February 11,2025Supplemental DataQ4&Fiscal 2024 EarningsForward Looking Statements&Non-GAAP Financia.
2025-04-25
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Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 20-FREGISTR.
2025-04-24
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2024 Annual ReportUNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 _FORM 10-K _(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2024OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-38017_SNAP INC.(Exact name of registrant as specified in its charter)_Delaware45-5452795(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)3000 31st Street,Santa Monica,California 90405(Address of principal executive offices,including zip code)(310)399-3339(Registrants telephone number,including area code)_Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredClass A Common Stock,par value$0.00001 per shareSNAPNew York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the Registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d)of the Act.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,a smaller reporting company,or emerging growth company.See the definition of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,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.Table of ContentsIndicate by check mark whether the registrant has filed a report on and attestation to its managements 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.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 registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant,based on the closing price of the shares of Class A common stock on the New York Stock Exchange on June 28,2024,the last business day of the Registrants most recently completed second fiscal quarter,was approximately$21.5 billion.As of January 31,2025,the Registrant had 1,442,210,767 shares of Class A common stock,22,523,290 shares of Class B common stock,and 231,626,943 shares of Class C common stock outstanding.Auditor Firm Id:42 Auditor Name:Ernst&Young LLP Auditor Location:Los Angeles,CA,United StatesTable of ContentsTABLE OF CONTENTSPageNote Regarding Forward-Looking Statements1Risk Factor Summary3Note Regarding User Metrics and Other Data5PART IItem 1.Business6Item 1A.Risk Factors13Item 1B.Unresolved Staff Comments52Item 1C.Cybersecurity52Item 2.Properties53Item 3.Legal Proceedings53Item 4.Mine Safety Disclosures54PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities55Item 6.Reserved56Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations57Item 7A.Quantitative and Qualitative Disclosures About Market Risk75Item 8.Financial Statements and Supplementary Data77Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure116Item 9A.Controls and Procedures116Item 9B.Other Information117Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections117PART IIIItem 10.Directors,Executive Officers and Corporate Governance118Item 11.Executive Compensation124Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters140Item 13.Certain Relationships and Related Transactions,and Director Independence143Item 14.Principal Accountant Fees and Services146PART IVItem 15.Exhibit and Financial Statement Schedules147Item 16.Form 10-K Summary150Signatures151Table of ContentsiiNOTE REGARDING FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,as amended,or the Securities Act,and Section 21E of the Securities Exchange Act of 1934,as amended,or the Exchange Act,about us and our industry that involve substantial risks and uncertainties.All statements other than statements of historical facts contained in this report,including statements regarding guidance,our future results of operations or financial condition,our future stock repurchase programs or stock dividends,business strategy and plans,user growth and engagement,product initiatives,objectives of management for future operations,and advertiser and partner offerings,are forward-looking statements.In some cases,you can identify forward-looking statements because they contain words such as“anticipate,”“believe,”“contemplate,”“continue,”“could,”“estimate,”“expect,”“going to,”“intend,”“may,”“plan,”“potential,”“predict,”“project,”“should,”“target,”“will,”or“would”or the negative of these words or other similar terms or expressions.We caution you that the foregoing may not include all of the forward-looking statements made in this report.You should not rely on forward-looking statements as predictions of future events.We have based the forward-looking statements contained in this Annual Report on Form 10-K primarily on our current expectations and projections about future events and trends,including our financial outlook,macroeconomic uncertainty,and geo-political events and conflicts,that we believe may continue to affect our business,financial condition,results of operations,and prospects.These forward-looking statements are subject to risks,uncertainties,and other factors described under“Risk Factor Summary”below,“Risk Factors”in Part I,Item 1A,and elsewhere in this Annual Report on Form 10-K,including among other things:our financial performance,including our revenues,cost of revenues,operating expenses,and our ability to attain and sustain profitability;our ability to generate and sustain positive cash flow;our ability to attract and retain users and partners;our ability to attract and retain advertisers;our ability to compete effectively with existing competitors and new market entrants;our ability to effectively manage our growth and future expenses;our ability to comply with modified or new laws,regulations,and executive actions applying to our business;our ability to maintain,protect,and enhance our