to purchase all or part of the direct and/or indirect equity interests of Lishui Mengxiang, or the Equity Call Option. The purchase price payable by Liandu WFOE or its designated purchaser in respect of the transfer of Lishui Mengxiang's direct and/or indirect equity interest or equity interests shall be at the lowest price permitted under the PRC laws and regulations. Liandu WFOE or its designated purchaser shall have the right to purchase such proportion of Lishui Mengxiang's interest in Lishui International School and/or other equity interest of Lishui Mengxiang as it decides at any time. Lishui International School provides high school education services, in which case the foreign investors are restricted to hold equity interests of Lishui Mengxiang, Lishui International School's sponsor, in accordance with the current PRC laws and regulations. If and when the PRC laws and regulations allow Liandu WFOE or us to directly hold all or part of the school sponsor interests in Lishui International School and/or all or part of other equity interests of Lishui Mengxiang and operate competent education business in the PRC, Liandu WFOE shall issue the notice of exercise of such equity call option as soon as practicable, and the percentage of interests to be purchased upon exercise of such Equity Call Option shall be no less than the maximum percentage allowed to be held by Liandu WFOE or its designated purchaser under the PRC laws and regulations. Such equity transfer price is not expressly provided for in the current PRC laws and regulations and it is uncertain whether it may be further regulated by future PRC laws and regulations. Pursuant to the Exclusive Call Option Agreement, all taxes and fees associated with the equity transfer shall be paid by Lishui Mengxiang's shareholders and/or the direct equity holders of the VIEs upon the transfer. In the absence of written consent from Liandu WFOE, except as otherwise described in the Exclusive Call Option Agreement, Lishui Mengxiang and its shareholders shall not sell, transfer, assign or otherwise dispose of or create any encumbrance on any of Lishui Mengxiang's assets, businesses or equity interests or procure separation or merge with any other entities. Furthermore, without written consent from Liandu WFOE, Lishui Mengxiang may not terminate any material contracts or enter into any other contracts which may contradict such material contracts, incur any indebtedness or provide any loan or guarantee to a third party, except as disclosed to Liandu WFOE, or alter the nature or scope of its business. The Exclusive Call Option Agreement will remain in force during the operation term of VIEs and any periods that are renewable pursuant to the PRC laws, and will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities of VIEs in accordance with this agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or its shareholders unilaterally, but may only be terminated by Liandu WFOE after notice in advance.

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***Proxy Agreement for School's Sponsors and Council Members.*** Pursuant to the Proxy Agreement for School's Sponsors and Council Members dated April 2, 2024, Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Lishui International School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to appoint and/or elect of council members of Lishui International School; (b) the right to appoint and/or elect the supervisors of Lishui International School; the right to put forward the School's mission and scope of operation;(c)the right to examine or approve the articles of association of Lishui International School, development planning, major projects and budget for revenues and expenditures;(d) the right to supervise the performance of Lishui International School and the achievement of the objectives set out in the bylaw;(e) the right to establish the executive school council in accordance with the authority and procedures prescribed in the bylaw of Lishui International School and to participate in the running and management of the School;(f) the right to access the information about the operation conditions and financial conditions of Lishui International School;(g) the right to consult the resolutions, records, financial and accounting statements and reports of the school council meetings in accordance with the PRC laws;(h) the right to use the remaining property of the school after the liquidation for running other non-profit schools continuously in accordance with the PRC laws;(i) the right to transfer the interests of Lishui International School's sponsor in accordance with the PRC laws; and (j) any other rights of Lishui International School's Sponsor provided by other applicable laws and regulations of the PRC and the articles of association of Lishui International School (as amended from time to time).

The appointed Council Members of Lishui International School from Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as school sponsor of Lishui International School to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) acting as the agent of Lishui International School's Sponsor to attend the council meeting of Lishui International School; enjoying the right to speak, propose, vote, elect and stand for election, and the right to know, propose and supervise council meeting and business activities carried out by Lishui International School; (b) exercising the voting rights on behalf of Lishui International School's Sponsor for all matters requiring discussion and resolution of the council; (c) proposing to convene a council meeting of Lishui International School; (d) signing the council meeting minutes, council meeting resolutions or other legal documents that the Appointed Council Members has the right to sign as the council member of Lishui International School; (e) instructing the legal representative, the financial, business and administrative chiefs, etc. of Lishui International School to act in accordance with the Trustee's intention; (f) exercising other rights of the council member and council members' voting rights under the articles of association (including any other council members' voting rights as stipulated in the amended articles of association) of Lishui International School; (g) handling legal procedures containing registration, examination and approval and license of schools at the competent departments of government; and (h) any other rights of the Council Member as pursuant to the applicable PRC laws, regulations and the articles of association (as amended from time to time) of Lishui International School. In addition, each of Lishui Mengxiang and the Council Members of Lishui International School have irrevocably agreed that (i) Liandu WFOE may delegate its rights under the Proxy Agreement for School's Sponsors and Council Members to the directors of Liandu WFOE or its designated person, without prior notice to or approval by Lishui Mengxiang and the Council Members of Lishui International School; and (ii) any person as successor of civil rights of Liandu WFOE or liquidator by reason of subdivision, merger, liquidation of Liandu WFOE or other circumstances shall have authority to replace Liandu WFOE to exercise all rights under the Proxy Agreement for School's Sponsors and Council Members.

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***Proxy Agreement for Shareholders.*** Pursuant to the Proxy Agreement for Shareholders dated April 2, 2024, each shareholder of Lishui Mengxiang has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as the shareholder to the extent permitted by the PRC laws. These rights include, but are not limited to: (a) the right to attend the shareholders' meeting of our school acting as WFOE's nominee; (b) the right to vote on behalf of the sponsors for all matters requiring discussion and resolution of the shareholders' meeting; (c) the right to sign the shareholders' minutes, resolutions or other legal documents; (d) the right to indicate the directors, the legal representative, etc. to act in accordance with WFOE's intention; (e) the right to handle legal procedures containing registration, examination and approval and license of schools at the competent departments of governments; (f) the right to decide to transfer or otherwise dispose of the equity of our school; (g) any other shareholder rights as pursuant to the applicable PRC laws, regulations and our school's articles of association as amended from time to time.

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***Business Cooperation Agreement*.** Pursuant to the Business Cooperation Agreement dated April 2, 2024, Liandu WFOE shall provide technical services, management support and consulting services necessary for the private education business, and in return, the VIEs shall make payments accordingly. In particular, such services include but not limited to developing curriculum, conducting market research and offering management and marketing advice, providing technology services, providing public relations services, providing support for teacher hiring and training and providing other services that the VIEs may need from time to time. Without the prior consent of Liandu WFOE, none of the VIEs may accept such services provided by any third party. As part of the business cooperative agreement, VIEs and the shareholders of Lishui Mengxiang agree that they will not take any actions except as otherwise described in the Business Cooperation Agreement, such as incurring indebtedness, disposing of material assets, materially changing the scope or nature of the business of the VIEs, disposing of their equity interests in the VIEs, or paying dividends or other similar payments to the sponsors or the shareholders VIEs in the absence of written consent from Liandu WFOE. The aforementioned agreements will terminate automatically when Liandu WFOE and/or its designated entities fully exercised their options to purchase all the equities held by Nominee Shareholders in accordance with the Exclusive Call Option Agreement. In addition, unless otherwise stipulated by laws, this agreement may not be terminated by VIEs or the shareholders, but may only be terminated by Liandu WFOE after notice in advance.

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***Exclusive Technical Service and Business Consulting Agreement.*** Pursuant to the Exclusive Technical Service and Business Consulting Agreement dated April 2, 2024, Liandu WFOE agreed to provide exclusive technical services to Lishui International School and Lishui International School's sponsor, Lishui Mengxiang. Furthermore, Liandu WFOE agreed to provide exclusive business consultancy services to Lishui International School and Lishui International School's sponsor. In consideration of the technical and business consultancy services provided by Liandu WFOE, Lishui International School and Lishui International School's sponsor agreed to pay Liandu WFOE a service fee withdrawn from their respective amount of surplus from operations after deducting all costs, expenses, taxes, losses (if required by the law) and the legally development fund of the respective school (if required by the law) and other costs and funds that shall be retained at Lishui International School in accordance with applicable PRC laws. Liandu WFOE has the right (but not the obligation) to adjust the amount of such service fee by reference to the actual services provided and the actual business operations and needs of Lishui International School and Lishui International School's sponsor, provided that any adjusted amount shall not exceed the amount mentioned above. Lishui International School and Lishui International School's sponsor do not have any right to make any such adjustment. Unless otherwise prescribed under the PRC laws and regulations, Liandu WFOE shall have exclusive proprietary rights to any technology and intellectual property developed and materials prepared in the course of the provision of research and development, technical support and services by Liandu WFOE to Lishui International School and Lishui International School's sponsor, and any intellectual property in the products developed, including any other rights derived thereunder, in the course of performance of obligations under the Exclusive Technical Service and Business Consulting Agreement and/or any other agreements entered into between Liandu WFOE and the VIEs.

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***Equity Pledge Agreement***. Pursuant to the Equity Pledge Agreement dated April 2, 2024, the shareholders unconditionally and irrevocably pledged all of their equity interests in Lishui Mengxiang to Liandu WFOE to guarantee performance of the obligations of the VIEs under the Exclusive Call Option Agreement, Business Cooperation Agreement, Exclusive Technical Service and Business Consulting Agreement, Proxy Agreement for Shareholders, Proxy Agreement for School's Sponsors and Council Members and Loan Agreement, each as described above the shareholders of Lishui Mengxiang agreed that without prior written consent of the PRC WFOE, they shall not transfer or dispose of the pledged equity interests, or create or allow any encumbrance on the pledged equity interests. Unless otherwise stipulated by laws, this agreement may not be terminated by Lishui Mengxiang or the shareholders of Lishui Mengxiang unilaterally, but may only be terminated by the Liandu WFOE after notice in advance. The equity pledge agreement remains in full force and effect until all of the obligations under the contractual arrangements have been duly performed or the guaranteed debts are duly paid. The pledge of equity interests in Lishui Mengxiang has been duly registered with the local branch of SAIC and is effective upon such registration.

After consulting with our PRC legal counsel Beijing DeHeng Law offices, we are of the view that:

● the ownership structures of Liandu WFOE and the VIEs currently will not violate any applicable PRC law, regulation, or rule currently in effect; and

● the contractual arrangements (a) among Liandu WFOE, Lishui Mengxiang, Qingtian International School, shareholders of Lishui Mengxiang and the Council Members of Qingtian International School; (b) among Liandu WFOE, Beijing P.X., Langfang School, shareholders of Beijing P.X. and the Council Members of Langfang School; and (c) among Liandu WFOE, Lishui Mengxiang, Lishui International School, shareholders of Lishui Mengxiang and the Council Members of Lishui International School, governed by PRC laws are valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules, and regulations currently in effect.

However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules. Accordingly, the PRC regulatory authorities may take a view that is contrary to us. It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide. If we or the VIE is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant 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 Relating to Our Corporate Structure*."

**D. Property, Plants and Equipment**

Our headquarters are located in Lishui City, Zhejiang Province, the People's Republic of China. As of December 31, 2025, we and the VIEs owned the land use rights for eight parcels of land in the PRC with a total site area of approximately 104,739 sq.m. We and the VIEs also owned 25 buildings with a total gross floor area of approximately 86,518 sq.m. On December 29, 2021, Lishui Mengxiang as the landlord entered into a lease agreement with Lianwai School. The lease covers three parcels of land in Liandu District and the term of this lease is for three years from January 1, 2022 to December 31, 2024. The lease agreement was a part of the essential services we provided to Lianwai School in order to keep Lianwai School in operation and minimize the disruptions to its existing students. We have not recognized any revenue from this lease pursuant to the 2021 Complementation Rules. The lease expired on December 31, 2024 and was not extended.

On September 1, 2019, Langfang School as the tenant entered into a lease agreement with a third party. The agreement covers the campus facilities and properties located at No.2 Yongxing road, Anci District in Langfang City, Hebei Province, which is provided to Langfang School for its daily operation. The term of this agreement is for five years from September 1, 2019 to August 31, 2024. Langfang School agreed to pay RMB330,000 (including tax) each month for using the campus facilities. This lease agreement was not renewed after expiration.

On December 13, 2022, Langfang School as the tenant entered into a cooperation agreement about the facilities use with a third party. The agreement covers the facilities located at No.63 Aiminxi road, Anci District in Langfang City, Hebei Province, and its term is from December 2022 to December 2024. Langfang School agreed to pay the rent based on the numbers of apartments used in the school years, and the annual rent for an apartment accommodating 4 students ranges from RMB30,600 to RMB31,800. This lease agreement was not renewed after expiration.

On June 30, 2024, Lishui Mengxiang as the landlord, entered into a lease agreement with a third party. The agreement covers the facilities located at No. 227, Dayang North Road, Liandu District, Lishui City, and its term is from July 1, 2024 to June 30, 2027. Lishui Mengxiang will receive an annual rental income of RMB1 million. We have completed the lease registration for this lease agreement.

On July 31, 2024, Langfang School entered into a cooperation agreement with Hebei Technical College of Petroleum Profession (河北石油职业技术学院) ("Hebei Petroleum College") for operating vocational education at the southern campus of Hebei Petroleum College, located at No.38 Yongxing road, Anci District in Langfang City, Hebei Province. Langfang School is allowed to use the facilities of the southern campus of Hebei Petroleum College for six years from July 31, 2024 to July 30, 2030, for operating vocational education, and agrees to pay RMB11,000,000 each year to Hebei Petroleum College, subject to certain fees adjustment arrangements. In January 2026, Langfang School and Hebei Petroleum College mutually agreed to terminate the cooperation agreement and Langfang School vacated the facilities it occupied at the southern campus of Hebei Petroleum College on January 15, 2026.

In November 2024, Beijing P.X. as the tenant entered into a lease agreement with a third party. The agreement covers office spaces located at Room 2101, Tower A, Genertime International Center, Chaoyang District, Beijing. The term of this agreement is for five years from November 1, 2024 to March 8, 2026. Beijing P.X. agreed to pay RMB45,000 (including tax) each month for using the facilities.

On December 1, 2025, Langfang School as the tenant entered into a lease agreement about the facilities use with a third party. The agreement covers the facilities located at No. 4, Chunming Road, Development Zone, Langfang City, Hebei Province, and its term is from March 31, 2026 to March 31, 2031. Langfang School agreed to pay an annual rent of RMB2,600,000 each year.

On December 15, 2024, Lishui Mengxiang as the landlord, entered into a lease agreement with Liandu Foreign Language School Kindergarten. The agreement covers the facilities located at No. 705, Shouerfu Road, Liandu District, Lishui City, and its term is from January 1, 2025 to December 31, 2025. Lishui Mengxiang will receive an annual rental income of RMB396,000. We have completed the lease registration for this lease agreement.

Pursuant to the applicable PRC laws and regulations, parties to a lease agreement are required to file the lease agreements for registration and obtain property leasing filing certificates for their leases. As of the date of the annual report, unless indicated otherwise above, we and the VIEs had not completed lease registration of the properties we and the VIEs leased in China. Although failure to register or file a lease does not in itself invalidate the leases, we and the VIEs may be required by relevant government authorities to file the lease agreements to complete the registration formalities and may be subject to a fine for non-registration within the prescribed time limit, which may range from RMB1,000 to RMB10,000 per lease agreement. See "*Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry*."

**ITEM 4A. UNRESOLVED STAFF COMMENTS**

None.

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

 

*You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial statements and the notes to those statements included elsewhere in this annual report on Form 20-F. The discussion in this annual report on Form 20-F contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this annual report on Form 20-F should be read as applying to all related forward-looking statements wherever they appear in this annual report on Form 20-F. Our actual results could differ materially from those discussed here. Factors that could cause or contribute to these differences include those discussed in "Risk Factors," as well as those discussed elsewhere. See "Item 3. Key Information—D. Risk Factors" or in other parts of this annual report on Form 20-F.*

**A. Operating Results**

**Overview**

Our and the VIEs' private education services primarily consist of high school education and vocational education. For the year ended December 31, 2025, we and the VIEs have established an education services network consisting of one high school, two vocational education services providers and one human resources and healthcare support services provider, covering Zhejiang Province, Hebei Province, and Hainan Province in mainland China. The entities engaging in our main business include:

● Lishui International School, an educational institution specialized in providing high school education to students from overseas Chinese families returning to China who are commonly known as the overseas Chinese returnees;

● Langfang School and Hainan Jiangcai, vocational education services providers offering a variety of vocational education programs with the aim to help students to equip with practical vocational skill sets; and

● Hebei Chuangxiang, a human resources service provider offering internship placement, employment referral and healthcare support services. It partners with employers to arrange internships for students from Langfang School and Hainan Technical School. It also cooperates with healthcare and elderly care enterprises to deliver daily care, specialized nursing and companion services.

On August 18, 2021, Lishui Mengxiang entered into a sponsorship interests transfer agreement with Qingtian Zhongyi Education Investment in respect of the acquisition of 100% of the sponsorship interests of Qingtian International School. On August 24, 2021, the alteration registration of Qingtian International School was completed and Lishui Mengxiang started to hold 100% of the sponsorship interests of Qingtian International School. The transaction was closed in November 2021. We have consolidated the results of Qingtian International School in our consolidated financial statements since August 31, 2021, in accordance with U.S GAAP through a series of contractual arrangements. On January 15, 2024, Lishui Mengxiang entered into a definitive agreement to transfer 100% of the sponsorship interests of Qingtian International School to Qiaoxiang Education. On April 2, 2024, Liandu WFOE and the shareholders of Lishui Mengxiang, among others, entered into the Acknowledgment Agreement of Contractual Agreements of Qingtian International School, pursuant to which rights and obligations under the contractual arrangements with respect to Qingtian International School were terminated on December 31, 2023. We deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023. For details regarding the history of Qingtian International School as one of the VIEs, see "*Item 4. Information on the Company—A. History and Development of the Company.*" Lishui Mengxiang also holds 100% of the sponsorship interests of Lishui International School since June 25, 2023. The high school curriculum programs offered at Qingtian International School and Lishui International School are designed for students from the families of overseas Chinese returnees. The increasing population of overseas Chinese returnees and their immediate relatives in Zhejiang Province provides a growing opportunity in the private education industry. Students as overseas Chinese returnees have the opportunity to attend the PRC Joint Recruitment Examination for overseas Chinese returnees and students in Hong Kong, Macau and Taiwan as a parallel track to the college entrance exam taken by local students. Qingtian International School and Lishui International School provide PRC high school curriculum program combined with the courses designed for the PRC Joint Recruitment Examination, using small-class teaching method and semi-military management, which enable its students to gain admission to the most prestigious colleges and universities and therefore we believe our outstanding admission performance will enhance our and the VIEs' schools' reputation in the industry and improve our prospects.

We and the VIEs offer vocational education services through the Vocational Education Services providers, namely Langfang School and Hainan Jiangcai.

Beijing Xinxiang is a vocational education service provider in the healthcare industry, formed in January 2022 by Lishui Mengxiang and Beijing R.R.Z. The healthcare industry in China has significant unmet demand for vocational training education to bridge the supply and demand gap between employers and students. Beijing Xinxiang was deregistered on June 17, 2024.

Langfang School is a provincial private vocational school approved by the Human Resources and Social Security Department of Hebei Province, integrating academic education and vocational education. Langfang School was acquired by Lishui Mengxiang in January 2022. As of the date of the annual report, the administrative procedures with the PRC governmental authorities to amend the registration reflecting the result of the acquisition of Langfang School have not been completed due to the internal procedures of the competent authorities and we and the VIEs are still in the process of active communication with such local authorities.

Through Hainan Jiangcai, a subsidiary of Beijing P.X., we and the VIEs cooperate with Hainan Technical School, a reputable vocational education school in Haikou City, Hainan Province to jointly design and develop curriculum programs based on the prevalent market trends and employer preferences.

Chuangmei Weiye is a professional comprehensive education and human resources service provider through which we assisted talents with practical skills in obtaining internship opportunities and positions in well-known companies so as to bridge the supply and demand gap between the employers and talents. On November 5, 2023, Lishui Mengxiang elected to exercise the right to sell 100% of the equity interests of Chuangmei Weiye back to Beijing S.K. and its affiliates pursuant to that certain supplementary agreement by and among Lishui Mengxiang, Beijing S.K., certain affiliates of Beijing S.K. and Beijing P.X. dated August 20, 2023, primarily due to the substantial amount of Chuangmei Weiye's historical debts. The equity interests of Chuangmei Weiye were transferred back to Beijing S.K.'s affiliates at a price of RMB6.36 million and the transfer was completed on November 9, 2023. After the transaction, the amount of RMB6.36 million has been added to the total debts owed by Beijing S.K. to Lishui Mengxiang.

On January 6, 2023, Beijing P.X. established Hebei Chuangxiang as its wholly-owned subsidiary, which was primarily engaged in providing healthcare support services, and human resources services integrating internship and employment recommendation services. For the healthcare support services, it has signed formal service cooperation contracts with a number of enterprises in the health and elderly care industry, providing professional healthcare support services covering basic living care, special care, accompanying services and other categories. Hebei Chuangxiang charges fixed daily service fees to cooperative customers based on the actual service period and service volume. For human resources services, it has entered into cooperation agreements with certain employers, assigning students from Langfang School and Hainan Technical School to these employers as interns and charging labor dispatch fees based on the number of interns dispatched.

Our net revenues for continuing operation were RMB50.8 million, RMB32.8 million and RMB30.8 million (US$4.4 million) in 2023, 2024 and 2025, respectively. We had net loss RMB127.0 million, RMB24.7 million and RMB121.3 million (US$17.3 million) in 2023, 2024 and 2025, respectively.

**Major Factors Affecting Our Results of Operations**

We believe that our results of operations are affected by the following factors:

 ****

***Demand for private education and vocational education in China***

Our and the VIEs' operations are driven by the growth of demand for private education and vocational education in China. Such demand is primarily driven by the increasing number of Chinese students who seek quality education and aspire to gain solid practical skills, which is in turn driven by an increasing number of affluent families in China, the rising recognition of the quality of high school education, and various economic factors. The demand of private education and vocational education are affected by a number of factors, including general economic conditions, diversified course offerings, quality of education, expected compensation levels, social acceptance towards vocational graduates, and government support. Material changes to these factors will affect our operation results.

 ****

***Level of our and the VIEs' student enrollment***

Our net revenues and profitability are dependent on the level of student enrollment at our schools. The number of students enrolled in Lishui International School, Langfang School and Hainan Jiangcai (through its cooperator Hainan Technical School) was 97,660 and 510 as of September 1, 2025, respectively.

Attracting students and subsequent student admission largely depends on our reputation which is mainly driven by the quality of education we and the VIEs provide. Through the years of operations, we and the VIEs have accumulated experience in developing and customizing our and the VIEs' educational programs to continue to attract students and teachers to our schools. We believe that highly qualified and dedicated teachers are critical to ensure our quality education and the quality of the teachers will continue to play an important role in the success of our schools. Accordingly, we and the VIEs provide various training opportunities to the teachers, such as education expert seminars and continuous studies. The teachers' assessments are performance-based, and we provide incentives based on the quality of teaching. We believe that our emphasis on high quality teachers will transform into high quality education for our students in and outside the classroom.

The student enrollment level is also affected by the capacity of the schools. As of September 1, 2025, there were 97 students in four classes enrolled in Lishui International School with 100% of the students living on-campus. The school recorded a utilization rate of 71.8% with the capacity of 135 students as of September 1, 2025. As of September 1, 2025, Lishui International School had 5 teachers, with a teacher-student ratio of 1:19.4. Subject to the capacity of the schools, we expect that the number of students will increase steadily by school year as the schools continue to recruit more students than graduates/withdrawals from the schools.

 ****

***Tuition, meal and accommodation services fees***

Our net revenues from schools primarily consist of tuition, meal and accommodation fees. The tuition and accommodation service fees we and the VIEs charge are subject to approval by the competent government pricing authorities. The pricing standards on tuition and accommodation fees for diploma education applied to privately-run schools shall be determined by the competent authorities with reference to the operating costs of the schools. The base price for each privately-run school shall be approved by the competent governmental departments for both price and education. The school may determine specific charging rates within applicable floating range on its own and implement such rates after reporting to those governmental departments and making announcements to the public.

Our tuition and accommodation fees are within the applicable floating range based on the approved base prices. In the event that we consider it necessary to increase the base prices based on the costs, we will initiate communications with the competent price authority which will issue a written notice instructing us the required application materials to be submitted. The new charging rates will be determined and issued after on-site examination and review of the materials by the competent price authority. The processing time of this procedure is approximately one to two months. The tuition rates we and the VIEs charge are typically based on the demand for our and the VIEs' educational programs, the cost of operations, the tuition rates charged by our competitors, our pricing strategy to gain market share and general economic conditions in China and the areas in which our campuses are located. We believe high-quality educational resources and school infrastructure will allow us and the VIEs to raise our tuition rates to the extent permitted by the government. We believe that we and the VIEs remain competitive leveraging on our reputation and our ability to attract and retain students even if we and the VIEs raise the tuition rates.

 ****

***Our ability to control operating costs and expenses***

Our cost of revenues primarily consists of salaries and welfare for the teachers, cost for food, books and uniform, depreciation and amortization, rental fees, utilities, tax surcharges and maintenance and repairs. Our general and administrative expenses primarily consist of salaries and welfare for our administrative staff and office expenses. Our profitability depends, in part, on our ability to control our operating costs and expenses. We and the VIEs highly value the teachers and invest in the teachers heavily, through extensive training opportunities and competitive compensation levels. The number of teachers employed by Lishui International School, Langfang School and Hainan Jiangcai were 5, 57, and 24 as of September 1, 2025, respectively. Our strategy is to maintain and attract more high-quality teachers, by continuing to increase teachers' salaries and other benefits from time to time to maintain our competitiveness in the market. As we and the VIEs continue to increase our student base and expand our operations, our cost of revenues and general and administrative expenses may increase accordingly. Our capability to effectively control operating costs and expenses will continue to affect our results of operations.

 ****

***Seasonality***

Our financial performance is subject to seasonality as each of the school years includes a winter holiday between December and January and a summer holiday between July and August. Our net loss and results of operations normally fluctuate from quarter to quarter as a result of seasonal variations in our education operations. The students and their parents typically pay the tuition and other fees prior to the commencement of a semester, and we recognize revenue generated from tuition and other fees on a straight-line basis over the semester. We and the VIEs typically incur higher upfront operating expenses in the third fiscal quarter at the start of each school year. As a result of the combination of the forgoing, we have historically recorded significantly lower net loss in the first and third fiscal quarters, primarily due to our school being closed due to the winter and summer holidays, when no revenue from our school operations is recognized.

**Key Components of Results of Operations**

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***Net revenues of continuing operations***

The following table sets forth the contribution of revenue of continuing operations.

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| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
| **Revenue from third parties:** |  |  |  |
| Tuition fees | 30626298 | 15416740 | 13863581 |
| Course design, development and training | 4766127 | 6839135 | 5101952 |
| Accommodation | 5963281 | 4032860 | 3580137 |
| Healthcare support services |  | 780233 | 2568905 |
| Uniforms, learning materials and other campus necessities | 2937007 | 2164187 | 2070624 |
| Meals | 1925744 |  | 986477 |
| Comprehensive human resource services | 653149 | 1263810 | 847756 |
| Rental revenue | 746294 | 888470 | 983125 |
| Others | 2443231 | 660940 | 226875 |
| **Subtotal** | **50061131** | **32046375** | **30229432** |
| **Revenue from related party:** |  |  |  |
| Rental revenue | 754285 | 754285 | 377143 |
| Others | - | - | 226415 |
| **Subtotal** | **754285** | **754285** | **603558** |
| **Total revenue** | **50815416** | **32800660** | **30832990** |

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For continuing operations, our total net revenues were RMB50.8 million, RMB32.8 million and RMB30.8 million (US$4.4 million) in 2023, 2024 and 2025, respectively.

 

*Revenue from third parties*

Lishui Mengxiang started to hold 100% of the sponsorship interests of Qingtian International School on August 24, 2021, and transferred 100% of such sponsorship interests to a related party, Qiaoxiang Education, for a consideration of RMB23,161,000, effective on December 31, 2023. Lishui Mengxiang began to hold 100% of the sponsorship interests of Lishui International School on June 25, 2023. Qingtian International School and Lishui International School offered high school education services and our high school curriculum programs were designed for students as overseas Chinese returnees. We offer high school curriculum programs and accommodation service to the students, and generally charge the students tuition and accommodation fees prior to the beginning of each semester. During the stay in school, Qingtian International School offered students with meals, and meal fees were collected each time students had meal.

To expand our and the VIEs' business into vocational education, Lishui Mengxiang entered into definitive agreements to acquire 100% of the equity interests of Beijing P.X. on January 1, 2022, which was a wholly-owned subsidiary of Beijing S.K. at the time, so that after the transaction, Lishui Mengxiang through its shareholding of Beijing P.X. would in turn hold 100% of the equity interests of Chuangmei Weiye and Hainan Jiangcai, and 100% of the sponsorship interests of Langfang School. The acquisition was completed in May 2022. Langfang School offers vocational education programs and accommodation service to the students, and charges tuition, learning materials fees and accommodation fees from the students prior to the beginning of each semester. On January 6, 2023, Beijing P.X established a wholly-owned subsidiary Hebei Chuangxiang to provide comprehensive human resource service and healthcare support service.

The following table sets forth the number of students enrolled at Qingtian International School, Lishui International School, Langfang School and Hainan Jiangcai as of the dates of the beginning of school year indicated.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of September 1,** | **As of September 1,** | **As of September 1,** | **As of September 1,** | **As of September 1,** | **As of September 1,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  | **Number** | **%** | **Number** | **%** | **Number** | **%** |
| **Enrollment** |  |  |  |  |  |  |
| Langfang School | 1554 | 59.8 | 1054 | 56.4 | 660 | 52.0 |
| Hainan Jiangcai | 480 | 18.5 | 685 | 36.7 | 510 | 40.3 |
| Lishui International School | 74 | 2.8 | 129 | 6.9 | 97 | 7.7 |
| Qingtian International School | 491 | 18.9 | - | - | - | - |
| **Total** | **2599** | **100.0** | **1868** | **100.0** | **1267** | **100.0** |

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In addition, we and the VIEs sell school uniform, learning materials and other campus necessities to students.

For the years ended December 31, 2025, Lishui International School, Langfang School, and Hainan Jiangcai generated total revenue of RMB3.9 million, RMB15.7 million and RMB0.1 million, respectively.

We leased staff dormitory and administrative office to the third parties for their daily operations. The total rental revenue generated from third parties was RMB0.8 million, RMB0.9 million and RMB1.0 million for the years ended December 31, 2023, 2024 and 2025, respectively.

We generated revenue from comprehensive human resource services, which integrate internship and employment recommendation services. The total comprehensive human resource services revenue from third parties amounted to RMB0.6 million, RMB1.3 million and RMB0.8 million for the years ended December 31, 2023, 2024 and 2025, respectively.

We generated revenue from healthcare support services. We cooperates with healthcare and elderly care enterprises to deliver daily care, specialized nursing and companion services. The total revenue from third parties amounted to nil, RMB0.8 million and RMB2.6 million for the years ended December 31, 2023, 2024 and 2025, respectively.

*Revenue from related parties*

Revenue from related parties consists of: (i) rental income from Liandu Foreign Language School Kindergarten, derived from the leasing of kindergarten facilities, with amounts of RMB0.8 million, RMB0.8 million and RMB0.4 million for the years ended December 31, 2023, 2024 and 2025, respectively. (ii) software license income from Qiaoxiang Education, which amounted to RMB0.2 million for the year ended December 31, 2025.

***Net revenues of discontinued operations***

For discontinued operations, our total net revenues were RMB1.6 million, nil and nil in 2023, 2024 and 2025, respectively.

 

*Revenue from Chuangmei Weiye*

To expand our and the VIEs' business into vocational education, Lishui Mengxiang entered into definitive agreements to acquire 100% of the equity interests of Beijing P.X. on January 1, 2022, which was a wholly-owned subsidiary of Beijing S.K. at the time, so that after the transaction, Lishui Mengxiang through its shareholding of Beijing P.X. would in turn hold 100% of the equity interests of Chuangmei Weiye and Hainan Jiangcai, and 100% of the sponsorship interests of Langfang School. The acquisition was completed in May 2022. In November 2023, Lishui Mengxiang elected to exercise its right to sell 100% of the equity interest of Chuangmei Weiye back to Beijing S.K pursuant to that certain supplementary agreement by and among Lishui Mengxiang, Beijing S.K., certain affiliates of Beijing S.K. and Beijing P.X. dated August 20, 2023, primarily due to the substantial amount of Chuangmei Weiye's historical debts. The equity interests of Chuangmei Weiye were transferred back to Beijing S.K.'s affiliates at a price of RMB6.36 million and the transfer was completed on November 9, 2023. After the transaction, the amount of RMB6.36 million has been added to the total debts owed by Beijing S.K. to Lishui Mengxiang. We have evaluated the disposal of Chuangmei Weiye and concluded that the disposal should be accounted as discontinued operation for the year ended and as of December 31, 2023 since this disposal had a major effect on our operations and financial results.

Chuangmei Weiye mainly provided comprehensive services for flexible employment, which primarily focused on recommending interns from schools to various enterprises with human resources demand. For the years ended December 31, 2023, 2024 and 2025, Chuangmei Weiye generated revenue of RMB1.6 million, nil and nil, respectively.

***Cost of revenues***

For continuing operation, our cost of revenues primarily consists of salaries, welfare costs, books and uniform, rental fees, utilities, tax surcharges, depreciation and amortization, maintenance and repairs, salary and welfare for interns, and healthcare support services fee paid to suppliers. Our cost of revenues was RMB46.9 million, RMB35.9 million and RMB42.8 million (US$6.1 million) in 2023, 2024 and 2025, accounting for 92.2%, 109.3% and 138.7% of our net revenues for the same periods, respectively.

***Gross profit/(loss)***

Our gross profit was RMB4.0 million in 2023. Our gross loss was RMB3.1 million and RMB11.9 million (US$1.7 million) in 2024 and 2025, respectively. Our gross profit margin was 7.8% in 2023. Our negative profit margin was 9.3% and 38.7% in 2024 and 2025, respectively. The decrease in profit margin was primarily due to the low-price strategy implemented to expand market share for healthcare support services, coupled with increased leasing expenses incurred by the Langfang School.

***General and administrative expenses***

Our general and administrative expenses primarily consist of salaries and welfare for our non-teaching staff, professional service fees, depreciation and amortization expenses, office expenses and others. Our general and administrative expenses were RMB25.4 million, RMB22.8 million and RMB23.5 million (US$3.4 million) in 2023, 2024 and 2025, respectively, accounting for 50.1%, 69.5% and 76.1% of our net revenues for the same periods, respectively.

***Selling and marketing expenses***

Our selling expenses primarily consist of salaries and welfare for staff, office expenses, professional service fees, traveling expenses, entertainment expenses and other miscellaneous expenses. Our selling expenses were RMB18.3 thousand, RMB111.8 thousand and RMB985.3 thousand (US$140.9 thousand) in 2023, 2024 and 2025, respectively, accounting for 0.04%, 0.3% and 3.2% of our net revenues for the same periods, respectively.

***Impairment loss on goodwill***

Our impairment loss on goodwill resulted from the impairment of goodwill from acquisition of Beijing P.X. Beijing P.X. has failed to meet the performance requirement and we performed the quantitative impairment test for goodwill. Fair value of Beijing P.X. reporting unit was less than its carrying amount. The goodwill has been fully impaired during the year 2023. Our impairment loss on goodwill was RMB22.7 million, nil and nil in 2023, 2024 and 2025, respectively, accounting for 44.6%, 0.0% and 0.0% of our net revenues for the same periods, respectively.

***Expected credit loss for receivables and other assets***

We periodically adjust our allowance for receivables when we believe that the future collection is unlikely. The allowance for Beijing S.K. receivables is calculated based on historical loss experience using probability of default and loss given default methods and adjusted for various qualitative factors that reflect current conditions and reasonable and supportable forecasts of future economic conditions after the adoption of Accounting Standard Codification ("ASC") Topic 326. We recognize any increase in allowance for advance deposit for intent acquisition and contingent consideration receivables from Beijing S.K. as expected credit loss for receivables for the relevant period.

***Interest expense and interest income***

Our interest expenses primarily consist of interest in bank borrowings. Our interest expense was RMB3.6 million, RMB2.9 million and RMB3.5 million (US$0.5 million) in 2023, 2024 and 2025, accounting for 7.2%, 8.7% and 11.2% of our net revenues for the same periods, respectively.

***Impairment loss on investments***

Impairment loss on investments resulted from our investment in Orientiert XYZ Investment LP. This investment is measured at the fund's reported net asset value. As the fair value of the investment declined below its carrying amount and such decline was deemed other-than-temporary, we recognized an impairment loss of RMB83.6 million (US$12.0 million) in 2025, accounting for 271.2% of our net revenues.

***Other income, net***

Our other income consists of government grants and other miscellaneous (expenses)/income. Government grants represented subsidies from various government authorities in China in relation to our school operation. Other miscellaneous (expenses)/income consists of non-operating expenses and income, bank charges, investment income and others. Our other income, net was RMB12.3 million, RMB3.8 and RMB2.2 million (US$0.3 million) in 2023, 2024 and 2025, respectively, accounting for 24.3%, 11.7% and 7.1% of our net revenues for the same periods, respectively.

**Taxation**

***Cayman Islands***

We are incorporated in the Cayman Islands and conduct our primary business operations through the wholly foreign-owned subsidiary and consolidated VIEs in China. Under the current laws of the Cayman Islands, we are not subject to income, corporation or capital gains taxes. In addition, dividend payments are not subject to withholding tax in the Cayman Islands.

***Hong Kong***

Our Hong Kong subsidiary, Hong Kong Mengxiang Education Development Group Limited, is located in Hong Kong and is subject to an income tax rate of 16.5% for its estimated assessable profit for the years ended December 31, 2023, 2024 and 2025. Dividend income received from subsidiaries in China is not subject to Hong Kong profit tax. We made no provision for Hong Kong profits tax in our consolidated financial statements as our Hong Kong subsidiary had no assessable profit in 2023, 2024 and 2025.

***British Virgin Islands***

Under the current laws of the British Virgin Islands, our British Virgin Islands subsidiary, Lianwai Investment Co., Ltd., is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholding tax in the British Virgin Islands.

***PRC***

Pursuant to the "EIT Law, a uniform 25% enterprise income tax rate is generally applicable to both foreign-invested enterprises and domestic enterprises except where a special preferential rate applies, and the income of qualified non-profit organizations shall be tax-exempt. According to the Announcement on Further Implementing the Income Tax Preferential Policies for Small and Micro Enterprises (Caishui [2023] No. 06) issued by the Ministry of Finance and the State Taxation Administration on March 14, 2022, for small and low-profit enterprises with an annual taxable income exceeding RMB1.0 million but not exceeding RMB3.0 million, a reduction of 25% will be included in the taxable income and the enterprise income tax will be paid at a 20% tax rate. The execution period of this announcement is from January 1, 2023 to December 31, 2024. On August 2, 2023, the Ministry of Finance and the State Taxation Administration announced Caishui [2023] No. 12 and extend the execution period of Caishui [2023] No. 06 from December 31, 2024 to December 31, 2027. For the years ended December 31, 2023, 2024 and 2025, Chuangmei Weiye, Hainan Jiangcai, Hebei Chuangxiang and Langfang school were qualified as small-scale and low profit enterprise. See "*Item 4. Information on the Company—B. Business Overview—Regulation—Regulations on Taxation in the PRC.*"

**Results of Operations**

The following table sets forth a summary of our consolidated results of operations by amount and as a percentage of total revenue for the periods indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report on Form 20-F. The results of operations in any period are not necessarily indicative of the results that may be expected for any future period.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **% of net revenue** | **RMB** | **% of net revenue** | **RMB** | **US$** | **% of net revenue** |
|  | **(in thousands, except for percentage, share and per share data)** | **(in thousands, except for percentage, share and per share data)** | **(in thousands, except for percentage, share and per share data)** | **(in thousands, except for percentage, share and per share data)** | **(in thousands, except for percentage, share and per share data)** | **(in thousands, except for percentage, share and per share data)** | **(in thousands, except for percentage, share and per share data)** |
| **Net revenues:** |  |  |  |  |  |  |  |
| Revenue from third parties | 50061 | 98.5% | 32046 | 97.7% | 30229 | 4323 | 98.0% |
| Revenue from related party | 754 | 1.5% | 754 | 2.3% | 604 | 86 | 2.0% |
| Total net revenues | 50815 | 100.0% | 32800 | 100.0% | 30833 | 4409 | 100.0% |
| Cost of revenues | (46850) | (92.2%) | (35851) | (109.3%) | (42763) | (6115) | (138.7%) |
| **Gross profit/(loss)** | 3965 | 7.8% | (3051) | (9.3%) | (11930) | (1706) | (38.7%) |
| **Operating expenses:** |  |  |  |  |  |  |  |
| General and administrative expenses | (25445) | (50.1%) | (22799) | (69.5%) | (23468) | (3356) | (76.1%) |
| Selling and marketing expenses | (18) | (0.04%) | (112) | (0.30%) | (985) | (141) | (3.20%) |
| Impairment loss on goodwill | (22678) | (44.6%) |  |  |  |  |  |
| Expected credit loss for receivables and other assets | (65138) | (128.2%) | - | - | - | - | - |
| **Total operating expenses** | (113279) | (222.9%) | (22911) | (69.9%) | (24453) | (3497) | (79.3%) |
| **Operating loss** | (109314) | (215.1%) | (25962) | (79.2%) | (36383) | (5203) | (118.0%) |
| Interest expense | (3635) | (7.2%) | (2861) | (8.7%) | (3457) | (494) | (11.2%) |
| Impairment loss on investments |  |  |  |  | (83622) | (11958) | (271.2%) |
| Interest income | 134 | 0.3% | 290 | 0.9% | 9 | 1 |  |
| Other income, net | 12340 | 24.3% | 3831 | 11.7% | 2190 | 313 | 7.1% |
| **Loss before income tax expense** | (100475) | (197.7%) | (24702) | (75.3%) | (121263) | (17341) | (393.3%) |
| Income tax expenses | (3120) | (6.1%) | - | - | - | - | - |
| **Loss from continuing operations, net of tax** | (103595) | (203.9%) | (24702) | (75.3%) | (121263) | (17341) | (393.3%) |
| **Loss from discontinued operation, net of tax** | (23395) | (46.0%) | - | - | - | - | - |
| **Net loss** | (126990) | (249.9%) | (24702) | (75.3%) | (121263) | (17341) | (393.3%) |
| **Net loss attributable to Lixiang Education Holding Co., Ltd. shareholders** | (126631) | (249.2%) | (24628) | (75.1%) | (121904) | (17432) | (395.4%) |
| **Net (loss)/income attributable to non-controlling interests** | (359) | (0.7%) | (74) | (0.2%) | 641 | 91 | 2.1% |
| **Other comprehensive income:** |  |  |  |  |  |  |  |
| Foreign currency translation adjustment, net of nil tax | 2971 | 5.8% | 3810 | 11.6% | (5748) | (822) | (18.6%) |
| **Comprehensive loss** | (124019) | (244.1%) | (20892) | (63.7%) | (127011) | (18163) | (411.9%) |
| **Total comprehensive loss attributable to Lixiang Education Holding Co., Ltd. shareholders** | (123660) | (243.4%) | (20818) | (63.5%) | (127651) | (18254) | (414.0%) |

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

*Net revenues*. Our net revenues decreased by 6.0% from RMB32.8 million in 2024 to RMB30.8 million (US$4.4 million) in 2025. The decrease in net revenues was mainly due to (i) a decrease of RMB2.0 million in tuition and accommodation service, as a result of the number of graduates exceeded the enrolment of new students; (ii) a decline of RMB1.7 million in course design, development and training revenue due to weakened market demand, and partially offset by (iii) a RMB1.8 million increase in revenue generated from healthcare support services.

*Cost of revenues*. Our cost of revenues increased by 19.3% from RMB35.9 million in 2024 to RMB42.8 million (US$6.1 million) in 2025. The increase in cost of revenues was mainly due to an increase of RMB4.4 million in our newly launched healthcare support services, (ii) an increase of RMB3.7 million in rental costs attributable to higher site rental fees in 2025, and partially offset by (i) a decrease of RMB3.9 million in taxes and surcharges.

*Gross profit/(loss).* As a result of the foregoing, our gross loss increased from RMB3.1 million in 2024 to RMB11.9 million (US$1.7 million) in 2025. Our gross margin increased from 9.3% to 38.7% in 2025.

*General and administrative expenses*. Our general and administrative expenses increased by 2.9% from RMB22.8 million in 2024 to RMB 23.5 million (US$3.4 million) in 2025. The slight increase was primarily due to a RMB1.4 million reversal of credit losses from Beijing S.K. recorded in 2024, offset by overall cost control in general and administrative expenses.

*Sales and marketing expenses*. Our sales and marketing expenses increased from RMB111.8 thousand in 2024 to RMB985.3 thousand (US$140.9 thousand) in 2025.There was an increase of RMB554.1 thousand in staff costs and RMB118.5 thousand in office expenses, attributable to expansion of the marketing team for business growth of healthcare support service.

*Loss from operations*. As a result of the foregoing, our loss from operations increased by 40.1% from RMB26.0 million in 2024 to RMB36.4 million (US$5.2 million) in 2025.

*Interest expense*. Our interest expense increased by 20.8% from RMB2.9 million in 2024 to RMB3.5million (US$0.5 million) in 2025, primarily due to the longer average utilization period of our bank borrowings.

*Other income, net*. Our other income, net decreased by 42.8% from RMB3.8 million in 2024 to RMB2.2 million (US$0.3 million) in 2025, primarily due to (i) a decrease of RMB0.8 million in other income mainly attributable to grants for needy students received by Langfang School, and (ii) an increase of RMB0.5 million in other expenses, driven by an overdue tax penalty of RMB0.3 million and additional employee compensation of RMB0.2 million.

*Net loss.* As a result of the foregoing, our net loss increased by 390.9% from RMB24.7 million in 2024 to RMB121.3 million (US$17.3 million) in 2025.

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

*Net revenues*. Our net revenues decreased by 35.5% from RMB50.8 million in 2023 to RMB32.8 million (US$4.5 million) in 2024. The decrease in net revenues was mainly due to (i) a decrease in revenue from tuition and accommodation service, as a result of the number of graduates exceeded the enrolment of new students and the disposal of Qingtian International School as of December 31, 2023; and (ii) that Liandu WFOE ceased to provide meal and uniforms to students since 2024; and was partially offset by an increase of course design, development and training provided by Hainan Jiangcai.

*Cost of revenues*. Our cost of revenues decreased by 23.5% from RMB46.9 million in 2023 to RMB35.9 million (US$4.9 million) in 2024. The decrease in cost of revenues was mainly due to a decrease in cost of revenues of RMB20.4 million as a result of the disposal of Qingtian International School; and was partially offset by (i) an increase of RMB8.3 million of property taxes in 2024; and (ii) the costs from cooperative education agreement with a third party for the operation of Lishui International School.

*Gross profit/(loss).* As a result of the foregoing, our gross profit decreased from RMB4.0 million in 2023 to a gross loss of RMB3.1 million (US$0.4 million) in 2024. Our gross margin decreased from 7.8% in 2023 to a negative margin of 9.3% in 2024.

*General and administrative expenses*. Our general and administrative expenses decreased by 10.4% from RMB25.4 million in 2023 to RMB 22.8 million (US$3.1 million) in 2024. The decrease was mainly due to (i) the reversal of credit losses from Beijing S.K. of RMB1.4 million due to subsequent collection; and (ii) the disposal of Qingtian International School.

*Sales and marketing expenses*. Our sales and marketing expenses increased from RMB18.0 thousand in 2023 to RMB112.0 thousand (US$15 thousand) in 2024.

*Impairment loss on goodwill.* Our impairment loss on goodwill decreased from RMB22.7 million in 2023 to nil in 2024, primarily due to the under-performance of Beijing P.X. in 2023 and that we made full impairment of the goodwill.

*Expected credit loss for receivables and other assets.* Our expected credit loss for receivables and other assets amounted to RMB65.1 million (US$9.2 million) in 2023, primarily because the collectability from Beijing S.K. is remote as it lacks profitability and financing capacity, and therefore we made full provision for receivables from Beijing S.K.

*Loss from operations*. As a result of the foregoing, our loss from operations decreased by 76.3% from RMB109.3 million in 2023 to RMB26.0 million (US$3.6 million) in 2024.

*Interest expense*. Our interest expense decreased by 21.3% from RMB3.6 million in 2023 to RMB2.9 million (US$0.4 million) in 2024, primarily due to lower interest rate charged on our borrowings in 2024.

*Fair value change gain of contingent consideration.* Our fair value change gain of contingent consideration in 2022 primarily due to compensation receivable from Beijing S.K resulted from Beijing P.X.'s under-performance in 2022.

*Other income, net*. Our other income, net decreased by 69.0% from RMB12.3 million in 2023 to RMB3.8 million (US$0.5 million) in 2024, primarily due to a decrease of government grants of RMB7.2 million received by Qingtian International School to support the development of school in 2023.

*Loss from continuing operations, net of tax*. As a result of the foregoing, our loss from continuing operations, net of tax decreased by 76.2% from RMB103.6 million in 2023 to RMB24.7 million (US$3.4 million) in 2024.

*Income/(loss) from discontinued operation, net of tax.* Our net loss from discontinued operations decreased from RMB23.4 million in 2023 to nil in 2024, primarily due to the disposal loss of Chuangmei Weiye in 2023.

*Net loss.* As a result of the foregoing, our net loss decreased by 80.5% from RMB 127.0 million in 2023 to RMB24.7 million (US$3.4 million) in 2024.

**Recent Accounting Pronouncements**

For detailed discussion on recent accounting pronouncements, see Note 2 to our Consolidated Financial Statements.

**Inflation**

Since our inception, inflation in China has not materially affected our results of operations. According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for December 2023, 2024 and 2025 were increases of 0.2%, 0.2% and 0.0%, respectively. Although we have not been materially affected by inflation in the past, we may be affected if China experiences higher rates of inflation in the future.

**Critical Accounting Policies**

An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements.

We prepare our financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates.

The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this annual report on Form 20-F. When reviewing our financial statements, you should consider (i) our selection of critical accounting policies, (ii) the judgments and other uncertainties affecting the application of such policies and (iii) the sensitivity of reported results to changes in conditions and assumptions.

***Consolidation of VIEs***

We account for entities qualifying as VIEs in accordance with Financial Accounting Standards Boards or ASC 810. In order to comply with PRC regulatory requirements restricting foreign ownership of education services in China, we have been conducting education services through VIEs.

In 2018, Liandu WFOE entered into a series of contractual arrangements with Lianwai School, Lishui Mengxiang and their respective shareholders, including loan agreement, exclusive call option agreement, proxy agreements and power of attorney for shareholders, proxy agreements and power of attorney for school's sponsors and directors, equity pledge agreements, spousal undertakings, business cooperation agreement and exclusive technical services and business consulting agreements. Before the 2021 Implementation Regulations became effective, as a result of our direct ownership in Liandu WFOE and the contractual arrangements relating to the VIEs and their respective shareholders, we are regarded as the primary beneficiary of the VIEs in accordance with ASC 810, and we treat them as our consolidated affiliate Chinese entities under U.S. GAAP. We have consolidated the financial results of the VIEs in our consolidated financial statements in accordance with U.S. GAAP.

***Qingtian International School***

On August 24, 2021, Lishui Mengxiang began to hold 100% of the sponsorship interests of Qingtian International School. Thereafter, Liandu WFOE entered into a series of contractual arrangements with Lishui Mengxiang, Qingtian International School, shareholders of Lishui Mengxiang and the Council Members of Qingtian International School, including Exclusive Call Option Agreement, Proxy Agreement for School's Sponsors and Council Members, Proxy Agreement for Shareholders, Business Cooperation Agreement, Exclusive Technical Service and Business Consulting Agreement, Equity Pledge Agreement, etc., which become effective since August 31, 2021. We have consolidated the results of Qingtian International School in our consolidated financial statements since August 31, 2021, in accordance with U.S GAAP through these VIE contractual arrangements. On December 31, 2023, Lishui Mengxiang transferred 100% of the sponsorship interests of Qingtian International School to Qiaoxiang Education, which is a related party as an entity affiliated with Mr. Biao Wei, a director and the Chief Executive Officer of the Company, and we deconsolidated the results of Qingtian International School in our consolidated financial statements since December 31, 2023.

***Langfang School***

On March 28, 2023, Liandu WFOE entered into a series of contractual arrangements with Lishui Mengxiang, Beijing P.X., Langfang School, shareholders of Lishui Mengxiang and the Council Members of Langfang School. The series of contractual arrangements included Exclusive Call Option Agreement, Proxy Agreement for School's Sponsors and Council Members, Proxy Agreement for Shareholders, Business Cooperation Agreement, Exclusive Technical Service and Business Consulting Agreement, Equity Pledge Agreement, etc., which became effective on January 1, 2022. We have consolidated the results of Langfang School in our consolidated financial statements since January 1, 2022, in accordance with U.S GAAP.

***Lishui International School***

On April 2, 2024, Liandu WFOE entered into a series of contractual arrangements with Lishui Mengxiang, Lishui International School, shareholders of Lishui Mengxiang and the Council Members of Lishui International School. The series of contractual arrangements included Exclusive Call Option Agreement, Proxy Agreement for School's Sponsors and Council Members, Proxy Agreement for Shareholders, Business Cooperation Agreement, Exclusive Technical Service and Business Consulting Agreement, Equity Pledge Agreement, etc., which became effective on June 25, 2023. We have consolidated the results of Lishui International School in our consolidated financial statements since June 25, 2023, in accordance with U.S GAAP.

***Revenue recognition***

We adopted ASC 606, "Revenue from Contracts with Customers" for all periods presented. Consistent with the criteria of ASC 606, we follow five steps for its revenue recognition: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

*Education Services*

For continuing operations, we and the VIEs offer school curriculum education services, including high school curriculum and vocational school curriculum, to students. Schools also provide accommodation service, offer meals, uniforms, learning materials and other campus necessities.

● *Tuition, meal and accommodation service income* 

Tuition and accommodation service income that are received in advance by schools prior to the beginning of each semester of a school year are initially recorded as contract liabilities, and then are recognized over time during the service period of each semester. Amounts which will be earned within one year are reflected as a current liability, and those which will be earned beyond one year are reflected as a non-current liability. Before disposal, Qingtian International School offered meals to students and collected meal fees each time students have meal, and therefore, revenue was recognized at the point of time when Qingtian International School offered meals to students.

We and the VIEs recognize service income on a gross basis, as we and the VIEs are responsible for fulfilling the promise to provide the education, meal and accommodation services to students.

● *Sale of uniforms, learning materials and other campus necessities* 

We and the VIEs sell uniforms, learning materials and other campus necessities to students. Schools provide school uniforms and learning materials to the students with payment made prior to the beginning of each semester. Revenue from uniform, learning materials and other campus necessities are recognized at a point in time when control of these goods have been transferred and accepted by the students.

We and the VIEs recognize revenue from sale of uniforms, learning materials and other campus necessities on a gross basis, as we and the VIEs control the goods before they are transferred to the students. We and the VIEs are responsible for design of uniforms and have inventory risk for the uniforms, learning materials and other campus necessities.

*Healthcare support services*

We, through VIE's consolidated subsidiaries, Hebei Chuangxiang, charge service fees to customers for providing healthcare support services, which are calculated based on the actual service periods. Revenue is recognized ratably over the service period.

Hebei Chuangxiang controls the healthcare support services provided to its customers as: (i) Hebei Chuangxiang acts as the primary obligor and manages the entire service process, including service quality, caregiver matching, supervision, and complaint handling; (ii) Hebei Chuangxiang collaborates with multiple service providers nationwide and deploys dedicated personnel to meet customized requirements; (iii) Hebei Chuangxiang directs caregivers to provide personalized care services on its behalf without direct cooperative relationship between caregivers and customers; (iv) Hebei Chuangxiang retains the ultimate discretion in setting service prices, including setting standard and differential rates. Accordingly, we act as a principal and recognizes revenue in the gross amount of consideration to which we expect to be entitled in exchange for the specified services transferred.

*Human Resources Services*

We, through VIE's consolidated subsidiaries, Chuangmei Weiye and Hebei Chuangxiang, generate the revenue from providing comprehensive services for flexible employment, which primarily focuses on recommending interns from schools to various clients with human resources demand. We, Chuangmei Weiye and Hebei Chuangxiang conclude that there is a single performance obligation to fulfill service requirements from clients. Chuangmei Weiye and Hebei Chuangxiang charge service fees from clients based on service periods at a fixed rate per day, and recognize revenue over time as the related performance obligations are continuously satisfied.

We conclude that Chuangmei Weiye and Hebei Chuangxiang control the service of recommending interns to their clients as (i) Chuangmei Weiye and Hebei Chuangxiang are primarily responsible for the fulfillment of the services and assuring the customers are satisfied with the services; (ii) Chuangmei Weiye and Hebei Chuangxiang need to maintain a talent pool of sufficient interns to satisfy the service requirement from its clients on an if-needed basis; (iii) Chuangmei Weiye and Hebei Chuangxiang can direct interns to provide services to its clients on its behalf, and there is no direct cooperation relationship between the interns and the clients, and (iv) Chuangmei Weiye and Hebei Chuangxiang have the ultimate discretion to set up its service price. Therefore, we act as a principal, and recognize revenue in the gross amount of consideration to which it expects to be entitled in exchange for the specified services transferred.

*Course Design, Development and Training*

The VIE, Hainan Jiangcai, jointly designs and develops curriculum and training programs with Hainan Technical School. We and the Hainan Jiangcai conclude that there is a single performance obligation to fulfill service requirements from Hainan Technical School and recognizes revenue over cooperation period in a straight-line method.

*Rental Income*

Rental income is recognized on a straight-line basis over the term of the lease.

We and the VIEs entered into lease agreements as lessor with both third parties and related parties.

**Income taxes**

Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions.

Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of operations and comprehensive income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.

*Uncertain Tax Positions*

The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statements recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating our uncertain tax positions and determining its provision for income taxes. We did not recognize any significant interest and penalties associated with uncertain tax positions for the years ended December 31, 2023, 2024 and 2025. As of December 31, 2024 and 2025, we did not have any significant unrecognized uncertain tax positions.

***Goodwill***

Goodwill represents the excess of the purchase consideration over the fair value of the identifiable net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment on an annual basis as of December 31 of each year, or more frequently if events or changes in circumstances indicate that it might be impaired. We have the option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. In the qualitative assessment, we consider primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. We will perform the quantitative impairment test if we bypass the qualitative assessment, or based on the qualitative assessment, if it is more likely than not that the fair value of each reporting unit is less than the carrying amount.

We adopted Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment by eliminating step two from the goodwill impairment test. Under the new guidance, if the fair value of a reporting unit exceeds its carrying amount, goodwill is not impaired and no further testing is required. If the fair value of a reporting unit is less than the carrying value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

For the years ended December 31, 2023, 2024 and 2025, we recognized RMB22.7 million, nil and nil impairment loss on goodwill.

**Impact of Foreign Currency Fluctuation**

See "*Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—Fluctuations in exchange rates may result in foreign currency exchange losses and may have a material adverse effect on your investment*." and "*Item 11. Quantitative and Qualitative Disclosures about Market Risk—Foreign Exchange Risk*."

**Impact of Governmental Policies**

See "*Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China*" and "*Item 4. Information on the Company—B. Business Overview—Regulation.*"

**B. Liquidity and Capital Resources**

Historically, we funded our operations primarily through cash generated from our operating activities, bank borrowings, financing from related parties and shareholders, and issuance of ordinary shares. As of December 31, 2024 and 2025, we had RMB220.7 million and RMB12.8 million (US$1.8 million), respectively, in cash and cash equivalents. As of December 31, 2025, our cash of RMB12.7 million (US$1.8 million) and RMB0.1 million (US$16.4 thousand) were held in China and overseas, respectively. Our cash primarily consists of cash in banks or other financial institutions which are unrestricted as to withdrawal or use. As of December 31, 2024 and 2025, we had short-term bank borrowings of RMB84.0 million and RMB84.0 million (US$12.0 million), respectively. Our bank borrowings were secured by (i) the pledge of the buildings we own and the land use right we have, and (ii) personal guarantees from related parties. As of December 31, 2025, we had negative net working capital of RMB 90.1 million (US$12.9 million).

We believe that, without giving effect to our management plans, our current working capital will not be sufficient to support our operations for the next twelve months as of the date of this annual report, due to our accumulated deficits, and working capital deficiency. We are evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) seeking to renew or extend existing short-term borrowings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) pursuing additional financing alternatives, including potential equity financing or strategic investments; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) focusing on the improvement of operation efficiency, implementation of strict cost control and budget and enhancement of internal controls to create a synergy resources.

There can be no assurances, however, that our current mitigation plans will be achieved or that additional funding will be available on terms acceptable to us, or at all. If we are unable to obtain sufficient funding, we could be required to delay our market expansion efforts and limit activities, which could adversely affect our business and the financial statements.

Although we consolidate the results of the VIEs, we only have access to the assets or earnings of the VIEs through our contractual arrangements with the VIEs and their shareholders. See "*Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements*."

We have not encountered any difficulties in meeting our cash obligations to date. When considering our liquidity position and our future capital resources and needs, we take into account price controls set by local governments that may affect the tuition and other fees we are able to charge to students in our schools, annual enrollment numbers approved for our schools, the economic benefits we have received from Liandu WFOE and the VIEs under our Business Cooperation Agreement and Exclusive Technical Service and Business Consulting Agreement.

**Cash Flows**

The following table presents our selected consolidated statements of cash flows for the years ended December 31, 2023, 2024 and 2025:

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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)** |
| **Selected Consolidated Cash Flows:** |  |  |  |  |
| Net cash used in operating activities from continuing operations | (66909) | (18322) | (314302) | (44945) |
| Net cash provided by operating activities from discontinued operation | 7710 |  |  |  |
| Net cash used in investing activities from continuing operations | (7576) | (554) | (142214) | (20336) |
| Net cash provided by investing activities from discontinued operation |  |  |  |  |
| Net cash provided by financing activities from continuing operations | 51856 | 8750 | 254323 | 36368 |
| Net cash used in financing activities from discontinued operation | (7773) |  |  |  |
| Effect of exchange rate changes on cash and cash equivalents | 2970 | 3810 | (5748) | (822) |
| Net decrease in cash | (19722) | (6316) | (207941) | (29735) |
| Cash and cash equivalents at the beginning of year | 246762 | 227040 | 220724 | 31563 |
| Cash and cash equivalents at the end of year | 227040 | 220724 | 12783 | 1828 |
| Less: cash and cash equivalents of discontinued operations at the end of year |  |  |  |  |
| Cash and cash equivalents of continuing operations at the end of year | 227040 | 220724 | 12783 | 1828 |

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***Operating activities***

We generate cash from operating activities primarily from tuition and accommodation fees, all of which are typically paid in advance before the respective services are rendered. Tuition and accommodation fees are initially recorded as contract liabilities. We recognize such amounts received as revenue proportionately over the relevant period in which the students attend the applicable programs of each semester. Before disposal, Qingtian International School offered students with meals, and meal fees were collected each time students have the meal. Lishui International School does not provide meals to students.

In 2025, we had net cash used in operating activities from continuing operations of RMB314.3 million (US$44.9 million) which is primarily attribute to net loss of RMB121.3 million (US$17.3 million) adjusted by depreciation and amortization of long-lived assets of RMB14.6 million (US$2.1 million), impairment loss of investment of RMB83.6 million (US$12.0 million) and changes in the working capital accounts mainly included a decrease in amounts due to Lianwai School of RMB288.7 million (US$41.3 million), resulting from the settlement of outstanding balances; a decrease in operating lease liabilities of RMB9.8 million (US$1.4 million).

In 2024, we had net cash used in operating activities from continuing operations of RMB18.3 million (US$2.5 million) which is primarily attribute to net loss of RMB24.7 million (US$3.4 million) adjusted by depreciation and amortization of long-lived assets of RMB11.7 million (US$1.6 million) and changes in the working capital accounts mainly included a decrease in operating lease liabilities of RMB10.5 million (US$1.4 million) as the Group entered into new leases in 2024 and prepaid rental fees, an increase in amounts due from a related parties of $6.8 million (US$0.9 million), partly offset by an increase in amounts due to Lianwai School of RMB8.9 million (US$1.2 million).

In 2023, we had net cash used in operating activities from continuing operations of RMB66.9 million which is primarily attribute to net loss of RMB127.0 million adjusted by impairment loss of goodwill of RMB22.7 million, provision for doubtful accounts of RMB65.1 million of receivables from Beijing S.K. and changes in the working capital accounts mainly included an increase in amounts due from Qingtian International School of RMB10.8 million due to deconsolidation, a decrease in amounts due to Lianwai School of RMB60.4 million due to repayment, partially offset by a decrease in prepayments and other current assets of RMB5.2 million and an increase in amounts due to a related party of $7.7 million.

***Investing activities***

In 2025, we had net cash used in investing activities from continuing operations of RMB142.2 million (US$20.3 million), primarily attributable to (i) payment for investment in fund of RMB128.6 million (US$18.4 million), (ii) payments for other non-current assets of RMB7.5 million (US$1.1 million) for software platform development, (iii) prepayment for merger and acquisition consulting services of RMB6.0 million (US$0.9 million), (iv) purchase of property and equipment of RMB0.1 million (US$16.8 thousand), (ii) purchase of short-term investment of RMB0.3 million (US$42.9 thousand), and partly offset by proceeds from maturity of short-term investment of RMB0.3 million (US$42.9 thousand).

In 2024, we had net cash used in investing activities from continuing operations of RMB0.6 million (US$0.1 million), primarily attributable to (i) purchase of property and equipment and software of RMB0.3 million (US$40.8 thousand), and (ii) cash loss of disposal of non-controlling interests of RMB0.3 million (US$35.1 thousand), (iii) purchase of short-term investment of RMB0.2 million (US$23.3 thousand),and partly offset by proceeds from maturity of short-term investment of RMB0.2 million (US$23.3 thousand).

In 2023, we had net cash used in investing activities from continuing operations of RMB7.6 million, primarily attributable to (i) purchase of property and equipment and software of RMB2.2 million, and (ii) cash loss of disposal of Qingtian International School of RMB5.0 million, and (iii) cash loss of disposal of Chuangmei Weiye of RMB0.4 million.

***Financing activities***

In 2025, we had net cash provided by financing activities from continuing operations of RMB254.3 million (US$36.4 million), primarily attributable to (i) proceeds from issuance of ordinary shares, net of issuance cost of RMB250.4 million (US$35.8 million), (ii) proceeds from short-term borrowings with banks of RMB104.0 million (US$14.9 million), (iii) proceeds borrowings from a third party of RMB3.9 million (US$0.6 million), and partly offset by (iii) repayments of short-term borrowings with banks of RMB104.0 million (US$14.9 million).

In 2024, we had net cash provided by financing activities from continuing operations of RMB8.8 million (US$1.2 million), primarily attributable to net proceeds from short-term bank borrowings amounting to RMB10.0 million (US$1.4 million) and repayments of long-term borrowings with banks of RMB1.3 million (US$0.2 million).

In 2023, we had net cash provided by financing activities from continuing operations of RMB51.9 million, primarily attributable to (i) proceeds from short-term borrowings with banks of RMB98.0 million, (ii) issuance of ordinary shares of RMB41.9 million to new individual investors, partly offset by (i) repayments of short-term borrowings with banks of RMB85.0 million and long-term borrowings with banks of RMB2.5 million, (ii) withdrawal of non-controlling shareholders of RMB0.5 million.

**Capital Expenditure**

We incurred capital expenditure of RMB2.2 million, RMB0.3 million and RMB7.6 million (US$1.1 million) in 2023, 2024 and 2025, respectively, primarily in connection with the purchase of educational equipment. We intend to fund our future capital expenditure through our existing cash balance, bank borrowings and other financing alternatives. We will continue to incur capital expenditure to support the growth of our and the VIEs' business.

**Holding Company Structure**

We are a holding company with no material operations of our own. We conduct our operations primarily through the wholly foreign-owned subsidiary and consolidated VIEs in China. As a result, our ability to pay dividends depends upon dividends paid by our wholly foreign-owned subsidiary in China. Our wholly foreign-owned subsidiary in China has not historically paid any dividends to our offshore entities until they generate accumulated profits and meet the requirements for statutory reserve funds. If our wholly foreign-owned subsidiary in China or any newly formed subsidiaries incur any debt in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly foreign-owned subsidiary in China is permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, each of our subsidiaries, the consolidated VIEs in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, our wholly foreign-owned subsidiary in China may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at its discretion, and the consolidated VIEs may allocate a portion of their after-tax profits based on PRC accounting standards to a discretionary 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 China is subject to examination by the banks designated by SAFE.

Furthermore, according to the Implementing Regulations for the Law of the PRC on the Promotion of Privately-run Schools currently in force, at the end of each fiscal year, our school is required to allocate a portion of its funds to the development fund for the construction or maintenance of the school properties or purchase and upgrade of teaching equipment. Our school shall also withhold at least 25.0% of our annual increase of the net assets for the same purposes.

**Off-Balance Sheet Arrangements**

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholders' equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

**C. Research and Development**

Not applicable.

**D. Trend Information**

Other than as disclosed elsewhere in this annual report on Form 20-F, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2024 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

**E. Critical Accounting Estimates**

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. For a detailed discussion of critical accounting estimate of (i) Consolidation of VIEs; (ii) Revenue recognition; (iii) Income tax and uncertain tax position; (iv) Goodwill. See *"—A. Operating results—Critical Accounting Policies.*"

**F. Tabular Disclosure of Contractual Obligations**

The following table sets forth our contractual obligations as of December 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Payment Due by Period** | **Payment Due by Period** | **Payment Due by Period** | **Payment Due by Period** |
|  | **Less than 1 year** | **2-3 years** | **Thereafter** | **Total** |
|  | **(in RMB)** | **(in RMB)** | **(in RMB)** | **(in RMB)** |
| &nbsp;&nbsp;&nbsp;&nbsp;Borrowings | 84000000 |  |  | 84000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease obligations | 12169810 | 12830189 | 28113208 | 53113207 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease commitments | 165000 | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total** | 96334810 | 12830189 | 28113208 | 137113207 |

---

Operating lease obligations consist of leases in relation to certain dormitory and school buildings for our daily operation.

Other than those shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2025.

**G. Safe Harbor**

This annual report on Form 20-F contains forward-looking statements. These statements are made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the sections titled "*Item 3. Key Information—D. Risk Factors*," "*Item 4. Information on the Company,*" and "*Item 5. Operating and Financial Review and Prospects*" in this annual report on Form 20-F, as well as our strategic and operational plans, contain forward-looking statements. We may also make written or oral forward-looking statements in our filings with the SEC, in our annual report to shareholders, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements and are subject to change, and such change may be material and may have a material and adverse effect on our financial condition and results of operations for one or more prior periods. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements in this annual report on Form 20-F. Potential risks and uncertainties include, but are not limited to: the Company's strategies, future business development, and financial condition and results of operations; the expected growth of the Chinese private education market; Chinese governmental policies relating to private educational services and providers of such services; the Company's ability to maintain and enhance its brand. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this annual report on Form 20-F and in the exhibits is as of the date of the annual report, and we do not undertake any obligation to update any such information, except as required under applicable law.

**ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

**A. Directors and Senior Management**

The following table sets forth information regarding our directors and executive officers as of the date of the annual report.

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position with the Company** |
| ***Executive Directors and Officers:*** |  |  |
| Fen Ye | 54 | Director; Chairlady |
| Biao Wei | 54 | Director; Chief Executive Officer |
| Zhaoxiang Wei | 30 | Director |
| Zhifu Yang | 44 | Chief Financial Officer |
| ***Non-Executive Directors:*** |  |  |
| Teck Yong Heng | 52 | Independent Director |
| Yan Kit Lee | 55 | Independent Director |
| Guoliang Chen | 58 | Independent Director |

---

**Executive Officers**

***Ms. Fen Ye***, aged 54, is our founder and has served as our chairlady and director since September 2018. Ms. Fen Ye founded the Company in August 2001 by establishing Lishui Mengxiang. Since 2003, Ms. Fen Ye has served as a director, chairlady and legal representative of Lianwai School. Ms. Fen Ye served as a director of Liandu Foreign Language School Kindergarten from 2014 to 2018.

***Mr. Biao Wei***, aged 54, is the spouse of Ms. Fen Ye and has served as our director since September 2018. Mr. Biao Wei joined us in August 2001 as the general manager of Lishui Mengxiang. Mr. Wei has served as a director of Lianwai School since September 2002 and a director of Lishui Yuanmeng Training Company Limited since 2014. Mr. Biao Wei served as a director of Liandu Foreign Language School Kindergarten from 2014 to 2018. Mr. Biao Wei attended a professional program in fashion design at the Zhejiang Institute of Silk Textiles in the PRC from September 1988 to November 1991.

***Mr. Zhaoxiang Wei***, aged 30, is the son of Ms. Fen Ye and Mr. Biao Wei and has served as our director since December 2022 and the assistant general manager of Hangzhou Youxi since June 2023. Mr. Zhaoxiang Wei served as the assistant general manager of North Cedar Academy from February 2022 to July 2023. He served as the office assistant of Lianwai School from February 2021 to January 2022. He received his bachelor's degree in language and literature from University of California, Los Angeles in March 2022.

***Mr. Zhifu Yang***, aged 44, has over 15 years of work experience in financial accounting and financial management. Since October 2021, Mr. Yang has been acting as the chief financial officer in Beijing Pengxiang Tianxia Education Technology Co., Ltd. From October 2019 to October 2021, Mr. Yang worked in Zhi Jin Education Consulting Co., Ltd as the chief financial officer. Before entering into the vocational education industry, Mr. Yang has worked in a state-owned enterprise of China for about nine years, and a property management company for about three years, conducting financial accounting and financial management work. Mr. Yang received his bachelor's degree in financial accounting from Renmin University of China.

**Non-executive Directors**

***Mr. Teck Yong Heng***, aged 52, has served as our independent director since September 30, 2020. Mr. Heng currently serves as the managing partner of C<sup>2</sup>Partners, or C-Squared Partners, a China focused consumer sector private equity fund. Before founding C-Squared Partners, he was the managing director in QianHai Fund of Funds ("Qianhai FoF"), where he led and recommended public and private equity direct investments in addition to commitments into private equity/venture capital funds. Prior to QianHai FoF, he worked at Temasek Holdings, Pavilion Capital, Arthur Andersen, Singapore Power and Cambridge Associates. Mr. Heng graduated from Nanyang Technological University with a bachelor's degree in Accountancy (Honors). He is also an alumnus of Harvard Business School and attended its General Management Program. He is a Chartered Financial Analyst (CFA), Chartered Accountant (CA), Financial Risk Manager (FRM) and a member of Singapore Institute of Directors.

***Mr. Yan Kit Lee***, aged 55, has served as our independent director since September 30, 2020. Meanwhile, Mr. Lee has been an independent non-executive director (also a member of audit committee and nomination committee, and the chairman of remuneration committee) of Landrich Holding Limited (HKEx Stock Code: 2132) (a contractor company having a long history of undertaking construction works in Hong Kong) since October 2020. Moreover, Mr. Lee has been the director of Hoyan Group International Limited, Skyyer MediaX Limited and Bling TravelX Group Limited since September 2016, October 2020 and May 2024 respectively. Mr. Lee is now the chairman of Hong Kong Young Chief Officers' Association, a director of Hong Kong Greater China SME Alliance Association, a honorary chairman of Hong Kong Private Detective Association, a honorary consultant of Guangdong-Hong Kong-Macao Greater Bay Area Youth Society, a vice chairman of Communications and Public Affairs Committee of Scout Association of Hong Kong, the deputy captain of Kwai Shing West Estate Care Team of Kwai Tsing District, and a honorary prime minister of Hong Kong Rehabilitation Power. Mr. Lee was successfully elected as the 5<sup>th</sup> "Outstanding Chinese Youth of the World" from Outstanding Chinese Culture Association in June 2020. Mr. Lee has over 20 years of rich experience in the banking and financial industry. Mr. Lee worked in Sin Hua Bank Limited (currently known as Bank of China (Hong Kong) Limited) from March 1996 to April 2000 with his last position held as an officer. He then worked as an assistant manager in Wing Hang Bank Limited (currently known as OCBC Wing Hang Bank Limited) from April 2000 to January 2001. Mr. Lee also worked in DBS Bank (Hong Kong) Limited from January 2001 to June 2004 with his last position held as vice president. He also acted as a senior business financial manager and team manager of Standard Chartered Bank (HK) Limited from June 2004 to September 2006. From September 2006 to July 2016, he held various positions at Dah Sing Bank Limited including team head, regional head, general manager and project manager. Mr. Lee was an independent non-executive director of C-Link Squared Limited, a company listed on the Main Board of the Stock Exchange (stock code: 1463) from March 2020 to March 2023. Mr. Lee also has abundant experience on the aspect of business management and marketing strategy. Mr. Lee was appointed as the president of SBG Holdings Limited and the chief marketing officer of HKST Group Holdings Limited from September 2016 to September 2017 and September 2016 to May 2018, respectively. He was the chief operating officer of National Arts Group Holdings Limited from May 2020 to January 2022. Mr. Lee obtained his Bachelor of Arts Degree (with a major in economics and a minor in psychology) from the University of Manitoba in May 1993 in Canada and a certificate of business management from Ryerson Polytechnic University in June 1996 in Canada. Mr. Lee also obtained a Master of Science Degree in financial management from the University of London in the United Kingdom in December 2000.

***Mr. Guoliang Chen***, aged 58, has served as our director since December 2022 and has served as our independent director since April 2026. He has served as the director and principal of Lianwai School since September 2013. Mr. Chen has over 30 years of experience in the education industry and joined us in September 2013. From September 2012 to August 2013, he served as the principal of Liandu District Chuzhou High School. From September 2005 to August 2012, he served as the principal of Liandu District Meishan High School. From September 2002 to August 2005, he was the vice principal of Tianning High School. Prior to this, he worked as the director of educational and student affairs in Dayang Road School from September 1994 to August 2002. From February 1988 to August 1994, he was the division head of language education and research in Laozhu School for Ethnic Minorities (formerly known as Yeling High School). Mr. Chen obtained his bachelor's degree from Zhejiang Education University in the PRC in June 1994. He graduated from Lishui Teachers Training College in the PRC in January 1988. He completed his master's degree in education in Zhejiang Normal University in the PRC in September 2000. Mr. Chen was qualified as a senior high school teacher in November 2002. In September 2016, he was awarded the 26th Spring Silkworm Award by the Zhejiang Province Education Foundation. In August 2015, Mr. Chen was awarded 2014 Excellent Principal by Lishui Liandu District Education Bureau. In September 2012, he was awarded the first-class award on education quality management by Liandu District Education Bureau and Top 10 Education Role Model by the People's Government of Lishui Liandu District. In January 2010, Mr. Chen was awarded 2008-2009 Lishui Education and Research Outstanding Individual. In August 2009, September 2011, September 2012 and August 2015, Mr. Chen was awarded the title of Liandu Excellent Educator. In September 2004, he was awarded as the 2003 Liandu District Excellent Teacher 2003 by Liandu District Education Bureau.

**Board Diversity Disclosure**

The following information was provided by our directors on a voluntary basis.

**Board Diversity Matrix (As of date of this annual report)**

---

| | |
|:---|:---|
| Country of Principal Executive Offices | China |
| Foreign Private Issuer | Yes |
| Disclosure Prohibited Under Home Country Law | No |
| Total Number of Directors | 6 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Female** | **Female** | **Male** | **Male** | **Non-Binary** | **Non-Binary** | **Did not <br> disclose** | **Did not <br> disclose** |
| **Part I:** Gender Identity | **Part I:** Gender Identity | **Part I:** Gender Identity | | | | | | |
| Directors |  | 1 |  | 5 |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0 |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0 |
| **Part II:** Demographic Background |  |  |  |  |  |  |  |  |
| Underrepresented Individual in Home Country |  |  |  |  |  | 0 |  |  |
| LGBTQ+ |  |  |  |  |  | 0 |  |  |
| Did Not Disclose Demographic Background |  |  |  |  |  | 0 |  |  |

---

**B. Compensation**

For the fiscal year ended December 31, 2025, we paid an aggregate of approximately US$0.15 million in cash to our executive officers and directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors. Our PRC subsidiaries are required by law to make contributions equal to certain percentages of each employee's salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. For incentive share grants to our officers and directors, see "*—Share Incentive Plan*."

**Share Incentive Plan**

*2020 Equity Incentive Plan*

Our 2020 Equity Incentive Plan was adopted on September 8, 2020 to attract and retain the best available personnel for positions of substantial responsibility, provide additional incentive to employees, directors and consultants and promote the success of our business. The equity incentive plan provides for the grant of an option, restricted shares, restricted share units and local awards.

*Authorized Shares* The maximum number of ordinary shares may be subject to awards pursuant to the 2020 Equity Incentive Plan is 5,000,000 initially. The aggregate number of ordinary shares available for issuance under the 2020 Equity Incentive Plan will be increased (i) on January 1 of the fiscal year immediately following the fiscal year in which an initial public offering of our shares, or a Qualified IPO, is consummated, by an amount equal to 0.5% of the total number of ordinary shares issued and outstanding on December 31 of the immediately preceding fiscal year, and (ii) on January 1 of each fiscal year during the period beginning with the second fiscal year following the fiscal year in which a Qualified IPO is consummated, by an amount equal to 1% of the total number of ordinary shares issued and outstanding on December 31 of the immediately preceding fiscal year.

*Administration* Our board of directors or a committee of the board or officers to which the board delegates the authority administers the 2020 Equity Incentive Plan. The administrator will determine the participants to receive awards, the type and number of awards to be granted to each participant and the provisions and terms and conditions of each award. In the event that any dividend or other distribution (whether in the form of cash, shares, other securities or other property), recapitalization, share division, share consolidation, reorganization or any change in the corporate structure of the Company affecting the shares occurs, the administrator will make adjustment with respect to the number and class of shares that may be delivered under the 2020 Equity Incentive Plan and/or the number, price and class of shares covered by outstanding awards, in order to prevent diminution or enlargement of the benefits intended to be made available under the 2020 Equity Incentive Plan.

*Awards under the Equity Incentive Plan*

*Share Options* Share options may be granted under the 2020 Equity Incentive Plan. The administrator determines the exercise price for each option award, which is stated in the award agreement and should in no case be lower than the par value of our ordinary shares. One-half of the shares subject to an option will vest on each of the first and second annual anniversaries of the vesting commencement date, unless otherwise provided in the award agreement.

*Restricted Shares* A restricted share award agreement will specify restrictions on the duration of the restricted period and the number of shares granted. Restricted shares may not be sold, transferred or pledged until the end of the restricted period and may be subject to forfeiture upon a termination of employment or service with us. Unless otherwise provided in the award agreement, the holder of restricted shares will be entitled to receive all dividends and other distributions paid with respect to the ordinary shares, subject to the same restrictions on transferability and forfeitability as the underlying shares of restricted shares. One-half of the restricted shares will vest on each of the first and second annual anniversaries of the vesting commencement date, unless otherwise provided in the award agreement.

*Restricted Share Units* Awards of restricted share units may be granted by the administrator. At the time of granting restricted share units, the administrator may impose conditions that must be satisfied, such as continued employment or service or attainment of corporate performance goals, and may place restrictions on the grant and/or vesting of the restricted share units. A restricted share unit award agreement will specify applicable vesting criteria, the number of restricted share units granted and the terms and conditions on time and form of payment. Each restricted share unit, upon fulfillment of applicable conditions, represents a right to receive an amount equal to the fair market value of one ordinary share.

*Local Awards* The administrator may cause any of our PRC subsidiaries or VIEs to grant local cash-settled awards in lieu of any other award under the 2020 Equity Incentive Plan, which such local awards shall be paid wholly by such PRC subsidiaries or VIEs. Each local award shall be linked to the fair market value of one ordinary share.

*Change in Control* In the event of a change in control, the administrator may provide for acceleration of awards, purchase of awards from holders or replacement of awards.

*Term* Unless terminated earlier, the 2020 Equity Incentive Plan will continue in effect for a term of ten years from the date of its adoption.

*Amendment and Termination* Subject to applicable shareholders' approval and certain exceptions, the board of directors may at any time amend or terminate the 2020 Equity Incentive Plan. The 2020 Equity Incentive Plan will automatically terminate in 2030, unless terminated sooner. The termination of the 2020 Equity Incentive Plan will not affect the administrator's ability to exercise the powers granted to it with respect to awards granted under the plan prior to the date of such termination.

*Granted Options and Restricted Share Units* For the fiscal year ended December 31, 2025, no options or restricted share units under the 2020 Equity Incentive Plan had been granted.

**C. Board Practices**

Our board of directors consists of six directors, including four executive directors and two non-executive directors. We also promote gender diversity among our board members. The powers and duties of our directors include convening general meetings and reporting our board's work at our shareholders' meetings, declaring dividends and distributions, appointing officers and determining the term of office and responsibilities of the officers, as well as exercising other powers, functions and duties as conferred by our articles of association. Our directors may at their discretion exercise all the powers of our company to borrow money, and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof, to issue debentures, debenture stock, bonds and other securities, whether outright or as collateral 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 an audit committee, a compensation committee and a nominating and corporate governance committee under the board of directors. We have adopted a charter for each of the three committees. Each committee's members and functions are described below.

***Audit Committee.*** Our audit committee consists of three directors, namely Mr. Teck Yong Heng, Mr. Yan Kit Lee and Mr. Guoliang Chen. The audit committee is chaired by Mr. Teck Yong Heng. Each of Mr. Teck Yong Heng, Mr. Yan Kit Lee and Mr. Guoliang Chen satisfies the "independence" requirements under Rule 5605(c)(2) of the Listing Rules of the Nasdaq Stock Market and meets the independence standards under Rule 10A-3 under the Exchange Act. Prior to April 2026, Mr. Guoliang Chen was a non-voting member of our audit committee and only had observer status on our audit committee. We have determined that Mr. Teck Yong Heng 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:

● selecting and appointing auditors and pre-approving all auditing and non-auditing services permitted to be performed by such independent auditors;

● reviewing with the independent auditors any audit problems or difficulties and management's response;

● reviewing and approving all proposed related party transactions;

● discussing the annual audited financial statements with management and the independent auditors;

● 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;

● meeting separately and periodically with management and our independent auditors;

● reporting regularly to the board of directors;

● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and

● other matters that are specifically assigned to our audit committee by our board of directors from time to time;

***Compensation Committee.*** Our compensation committee consists of three members, namely Mr. Teck Yong Heng, Mr. Yan Kit Lee and Mr. Guoliang Chen. The compensation committee is chaired by Mr. Yan Kit Lee. Each of those three directors satisfies the "independence" requirements of Rule 5605(c)(2) of the Listing Rules of the Nasdaq Stock Market. Our compensation committee assists the board in reviewing and approving the compensation structure of our directors and executive officers, including all forms of compensation to be provided to our directors and executive officers. Members of the compensation committee are not prohibited from direct involvement in determining their own compensation. 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:

● reviewing and making recommendations to the board of directors with respect to directors' compensation;

● reviewing and approving to the board with respect to the compensation for our chief executive officer and other executive officers;

● reviewing periodically and approving any incentive compensation or equity plans, programs or other similar arrangements;

● approving guidelines for senior management salary, incentive, stock option, benefit and other compensation levels; and

● producing an annual report on executive compensation in accordance with applicable rules and regulations.

***Nominating and Corporate Governance Committee.*** Our nominating and corporate governance committee consists of three directors, namely Mr. Teck Yong Heng, Mr. Yan Kit Lee and Mr. Guoliang Chen. The nominating and corporate governance committee is chaired by Mr. Teck Yong Heng. Each of those three directors satisfies the "independence" requirements of Rule 5605(c)(2) of the Listing Rules of the Nasdaq Stock Market. 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:

● identifying and recommending nominees for election by the shareholders or appointment by the board of directors;

● reviewing annually with the board of directors its current composition with regards to characteristics such as independence, age, skills, experience, diversity and availability of service to us;

● advising the board of directors on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and

● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as monitoring 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 have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time, and the class rights vested thereunder in the holders of the shares. Our company has the right to seek damages if a duty owed by our directors is breached. A shareholder may in certain limited exceptional circumstances have the right to seek damages in our name if a duty owed by the directors is breached.

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:

● convening shareholders' annual and extraordinary general meetings and reporting its work to shareholders at such meetings;

● declaring dividends and distributions;

● appointing officers and determining the term of office and responsibilities of the officers;

● exercising the borrowing powers of our company and mortgaging the property of our company; and

● approving the transfer of shares in our company, including the registration of such shares in our register of members.