intellectual property;our ability to successfully expand in our existing market segments and penetrate new market segments;our ability to attract and retain qualified team members and key personnel;our ability to repay or refinance outstanding debt,or to access additional financing;future acquisitions of or investments in complementary companies,products,services,or technologies;andthe potential adverse impact of climate change,natural disasters,health epidemics,macroeconomic conditions,and war or other armed conflict on our business,operations,and the markets and communities in which we and our partners,advertisers,and users operate.Moreover,we operate in a very competitive and rapidly changing environment.New risks and uncertainties emerge from time to time,and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Annual Report on Form 10-K.The results,events,and circumstances reflected in the forward-looking statements may not be achieved or occur,and actual results,events,or circumstances could differ materially from those described in the forward-looking statements.In addition,statements that“we believe”and similar statements reflect our beliefs and opinions on the relevant subject.These statements are based on information available to us as of the date of this Annual Report on Form 10-K.And while we believe that information provides a reasonable basis for these statements,that information may be limited or incomplete.Our statements should not be read to indicate that we have conducted an exhaustive inquiry into,or review of,all relevant information.These statements are inherently uncertain,and investors are cautioned not to unduly rely on these statements.Table of Contents1The forward-looking statements made in this Annual Report on Form 10-K relate only to events as of the date on which the statements are made.We undertake no obligation to update any forward-looking statements made in this report to reflect events or circumstances after the date of this report or to reflect new information or the occurrence of unanticipated events,including future developments related to geo-political events and conflicts and macroeconomic conditions,except as required by law.We may not actually achieve the plans,intentions,or expectations disclosed in our forward-looking statements,and you should not place undue reliance on our forward-looking statements.Our forward-looking statements do not reflect the potential impact of any future acquisitions,dispositions,joint ventures,restructurings,legal settlements,or investments.Investors and others should note that we may announce material business and financial information to our investors using our websites(including ),filings with the U.S.Securities and Exchange Commission,or SEC,webcasts,press releases,investor letters,and conference calls.We use these mediums,including Snapchat and our website,to communicate with our members and the public about our company,our products,and other issues.It is possible that the information that we make available may be deemed to be material information.We therefore encourage investors and others interested in our company to review the information that we make available on our websites.Table of Contents2Risk Factor SummaryOur business is subject to significant risks and uncertainties that make an investment in us speculative and risky.Below we summarize what we believe are the principal risk factors but these risks are not the only ones we face,and you should carefully review and consider the full discussion of our risk factors in the section titled“Risk Factors,”together with the other information in this Annual Report on Form 10-K.1.Our Strategy and Advertising BusinessWe operate in a highly competitive and rapidly changing environment so we must continually innovate our products and evolve our business model for us to succeed.We emphasize rapid innovation and prioritize long-term user engagement over short-term financial conditions or results if we believe that it will benefit the aggregate user experience and improve our financial performance over the long term.Although we have achieved profitability in certain periods,we have a history of operating losses and,as a result of our long-term focus,we may prioritize investments and expenses we believe are necessary for our long-term growth over achieving short-term profitability.Investments in our future,including through new products or acquisitions,are inherently risky and may not pay off,which would adversely affect our ability to settle the principal and interest payments on our outstanding convertible senior notes or other indebtedness when due,and further delay or hinder our ability to sustain profitability.This in turn would hinder our ability to secure additional financing to meet our current and future financial needs on favorable terms,or at all.We generate substantially all of our revenue from advertising.Our advertising business is most effective when our advertisers succeed.Driving their success requires continual investment in our advertising products and may be hindered by competitive challenges and various legal,regulatory,and operating system changes that make it more difficult for us to achieve and demonstrate a meaningful return for our advertisers.For example,on-going changes to privacy and data protection laws and mobile operating systems continue to present issues for us in measuring the effectiveness of advertisements on our services.Additionally,individuals are becoming increasingly resistant to the processing of personal data to deliver behavioral,interest-based,or targeted advertisements,and regulators are likewise scrutinizing such data processing activities,which