**Terms of Directors and Officers**

Our directors may be elected by an ordinary resolution of our shareholders, or by the affirmative vote of a simple majority of the remaining directors present and voting at a board meeting. Our directors are not subject to a term of office and hold office until they are removed from office by ordinary resolution of the shareholders. In accordance with our memorandum and articles of association, 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 office by notice in writing to the company, (iv) without special leave of absence from our board, is absent from three consecutive board meetings and our directors resolve that his office be vacated, (v) is removed from office pursuant to any other provision of our memorandum and articles of association, as amended and restated from time to time. Our officers are elected by and serve at the discretion of the board of directors.

**Employment Agreements and Confidentiality Agreements**

We have entered into employment agreements and confidentiality agreements with each of our executive officers. Under these agreements, we are entitled to terminate an executive officer's employment for cause at any time for certain acts of the officer, such as being convicted of any criminal conduct, any act of gross or willful misconduct or any serious, willful, grossly negligent or persistent breach of any employment agreement provision. We may also terminate an executive officer's employment by giving three-month's prior written notice without cause. An executive officer may terminate his or her employment at any time by giving three-month's prior written notice. In connection with the employment agreement, each executive officer will enter into an intellectual property ownership and confidentiality agreement and agreed to hold all information, know-how and records in any way connected with the products or services of our company, in strict confidence perpetually. Each executive officer also agree that we shall own all the intellectual property developed by such executive officer during his or her employment.

We may enter 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.

**D. Employees**

We and the VIEs had 197, 192 and 187 full-time employees as of December 31, 2023, 2024 and 2025, respectively. The decrease in the numbers of the full-time employees was primarily due to the change of scope of the VIEs. See "*Item 4. Information on the Company—A. History and Development of the Company.*" None of the employees in Lishui International School is represented by a labor union. We and the VIEs have not experienced any work stoppages, and consider our relations with the employees and the labor union to be good. The following table sets forth the number of our full-time employees categorized by function as of December 31, 2025:

---

| | |
|:---|:---|
| **Function** | **Number of<br> Employees** |
| Executive Directors and senior management | 7 |
| Teachers | 92 |
| Counselors | 3 |
| Administrative staff | 43 |
| Accounting and finance staff | 14 |
| Supporting staff | 28 |
| **Total** | 187 |

---

We invest resources in the recruitment of employees in support of our and the VIEs' business operations. We and the VIEs have established comprehensive training programs, including training programs for newly hired teachers and continuing education courses for teachers and on-the-job-training, to enhance performance and service quality.

As required by PRC Laws and regulations, we and the VIEs participate in various employee social security plans for our PRC employees that are administered by municipal and provincial governments, including housing, pension, medical insurance, unemployment insurance, work-related injury insurance, maternity insurance. We and the VIEs are required under PRC law to contribute to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees up to a maximum amount specified by the local government from time to time.

We and the VIEs maintain various insurance policies against certain risks and unexpected events, such as school liability insurance, student personal accident insurance and property insurance for vehicles. We and the VIEs also provide social security insurance including pension insurance, unemployment insurance, work related injury insurance and medical insurance for our PRC employees. We and the VIEs consider our insurance coverage to be generally in line with companies of similar industry and size in the PRC. See "*Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—We have limited insurance coverage.*" for further details of risks associated with our insurance coverage.

We and the VIEs enter into standard labor contracts with our employees. We may also enter into standard confidentiality and non-compete agreements with the executive officers. See *"—C. Board Practices—Employment Agreements and Confidentiality Agreements*."

**E. Share Ownership**

Please refer to "Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders" and "—B. Compensation—Share Incentive Plan."

**F. Disclosure of a registrant's action to recover erroneously awarded compensation**

Not applicable.

**ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

**A. Major Shareholders**

The following table presents information regarding the beneficial ownership of our ordinary shares as of March 31, 2026 by:

● each person or entity that we know beneficially owns or will beneficially own more than 5% of our outstanding ordinary shares;

● each director or executive officer who beneficially owns or will beneficially own more than 1% of our outstanding ordinary shares; and

● all of our directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, we have included ordinary 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 ordinary shares, however, are not included in the computation of the percentage ownership of any other person. Unless otherwise indicated below, to our knowledge, all persons named in the table have sole voting and investment power with respect to their shares, except to the extent authority is shared by spouses under community property laws.

The percentage of beneficial ownership of our ordinary shares is based on 1,871,667,000 Class A ordinary shares and 45,000,000 Class B ordinary shares outstanding immediately as of March 31, 2026.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Class A<br> Ordinary<br> Shares** | **Percentage<br> of Beneficial<br> Ownership<br> of Class A<br> Ordinary<br> Shares** | **Class B<br> Ordinary<br> Shares** | **Percentage<br> of Beneficial<br> Ownership<br> of Class B<br> Ordinary<br> Shares** | **Percentage<br> of Aggregate<br> Voting<br> Power\*\*** |
| <br>**Name of Beneficial Owner** | **Number** | **%<sup>(2)</sup>** | **Number** | **%<sup>(3)</sup>** | **%** |
| **Directors and Executive Officers<sup>(1)</sup>** | | | | |  |
| Fen Ye | 2500000 | &nbsp;&nbsp;&nbsp;&nbsp; \* | 45000000 | 100.0% | 82.8% |
| Biao Wei<sup>(4)</sup> |  |  |  |  |  |
| Zhaoxiang Wei<sup>(5)</sup> |  |  |  |  |  |
| Zhifu Yang |  |  |  |  |  |
| Teck Yong Heng |  |  |  |  |  |
| Yan Kit Lee |  |  |  |  |  |
| Guoliang Chen |  |  |  |  |  |
| All directors and executive officers as a group: | 2500000 | \* | 45000000 | 100.0% | 82.8% |
| **Principal Shareholders** |  |  |  |  |  |
| Mengxiang Holdings<sup>(6)</sup> |  |  | 45000000 | 100.0% | 82.78% |
| Lianwai Holdings Co., Ltd.<sup>(7)</sup> | 2500000 | \* |  |  | \* |
| Mengxiang Investment Co., Ltd.<sup>(8)</sup> | 2500000 | \* |  |  | \* |

---

*Notes:*

\* Less than 1%.

\*\* For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our outstanding Class A ordinary shares and Class B ordinary shares as a single class. Each holder of our Class A ordinary shares is entitled to one vote per share. Each holder of Class B ordinary shares is entitled to 200 votes per share, and while on all matters submitted to them for a vote. Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders.

(1) The
 address of our directors and executive officers is No. 818 Hua Yuan Street, Liandu District,
 Lishui City, Zhejiang Province, 323000, the PRC.

(2) For
 each person and group included in this column, percentage ownership is calculated by dividing
 the number of Class A ordinary shares beneficially owned by such person or group, including
 shares that such person or group has the right to acquire within 60 days after March 31,
 2026, by the sum of (i) 1,871,667,000 which is the total number of Class A ordinary shares
 outstanding as of March 31, 2026, and (ii) the number of Class A ordinary shares
 such person or group has the right to acquire within 60 days after March 31, 2026.

(3) For
 each person and group included in this column, percentage ownership is calculated by dividing
 the number of Class B ordinary shares beneficially owned by such person or group, including
 shares that such person or group has the right to acquire within 60 days after March 31,
 2026, by the sum of (i) 45,000,000 which is the total number of Class B ordinary shares outstanding
 as of March 31, 2026, and (ii) the number of Class B ordinary shares such person
 or group has the right to acquire within 60 days after March 31, 2026.

(4) Mr. Biao
 Wei is the spouse of Ms. Fen Ye.

(5) Mr. Zhaoxiang
 Wei is the son of Ms. Fen Ye and Mr. Biao Wei.

(6) A
 British Virgin Islands company which is wholly-owned and controlled by Ms. Fen Ye. The
 registered office of Mengxiang Holdings is at Coastal Building, Wickham's Cay II, P.O.
 Box 2221, Road Town Tortola, British Virgin Islands.

(7) A
 British Virgins Islands company which is wholly-owned and controlled by Ms. Hong Ye.
 The registered office of Lianwai Holdings Co., Ltd. is at Coastal Building, Wickham's
 Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.

(8) A
 British Virgin Islands company which is wholly-owned and controlled by Ms. Fen Ye. The
 registered office of Mengxiang Investment Co., Ltd. is at Coastal Building, Wickham's
 Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.

On August 25, 2023, we entered into a share subscription agreement with each of Xiaoxiong Li, Haibin Gong, Yiqiang Dong, Huafeng Hong, Kin Mang Kung, Shulin Gong, Kim Tuk Yeung, Qunzhu Dong, Jinglong Hong and Canghai Hong, pursuant to which we agreed to issue and sell to such individual investors a total of 50,000,000 ordinary shares (now redesignated as Class A ordinary shares) of the Company with a par value of US$0.0001 each, in the aggregate consideration of US$6,000,000. Additionally, we filed a registration statement with the SEC covering the resale of the ADSs representing the ordinary shares (now redesignated as Class A ordinary shares) that would be issued to such investors under the Purchase Agreements. After such registration statement was declared effective by the SEC and a final prospectus in connection therewith was filed and the other conditions set forth in the Purchase Agreements were satisfied, we issued and sold the 50,000,000 ordinary shares (now redesignated as Class A ordinary shares) to be represented by ADSs to the investors and the transaction was closed on October 6, 2023.

On November 28, 2024, we entered into a share subscription agreement with each of Jong Tchun Jin, Chong Juinn Hui, Kon Chee Thong, Ong Sin Leong, Man Ken Toh, Vun Siong Wee, Law Kok Leong, Raymond Wee Hian Sen, Chai Kueh Sin, Wong Siong Yee and Siaw Ting Liang (collectively, the "2024 Purchase Agreements"), pursuant to which we agreed to issue and sell to such individual investors a total of 1,800,000,000 Class A ordinary shares with a par value of US$0.0001 each of the Company, in the aggregate consideration of US$34,200,000. Additionally, we filed a registration statement with the SEC covering the resale of the ADSs representing the Class A ordinary shares that would be issued to such investors under the 2024 Purchase Agreements. After such registration statement was declared effective by the SEC and a final prospectus in connection therewith was filed and the other conditions set forth in the Purchase Agreements were satisfied, we issued and sold the 1,800,000,000 Class A ordinary shares to be represented by ADSs to the investors and the transaction was closed in early 2025.

As of March 31, 2026, a total of 1,866,667,000 ordinary shares were held by one record holder in the United States in the form of ADSs, representing 97.4% of our total outstanding shares. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

**B. Related Party Transactions**

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

In 2018, Liandu WFOE entered into a series of contractual arrangements with Lishui Mengxiang, Lianwai School, shareholders of Lishui Mengxiang and the directors of Lianwai School, which had enabled us to (i) exercise the power over Lishui Mengxiang and Lianwai School, (ii) have the exposure or rights to variable returns from our involvement with Lishui Mengxiang and Lianwai School, and (iii) exercise the ability to affect those returns through use of its power over Lishui Mengxiang and Lianwai School.

Under the 2021 Implementation Rules which took effect on September 1, 2021, social organizations and individuals are prohibited from controlling a private school that provides compulsory education by means of, among others, merger, acquisition, and contractual arrangements, and a private school providing compulsory education is prohibited from conducting transactions with its related party. In particular, the prohibition over related party transactions has significantly affected the enforceability of the exclusive management services and business cooperation agreements among Liandu WFOE and Lianwai School providing compulsory education. Therefore, we re-assessed our control over Lianwai School. Based on the relevant accounting standard in accordance with U.S. GAAP, we have concluded that we have lost control of Lianwai School since August 31, 2021, in view of the significant uncertainties and restrictions the 2021 Implementation Rules impose on our ability to direct the range of ongoing activities that would most significantly impact the returns of Lianwai School. In light of such regulatory developments, on April 20, 2022, we entered into an acknowledgment agreement of contractual agreements with Lianwai School and respective directors, to confirm all the terms of rights and obligations relating to Lianwai School and the directors appointed by the sponsor under the contractual arrangements among them, and agree among the parties that such arrangements shall have been terminated on August 31, 2021. To minimize disruptions to existing students enrolled in Lianwai School, we and the VIEs continued to offer essential services to the students. We deconsolidated Lianwai School commencing from September 1, 2021 and presented it as a discontinued operation in current and comparative period financial statements.

Lishui Mengxiang completed the required registration to hold 100% sponsorship interests of Qingtian International School on August 24, 2021. On April 20, 2022, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Lishui Mengxiang, Qingtian International School, shareholders of Lishui Mengxiang and the Council Members of Qingtian International School. On January 31, 2023, due to the change of shareholders of Lishui Mengxiang, Liandu WFOE entered into an updated series of contractual arrangements with respect to the operation of Qingtian International School. The updated series of contractual arrangements replaced the previous ones and took effect on December 16, 2022, the same date when the shareholders of Lishui Mengxiang signed an equity transfer agreement. After Lishui Mengxiang entered into a definitive agreement to transfer 100% of the sponsorship interests of Qingtian International School to Qiaoxiang Education on January 15, 2024, Liandu WFOE, Lishui Mengxiang, Qingtian International School, the shareholders of Lishui Mengxiang and the Council Members of Qingtian International School entered into the Acknowledgment Agreement of Contractual Agreements of Qingtian Overseas Chinese Experimental High School on April 2, 2024, pursuant to which rights and obligations under the Business Cooperation Agreement, the Exclusive Technical Service and Business Consulting Agreement, the Exclusive Call Option Agreement, the Proxy Agreement for School's Sponsor and Council Members and the Loan Agreement relating to Qingtian International School and the Council Members thereunder were actually terminated on December 31, 2023.

On March 28, 2023, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Beijing P.X., Langfang School, shareholders of Beijing P.X. and the Council Members of Langfang School, which became effective on January 1, 2022.

On April 2, 2024, Liandu WFOE entered into a series of contractual arrangements, or the VIE structure, with Lishui Mengxiang, Lishui International School, shareholders of Lishui Mengxiang and the Council Members of Lishui International School. The series of contractual arrangements became effective on June 25, 2023.

The above series of contractual arrangements enable us to (i) exercise the power over VIEs, (ii) have the exposure or rights to variable returns from our involvement with the VIEs, and (iii) exercise the ability to affect those returns through use of its power over the VIEs. These contractual arrangements include exclusive call option agreement, proxy agreements for school's sponsors and council members, proxy agreements for shareholders, business cooperation agreement, exclusive technical service and business consulting agreement, equity pledge agreements, etc. Terms contained in each set of contractual arrangements with our PRC subsidiaries, the VIEs and their respective shareholders are substantially similar. For more details of these contractual arrangements, see "*Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements.*"

**Transactions with Certain Related Parties**

***Transfer of Sponsorship***

On January 15, 2024, Lishui Mengxiang entered into a definitive agreement to transfer 100% of the sponsorship interests of Qingtian International School to Qiaoxiang Education, an entity affiliated with Mr. Biao Wei, a director and the Chief Executive Officer of the Company, for a consideration of RMB23,161,000. The transfer of the sponsorship interests has been approved by the audit committee and the board of directors of the Company. The completion of the transfer would be subject to the terms and conditions of the definitive agreement, including the registration of change of sponsorship of the school with competent authorities of Qingtian county, Zhejiang province, China. As of the date of the annual report on Form 20-F, we and the VIEs are still in the process to complete such registration.

***Lease agreements with related parties***

We and the VIEs lease the school buildings and the related properties and facilities to Liandu Foreign Language School Kindergarten. In 2023, 2024 and 2025, our rental income from related parties was RMB0.8 million, RMB0.8 million and RMB0.4 million, respectively.

The terms of the leases are one year. Under the leasing agreements, we can terminate the lease at any time for cause.

**Private Placements**

See "*Item 10. Additional Information—B. Memorandum and Articles of Association—Ordinary Shares*."

**Employment Agreements and Indemnification Agreements**

See "*Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements and Confidentiality Agreements*."

**Share Incentive Plans**

See "*Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan*."

**C. Interests of Experts and Counsel**

Not applicable.

**ITEM 8. FINANCIAL INFORMATION**

**A. Consolidated Statements and Other Financial Information**

Please refer to Item 18.

**Legal Proceedings**

From time to time, we are subject to legal proceedings, investigations and claims during the course of our and the VIEs' business. We have not been involved in any major legal proceedings during the fiscal year of 2025, which, in the opinion of our management, has or is likely to have a material adverse effect on our and the VIEs' business, financial condition or results of operations.

We have been involved in the following legal proceedings in previous financial years:

On October 12, 2023, Langfang School received a court notice from the People's Court of Anci District, Langfang City, Hebei Province that Hebei Technical College of Petroleum Profession (河北石油职业技术学院) ("Hebei Petroleum College"), as the plaintiff, had filed a complaint in relation to its contractual dispute against Langfang School and Beijing S.K.'s affiliates. On December 18, 2023, Langfang School received the first-instance judgment, pursuant to which the court ruled that Langfang School should, within ten days after the effectiveness of the judgment, pay the plaintiff overdue rental expenses of RMB25,235,000 for the period from January 1, 2022 to August 31, 2023, and continue to pay rent for the period from September 1, 2023 to the date when the lease is terminated. Langfang School filed for a second-instance lawsuit on December 19, 2023. A trial for cross-examination was held on January 31, 2024. On April 19, 2024, Langfang School received the final judgment that it would not need to pay rental expenses for the period from January 1, 2022 to August 31, 2023 or the period after September 1, 2023, but should vacate the premises in relation to the dispute by July 30, 2024. To continue using the premises and facilities, Langfang School entered into a cooperation agreement with Hebei Petroleum College on July 31, 2024, in which it was agreed that Langfang School could continue to use the facilities of the southern campus of Hebei Petroleum College for operating vocational education, for six years from July 31, 2024 to July 30, 2030, and Langfang School would pay Hebei Petroleum College RMB11,000,000 each year, subject to certain fees adjustment arrangements.

On December 18, 2023, Lishui Mengxiang, as applicant, filed an arbitration application against Beijing S.K. and its affiliates, as respondents in relation to the breach of the investment cooperation agreement entered into between the two parties on July 27, 2021 and a series of investment supplemental agreement entered into between the two parties during 2022 and 2023. The main arbitration claim was to request the respondents to pay the contracted amount of RMB72.41 million and liquidated damages of RMB20 million. On April 3, 2025, the Beijing Arbitration Commission rendered a final award granting the applicant's main arbitration claim. As of the date of this annual report, Lishui Mengxiang has applied for enforcement of the arbitration award but has not yet received the aforementioned amount.

**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, 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 and the VIEs' business.

We are a holding company incorporated in the Cayman Islands. We may rely on dividends from our subsidiaries in China for our cash requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. See "*Item 4. Information on the Company—B. Business Overview—Regulation—PRC Laws and Regulations Relating to Foreign Exchange*" and "*Item 4. Information on the Company—B. Business Overview—Regulation—Regulations on Taxation in the PRC—Income Tax in relation to Dividend Distribution.*"

If we pay any dividends on our ordinary shares, we will pay those dividends which are payable in respect of the ordinary shares underlying our ADSs to the depositary, as the registered holder of such ordinary shares, and the depositary then will pay such amounts to our ADS holders in proportion to ordinary shares underlying the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars. See "*Item 12. Description of Securities other than Equity Securities—D. American Depositary Shares.*"

**B. Significant Changes**

We have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report on Form 20-F.

**ITEM 9. THE OFFER AND LISTING**

**A. Offering and Listing Details**

Our ADSs have been listed on the Nasdaq Global Market since October 1, 2020. Our ADSs trade under the symbol "LXEH."

**B. Plan of Distribution**

Not applicable.

**C. Markets**

See "*Item 9. The Offer and Listing—A. Offering and Listing Details*."

**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.

**B. Memorandum and Articles of Association**

We were incorporated as an exempted company with limited liability in the Cayman Islands on September 6, 2018. Our affairs are currently governed by our third amended and restated memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands, or the Companies Act in this section, and the common law of the Cayman Islands.

As of the date of the annual report, our authorized share capital is US$2,000,000 divided into (i) 19,700,000,000 Class A ordinary shares of a par value of US$0.0001 each, (ii) 100,000,000 Class B ordinary shares of a par value of US$0.0001 each, and (iii) 200,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with our articles of association, as amended or substituted from time to time. As of the date of the annual report, there are 1,871,667,000 Class A ordinary shares and 45,000,000 Class B ordinary shares issued and outstanding. All of our issued and outstanding ordinary shares are fully paid. All options, regardless of grant dates, will entitle holders to an equivalent number of ordinary shares once the vesting and exercising conditions are met.

We have adopted a third amended and restated memorandum and articles of association, which became effective after annual general meeting on November 18, 2024.

The following are summaries of material provisions of our third amended and restated memorandum and articles of association and the Companies Act insofar as they relate to the material terms of our ordinary shares. This summary is not complete, and you should read our third amended and restated memorandum and articles of association, which has been filed as Annex A to Exhibit 99.1 to our Form 6-K filed with the SEC on November 1, 2024.

**Registered Office and Objects**

Our registered office in the Cayman Islands is located at the offices of Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. As set forth in article 3 of our memorandum and articles of association, the objects for which our company is established are unrestricted.

**Board of Directors**

See "*Item 6. Directors, Senior Management and Employees—C. Board Practices—Committees of the Board of Directors*" and "*Item 6. Directors, Senior Management and Employees—C. Board Practices—Terms of Directors and Officers*."

**Ordinary Shares**

*General.* Our authorized share capital is US$2,000,000 divided into (i) 19,700,000,000 Class A ordinary shares of a par value of US$0.0001 each, (ii) 100,000,000 Class B ordinary shares of a par value of US$0.0001 each, and (iii) 200,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with our articles of association, as amended or substituted from time to time. Our ordinary shares are issued in registered form and are issued when registered in our register of members (shareholders). We may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and transfer their ordinary shares.

*Conversion.* Each Class B ordinary share is convertible into one (1) Class A ordinary share at any time at the option of the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

Any number of Class B ordinary shares held by a holder thereof will be automatically and immediately converted into an equal number of Class A ordinary shares upon the occurrence of any of the following: (a) any direct or indirect sale, transfer, assignment or disposition of such number of Class B ordinary shares by the holder thereof or the direct or indirect transfer or assignment of the voting power attached to such number of Class B ordinary shares through voting proxy or otherwise to any person that is neither an affiliate of such holder nor another holder of Class B ordinary shares or an affiliate of such another holder; or (b) any direct or indirect sale, transfer, assignment or disposition of a majority of the issued and outstanding voting securities of, or the direct or indirect transfer or assignment of the voting power attached to such voting securities through voting proxy or otherwise, or the direct or indirect sale, transfer, assignment or disposition of all or substantially all of the assets of, a holder of Class B ordinary shares that is an entity to any person that is neither an affiliate of such holder nor another holder of Class B ordinary shares or an affiliate of such holder.

*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 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.

Our directors may also pay interim dividends, whenever our financial position, in the opinion of our directors, justifies such payment.

Our directors may deduct from any dividend or distribution payable to any shareholder all sums of money (if any) presently payable by such shareholder to us on account of calls or otherwise.

No dividend or other money payable by us on or in respect of any share shall bear interest against us.

*Voting Rights.* Each Class A ordinary share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of the Company, and each Class B ordinary share shall entitle the holder thereof to two hundred (200) votes on all matters subject to vote at general meetings of the Company. Voting at any shareholders' meeting is by show of hands of shareholders who are present in person or by proxy or, in the case of a shareholder being a corporation, by its duly authorized representative, unless a poll is demanded.

A poll may be demanded by the chairman of such meeting or any shareholder present in person or by proxy.

No shareholder shall be entitled to vote or be reckoned in a quorum at any general meeting unless such shareholder is duly registered as our shareholder and all calls or other sums presently payable by such shareholder in respect of his voting shares to us have been paid.

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 memorandum and articles of association. Our shareholders may, among other things, divide or combine their shares by ordinary resolution.

*General Meetings of Shareholders.* As a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders' annual general meetings. Our memorandum and articles of association provide that we may (but are not obliged to) in each calendar year hold a general meeting as our annual general meeting in which case we shall specify the meeting as such in the notices calling it, and the annual general meeting shall be held at such time and place as may be determined by our directors.

Shareholders' general meetings may be convened by a majority of our board of directors. Advance notice of at least 10 calendar days is required for the convening of our annual general shareholders' meeting (if any) and any other general meeting of our shareholders. A quorum required for any general meeting of shareholders consists of at least one shareholder present or by proxy, representing not less than one-third of all votes attaching to the issued and outstanding shares in our company entitled to vote at general meeting.

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 memorandum and articles of association provide that upon the requisition of any one or more of our shareholders who together hold shares which carry in aggregate not less than one-third of all votes attaching to the issued and outstanding shares of our company entitled to vote at general meetings, our board will convene an extraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting. However, our memorandum and articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders.

*Transfer of Ordinary Shares.* Subject to any applicable restrictions set forth in our memorandum and articles of association as set out below, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or in a form prescribed by the Nasdaq Global Market or in another form that our directors may approve.

Our directors may decline to register any transfer of any share which is not paid up or on which we have a lien. Our directors may also decline to register any transfer of any share unless:

● the instrument of transfer is lodged with us and is accompanied by the certificate for the shares to which it relates and such other evidence as our directors may reasonably require to show the right of the transferor to make the transfer;

● the instrument of transfer is in respect of only one class of share;

● the instrument of transfer is properly stamped (if required);

● 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;

● the shares are free from any lien in favor of the Company; and

● a fee of such maximum sum as the Nasdaq Global Market 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.

 

*Liquidation.* Subject to any future shares which are issued with specific rights, (1) if we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the surplus shall be distributed amongst the shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise, and (2) if we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the share capital, those assets shall be distributed so that, as nearly as may be, the losses shall be borne by the shareholders in proportion to the par value of the shares held by them.

If we are wound up the liquidator may with the sanction of our special resolution and any other sanction required by the Companies Act, divide among our shareholders in kind the whole or any part of our assets (whether or not they shall consist of property of the same kind) and may, for such purpose, value any assets and determine how such division shall be carried out as between the shareholders or different classes of shareholders.

The liquidator may also vest the whole or any part of these assets in trustees upon such trusts for the benefit of the shareholders as the liquidator shall think fit, but so that no shareholder will be compelled to accept any assets, shares or other securities upon which there is a liability.

*Calls on Ordinary Shares and Surrender of Ordinary Shares.* Subject to our memorandum and articles of association and to the terms of allotment our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their ordinary shares in a notice served to such shareholders at least 14 days prior to the specified time of payment.

The ordinary shares that have been called upon and remain unpaid are subject to forfeiture.

*Redemption, Repurchase and Surrender of Ordinary Shares.* We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders of these shares, on such terms and in such manner as may be determined by either our board of directors or by a special resolution of our shareholders. 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 fresh 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 the 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 (1) unless it is fully paid up, (2) if such redemption or repurchase would result in there being no shares outstanding, or (3) 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 of shares, all or any of the special rights attached to any class of shares may, subject to the provisions of the Companies Act, be varied with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with the sanction of a resolution passed by at least a two-thirds majority of the holders of shares of the class present in person or by proxy at a separate general meeting of the holders of the shares of that class.

The rights conferred upon the holders of the shares of any class issued shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu with such existing class of shares.

*Inspection of Books and Records.* Holders of our ordinary shares have no general right under Cayman Islands law to inspect or obtain copies of our register of members or our corporate records (other than copies of our memorandum and articles of association, our register of mortgages and charge, and any special resolution passed by our shareholders). The Registrar of Companies of the Cayman Islands shall make available the list of the names of the current directors of the Company (and where applicable the current alternate directors of the Company) for inspection by any person upon payment of a fee by such person. However, we will provide our shareholders with annual audited financial statements.

*Issuance of Additional Shares.* Our memorandum of association authorizes 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.

Our memorandum of association also authorizes our board of directors to establish from time to time one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:

● the designation of the series;

● the number of shares of the series;

● the dividend rights, dividend rates, conversion rights, voting rights; and

● the rights and terms of redemption and liquidation preferences.

Our board of directors may issue preferred shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of ordinary shares.

*Anti-Takeover Provisions.* Some provisions of our memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:

● authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders.

● limit the ability of shareholders to requisition and convene general meetings of shareholders.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our 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.

**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 United Kingdom 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 United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to United States corporations and companies incorporated in the State of Delaware.

***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, (a) "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 (b) 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 declaration as to 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. Dissenting shareholders have the right to be paid the fair value of their shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) if they follow the required procedures, subject to certain exceptions. 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) 75% in value of the shareholders or class of shareholders, as the case may be, or (b) a majority in number representing 75% in value of the creditors or each class of creditors, as the case may be, with whom the arrangement is to be made, that are, in each case, present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The 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 Grand Court can be expected to approve the arrangement if it determines that:

● the statutory provisions as to the required majority vote have been met;

● 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;

● 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

● 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 a 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 offeror 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 offeror 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 is thus approved, or, if a tender offer is made and accepted, 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. 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 our company to challenge actions where:

● a company acts or proposes to act illegally or ultra vires;

● 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

● those who control our 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 memorandum and articles of association provide that we shall indemnify our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such directors or officer, other than by reason of such person's dishonesty, willful default or fraud, in or about the conduct of our company's business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere.

In addition, we have entered into indemnification agreements with our directors and executive officers that provide such persons with additional indemnification beyond that provided in our memorandum and articles of association.

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.

***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 personal profit based on his or her position as director (unless the company permits him or her to do so), a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party, 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 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.

***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. Under Cayman Islands Law, a company may eliminate the ability of shareholders to approve corporate matters by way of written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matters at a general meeting without a meeting being held by amending the articles of association. Our memorandum and articles of association provide that 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 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 memorandum and articles of association allow shareholders holding at least one third of the paid-up voting share capital of the Company to requisition an extraordinary general meeting of our shareholders, in which case our board is obliged to convene a general meeting. Other than this right to requisition a shareholders' meeting, our memorandum and articles of association do not provide our shareholders with any other right to put proposals before annual general meetings or extraordinary general meetings not called by such shareholders.

***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 memorandum and articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

***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 outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our memorandum and articles of association, directors may be removed with or without cause, by an ordinary resolution of our shareholders. A director shall hold office until the expiration of his or her term or his or her successor shall have been elected and qualified, or until his or her office is otherwise vacated. In addition, a director's office shall be vacated if the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) is found to be or becomes of unsound mind or dies; (iii) resigns his office by notice in writing to the company; (iv) without special leave of absence from our board of directors, is absent from three consecutive meetings of the board and the board resolves that his office be vacated; (v) is prohibited by law from being a director; or (vi) is removed from office pursuant to any other provisions of our memorandum and articles of association.

***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 share 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, the directors of our company are required to comply with fiduciary duties which they owe to our company under Cayman Islands laws, including the duty to ensure that, in their opinion, any such transactions must be entered into bona fide in the best interests of the company, and are entered into for a proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.

***Restructuring.*** A company may present a petition to the Grand Court of the Cayman Islands for the appointment of a restructuring officer on the grounds that the company:

&nbsp;&nbsp;&nbsp;&nbsp;(a) is
 or is likely to become unable to pay its debts; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) intends
 to present a compromise or arrangement to its creditors (or classes thereof) either pursuant
 to the Companies Act, the law of a foreign country or by way of a consensual restructuring.

The Grand Court may, among other things, make an order appointing a restructuring officer upon hearing of such petition, with such powers and to carry out such functions as the court may order. At any time (i) after the presentation of a petition for the appointment of a restructuring officer but before an order for the appointment of a restructuring officer has been made, and (ii) when an order for the appointment of a restructuring officer is made, until such order has been discharged, no suit, action or other proceedings (other than criminal proceedings) shall be proceeded with or commenced against the company, no resolution to wind up the company shall be passed, and no winding up petition may be presented against the company, except with the leave of the court. However, notwithstanding the presentation of a petition for the appointment of a restructuring officer or the appointment of a restructuring officer, a creditor who has security over the whole or part of the assets of the company is entitled to enforce the security without the leave of the court and without reference to the restructuring officer appointed.

***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 the board.

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 Cayman Islands law and our memorandum and articles of association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class with the written consent of two-thirds of holders of the issued shares of that class or with the sanction of a special resolution passed at a general 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 memorandum and articles of association, our memorandum and articles of association may only be amended by a special resolution of our shareholders.

***Rights of Non-resident or Foreign Shareholders.*** There are no limitations imposed by our memorandum and articles of association on the rights of nonresident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association that require our company to disclose shareholder ownership above any particular ownership threshold.

**C. Material Contracts**

We and the VIEs 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**

There is no exchange control legislation under Cayman Islands law, and accordingly, there are no exchange control regulations imposed under Cayman Islands law. See also "*Item 4. Information on the Company—B. Business Overview—Regulation— PRC Laws and Regulations Relating to Foreign Exchange" and "Item 4. Information on the Company—B. Business Overview—Regulation—Regulations on Taxation in the PRC—Income Tax in relation to Dividend Distribution*."

**E. Taxation**

The following summary of the material Cayman Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs or ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of the annual report, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in our ADSs or ordinary shares, such as the tax consequences under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands, PRC and the United States.

**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 us 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 the shares 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 ADSs or ordinary shares, nor will gains derived from the disposal of our ADSs or ordinary shares be subject to Cayman Islands income or corporate tax.

**People's Republic of China Taxation**

Under the EIT Law and implementation regulations issued by the PRC State Council on April 23, 2019, an enterprise established outside the PRC with "de facto management bodies" within the PRC is considered a "resident enterprise" for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. Under the Regulation on the Implementation of Enterprise Income Tax Law of the PRC, a "de facto management body" is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise. Accordingly, our holding company may be considered a resident enterprise and may therefore be subject to a PRC income tax on our global income.

The State Administration of Taxation issued the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or Circular 82, on April 22, 2009. Circular 82 provides certain specific criteria for determining whether the "de facto management body" of a Chinese-controlled offshore incorporated enterprise is located in China, which include all of the following conditions: (i) the senior management and core management departments in charge of daily operations are located mainly inside PRC, (ii) financial and personnel decision are subject to determination or approval by persons or organizations located inside PRC, (iii) major assets, accounting books, company seals and minutes and files of board and shareholders' meeting are placed or kept inside PRC, and (iv) at least half of the enterprise's directors with voting rights or senior management customarily reside inside PRC. Although Circular 82 explicitly provides that the above standards apply to enterprises which are registered outside the PRC and funded by PRC enterprises or PRC enterprise groups as controlling investors, the determining criteria set forth in Circular 82 may reflect the general position of the State Administration of Taxation on how the "de facto management body" test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises or PRC enterprise groups or by PRC or foreign individuals.

The Company is a company incorporated outside the PRC. As a holding company, its key assets are its ownership interests in its subsidiaries, and its key assets are located, and its records (including the resolutions of its board of directors and its shareholders) are maintained, outside the PRC. For the same reasons, we believe our other entities outside of China are not PRC 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 ours. See "*Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China*." Such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.

The implementation rules of the EIT Law provide that, (i) if the enterprise that distributes dividends is domiciled in the PRC, or (ii) if gains are realized from transferring equity interests of enterprises domiciled in the PRC, then such dividends or capital gains are treated as China-sourced income. It is not clear how "domicile" may be interpreted under the EIT Law, and it may be interpreted as the jurisdiction where the enterprise is a tax resident. Any dividends we pay to our overseas shareholders or ADS holders as well as gains realized by such shareholders or ADS holders from the transfer of our shares or ADSs may be regarded as China-sourced income, if we are considered a PRC tax resident enterprise for tax purposes, and as a result, such dividends and capital gains paid to overseas shareholders or ADS holders that are non-PRC resident enterprises may become subject to PRC income tax at a rate of up to 10.0%, unless otherwise exempted or reduced under relevant tax treaties or arrangements between the PRC and relevant foreign jurisdictions. For example, for shareholders eligible for the benefits of the tax treaty between China and Hong Kong, the tax rate is reduced to 5% for dividends if relevant conditions are met.

It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. Under the PRC Individual Income Tax Law promulgated on September 10, 1980, and amended in 2018 and its implementation rules, dividends from sources within the PRC paid to foreign individual investors who are not residents of the PRC are ordinarily subject to a PRC withholding tax at a rate of 20% and PRC source gains realized by such investors on the transfer of ADSs or shares would be subject to 20% PRC income tax. However, it is also unclear whether non-PRC shareholders of the Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that the Company is treated as a PRC resident enterprise. See "*Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China*." Such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.

**United States Federal Income Taxation**

The following discussion describes the material United States federal income tax consequences to a U.S. Holder (as defined below), under current law, of an investment in our ADSs or ordinary shares. This discussion is based on the federal income tax laws of the United States as of the date of the annual report, including the United States Internal Revenue Code of 1986, as amended, or the Code, existing and proposed Treasury regulations promulgated thereunder, judicial authority, published administrative positions of U.S. Internal Revenue Service, or the IRS, and other applicable authorities, all as of the date of the annual report. All of the foregoing authorities are subject to change, which change could apply retroactively and could significantly affect the tax consequences described below. We have not sought any ruling from the IRS with respect to the statements made and the conclusions reached in the following discussion and there can be no assurance that the IRS or a court will agree with our statements and conclusions. This summary does not discuss the Medicare contribution tax on net investment income, any federal non-income tax laws, including the federal estate or gift tax laws, or the laws of any state, local or non-United States taxing jurisdiction.

This discussion applies only to a U.S. Holder that holds ADSs or ordinary shares as capital assets for United States federal income tax purposes (generally, property held for investment). The discussion neither addresses the tax consequences to any particular investor nor describes all of the tax consequences applicable to persons in special tax situations, such as:

● banks;

● certain financial institutions;

● insurance companies;

● regulated investment companies;

● real estate investment trusts;

● brokers or dealers in stocks and securities, or currencies;

● persons who are required to use a mark-to-market method of accounting;

● certain former citizens or residents of the United States subject to Section 877 of the Code;

● entities subject to the United States anti-inversion rules;

● tax-exempt organizations and entities;

● persons subject to the alternative minimum tax provisions of the Code;

● persons whose functional currency is other than the United States dollar;

● persons holding ADSs or ordinary shares as part of a straddle, hedging, conversion or integrated transaction;

● persons holding ADSs or ordinary shares through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States;

● persons that actually or constructively own 10% or more of our stock by vote or value;

● persons subject to special tax accounting rules under Section 451(b) of the Code;

● persons who acquired ADSs or ordinary shares pursuant to the exercise of an employee stock option or otherwise as compensation; or

● partnerships or other pass-through entities, or persons holding ADSs or ordinary shares through such entities.

If a partnership (including an entity or arrangement treated as a partnership for United States federal income tax purposes) holds our ADSs or ordinary shares, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. A partner in a partnership holding our ADSs or ordinary shares should consult its own tax advisors regarding the tax consequences of holding our ADSs or ordinary shares.

**The following discussion is for informational purposes only and is not a substitute for careful tax planning and advice. Investors considering the purchase of ADSs or ordinary shares should consult their own tax advisors with respect to the application of the United States federal income tax laws to their particular situations, as well as any tax consequences arising under the Medicare contribution tax on net investment income, any federal non-income tax laws, including the federal estate or gift tax laws, or the laws of any state, local or non-United States taxing jurisdiction and under any applicable tax treaty.**

For purposes of the discussion below, a "U.S. Holder" is a beneficial owner of our ADSs or ordinary shares that is, for United States federal income tax purposes:

● an individual who is a citizen or resident of the United States;

● a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

● an estate, the income of which is subject to United States federal income taxation regardless of its source; or

● a trust, if (i) a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all of its substantial decisions or (ii) in the case of a trust that was treated as a domestic trust on August 19, 1996 under the law in effect as of that date, a valid election is in place under applicable Treasury regulations to treat such trust as a domestic trust.

The discussion below assumes that the representations contained in the deposit agreement and any related agreement is true and that the obligations in such agreements will be complied with in accordance with their terms.

***ADSs***

If you own our ADSs, then you should be treated as the owner of the underlying ordinary shares represented by those ADSs for United States federal income tax purposes. Accordingly, deposits or withdrawals of ordinary shares for ADSs should not be subject to United States federal income tax.

The United States Treasury Department and the IRS have expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security (for example, a pre-release of ADSs to persons that do not have beneficial ownership of the securities underlying the ADSs). Such actions may be inconsistent with the claiming of the reduced rate of tax applicable to certain dividends received by non-corporate U.S. Holders of ADSs, including individual U.S. Holders, and the claiming of foreign tax credits by U.S. Holders of ADSs. Accordingly, among other things, the availability of foreign tax credits or the reduced tax rate for dividends received by non-corporate U.S. Holders, each discussed below, could be affected by actions taken by intermediaries in the chain of ownership between the holder of an ADS and our company, if as a result of such actions, the holders of ADSs are not properly treated as beneficial owners of ordinary shares.

***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 (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, or the asset test. Passive income generally includes, among other things, dividends, interest, rents, royalties, and gains from the disposition of passive assets. Passive assets are those which give rise to passive income, and include assets held for investment, as well as cash, assets readily convertible into cash, and working capital. The company's goodwill and other unbooked intangibles are taken into account and may be classified as active or passive depending upon the relative amounts of income generated by the company in each category. 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, 25% or more (by value) of the stock. Although the law in this regard is not entirely clear, we treat the consolidated VIEs as being owned by us for U.S. federal income tax purposes because we control their management decisions and are entitled to substantially all of the economic benefits associated with them. As a result, we consolidate their results of operations in our consolidated U.S. GAAP financial statements. If it were determined, however, that we are not the owner of the consolidated VIEs for U.S. federal income tax purposes, we may be treated as a PFIC for the current taxable year and any subsequent taxable year.

Assuming that we are the owner of the consolidated VIEs for U.S. federal income tax purposes and based upon our current and projected income and assets, we do not expect to be a PFIC for the current taxable year or the foreseeable future. However, no assurance can be given in this regard because the determination of whether we are or will become a PFIC is a factual determination made annually that will depend, in part, upon the composition and classification of our income and assets. Because there are uncertainties in the application of the relevant rules, it is possible that the IRS may challenge our classification of certain income and assets as non-passive, which may result in our being or becoming classified as a PFIC in the current or subsequent years. Furthermore, fluctuations in the market price of our ADSs may cause us to be 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 our ADSs from time to time (which may be volatile). Among other matters, if our market capitalization is less than anticipated or subsequently declines, we may be or become a PFIC for the current or future taxable years. The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in the initial public offering. 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.

If we are a PFIC for any year during which a U.S. Holder holds our ADSs or ordinary shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or ordinary shares unless, in such case, we cease to be treated as a PFIC and such U.S. Holder makes a deemed sale election.

The discussion below under "—Dividends" and "—Sale or Other Disposition" is written on the basis that we will not be or become classified as a PFIC for U.S. federal income tax purposes. The U.S. federal income tax rules that apply generally if we are treated as a PFIC are discussed below under "—Passive Foreign Investment Company Rules."

***Dividends***

Any cash distributions paid on our ADSs or ordinary shares 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 our 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 may be subject to tax on any such dividends at the lower capital gain tax rate applicable to "qualified dividend income," provided that certain conditions are satisfied, including that (i) either (x) our ADSs or ordinary shares on which the dividends are paid are readily tradable on an established securities market in the United States or (y) we are eligible for the benefits of a comprehensive income tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program, (ii) we are neither a PFIC nor treated as such with respect to a U.S. Holder for the taxable year in which the dividend is paid and the preceding taxable year, and (iii) certain holding period requirements are met. We have been approved for listing the ADSs on the Nasdaq Global Market. Provided that this listing is approved, we believe that the ADSs should generally be considered to be readily tradeable on an established securities market in the United States. There can be no assurance that the ADSs will be, or will in later years continue to be, considered readily tradable on an established securities market. Because the ordinary shares will not be listed on a U.S. exchange, we do not believe that dividends received with respect to ordinary shares that are not represented by ADSs will be treated as qualified dividends. In the event we are deemed to be a PRC resident enterprise under EIT Law (see "*—People's Republic of China Taxation*"), we may be eligible for the benefits of the Agreement Between the Government of the United States of America and the Government of the People's Republic of China for the Avoidance of Double Taxation and the Prevention of Tax Evasion with Respect to Taxes on Income (which the Secretary of Treasury of the United States has determined is satisfactory for this purpose). 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.

For U.S. foreign tax credit purposes, dividends paid on our ADSs or ordinary shares will generally be treated as income from foreign sources and will generally constitute passive category income. 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.

***Sale or Other Disposition***

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. Such gain or loss will generally be capital gain or loss. Any such capital gain or loss will be long term if the ADSs or ordinary shares have been held for more than one year. Non-corporate U.S. Holders (including individuals) generally will be subject to United States federal income tax on long-term capital gain at preferential 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 could limit the availability of foreign tax credits. Each U.S. Holder is advised to consult its tax advisor regarding the tax consequences if a foreign tax is imposed on a disposition of our ADSs or ordinary shares, including the applicability of any tax treaty and the availability of the foreign tax credit under its 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 our ADSs or ordinary shares, and unless the U.S. Holder makes 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, including, under certain circumstances, a pledge, of ADSs or ordinary shares. Under the PFIC rules:

● the excess distribution or gain will be allocated ratably over the U.S. Holder's holding period for the ADSs or ordinary shares;

● the amount allocated to the taxable year of distribution or gain 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

● 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.

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. If a U.S. Holder makes this election with respect to our 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 net 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 our 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 our ADSs in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as ordinary loss, but such loss will only be treated as ordinary loss to the extent of the net amount previously included in income as a result of the mark-to-market election.

The mark-to-market election is available only for "marketable stock," which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter, or regularly traded, on a qualified exchange or other market, as defined in applicable United States Treasury regulations. We expect that our ADSs being listed on the Nasdaq Global Market, but not our ordinary shares, will be treated as marketable stock. We anticipate that our ADSs should qualify as being regularly traded, but no assurances may be given in this regard.

Because a mark-to-market election cannot technically 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 interests 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.

Dividends that we pay on our ADS or ordinary shares will not be eligible for the reduced tax rate that applies to qualified dividend income if we are classified as a PFIC for the taxable year in which the dividend is paid or the preceding taxable year. If a U.S. Holder owns our ADSs or ordinary shares during any taxable year that we are a PFIC, the holder must generally file an annual IRS Form 8621. You should consult your tax advisor regarding the U.S. federal income tax consequences of owning and disposing of our ADSs or ordinary shares if we are or become a PFIC.

***Information Reporting and Backup Withholding***

Certain U.S. Holders are required to report information to the IRS relating to an interest in "specified foreign financial assets" (as defined in the Code), including shares issued by a non-U.S. corporation, for any year in which the aggregate value of all specified foreign financial assets exceeds $50,000 (or a higher dollar amount prescribed by the IRS), subject to certain exceptions (including an exception for shares held in custodial accounts maintained with a U.S. financial institution). These rules also impose penalties if a U.S. Holder is required to submit such information to the IRS and fails to do so.

In addition, U.S. Holders may be subject to information reporting to the IRS and backup withholding with respect to dividends on and proceeds from the sale or other disposition of the ADSs or ordinary shares. Information reporting will generally apply to payments of dividends on, and proceeds from the sale or other disposition of, ADSs or ordinary shares made by a paying agent within the United States to a U.S. Holder, other than U.S. Holders that are exempt from information reporting and properly certify their exemption. A paying agent within the United States will be required to withhold at the applicable statutory rate, currently 24%, in respect of any payments of dividends on, and the proceeds from the sale or other disposition of, ADSs or ordinary shares within the United States to a U.S. Holder (other than U.S. Holders that are exempt from backup withholding and properly certify their exemption) if the holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with applicable backup withholding requirements. U.S. Holders who are required to establish their exempt status generally must provide a properly completed IRS Form W-9.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder's U.S. federal income tax liability. A U.S. Holder generally may obtain a refund of any amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS in a timely manner and furnishing any required information. Each U.S. Holder is advised to consult with its tax advisor regarding the application of information reporting and backup withholding rules to their particular circumstances.

**F. Dividends and Paying Agents**

Not applicable.

**G. Statements by Experts**

Not applicable.

**H. Documents on Display**

We previously filed with the SEC our registration statement on Form F-1, as amended, to register our ordinary shares (now redesignated as Class A ordinary shares) in relation to our initial public offering. We have also filed with the SEC a related registration statement on F-6 (Registration No. 333-249010) to register the ADSs.

We are subject to periodic reporting and other information requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC. All information filed with the SEC can be obtained over the internet at the SEC's website at <u>www.sec.gov</u> or inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of documents, upon payment of a duplicating fee, by writing to the SEC.

As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we will transmit to the depositary annual and semi-annual reports prepared in accordance with the applicable requirements of the SEC, to the extent such notices, reports and communications are not available on our website or are not otherwise publicly available, 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, if we so request, will provide copies thereof to all record holders of ADSs.

**I. Subsidiary Information**

Not applicable.

**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**Foreign Exchange Risk**

Our revenues, expenses and assets and liabilities are primarily denominated in Renminbi. Renminbi is not freely convertible into foreign currencies for capital account transactions. The value of the Renminbi against the U.S. dollar and other currencies is affected by changes in China's political and economic conditions and by China's foreign exchange policies, among other things. In July 2005, the PRC government changed its decades-old policy of pegging the value of the Renminbi to the U.S. dollar, and the Renminbi appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation subsided and the exchange rate between the Renminbi and the U.S. dollar remained within a narrow band. Since June 2010, the Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. On March 17, 2014, the PRC government announced a policy to further expand the maximum daily floating range of Renminbi trading prices against the U.S. dollar in the inter-bank spot foreign exchange market to 2.0%. On August 10, 2015, the PRC government announced that it had changed the calculation method for Renminbi's daily central parity exchange rate against the U.S. dollar, which resulted in an approximately 2.0% depreciation of Renminbi on that day. We expect Renminbi to fluctuate more significantly in value against the U.S. dollar or other foreign currencies in the future, depending on the market supply and demand with reference to a basket of major foreign currencies. It is difficult to predict how market forces or PRC or U.S. government policy may affect the exchange rate between the Renminbi and the U.S. dollar in the future.

To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. To the extent that we need to convert U.S. dollars we received from the initial public offering into Renminbi for our operations or capital expenditures, appreciation of the Renminbi 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 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.

It is difficult to predict how market forces, PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. Dollar in the future.

See "*Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—Fluctuations in exchange rates may result in foreign currency exchange losses and may have a material adverse effect on your investment*."

**Credit and concentration risk**

Financial instruments, including cash and cash equivalents, short-term investments, prepayments and accounts receivable, potentially subject us to credit risks. As of December 31, 2025, our cash and cash equivalents were held by reputable financial institutions with high-credit ratings and quality. As a result, we do not have significant credit risk associated with the cash and cash equivalents and short-term investments. We do not have significant concentrations of credit risk associated with prepayments. We have not experienced any significant recoverability issue with respect to our accounts receivable and periodically evaluate the creditworthiness of the existing customers in determining an allowance for doubtful accounts primarily based on the age of receivables as well as other factors.

**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 under the terms of the deposit agreement:

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| | | |
|:---|:---|:---|
| **Service** | **Service** | **Fees** |
| (1) | Issuance of ADSs (e.g., an issuance of ADS upon a deposit of Class A ordinary shares, upon a change in the ADS(s)-to Class A ordinary shares ratio, or for any other reason), excluding ADS issuances as a result of distributions of Class A ordinary shares) | Up to U.S.$5.00 per 100 ADSs issued |
| (2) | Cancelation of ADSs (e.g., a cancelation of ADSs for delivery of deposited property, upon a change in the ADS(s)-to-Class A ordinary shares ratio, or for any other reason) | Up to U.S.$5.00 per 100 ADSs canceled |
| (3) | Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements) | Up to U.S.$5.00 per 100 ADSs held |
| (4) | Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs | Up to U.S.$5.00 per 100 ADSs held |
| (5) | Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., upon a spin-off) | Up to U.S.$5.00 per 100 ADSs held |
| (6) | ADS Services | Up to U.S.$5.00 per 100 ADSs held on the applicable record date(s) established by the depositary |
| (7) | Registration of ADS transfers (e.g., upon a registration of the transfer of registered ownership of ADSs, upon a transfer of ADSs into DTC and vice versa, or for any other reason) | Up to U.S.$5.00 per 100 ADSs (or fraction thereof) transferred |
| (8) | Conversion of ADSs of one series for ADSs of another series (e.g., upon conversion of Partial Entitlement ADSs for Full Entitlement ADSs, or upon conversion of Restricted ADSs (each as defined in the Deposit Agreement) into freely transferable ADSs, and vice versa). | Up to U.S.$5.00 per 100 ADSs (or fraction thereof) transferred |

---

As an ADS holder, you will also be responsible to pay certain charges such as:

● taxes (including applicable interest and penalties) and other governmental charges;

● the registration fees as may from time to time be in effect for the registration of Class A ordinary shares on the share register and applicable to transfers of Class A ordinary shares to or from the name of the custodian, the depositary or any nominees upon the making of deposits and withdrawals, respectively;

● certain cable, telex and facsimile transmission and delivery expenses;

● the fees, expenses, spreads, taxes and other charges of the depositary and/or service providers (which may be a division, branch or affiliate of the depositary) in the conversion of foreign currency;

● the reasonable and customary out-of-pocket expenses incurred by the depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to Class A ordinary shares, ADSs and ADRs; and

● the fees, charges, costs and expenses incurred by the depositary, the custodian, or any nominee in connection with the ADR program.

ADS fees and charges for (i) the issuance of ADSs, and (ii) the cancelation of ADSs are charged to the person for whom the ADSs are issued (in the case of ADS issuances) and to the person for whom ADSs are canceled (in the case of ADS cancelations). In the case of ADSs issued by the depositary into DTC, the ADS issuance and cancelation fees and charges may be deducted from distributions made through DTC, and may be charged to the DTC participant(s) receiving the ADSs being issued or the DTC participant(s) holding the ADSs being canceled, as the case may be, on behalf of the beneficial owner(s) and will be charged by the DTC participant(s) to the account of the applicable beneficial owner(s) in accordance with the procedures and practices of the DTC participants as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are charged to the holders as of the applicable ADS record date. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, holders as of the ADS record date will be invoiced for the amount of the ADS fees and charges and such ADS fees and charges may be deducted from distributions made to holders of ADSs. For ADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted from distributions made through DTC, and may be charged to the DTC participants in accordance with the procedures and practices prescribed by DTC and the DTC participants in turn charge the amount of such ADS fees and charges to the beneficial owners for whom they hold ADSs. In the case of (i) registration of ADS transfers, the ADS transfer fee will be payable by the ADS Holder whose ADSs are being transferred or by the person to whom the ADSs are transferred, and (ii) conversion of ADSs of one series for ADSs of another series, the ADS conversion fee will be payable by the Holder whose ADSs are converted or by the person to whom the converted ADSs are delivered.

In the event of refusal to pay the depositary fees, the depositary 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. Certain depositary fees and charges (such as the ADS services fee) may become payable shortly after the closing of the ADS offering. Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the depositary. You will receive prior notice of such changes.

**Fees and Other Payments Made by the Depositary to Us**

The depositary has agreed to share with us certain fees payable to the depositary by holders of ADSs. For the year ended December 31, 2025, we did not receive any payment from the depositary in reimbursements relating to the establishment and maintenance of the ADS program.

**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.

**Use of Proceeds**

The following "Use of Proceeds" information relates to (i) the registration statement on Form F-1, as amended (File Number: 333-248691) in relation to our initial public offering of 3,333,400 ADSs representing 16,667,000 ordinary shares (now redesignated as Class A ordinary shares), at an initial offering price of US$9.25 per ADS. AMTD Global Markets Limited and Loop Capital Markets LLC were the representatives of the underwriters for our initial public offering.

The F-1 Registration Statement became effective on September 30, 2020. From the period from the date that the Form F-1 was declared effective by the SEC, to December 31, 2020, the total expenses incurred for our company's account in connection with our initial public offering was approximately US$4.8 million, which included approximately US$2.2 million in underwriting discounts and commissions for the initial public offering, approximately US$440,000 in expenses paid to or for the underwriters as reimbursements, and approximately US$2.2 million in other costs and expenses for our initial public offering. As a result of our initial public offering, we raised an aggregate of approximately US$26.2 million in net proceeds, after deducting related costs and expenses. None of the transaction expenses included payments to directors or officers of our company or their associates, persons owning more than 10% or more of our equity securities or our affiliates.

From the period from September 30, 2020, the date that the Form F-1 was declared effective by the SEC, to December 31, 2025, we used the net proceeds received from our initial public offering for our business operation. None of the net proceeds from the initial public offering were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities or our affiliates.

**ITEM 15. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

Our management, including our chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of the end of the period covered by this annual report on Form 20-F, as required by Rule 13a-15(b) under the Exchange Act.

Based on that evaluation, our management concluded that, as of December 31, 2025, our disclosure controls and procedures were not effective due to our material weaknesses in our internal control over financial reporting described below.

**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 Rules13a-15(f) and 15d-15(f) promulgated under the Exchange Act. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management or our board of directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our interim or annual consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting can provide only reasonable assurance with respect to consolidated financial statement preparation and presentation and 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.

Our management, including our chief executive officer and chief financial officer, evaluated the effectiveness of our internal control over financial reporting using the criteria established in the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025, due to the material weaknesses in our internal control over financial reporting described as follows: (i) lack of sufficient and competent accounting staff and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements; and (ii) lack of robust and formal period-end financial reporting policies and procedures in place to address complex U.S. GAAP technical accounting and the SEC reporting requirements.

During the year ended December 31, 2025, our management is in the process of implementing a number of measures to address the material weaknesses identified, including but not limited to:

● Develop and implement a comprehensive set of processes and internal controls to timely and appropriately identify, analyze, and record transactions that may be subject to complex U.S. GAAP accounting treatment;

● Hire additional accounting staff members with U.S. GAAP and SEC reporting experiences to implement the abovementioned financial reporting procedures and internal controls to ensure the consolidated financial statements and related disclosures under U.S. GAAP and SEC reporting requirements are prepared appropriately on a timely basis;

● Establish an ongoing training program to provide sufficient and appropriate trainings for accounting and financial reporting personnel, including trainings related to U.S. GAAP and SEC reporting requirements; and

However, our management concluded that these actions, while in progress, were not sufficient to fully remediate the material weaknesses. In addition, we cannot assure you that we will remediate our material weaknesses in a timely manner. See "*Item 3. Key Information—D. Risk Factors—Risks Relating to Our ADSs —We have identified material weaknesses in our internal control over financial reporting. If our remediation of the material weaknesses is not effective, or we fail to develop and maintain effective internal controls over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.*"

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness of our internal control over financial reporting 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 and procedures may deteriorate.

**Attestation Report of the Independent Registered Public Accounting Firm**

This annual report does not include an attestation report of our company's independent registered public accounting firm because we are a non-accelerated filer for the fiscal year ended December 31, 2025.

**Changes in Internal Control over Financial Reporting**

Other than those disclosed above, there were no changes in our internal controls 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 16. A. AUDIT COMMITTEE FINANCIAL EXPERT**

Our audit committee consists of three members and is chaired by Mr. Teck Yong Heng. Each of Mr. Teck Yong Heng and Mr. Yan Kit Lee satisfies the "independence" requirements of the listing rules of Nasdaq Global Market and meet the independence standards under Rule 10A-3 under the Exchange Act. We have determined that Mr. Teck Yong Heng qualifies as an "audit committee financial expert."

**ITEM 16. B. CODE OF ETHICS**

Our board of directors adopted a code of business conduct and ethics that applies to our directors, officers, employees and advisors. We have posted a copy of our code of business conduct and ethics on our website at *www.lixiangeh.com*.

**ITEM 16. C. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The following table sets forth the aggregate fees by the categories specified in connection with certain professional services rendered by Audit Alliance LLP, our independent registered public accounting firm for the fiscal years ended December 31, 2023 2024 and 2025. We did not pay any other fees to our auditors during the periods indicated below.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2023** | **2024** | **2025** |
| Audit fees <sup>(1)</sup> | RMB3,088,457 | RMB2,189,790 | RMB2,097,930 |
|  | (US$435,000) | (US$300,000) | (US$300,000) |
| Tax fees <sup>(2)</sup> |  |  |  |

---

(1) "Audit
 fees" represent the aggregate fees for professional services rendered by our principal
 auditors for the review of our interim consolidated financial statements, the audit of our
 annual consolidated financial statements and/or services that are normally provided by the
 auditors in connection with statutory and regulatory filings or engagements.

(2) "Tax
 fees" represent the aggregate fees for professional services rendered by our principal
 auditors for tax compliance, tax advice and tax planning.

The policy of our audit committee is to pre-approve all audit and non-audit services to be provided by Audit Alliance LLP, including audit services, audit-related services, tax services and other services as are described above, other than those for de minimis services which are approved by the audit committee prior to the completion of the audit.

**ITEM 16. D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

Our audit committee consists of three members (two of whom are independent directors and one of whom is an executive director prior to April 2026). Mr. Guoliang Chen on the audit committee was not considered an independent director, as he was the principal of Lianwai School, which was historically controlled and consolidated by Liandu WFOE through a series of contractual arrangements but was deconsolidated commencing from September 1, 2021. Prior to April 2026, Mr. Guoliang Chen was a non-voting member of our audit committee and only has observer status on our audit committee. Based on our assessment, Mr. Chen's membership did not materially adversely affect the ability of the audit committee to act independently or to satisfy other requirements of Rule 10A-3 under the Exchange Act. As the statutory look-back period under Rule 5605(c)(2) of the Listing Rules of the Nasdaq Stock Market has expired on September 1, 2024, Mr. Guoliang Chen was reappointed as an independent director in April 2026.

**ITEM 16. E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**

Not applicable.

**ITEM 16. F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT**

On November 10, 2021, we dismissed PricewaterhouseCoopers Zhong Tian LLP as our independent registered public accounting firm in connection with the audit of our consolidated financial statements for the two most recent fiscal years ended December 31, 2019 and 2020. The audit report of PricewaterhouseCoopers Zhong Tian LLP on the consolidated financial statements of the Company as of December 31, 2019 and 2020 and for the fiscal years ended December 31, 2019 and 2020 did not contain an adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles. The decision to change independent registered public accounting firm was recommended and approved by the audit committee and the board of directors of the Company.

During the fiscal years ended December 31, 2019 and 2020 and any subsequent interim period (as applicable) preceding the dismissal, there were no disagreements, as defined in Item 16F(a)(1)(iv) of Form 20-F, between us and PricewaterhouseCoopers Zhong Tian LLP on any matter of accounting matters, accounting principles or practices, financial statement disclosure, or auditing scope or procedure. There were no reportable events as defined in Item 16F(a)(1)(v)(A)-(D) of Form 20-F, other than as disclosed in this Item 16F and the material weakness in our internal control over financial reporting as disclosed in our annual report on Form 20-F for the fiscal year ended December 31, 2020 filed with the SEC on April 30, 2021.

On November 10, 2021, we engaged WWC, P.C., as our independent registered public accounting firm for the fiscal year ended December 31, 2021. We also appointed WWC, P.C. to re-audit the consolidated financial statements for the two most recent fiscal years ended December 31, 2019 and 2020. The engagement of WWC, P.C. was approved by our audit committee and the board of directors. During the fiscal years ended December 31, 2019 and 2020 and any subsequent interim periods (as applicable) prior to the engagement of WWC, P.C., neither we, nor someone on our behalf, have consulted WWC, P.C. regarding:

&nbsp;&nbsp;&nbsp;&nbsp;a. the
 application of accounting principles to a specified transaction, either completed or proposed;
 or the type of audit opinion that might be rendered on our consolidated financial statements,
 and neither a written report was provided to us or oral advice was provided that WWC, P.C.
 concluded was an important factor considered by us in reaching a decision as to the accounting,
 auditing or financial reporting issue; or

&nbsp;&nbsp;&nbsp;&nbsp;b. any
 matter that was the subject of a disagreement, or any reportable event as described above.

We provided PricewaterhouseCoopers Zhong Tian LLP and WWC, P.C. with a copy of the foregoing disclosure, and requested that each of PricewaterhouseCoopers Zhong Tian LLP and WWC, P.C. furnish us with a letter addressed to the SEC stating whether it agrees with the above statements that relate to them, and if not, stating the respects in which it does not agree. We have received the requested letters from WWC, P.C. and PricewaterhouseCoopers Zhong Tian LLP, copies of which are included as Exhibit 15.3 and Exhibit 15.4 to the annual report on Form 20-F for the fiscal year ended December 31, 2021 filed with the SEC on April 29, 2022.

On April 24, 2024, we dismissed WWC, P.C. as our independent registered public accounting firm in connection with the audit of our consolidated financial statements for the fiscal years ended December 31, 2021 and 2022. The audit report of WWC, P.C. on the consolidated financial statements of the Company as of December 31, 2021 and 2022 and for the fiscal years ended December 31, 2021 and 2022 did not contain an adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles. The decision to change independent registered public accounting firm was recommended and approved by the audit committee and the board of directors of the Company.

During the fiscal years ended December 31, 2021 and 2022 and any subsequent interim period (as applicable) preceding the dismissal, there were no disagreements, as defined in Item 16F(a)(1)(iv) of Form 20-F, between us and WWC, P.C. on any matter of accounting matters, accounting principles or practices, financial statement disclosure, or auditing scope or procedure. There were no reportable events as defined in Item 16F(a)(1)(v)(A)-(D) of Form 20-F, other than as disclosed in this Item 16F.

On April 24, 2024, we engaged Audit Alliance LLP, as our independent registered public accounting firm for the fiscal year ended December 31, 2023. The engagement of Audit Alliance LLP was approved by our audit committee and the board of directors. During the fiscal years ended December 31, 2021 and 2022 and any subsequent interim periods (as applicable) prior to the engagement of Audit Alliance LLP, neither we, nor someone on our behalf, have consulted Audit Alliance LLP regarding:

&nbsp;&nbsp;&nbsp;&nbsp;a. the
 application of accounting principles to a specified transaction, either completed or proposed;
 or the type of audit opinion that might be rendered on our consolidated financial statements,
 and neither a written report was provided to us or oral advice was provided that Audit Alliance
 LLP concluded was an important factor considered by us in reaching a decision as to the accounting,
 auditing or financial reporting issue; or

&nbsp;&nbsp;&nbsp;&nbsp;b. any
 matter that was the subject of a disagreement, or any reportable event as described above.

We provided WWC, P.C. and Audit Alliance LLP with a copy of the foregoing disclosure, and requested that each of WWC, P.C. and Audit Alliance LLP furnish us with a letter addressed to the SEC stating whether it agrees with the above statements that relate to them, and if not, stating the respects in which it does not agree. We have received the requested letters from Audit Alliance LLP and WWC, P.C., copies of which are included as Exhibit 15.3 and Exhibit 15.5 to the annual report on Form 20-F for the fiscal year ended December 31, 2023 filed with the SEC on May 15, 2024.

**ITEM 16. G. CORPORATE GOVERNANCE**

As a Cayman Islands exempted company listed on Nasdaq, we are subject to the Nasdaq corporate governance listing standards. However, as a foreign private issuer, we are allowed to follow the corporate governance practices of our home country, or apply certain exemptions available for foreign private issuers. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. Currently, we have relied on and intend to continue to rely on some of our home country practices for corporate governance matters. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards.

We relied on our home country practice in lieu of the provisions of Nasdaq Rule 5635(d), and did not obtain shareholder approval in our private placements in 2023 and 2024. Nasdaq Rule 5635(d) provides that shareholder approval is required prior to a 20% Issuance at a price that is less than the Minimum Price, and that for the purposes of this rule:

&nbsp;&nbsp;&nbsp;&nbsp;(A) "Minimum
 Price" means a price that is the lower of: (i) the Nasdaq Official Closing Price (as
 reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii)
 the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com)
 for the five trading days immediately preceding the signing of the binding agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;(B) "20%
 Issuance" means a transaction, other than a public offering as defined in IM-5635-3,
 involving the sale, issuance or potential issuance by the Company of common stock (or securities
 convertible into or exercisable for common stock), which alone or together with sales by
 officers, directors or Substantial Shareholders of the Company, equals 20% or more of the
 common stock or 20% or more of the voting power outstanding before the issuance.

In addition, we relied on home country practice exemption with respect to Nasdaq Rule 5620(a), which requires a Nasdaq-listed company to hold an annual meeting of shareholders no later than one year after the end of the company's fiscal year-end and we did not hold an annual shareholders meeting in 2025. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders' approvals.

As a result, you may not be provided with the benefits of certain corporate governance requirements of the Nasdaq Global Market. See "*Item 3. Key Information—D. Risk Factors—Risks Relating to Our ADSs—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 Nasdaq Global Market listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq Global Market listing standards.*"

**ITEM 16. H. MINE SAFETY DISCLOSURE**

Not applicable.

**ITEM 16. I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

**ITEM 16. J. Insider trading policies**

We have adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of our securities by our directors, officers, employees, designated consultants and contractors that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and listing standards applicable to us. Our Insider Trading Policy has been filed as Exhibit 11.2 to the annual report on Form 20-F for the fiscal year ended December 31, 2024 filed with the SEC on April 30, 2025.

**ITEM 16. K. Cybersecurity**

**Risk management and strategy**

We identify, assess and manage any material risks from cybersecurity threats through the following measures, which have been integrated into our Code of Business Conduct and Ethics (the "Code"):

● We reserve the right to monitor or review any and all data and information contained on any employee's or officer's computer or other electronic device issued by us. In addition, we reserve the right to monitor or review an employee's or officer's use of the Internet, Company Intranet and Company e-mail or any other electronic communications without prior notice.

● Access to Company systems will be revoked and disciplinary action may be taken in the event that such systems are used to commit illegal acts, or to violate the non-discrimination, harassment, pornography, solicitation or proprietary information terms of this Code, or any other terms of this Code.

● In order to maintain systems integrity and protect the Company network, no employee or officer should divulge any passwords used to access any Company computer or database. Any suspected breach of the Company's network security systems should be reported to a responsible supervisor or appropriate internal authority immediately.

● All employees and officers should refrain from using or distributing software that may damage or disrupt the Company's work environment by transmitting a virus or conflicting with Company systems. No employee or officer should engage in the unauthorized use, copying, distribution or alteration of computer software whether obtained from outside sources or developed internally. All software, including "shareware," contains terms of use that must be adhered to.

We do not engage any assessors, consultants, auditors, or other third parties in connection with any of our cybersecurity risk management processes.

As of the date of this annual report, we have not experienced any cybersecurity incidents or any other risks from cybersecurity threats, that have materially affected or are reasonably likely to materially affect us, our business strategy, results of operations, or financial condition.

**Governance**

Our board of directors has oversight responsibility for the Company's overall risk management, including cybersecurity risk. Our executive officers oversee the overall processes to safeguard data and comply with relevant regulations and will report material cybersecurity incidents to the board. Our executive officers have limited experience in the area of cybersecurity, but where necessary in the view of the Company's executive officers, the Company will consult with external advisers to manage and remediate any cybersecurity incidents.

**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 Lixiang Education Holding Co., Ltd., its subsidiaries and its consolidated Variable Interest Entities are included at the end of this annual report on Form 20-F.

**ITEM 19. EXHIBITS**

**EXHIBIT INDEX**

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| | |
|:---|:---|
| **Exhibit<br> Number** | **Description of Document** |
| 1.1 | [Third Amended and Restated Memorandum and Articles of Association of the Registrant (incorporated herein by reference to Annex A to Exhibit 99.1 to the Form 6-K filed with the Securities and Exchange Commission on November 1, 2024)](https://www.sec.gov/Archives/edgar/data/1814067/000121390024093183/ea021915901ex99-1_lixiang.htm) |
| 2.1 | [Form of Registrant's Specimen American Depositary Receipt (included in Exhibit 2.6)](http://www.sec.gov/Archives/edgar/data/1472033/000119380524001386/e664030_ex99-ai.htm) |
| 2.2 | [Registrant's Specimen Certificate for Class A Ordinary Shares (incorporated herein by reference to Exhibit 2.2 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 30, 2025)](https://www.sec.gov/Archives/edgar/data/1814067/000121390025037081/ea023882701ex2-2_lixiang.htm) |
| 2.3 | [Form of Deposit Agreement by and among the Registrant, the Depositary, and the Holders and Beneficial Owners of the American Depositary Shares (incorporated herein by reference to Exhibit (a) to the Pre-Effective Amendment No. 1 to Form F-6 registration statement (File No. 333-249010), filed with the Securities and Exchange Commission on September 30, 2020)](http://www.sec.gov/Archives/edgar/data/1472033/000119380520001210/e619964_ex99-a.htm) |
| 2.4 | [Form of Amendment No. 1 to Deposit Agreement by and among the Registrant, the Depositary, and the Holders and Beneficial Owners of the American Depositary Shares (incorporated herein by reference to Exhibit (a)(i) to the Post-Effective Amendment No. 1 to Form F-6 registration statement (File No. 333-249010), filed with the Securities and Exchange Commission on December 15, 2023)](https://www.sec.gov/Archives/edgar/data/1472033/000119380523001602/e619123_ex99-ai.htm) |
| 2.5 | [Form of Amendment No. 2 to Deposit Agreement by and among the Registrant, the Depositary, and the Holders and Beneficial Owners of the American Depositary Shares (incorporated herein by reference to Exhibit (a)(i) to the Post-Effective Amendment No. 2 to Form F-6 registration statement (File No. 333-249010), filed with the Securities and Exchange Commission on September 13, 2024)](https://www.sec.gov/Archives/edgar/data/1472033/000119380524001117/e663884_ex99-ai.htm) |
| 2.6 | [Form of Amendment No. 3 to Deposit Agreement by and among the Registrant, the Depositary, and the Holders and Beneficial Owners of the American Depositary Shares (incorporated herein by reference to Exhibit (a)(i) to the Post-Effective Amendment No. 3 to Form F-6 registration statement (File No. 333-249010), filed with the Securities and Exchange Commission on November 18, 2024)](https://www.sec.gov/Archives/edgar/data/1472033/000119380524001386/e664030_ex99-ai.htm) |
| 2.7 | [Form of Amendment No. 4 to Deposit Agreement by and among the Registrant, the Depositary, and the Holders and Beneficial Owners of the American Depositary Shares (incorporated herein by reference to Exhibit (a)(i) to the Post-Effective Amendment No. 4 to Form F-6 registration statement (File No. 333-249010), filed with the Securities and Exchange Commission on April 1, 2026)](http://www.sec.gov/Archives/edgar/data/1472033/000119380526000384/e665313_ex99-ai.htm) |
| 2.8\* | [Description of securities of the Registrant registered under Section 12 of the Securities Exchange Act of 1934](ea028775901ex2-8.htm) |
| 4.1 | [2020 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.30 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1030.htm) |
| 4.2 | [Form of Restricted Share Agreement (incorporated herein by reference to Exhibit 10.31 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1031.htm) |
| 4.3 | [Form of Option Agreement (incorporated herein by reference to Exhibit 10.32 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1032.htm) |
| 4.4 | [Form of Indemnification Agreement between the Registrant and its directors and executive officers (incorporated herein by reference to Exhibit 10.1 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex101.htm) |
| 4.5 | [Form of Employment Agreement between the Registrant and its executive officers (incorporated herein by reference to Exhibit 10.2 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex102.htm) |

---

4.6 [English translation of Business Cooperation Agreement, among Zhejiang Mengxiang Consulting Services Co., Ltd., Liandu Foreign Languages School, the Kindergarten of Liandu Foreign Languages School, Zhejiang Lishui Mengxiang Education Development Co., Ltd., Ye Fen, Ye Fang and Ye Hong dated October 13, 2018 (incorporated herein by reference to Exhibit 10.3 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex103.htm)

4.7 [English translation of Supplemental Agreement of Business Cooperation Agreement, among Zhejiang Mengxiang Consulting Services Co., Ltd., Liandu Foreign Languages School, the Kindergarten of Liandu Foreign Languages School and Zhejiang Lishui Mengxiang Education Development Co., Ltd., and Ye Fen, Ye Fang and Ye Hong dated November 29, 2018 (incorporated herein by reference to Exhibit 10.4 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex104.htm)

4.8 [English translation of Exclusive Technical Service and Business Consulting Agreement, among Zhejiang Mengxiang Consulting Services Co., Ltd. and Liandu Foreign Languages School, the Kindergarten of Liandu Foreign Languages School and Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated October 13, 2018 (incorporated herein by reference to Exhibit 10.5 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex105.htm)

4.9 [English translation of Supplemental Agreement of Exclusive Technical Service and Business Consulting Agreement, among Zhejiang Mengxiang Consulting Services Co., Ltd. and Liandu Foreign Languages School, the Kindergarten of Liandu Foreign Languages School and Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated November 29, 2018 (incorporated herein by reference to Exhibit 10.6 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex106.htm)

4.10 [English translation of the Second Supplemental Agreement of Exclusive Technical Service and Business Consulting Agreement, among Zhejiang Mengxiang Consulting Services Co., Ltd. and Liandu Foreign Languages School, and Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated March 29, 2019 (incorporated herein by reference to Exhibit 10.7 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex107.htm)

4.11 [English translation of Exclusive Call Option Agreement, among Zhejiang Mengxiang Consulting Services Co., Ltd., Ye Fen, Ye Fang and Ye Hong, and Liandu Foreign Languages School, the Kindergarten of Liandu Foreign Languages School and Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated October 13, 2018 (incorporated herein by reference to Exhibit 10.8 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex108.htm)

4.12 [English translation of Supplemental Agreement of Exclusive Call Option Agreement, among Zhejiang Mengxiang Consulting Services Co., Ltd., Ye Fen, Ye Fang and Ye Hong, and Liandu Foreign Languages School, the Kindergarten of Liandu Foreign Languages School and Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated November 29, 2018 (incorporated herein by reference to Exhibit 10.9 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex109.htm)

4.13 [English translation of Equity Pledge Agreement, among Ye Fen, Ye Fang, Ye Hong, and Zhejiang Lishui Mengxiang Education Development Co., Ltd. and Zhejiang Mengxiang Consulting Services Co., Ltd. dated October 13, 2018. (incorporated herein by reference to Exhibit 10.10 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1010.htm)

4.14 [English translation of Supplemental Agreement of the Equity Pledge Agreement, among Ye Fen, Ye Fang, Ye Hong and Zhejiang Lishui Mengxiang Education Development Co., Ltd. and Zhejiang Mengxiang Consulting Services Co., Ltd. dated November 29, 2018 (incorporated herein by reference to Exhibit 10.11 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1011.htm)

4.15 [English translation of Proxy Agreement for Shareholders granted by Ye Fen, Ye Fang and Ye Hong to Zhejiang Mengxiang Consulting Services Co., Ltd. regarding Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated October 13, 2018 (incorporated herein by reference to Exhibit 10.12 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1012.htm)

4.16 [English translation of Supplemental Agreement of the Proxy Agreement for Shareholders granted by Ye Fen, Ye Fang and Ye Hong to Zhejiang Mengxiang Consulting Services Co., Ltd. regarding Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated November 29, 2018 (incorporated herein by reference to Exhibit 10.13 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1013.htm)

4.17 [English translation of Power of Attorney granted by Ye Fen to Zhejiang Mengxiang Consulting Services Co., Ltd. regarding Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated October 13, 2018 (incorporated herein by reference to Exhibit 10.14 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1014.htm)

4.18 [English translation of Power of Attorney granted by Ye Fang to Zhejiang Mengxiang Consulting Services Co., Ltd. regarding Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated October 13, 2018 (incorporated herein by reference to Exhibit 10.15 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1015.htm)

4.19 [English translation of Power of Attorney granted by Ye Hong to Zhejiang Mengxiang Consulting Services Co., Ltd. regarding Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated October 13, 2018 (incorporated herein by reference to Exhibit 10.16 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1016.htm)

4.20 [English translation of Proxy Agreement for School's Sponsors and Directors, granted by Zhejiang Lishui Mengxiang Education Development Co., Ltd. and Ye Fen, Wei Biao, Ye Fang, Ye Hong, Chen Guoliang and Shi Jixing, to Zhejiang Mengxiang Consulting Services Co., Ltd. regarding Liandu Foreign Languages School and the Kindergarten of Liandu Foreign Languages School, dated October 13, 2018 (incorporated herein by reference to Exhibit 10.17 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1017.htm)

4.21 [English translation of Supplemental Agreement of the Proxy Agreement for School's Sponsors and Directors granted by Zhejiang Lishui Mengxiang Education Development Co., Ltd. and Ye Fen, Wei Biao, Ye Fang, Ye Hong, Chen Guoliang and Shi Jixing, to Zhejiang to Mengxiang Consulting Services Co., Ltd. regarding Liandu Foreign Languages School and the Kindergarten of Liandu Foreign Languages School, dated November 29, 2018 (incorporated herein by reference to Exhibit 10.18 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1018.htm)

4.22 [English translation of Power of Attorney for the School's Sponsor granted by Zhejiang Lishui Mengxiang Education Development Co., Ltd. to Zhejiang Mengxiang Consulting Services Co., Ltd. regarding Liandu Foreign Languages School dated November 29, 2018 (incorporated herein by reference to Exhibit 10.19 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1019.htm)

4.23 [English translation of Power of Attorney granted by Ye Fen to Zhejiang Mengxiang Consulting Service Co. Ltd. regarding Liandu Foreign Languages School dated November 29, 2018 (incorporated herein by reference to Exhibit 10.20 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1020.htm)

4.24 [English translation of Power of Attorney granted by Wei Biao to Zhejiang Mengxiang Consulting Service Co. Ltd. regarding Liandu Foreign Languages School dated November 29, 2018 (incorporated herein by reference to Exhibit 10.21 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1021.htm)

4.25 [English translation of Power of Attorney granted by Ye Fang to Zhejiang Mengxiang Consulting Service Co. Ltd. regarding Liandu Foreign Languages School dated November 29, 2018 (incorporated herein by reference to Exhibit 10.22 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1022.htm)

4.26 [English translation of Power of Attorney granted by Ye Hong to Zhejiang Mengxiang Consulting Service Co. Ltd. regarding Liandu Foreign Languages School dated November 29, 2018 (incorporated herein by reference to Exhibit 10.23 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1023.htm)

4.27 [English translation of Power of Attorney granted by Chen Guoliang to Zhejiang Mengxiang Consulting Service Co. Ltd. regarding Liandu Foreign Languages School dated November 29, 2018 (incorporated herein by reference to Exhibit 10.24 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1024.htm)

4.28 [English translation of Spouse Undertaking, granted by Wei Biao, the spouse of Ye Fen, to Ye Fen regarding Zhejiang Lishui Mengxiang Education Development Co., Ltd., dated November 29, 2018 (incorporated herein by reference to Exhibit 10.25 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1025.htm)

4.29 [English translation of Spouse Undertaking, granted by Chen Jianjun, the spouse of Ye Fang, to Ye Fang regarding Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated November 29, 2018 (incorporated herein by reference to Exhibit 10.26 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1026.htm)

4.30 [English translation of Spouse Undertaking, granted by Ji Hongfeng, the spouse of Ye Hong, to Ye Hong regarding Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated November 29, 2018 (incorporated herein by reference to Exhibit 10.27 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1027.htm)

4.31 [English translation of Loan Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd. and Zhejiang Lishui Mengxiang Education Development Co., Ltd. regarding Liandu Foreign Languages School and the Kindergarten of Liandu Foreign Languages School dated October 13, 2018 (incorporated herein by reference to Exhibit 10.28 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1028.htm)

4.32 [English translation of Supplemental Agreement of Loan Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd. and Zhejiang Lishui Mengxiang Education Development Co., Ltd. regarding Liandu Foreign Languages School and the Kindergarten of Liandu Foreign Languages School dated November 29, 2018 (incorporated herein by reference to Exhibit 10.29 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](http://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex1029.htm)

4.33 [English translation of the Equity Transfer Agreement, between Zhejiang Mengxiang Consultancy Services Co., Ltd., Gamefield Hong Kong Limited and Li Qiang dated January 27, 2021 (incorporated herein by reference to Exhibit 4.33 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 30, 2021)](http://www.sec.gov/Archives/edgar/data/1814067/000119312521142767/d105244dex433.htm)

4.34 [English translation of the Investment Cooperation Agreement, between Lishui Mengxiang, Beijing S.K. and certain other parties affiliated with Beijing S.K. regarding the acquisition of the controlling stake in Beijing S.K. dated July 27, 2021 (incorporated herein by reference to Exhibit 4.34 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex434.htm)

4.35 [English translation of the Sponsorship Interest Transfer Agreement, between Lishui Mengxiang and Qingtian Zhongyi Education Investment regarding the acquisition of 100% of the sponsorship interest of Qingtian International School dated August 18, 2021 (incorporated herein by reference to Exhibit 4.35 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex435.htm)

4.36 [English translation of the Investment Cooperation Agreement, between Lishui Mengxiang and Beijing R.R.Z. regarding the formation of Beijing Xinxiang dated January 18, 2022 (incorporated herein by reference to Exhibit 4.36 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex436.htm)

4.3**7** [English translation of Supplementary Agreement of the Investment Cooperation Agreement, between Lishui Mengxiang, Beijing S.K., Beijing P.X. and certain other parties affiliated with Beijing S.K. regarding the partial conversion of the previously issued convertible debt dated April 18, 2022 (incorporated herein by reference to Exhibit 4.37 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex437.htm)

4.38 [English translation of Acknowledgment Agreement of Contractual Agreements, between Zhejiang Mengxiang Consulting Services Co., Ltd., Qingtian Overseas Chinese International School, Zhejiang Lishui Mengxiang Education Development Co., Ltd. And certain other parties dated April 20, 2022 (incorporated herein by reference to Exhibit 4.38 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex438.htm)

4.39 [English translation of the Business Cooperation Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd., Qingtian Overseas Chinese International School, Zhejiang Lishui Mengxiang Education Development Co., Ltd. and certain other parties dated April 20, 2022 (incorporated herein by reference to Exhibit 4.39 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex439.htm)

4.40 [English translation of the Exclusive Technical Service and Business Consulting Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd. Qingtian Overseas Chinese International School and Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated April 20, 2022 (incorporated herein by reference to Exhibit 4.40 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex440.htm)

4.41 [English translation of Exclusive Call Option Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd., Qingtian Overseas Chinese International School, Zhejiang Lishui herein Mengxiang Education Development Co., Ltd. and certain other parties dated April 20, 2022 (incorporated by reference to Exhibit 4.41 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex441.htm)

4.42 [English translation of the Equity Pledge Agreement, between Zhejiang Lishui Mengxiang Education Development Co., Ltd., Zhejiang Mengxiang Consulting Services Co., Ltd., Ye Fen, Ye Fang and Ye Hong dated April 20, 2022 (incorporated herein by reference to Exhibit 4.42 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex442.htm)

4.43 [English translation of the Proxy Agreement for Shareholders, between Zhejiang Lishui Mengxiang Education Development Co., Ltd., Zhejiang Mengxiang Consulting Services Co., Ltd., Ye Fen, Ye Fang and Ye Hong dated April 20, 2022 (incorporated herein by reference to Exhibit 4.43 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex443.htm)

4.44 [English translation of the Power of Attorney signed by Ye Fen as a shareholder dated April 20, 2022 (incorporated herein by reference to Exhibit 4.44 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex444.htm)

4.45 [English translation of the Power of Attorney signed by Ye Fang as a shareholder dated April 20, 2022 (incorporated herein by reference to Exhibit 4.45 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex445.htm)

4.46 [English translation of the Power of Attorney signed by Ye Hong as a shareholder dated April 20, 2022 (incorporated herein by reference to Exhibit 4.46 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex446.htm)

4.47 [English translation of the Proxy Agreement for School's Sponsor and Council Members, between Zhejiang Lishui Mengxiang Education Development Co., Ltd., Qingtian Overseas Chinese International School, Zhejiang Lishui Mengxiang Education Development Co., Ltd. and certain other parties dated April 20, 2022 (incorporated herein by reference to Exhibit 4.47 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex447.htm)

4.48 [English translation of the Power of Attorney for School's Sponsor signed by Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated April 20, 2022 (incorporated herein by reference to Exhibit 4.48 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex448.htm)

4.49 [English translation of the Power of Attorney signed by Ye Fen as a council member dated April 20, 2022 (incorporated herein by reference to Exhibit 4.49 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex449.htm)

4.50 [English translation of the Power of Attorney signed by Ye Hong as a council member dated April 20, 2022 (incorporated herein by reference to Exhibit 4.50 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex450.htm)

4.51 [English translation of the Power of Attorney signed by Ye Fang as a council member dated April 20, 2022 (incorporated herein by reference to Exhibit 4.51 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex451.htm)

4.52 [English translation of the Power of Attorney signed by Li Haibo as a council member dated April 20, 2022 (incorporated herein by reference to Exhibit 4.52 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex452.htm)

4.53 [English translation of the Power of Attorney signed by Yao Jianwei as a council member dated April 20, 2022 (incorporated herein by reference to Exhibit 4.53 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex453.htm)

4.54 [English translation of the Spouse Undertaking signed by Wei Biao dated April 20, 2022 (incorporated herein by reference to Exhibit 4.54 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex454.htm)

4.55 [English translation of the Spouse Undertaking signed by Chen Jianjun dated April 20, 2022 (incorporated herein by reference to Exhibit 4.55 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex455.htm)