could reduce the demand for our products and services and threaten our primary revenue stream.Alternative methods,to the extent we can develop such methods in compliance with current or future privacy and data protection laws,mobile operating system requirements,and other requirements,may take time to develop and be adopted by our advertisers and users,and may not be as effective as prior methods.We believe that this impact on our targeting,measurement,and optimization capabilities has negatively affected and may continue to negatively affect our operating results.In addition,our advertising business is seasonal,volatile,and cyclical,which could result in fluctuations in our quarterly revenues and operating results,including the expectations of our business prospects.Our business and operations have been,and in the future could be,adversely affected by events beyond our control,such as health epidemics and geo-political events and conflicts.In addition,macroeconomic factors like labor shortages and disruptions,supply chain disruptions,banking instability,tariffs,and inflation have in the past and may continue to cause logistical challenges,increased input costs,and inventory constraints for our advertisers,which in turn may also halt or decrease advertising spending,and harm our business.2.Our Community and CompetitionWe need to continually innovate and create new products,and enhance our existing products,to attract,retain,and grow our global community.Products that we create may fail to attract or retain users or partners,or to generate meaningful revenue,if any.In addition,we have and expect to continue to expand organically and through acquisitions,including in international markets,which we may not be able to effectively manage or scale.If our community does not see the value in our products or brand,or if competitors offer better alternatives,our community could easily switch to other services.Although we have experienced rapid growth in our community over the last few years,we have also experienced declines and there can be no assurance that declines wont happen again.Many of our competitors have significantly more resources and larger market shares than we do,which gives them advantages over us that can make it more difficult for us to succeed.Table of Contents33.Our PartnersWe primarily rely on Google,Apple,and Amazon to provide their mobile operating systems and other services for our applications and other core services,including our platform.If these partners do not provide their services as we expect,terminate their services,or change the terms,or their interpretation of the terms,of our agreements,or change the functionality of their mobile operating systems in ways that are adverse to us,our service may be interrupted and our product experience could be degraded,which may harm our reputation,increase our costs,or make it harder for us to sustain profitability.Many other parts of our business depend on partners,including content partners and advertising partners,so our success depends on our ability to attract and retain these partners.4.Our Technology and RegulationOur business is complex and success depends on our ability to rapidly innovate,the interoperability of our service on many different smartphones and mobile operating systems,and our ability to safeguard sensitive user data.Because our systems and our products are constantly changing,we are susceptible to data breaches,cyberattacks,security incidents,bugs,and other vulnerabilities and errors in how our products work and are measured.We may also fail to maintain effective processes that report our metrics or financial results.Given the complexity of the systems involved and the rapidly changing nature of mobile devices and operating systems,we expect to encounter issues,particularly if we continue to expand in parts of the world where mobile data systems and connections are less stable.We are also subject to complex and evolving federal,state,local,and foreign laws and regulations regarding privacy,data protection,biometric processing,content regulation,artificial intelligence,or AI,taxes,and other matters,which are subject to change and have uncertain interpretations.Given the nature of our business,we are particularly susceptible to changes in such laws regarding privacy and data protection,which may require us to change our products and may impact our revenue stream.Any actual or perceived failure to comply with such legal and regulatory obligations,including in connection with our consent decree with the U.S.Federal Trade Commission,may lead to costly litigation or otherwise adversely impact our business.We also must actively protect our intellectual property.We are subject to various legal proceedings,claims,class actions,inquiries,and investigations related to our intellectual property,which may be costly or distract management.We also rely on a variety of statutory and common-law frameworks for the content we provide our users,including the Digital Millennium Copyright Act,the Communications Decency Act,and the fair-use doctrine,each of which has been subject to adverse judicial,political,and regulatory scrutiny in recent times.5.Our Team and Capital StructureWe need to attract and retain a high caliber team to maintain our competitive position.We may incur significant costs and expenses in maintaining and growing our team,and may lose valuable members of our team as we compete globally,including with our competitors,for key talent.A substantial portion of our employment costs is paid in our common stock,the price of which has been volatile,and our ability to attract and retain talent may be adversely affected if