4.56 [English translation of the Spouse Undertaking signed by Ji Hongfeng dated April 20, 2022 (incorporated herein by reference to Exhibit 4.56 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex456.htm)

4.57 [English translation of the Loan Agreement, among Zhejiang Mengxiang Consulting Services Co., Ltd., Zhejiang Lishui Mengxiang Education Development Co., Ltd. and Qingtian Overseas Chinese International School dated April 20, 2022 (incorporated herein by reference to Exhibit 4.57 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex457.htm)

4.58 [English translation of the Supplemental Agreement on the Transfer of the Target Company with Beijing S.K., Beijing P.X. and certain other parties, in respect of the confirmation on consolidating Beijing P.X. into the 2022 consolidated financial statements dated April 24, 2022 (incorporated herein by reference to Exhibit 4.58 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex458.htm)

4.59 [English translation of the Business Cooperation Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd., Qingtian Overseas Chinese International School, Zhejiang Lishui Mengxiang Education Development Co., Ltd. and certain other parties dated January 31, 2023 (incorporated by reference to Exhibit 4.59 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-59_lixiangedu.htm)

4.60 [English translation of the Exclusive Technical Service and Business Consulting Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd. Qingtian Overseas Chinese International School and Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated January 31, 2023 (incorporated by reference to Exhibit 4.60 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-60_lixiangedu.htm)

4.61 [English translation of Exclusive Call Option Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd., Qingtian Overseas Chinese International School, Zhejiang Lishui Mengxiang Education Development Co., Ltd. and certain other parties dated January 31, 2023 (incorporated by reference to Exhibit 4.61 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-61_lixiangedu.htm)

4.62 [English translation of the Equity Pledge Agreement, between Zhejiang Lishui Mengxiang Education Development Co., Ltd., Zhejiang Mengxiang Consulting Services Co., Ltd., Ye Fen and Ye Hong dated January 31, 2023 (incorporated by reference to Exhibit 4.62 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-62_lixiangedu.htm)

4.63 [English translation of the Proxy Agreement for Shareholders, between Zhejiang Lishui Mengxiang Education Development Co., Ltd., Zhejiang Mengxiang Consulting Services Co., Ltd., Ye Fen and Ye Hong dated January 31, 2023 (incorporated by reference to Exhibit 4.63 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-63_lixiangedu.htm)

4.64 [English translation of the Power of Attorney signed by Ye Fen as a shareholder dated January 31, 2023 (incorporated by reference to Exhibit 4.64 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-64_lixiangedu.htm)

4.65 [English translation of the Power of Attorney signed by Ye Hong as a shareholder dated January 31, 2023 (incorporated by reference to Exhibit 4.65 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-65_lixiangedu.htm)

4.66 [English translation of the Proxy Agreement for School's Sponsor and Council Members, between Zhejiang Lishui Mengxiang Education Development Co., Ltd., Qingtian Overseas Chinese International School, Zhejiang Lishui Mengxiang Education Development Co., Ltd. and certain other parties dated January 31, 2023 (incorporated by reference to Exhibit 4.66 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-66_lixiangedu.htm)

4.67 [English translation of the Power of Attorney for School's Sponsor signed by Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated January 31, 2023 (incorporated by reference to Exhibit 4.67 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-67_lixiangedu.htm)

4.68 [English translation of the Power of Attorney signed by Ye Fen as a council member dated January 31, 2023 (incorporated by reference to Exhibit 4.68 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-68_lixiangedu.htm)

4.69 [English translation of the Power of Attorney signed by Li Haibo as a council member dated January 31, 2023 (incorporated by reference to Exhibit 4.69 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-69_lixiangedu.htm)

4.70 [English translation of the Power of Attorney signed by Ye Jun as a council member dated January 31, 2023 (incorporated by reference to Exhibit 4.70 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-70_lixiangedu.htm)

4.71 [English translation of the Power of Attorney signed by Yan Yaomin as a council member dated January 31, 2023 (incorporated by reference to Exhibit 4.71 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-71_lixiangedu.htm)

4.72 [English translation of the Power of Attorney signed by Liu Fenghua as a council member dated January 31, 2023 (incorporated by reference to Exhibit 4.72 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-72_lixiangedu.htm)

4.73 [English translation of the Spouse Undertaking signed by Wei Biao dated January 31, 2023 (incorporated by reference to Exhibit 4.73 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-73_lixiangedu.htm)

4.74 [English translation of the Spouse Undertaking signed by Ji Hongfeng dated January 31, 2023 (incorporated by reference to Exhibit 4.74 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-74_lixiangedu.htm)

4.75 [English translation of the Loan Agreement, among Zhejiang Mengxiang Consulting Services Co., Ltd., Zhejiang Lishui Mengxiang Education Development Co., Ltd. and Qingtian Overseas Chinese International School dated January 31, 2023 (incorporated by reference to Exhibit 4.75 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-75_lixiangedu.htm)

4.76 [English translation of the Business Cooperation Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd., Langfang City Rail Transit Technical School, Beijing Pengxiang Tianxia Education Technology Co., Ltd., Zhejiang Lishui Mengxiang Education Development Co., Ltd. and certain other parties dated March 28, 2023 (incorporated by reference to Exhibit 4.76 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-76_lixiangedu.htm)

4.77 [English translation of the Exclusive Technical Service and Business Consulting Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd., Langfang City Rail Transit Technical School and Beijing Pengxiang Tianxia Education Technology Co., Ltd. dated March 28, 2023 (incorporated by reference to Exhibit 4.77 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-77_lixiangedu.htm)

4.78 [English translation of Exclusive Call Option Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd., Langfang City Rail Transit Technical School, Beijing Pengxiang Tianxia Education Technology Co., Ltd., Zhejiang Lishui Mengxiang Education Development Co., Ltd. and certain other parties dated March 28, 2023 (incorporated by reference to Exhibit 4.78 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-78_lixiangedu.htm)

4.79 [English translation of the Equity Pledge Agreement, between Zhejiang Lishui Mengxiang Education Development Co., Ltd., Beijing Pengxiang Tianxia Education Technology Co., Ltd., Zhejiang Mengxiang Consulting Services Co., Ltd., Ye Fen and Ye Hong dated March 28, 2023 (incorporated by reference to Exhibit 4.79 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-79_lixiangedu.htm)

4.80 [English translation of the Proxy Agreement for Shareholders, between Zhejiang Lishui Mengxiang Education Development Co., Ltd., Beijing Pengxiang Tianxia Education Technology Co., Ltd., Zhejiang Mengxiang Consulting Services Co., Ltd., Ye Fen and Ye Hong dated March 28, 2023 (incorporated by reference to Exhibit 4.80 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-80_lixiangedu.htm)

4.81 [English translation of the Power of Attorney executed by Zhejiang Lishui Mengxiang Education Development Co., Ltd. as a shareholder dated March 28, 2023 (incorporated by reference to Exhibit 4.81 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-81_lixiangedu.htm)

4.82 [English translation of the Proxy Agreement for School's Sponsor and Council Members, between Zhejiang Mengxiang Consulting Services Co., Ltd., Langfang City Rail Transit Technical School, Beijing Pengxiang Tianxia Education Technology Co., Ltd. and certain other parties dated March 28, 2023 (incorporated by reference to Exhibit 4.82 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-82_lixiangedu.htm)

4.83 [English translation of the Power of Attorney for School's Sponsor signed by Beijing Pengxiang Tianxia Education Technology Co., Ltd. dated March 28, 2023 (incorporated by reference to Exhibit 4.83 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-83_lixiangedu.htm)

4.84 [English translation of the Power of Attorney signed by Ye Fen as a council member dated March 28, 2023 (incorporated by reference to Exhibit 4.84 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-84_lixiangedu.htm)

4.85 [English translation of the Power of Attorney signed by Wei Biao as a council member dated March 28, 2023 (incorporated by reference to Exhibit 4.85 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-85_lixiangedu.htm)

4.86 [English translation of the Power of Attorney signed by Mao Hailing as a council member dated March 28, 2023 (incorporated by reference to Exhibit 4.86 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-86_lixiangedu.htm)

4.87 [English translation of the Power of Attorney signed by Qi Yuhai as a council member dated March 28, 2023 (incorporated by reference to Exhibit 4.87 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-87_lixiangedu.htm)

4.88 [English translation of the Spouse Undertaking signed by Wei Biao dated March 28, 2023 (incorporated by reference to Exhibit 4.88 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](http://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-88_lixiangedu.htm)

4.89 [English translation of the Spouse Undertaking signed by Ji Hongfeng dated March 28, 2023 (incorporated by reference to Exhibit 4.89 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](https://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-89_lixiangedu.htm)

4.90 [English translation of the Loan Agreement, among Zhejiang Mengxiang Consulting Services Co., Ltd., Langfang City Rail Transit Technical School and Beijing Pengxiang Tianxia Education Technology Co., Ltd. dated March 28, 2023 (incorporated by reference to Exhibit 4.90 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 1, 2023)](https://www.sec.gov/Archives/edgar/data/1814067/000121390023034581/f20f2022ex4-90_lixiangedu.htm)

4.91 [English translation of Supplementary Agreement to the Investment Cooperation Agreement, among Lishui Mengxiang, Beijing S.K., Beijing P.X. and certain other parties affiliated with Beijing S.K. regarding the terms of the conversion of creditor's rights to equity dated August 20, 2023(incorporated by reference to Exhibit 4.91 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-91_lixiang.htm)

4.92 [English Translation of Sponsorship Interests Transfer Agreement of Qingtian Overseas Chinese Experimental High School, between Zhejiang Lishui Mengxiang Education Development Co., Ltd. and Zhejiang Lishui Qiaoxiang Education Consulting Service Co., Ltd. dated January 15, 2024 (incorporated by reference to Exhibit 4.92 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-92_lixiang.htm)

4.93 [English translation of Acknowledgment Agreement of Contractual Agreements, between Zhejiang Mengxiang Consulting Services Co., Ltd., Qingtian Overseas Chinese Experimental High School, Zhejiang Lishui Mengxiang Education Development Co., Ltd. and certain other parties dated April 2, 2024 (incorporated by reference to Exhibit 4.93 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-93_lixiang.htm)

4.94 [English translation of the Business Cooperation Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd., Lishui Overseas Chinese Senior High School, Zhejiang Lishui Mengxiang Education Development Co., Ltd. and certain other parties dated April 2, 2024 (incorporated by reference to Exhibit 4.94 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-94_lixiang.htm)

4.95 [English translation of the Exclusive Technical Service and Business Consulting Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd. Lishui Overseas Chinese Senior High School and Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated April 2, 2024 (incorporated by reference to Exhibit 4.95 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-95_lixiang.htm)

4.96 [English translation of Exclusive Call Option Agreement, between Zhejiang Mengxiang Consulting Services Co., Ltd., Lishui Overseas Chinese Senior High School, Zhejiang Lishui Mengxiang Education Development Co., Ltd. and certain other parties dated April 2, 2024 (incorporated by reference to Exhibit 4.96 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-96_lixiang.htm)

4.97 [English translation of the Equity Pledge Agreement, between Zhejiang Lishui Mengxiang Education Development Co., Ltd., Zhejiang Mengxiang Consulting Services Co., Ltd., Ye Fen and Ye Hong dated April 2, 2024 (incorporated by reference to Exhibit 4.97 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-97_lixiang.htm)

4.98 [English translation of the Proxy Agreement for Shareholders, between Zhejiang Lishui Mengxiang Education Development Co., Ltd., Zhejiang Mengxiang Consulting Services Co., Ltd., Ye Fen and Ye Hong dated April 2, 2024 (incorporated by reference to Exhibit 4.98 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-98_lixiang.htm)

4.99 [English translation of the Power of Attorney signed by Ye Fen as a shareholder dated April 2, 2024 (incorporated by reference to Exhibit 4.99 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-99_lixiang.htm)

4.100 [English translation of the Power of Attorney signed by Ye Hong as a shareholder dated April 2, 2024 (incorporated by reference to Exhibit 4.100 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-100_lixiang.htm)

4.101 [English translation of the Proxy Agreement for School's Sponsor and Council Members, between Zhejiang Lishui Mengxiang Education Development Co., Ltd., Lishui Overseas Chinese Senior High School, Zhejiang Mengxiang Consulting Services Co., Ltd. and certain other parties dated April 2, 2024 (incorporated by reference to Exhibit 4.101 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-101_lixiang.htm)

4.102 [English translation of the Power of Attorney for School's Sponsor signed by Zhejiang Lishui Mengxiang Education Development Co., Ltd. dated April 2, 2024 (incorporated by reference to Exhibit 4.102 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-102_lixiang.htm)

4.103 [English translation of the Power of Attorney signed by Ye Fen as a council member dated April 2, 2024 (incorporated by reference to Exhibit 4.103 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-103_lixiang.htm)

4.104 [English translation of the Power of Attorney signed by Yu Yingte as a council member dated April 2, 2024 (incorporated by reference to Exhibit 4.104 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-104_lixiang.htm)

4.105 [English translation of the Power of Attorney signed by Ye Jun as a council member dated April 2, 2024 (incorporated by reference to Exhibit 4.105 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-105_lixiang.htm)

4.106 [English translation of the Power of Attorney signed by Xu Guiyun as a council member dated April 2, 2024 (incorporated by reference to Exhibit 4.106 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-106_lixiang.htm)

4.107 [English translation of the Power of Attorney signed by Mao Hailing as a council member dated April 2, 2024 (incorporated by reference to Exhibit 4.107 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-107_lixiang.htm)

4.108 [English translation of the Spouse Undertaking signed by Wei Biao dated April 2, 2024 (incorporated by reference to Exhibit 4.108 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-108_lixiang.htm)

---

| | |
|:---|:---|
| 4.109 | [English translation of the Spouse Undertaking signed by Ji Hongfeng dated April 2, 2024 (incorporated by reference to Exhibit 4.109 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-109_lixiang.htm) |
| 4.110 | [English translation of the Loan Agreement, among Zhejiang Mengxiang Consulting Services Co., Ltd., Zhejiang Lishui Mengxiang Education Development Co., Ltd. and Lishui Overseas Chinese Senior High School dated April 2, 2024 (incorporated by reference to Exhibit 4.110 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex4-110_lixiang.htm) |
| 4.111† | [English translation of the Cooperation Agreement, between Langfang City Rail Transit Technical School and Hebei Technical College of Petroleum Profession dated July 31, 2024 (incorporated herein by reference to Exhibit 4.111 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 30, 2025)](https://www.sec.gov/Archives/edgar/data/1814067/000121390025037081/ea023882701ex4-111_lixiang.htm) |
| 8.1\* | [List of Subsidiaries and VIEs of the Registrant](ea028775901ex8-1.htm) |
| 11.1 | [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. 333-248691), filed with the Securities and Exchange Commission on September 9, 2020)](https://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex991.htm) |
| 11.2 | [Insider Trading Policy (incorporated herein by reference to Exhibit 11.2 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 30, 2025)](https://www.sec.gov/Archives/edgar/data/1814067/000121390025037081/ea023882701ex11-2_lixiang.htm) |
| 12.1\* | [Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028775901ex12-1.htm) |
| 12.2\* | [Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028775901ex12-2.htm) |
| 13.1\*\* | [Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028775901ex13-1.htm) |
| 13.2\*\* | [Certification by Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028775901ex13-2.htm) |
| 15.1\* | [Consent of DeHeng Law Offices](ea028775901ex15-1.htm) |
| 15.2 | [Consent of Frost & Sullivan (incorporated herein by reference to Exhibit 23.5 to the registration statement on Form F-1 (File No. 333-248691), as amended, initially filed with the Securities and Exchange Commission on September 9, 2020)](https://www.sec.gov/Archives/edgar/data/1814067/000119312520242249/d921897dex235.htm) |
| 15.3 | [Letter from PricewaterhouseCoopers Zhong Tian LLP (incorporated herein by reference to Exhibit 15.4 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on April 29, 2022)](http://www.sec.gov/Archives/edgar/data/1814067/000119312522128185/d271877dex154.htm) |
| 15.4 | [Response Letter from WWC, P.C., Independent Registered Public Accounting Firm (incorporated herein by reference to Exhibit 15.5 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex15-5_lixiang.htm) |
| 15.5\* | [Consent of Maples and Calder (Hong Kong) LLP](ea028775901ex15-5.htm) |
| 97.1 | [Executive Compensation Recovery Policy of the Registrant (incorporated by reference to Exhibit 97.1 to the annual report on Form 20-F (File No. 001-39559), filed with the Securities and Exchange Commission on May 15, 2024)](http://www.sec.gov/Archives/edgar/data/1814067/000121390024043569/ea020444301ex97-1_lixiang.htm) |

---

\* Filed herewith

\*\* Furnished herewith

† Certain
 portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation
 S-K on the basis that the Company customarily and actually treats that information as private
 or confidential and the omitted information is not material.

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F, and that it has duly caused and authorized the undersigned to sign the annual report on its behalf.

---

| | |
|:---|:---|
| Lixiang Education Holding Co., Ltd. | Lixiang Education Holding Co., Ltd. |
| By: | /s/ Biao Wei |
| Name: | Biao Wei |
| Title: | Director and Chief Executive Officer |

---

Date: May 12, 2026

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| **Content** | **Page(s)** |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID:3487)](#f_001) | F-2 |
| [Consolidated Balance Sheets as of December 31, 2024 and 2025](#f_002) | F-3 |
| [Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023, 2024 and 2025](#f_003) | F-4 |
| [Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2023, 2024 and 2025](#f_004) | F-5 |
| [Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2024 and 2025](#f_005) | F-6 |
| [Notes to the Consolidated Financial Statements](#f_006) | F-7 |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Shareholders and Board of Directors of

Lixiang Education Holding Co., Ltd.

**Opinion on the Financial Statements** 

We have audited the accompanying consolidated balance sheets of Lixiang Education Holding Co., Ltd. (the "Company")and its subsidiaries (the "Group") as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in shareholders' equity and cash flows for each of the years ended December 31, 2025, 2024 and 2023 and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated 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 years ended December 31, 2025, 2024 and 2023 in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP").

**Material Uncertainty Related to Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Group had a working capital deficiency of RMB90,091,355, incurred a net loss of RMB121,262,741, and net cash used in operating activities of RMB314,302,893. As of December 31, 2025, the Group had an accumulated deficit of RMB391,851,008, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion** 

These consolidated financial statements are the responsibility of the Group's management. Our responsibility is to express an opinion on the Group's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group's 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 consolidated financial statements are free of material misstatement, whether due to error or fraud. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Group internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters** 

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) related to accounts or disclosures that were material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated 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 they relate.

***Fair Value Measurement of investment in equity securities***

As described in Note 10 to the consolidated financial statements, the company measures certain investment in equity securities at fair value.

We identified the valuation of these instruments as a critical audit matter due to the significant estimation uncertainty and judgment in determining fair value, particularly in respect of: the selection of appropriate valuation methodologies.

Our principal audit procedures performed to address this critical audit matter included the following:

● We sent confirmation letters to the fund company and obtained replies, which verified the value of the investment in equity securities.

● We obtained an understanding of the controls and processes surrounding the evaluation, initial measurement and revaluation of the investment in equity securities.

● We evaluated management's assessment and the conclusions reached to ensure these investment in equity securities were recorded in accordance with the relevant accounting guidance.

● We evaluated the value of these investment in equity securities by verifying the related agreement.

● We assessed the adequacy of the company's disclosures related to fair value measurements, including the valuation techniques, significant assumptions and estimation uncertainties.

 

*/s/ Audit Alliance LLP*

We have served as the Company's auditor since 2024

Singapore

May 12, 2026

**Lixiang Education Holding Co., Ltd.**

**CONSOLIDATED BALANCE SHEETS**

**As of December 31, 2024 and 2025**

**(RMB, except share data or otherwise noted)**

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **US$(Note 2(g))** |
| **ASSETS** |  |  |  |
| **Current assets:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 220724238 | 12782851 | 1827923 |
| &nbsp;&nbsp;&nbsp;Prepayments and other current assets, net | 5846730 | 12303879 | 1759431 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 156770 | 164207 | 23481 |
| &nbsp;&nbsp;&nbsp;Amounts due from related parties | 9542000 | 8932000 | 1277259 |
| **Total current assets** | **236269738** | **34182937** | **4888094** |
| **Non-current assets:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 147250054 | 142771400 | 20416039 |
| &nbsp;&nbsp;&nbsp;Land use rights, net | 33927238 | 32980543 | 4716155 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 163687 | 130896 | 18718 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | 51906613 | 54080188 | 7733364 |
| &nbsp;&nbsp;&nbsp;Other non-current asset | 1100000 | 7800000 | 1115385 |
| &nbsp;&nbsp;&nbsp;Investment in equity securities | - | 44974376 | 6431250 |
| **Total non-current assets** | **234347592** | **282737403** | **40430911** |
| **Total assets** | **470617330** | **316920340** | **45319005** |
| **LIABILITIES** |  |  |  |
| **Current liabilities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | 84000000 | 84000000 | 12011840 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 388494 | 4020942 | 574987 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 5595491 | 7796228 | 1114846 |
| &nbsp;&nbsp;&nbsp;Salary and welfare payable | 1861780 | 1829701 | 261644 |
| &nbsp;&nbsp;&nbsp;Amounts due to a related party | 1817485 | 1621303 | 231843 |
| &nbsp;&nbsp;&nbsp;Taxes payable | 2146819 | 3266167 | 467056 |
| &nbsp;&nbsp;&nbsp;Income tax payable | 213495 | 179316 | 25642 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities and other current liabilities | 7489769 | 11081009 | 1584562 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, current | 9208569 | 10479626 | 1498567 |
| **Total current liabilities** | **112721902** | **124274292** | **17770987** |
| **Non-current liabilities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Amounts due to Affected Entity, non-current | 173046163 | - | - |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, non-current | 38352135 | 38439295 | 5496746 |
| &nbsp;&nbsp;&nbsp;Other non-current liabilities | 1000000 | 1000000 | 142998 |
| **Total non-current liabilities** | **212398298** | **39439295** | **5639744** |
| **Total liabilities** | **325120200** | **163713587** | **23410731** |
| **Commitments and contingencies** |  |  |  |
| **Shareholders' equity:** |  |  |  |
| Class A ordinary shares (USD$0.0001 par value; 19,700,000,000 shares authorized, 71,667,000 and 1,871,667,000 shares issued and outstanding as of December 31, 2024 and 2025, respectively) | 50584 | 1368598 | 195707 |
| Class B ordinary shares (USD$0.0001 par value; 100,000,000 shares authorized, 45,000,000 and 45,000,000 shares issued and outstanding as of December 31, 2024 and 2025, respectively) | 30508 | 30508 | 4363 |
| Additional paid-in capital | 343098862 | 476500785 | 68138706 |
| Statutory reserves | 60610543 | 60610543 | 8667192 |
| Accumulated other comprehensive income | 12294900 | 6547327 | 936255 |
| Accumulated deficit | (269947314) | (391851008) | (56033949) |
| **Total Lixiang Education Holding Co., Ltd. shareholders' equity** | **146138083** | **153206753** | **21908274** |
| Non-controlling interests | (640953) | - | - |
| **Total shareholders' equity** | **145497130** | **153206753** | **21908274** |
| **Total liabilities and shareholders' equity** | **470617330** | **316920340** | **45319005** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**Lixiang Education Holding Co., Ltd.**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

**For the years ended December 31, 2023, 2024 and 2025**

**(RMB, except share data or otherwise noted)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$ <br> (Note 2(g))** |
| **Net revenues:** |  |  |  |  |
| Revenue from third parties | 50061131 | 32046375 | 30229432 | 4322751 |
| Revenue from related parties | 754285 | 754285 | 603558 | 86308 |
| **Total net revenues** | **50815416** | **32800660** | **30832990** | **4409059** |
| Cost of revenues | (46850314) | (35851105) | (42763080) | (6115039) |
| **Gross profit/(loss)** | **3965102** | **(3050445)** | **(11930090)** | **(1705980)** |
| **Operating expenses:** |  |  |  |  |
| General and administrative expenses | (25445401) | (22799165) | (23468370) | (3355932) |
| Selling and marketing expenses | (18300) | (111780) | (985278) | (140893) |
| Impairment loss on goodwill | (22677921) | - | - | - |
| Expected credit loss for receivables and other assets | (65138293) | - | - | - |
| **Total operating expenses** | **(113279915)** | **(22910945)** | **(24453648)** | **(3496825)** |
| **Operating loss** | **(109314813)** | **(25961390)** | **(36383738)** | **(5202805)** |
| Interest expense | (3634721) | (2860956) | (3456630) | (494292) |
| Fair value changes of equity securities | - | - | (83621753) | (11957752) |
| Interest income | 134011 | 289865 | 9301 | 1330 |
| Other income, net | 12339894 | 3830448 | 2190079 | 313177 |
| **Loss before income tax expense** | **(100475629)** | **(24702033)** | **(121262741)** | **(17340342)** |
| Income tax expenses | (3119576) | - | - | - |
| **Loss from continuing operations, net of tax** | **(103595205)** | **(24702033)** | **(121262741)** | **(17340342)** |
| **Loss from discontinued operation, net of tax** | **(23394661)** | **-**  | **-**  | **-**  |
| **Net loss** | **(126989866)** | **(24702033)** | **(121262741)** | **(17340342)** |
| **Net loss attributable to Lixiang Education Holding Co., Ltd. shareholders** | **(126630648)** | **(24627666)** | **(121903694)** | **(17431997)** |
| **Net (loss)/income attributable to non-controlling interests** | **(359218)** | **(74367)** | **640953** | **91655** |
| **Other comprehensive income/(loss):** |  |  |  |  |
| Foreign currency translation adjustment, net of nil tax | 2970553 | 3809859 | (5747573) | (821892) |
| **Comprehensive loss** | **(124019313)** | **(20892174)** | **(127010314)** | **(18162234)** |
| Total comprehensive (loss)/income attributable to non-controlling interests | (359218) | (74367) | 640953 | 91655 |
| **Total comprehensive loss attributable to Lixiang Education Holding Co., Ltd. shareholders** | (123660095) | (20817807) | (127651267) | (18253889) |
| Loss per ordinary share attributable to Lixiang Education Holding Co., Ltd. shareholders from continuing operations | (1.32) | (0.21) | (0.06) | (0.01) |
| **—Basic and diluted** |  |  |  |  |
| Loss per ordinary share attributable to Lixiang Education Holding Co., Ltd. shareholders from discontinued operation | (0.30) | - | - | - |
| **—Basic and diluted** |  |  |  |  |
| Weighted average number of ordinary shares outstanding | 78584808 | 116667000 | 1911667000 | 1911667000 |

---

The accompanying notes are an integral part of these consolidated financial statements.

**Lixiang Education Holding Co., Ltd.**

**CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

**For the years ended December 31, 2023, 2024 and 2025**

**(RMB, except share data or otherwise noted)**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Class A Ordinary<br> Shares** | **Class A Ordinary<br> Shares** | **Class B Ordinary Shares** | **Class B Ordinary Shares** | | | | | | | |
|  | **Share** | **Amount** | **Share** | **Amount** | **Additional paid-in**<br>**capital** | **Statutory**<br>**reserves** | **Accumulated other comprehensive**<br>**income** | **Accumulated**<br>**deficit** | **Total Lixiang Education Holding Co., Ltd. shareholders'**<br>**equity** | **Non-controlling**<br>**interests** | **Total shareholders'**<br>**equity** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| **Balance as of December 31, 2021** | **21667000** | **14690** | **45000000** | **30508** | **305460907** | **60201702** | **5514488** | **(118280159)** | **252942136** | **548631** | **253490767** |
| Net loss for the year |  |  |  |  |  |  |  | (126630648) | (126630648) | (359218) | (126989866) |
| Issuance of ordinary shares (Note 14) | 50000000 | 35894 |  |  | 43037505 |  |  |  | 43073399 |  | 43073399 |
| Reversal of shareholder's deemed contribution (Note 20) |  |  |  |  | (17455572) |  |  |  | (17455572) |  | (17455572) |
| Offering costs |  |  |  |  | (1216965) |  |  |  | (1216965) |  | (1216965) |
| Withdrawal of non-controlling shareholders (Note 21) |  |  |  |  |  |  |  |  |  | (500000) | (500000) |
| Disposal Qingtian International School |  |  |  |  | 3726595 |  |  |  | 3726595 |  | 3726595 |
| Provision of statutory reserve |  |  |  |  |  | 408841 |  | (408841) |  |  |  |
| Foreign currency translation | - | - | - | - | - | - | 2970553 | - | 2970553 | - | 2970553 |
| **Balance as of December 31, 2023** | **71667000** | **50584** | **45000000** | **30508** | **333552470** | **60610543** | **8485041** | **(245319648)** | **157409498** | **(310587)** | **157098911** |
| Net loss for the year |  |  |  |  |  |  |  | (24627666) | (24627666) | (74367) | (24702033) |
| Deemed shareholder's contribution (Note 20) |  |  |  |  | 9546392 |  |  |  | 9546392 |  | 9546392 |
| Disposal of non-controlling interests (Note21) |  |  |  |  |  |  |  |  |  | (255999) | (255999) |
| Foreign currency translation | - | - | - | - | - | - | 3809859 | - | 3809859 | - | 3809859 |
| **Balance as of December 31, 2024** | **71667000** | **50584** | **45000000** | **30508** | **343098862** | **60610543** | **12294900** | **(269947314)** | **146138083** | **(640953)** | **145497130** |
| Net loss for the year \* |  |  |  |  |  |  |  | (121903694) | (121903694) | 640953 | (121262741) |
| Reversal of shareholder's deemed contribution |  |  |  |  | (115702723) |  |  |  | (115702723) |  | (115702723) |
| Issuance of ordinary shares | 1800000000 | 1318014 |  |  | 249104646 |  |  |  | 250422660 |  | 250422660 |
| Foreign currency translation | - | - | - | - | - | - | (5747573) | - | (5747573) | - | (5747573) |
| **Balance as of December 31, 2025** | **1871667000** | **1368598** | **45000000** | **30508** | **476500785** | **60610543** | **6547327** | **(391851008)** | **153206753** | **-** | **153206753** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**Lixiang Education Holding Co., Ltd.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**For the years ended December 31, 2023, 2024 and 2025**

**(RMB, except share data or otherwise noted)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$(Note 2(g))** |
| **Cash flows from operating activities** |  |  |  |  |
| **Net loss** | **(126989866)** | **(24702033)** | **(121262741)** | **(17340342)** |
| Net loss from discontinued operation | (23394661) | - | - | - |
| Net loss from continuing operations | (103595205) | (24702033) | (121262741) | (17340342) |
| Adjustments for: |  |  |  |  |
| Provision/(reversal) for credit losses | 65078293 | (1574942) | 12310 | 1760 |
| Depreciation of property and equipment | 6128680 | 4598768 | 4596107 | 657235 |
| Amortization of land use rights | 946697 | 946697 | 946697 | 135376 |
| Amortization of intangible assets | 33045 | 32789 | 32791 | 4689 |
| Amortization of right-of-use assets | 4185583 | 6158318 | 9020938 | 1289977 |
| Impairment of goodwill | 22677921 | - | - | - |
| Deferred tax expenses | 2903456 | - | - | - |
| Impairment loss on investments | - | - | 83621753 | 11957752 |
| **Changes in assets and liabilities:** |  |  |  |  |
| Accounts receivable | (6601) | (147390) | (7437) | (1063) |
| Inventories | 276881 | 886895 | - | - |
| Prepayments and other current assets | 5195189 | 1921752 | (469459) | (67132) |
| Amounts due from related parties | (10750000) | (6792000) | 610000 | 87229 |
| Other non-current asset | - | (1100000) | 800000 | 114398 |
| Accounts payable | (295626) | (1115604) | 3632448 | 519433 |
| Amounts due to a related party | 7676600 | 1817485 | (196182) | (28054) |
| Amounts due to Affected Entity, current | (60375678) | 8912193 | (288748886) | (41290542) |
| Salaries and welfare payable | 645567 | (592660) | (32079) | (4587) |
| Taxes payable | 160456 | 1315310 | 1119348 | 160065 |
| Income tax payable | 162001 | (6337) | (34179) | (4888) |
| Contract liabilities | (1024939) | (917581) | 2200737 | 314701 |
| Accrued liabilities and other current liabilities | (3064836) | 1540776 | (308763) | (44151) |
| Other non-current liabilities | - | 1000000 | - | - |
| Operating lease liabilities, current and non-current | (3866909) | (10504227) | (9836296) | (1406572) |
| Net cash used in operating activities from continuing operations | (66909425) | (18321791) | (314302893) | (44944716) |
| Net cash provided by operating activities from discontinued operation | 7709950 | - | - | - |
| **Net cash used in operating activities** | **(59199475)** | **(18321791)** | **(314302893)** | **(44944716)** |
| **Cash flows from investing activities:** |  |  |  |  |
| Purchase of short-term investments | - | (170000) | (300000) | (42899) |
| Proceeds from maturity of short-term investments | - | 170000 | 300000 | 42899 |
| Purchase of property and equipment and intangible assets | (2177538) | (298083) | (117452) | (16795) |
| Disposal of non-controlling interests | - | (255999) | - | - |
| Cash loss of disposal of Qingtian International School | (4972757) | - | - | - |
| Cash loss of disposal of Chuangmei Weiye | (425988) | - | - | - |
| Payments for software platform development | - | - | (7500000) | (1072486) |
| Prepayment for merger and acquisition consulting services | - | - | (6000000) | (857989) |
| Payment for investment in fund | - | - | (128596129) | (18389002) |
| Net cash used in investing activities from continuing operations | (7576283) | (554082) | (142213581) | (20336272) |
| Net cash provided by investing activities from discontinued operation | - | - | - | - |
| **Net cash used in investing activities** | **(7576283)** | **(554082)** | **(142213581)** | **(20336272)** |
| **Cash flows from financing activities:** |  |  |  |  |
| Proceeds from short-term borrowings with banks | 98000000 | 114000000 | 104000000 | 14871802 |
| Repayments of short-term borrowings with banks | (85000000) | (104000000) | (104000000) | (14871802) |
| Repayments of long-term borrowings with banks | (2500000) | (1250000) | - | - |
| Proceeds from issuance of ordinary shares, net of issuance cost | 41856434 | - | 250422660 | 35809964 |
| Proceeds from borrowings from third parties | - | - | 3900000 | 557693 |
| Withdrawal of non-controlling shareholders | (500000) | - | - | - |
| Net cash provided by financing activities from continuing operations | 51856434 | 8750000 | 254322660 | 36367657 |
| Net cash used in financing activities from discontinued operation | (7772526) | - | - | - |
| **Net cash provided by financing activities** | **44083908** | **8750000** | **254322660** | **36367657** |
| Effect of exchange rate changes on cash and cash equivalents | 2970553 | 3809860 | (5747573) | (821892) |
| **Net decrease in cash and cash equivalents** | **(19721297)** | **(6316013)** | **(207941387)** | **(29735223)** |
| **Cash and cash equivalents at the beginning of year** | **246761548** | **227040251** | **220724238** | **31563146** |
| **Cash and cash equivalents at the end of year** | **227040251** | **220724238** | **12782851** | **1827923** |
| **Less: cash and cash equivalents of discontinued operations at the end of year** | **-**  | **-**  | **-**  | **-**  |
| **Cash and cash equivalents of continuing operations at the end of year** | **227040251** | **220724238** | **12782851** | **1827923** |
| **Supplemental disclosure of cash flow information:** |  |  |  |  |
| Cash paid for interest expenses | 3838286 | 2739254 | 3480392 | 497689 |
| Cash paid for income tax expenses | 66549 | 9154 | 40332 | 5767 |
| **Supplemental disclosure of non-cash flow information:** |  |  |  |  |
| Obtaining right-of-use assets in exchange for operating lease liabilities | - | 55593928 | 11194513 | 1600794 |
| Deemed shareholder's contribution | - | 9546392 | - | - |
| Deemed withdrawal of shareholder's contribution | (17455572) | - | (115702723) | (16545269) |
| Offset between consideration from disposal of Qingtian International School and amount due to Lianwai School | 23161000 | - | - | - |
| Disposal Qingtian International School | 3726595 | - | - | - |
| Offset between amounts due to Qingtian Zhongyi and amounts due from Qingtian International School | - | 8000000 | - | - |

---

The accompanying notes are an integral part of these consolidated financial statements.

**Lixiang Education Holding Co., Ltd.**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(RMB, except share data or otherwise noted)**

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Organization and Principal Activities** 

&nbsp;&nbsp;&nbsp;&nbsp;***(a)***  ***Principal activities*** 

Lixiang Education Holding Co., Ltd. (formerly known as Lianwai Education Group Limited, the "Company") was incorporated on September 6, 2018 under the law of the Cayman Islands as an exempted company with limited liability. The Company's original name was Lianwai Education Group Limited. The Company changed its name to Lixiang Education Holding Co., Ltd. on May 26, 2020. The Company, through its subsidiaries and consolidated variable interest entities ("VIEs") (collectively referred to as the "Group") is primarily engaged in providing education services including high school and vocational education services through Zhejiang Lishui Mengxiang Education Development Company Limited, Langfang City Rail Transit Technical School ("Langfang School") and Lishui Overseas Chinese high School ("Lishui International School") in the People's Republic of China (the "PRC").

On May 14, 2021, the General Office of the State Council of the People's Republic of China (the "PRC State Council") announced the Implementation Rules, which became effective on September 1, 2021. Under the Implementation Rules, social organizations and individuals are prohibited from controlling a private school that provides compulsory education, referring to nine years of curriculum education mandated by the PRC, by means of, among others, merger, acquisition, and contractual arrangements, and a private school providing compulsory education is prohibited from conducting transactions with its related party. As a result of the effectiveness of the Implementation Rules, the Company would no longer be able to use its power under the contractual arrangements as disclosed in Note 2(c) to direct the relevant activities that would most significantly affect the economic performance of those schools and hence, has lost control on August 31, 2021 over Lianwai School ("Affected Entity"). Accordingly, the carrying amount related to the net assets of the Affected Entity were deconsolidated from the consolidated financial statements of the Group as of August 31, 2021.

*Significant equity transactions* 

On October 1, 2020, the Company completed its IPO on the NASDAQ Global Market of 3,333,400 American Depositary Shares ("ADS"). Each ADS represents 5 ordinary shares. The offering was at a price of US$9.25 per ADS for a total offering size of approximately US$30.8 million. The net proceeds raised from the IPO amounted to approximately RMB170.7 million (US$26.2 million) after deducting underwriting discounts and commissions and other offering expenses.

On August 31, 2021, the Company consolidated 100% of the sponsorship interest of Qingtian International School from Qingtian Zhongyi Education Investment Co., Ltd under the consideration of RMB23.0 million.

On January 1, 2022, the Group acquired 100% equity interest of Beijing P.X. from Beijing Shangkun Education Technology Development Co., Ltd. ("Beijing S.K.") with the consideration of RMB53.4 million.

On January 6, 2023, the Group established Hebei Chuangxiang Enterprise Management Co., LTD ("Hebei Chuangxiang"), and Beijing P.X. held its 100% equity interest.

On June 25, 2023, the Group established Lishui International School, and Zhejiang Lishui Mengxiang Education Development Company Limited held its 100% sponsorship interest.

On August 25, 2023, the Group entered into a share subscription agreement with each of the Individual Investors (collectively, the "Purchase Agreements"), pursuant to which the Group agreed to issue and sell to such Individual Investors a total of 50,000,000 ordinary shares with a par value of US$0.0001 each of the Group, in the aggregate consideration of US$6,000,000.

On November 9, 2023, the Group transferred Beijing Chuangmei Weiye Enterprise Management Co with 100% equity interests, and the consideration of RMB6.36 million was considered remote to be collected.

**1.** **Organization and Principal Activities (Continued)** 

On December 31, 2023, the Group transferred Qingtian International School with 100% sponsorship interests for a consideration of RMB23.2 million.

On November 28, 2024, the Company entered into a share subscription agreement with certain individual investors and sell to individual investors a total of 1,800,000,000 Class A ordinary, in the aggregate consideration of US$34.2 million. The financing transaction was closed in January 2025.

As of December 31, 2025, the Company's major subsidiaries and VIEs are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of subsidiaries and VIE** | **Date of establishment / acquisition** | **Place of<br> incorporation** | **Percentage of<br> direct or<br> indirect<br> economic<br> ownership** | **Principal<br> activities** |
| **Wholly owned subsidiaries of the Company:** |  |  | |  |
| Lianwai Investment Co., Ltd. ("Lianwai investment") | Established <br> on September 11, 2018 | BVI | 100% | Investment <br> holding |
| Hong Kong Mengxiang Education Development Group Limited ("HK Mengxiang") | Established <br> on September 20, 2018 | Hong Kong | 100% | Investment<br> holding |
| Zhejiang Mengxiang Consulting Services Co., Ltd. ("Liandu WFOE") | Established <br> on October 10, 2018 | PRC | 100% | Investment<br> holding |
| **Variable Interest Entities ("VIEs")** |  |  |  |  |
| Zhejiang Lishui Mengxiang Education Development Company Limited ("Lishui Mengxiang VIE") | Established <br> on August 20, 2001 | PRC | 100% | Operation of<br> Liandu Foreign<br> Language School |
| Langfang City Rail Transit Technical School ("Langfang School") | Acquired <br> on January 1, 2022 | PRC | 100% | Operation of <br> vocational education |
| Hainan Jiangcai Vocational Skills Training School Co. Ltd. ("Hainan Jiangcai") | Acquired <br> on January 1, 2022 | PRC | 100% | Operation of <br> vocational education |
| Lishui Overseas Chinese high School ("Lishui International School") | Established <br> on June 25, 2023 | PRC | 100% | Operation of <br> high school |
| Hebei Chuangxiang | Established <br> on January 6, 2023 | PRC | 100% | Comprehensive human resources service, and healthcare support services |

---

***(b)***  ***Group history*** 

The Group started its business through Lishui Mengxiang VIE and Lianwai School VIE. To facilitate offshore financing, an offshore corporate structure was formed in 2018, which was carried out as follows:

1) On September 6, 2018, the Company was incorporated in the Cayman Islands by Ms. Fen Ye, Ms. Fang Ye, and Ms. Hong Ye (the "founders.").

2) On September 11, 2018, Lianwai investment was incorporated in British Virgin Islands with 100% ownership by the Company.

3) On September 20, 2018, HK Mengxiang was incorporated in Hong Kong with 100% ownership by Lianwai investment.

4) On October 10, 2018, Liandu WFOE was incorporated in the PRC with 100% ownership by HK Mengxiang.

5) On August 13, 2020, Zhejiang Lishui Xianke Agricultural Products Distribution Co., Ltd. ("Xianke") was incorporated in the PRC with 100% ownership by Liandu WFOE.

**1.** **Organization and Principal Activities (Continued)** 

In order to comply with the PRC laws and regulations which prohibit or restrict foreign investments into companies involved in restricted businesses, the Group provides education services in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members of the Company or onshore nominees of certain investors of the Company ("Nominee Shareholders").

The Company obtained control over these PRC domestic companies by entering into a series of Contractual Arrangements.

On August 31, 2021, the ability of Group to use its power under the contractual arrangements with Lishui Mengxiang VIE to direct the relevant activities that would most significantly affect the economic performance of the Affected Entity had ceased due to Implementation Rules. The Group has executed the Acknowledgment Agreement in April 2022 to confirm all the terms of rights and obligations relating to Lianwai School and the director appointed by the sponsor under the VIE Agreements, which shall be terminated on August 31, 2021. Meanwhile, the Group has entered into a series of Contractual Agreements through Liandu WFOE, Qingtian International School and the Council Members of Qingtian International School ("Qingtian International School Contractual Agreement"). The Group has executed the Acknowledgment Agreement in April 2024 to confirm all the terms of rights and obligations relating to Qintian International School and the director appointed by the sponsor under the Qingtian International School Contractual Agreement, which shall be terminated on December 31, 2023.

In March 2023, the Group has entered into a series of Contractual Agreements through Liandu WFOE, Langfang School and the Council Members of Langfang School ("Langfang School Contractual Agreements"). In April 2024, the Group has entered into a series of Contractual Agreements through Liandu WFOE, Lishui International School, and the Council Members of Lishui International School (together with Langfang School Contractual Agreements, as "new VIE Agreements"). After that Lishui Mengxiang VIE and Langfang School became VIEs effective on January 1, 2022, and Lishui International School became VIE effective on June 25, 2023, whose primary beneficiary is Liandu WFOE, and the shareholders of new VIEs became the Nominee Shareholders at that date.