our shares decline in value.Our two co-founders,who serve as our Chief Executive Officer and Chief Technology Officer,control over 99%of the voting power of our outstanding capital stock,which means they control substantially all outcomes submitted to stockholders.Class A common stockholders have no voting rights,unless required by Delaware law.This concentrated control may result in our co-founders voting their shares in their best interest,which might not always be in the interest of our stockholders generally.Table of Contents4NOTE REGARDING USER METRICS AND OTHER DATAWe define a Daily Active User,or DAU,as a registered and logged-in Snapchat user who visits Snapchat through our applications or websites at least once during a defined 24-hour period.We calculate average DAUs for a particular quarter by adding the number of DAUs on each day of that quarter and dividing that sum by the number of days in that quarter.DAUs are broken out by geography because markets have different characteristics.We define average revenue per user,or ARPU,as quarterly revenue divided by the average DAUs.For purposes of calculating ARPU,revenue by user geography is apportioned to each region based on our determination of the geographic location in which advertising impressions are delivered,as this approximates revenue based on user activity.This allocation differs from our components of revenue disclosure in the notes to our consolidated financial statements,where revenue is based on the billing address of the advertising customer.For information concerning these metrics as measured by us,see“Managements Discussion and Analysis of Financial Condition and Results of Operations.”Unless otherwise stated,statistical information regarding our users and their activities is determined by calculating the daily average of the selected activity for the most recently completed quarter included in this report.While these metrics are determined based on what we believe to be reasonable estimates of our user base for the applicable period of measurement,there are inherent challenges in measuring how our products are used across large populations globally.For example,there may be individuals who attempt to create accounts for malicious purposes,including at scale,even though we forbid that in our Terms of Service and Community Guidelines.We implement measures in our user registration process and through other technical measures to prevent,detect,and suppress that behavior,although we have not determined the number of such accounts.Changes in our products,infrastructure,mobile operating systems,or metric tracking system,or the introduction of new products,may impact our ability to accurately determine active users or other metrics and we may not determine such inaccuracies promptly.We also believe that we dont capture all data regarding each of our active users.Technical issues may result in data not being recorded from every users application.For example,because some Snapchat features can be used without internet connectivity,we may not count a DAU because we dont receive timely notice that a user has opened the Snapchat application.This undercounting may increase as we grow in Rest of World markets where users may have poor connectivity.We do not adjust our reported metrics to reflect this underreporting.We believe that we have adequate controls to collect user metrics,however,there is no uniform industry standard.We continually seek to identify these technical issues and improve both our accuracy and precision,including ensuring that our investors and others can understand the factors impacting our business,but these technical issues and new issues may continue in the future,including if there continues to be no uniform industry standard.Some of our demographic data may be incomplete or inaccurate.For example,because users self-report their dates of birth,our age-demographic data may differ from our users actual ages.And because users who signed up for Snapchat before June 2013 were not asked to supply their date of birth,we may exclude those users from our age demographics or estimate their ages based on a sample of the self-reported ages that we do have.If our active users provide us with incorrect or incomplete information regarding their age or other attributes,then our estimates may prove inaccurate and fail to meet investor expectations.We count a DAU only when a user visits Snapchat through our applications or websites and only once per user per day.We believe this methodology more accurately measures our user engagement.We have multiple pipelines of user data that we use to determine whether a user has visited Snapchat through our applications or websites during a particular day.This provides redundancy in the event one pipeline of data were to become unavailable for technical reasons,and also gives us redundant data to help measure how users interact with our application.If we fail to maintain an effective analytics platform,our metrics calculations may be inaccurate.We regularly review,have adjusted in the past,and are likely in the future to adjust our processes for calculating our internal metrics to improve their accuracy.As a result of such adjustments,our DAUs or other metrics may not be comparable to those in prior periods.Our measures of DAUs may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology or data used.Table of Contents5PART IItem 1.Business.OverviewSnap Inc.is a technology company.We believe the camera presents the greatest opportunity to improve the way people live and communicate.We contribute to human progress by empowering people to express themselves,live in the moment,learn about the world,and