These Contractual Agreements cannot be unilaterally terminated by the Nominee Shareholders, or the new VIEs. As a result, the Company maintains the ability to control these new VIEs, and is entitled to substantially all of the economic benefits from these new VIEs. Accordingly, the Group had consolidated the financial position and operating results of affiliate Chinese entities, new VIEs in the consolidated financial statements of the Company during the year ended December 31, 2023, 2024 and 2025. The Company's VIE includes (1) affiliate Chinese entities, prior to August 31, 2021; and (2) the new VIEs after August 31, 2021. Qingtian International School is the Company's VIE from August 31, 2021 to December 31, 2023.

The principal terms of the agreements entered into amongst the VIEs, their respective shareholders and the Liandu WFOE are further described below.

**1.** **Organization and Principal Activities (Continued)** 

***(c)***  ***Contractual Agreements with VIEs*** 

 

*Loan Agreements* 

 

Pursuant to the loan agreements entered into between Liandu WFOE and affiliate Chinese entities, and between Liandu WFOE and new VIEs, Liandu WFOE can grant interest-free loans to Lishui Mengxiang VIE, or Beijing P.X. with the sole purpose of providing funds necessary for the business operations and development of Langfang School and Lishui International School. These business loan amounts can be injected into Langfang School and Lishui International School as capital or other operation means, and cannot be accessed for any personal uses. There is no fixed term for each loan under the loan agreement except that Liandu WFOE can unilaterally decide when to recover the loan and the loan agreements shall remain effective during the operation term of Langfang School and Lishui International School and any periods that are renewable pursuant to PRC laws. Liandu WFOE has the right to unilaterally terminate these agreements after giving notice in advance, including that Liandu WFOE and/or its designated entities have fully exercised their options to purchase all the (direct and indirect) equities held by Nominee Shareholders of the relevant VIE in accordance with the Exclusive Call Option Agreements (as described in the following paragraph), while the shareholders of such consolidated affiliated Chinese entities have no right to unilaterally terminate these agreements. As of December 31, 2024 and 2025, no loans have been granted yet.

*Exclusive Call Option Agreements* 

 

Under the exclusive call option agreements, each Nominee Shareholders of the affiliate Chinese entities and new VIEs granted Liandu WFOE the exclusive and irrevocable right to purchase or to designate entities at their discretion to purchase part or all of the equity interests in the VIEs from the Nominee Shareholders, in the case that the PRC laws and regulations allows, at any time for a purchase price subject to the lowest price permitted by PRC laws and regulations. Liandu WFOE or its designated representatives have sole discretion as to when to exercise such options, either in part or in full. The affiliate Chinese entities and new VIEs (collectively the "VIEs"), and their Nominee Shareholders have agreed that without Liandu WFOE's prior written consent, their respective Nominee Shareholders cannot sell, transfer, assign or dispose of or create any encumbrance on any of the VIEs' equity interests, assets, and business. Also, as agreed, the VIEs cannot declare any dividend or change the capitalization structure of the VIEs and cannot enter into any loan, guarantee or investment agreements.

Furthermore, the Nominee Shareholders have agreed that any proceeds but not limited to the sales of the Nominee Shareholders' equity interest in relevant VIEs should be gratuitously paid to Liandu WFOE or one or more person(s) at their discretion. The agreements will remain in force during the operation terms of the relevant VIEs and any periods that are renewable pursuant to the PRC laws, and will terminate automatically when Liandu WFOE and/or its designated entities fully exercise their options to purchase all the equities held by Nominee Shareholders in accordance with the Exclusive Call Option Agreements. In addition, Liandu WFOE has the right to unilaterally terminate these agreements after 30 days advance written notice, while the Nominee Shareholders and relevant VIEs have no right to unilaterally terminate these agreements.

 

*Proxy Agreements and Power of Attorney for Shareholders* 

Pursuant to the proxy agreements and power of attorney, each equity holder of Lishui Mengxiang VIE appointed the Liandu WFOE as their attorney-in-fact to exercise all shareholder rights under PRC law and the relevant articles of association, including but not limited to, calling and attending shareholders' meetings, voting on their behalf on all matters requiring shareholder approval, including but not limited to designating and electing the directors and other senior management of the VIEs, as well as liquidating and dismantling the VIEs. Each power of attorney will remain in force during the operation term of Lishui Mengxiang VIE and any periods that are renewable pursuant to the PRC laws, and will terminate automatically when Liandu WFOE and/or its designated entities fully exercise their options to purchase all the equities held by the Nominee Shareholders in accordance with the Exclusive Call Option Agreements. In addition, Liandu WFOE has the right to unilaterally terminate these agreements after 30 days advance written notice, while the Nominee Shareholders and Lishui Mengxiang VIE have no right to unilaterally terminate these agreements.

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Organization and Principal Activities (Continued)** 

*Proxy Agreements and Power of Attorney for School's Sponsors, Directors and Council Members*

Pursuant to the proxy agreements and power of attorney, Lishui Mengxiang VIE has irrevocably authorized and entrusted Liandu WFOE to exercise all its rights as sponsor of both Langfang School, Qingtian International School and Lishui International School to the extent permitted by the PRC laws. The agreements shall remain effective during the operation term of Qingtian International School, Lishui International School and Langfang School, and any periods that are renewable pursuant to PRC laws, and will terminate automatically when Liandu WFOE and/or its designated entities fully exercise their options to purchase all the equities held by the Nominee Shareholders in accordance with the Exclusive Call Option Agreement. In addition, the Liandu WFOE has the right to unilaterally terminate these agreements after 30 days advance written notice, while Langfang School, Lishui International School, Qingtian International School and their sponsors, council members and appointed directors have no right to unilaterally terminate these agreements.

*Business Cooperation Agreement, Exclusive Technical Services and Business Consulting Agreement* 

Pursuant to the Business Cooperation Agreement, Exclusive Technical Services and Business Consulting Agreement, Liandu WFOE has agreed to provide affiliate Chinese entities and new VIEs with technical services, management support services, consulting services and intellectual property licenses required for the conducting of private education business activities, including but not limited to preparation, selection and/or recommendation of schools textbooks, recruitment of teachers and other staff, training support, admissions support, public relations maintenance, market research and development, management and marketing consulting and other related services. The affiliate Chinese entities and new VIEs shall pay to Liandu WFOE service fees withdrawn from their respective amount of surplus from operations after deducting all costs, expenses, taxes, losses (if required by the law) and the legally development fund of the respective school (if required by the law) and other costs and funds that shall be retained at Langfang School and Lishui International School in accordance with applicable PRC laws. Liandu WFOE has the right (but not the obligation) to adjust the amount of such service fee by reference to the actual services provided and the actual business operations and needs of affiliate Chinese entities and new VIEs, provided that any adjusted amount shall not exceed the amount mentioned above. The affiliate Chinese entities and new VIEs do not have any right to make any such adjustment. Liandu WFOE, as appropriate, will exclusively own any intellectual property rights arising from the performance of these agreements. The aforementioned agreements will terminate automatically when Liandu WFOE and/or its designated entities fully exercise their options to purchase all the equities held by the Nominee Shareholders in accordance with the Exclusive Call Option Agreements. In addition, Liandu WFOE retains the exclusive right to terminate the agreements at any time by delivering a written notice 30 days in advance to the applicable consolidated affiliate Chinese entities and new VIEs.

*Equity Pledge Agreements* 

 

Pursuant to the equity pledge agreements among Liandu WFOE, Lishui Mengxiang VIE and the Nominee Shareholders of Lishui Mengxiang VIE, the Nominee Shareholders shall pledge all of their equity interests in Lishui Mengxiang VIE, and Beijing P.X. to Liandu WFOE as collateral for all of their payments to direct, indirect and derivate losses and losses of predictable profits of the PRC subsidiaries ("Secured Debts") and to secure their obligations under the above agreements. In the event of a breach by the affiliate Chinese entities and new VIEs or any of their Nominee Shareholders of their contractual obligations, Liandu WFOE has the right to deal with the equity interests pledged in the following ways: i) purchasing or designating entities at their discretion to purchase part or all of the equity interests in the affiliate Chinese entities and new VIEs from the Nominee Shareholders, subject to the lowest price permitted by PRC laws and regulations; ii) selling the equity interests pledged through auction or discount, and preferentially compensated from the sales price; iii) other means agreed between Liandu WFOE and the Nominee Shareholders, after giving written notice to the Nominee Shareholders. The equity pledge agreements will expire when the Nominee Shareholders have completed all their obligations under the above agreements or the Secured Debts are fully settled, or when Liandu WFOE unilaterally delivers a written notice 30 days in advance.

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Organization and Principal Activities (Continued)** 

*Spousal Undertakings* 

Pursuant to the Spousal Undertakings, each Nominee Shareholder, who is a natural person, and their spouses unconditionally and irrevocably agreed that the equity interests in the affiliate Chinese entities and new VIEs held by and registered in the name of their spouse will be disposed of pursuant to the equity pledge agreements, the exclusive call option agreements, the loan agreement and the proxy agreement and power of attorney. Each of their spouses agreed not to assert any rights over the equity interests in the affiliate Chinese entities and new VIEs held by their respective spouses. In addition, in the event that any spouse obtains any equity interests in the affiliate Chinese entities and new VIEs held by their spouse for any reason, they agreed to be bound by similar obligations and agreed to enter into similar contractual agreements.

&nbsp;&nbsp;&nbsp;&nbsp;***(d)***  ***Combined financial information of the VIEs*** 

The following combined financial information of the Group's VIEs 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 of the Group as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **US$(Note 2(g))** |
| **ASSETS** |  |  |  |
| **Current assets:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash | 3897892 | 11699127 | 1672953 |
| &nbsp;&nbsp;&nbsp;Amounts due from inter-company entities | 15356140 | - | - |
| &nbsp;&nbsp;&nbsp;Prepayments and other current assets, net | 4426665 | 11054550 | 1580779 |
| &nbsp;&nbsp;&nbsp;Amounts due from a related party | 9542000 | 8692000 | 1242939 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 156770 | 164207 | 23481 |
| **Total current assets** | **33379467** | **31609884** | **4520152** |
| **Non-current assets:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 146646206 | 142306682 | 20349585 |
| &nbsp;&nbsp;&nbsp;Land use rights, net | 33927238 | 32980543 | 4716155 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 7749 | 5634 | 806 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | 51906613 | 54080188 | 7733364 |
| &nbsp;&nbsp;&nbsp;Other non-current asset | 1100000 | 7800000 | 1115385 |
| **Total non-current assets** | **233587806** | **237173047** | **33915295** |
| **Total assets** | **266967273** | **268782931** | **38435447** |
| **LIABILITIES** |  |  |  |
| **Current liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | 84000000 | 84000000 | 12011840 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 367678 | 3964037 | 566850 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 5595491 | 7796228 | 1114846 |
| &nbsp;&nbsp;&nbsp;Salary and welfare payable | 1779265 | 1739339 | 248722 |
| &nbsp;&nbsp;&nbsp;Amounts due to related parties | 1817485 | 1621303 | 231843 |
| &nbsp;&nbsp;&nbsp;Tax payable | 2139976 | 3215855 | 459861 |
| &nbsp;&nbsp;&nbsp;Income tax payable | 213495 | 179316 | 25642 |
| &nbsp;&nbsp;&nbsp;Amount due to inter-company entities | 20645000 | 309551096 | 44265218 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities and other current liabilities | 7457837 | 11046243 | 1579591 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, current | 9208569 | 10479626 | 1498567 |
| **Total current liabilities** | **133224796** | **433593043** | **62002980** |
| **Non-current liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Amounts due to Affected Entity, non-current | 158514326 | - | - |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities, non-current | 38352135 | 38439295 | 5496746 |
| &nbsp;&nbsp;&nbsp;Other non-current liabilities | 1000000 | 1000000 | 142998 |
| **Total non-current liabilities** | **197866461** | **39439295** | **5639744** |
| **Total liabilities** | **331091257** | **473032338** | **67642724** |

---

**1.** **Organization and Principal Activities (Continued)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$**<br> **(Note 2(g))**  |
| Net revenues from continuing operations | 48374296 | 32139658 | 30606575 | 4376682 |
| Net revenues from discontinued operation | 1617904 | - | - | - |
| Net loss from continuing operations | (100474594) | (21277736) | (34139026) | (4881816) |
| Net loss from discontinued operation | (23394661) | - | - | - |
| Net cash (used in)/provided by operating activities | (16213871) | (16099979) | 17518687 | 2505139 |
| Net cash used in investing activities | (7576283) | (554082) | (13617452) | (1947270) |
| Net cash provided by financing activities | 2227473 | 8750000 | 3900000 | 557693 |
| Net changes in cash and cash equivalents | (21562681) | (7904061) | 7801235 | 1115562 |

---

In accordance with the aforementioned agreements, the Company has the power to direct the activities of the VIEs, and have the control of their assets. Therefore, the Company considers that there is no other asset in the VIEs that can be used only to settle obligations of the respective VIE, except for the education facilities assets, registered capital and the PRC statutory reserves, as of December 31, 2024 and 2025. As the VIEs are incorporated as schools and limited liability company under the PRC Company Law, the creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. As the Group is conducting certain businesses in the PRC through the VIEs, the Group may provide additional financial support on a discretionary basis in the future, which could expose the Group to a loss.

The VIEs' assets comprise both recognized and unrecognized revenue-producing assets. The recognized revenue-producing assets mainly include buildings, land use rights, computers and electronic devices. The unrecognized revenue-producing assets mainly consist of patents, trademarks and assembled workforce which are not recorded in the financial statements of the VIEs as they do not meet the recognition criteria set in ASC 350-30-25.

There is no VIE where the Company has a variable interest, but is not the primary beneficiary.

**1.** **Organization and Principal Activities (Continued)** 

***(e)***  ***Risks associated with VIE arrangements*** 

 ****

Foreign investment in the education industry in PRC is extensively regulated and subject to various restrictions. Specifically, high school is restricted industries for foreign investors, and foreign investors are only allowed to invest in such industries in cooperative ways with domestic investors, provided that domestic investors play a dominant role in such cooperation. In addition, foreign investment in education institutions in the PRC must be in the form of cooperation between Chinese educational institutions and foreign educational institutions and the foreign portion of the total investment in a Sino-foreign education institute must be below 50%. Although foreign investment in high schools is not prohibited, based on the operation experience, Liandu WFOE in China is still ineligible to independently or jointly invest and operate high schools, including Qingtian International School and Lishui International School. To comply with PRC laws and regulations, the Group have entered into a series of contractual arrangements pursuant to which Liandu WFOE receives the economic benefits from our VIEs. If the contractual arrangements that establish the structure for operating our business in China are found to violate any PRC laws or regulations in the future or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities, including the Ministry of Education of People's Republic of China, or the MOE, which regulates the education industry, the Ministry of Commerce, or MOFCOM, which regulates the foreign investment in China, and the Civil Affairs Bureau, which regulates the registration of schools in China, would have broad discretion in dealing with such violations, including:

● revoking the business and operating licenses of the Company's PRC subsidiaries or VIEs;

● discontinuing or restricting the operations of any related-party transactions among Liandu WFOE or VIEs;

● imposing fines or other requirements with which the Company or Liandu WFOE or VIEs may not be able to comply;

● requiring the Company to restructure operations in such a way as to compel the Company to establish new entities, re-apply for the necessary licenses or relocate the businesses, staff and assets;

● imposing additional conditions or requirements with which the Company may not be able to comply; or

● restricting the use of proceeds from our additional public offering or financing to finance the business and operations in China.

Similar ownership structure and contractual arrangements have been used by many China-based companies listed overseas, including a number of education companies listed in the United States. To the Company's knowledge, none of the fines or punishments listed above has been imposed on any of these public companies, including companies in the education industry. However, the Company cannot assure that such fines or punishments will not be imposed on the Company in the future. If any of the above fines or punishments is imposed on the Company, the Company's business, financial condition and results of operations could be materially and adversely affected. If any of these penalties results in the Company's inability to direct the activities of the VIEs and their respective subsidiaries that most significantly impact their economic performance, and/or our failure to receive the economic benefits from the VIEs and their respective subsidiaries, the Company may not be able to consolidate the VIEs and their respective subsidiaries in our financial statements in accordance with U.S. GAAP. However, the Company do not believe that such actions would result in the liquidation or dissolution of the Company, the wholly-owned subsidiaries in China or the VIEs or their respective subsidiaries.

On March 15, 2019, the National People's Congress promulgated the Foreign Investment Law of PRC or the Foreign Investment Law, which came into effect on January 1, 2020 and replaced the Law of the PRC on Chinese-Foreign Equity Joint Ventures, the Law of the PRC on Chinese-Foreign Contractual Joint Ventures, and the Wholly Foreign-invested Enterprise Law. The Foreign Investment Law embodies an expected PRC regulatory trend 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. For instance, the Foreign Investment Law does not explicitly classify contractual arrangements as a form of foreign investment.

**1.** **Organization and Principal Activities (Continued)** 

Conducting operations through contractual arrangements has been adopted by many PRC-based companies, and has been adopted by the Company to establish control of VIEs. Since the Foreign Investment Law is relatively new, uncertainties still 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, although the Foreign Investment Law does not explicitly classify contractual arrangement as a form of foreign investment, it still leaves a leeway for future laws and if future laws, administrative regulations or provisions stipulates contractual arrangements as a way of foreign investment, then whether the Company's contractual arrangements will be recognized as foreign investment, whether the contractual arrangements will be deemed to be in violation of the foreign investment access requirements and how the Company's contractual arrangements will be handled are uncertain. In the extreme case-scenario, the Company may be required to unwind the contractual arrangements and/or dispose relevant business operations, which could have a material and adverse effect on the Company's business, financial condition and result of operations.

**2.** **Principal Accounting Policies** 

***(a)***  ***Basis of preparation*** 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP").

Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized further below.

***(b)***  ***Use of estimates*** 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used to principles of consolidation, contingencies, revenue recognition, impairment of goodwill, expected credit loss for receivables and other assets, impairment of long-lived assets, realizability of deferred tax assets, estimated useful lives of fixed assets, intangible assets and operating lease right-of-use assets, and accruals for income tax uncertainties.

***(c)***  ***Consolidation*** 

 ****

The Group's consolidated financial statements include the financial statements of the Company, its subsidiaries and its VIEs for which the Company or its subsidiaries are the primary beneficiary. All transactions and balances among the Company, its subsidiaries and its VIEs have been eliminated upon consolidation.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting powers; has the power to appoint or remove the majority of the members of the board of directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual agreements, bears the risks of, and enjoys the rewards normally associated with ownership of the entity. In determining whether the Company or its subsidiaries are the primary beneficiary, the Company considers whether it has the power to direct activities that are significant to the VIE's economic performance, and also the Group's obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company, through Liandu WFOE holds all the variable interests of the VIEs, and has been determined to be the primary beneficiary of the VIEs.

**2.** **Principal Accounting Policies (Continued)** 

***(d)***  ***Deconsolidation*** 

Upon the occurrence of certain events and on a regular basis, the Group evaluates whether it no longer has a controlling interest in its subsidiaries, including consolidated variable interest entities. If the Company determines it no longer has a controlling interest, the subsidiary is deconsolidated. The Company records a gain or loss on deconsolidation based on the difference on the deconsolidation date between (i) the aggregate of (a) the fair value of any consideration received, (b) the fair value of any retained non-controlling investment in the former subsidiary and (c) the carrying amount of any non-controlling interest in the subsidiary being deconsolidated, less (ii) the carrying amount of the former subsidiary's assets and liabilities.

The Company assesses whether a deconsolidation is required to be presented as discontinued operation in its consolidated financial statements on the deconsolidation date. This assessment is based on whether or not the deconsolidation represents a strategic shift that has or will have a major effect on the Company's operations or financial results. If the Company determines that a deconsolidation requires presentation as a discontinued operation on the deconsolidation date, or at any point during the one-year period following such date, it will present the former subsidiary as a discontinued operation in current and comparative period financial statements.

***(e)***  ***Business Combination*** 

Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed, and any non-controlling interests of the acquiree at the acquisition date, if any, are measured at their fair values as of the acquisition date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any non-controlling interest of the acquiree and fair value of previously held equity interest in the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Common forms of the consideration made in acquisitions include cash and common equity instruments. Consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition. Acquisition-related expenses and restructuring costs are expensed as incurred.

Where the consideration in an acquisition includes contingent consideration the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and is recorded as a liability, it is subsequently remeasured at fair value at each reporting date with changes in fair value reflected in earnings.

 ****

***(f)***  ***Functional currency and foreign currency translation*** 

The Group uses Renminbi ("RMB") as its reporting currency. The functional currency of the Company and its subsidiaries incorporated outside of PRC is the United States dollar ("US$"), while the functional currency of the PRC entities in the Group is RMB as determined based on the criteria of ASC 830, Foreign Currency Matters.

Transactions denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Financial assets and liabilities denominated in other than the functional currency are re-measured at the balance sheet date exchange rate. The resulting exchange differences are included in the consolidated statements of operations and comprehensive loss as other income, net.

The financial statements of the Group are translated from the functional currency to the reporting currency, RMB. Assets and liabilities of the Company and its subsidiaries incorporated outside of PRC are translated into RMB at fiscal year-end exchange rates, income and expense items are translated at average exchange rates prevailing during the fiscal year, representing the index rates stipulated by the People's Bank of China. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a separate component of shareholders' equity on the consolidated financial statement. The exchange rates used for translation on December 31, 2024 and 2025 were US$1.00= RMB7.1884 and RMB7.0288, respectively, representing the index rates stipulated by the People's Bank of China.

**2.** **Principal Accounting Policies (Continued)** 

***(g)***  ***Convenience translation*** 

The unaudited United States dollar ("US$") amounts disclosed in the accompanying financial statements are presented solely for the convenience of the readers. Translations of amounts from RMB into US$ for the convenience of the reader were calculated at the rate of US$1.00 = RMB 6.9931 on December 31, 2025, representing the noon buying rate in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on December 31, 2025, or at any other rate.

***(h)***  ***Fair value of financial instruments*** 

Fair value is 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 it considers assumptions that market participants would use when pricing the asset or liability.

The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The three levels of inputs that may be used to measure fair value include:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities.

Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

The Group does not have any non-financial assets or liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis.

Short-term financial instruments of the Group primarily consist of cash and cash equivalents, account receivables, amounts due from related parties, accounts payable, borrowings, amounts due to a related party and accrued liabilities and other liabilities. As of December 31, 2024 and 2025, the carrying values of these financial instrument approximated to their fair values reported in the consolidated balance sheets due to the short-term maturities of these instruments. For short term borrowings, the fair value approximates their carrying value at the year-end as the fair value is estimated by used discounted cash flow, in which interest rates used to discount the bank loans approximate market rates.

**2.** **Principal Accounting Policies (Continued)** 

The following table presents the fair value hierarchy for the Group's assets that are measured and recorded at fair value on a recurring basis:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **Fair value measurement at reporting date using** | **Fair value measurement at reporting date using** | **Fair value measurement at reporting date using** | **Fair value measurement at reporting date using** |
|  |<br>**Fair<br> Value<br> as of December 31,<br> 2025** | **Ouoted Prices<br> in Active<br> Markets for<br> Identical Assets<br> (Level 1)** | **Significant<br> Other<br> Observable Inputs<br> (Level 2)** | **Significant<br> Unobservable<br> Inputs<br> (Level 3)** | **NAV practical<br> expedient** |
| **Assets** | | | | | |
| Investment in equity securities | 44974376 |  |  |  | 44974376 |
| **Total** | **44974376** |  |  |  | **44974376** |

---

For equity securities without readily determinable fair value at its quoted price in active markets, as a practical expedient, the Group uses NAV or its equivalent to measure the fair value of its fund investments which the Group does not have the ability to exercise significant influence. NAV is primarily determined based on information provided by external fund administrators. The Group's investments valued at NAV as a practical expedient are private equity funds.

***(i)***  ***Cash and cash equivalents*** 

Cash and cash equivalents consist of cash on hand, restricted cash and the Group's demand deposit placed with financial institutions, which have original maturities of less than three months and unrestricted as to withdrawal and use. As of December 31, 2025, the Group had restricted cash of RMB1,000, primarily representing contracted agreement deposits.

***(j)***  ***Accounts receivables, net*** 

Accounts receivable are recorded at the gross billing amount less an allowance for any uncollectible accounts due from the customers. Accounts receivable do not bear interest.

Since January 1, 2023, the Group adopted Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Group changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets.

The Group assesses the collectability of accounts receivable using aging schedules. In determining the amount of the allowance for credit losses, the Group considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Group's ability to collect from customers. No provision for expected credit losses on accounts receivable were recorded for the years ended December 31, 2023, 2024 and 2025.

**2.** **Principal Accounting Policies (Continued)** 

***(k)***  ***Property and equipment, net*** 

Property and equipment are stated at historical cost less accumulated depreciation and impairment income, if any. Depreciation is calculated using the straight-line method over their estimated useful lives. The estimated useful lives are as follows:

---

| | | |
|:---|:---|:---|
| **Category** | **Estimated useful lives** | **Residual value** |
| Buildings | 10 years to 50 years | 5% |
| Electronic devices and other general equipment | 2 years to 5 years | 0%,5% |
| Leasehold improvements | Over the shorter of lease term or the estimated useful lives of the assets | 0% |

---

Expenditures for maintenance and repairs are expensed as incurred. The gain or income on the disposal of property and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of operations and comprehensive loss.

&nbsp;&nbsp;&nbsp;&nbsp;***(l)***  ***Land use rights, net*** 

Land use rights are recorded at cost less accumulated amortization. Amortization is provided over the term of the land use rights agreement on a straight-line basis over the term of the agreement, which is 50 years.

&nbsp;&nbsp;&nbsp;&nbsp;***(m)***  ***Impairment of long-lived assets other than goodwill*** 

For other long-lived assets including property and equipment, other non-current assets, land use rights and intangible assets, the Group evaluates for impairment whenever events or changes (triggering events) indicate that the carrying amount of an asset may no longer be recoverable. The Group assesses the recoverability of the long-lived assets by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to receive from use of the assets and their eventual disposition. Such assets are considered to be impaired if the sum of the expected undiscounted cash flows is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Group did not recognize any impairment loss for the years ended December 31, 2023, 2024 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;***(n)***  ***Goodwill*** 

Goodwill represents the excess of the purchase consideration over the fair value of the identifiable net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment on an annual basis as of December 31, or more frequently if events or changes in circumstances indicate that it might be impaired. The Group has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. The Group will perform the quantitative impairment test if the Group bypasses the qualitative assessment, or based on the qualitative assessment, if it is more likely than not that the fair value of each reporting unit is less than the carrying amount.

Under the new guidance, if the fair value of a reporting unit exceeds its carrying amount, goodwill is not impaired and no further testing is required. If the fair value of a reporting unit is less than the carrying value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

For the years ended December 31, 2023, 2024 and 2025, the Group recognized impairment loss of RMB22,677,921, nil and nil on goodwill, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Principal Accounting Policies (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;***(o)***  ***Investments*** 

The Group's long-term investments are equity securities.

For investments that (i) are equity instruments in legal form, (ii) lack a substantive redemption right, and (iii) meet the definition of securities under ASC 320-10-20, those investments are accounted for as equity securities in accordance with Investments—Equity Securities (Topic 321).

Those equity securities do not have readily determinable fair value pursuant to ASC 321-10-20 as their prices are not publicly available on a registered exchange, a comparable foreign market, or for mutual funds/structures with published values. For equity securities qualified for net asset value ("NAV") practical expedient ("NAV practical expedient") in Topic 820 "Fair Value Measurements and Disclosures" ("ASC 820"), the Group estimates fair value using the net asset value per share (or its equivalent) of the investment. For equity securities do not qualify for NAV practical expedient, the Group elects to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes, in accordance with ASC 321-10-35. Under this measurement alternative, changes in the carrying value of the equity investment will be required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer.

The Group makes assessments at each reporting period and if the assessment indicates that the fair value of the investment is less than the NAV, the investment in equity securities will be written down to its fair value, with the difference between the fair value and the NAV of the investment as an impairment loss recognized through net loss and recorded in the consolidated statements of operations and comprehensive loss.

The Group evaluates each individual investment periodically for impairment.

For investments where the Group has the intention to sell or it is more likely than not before recovery of the amortized cost basis, an impairment is recognized in the consolidated statements of operations and comprehensive loss.

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 loss. Subsequent increases in fair value due to credit improvement are recognized through reversal of the credit losses and corresponding reduction in the allowance for credit losses. Any decline in fair value that is non-credit related is recorded in accumulated other comprehensive income or loss as a component of shareholders' equity.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Principal Accounting Policies (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;***(p)***  ***Leases*** 

From January 1, 2022, the Group adopted Accounting Standards Update ("ASU") 2016-02, Lease (FASB ASC Topic 842). The adoption of Topic 842 resulted in the presentation of operating lease right-of-use ("ROU") assets and operating lease liabilities on the consolidated balance sheet. The Group has elected the package of practical expedients, which allows the Group not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption date. Lastly, the Group elected the short-term lease exemption for all contracts with lease terms of 12 months or less.

The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

For operating leases, the Group records a lease liability and corresponding ROU asset at lease commencement. Lease terms are based on the non-cancellable term of the lease and may contain options to extend the lease when it is reasonably certain that the Group will exercise the option. Lease liabilities represent the present value of the lease payments not yet paid, discounted using the discount rate for the lease at lease commencement.

The Group estimates its incremental borrowing rate for its leases at the commencement date to determine the present value of future lease payments when the implicit rate is not readily determinable in the lease. In estimating its incremental borrowing rate, the Group considers its credit rating and publicly available data of borrowing rates for loans of similar amount, currency and term as the lease.

Operating leases are presented as "Right-of-use assets" and "Operating lease liabilities". Lease liabilities that become due within one year of the balance sheet date are classified as current liabilities. At lease commencement, right-of-use assets represent the right to use underlying assets for their respective lease terms and are recognized at amounts equal to the lease liabilities adjusted for any lease payments made prior to the lease commencement date, less any lease incentives received and any initial direct costs incurred by the Group.

After lease commencement, operating lease liabilities are measured at the present value of the remaining lease payments using the discount rate determined at lease commencement. Right-of-use assets are measured at the amount of the lease liabilities and further adjusted for prepaid or accrued lease payments, the remaining balance of any lease incentives received, unamortized initial direct costs and impairment of the ROU assets, if any. Operating lease expense is recognized as a single cost on a straight-line basis over the lease term.

Leases that have a term of 12 months or less at the commencement date ("short-term leases") are not included in right-of-use assets and operating lease liabilities. Lease expense for the short-term leases is recognized on a straight-line basis over the lease term.

*<u>Operating leases as Lessor</u>*

For operating leases, the Group recognized rental income over the non-cancellable lease term on a straight-line basis. The Group does not have any sales-type or direct financing leases for the years ended December 31, 2023, 2024 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Principal Accounting Policies (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;***(q)***  ***Revenue recognition*** 

The Group adopted ASC 606, "Revenue from Contracts with Customers" for all periods presented. Consistent with the criteria of Topic 606, the Group follows five steps for its revenue recognition: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

The Group is mainly engaged in providing education services including high school, vocational education services, healthcare support services and comprehensive human resource services. Schools also provide accommodation service, offer meals, uniforms, learning materials and other campus necessities to students.

*<u>Tuition, meal and accommodation service income</u>*

Tuition and accommodation service income that are received in advance by schools prior to the beginning of each semester of a school year are initially recorded as contract liabilities, and then are recognized over time during the service period of each semester. All amounts of the tuition and accommodation service income are earned within one year and reflected as a current liability.

The Group has determined that education services and accommodation services are capable of being distinct and are separately identifiable from each other because students can benefit from each service independently. Accordingly, tuition services and accommodation services are accounted for as separate performance obligations and revenue is recognized over time as the respective services are provided during the semester.

Before disposal, Qingtian International School offers meals to students and collects fee each time students have meal, and therefore, revenue is recognized at a point in time when Qingtian International School offers students the meals.

The Group recognizes service income on a gross basis, as the Group is responsible for fulfilling the promise to provide the education, meal and accommodation services to students, and has discretion in establishing price charged to students in accordance with ASC606-10-55-39.

*<u>Financing component included in tuition fees</u>*

Some contracts contain a financing component because payment by the customer occurs significantly before performance of the obligation. The Group takes the practical expedient and will not adjust the impact of a financing component for contract liabilities which will be earned within one year. The Group does not adjust the impact of a financing component for contract liabilities which will be earned beyond one year as the portion of financing component is immaterial.

*<u>Sale of uniforms, learning materials and other campus necessities</u>*

Schools provide school uniforms, learning materials and other campus necessities to the students with payment also made prior to the beginning of each semester. The Group identifies each promise to transfer uniforms, learning materials and other campus necessities as a performance obligation in accordance with ASC 606-10-25-14. The Group assesses whether such goods are distinct in accordance with ASC 606-10-25-19 and has concluded that they are distinct because students can benefit from the goods on their own and the goods are separately identifiable from other promises in the contracts with students.

Revenue from uniform, learning materials and other campus necessities is recognized at a point in time when control of the goods has been transferred and accepted by the students.

The Group recognizes revenue from sale of uniforms, learning materials and other campus necessities on a gross basis, as the Group controls the goods before they are transferred to the students. In accordance with ASC606-10-55-39, the Group is responsible for the design of uniforms and have inventory risk for the uniforms, learning materials and other campus necessities.

**2.** **Principal Accounting Policies (Continued)** 

*<u>Healthcare support services</u>*

The Group generates its revenue from providing healthcare supporting service, cooperating with healthcare and elderly care enterprises to deliver daily care, specialized nursing and companion service. The Group identifies a single performance obligation to providing healthcare performance obligation. The Group charges service fees to customers for providing healthcare support services, which are calculated based on the actual service periods.

Revenue is recognized ratably over the service period because customers simultaneously receive and consume the benefits of the healthcare support services as the Group performed.

The Group controls the healthcare support services provided to its customers in accordance with ASC606-10-55-39 as: (i) the Group acts as the primary obligor and manages the entire service process, including service quality, caregiver matching, supervision, and complaint handling; (ii) the Group collaborates with multiple service providers nationwide and deploys dedicated personnel to meet customized requirement; (iii) the Group directs caregivers to provide personalized care services on its behalf without direct cooperative relationship between caregivers and customers; (iv) the Group retains the ultimate discretion in setting service prices, including setting standard and differential rates. Therefore, the Group acts as a principal and recognizes revenue in the gross amount of consideration to which it expects to be entitled in exchange for the specified services transferred.

*<u>Comprehensive human resource service</u>*

The Group generates its revenue from providing comprehensive service for flexible employment, which primarily focuses on recommending interns from schools to various customers with human resources demand. The Group concludes that there is a single performance obligation to fulfill service requirements from customers, as the promised activities are not separately identifiable in the context of the contracts and are integrated into one combined service. The Group charges service fees to customers based on service periods at a fixed rate per day and recognizes revenue over time as the related performance obligations are continuously satisfied.

The Group controls the service provided by interns to customers in accordance with ASC606-10-55-39 as (i) the Group is primarily responsible for the fulfillment of the services and assures the customers are satisfied with services; (ii) the Group needs to maintain sufficient interns in order to satisfy the service requirement from customers on an if-needed basis; (iii) the Group can direct interns to provide service to customers on its behalf, and there is no direct cooperation relationship between interns and customers, and (iv) the Group has the ultimate discretion to set up the price of the service with customers. Therefore, the Group acts as a principal, and recognizes revenue in the gross amount of consideration to which it expects to be entitled in exchange for the specified service transferred.

*<u>Course design, development and training</u>*

 

Hainan Jiangcai jointly designs and develops curriculum and training programs with Hainan Technical School. The Group identifies its performance obligation in accordance with ASC 606-10-25-14 and ASC 606-10-50-12 by assessing the promised course design, curriculum development and training services in the contract. The Group has determined that these promised services are not separately identifiable in the context of the contract, as they are highly interrelated and are integrated into one combined output. Accordingly, the Group concludes that there is a single performance obligation to fulfill service requirements from Hainan Technical School and recognizes revenue over cooperation period in a straight-line method. In accordance with ASC606-10-50-20, the transaction price is based on the fixed consideration specified in the contract and is allocated entirely to the single performance obligation. The arrangement does not include material variable consideration, significant financing components, refund obligations or warranties.

*<u>Contract Balances</u>*

Contract balances include accounts receivable and contract liabilities. Accounts receivable represent amounts due from customers when the Group has satisfied its performance obligations and has the unconditional right to consideration. Contract liabilities represent the cash received for services in advance of revenue recognition and are recognized as revenue when all of the Group's revenue recognition criteria are met.

The Group's contract liabilities amounted to RMB5,595,491 and RMB7,796,228 as of December 31, 2024 and 2025, respectively. The Group expects to recognize the balance of contract liabilities as revenue over time in the next 12 months. For the years ended December 31, 2024 and 2025, the movement of contract liabilities were as follows:

---

| | | |
|:---|:---|:---|
|  | **For the years ended<br> December 31,** | **For the years ended<br> December 31,** |
|  | **2024** | **2025** |
| Balance at beginning of the year | 6513072 | 5595491 |
| Receipts during the year | 21467951 | 21036220 |
| Revenue recognized | (22385532) | (18835483) |
| **Balance at end of the year** | **5595491** | **7796228** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Principal Accounting Policies (Continued)** 

 ****

&nbsp;&nbsp;&nbsp;&nbsp;***(r)***  ***Cost of revenues*** 

Cost of revenues consist of expenditures incurred in the generation of the Group's revenue, includes but not limited to the salary and welfare for teachers, food costs, uniform and learning materials cost, campus rental cost, utilities charges, depreciations, salary and welfare for interns, and healthcare support services fee paid to suppliers.

&nbsp;&nbsp;&nbsp;&nbsp;***(s)***  ***General and administrative expenses*** 

General and administrative expenses consist primarily of salary and welfare for general and administrative personnel, professional service fees and general office expenses.

&nbsp;&nbsp;&nbsp;&nbsp;***(t)***  ***Selling and marketing expenses*** 

Selling expenses consist primarily of advertising, marketing and promotional expense including student referral and customer referral expenses, and other miscellaneous expenses. For the years ended December 31, 2023, 2024 and 2025, selling and marketing expenses were RMB18,300, RMB111,780 and RMB985,278, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;***(u)***  ***Government subsidies*** 

Government subsidies primarily consist of financial subsidies received from local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. There are no defined rules and regulations to govern the criteria necessary for companies to receive such benefits, and the amount of financial subsidy is determined at the discretion of the relevant government authorities. The government subsidies with no further conditions to be met are recorded as "Other income, net" when received. The government subsidies with certain operating conditions are recorded as liabilities when received and will be recorded as operating income when the conditions are met.

For the years ended December 31, 2023, Qingtian International School, Langfang school, Hainan Jiangcai and Hebei Chuangxiang, received financial subsidies of RMB7,226,647, RMB4,351,738, RMB2,000 and RMB521, respectively. For the years ended December 31, 2024, Langfang school, Lishui International School, Hainan Jiangcai and Hebei Chuangxiang, received financial subsidies of RMB3,406,245, RMB190,700, RMB1,739 and RMB1,483, respectively. For the years ended December 31, 2025, Langfang school and Lishui International School received financial subsidies of RMB2,563,750 and RMB200,000, respectively. All government subsidies received for the years ended December 31, 2023, 2024 and 2025 were education development and employment related financial support, which had no further conditions and were recorded as other income, net.

&nbsp;&nbsp;&nbsp;&nbsp;***(v)***  ***Non-controlling interests*** 

Non-controlling interests are recognized to reflect the portion of the equity of a subsidiary of VIEs which is not attributable, indirectly, to the controlling shareholder.

Non-controlling interests are presented as a separate component of equity in the consolidated balance sheets. Consolidated net loss on the consolidated statements of operations and comprehensive loss includes the net loss attributable to non-controlling interests. The cumulative results of operations attributable to non-controlling interests are recorded as non-controlling interests in the consolidated balance sheets.

&nbsp;&nbsp;&nbsp;&nbsp;***(w)***  ***Concentration and risk*** 

 

*Concentration of credit risk*

Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, other receivable included in prepayments and other current assets, amounts due from related parties, and investment in equity securities. The maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of December 31, 2025, cash and cash equivalents of RMB12,667,977 were deposited in financial institutions in the PRC, and each bank accounts is insured by the PRC government with the maximum limit of RMB500,000 (equivalent US$68,500). To limit exposure to credit risk relating to deposits, substantially all of the Group's cash and cash equivalents, term deposits were deposited with financial institutions with high-credit ratings.

**2.** **Principal Accounting Policies (Continued)** 

Concentration of credit risks with respect to accounts receivable, amounts from related parties, and other receivables included in prepayment and other current assets, to manage credit risk, the Group performs ongoing credit evaluations of customers' and suppliers', as well as related parties' financial condition. There is no significant credit risk for the years ended December 31, 2023, 2024 and 2025.

For the investment in equity securities, the Group makes assessments at each reporting period and if the assessment indicates that the fair value of the investment is less than the NAV, the investment in equity securities will be written down to its fair value, with the difference between the fair value and the NAV of the investment as an impairment loss recognized through net loss and recorded in the consolidated statements of operations and comprehensive loss. For the year ended December 31, 2025, impairment loss recognized for equity investment measured using NAV practical expedient were RMB83,621,753 (US$11,957,752).

*Currency convertibility risk*

The Group primarily transacts all of its business in RMB, which is not freely convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the PBOC. However, the unification of the exchange rates does not imply that the RMB may be readily convertible into United States dollars or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approval of foreign currency payments by the PBOC or other institutions requires submitting a payment application form together with suppliers' invoices, shipping documents and signed contracts. The Company's cash denominated in RMB amounted to RMB4,921,106 and RMB12,667,977 as of December 31, 2024 and 2025, respectively.

*Major customers and supplying channels*

For the continuing operations, no single customer represented 10% or more of the Group's net revenues or purchase for the years ended December 31, 2023, 2024 and 2025. The Group's customers are mainly students and the Group's suppliers are mainly faculty.

The following table sets forth a summary of single customers who represent 10% or more of the Group's total accounts receivable:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** |
| | **2024** | **2024** | **2025** | **2025** |
| <br>**Percentage of the Group's accounts receivable** | **Amount** | **%** | **Amount** | **%** |
| Customer A | 84128 | 53.7 | 125890 | 76.7 |
| Customer B | 72642 | 46.3 | 17070 | 10.4 |

---

The following table sets forth a summary of single suppliers who represent 10% or more of the Group's total accounts payable:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** |
| | **2024** | **2024** | **2025** | **2025** |
| <br>**Percentage of the Group's accounts payable** | **Amount** | **%** | **Amount** | **%** |
| Supplier C | \* | \* | 3742138 | 93.1 |
| Supplier A | 47556 | 12.2 | \* | \* |
| Supplier E | 154725 | 39.8 | \* | \* |
| Supplier F | 73100 | 18.8 | \* | \* |

---

\* Represent percentage less than 10%

***(x)***  ***Employee social security and welfare benefits*** 

Employees of the Group in the PRC are entitled to staff welfare benefits including pension, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund plans through a PRC government-mandated multi-employer defined contribution plan. The Group is required to contribute to the plan based on certain percentages of the employees' salaries, up to a maximum amount specified by the local government.

The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group's obligations are limited to the amounts contributed and no legal obligation beyond the contributions made.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Principal Accounting Policies (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;***(y)***  ***Income taxes*** 

Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions.

Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of operations and comprehensive loss in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.

*Uncertain tax positions* 

The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statements recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Group's uncertain tax positions and determining its provision for income taxes. The Group did not recognize any significant interest and penalties associated with uncertain tax positions for the years ended December 31, 2023, 2024 and 2025. As of December 31, 2024 and 2025, the Group did not have any significant unrecognized uncertain tax positions.

&nbsp;&nbsp;&nbsp;&nbsp;***(z)***  ***Statutory reserves*** 

As stipulated by the relevant PRC laws and regulations applicable to the Group's entities in the PRC, the Group is required to make appropriations from net income as determined in accordance with the PRC GAAP to non-distributable reserves, which include a statutory surplus reserve and a statutory welfare reserve. The PRC laws and regulations require that annual appropriations of 10% of after-tax income should be set aside prior to payments of dividends as reserve fund, the appropriations to statutory surplus reserve are required until the balance reaches 50% of the PRC entity registered capital.

In the private school sector, the Implementing Regulations for the Law of the People's Republic of China on the Promotion of Privately-run Schools require that annual appropriations of 25% of after-tax income should be set aside prior to payments of dividend as development fund. Under the Implementation Rules for the Law for Promoting Private Education of the PRC for Private Education Laws, or the 2021 Implementation Rules, which took effect on September 1, 2021, annual appropriations of 10% of after-tax income should be set aside prior to payments of dividend as development fund. The statutory reserve is applied against prior year income, if any, and may be used for general business expansion and production or increase in registered capital of the entities. For the years ended December 31, 2023, 2024 and 2025, the Group made apportions of RMB408,841, nil and nil to the development fund, respectively. For the year ended December 31, 2025, the Group's other subsidiaries made nil statutory reserves in addition to development fund.