have fun together.Our flagship product,Snapchat,is a visual messaging application that enhances your relationships with friends,family,and the world.Visual messaging is a fast,fun way to communicate with friends and family using augmented reality,video,voice,messaging,and creative tools.Snaps are deleted by default to mimic real-life conversations,so there is less pressure to look popular or perfect when creating and sending images on Snapchat.By reducing the friction typically associated with creating and sharing content,Snapchat has become one of the most used cameras in the world.The camera is a powerful tool for communication and the entry point for augmented reality experiences.By opening directly to the camera,Snapchat empowers our community to express themselves instantly and offers millions of augmented reality Lenses for self expression,learning,and play.In the way that the flashing cursor became the starting point for most products on desktop computers,we believe the camera screen will be the starting point for most products on smartphones.This is because images created by smartphone cameras contain more context and richer information than other forms of input like text entered on a keyboard.Given the magnitude of this opportunity,we are investing and innovating to continue to deliver products and services that are differentiated and that are better able to reflect and improve our life experiences.SnapchatSnapchat is our core mobile device application and contains five distinct tabs,complemented by additional tools that function outside of the application.With a breadth of visual messaging and content experiences available within the application,Snapchatters can interact with any or all of the five tabs.Camera:The Camera is a powerful tool for communication and the entry point for augmented reality experiences in Snapchat.Snapchat opens directly to the Camera,making it easy to create a Snap and send it to friends.Our augmented reality,or AR,capabilities within our Camera allow for creativity and self-expression.We offer millions of Lenses,created by both us and our community,along with creative tools and licensed music and audio clips,which make it easy for people to personalize and contextualize their Snaps.We also offer voice and scanning technology within our Camera.While Snaps are deleted by default to mimic real-life conversations,Snapchatters can save their creativity through a searchable collection of Memories stored on both their Snapchat account and their mobile device.Visual Messaging:Visual Messaging is a fast,fun way to communicate with friends and family using AR,video,voice,messaging,and creative tools.We also offer My AI,our AI-powered chatbot,which helps our community foster creativity and connection with friends,receive real-world recommendations,and learn more about their interests and favorite subjects.They can also communicate through our proprietary personalized avatar tool,Bitmoji,and its associated contextual stickers and images,which integrate seamlessly into both mobile devices and desktop browsers.Snap Map:Snap Map is a live and highly personalized map that allows Snapchatters to connect with friends and explore what is going on in their local area.Snap Map makes it easy to locate nearby friends who choose to share their location,view a heatmap of recent Snaps posted to Our Story by location,and locate local businesses.Places,rich profiles of local businesses that include information such as store hours and reviews,overlay specialized experiences from select partners on top of Snap Map,and allow Snapchatters to take direct actions from Snap Map,such as sharing a favorite store,ordering takeout,or making a reservation.Stories:Stories are a fun way to stay connected,and feature content from friends,our community,and our content partners.Friends Stories allow Snapchatters to express themselves in narrative form through photos and videos,shown in chronological order,to their friends.The Discover section of this tab displays curated content based on a Snapchatters subscriptions and interests,and features news and entertainment from both our creator community and publisher partners.We also offer Public Profiles as a way for our creator community and our advertising partners to memorialize and scale their content and AR Lenses on our platform.Table of Contents6Spotlight:Spotlight showcases the best of Snapchat,helping people discover new creators and content in a personalized way.Here we surface the most entertaining Snaps from our community all in one place,which becomes tailored to each Snapchatter over time based on their preferences and favorites.The Trending page allows Snapchatters to discover and engage with popular topics and genres.We are currently testing a new and simplified version of Snapchat referred to as Simple Snapchat,which organizes the tabs into three core experiences focused on communicating with friends,using the camera,and watching entertaining content.In addition to our core Snapchat product,we offer Snapchat ,our subscription service that provides subscribers access to exclusive,experimental,and pre-release features.Snapchat offers a variety of features from allowing Snapchatters to customize the look and feel of their app to giving special insights into their friendships.We also offer Snapchat for Web,a browser-based product that brings Snapchats signature capabilities to the web.Spectacles are our wearable AR glasses,which overlay computing over the world and extend the immersive AR Lenses experience beyond Snapchat.Spectacles are powered by Snap OS,a new purpose-built operating system with a natural interface that uses your hands and voice