&nbsp;&nbsp;&nbsp;&nbsp;***(aa)***  ***Related parties*** 

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Principal Accounting Policies (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;***(bb)***  ***Dividends*** 

Dividends are recognized when declared. No dividends were declared for the years ended December 31, 2023, 2024 and 2025, respectively. The Group does not have any present plan to pay any dividends on ordinary shares in the foreseeable future. The Group currently intends to retain the available funds and any future earnings to operate and expand its business.

&nbsp;&nbsp;&nbsp;&nbsp;***(cc)***  ***Loss per share*** 

Basic loss per share is computed by dividing net loss attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year.

Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalents shares outstanding during the year. Dilutive equivalent shares are excluded from the computation of diluted income per share if their effects would be anti-dilutive.

&nbsp;&nbsp;&nbsp;&nbsp;***(dd)***  ***Comprehensive loss*** 

Comprehensive loss is defined as the change in shareholders' equity of the Company during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive loss is reported in the consolidated statements of operations and comprehensive income. Accumulated other comprehensive income of the Group includes the foreign currency translation adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;***(ee)***  ***Discontinued operation*** 

 ****

A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when any of the following occurs:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the component of an entity
 or group of components of an entity meets the criteria to be classified as held for sale;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the component of an entity
 or group of components of an entity is disposed of by sale;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the component of an entity
 or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners
 in a spinoff).

The results of operations of discontinued operation for the years ended December 31, 2023 have been reflected separately in the consolidated statements of loss as a single line item for all periods presented in accordance with U.S. GAAP. Cash flows from discontinued operations of the three categories for the years ended December 31, 2023 were separately presented in the consolidated statements of cash flows for all periods presented in accordance with U.S. GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Principal Accounting Policies (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;***(ff)***  ***Segment reporting*** 

An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Group's chief operating decision maker in order to allocate resources and assess performance of the segment.

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker ("CODM"), in deciding how to allocate resources and in assessing performance. The Group's reportable segments are strategic business units that provide different educational services and are managed separately due to their distinct target student populations, curriculum frameworks, market positioning and operational development focus. The Group uses the "management approach" in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Group's chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group's reportable segments. The Group's CODM has been identified as the chief executive officer (the "CEO"), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. The Group has organized two reportable segments from operations, including high school and vocational education. All other operating segments are considered immature and immaterial for separate disclosure purposes and are aggregated within "All Other", and reconciled to the consolidated financial totals.

&nbsp;&nbsp;&nbsp;&nbsp;***(gg)***  ***Recently issued accounting pronouncements*** 

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03") which requires detailed disclosures in the notes to financial statements disaggregating specific expense categories and certain other disclosures to provide enhanced transparency into the nature and function of expenses. The FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements should be applied on a prospective basis while retrospective application is permitted. The Group is in the process of evaluating the impact of adopting this new guidance on its consolidated financial statement.

In May 2025, the FASB issued ASU 2025-03, "Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity," which requires an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business to consider specific factors to determine the accounting acquirer and removes the requirement that the primary beneficiary always is the acquirer for certain transactions. Under the amendments, acquisition transactions in which the legal acquiree is a VIE will, in more instances, result in the same accounting outcomes as economically similar transactions in which the legal acquiree is a voting interest entity. The amendments do not change the accounting for a transaction determined to be a reverse acquisition or a transaction in which the legal acquirer is not a business and is determined to be the accounting acquiree. The new guidance is required to be applied prospectively to any acquisition transaction that occurs after the initial application date. This guidance is effective for the Company for the year ending March 31, 2028. Early adoption is permitted. The Group is evaluating the impact of the adoption of this guidance.

**2.** **Principal Accounting Policies (Continued)** 

In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses ("Topic 326"): Purchased Loans ("ASU 2025-08"). The amendments expand the population of acquired loans subject to the gross-up approach, treating non-credit-deteriorated loans (excluding credit cards) as "seasoned" if purchased at least 90 days after origination or acquired in a business combination. ASU 2025-08 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Group is currently evaluating the impact that this update will have on the consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This update establishes the accounting for a government grant received by a business entity, including guidance for (1) a grant related to an asset and (2) a grant related to income. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Group is currently evaluating the impact of adopting ASU 2025-10.

In December 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-11, Interim Reporting (Topic 270) Improvements to Interim Disclosure Requirements. The standard clarifies disclosure requirements for interim financial statements and is effective for interim periods beginning after December 15, 2026. Early adoption is permitted. The Group is currently evaluating the impact of adopting ASU 2025-11.

In December 2025, the FASB issued ASU 2025-11, which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP. The ASU also addresses the form and content of such financial statements, adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. As the Board stated in the proposed guidance and reiterates in the ASU, the amendments are not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. For public business entities, the amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. For entities other than public business entities, for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted for all entities. The Group is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements ("ASU 2025-12"). ASU 2025-12 addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. Early adoption is permitted. The Group is currently evaluating the impact of adopting ASU 2025-12.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows, or disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Going concern** 

The Group incurred net losses of RMB126,989,866, RMB24,702,033 and RMB121,262,741 for the years ended December 31, 2023, 2024 and 2025, respectively. Net cash used in operating activities was RMB59,199,475, RMB18,321,791 and RMB314,302,893 for the year ended December 31, 2023, 2024 and 2025, respectively. As of December 31, 2025, the Group's accumulated deficits were RMB391,851,008, with a working capital deficit of RMB90,091,355. The Group's operating results for future periods are subject to numerous uncertainties and it is uncertain if the Group will be able to reduce or eliminate its net losses for the foreseeable future. These conditions raise substantial doubt about the Group's ability to continue as a going concern.

The Group has historically depended on financing from banks, related parties, shareholders and issuance of ordinary shares to support its operations. The Group's future operations are dependent upon equity or debt financing and its ability to generate profits through operations at an indeterminate time in the future. The Group cannot assure that it will be successful in completing an equity or debt financing or in achieving or maintaining profitability in the near term. The Group's financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should the Group be unable to continue as a going concern.

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Discontinued operation** 

On November 9, 2023, Chuangmei Weiye was transferred back to Beijing S.K. The Group has evaluated the disposal of Chuangmei Weiye and concluded that the disposal should be accounted as discontinued operation during the year ended and as of December 31, 2023 for this disposal had a major effect on operations and financial results of the Group. There were no carrying amounts of major classes of assets and liabilities from the discontinued operation in the consolidated balance sheets as of December 31, 2024 and 2025.

There were no carrying amounts of major classes of income and losses from the discontinued operation in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2024 and 2025. Reconciliation of the major classes of income and losses from discontinued operations in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023 was as follow:

---

| | |
|:---|:---|
|  | **For the<br> years ended<br> December 31,**<br>**2023** |
|  | **RMB** |
| **Net revenues:** |  |
| Total net revenue | 1617904 |
| Cost of revenues | (795112) |
| **Gross profit** | 822792 |
| **Operating expenses:** |  |
| General and administrative expenses | (2224057) |
| Sales and marketing expenses | (668264) |
| **Total operating expenses** | (2892321) |
| **Operating loss** | (2069529) |
| Interest expense | (203565) |
| Interest income | 770 |
| Other income, net | 166086 |
| **Loss before income tax expense** | (2106238) |
| Income tax benefit | 523710 |
| **Loss before one-off loss upon deconsolidation of Chuangmei Weiye** | (1582528) |
| **One-off loss upon deconsolidation of Chuangmei Weiye, net of tax** | (21812133) |
| **Net loss from discontinued operation** | (23394661) |

---

---

| | |
|:---|:---|
|  | **For the years<br> ended<br> December 31,**<br>**2023** |
|  | **RMB** |
| Net cash provided by operating activities | 7709950 |
| Net cash provided by investing activities | - |
| Net cash used in financing activities | (7772526) |

---

&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Disposal of Qingtian International School** 

On December 31, 2023, the Group transferred 100% sponsorship interests of Qingtian International School to a related party Zhejiang Lishui Qiaoxiang Education Consulting Service Co., LTD ("Qiaoxiang Education") which is a related party as an entity affiliated with Mr. Biao Wei, for a consideration of RMB23.2 million. Therefore, the Group was no longer able to operate and exert control over the subsidiary since the disposal date.

This disposal of Qingtian International School did not constitute a strategic shift that will have a major effect on the Group's operations and financial results, so it was not reported as "discontinued operations". As the disposal of Qingtian International School was under common control, the Group recognized additional paid-in capital of RMB3.7 million.

The deconsolidated subsidiary had assets and liabilities on disposal date as the following:

---

| | |
|:---|:---|
|  | **Amount in RMB** |
|  | **2023** |
| Consideration | 23161000 |
| Less: |  |
| Total assets as of deconsolidated date | 9783831 |
| Goodwill gained from acquisition | 26644407 |
| Total liabilities as of deconsolidated date | (16993833) |
| Total gain from deconsolidation recorded in additional paid-in capital | **3726595** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**6.** **Cash and cash equivalents** 

Cash and cash equivalents represent cash on hand and demand deposits placed with banks or other financial institutions, which have original maturities of less than three months and unrestricted as to withdrawal and use. The following table sets forth a breakdown of cash by currency denomination and jurisdiction as of December 31, 2024 and 2025.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **RMB equivalent (US$)** | **RMB** | **RMB** | **Total in RMB** |
|  | | **China** | **China** | |
|  |<br>**Overseas** | **Non VIE** | **VIEs** | |
| December 31, 2024 | 215803132 | 1023214 | 3897892 | 220724238 |
| December 31, 2025 | 114874 | 968850 | 11699127 | 12782851 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**7.** **Prepayments and other current assets, net** 

Prepayments and other current assets, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
| Prepayments of services <sup>(1)</sup> | 1042259 | 6482998 |
| Deductible input value-added tax | 3316438 | 2522654 |
| Security deposits for leases <sup>(2)</sup> | - | 1100000 |
| Rent receivable | 333333 | 986132 |
| Receivables of over-paid income tax | 892119 | 890222 |
| Others | 262581 | 321873 |
| **Total** | **5846730** | **12303879** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Prepayments of services primarily consist of financial consulting service fees related to the vocational education merger and acquisition project of RMB6.0 million. The services cover target screening, due diligence coordination, transaction document drafting, negotiation support, and post-investment management.

**7.** **Prepayments and other current assets, net (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;(2) On July 31, 2024, the Group entered into a six-year lease agreement with Hebei Petroleum Technical College for educational use. Following the early termination of the agreement in 2025, the security deposits will be returned after the Group completes campus relocation and vacates the property by January 15, 2026. The Group has fully recovered the security deposits on 25 March 2026.

&nbsp;&nbsp;&nbsp;&nbsp;**8.** **Property and equipment, net** 

Property and equipment, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
| Cost: |  |  |
| Buildings | 184813833 | 184813835 |
| Electronic devices and other general equipment | 4220664 | 4338116 |
| Leasehold improvements | 3118069 | 2558798 |
| Total cost | 192152566 | 191710749 |
| Less: Accumulated depreciation | (44902512) | (48939349) |
| **Property and equipment, net** | **147250054** | **142771400** |

---

Depreciation expense recognized for the years ended December 31, 2023, 2024 and 2025 were RMB6,128,680, RMB4,598,768 and RMB4,596,107. The net book amount of buildings pledged as collateral for the continuing operations' borrowings (Note 15) as at December 31, 2024 and 2025 was RMB74,807,854 and RMB73,181,173, respectively. The net book amount of buildings pledged as collateral for the Lianwai School's borrowings as at December 31, 2024 and 2025 was RMB2,881,608and RMB2,794,828, respectively. The net book amount of buildings pledged as collateral for the Lianwai Kindergarten's borrowings as at December 31, 2024 and 2025 was RMB4,323,813 and RMB4,214,831, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;**9.** **Land use rights** 

Land use rights, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
| Cost: |  |  |
| Land use rights | 47334839 | 47334841 |
| Less: Accumulated amortization | (13407601) | (14354298) |
| **Land use rights, net** | **33927238** | **32980543** |

---

The amortization expenses recognized for the years ended December 31, 2023, 2024 and 2025 were RMB946,697, RMB946,697 and RMB946,697, respectively. The Group expects to record estimated amortization expenses RMB946,697, RMB946,697, RMB946,697, RMB946,697 and RMB946,697 for the years ending December 31, 2026, 2027, 2028 and 2029, respectively.

The net book amounts of land use rights as collateral for the continuing operations' borrowings (Note 15) as of December 31, 2024 and 2025 were RMB28,129,639 and RMB27,371,318, respectively. The net book amounts of land use rights as collateral for the Lianwai School's borrowings as of December 31, 2024 and 2025 were RMB2,837,247 and RMB2,733,654, respectively.

**10.** **Investment** 

In October 2025, the Group subscribed for US$18.4 million for a third-party investment fund, which is structured under Hong Kong's Limited Partnership Fund Ordinance and is primarily designed to achieve capital appreciation. The fund primarily invests in various underlying without quotation in public markets.

The investment was accounted for as equity securities in accordance with ASC 321 without a readily determinable fair value, and qualify for the NAV practical expedient. Therefore, the Group applies NAV to measure the fair value of equity securities in accordance with ASC 820. There is no indication that the investments is probable of being sold at amounts different from NAV per share. For the year ended December 31, 2025, fair value changes recognized for equity investment measured using NAV practical expedient were RMB83,621,753 (US$11,957,752).

**11.** **Other non-current asset** 

Other non-current asset consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
| Payments for platform development services <sup>(1)</sup> | - | 7500000 |
| Security deposits for leases | 1100000 | 300000 |
| **Total** | **1100000** | **7800000** |

---

(1) During the year, the Group entered into two agreements for customized education platform development, covering a smart virtual simulation platform with a total contract amount of RMB6.7 million and a digital campus management platform with a total contract amount of RMB5.8 million. Both platforms are expected to be completed in 2027. The aggregate prepayment for the development, deployment and integration of the above platforms amounted to RMB7.5 million.

**12.** **Taxes payable** 

Taxes payable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
| Value-added tax | 1940711 | 1534009 |
| Surtaxes | 145505 | 1636110 |
| Withholding individual income tax | 60603 | 96048 |
| **Total** | **2146819** | **3266167** |

---

**13.** **Accrued liabilities and other liabilities** 

Accrued liabilities and other liabilities consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
| Payables to third parties <sup>(1)</sup> | 2679350 | 7238177 |
| Deposits related to the Group staff apartment sales <sup>(2)</sup> | 3290500 | 2545060 |
| Deposits | 856790 | 813680 |
| Interests payable | 153951 | 130189 |
| Leasehold improvement payables | 50000 | 50000 |
| Others | 459178 | 303903 |
| **Total** | **7489769** | **11081009** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Payables to third parties consisted of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) loans from third party for daily operational purposes which is non-interest bearing, unsecured and repayable on demand as of December 31, 2025, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) miscellaneous fee collected on behalf of Hainan Advanced Technical School of Communications and insurance fees collected on behalf of the students as of December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Deposit prepaid to the Group for intention of purchasing the Group's staff apartments which can be freely withdrawn before final approval of the ownership transfer.

**14.** **Ordinary shares** 

In June 2020, the Company changed its authorized capital to US$50,000 (500,000,000 ordinary shares), with par value of $0.0001 per share.

On October 1, 2020, the Company completed its IPO on the NASDAQ Global Market of 3,333,400 American Depositary Shares ("ADS"). Each ADS represents 5 ordinary shares. The offering was at a price of US$9.25 per ADS for a total offering size of approximately US$30.8 million. The net proceeds raised from the IPO amounted to approximately RMB170.7 million (US$26.2 million) after deducting underwriting discounts and commissions and other offering expenses. The excesses of offering price over par value were recorded in additional paid-in capital.

On August 25, 2023, the Group entered into a share subscription agreement with Individual Investors, pursuant to which the Group agreed to issue and sell to such individual investors a total of 50,000,000 ordinary shares with a par value of US$0.0001 each of the Group, in the aggregate consideration of US$6,000,000.

On December 15, 2023, the Company announced that it planned to change its ADS Ratio, par value US$0.0001 per share, from the current ADS Ratio of one (1) ADS to five (5) ordinary shares to a new ADS Ratio of one (1) ADS to ten (10) ordinary shares (the "ADS Ratio Change"). Effective January 3, 2024, the Company effected a 1-for-2 reverse stock split.

On September 13, 2024, the Company announced that it planned to change its ADS Ratio, par value US$0.0001 per share, from the current ADS Ratio of one (1) ADS to ten (10) ordinary shares to a new ADS Ratio of one (1) ADS to one hundred (100) ordinary shares.

On November 18, 2024, the Company announced a dual-class stock structure that the ordinary shares were re-classified as Class A ordinary shares and Class B ordinary shares. Besides, the Company approved that the addition of 19,500,000,000 of authorized shares with a par value of US$0.0001 each. As a results, the authorized shares included (i) 19,700,000,000 Class A ordinary shares of a par value of US$0.0001 each, (ii) 100,000,000 Class B ordinary shares of a par value of US$0.0001 each; and (iii) 200,000,000 shares of a par value of US$0.0001 each of such class or classes as the board of directors may determine in accordance with the third amended and restated memorandum and articles of association of the Company.

On November 28, 2024, the Company entered into a share subscription agreement with certain individual investors and sell to individual investors a total of 1,800,000,000 Class A ordinary, in the aggregate consideration of US$34.2 million. The financing transaction was closed in January 2025.

As of December 31, 2024 and 2025, the number of ordinary shares outstanding was 116,667,000 and 1,916,667,000, respectively, consisting of 71,667,000 and 1,871,667,000 Class A ordinary shares, 45,000,000 and 45,000,000 Class B ordinary shares in each of those years.

On April 20, 2026, the Company completed change of the ratio of ADS Ratio, from the current ADS Ratio of one (1) ADS to one hundred (100) ordinary shares to a new ADS Ratio of one (1) ADS to one thousand (1,000) ordinary shares.

**15.** **Loans and borrowings** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Annual Interest Rate** | **Maturity (Months)** | **As of December 31, 2024** | **As of December 31, 2025** |
| **Short-term borrowings:** |  |  |  |  |
| China CITIC Bank | 3.75% | September, 2026 | 24000000 | 24000000 |
| Bank of Ningbo | 3.90% | October, 2026 | 10000000 | 10000000 |
| Bank of Ningbo | 3.90% | November, 2026 | 20000000 | 10000000 |
| Bank of Ningbo | 3.90% | January, 2026 | 10000000 | 10000000 |
| Bank of Ningbo | 3.90% | December, 2026 | 10000000 | 20000000 |
| Rural Commercial Bank | 4.00% | November, 2026 | 10000000 | 10000000 |
| **Total** |  |  | **84000000** | **84000000** |

---

For the years ended December 31, 2023, 2024 and 2025, the weighted average interest rate per annum for the Group's loans was 4.47%, 4.21% and 4.03%, respectively. The Group's bank loans were secured by the pledge of Group's buildings and land use rights plus personal guarantees provided by related parties. As of December 31, 2024 and 2025, the total net book amounts of pledged assets were RMB102,937,493 and RMB100,552,491, respectively (Note 8 and 9). As of December 31, 2025, the total guaranteed amounts provided by related parties were RMB40,000,000 within the period from March 17, 2022 to March 17, 2027.

The fair values of personal guarantee provided by the related parties for the Group's loan were not significant as of December 31, 2024 and 2025 respectively.

**16.** **Revenue** 

For the years ended December 31, 2023, 2024 and 2025, all of the Group's revenue was generated in the PRC. The disaggregated revenues were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
| **Revenue from third parties:** |  |  |  |
| Tuition fees | 30626298 | 15416740 | 13863581 |
| Course design, development and training | 4766127 | 6839135 | 5101952 |
| Accommodation | 5963281 | 4032860 | 3580137 |
| Healthcare support services | - | 780233 | 2568905 |
| Uniforms, learning materials and other campus necessities | 2937007 | 2164187 | 2070624 |
| Meals | 1925744 | - | 986477 |
| Comprehensive human resource services | 653149 | 1263810 | 847756 |
| Rental revenue | 746294 | 888470 | 983125 |
| Others | 2443231 | 660940 | 226875 |
| **Subtotal** | **50061131** | **32046375** | **30229432** |
| **Revenue from related parties:** |  |  |  |
| Rental revenue | 754285 | 754285 | 377143 |
| Others | - | - | 226415 |
| **Subtotal** | **754285** | **754285** | **603558** |
| **Total revenue** | **50815416** | **32800660** | **30832990** |

---

(1) Tuition and accommodation fees, revenue from course design, development and training, rental revenue, comprehensive human resource services and healthcare support services fee were recognized over time, amounted to RMB42,856,285, RMB27,931,490 and RMB27,549,014 for the years ended December 31, 2023, 2024 and 2025, respectively. Other types of revenue were recognized at a point of time.

As of December 31, 2025, revenue for unsatisfied performance obligations expected to be recognized in year 2026 is RMB7,796,228 which primarily relates to education services and accommodation services to be delivered in the future to the students.

**17.** **Income taxes** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Cayman Islands

Under the current tax laws of the Cayman Islands, the Company is not subject to income, corporate or capital gains tax, and no withholding tax is imposed upon the payment of dividends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Hong Kong

According to Tax (Amendment) (No. 3) Ordinance 2018 published by Hong Kong government, from April 1, 2018, under the two-tiered profits tax rates regime, the profits tax rate for the first HKD2 million of assessable profits will be lowered to 8.25% (half of the rate specified in Schedule 8 to the Inland Revenue Ordinance (IRO)) for corporations. The Company was not subject to Hong Kong profit tax for the years ended December 31, 2023, 2024 and 2025 as it did not have assessable profit for any period presented. Dividends income received from Liandu WFOE is not subject to Hong Kong profits tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) British Virgin Islands

Under the current laws of the British Virgin Islands ("BVI"), the Company's subsidiary in BVI is not subject to tax on its income or capital gains. In addition, upon any payment of dividends by the Company, no British Virgin Islands withholding tax is imposed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Mainland

On March 16, 2007, the National People's Congress of the PRC enacted an Enterprise Income Tax Law ("EIT Law"), under which Foreign Investment Enterprises ("FIEs") and domestic companies would be subject to EIT at a uniform rate of 25%. The EIT law became effective on January 1, 2008. According to the Article 14 of Guofa 2016 No. 81 released by the State Council non-profit private schools are eligible to enjoy the same preferential tax treatment as public schools. As a result, non-profit private schools providing academic qualification education are eligible to enjoy income tax exemption treatment.

Starting from June 25, 2023, Lishui International School was subject to EIT at a uniform rate of 25%.

According to the Financial management system scheme of Lishui Development Zone (Park), Lishui Xianke is eligible to enjoy 40% income tax reduction treatment, subjecting to the PRC income tax at the rate of 15%.

According to the Announcement on Further Implementing the Income Tax Preferential Policies for Small and Micro Enterprises (Caishui [2023] No. 06) issued by the Ministry of Finance and the State Taxation Administration on March 14, 2022, for small and low-profit enterprises with an annual taxable income exceeding RMB1.0 million but not exceeding RMB3.0 million, a reduction of 25% will be included in the taxable income and the enterprise income tax will be paid at a 20% tax rate. The execution period of this announcement is from January 1, 2023 to December 31, 2024. On August 2, 2023, the Ministry of Finance and the State Taxation Administration announced Caishui [2023] No. 12 and extend the execution period of Caishui [2023] No. 06 from December 31, 2024 to December 31, 2027. For the years ended December 31, 2023, 2024 and 2025, Chuangmei Weiye, Hainan Jiangcai, Hebei Chuangxiang and Langfang school were qualified as small-scale and low profit enterprise.

The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose "de facto management body" is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The implementing Rules of the EIT Law merely define the location of the "de facto management body" as "the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located."

**17.** **Income taxes (Continued)** 

The EIT Law also imposes a withholding income tax of 10% on dividends distributed by a FIE to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company's jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. The Cayman Islands, where the Company is incorporated, does not have such a tax treaty with China. According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by a FIE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5% if the immediate holding company in Hong Kong owns directly at least 25% of the shares of the FIE and could be recognized as a Beneficial Owner of the dividend from PRC tax perspective.

*Composition of income tax expense from continuing operations*

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
| Current | 216120 |  |  |
| Deferred | 2903456 |  |  |
| **Total income tax expenses** | **3119576** |  |  |

---

A reconciliation between the effective income tax rate and the PRC statutory income tax rate is as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  | **Amount** | **Percentage** | **Amount** | **Percentage** | **Amount** | **Percentage** |
| PRC Statutory income tax rates | (25118909) | 25.0% | (6175509) | 25.0% | (30315688) | 25.0% |
| Effect of preferential tax rates | 323804 | (0.3)% | 667990 | (2.7)% | 21448229 | (17.7)% |
| Effect of non-taxable loss <sup>(1)</sup> | (864477) | 0.9% | - | - | - | - |
| Effect of favorable tax rates on small-scale and low-profit entities | 5669481 | (5.6)% | (298213) | 1.2% | - | - |
| Change of valuation allowance | 23109677 | (23.0)% | 5805732 | (23.5)% | 8867459 | (7.3)% |
| **Provision for income tax** | **3119576** | **(3.0)%** | **-**  | **0.0%** | **-**  | **0.0%** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Non-taxable loss was primarily due to goodwill impairment loss of Beijing P.X.

*Deferred tax assets* 

The significant components of the deferred tax assets are summarized below:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
| Deferred tax assets: |  |  |
| Net operating loss carry-forwards | 14071879 | 22929648 |
| Allowance of credit losses | 15890837 | 15900526 |
| Less: valuation allowance | (29962716) | (38830174) |
| **Net deferred tax assets** | **-**  | **-**  |

---

As of December 31, 2024 and 2025, the Group had net operating loss carryforwards of approximately RMB47,426,238 and RMB80,529,758, respectively, which arose from the Group's subsidiaries, VIEs and the VIEs' subsidiaries established in the PRC. As of December 31, 2024 and 2025, deferred tax assets from the net operating loss carryforwards amounted to RMB14,071,879 and RMB22,929,648, respectively.

As private schools providing compulsory education should not conduct any transaction with any related party under the Implementation Rules, some of the Group's subsidiaries and Lishui Mengxiang VIE were confronted with the adjustment of business. Thus, the Group considered it more likely than not that those subsidiaries and Lishui Mengxiang VIE could not generate sufficient pre-tax profit in the next 5 consecutive years and the deferred tax assets will not be utilized in the future. As of December 31, 2024 and 2025, the Group provided valuation allowance of RMB29,962,716 and RMB38,830,174, respectively.

**17.** **Income taxes (Continued)** 

The movement of valuation allowance is as follows:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
| **Balance at beginning of the year** | **24156986** | **29962716** |
| Disposal of a subsidiary | - | - |
| Additions | 6240696 | 8867458 |
| Decrease | (434966) | - |
| **Balance at end of the year** | **29962716** | **38830174** |

---

As of December 31, 2025, the net operating loss carryforwards from the Group's subsidiaries, VIEs and the VIEs' subsidiaries established in the PRC will expire, if unused, as follows:

---

| | |
|:---|:---|
| Net operating loss carryforwards |  |
| 2026 | 2611109 |
| 2027 | 1009456 |
| 2028 | 16586588 |
| 2029 | 24870235 |
| 2030 | 35452370 |
| **Total** | **80529758** |

---

**18.** **Leases** 

 

*The Group as a lessor* 

 

The Group entered into lease agreements as lessor with both third parties and a related party.

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
| **Rental Income** |  |  |  |
| ***Third parties*** |  |  |  |
| Lishui Boyuan Education Consulting Co., Ltd. | - | - | 628931 |
| Langfang Lizhi Education Consulting Co., Ltd. | - | - | 330189 |
| Langfang Xingrun Aviation Service Co., Ltd. | - | - | 16509 |
| Zhejiang Huapu Yifang Technology Co., Ltd. | - | - | 4666 |
| Langfang Quantong Logistics Co., Ltd. | - | - | 2830 |
| ***Related party*** |  |  |  |
| Lianwai Kindergarten | 754285 | 754285 | 377143 |
| **Total** | **754285** | **754285** | **1360268** |

---

The Group continued leasing its space to Lianwai Kindergarten for their operation of kindergarten care service after the disposal in November, 2018. The original lease term expired on 31 December 2025 (Note 20). On the same date, the Group entered into a new one-year lease agreement with Lianwai Kindergarten.

 

*The Group as a lessee*

On July 31, 2024, the Group entered into a six-year lease agreement with Hebei Petroleum Technical College for educational use. Following the early termination of the agreement in 2025, the Group is required to complete campus relocation and vacate the property by January 15, 2026.

On December 31, 2025, the Group entered into another lease agreement with AVIC China Railway Education Technology Co., Ltd for education use, with a lease term from December 31, 2025 to March 30, 2031.

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
| Operating right-of-use assets | 51906613 | 54080188 |
| Operating lease payment liabilities, current | 9208569 | 10479626 |
| Operating lease payment liabilities, non-current | 38352135 | 38439295 |
| **Total** | **47560704** | **48918921** |

---

**18.** **Leases (Continued)** 

The weighted average discount rate of the operating lease was 3.84% and 3.78% as of December 31, 2024 and 2025. The weighted average remaining lease term was 5.45years and 4.59 year as of December 31, 2024 and 2025. Cash paid for operating lease was RMB11,628,836 and RMB11,552,022 for the years ended December 31, 2024 and 2025. Operating right-of-use assets obtained in exchange for operating lease payment liabilities was RMB 55,593,928 and RMB11,194,513 for the year ended December 31, 2024 and 2025.

For the years ended December 31 2023, 2024 and 2025, the lease expense was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
| Operating leases expense | 4454857 | 7076506 | 10736663 |
| Short-term lease expense | 1295043 | 377430 | 308926 |
| **Total** | **5749900** | **7453936** | **11045589** |

---

Because most of the leases do not provide an implicit rate of return, the Group used the incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments.

The following is a schedule of future minimum payments under the Group's operating leases as of December 31, 2025:

---

| | |
|:---|:---|
| **For the years ended December 31,** | **RMB** |
| 2026 | 12169810 |
| 2027 | 12830189 |
| 2028 | 12830189 |
| 2029 | 12830189 |
| Thereafter | 2452830 |
| Total lease payments | 53113207 |
| Less: imputed interest | (4194286) |
| **Total operating lease liabilities** | **48918921** |

---

**19.** **Commitments and contingencies** 

 ****

***(a)***  ***Commitments*** 

***Lease Commitments***

*The Group as a lessor* 

The Group leases out the premises to lessees under non-cancellable operating leases. As at the balance sheet date, lease commitments under non-cancellable operating leases where the Group is the lessors are as follows:

---

| | |
|:---|:---|
|  | **2025** |
| Lease income receivable |  |
| within 1 year | 826931 |
| after 1 year but not later than 5 years | 314465 |
| Total | 1141396 |

---

The above operating leases do not provide for contingent rents.

 

*The Group as a lessee*

The total future minimum lease payments of short-term lease under the non-cancellable operating lease with respect to the house as of December 31, 2025 are payable as follows:

---

| | |
|:---|:---|
|  | **Lease <br> Commitment** |
| Within 1 year | 165000 |
| Total | 165000 |

---

As of December 31, 2025, the Group did not have any purchase commitments or capital commitments.

***Others***

 ****

During the year, the Group entered into two agreements for customized education platform development, covering a smart virtual simulation platform with a total contract amount of RMB6.7 million and a digital campus management platform with a total contract amount of RMB5.8 million. Both platforms are expected to be completed in 2027, with future payments of RMB2,680,000 and RMB2,320,000, respectively.

***(b)***  ***Litigations*** 

On December 18, 2023, Lishui Mengxiang, as applicant, filed an arbitration application against Beijing S.K. and its affiliates, as respondents in relation to the breach of the investment cooperation agreement entered into between the two parties on July 27, 2021 and a series of investment supplemental agreement entered into between the two parties during 2023 and 2024. The main arbitration claim was to request the respondents to pay the contract amount of RMB72.41 million and the liquidated damages of RMB20 million. On April 3, 2025, the Beijing Arbitration Commission rendered a final award granting the applicant's main arbitration claims. As of the date of this annual report, Lishui Mengxiang has not yet received the aforementioned amount.

In the opinion of management, there were no other pending or threatened claims and litigation as of December 31, 2025 and through the issuance date of these consolidated financial statements.

**20.** **Related party transaction and balances** 

Name and relationship with related parties:

---

| | |
|:---|:---|
| **Name of related parties** | **Relationship** |
| Ms. Fen Ye | Significant shareholder, director, and chairlady of the Company |
| Mr. Biao Wei | A close family member of Ms. Fen Ye, director and Chief Executive Officer of the Company |
| Lianwai Kindergarten | Controlled by Ms. Fen Ye |
| Qingtian International School | Ultimately controlled by Mr. Biao Wei |
| Zhejiang Lishui Qiaoxiang Education Consulting Services Co., Ltd ("Qiaoxiang Education") | Controlled by Mr. Biao Wei |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Significant transactions with related parties for continuing operations

---

| | | | |
|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** |
| **Rental revenue:** |  |  |  |
| Lianwai Kindergarten | 754285 | 754285 | 377143 |
| **Software license income:** |  |  |  |
| Qiaoxiang Education | - | - | 226415 |
| **Total** | **754285** | **754285** | **603558** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
| **Disposal of Qingtian International School:** | | | | | | |
| Qiaoxiang Education |  | 23161000 |  | - |  | - |

---

On December 31, 2023, the Group transferred 100% sponsorship interests of Qingtian International School to Qiaoxiang Education which is controlled by the controlling shareholder for a consideration of RMB23.2 million (Note 5).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Balances with related parties for continuing operations

---

| | | |
|:---|:---|:---|
|  | **As of** December 31,** | **As of** December 31,** |
|  | **2024** | **2025** |
| **Due to a related party:** |  |  |
| Mr. Biao Wei | 1817485 | 1621303 |
| **Total** | **1817485** | **1621303** |

---

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
| **Due from related parties:** |  |  |
| Qingtian International school | 8750000 | 7090000 |
| Lianwai Kindergarten | 792000 | 1842000 |
| **Total** | **9542000** | **8932000** |

---

**20.** **Related party transaction and balances (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Balances with Affected Entity for continuing operations

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** |
| **Due to Affected Entity:** |  |  |
| Payables to Affected Entity, non-current | 173046163 |  |
| **Total** | **173046163** |  |

---

For the years ended December 31, 2023, 2024 and 2025, other receivables from and payables to Affected Entity were non-interest bearing and unsecure.

Revenue transaction amount were recognized in the consolidated financial statements (Note 16).

**21.** **Non-controlling interests** 

In January 2022, the Group entered into an agreement of establishing a joint venture company Beijing Xinxiang Future Technology Development Co., Ltd ("Xinxiang") with Beijing Renrenzhen Intelligent Technology Co., Ltd ("Renren") and Beijing Chuang'ao Technology Center LLP. ("Chuangao"). The Group directly held 43% equity interests for a total consideration of RMB4,300,000. Given that the board of directors of Xinxiang consists of five members, three of which shall be appointed by Lishui Mengxiang, the Group controlled Xinxiang as Lishui Mengxiang holds more than half of the voting power in the board of directors of Xinxiang. The remaining 57% interests held by Renren and Chuangao were accounted for as non-controlling interest. As of December 31, 2023, Chuangao withdrew capital of RMB500,000. On June 17, 2024, Xinxiang was deregistered, resulting in a non-controlling interests disposal loss of RMB255,999.

&nbsp;&nbsp;&nbsp;&nbsp;**22.** **SEGMENT INFORMATION** 

The CODM reviews financial information of operating segments based on internal management report when making decisions about allocating resources and assessing the performance of the Group. As a result of the assessment made by CODM, the Group has two reportable segments for operations, includinghigh school and vocational education. . All other operating segments are considered immature and immaterial for separate disclosure purposes and are aggregated within "All Other", and reconciled to the consolidated financial totals. The Group's CODM evaluates performance based on the operating segment's revenue and their operating results. The revenue and operating results by segments were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **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** |
|  | **High school** | **Vocational** <br> **education** | **All Other** | **Consolidated** |
| Revenues | 16334106 | 29877168 | 4604142 | 50815416 |
| Cost of revenues | (21591312) | (23685307) | (1573695) | (46850314) |
| **Operating expenses** |  |  |  |  |
| General and administrative expenses | (2778289) | (7309405) | (15357707) | (25445401) |
| Selling and marketing expenses | - | (16800) | (1500) | (18300) |
| Impairment loss on goodwill | - | - | (22677921) | (22677921) |
| Expected credit loss for receivables and other assets | - | - | (65138293) | (65138293) |
| **Total operating expenses** | **(2778289)** | **(7326205)** | **(103175421)** | **(113279915)** |
| **Total other income/(expenses), net** | **7076175** | **4615303** | **(2852294)** | **8839184** |
| **Segment loss before tax** | **(959320)** | **3480959** | **(102997268)** | **(100475629)** |

---

**22.** **SEGMENT INFORMATION (Continued)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **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** |
|  | **High school** | **Vocational**<br> **education** | **All Other** | **Consolidated** |
| Revenues | 3383866 | 25067284 | 4349510 | 32800660 |
| Cost of revenues | (2899012) | (22594526) | (10357567) | (35851105) |
| **Operating expenses** |  |  |  |  |
| General and administrative expenses | (387098) | (9278628) | (13133439) | (22799165) |
| Selling and marketing expenses | - | - | (111780) | (111780) |
| **Total operating expenses** | **(387098)** | **(9278628)** | **(13245219)** | **(22910945)** |
| **Total other income/(expenses), net** | **71549** | **3443074** | **(2255266)** | **1259357** |
| **Segment income/(loss) before tax** | **169305** | **(3362796)** | **(21508542)** | **(24702033)** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **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** |
|  | **High school** | **Vocational** <br> **education** | **All Other** | **Consolidated** |
| Revenues | 3925775 | 22247737 | 4659478 | 30832990 |
| Cost of revenues | (4049479) | (28305702) | (10407899) | (42763080) |
| **Operating expenses** |  |  |  |  |
| General and administrative expenses | (246788) | (9224089) | (13997493) | (23468370) |
| Selling and marketing expenses | - | - | (985278) | (985278) |
| **Total operating expenses** | **(246788)** | **(9224089)** | **(14982771)** | **(24453648)** |
| **Total other (expenses)/income, net** | **(26548)** | **2415089** | **(87267544)** | **(84879003)** |
| **Segment loss before tax** | **(397040)** | **(12866965)** | **(107998736)** | **(121262741)** |

---

**23.** **Restricted net assets** 

As stipulated by the relevant PRC laws and regulations applicable to the Group's entities in the PRC, the Group is required to make appropriations from net income as determined in accordance with the PRC GAAP to non-distributable reserves, which include a statutory surplus reserve and a statutory welfare reserve. In addition, Liandu WFOE and Lishui Mengxiang VIE are required to annually appropriate 10% of their net after-tax income to the statutory general reserve fund prior to payment of any dividends, unless such reserve funds have reached 50% of their respective registered capital. In addition, for private schools such as the School, PRC laws and regulations require that annual appropriations of at least 25% of after-tax income should be set aside as development funds. Under the Implementation Rules for the Law for Promoting Private Education of the PRC for Private Education Laws, or the 2021 Implementation Rules, which took effect on September 1, 2021, annual appropriations of 10% of after-tax income should be set aside prior to payments of dividend as development fund. The sponsor of non-profit private schools shall not receive proceeds from the running of the school, and the cash surplus of the non-profit private schools shall be retained for the running of the school development only. As a result of these and other restrictions under PRC laws and regulations, the Group's subsidiaries and the VIEs incorporated in the PRC are restricted in their ability to transfer a portion of their net assets to the Company either in the form of dividends, loans or advances. There are no significant differences between US GAAP and PRC accounting standards in connection with the reported net assets of the legally owned subsidiary in the PRC and the VIE. Even though the Company currently does not require any such dividends, loans or advances from the PRC entities for working capital and other funding purposes, the Company may in the future require additional cash resources from them due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay dividends or distributions to the shareholders. Except for the above, there is no other restriction on use of proceeds generated by the Group's subsidiaries and the VIEs to satisfy any obligations of the Company.

**23.** **Restricted net assets (Continued)** 

As of December 31, 2025, the total restricted net assets of the Company's subsidiaries and VIEs incorporated in PRC subjected to restriction, including the registered capital, the PRC statutory reserves and certain education facilities assets, exceeded the 25 percent threshold, which amounted to RMB76.2 million (US$10.9 million). This restriction results in a corresponding requirement to provide the Company's financial information.

**24.** **Subsequent events** 

On January 9, 2026, the Group obtained a borrowing of RMB10,000,000 from Bank of Ningbo with one-year term and an annual interest rate of 3.9%.

On January 13, 2026, Langfang School and Hebei Petroleum College mutually agreed to terminate the cooperation agreement and Langfang School vacated the facilities it occupied at the southern campus of Hebei Petroleum College on January 15, 2026.

On February 25, 2026, Lishui Mengxiang VIE made total capital contribution of RMB2,000,000 to Beijing P.X. by cash.

On March 5, 2026, Mudanjiang Chuangxiang Health Management Co., Ltd. ("Mudanjiang Chuangxiang") was incorporated in the PRC with 100% ownership by Hebei Chuangxiang.

On April 20, 2026, the Company completed change of the ratio of ADS Ratio, from the current ADS Ratio of one (1) ADS to one hundred (100) ordinary shares to a new ADS Ratio of one (1) ADS to one thousand (1,000) ordinary shares.

The Group has evaluated events subsequent to the balance sheet date of December 31, 2025 through May 12, 2026, the date on which the consolidated financial statements were issued and noted that there are no other subsequent events except for the events mentioned above.

**25.** **Information: Condensed financial statements of the Company** 

Rules 12-04(a) and 4-08(e) (3) of Regulation S-X require condensed financial information as to the financial position, cash flows and results of operations of a parent company as of and for the same periods for which the audited consolidated financial statements have been presented when the restricted net assets of the consolidated and unconsolidated subsidiaries together exceed 25% of consolidated net assets as of the end of the most recently completed fiscal year.

The following condensed financial statements of the Company have been prepared using the same accounting policies as set out in the Company's consolidated financial statements except that the Company used the equity method to account for its investment in its subsidiaries and VIEs. Such investment is presented on the separate condensed balance sheets of the Company as "Investment in subsidiaries and VIEs". The Company, its subsidiaries and VIEs were included in the consolidated financial statements whereby the inter-company balances and transactions were eliminated upon consolidation. The Company's share of income from its subsidiaries and VIEs is reported as equity in loss of subsidiaries and VIEs in the condensed financial statements.

The Company is a Cayman Islands exempted company and, therefore, is not subject to income taxes for all years presented. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

As of December 31, 2025, there were no material commitments or contingencies, significant provisions for long-term obligations or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any.