without the need for physical controllers.Spectacles are available to professional and hobbyist developers through our Spectacle Developer Program to create AR experiences through Lens Studio,our free AR development and distribution tool.Our Partner EcosystemMany elements and features of Snapchat are enhanced by our expansive partner ecosystem that includes developers,creators,publishers,and advertisers,among others.We help them create and bring diverse content and experiences into Snapchat,leverage Snapchat capabilities in their own applications and websites,and use advertising to promote these and other experiences to our large,engaged,and differentiated user base.We seek to reward our partner ecosystem for their creativity,and continue to support them as they grow their audience and build their business on Snapchat.Developers are able to integrate with Snapchat and its core technologies,like Snaps AR Camera and Bitmoji,through a variety of tools.Creative Kit gives developers and their communities a seamless sharing experience from their app directly to Snapchat.Through Camera Kit,our partners can embed Snaps AR platform directly into their application,extending the use of AR beyond self-expression and communication use cases.We also provide developers a turnkey suite of tools and services that enable them to create AR Lenses and track the performance of those through analytics.Finally,developers can bring an inclusive mode of identity and expression to their apps and games with our Bitmoji for Developers APIs.AR creators can use Lens Studio,our powerful desktop application designed for creators and developers,to build Lenses and AR experiences for Snapchatters.Spotlight creators can utilize our content creation tools to reach millions of Snapchatters and build their businesses through various monetization opportunities.Our Creator Marketplace connects both AR and Spotlight creators directly with our advertising partners.We provide monetizable opportunities through programs like the Snap Lens Network and Spectacles Lens Fund,which provide grants to support AR product development across many industries.We recognize and reward top performing Lenses through our Lens Creator Rewards program.We also support our content creator community through a number of programs,including advertising revenue sharing on our mid-roll advertisements in Snap Stars Stories and Spotlight.Publisher partners can expand their audiences and monetize content through our Discover section.In addition,we work with various telecommunications providers and original equipment manufacturers,particularly as we build our presence in new markets.Our Advertising ProductsWe connect both brand and direct response advertisers to Snapchatters globally.Our ad products are built on the same foundation that makes our consumer products successful.This means that we can take the things we learn while creating our consumer products and apply them to building innovative and engaging advertising products familiar to our community.Table of Contents7AR Ads:Advertising through Snaps AR tools unlocks the ability to reach a unique audience in a highly differentiated way through AR Lenses.AR Lenses are designed through our camera to take advantage of the reach and scale of our augmented reality platform to create visually engaging 3D experiences,including the ability to visualize and try on products such as beauty,apparel,accessories,and footwear.AR Lenses can be memorialized on Snapchat,through Public Profiles that aggregate content and lenses in a single,easy to find place.Snap Ads:We let advertisers tell their stories the same way our users do,using full screen videos with sound.These also allow advertisers to integrate additional experiences and actions directly within these advertisements,including watching a long-form video,visiting a website,or installing an app.Snap Ads include the following:Single Image or Video Ads:These are full screen ads that are skippable,and can contain an attachment to enable Snapchatters to swipe up and take action.Story Ads:Story Ads are branded tiles that live within the Discover section of the Stories tab that can be either video ads or a series of 3 to 20 images.Collection Ads:Collection Ads feature four tappable tiles to showcase multiple products,giving Snapchatters a frictionless way to browse and buy.Dynamic Ads:Dynamic ads leverage our machine learning algorithm to match a product catalog to serve the right ad to the right Snapchatter at the right time.Commercials:Commercials are non-skippable for six seconds,but can last up to three minutes.These ads appear within Snapchats curated content.Sponsored Snaps:Sponsored Snaps allow advertisers to communicate visually with the Snapchat community through sponsored messages within the chat tab.Promoted Places:Promoted Places allow businesses to use the Snap Map to suggest sponsored places of interest to Snapchatters by highlighting the brands locations on the Snap Map with a promoted pin.Campaign Management and Delivery:We aim to continually improve the way these ad formats are purchased and delivered.We have invested heavily to build our self-serve advertising platform,which provides automated,sophisticated,and scalable ad buying and campaign management.We offer the ability to bid for advertisements that are designated to drive Snapchatters to:visit a website,make a purchase,visit a local business,call or text a business,watch a story or video,download an app,or return to an app,among others.Additionally,our delivery framework continues to optimize relevance of ads across the entire platform by determining the best ad to show to any given user based on their real-time and