**25.** **Information: Condensed financial statements of the Company (Continued)** 

**Condensed Financial Information of the Company**

**BALANCE SHEETS** 

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **US$**<br> **(Note 2(g))** |
| **ASSETS** |  |  |  |
| **Current assets:** |  |  |  |
| Cash | 215770215 | 27742 | 3967 |
| Amounts due from subsidiaries and VIEs | 43130675 | 374863600 | 53604782 |
| **Total current assets** | **258900890** | **374891342** | **53608749** |
| **Current assets:** |  |  |  |
| Investment in equity securities | - | 44974376 | 6431250 |
| **Total current assets** | **-**  | **44974376** | **6431250** |
| **Total assets** | **258900890** | **419865718** | **60039999** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |
| **Current liabilities:** |  |  |  |
| Accrued liabilities and other current liabilities | 31932 | 31223 | 4465 |
| Investment deficit in subsidiaries and VIEs | 66144375 | 218625928 | 31263092 |
| Amounts due to subsidiaries and VIEs | 46586500 | 48001814 | 6864168 |
| **Total current liabilities** | **112762807** | **266658965** | **38131725** |
| **Total liabilities** | **112762807** | **266658965** | **38131725** |
| **Shareholders' equity:** |  |  |  |
| Class A ordinary shares (USD$0.0001 par value; 19,700,000,000 shares authorized, 71,667,000 and 1,871,667,000 shares issued and outstanding as of December 31, 2024 and 2025, respectively) | 50584 | 1368598 | 195707 |
| Class B ordinary shares (USD$0.0001 par value; 100,000,000 shares authorized, 45,000,000 and 45,000,000 shares issued and outstanding as of December 31, 2024 and 2025, respectively) | 30508 | 30508 | 4363 |
| Additional paid-in capital | 343098862 | 476500785 | 68138706 |
| Statutory reserves | 60610543 | 60610543 | 8667192 |
| Accumulated other comprehensive income | 12294900 | 6547327 | 936255 |
| Accumulated deficit | (269947314) | (391851008) | (56033949) |
| **Total shareholders' equity** | **146138083** | **153206753** | **21908274** |
| **Total liabilities and shareholders' equity** | **258900890** | **419865718** | **60039999** |

---

**25.** **Information: Condensed financial statements of the Company (Continued)** 

**STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$**<br> **(Note 2(g))** |
| **Operating expenses** |  |  |  |  |
| General and administrative expenses | (1292974) | (2647144) | (2160564) | (308957) |
| **Total operating expenses** | **(1292974)** | **(2647144)** | **(2160564)** | **(308957)** |
| Other income/(expense) | 336 | 18 | (151) | (22) |
| Impairment loss on Investments | - | - | (83621753) | (11957752) |
| Equity in loss of subsidiaries and VIEs, net | (125338010) | (21980540) | (36121226) | (5165266) |
| **Loss from subsidiaries and VIEs** | **(125337674)** | **(21980522)** | **(119743130)** | **(17123040)** |
| **Net loss** | **(126630648)** | **(24627666)** | **(121903694)** | **(17431997)** |
| Net loss attributable to Lixiang Education Holding Co., Ltd. shareholders | (126630648) | (24627666) | (121903694) | (17431997) |
| Other comprehensive income/(loss), net of nil tax | 2970553 | 3809859 | (5747573) | (821892) |
| **Comprehensive loss** | **(123660095)** | **(20817807)** | **(127651267)** | **(18253889)** |

---

**STATEMENTS OF CASH FLOWS**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** | **For the years ended December 31,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **US$** <br> **(Note 2(g))** |
| Cash flows used in operating activities | (42725890) | (861999) | (331856004) | (47454777) |
| Cash flows used in investing activities | - | - | (128596129) | (18389002) |
| Cash flows provided by financing activities | 41856435 | - | 250422660 | 35809964 |
| Effect of exchange rate changes on cash | 2947203 | 3785027 | (5713000) | (816949) |
| Net changes in cash | 2077748 | 2923028 | (215742473) | (30850763) |
| Cash at the beginning of year | 210769439 | 212847187 | 215770215 | 30854730 |
| Cash at the end of year | 212847187 | 215770215 | 27742 | 3967 |

---

## Exhibit 2.8

**Exhibit 2.8**

**Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act")**

As of December 31, 2025, Lixiang Education Holding Co., Ltd. ("Lixiang," the "Company," "we," "us," and "our") had the following series of securities registered pursuant to Section 12(b) of the Exchange Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of exchange on which registered** |
| American Depositary Shares (one American depositary share representing one hundred Class A ordinary shares, par value US$0.0001 per share)\* | LXEH | The Nasdaq Stock Market LLC<br> (The Nasdaq Global Market) |
| Class A ordinary shares, par value US$0.0001 per share\*\* | N/A | The Nasdaq Stock Market LLC<br> (The Nasdaq Global Market) |

---

\* Effective April 20, 2026, our American depositary shares to Class A ordinary shares ratio was changed to one American depositary share representing one thousand Class A ordinary shares.

\*\* Not for trading, but only in connection with the listing of the American depositary shares on the Nasdaq Stock Market LLC.

**Description of Ordinary Shares (Items 9.A.3, 9.A.5, 9.A.6, 9.A.7, 10.B.3, 10.B.4, 10.B.6, 10.B.7, 10.B.8, 10.B.9 and 10.B.10 of Form 20-F)**

***General***

We were incorporated as an exempted company with limited liability in the Cayman Islands on September 6, 2018. Our affairs are currently governed by our third amended and restated memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands, or the Companies Act in this section, and the common law of the Cayman Islands.

Our authorized share capital is US$2,000,000 divided into (i) 19,700,000,000 Class A ordinary shares of a par value of US$0.0001 each, (ii) 100,000,000 Class B ordinary shares of a par value of US$0.0001 each, and (iii) 200,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with the third amended and restated memorandum and articles of association of the Company. The number of ordinary shares that had been issued as of December 31, 2025 is provided on the cover of our annual report on Form 20-F for the year ended December 31, 2025. All of our issued and outstanding ordinary shares are fully paid.

Our ordinary shares are issued in registered form, and are issued when registered in our register of members. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their ordinary shares.

***Conversion***

Each Class B ordinary share is convertible into one (1) Class A ordinary share at any time at the option of the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

Any number of Class B ordinary shares held by a holder thereof will be automatically and immediately converted into an equal number of Class A ordinary shares upon the occurrence of any of the following: (a) any direct or indirect sale, transfer, assignment or disposition of such number of Class B ordinary shares by the holder thereof or the direct or indirect transfer or assignment of the voting power attached to such number of Class B ordinary shares through voting proxy or otherwise to any person that is neither an affiliate of such holder nor another holder of Class B ordinary shares or an affiliate of such another holder; or (b) any direct or indirect sale, transfer, assignment or disposition of a majority of the issued and outstanding voting securities of, or the direct or indirect transfer or assignment of the voting power attached to such voting securities through voting proxy or otherwise, or the direct or indirect sale, transfer, assignment or disposition of all or substantially all of the assets of, a holder of Class B ordinary shares that is an entity to any person that is neither an affiliate of such holder nor another holder of Class B ordinary shares or an affiliate of such holder.

***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 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.

Our directors may also pay interim dividends, whenever our financial position, in the opinion of our directors, justifies such payment.

Our directors may deduct from any dividend or distribution payable to any shareholder all sums of money (if any) presently payable by such shareholder to us on account of calls or otherwise.

No dividend or other money payable by us on or in respect of any share shall bear interest against us.

***Voting Rights***

On a show of hands holders of Class A ordinary shares will be entitled to one vote per share, while holders of Class B ordinary shares will be entitled to 200 votes per share based on our dual-class share structure, on all matters that require a shareholder's vote. Voting at any shareholders' meeting is by show of hands of shareholders who are present in person or by proxy or, in the case of a shareholder being a corporation, by its duly authorized representative, unless a poll is demanded.

A poll may be demanded by the chairman of such meeting or any shareholder present in person or by proxy.

No shareholder shall be entitled to vote or be reckoned in a quorum at any general meeting unless such shareholder is duly registered as our shareholder and all calls or other sums presently payable by such shareholder in respect of his voting shares to us have been paid.

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 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 any applicable restrictions set forth in our memorandum and articles of association as set out below, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or in a form prescribed by the Nasdaq Global Market or in another form that our directors may approve.

Our directors may decline to register any transfer of any share which is not paid up or on which we have a lien. Our directors may also decline to register any transfer of any share unless:

● the instrument of transfer is lodged with us and is accompanied by the certificate for the shares to which it relates and such other evidence as our directors may reasonably require to show the right of the transferor to make the transfer;

● the instrument of transfer is in respect of only one class of share;

● the instrument of transfer is properly stamped (if required);

● 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;

● the shares are free from any lien in favor of the Company; and a fee of such maximum sum as the Nasdaq Global Market 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.

***Liquidation***

Subject to any future shares which are issued with specific rights, (1) if we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the surplus shall be distributed amongst the shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise, and (2) if we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the share capital, those assets shall be distributed so that, as nearly as may be, the losses shall be borne by the shareholders in proportion to the par value of the shares held by them.

If we are wound up the liquidator may with the sanction of our special resolution and any other sanction required by the Companies Act, divide among our shareholders in kind the whole or any part of our assets (whether or not they shall consist of property of the same kind) and may, for such purpose, value any assets and determine how such division shall be carried out as between the shareholders or different classes of shareholders.

The liquidator may also vest the whole or any part of these assets in trustees upon such trusts for the benefit of the shareholders as the liquidator shall think fit, but so that no shareholder will be compelled to accept any assets, shares or other securities upon which there is a liability.

***Calls on Ordinary Shares and Surrender of Ordinary Shares***

Subject to our memorandum and articles of association and to the terms of allotment our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their ordinary shares in a notice served to such shareholders at least 14 days prior to the specified time of payment.

The ordinary shares that have been called upon and remain unpaid are subject to forfeiture.

***Redemption, Repurchase and Surrender of Ordinary Shares***

We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders of these shares, on such terms and in such manner as may be determined by either our board of directors or by a special resolution of our shareholders. 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 fresh 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 the 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 (1) unless it is fully paid up, (2) if such redemption or repurchase would result in there being no shares outstanding, or (3) 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 of shares, all or any of the special rights attached to any class of shares may, subject to the provisions of the Companies Act, be varied with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with the sanction of a resolution passed by at least a two-thirds majority of the holders of shares of the class present in person or by proxy at a separate general meeting of the holders of the shares of that class.

The rights conferred upon the holders of the shares of any class issued shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu with such existing class of shares.

***Inspection of Books and Records***

Holders of our ordinary shares have no general right under Cayman Islands law to inspect or obtain copies of our register of members or our corporate records (other than copies of our memorandum and articles of association, our register of mortgages and charge, and any special resolution passed by our shareholders). The Registrar of Companies of the Cayman Islands shall make available the list of the names of the current directors of the Company (and where applicable the current alternate directors of the Company) for inspection by any person upon payment of a fee by such person. However, we will provide our shareholders with annual audited financial statements.

***Issuance of Additional Shares***

Our memorandum of association authorizes 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.

Our memorandum of association also authorizes our board of directors to establish from time to time one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:

● the designation of the series;

● the number of shares of the series;

● the dividend rights, dividend rates, conversion rights, voting rights; and

● the rights and terms of redemption and liquidation preferences.

Our board of directors may issue preferred shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of ordinary shares.

***Anti-Takeover Provisions***

Some provisions of our memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:

● authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders.

● limit the ability of shareholders to requisition and convene general meetings of shareholders.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our 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.

***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 United Kingdom 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 United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to United States corporations and companies incorporated in the State of Delaware.

*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, (a) "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 (b) 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 declaration as to 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. Dissenting shareholders have the right to be paid the fair value of their shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) if they follow the required procedures, subject to certain exceptions. 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) 75% in value of the shareholders or class of shareholders, as the case may be, or (b) a majority in number representing 75% in value of the creditors or each class of creditors, as the case may be, with whom the arrangement is to be made that are, in each case, present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The 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 Grand Court can be expected to approve the arrangement if it determines that:

● the statutory provisions as to the required majority vote have been met;

● 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;

● 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

● 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 a 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 offeror 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 offeror 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 is thus approved, or, if a tender offer is made and accepted, 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 our company to challenge actions where:

● a company acts or proposes to act illegally or ultra vires;

● 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

● those who control our 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 memorandum and articles of association provide that we shall indemnify our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such directors or officer, other than by reason of such person's dishonesty, willful default or fraud, in or about the conduct of our company's business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere.

In addition, we have entered into indemnification agreements with our directors and executive officers that provide such persons with additional indemnification beyond that provided in our memorandum and articles of association.

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.

*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 personal profit based on his or her position as director (unless the company permits him or her to do so), a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party, 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 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.

*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. Under Cayman Islands law, a company may eliminate the ability of shareholders to approve corporate matters by way of written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matters at a general meeting without a meeting being held by amending the articles of association. Our memorandum and articles of association provide that 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 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 memorandum and articles of association allow shareholders holding at least one third of the paid up voting share capital of the Company to requisition an extraordinary general meeting of our shareholders, in which case our board is obliged to convene a general meeting. Other than this right to requisition a shareholders' meeting, our memorandum and articles of association do not provide our shareholders with any other right to put proposals before annual general meetings or extraordinary general meetings not called by such shareholders.

*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 memorandum and articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

*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 outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our memorandum and articles of association, directors may be removed with or without cause, by an ordinary resolution of our shareholders. A director shall hold office until the expiration of his or her term or his or her successor shall have been elected and qualified, or until his or her office is otherwise vacated. In addition, a director's office shall be vacated if the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) is found to be or becomes of unsound mind or dies; (iii) resigns his office by notice in writing to the company; (iv) without special leave of absence from our board of directors, is absent from three consecutive meetings of the board and the board resolves that his office be vacated; (v) is prohibited by law from being a director; or (vi) is removed from office pursuant to any other provisions of our memorandum and articles of association.

*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 share 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, the directors of our company are required to comply with fiduciary duties which they owe to our company under Cayman Islands laws, including the duty to ensure that, in their opinion, any such transactions must be entered into bona fide in the best interests of the company, and are entered into for a proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.

*Restructuring*

A company may present a petition to the Grand Court of the Cayman Islands for the appointment of a restructuring officer on the grounds that the company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is or is likely to become unable to pay its debts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) intends to present a compromise or arrangement to its creditors (or classes thereof) either pursuant to the Companies Act, the law of a foreign country or by way of a consensual restructuring.

The Grand Court may, among other things, make an order appointing a restructuring officer upon hearing of such petition, with such powers and to carry out such functions as the court may order. At any time (i) after the presentation of a petition for the appointment of a restructuring officer but before an order for the appointment of a restructuring officer has been made, and (ii) when an order for the appointment of a restructuring officer is made, until such order has been discharged, no suit, action or other proceedings (other than criminal proceedings) shall be proceeded with or commenced against the company, no resolution to wind up the company shall be passed, and no winding up petition may be presented against the company, except with the leave of the court. However, notwithstanding the presentation of a petition for the appointment of a restructuring officer or the appointment of a restructuring officer, a creditor who has security over the whole or part of the assets of the company is entitled to enforce the security without the leave of the court and without reference to the restructuring officer appointed.

*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 the board.

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 Cayman Islands law and our memorandum and articles of association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class with the written consent of two-thirds of the holders of the issued shares of that class or with the sanction of a special resolution passed at a general 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 memorandum and articles of association, our memorandum and articles of association may only be amended by a special resolution of our shareholders.

*Rights of Non-Resident or Foreign Shareholders* 

There are no limitations imposed by our memorandum and articles of association on the rights of nonresident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association that require our company to disclose shareholder ownership above any particular ownership threshold.

**Description of Debt Securities, Warrants and Rights and Other Securities (Items 12.A, 12.B and 12.C of Form 20-F)** 

Not applicable.

**Description of American Depositary Shares (Items 12.D.1 and 12.D.2 of Form 20-F)** 

The name of the depositary is Citibank, N.A. The depositary's office is located at 388 Greenwich Street, 23rd Floor, New York, New York 10013 USA. American Depositary Shares are frequently referred to as "ADSs" and represent ownership interests in securities that are on deposit with the depositary. ADSs may be represented by certificates that are commonly known as "American Depositary Receipts" or "ADRs." The depositary bank typically appoints a custodian to safekeep the securities on deposit. In this case, the custodian is Citibank, N.A.—Hong Kong, located at 9/F, Citi Tower, One Bay East, 83 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong.

Each ADS represents the right to receive, and to exercise the beneficial ownership interests in, 5 ordinary shares that are on deposit with the depositary and/or custodian. An ADS also represents the right to receive, and to exercise the beneficial interests in, any other property received by the depositary or the custodian on behalf of the owner of the ADS but that has not been distributed to the owners of ADSs because of legal restrictions or practical considerations. We and the depositary may agree to change the ADS-to-Share ratio by amending the deposit agreement. This amendment may give rise to, or change, the depositary fees payable by ADS owners. The custodian, the depositary and their respective nominees will hold all deposited property for the benefit of the holders and beneficial owners of ADSs. The deposited property does not constitute the proprietary assets of the depositary, the custodian or their nominees. Beneficial ownership in the deposited property will under the terms of the deposit agreement be vested in the beneficial owners of the ADSs. The depositary, the custodian and their respective nominees will be the record holders of the deposited property represented by the ADSs for the benefit of the holders and beneficial owners of the corresponding ADSs. A beneficial owner of ADSs may or may not be the holder of ADSs. Beneficial owners of ADSs will be able to receive, and to exercise beneficial ownership interests in, the deposited property only through the registered holders of the ADSs, the registered holders of the ADSs (on behalf of the applicable ADS owners) only through the depositary, and the depositary (on behalf of the owners of the corresponding ADSs) directly, or indirectly, through the custodian or their respective nominees, in each case upon the terms of the deposit agreement.

If you become an owner of ADSs, you will become a party to the deposit agreement and therefore will be bound to its terms and to the terms of any ADR that represents your ADSs. The deposit agreement and the ADR specify our rights and obligations as well as your rights and obligations as an owner of ADSs and those of the depositary. As an ADS holder you appoint the depositary to act on your behalf in certain circumstances. The deposit agreement and the ADRs are governed by New York law. However, our obligations to the holders of ordinary shares will continue to be governed by the laws of the Cayman Islands, which may be different from the laws in the United States.

In addition, applicable laws and regulations may require you to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. You are solely responsible for complying with such reporting requirements and obtaining such approvals. Neither the depositary, the custodian, us or any of their or our respective agents or affiliates shall be required to take any actions whatsoever on your behalf to satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.

As an owner of ADSs, we will not treat you as one of our shareholders and you will not have direct shareholder rights. The depositary will hold on your behalf the shareholder rights attached to the ordinary shares underlying your ADSs. As an owner of ADSs you will be able to exercise the shareholders rights for the ordinary shares represented by your ADSs through the depositary only to the extent contemplated in the deposit agreement. To exercise any shareholder rights not contemplated in the deposit agreement you will, as an ADS owner, need to arrange for the cancelation of your ADSs and become a direct shareholder.

The manner in which you own the ADSs (e.g., in a brokerage account vs. as registered holder, or as holder of certificated vs. uncertificated ADSs) may affect your rights and obligations, and the manner in which, and extent to which, the depositary's services are made available to you. As an owner of ADSs, you may hold your ADSs either by means of an ADR registered in your name, through a brokerage or safekeeping account, or through an account established by the depositary in your name reflecting the registration of uncertificated ADSs directly on the books of the depositary (commonly referred to as the "direct registration system" or "DRS"). The direct registration system reflects the uncertificated (book-entry) registration of ownership of ADSs by the depositary. Under the direct registration system, ownership of ADSs is evidenced by periodic statements issued by the depositary to the holders of the ADSs. The direct registration system includes automated transfers between the depositary and The Depository Trust Company ("DTC"), the central book-entry clearing and settlement system for equity securities in the United States. If you decide to hold your ADSs through your brokerage or safekeeping account, you must rely on the procedures of your broker or bank to assert your rights as ADS owner. Banks and brokers typically hold securities such as the ADSs through clearing and settlement systems such as DTC. The procedures of such clearing and settlement systems may limit your ability to exercise your rights as an owner of ADSs. Please consult with your broker or bank if you have any questions concerning these limitations and procedures. All ADSs held through DTC will be registered in the name of a nominee of DTC. This summary description assumes you have opted to own the ADSs directly by means of an ADS registered in your name and, as such, we will refer to you as the "holder." When we refer to "you," we assume the reader owns ADSs and will own ADSs at the relevant time.

The registration of the ordinary shares in the name of the depositary or the custodian shall, to the maximum extent permitted by applicable law, vest in the depositary or the custodian the record ownership in the applicable ordinary shares with the beneficial ownership rights and interests in such ordinary shares being at all times vested with the beneficial owners of the ADSs representing the ordinary shares. The depositary or the custodian shall at all times be entitled to exercise the beneficial ownership rights in all deposited property, in each case only on behalf of the holders and beneficial owners of the ADSs representing the deposited property.

The following is a summary of the material provisions of the deposit agreement. For more complete information, you should read the entire deposit agreement and the amendments thereto and the form of American Depositary Receipt. This summary does not purport to be complete and is subject to and qualified in its entirety by our Form F-6 and its amendments, as filed on September 24, 2020 and September 30, 2020 (File No. 333-249010). For directions on how to obtain copies of those documents, see "Where You Can Find Additional Information" in our prospectus.

***Dividends and Other Distributions***

As a holder of ADSs, you generally have the right to receive the distributions we make on the securities deposited with the custodian. Your receipt of these distributions may be limited, however, by practical considerations and legal limitations. Holders of ADSs will receive such distributions under the terms of the deposit agreement in proportion to the number of ADSs held as of the specified record date, after deduction of the applicable fees, taxes and expenses.

***Distributions of Cash***

Whenever we make a cash distribution for the securities on deposit with the custodian, we will deposit the funds with the custodian. Upon receipt of confirmation of the deposit of the requisite funds, the depositary will arrange for the funds received in a currency other than U.S. dollars to be converted into U.S. dollars and for the distribution of the U.S. dollars to the holders, subject to the laws and regulations of the Cayman Islands.

The conversion into U.S. dollars will take place only if practicable and if the U.S. dollars are transferable to the United States. The depositary will apply the same method for distributing the proceeds of the sale of any property (such as undistributed rights) held by the custodian in respect of securities on deposit.

The distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. The depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable holders and beneficial owners of ADSs until the distribution can be effected or the funds that the depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States.

***Distributions of Shares***

Whenever we make a free distribution of ordinary shares for the securities on deposit with the custodian, we will deposit the applicable number of ordinary shares with the custodian. Upon receipt of confirmation of such deposit, the depositary will <u>either</u> distribute to holders new ADSs representing the ordinary shares deposited <u>or</u> modify the ADS-to-ordinary shares ratio, in which case each ADS you hold will represent rights and interests in the additional ordinary shares so deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold and the proceeds of such sale will be distributed as in the case of a cash distribution.

The distribution of new ADSs or the modification of the ADS-to-ordinary shares ratio upon a distribution of ordinary shares will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes or governmental charges, the depositary may sell all or a portion of the new ordinary shares so distributed.

No such distribution of new ADSs will be made if it would violate a law (*e.g.*, the U.S. securities laws) or if it is not operationally practicable. If the depositary does not distribute new ADSs as described above, it may sell the ordinary shares received upon the terms described in the deposit agreement and will distribute the proceeds of the sale as in the case of a distribution of cash.

***Distributions of Rights***

Whenever we intend to distribute rights to subscribe for additional ordinary shares, we will give prior notice to the depositary and we will assist the depositary in determining whether it is lawful and reasonably practicable to distribute rights to subscribe for additional ADSs to holders.

The depositary will establish procedures to distribute rights to subscribe for additional ADSs to holders and to enable such holders to exercise such rights if it is lawful and reasonably practicable to make the rights available to holders of ADSs, and if we provide all of the documentation contemplated in the deposit agreement (such as opinions to address the lawfulness of the transaction). You may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of your rights. The depositary is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights to subscribe for new ordinary shares other than in the form of ADSs.

The depositary will *not* distribute the rights to you if:

● We do not timely request that the rights be distributed to you or we request that the rights not be distributed to you; or

● We fail to deliver satisfactory documents to the depositary; or

● It is not reasonably practicable to distribute the rights.

The depositary will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will be distributed to holders as in the case of a cash distribution. If the depositary is unable to sell the rights, it will allow the rights to lapse.

***Elective Distributions***

Whenever we intend to distribute a dividend payable at the election of shareholders either in cash or in additional shares, we will give prior notice thereof to the depositary and will indicate whether we wish the elective distribution to be made available to you. In such case, we will assist the depositary in determining whether such distribution is lawful and reasonably practicable.

The depositary will make the election available to you only if it is reasonably practicable and if we have provided all of the documentation contemplated in the deposit agreement. In such case, the depositary will establish procedures to enable you to elect to receive either cash or additional ADSs, in each case as described in the deposit agreement.

If the election is not made available to you, you will receive either cash or additional ADSs, depending on what a shareholder in the Cayman Islands would receive upon failing to make an election, as more fully described in the deposit agreement.

***Other Distributions***

Whenever we intend to distribute property other than cash, ordinary shares or rights to subscribe for additional ordinary shares, we will notify the depositary in advance and will indicate whether we wish such distribution to be made to you. If so, we will assist the depositary in determining whether such distribution to holders is lawful and reasonably practicable.

If it is reasonably practicable to distribute such property to you and if we provide to the depositary all of the documentation contemplated in the deposit agreement, the depositary will distribute the property to the holders in a manner it deems practicable.

The distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes and governmental charges, the depositary may sell all or a portion of the property received.

The depositary will *not* distribute the property to you and will sell the property if:

● We do not request that the property be distributed to you or if we request that the property not be distributed to you; or

● We do not deliver satisfactory documents to the depositary; or

● The depositary determines that all or a portion of the distribution to you is not reasonably practicable.

The proceeds of such a sale will be distributed to holders as in the case of a cash distribution.

***Redemption***

Whenever we decide to redeem any of the securities on deposit with the custodian, we will notify the depositary in advance. If it is practicable and if we provide all of the documentation contemplated in the deposit agreement, the depositary will provide notice of the redemption to the holders.

The custodian will be instructed to surrender the shares being redeemed against payment of the applicable redemption price. The depositary will convert into U.S. dollars upon the terms of the deposit agreement the redemption funds received in a currency other than U.S. dollars and will establish procedures to enable holders to receive the net proceeds from the redemption upon surrender of their ADSs to the depositary. You may have to pay fees, expenses, taxes and other governmental charges upon the redemption of your ADSs. If less than all ADSs are being redeemed, the ADSs to be retired will be selected by lot or on a *pro rata* basis, as the depositary may determine.

***Changes Affecting Ordinary Shares***

The ordinary shares held on deposit for your ADSs may change from time to time. For example, there may be a change in nominal or par value, split-up, cancelation, consolidation or any other reclassification of such ordinary shares or a recapitalization, reorganization, merger, consolidation or sale of assets of the Company.

If any such change were to occur, your ADSs would, to the extent permitted by law and the deposit agreement, represent the right to receive the property received or exchanged in respect of the ordinary shares held on deposit. The depositary may in such circumstances deliver new ADSs to you, amend the deposit agreement, the ADRs and the applicable Registration Statement(s) on Form F-6, call for the exchange of your existing ADSs for new ADSs and take any other actions that are appropriate to reflect as to the ADSs the change affecting the Shares. If the depositary may not lawfully distribute such property to you, the depositary may sell such property and distribute the net proceeds to you as in the case of a cash distribution.

***Issuance of ADSs upon Deposit of Ordinary Shares***

The depositary may create ADSs on your behalf if you or your broker deposits ordinary shares with the custodian. The depositary will deliver these ADSs to the person you indicate only after you pay any applicable issuance fees and any charges and taxes payable for the transfer of the ordinary shares to the custodian. Your ability to deposit ordinary shares and receive ADSs may be limited by U.S. and Cayman Islands legal considerations applicable at the time of deposit.

The issuance of ADSs may be delayed until the depositary or the custodian receives confirmation that all required approvals have been given and that the ordinary shares have been duly transferred to the custodian. The depositary will only issue ADSs in whole numbers.

When you make a deposit of the ordinary shares, you will be responsible for transferring good and valid title to the depositary. As such, you will be deemed to represent and warrant that:

● The ordinary shares are duly authorized, validly issued, fully paid, non-assessable, and legally obtained.

● All preemptive (and similar) rights, if any, with respect to such ordinary shares have been validly waived or exercised.

● You are duly authorized to deposit the ordinary shares.

● The ordinary shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage, or adverse claim, and are not, and the ADSs issuable upon such deposit will not be, "restricted securities" (as defined in the deposit agreement).

● The ordinary shares presented for deposit have not been stripped of any rights or entitlements.

If any of the representations or warranties is incorrect in any way, we and the depositary bank may, at your cost and expense, take any and all actions necessary to correct the consequences of the misrepresentations.

***Transfer, Combination and Split Up of ADRs***

As an ADR holder, you will be entitled to transfer, combine or split up your ADRs and the ADSs evidenced thereby. For transfers of ADRs, you will have to surrender the ADRs to be transferred to the depositary and also must:

● ensure that the surrendered ADR is properly endorsed or otherwise in proper form for transfer;

● provide such proof of identity and genuineness of signatures as the depositary deems appropriate;

● provide any transfer stamps required by the State of New York or the United States; and

● pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms of the deposit agreement, upon the transfer of ADRs.

To have your ADRs either combined or split up, you must surrender the ADRs in question to the depositary with your request to have them combined or split up, and you must pay all applicable fees, charges and expenses payable by ADR holders, pursuant to the terms of the deposit agreement, upon a combination or split up of ADRs.

***Withdrawal of Ordinary Shares upon Cancelation of ADSs***

As a holder, you will be entitled to present your ADSs to the depositary for cancelation and then receive the corresponding number of underlying ordinary shares at the custodian's offices. Your ability to withdraw the ordinary shares held in respect of the ADSs may be limited by U.S. and Cayman Islands law considerations applicable at the time of withdrawal. In order to withdraw the ordinary shares represented by your ADSs, you will be required to pay to the depositary the fees for cancelation of ADSs and any charges and taxes payable upon the transfer of the ordinary shares. You assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under the deposit agreement.

If you hold ADSs registered in your name, the depositary may ask you to provide proof of identity and genuineness of any signature and such other documents as the depositary may deem appropriate before it will cancel your ADSs. The withdrawal of the ordinary shares represented by your ADSs may be delayed until the depositary receives satisfactory evidence of compliance with all applicable laws and regulations. Please keep in mind that the depositary will only accept ADSs for cancelation that represent a whole number of securities on deposit.

You will have the right to withdraw the securities represented by your ADSs at any time except for:

● Temporary delays that may arise because (i) the transfer books for the ordinary shares or ADSs are closed, or (ii) ordinary shares are immobilized on account of a shareholders' meeting or a payment of dividends.

● Obligations to pay fees, taxes and similar charges.

● Restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit.

The deposit agreement may not be modified to impair your right to withdraw the securities represented by your ADSs except to comply with mandatory provisions of law.

***Voting Rights***

As a holder, you generally have the right under the deposit agreement to instruct the depositary to exercise the voting rights for the ordinary shares represented by your ADSs. The voting rights of holders of ordinary shares are described in "Item 10. Additional Information—B. Memorandum and Articles of Association" of the annual report on Form 20-F

At our request, the depositary will distribute to you any notice of shareholders' meeting received from us together with information explaining how to instruct the depositary to exercise the voting rights of the securities represented by ADSs. In lieu of distributing such materials, the depositary may distribute to holders of ADSs instructions on how to retrieve such materials upon request.

If the depositary timely receives voting instructions from a holder of ADSs, it will endeavor to vote the securities (in person or by proxy) represented by the holder's ADSs as follows:

● *In the event of voting by show of hands*, the depositary will vote (or cause the custodian to vote) all ordinary shares held on deposit at that time in accordance with the voting instructions received from a majority of holders of ADSs who provide timely voting instructions.

● *In the event of voting by poll*, the depositary will vote (or cause the Custodian to vote) the ordinary shares held on deposit in accordance with the voting instructions received from the holders of ADSs.

Securities for which no voting instructions have been received will not be voted (except (a) as set forth above in the case voting is by show of hands, (b) in the event of voting by poll, holders of ADSs in respect of which no timely voting instructions have been received shall be deemed to have instructed the depositary to give a discretionary proxy to a person designated by us to vote the ordinary shares represented by such holders' ADSs; provided, however, that no such discretionary proxy shall be given with respect to any matter to be voted upon as to which we inform the depositary that (i) we do not wish such proxy to be given, (ii) substantial opposition exists, or (iii) the rights of holders of ordinary shares may be adversely affected, and (c) as otherwise contemplated in the deposit agreement). Please note that the ability of the depositary to carry out voting instructions may be limited by practical and legal limitations and the terms of the securities on deposit. We cannot assure you that you will receive voting materials in time to enable you to return voting instructions to the depositary in a timely manner.

***Amendments and Termination***

We may agree with the depositary to modify the deposit agreement at any time without your consent. We undertake to give holders 30 days' prior notice of any modifications that would materially prejudice any of their substantial rights under the deposit agreement. We will not consider to be materially prejudicial to your substantial rights any modifications or supplements that are reasonably necessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, in each case without imposing or increasing the fees and charges you are required to pay. In addition, we may not be able to provide you with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of law.

You will be bound by the modifications to the deposit agreement if you continue to hold your ADSs after the modifications to the deposit agreement become effective. The deposit agreement cannot be amended to prevent you from withdrawing the ordinary shares represented by your ADSs (except as permitted by law).

We have the right to direct the depositary to terminate the deposit agreement. Similarly, the depositary may in certain circumstances on its own initiative terminate the deposit agreement. In either case, the depositary must give notice to the holders at least 30 days before termination. Until termination, your rights under the deposit agreement will be unaffected.

After termination, the depositary will continue to collect distributions received (but will not distribute any such property until you request the cancelation of your ADSs) and may sell the securities held on deposit. After the sale, the depositary will hold the proceeds from such sale and any other funds then held for the holders of ADSs in a non-interest bearing account. At that point, the depositary will have no further obligations to holders other than to account for the funds then held for the holders of ADSs still outstanding (after deduction of applicable fees, taxes and expenses).

In connection with any termination of the deposit agreement, the depositary may make available to owners of ADSs a means to withdraw the ordinary shares represented by ADSs and to direct the depositary of such ordinary shares into an unsponsored American depositary share program established by the depositary. The ability to receive unsponsored American depositary shares upon termination of the deposit agreement would be subject to satisfaction of certain U.S. regulatory requirements applicable to the creation of unsponsored American depositary shares and the payment of applicable depositary fees.

***Books of Depositary***

The depositary will maintain ADS holder records at its depositary office. You may inspect such records at such office during regular business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the ADSs and the deposit agreement.

The depositary will maintain in New York facilities to record and process the issuance, cancelation, combination, split-up and transfer of ADSs. These facilities may be closed from time to time, to the extent not prohibited by law.

***Limitations on Obligations and Liabilities***

The deposit agreement limits our obligations and the depositary's obligations to you. Please note the following:

● We and the depositary are obligated only to take the actions specifically stated in the deposit agreement without negligence or bad faith.

● The depositary disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for the effect of any vote, provided it acts in good faith and in accordance with the terms of the deposit agreement.

● The depositary disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content of any document forwarded to you on our behalf or for the accuracy of any translation of such a document, for the investment risks associated with investing in ordinary shares, for the validity or worth of the ordinary shares, for any tax consequences that result from the ownership of ADSs, for the credit-worthiness of any third party, for allowing any rights to lapse under the terms of the deposit agreement, for the timeliness of any of our notices or for our failure to give notice.

● We and the depositary will not be obligated to perform any act that is inconsistent with the terms of the deposit agreement.

● We and the depositary disclaim any liability if we or the depositary are prevented or forbidden from or subject to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the deposit agreement, by reason of any provision, present or future of any law or regulation, or by reason of present or future provision of any provision of our articles of association, or any provision of or governing the securities on deposit, or by reason of any act of God or war or other circumstances beyond our control.

● We and the depositary disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for in the deposit agreement or in our articles of association or in any provisions of or governing the securities on deposit.

● We and the depositary further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel, accountants, any person presenting Shares for deposit, any holder of ADSs or authorized representatives thereof, or any other person believed by either of us in good faith to be competent to give such advice or information.

● We and the depositary also disclaim liability for the inability by a holder to benefit from any distribution, offering, right or other benefit that is made available to holders of ordinary shares but is not, under the terms of the deposit agreement, made available to you.

● We and the depositary may rely without any liability upon any written notice, request or other document believed to be genuine and to have been signed or presented by the proper parties.

● We and the depositary also disclaim liability for any consequential or punitive damages for any breach of the terms of the deposit agreement.

● No disclaimer of any Securities Act liability is intended by any provision of the deposit agreement.

● Nothing in the deposit agreement gives rise to a partnership or joint venture, or establishes a fiduciary relationship, among us, the depositary and you as ADS holder.

● Nothing in the deposit agreement precludes Citibank (or its affiliates) from engaging in transactions in which parties adverse to us or the ADS owners have interests, and nothing in the deposit agreement obligates Citibank to disclose those transactions, or any information obtained in the course of those transactions, to us or to the ADS owners, or to account for any payment received as part of those transactions.

***Taxes***

You will be responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs. We, the depositary and the custodian may deduct from any distribution the taxes and governmental charges payable by holders and may sell any and all property on deposit to pay the taxes and governmental charges payable by holders. You will be liable for any deficiency if the sale proceeds do not cover the taxes that are due.

The depositary may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all taxes and charges are paid by the applicable holder. The depositary and the custodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for any distributions on your behalf. However, you may be required to provide to the depositary and to the custodian proof of taxpayer status and residence and such other information as the depositary and the custodian may require to fulfill legal obligations. You are required to indemnify us, the depositary and the custodian for any claims with respect to taxes based on any tax benefit obtained for you.

***Foreign Currency Conversion***

The depositary will arrange for the conversion of all foreign currency received into U.S. dollars if such conversion is practical, and it will distribute the U.S. dollars in accordance with the terms of the deposit agreement. You may have to pay fees and expenses incurred in converting foreign currency, such as fees and expenses incurred in complying with currency exchange controls and other governmental requirements.

If the conversion of foreign currency is not practical or lawful, or if any required approvals are denied or not obtainable at a reasonable cost or within a reasonable period, the depositary may take the following actions in its discretion:

● Convert the foreign currency to the extent practical and lawful and distribute the U.S. dollars to the holders for whom the conversion and distribution is lawful and practical.

● Distribute the foreign currency to holders for whom the distribution is lawful and practical.

● Hold the foreign currency (without liability for interest) for the applicable holders.

***Governing Law/Waiver of Jury Trial***

The deposit agreement, the ADRs and the ADSs will be interpreted in accordance with the laws of the State of New York. The rights of holders of ordinary shares (including ordinary shares represented by ADSs) is governed by the laws of the Cayman Islands.

As an owner of ADSs, you irrevocably agree that any legal action arising out of the Deposit Agreement, the ADSs or the ADRs, involving the Company or the Depositary, may only be instituted in a state or federal court in the city of New York.

AS A PARTY TO THE DEPOSIT AGREEMENT, YOU IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, YOUR RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF THE DEPOSIT AGREEMENT OR THE ADRs AGAINST US AND/OR THE DEPOSITARY.

***The deposit agreement provides that, to the 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 ordinary shares, the ADSs or the deposit agreement, including any claim under 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 in the facts and circumstances of that case in accordance with applicable case law. However, you will not be deemed, by agreeing to the terms of the deposit agreement, to have waived our or the depositary's compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder.***

## Exhibit 8.1

**Exhibit 8.1**

**Subsidiaries and VIEs of the Registrant**

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| | |
|:---|:---|
| **Subsidiaries** | **Place of<br> incorporation** |
| Lianwai Investment Co., Ltd. | BVI |
| Hong Kong Mengxiang Education Development Group Limited | Hong Kong |
| Zhejiang Mengxiang Consulting Services Co., Ltd. ("Liandu WFOE") | PRC |
| Zhejiang Lishui Xianke Agricultural Products Distribution Co., Ltd. ("Xianke") | PRC |
| Hangzhou Youxi Information Technology Co., Ltd. ("Hangzhou Youxi") | PRC |

---

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| | |
|:---|:---|
| **VIEs** | **Place of<br> incorporation** |
| Zhejiang Lishui Mengxiang Education Development Company Limited ("Lishui Mengxiang") | PRC |
| Lishui Overseas Chinese Senior High School ("Lishui International School") | PRC |
| Beijing Pengxiang Tianxia Education Technology Co., Ltd.. ("Beijing P.X.") | PRC |
| Langfang City Rail Transit Technical School ("Langfang School") | PRC |
| Hainan Jiangcai Vocational Skills Training School Co., Ltd. ("Hainan Jiangcai") | PRC |
| Hebei Chuangxiang Enterprise Management Co., Ltd. ("Hebei Chuangxiang") | PRC |
| Mudanjiang Chuangxiang Health Management Co., Ltd. ("Mudanjiang Chuangxiang") | PRC |

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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, Biao Wei, certify that:

1. I have reviewed this annual report on Form 20-F of Lixiang Education Holding Co., Ltd. (the "**Company** ");

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;(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;(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;(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;(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;(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;(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: May 12, 2026

---

| | | |
|:---|:---|:---|
| By: | /s/ Biao Wei | /s/ Biao Wei |
|  | Name: | Biao Wei |
|  | Title: | Chief Executive Officer |

---

## Exhibit 12.2

**Exhibit 12.2**

**Certification by the Principal Financial Officer**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Zhifu Yang, certify that:

1. I have reviewed this annual report on Form 20-F of Lixiang Education Holding Co., Ltd. (the "**Company** ");

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;(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;(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;(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;(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;(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;(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: May 12, 2026

---

| | | |
|:---|:---|:---|
| By: | /s/ Zhifu Yang | /s/ Zhifu Yang |
|  | Name: | Zhifu Yang |
|  | Title: | Chief Financial Officer |

---

## Exhibit 13.1

**Exhibit 13.1**

**<u>Certification by the Principal Executive Officer</u>**

**<u>Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>**

In connection with the Annual Report of Lixiang Education Holding Co., Ltd. (the "**Company**") on Form 20-F for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "**Report**"), I, Biao Wei, 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, as amended; 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: May 12, 2026

---

| | | |
|:---|:---|:---|
| By: | /s/ Biao Wei | /s/ Biao Wei |
|  | Name: | Biao Wei |
|  | Title: | Chief Executive Officer |

---

## Exhibit 13.2

**Exhibit 13.2**

**<u>Certification by the Principal Financial Officer</u>**

**<u>Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>**

In connection with the Annual Report of Lixiang Education Holding Co., Ltd. (the "Company") on Form 20-F for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Zhifu Yang, 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, as amended; 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: May 12, 2026

---

| | | |
|:---|:---|:---|
| By: | /s/ Zhifu Yang | /s/ Zhifu Yang |
|  | Name: | Zhifu Yang |
|  | Title: | Chief Financial Officer |

---

## Exhibit 15.1

**Exhibit 15.1**

---

| | | |
|:---|:---|:---|
| ![](ea028775901_ex15-1img1.jpg) | <br> **北京德恒律师事务所**<br>Offices | <br> **Beijing DeHeng Law** |
| 12/F, Tower B, Focus Place, No.19 Finance Street | 12/F, Tower B, Focus Place, No.19 Finance Street | Tel: (86) 010-52682888 |
| Beijing, P.R. China 100033 | Beijing, P.R. China 100033 | Fax: (86) 010-52682999 |
| 中国 · 北京西城区金融街19号 | 中国 · 北京西城区金融街19号 | Website: www.dehenglaw.com |
| 富凯大厦B座12层 邮编：100033 | 富凯大厦B座12层 邮编：100033 | Email: DeHeng@dehenglaw.com |

---

**May 12, 2026**

---

| | |
|:---|:---|
| **To:** | **Lixiang Education Holding Co., Ltd.** |

---

No. 818 Hua Yuan Street

Liandu District, Lishui City

Zhejiang Province, 323000

People's Republic of China

Dear Sirs,

Solely in connection with the Company's annual report on Form 20-F for the year ended December 31, 2025 (the "Annual Report") , we hereby consent to the references to our firm and the summary of our opinion under the headings "Enforceability of Civil Liabilities" on page v, "Item 3. Key Information—Permissions Required for Our Operations in China" on page 14, page 16 and page 17, "Item 3. Key Information—Risks Relating to Our Business and Industry" on page 40, "Item 3. Key Information—Risks Relating to Doing Business in China" on page 68 and page 71, and "Item 4. Information on the Company—C. Organizational Structure" on page 123 separately included in the Annual Report, which is filed with the Securities and Exchange Commission (the "SEC") on April 30, 2026. We also consent to the filing with of this consent letter with the SEC 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,

For and on behalf of

**Beijing DeHeng Law Offices**

**/s/ Zhang Xiaodan**

**张晓丹 (Zhang Xiaodan)**

## Exhibit 15.5

**Exhibit 15.5**

![](ea028775901_ex15-5img1.jpg)

Our ref SQG/772919-000001/86572126v1

---

| |
|:---|
| Lixiang Education Holding Co., Ltd.<br> No. 818 Hua Yuan Street<br> Liandu District, Lishui City, Zhejiang Province, 323000<br> People's Republic of China |
| Lixiang Education Holding Co., Ltd.<br> No. 818 Hua Yuan Street<br> Liandu District, Lishui City, Zhejiang Province, 323000<br> People's Republic of China |
| Lixiang Education Holding Co., Ltd.<br> No. 818 Hua Yuan Street<br> Liandu District, Lishui City, Zhejiang Province, 323000<br> People's Republic of China |
| Lixiang Education Holding Co., Ltd.<br> No. 818 Hua Yuan Street<br> Liandu District, Lishui City, Zhejiang Province, 323000<br> People's Republic of China |

---

May 12, 2026

Dear Sirs

**Lixiang Education Holding Co., Ltd.**

We have acted as legal advisers as to the laws of the Cayman Islands to Lixiang Education Holding Co., Ltd., an exempted company with limited liability 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 ("**Form 20-F**").

We hereby consent to the reference of our firm under the heading "Enforceability of Civil Liabilities" and "Item 10. Additional Information – E. Taxation – Cayman Islands Taxation" in the Form 20-F.

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 U.S. Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.

Yours faithfully

/s/ Maples and Calder (Hong Kong) LLP

Maples and Calder (Hong Kong) LLP