historical attributes and activity.This decreases the number of wasted impressions while improving the effectiveness of the ads that are shown to our community.This helps advertisers increase their return on investment by providing more refined targeting,the ability to test and learn with different creatives or campaign attributes in real time,and the dynamics of our self-serve pricing.Measuring Advertising Effectiveness:We offer first-party measurement solutions and we support our advertising partners preferred third-party measurement solutions to provide a vast array of analytics on campaign attributes like reach,frequency,demographics,and viewability;changes in perceptions like brand favorability or purchase intent;and lifts in actual behavior like purchases,foot traffic,app installs,and online purchases.TechnologyOur research and development efforts focus on product development,advertising technology,and large-scale infrastructure.Product Development:We work relentlessly and invest deliberately to create and improve products for our community and our partners.We develop a wide range of products related to visual messaging and storytelling that are powered by a variety of new technologies.Advertising Technology:We constantly develop and expand our advertising products and technology.In an effort to provide a strong and scalable return on investment to our advertisers,our advertising technology roadmap centers around improving our delivery framework,measurement capabilities,and self-serve tools.Table of Contents8Large-scale Infrastructure:We spend considerable resources and investment on the underlying architecture that powers our products,such as optimizing the delivery of billions of videos to hundreds of millions of people around the world every day.We currently partner with third party providers to support the infrastructure for our growing needs.These partnerships have allowed us to scale quickly without upfront physical infrastructure costs,allowing us to focus our efforts on product innovation.Employees and CultureWe seek to be a force for good through our products,our work to strengthen our communities,our efforts to make a positive impact on the planet,and our inclusive workplace.Supporting Our Team:Our values at Snap are being kind,smart,and creative,and we put those values into action through how we support our team and how our team supports one another.Council,which is a practice of active listening that promotes open-mindedness and cultivates empathy and compassion among participants,helps us build and sustain a community steeped in integrity,connection,collaboration,creativity,and kindness.Our talent development programs seek to unlock potential by helping team members advance,learn,and grow in a fair and equitable way at Snap.We focus on the health and well-being of our employees through programs and benefits that support their physical,emotional,and financial fitness.To attract and retain the best talent,we offer challenging work in an environment that enables our employees to have a direct meaningful contribution to new and exciting projects.Underlying these values is our commitment to ethical conduct where we work to instill in our team that acting with integrity means being your whole self,being honest,and doing the right thing.Diversity,Equity,and Inclusion:Snap has long supported Diversity,Equity and Inclusion,or DEI,so that every team member uses their unique backgrounds,experiences,and abilities to build products that uplift the lived experiences of Snapchatters globally.To aid in our mission,we publish a Diversity Annual Report that discusses our diversity,equity,and inclusion strategy.This report outlines our beliefs around the idea that an inclusive workplace and inclusive products are central to achieving that purpose.This report is excerpted in our broader CitizenSnap Report that details the work were doing to support our communities,our planet,and our team,and is available on our website at .Human Capital:As part of our human capital resource objectives,we seek to recruit,retain,and incentivize our highly talented existing and future employees.We believe that creating an inclusive environment where team members can grow,develop,and be their true selves is critical to attracting and retaining talent.Our compensation philosophies also align to that belief.Our compensation philosophy is based around building a culture of ownership and high performance by putting both impact and our values at the center of our performance feedback process and pay outcomes.We utilize equity as part of our compensation practices to drive a long-term orientation and have committed to paying a minimum living wage for all employees globally.As of December 31,2024,we had 4,911 full-time employees,of whom approximately 52%are in engineering roles involved in the design,development,support,and manufacture of new and existing products and processes.Climate Change:Our commitment to combating climate change remains unchanged.In 2021,we adopted a set of science-based emissions reduction targets which were validated by the Science Based Targets Initiative.Additionally,in 2021,we achieved carbon neutrality with the purchase of carbon offsets for our historical operations from our founding in 2011 through 2020.Since then,weve maintained our carbon-neutral status each year through the purchase of carbon offsets for emissions attributable to us.Our Commitment to PrivacyOur approach to privacy is simple:Be upfront,offer choices,and never forget that our community comes first.We built Snapchat as an antidote to the context-less communication that has plagued“social media.”Not so long ago,a conversation among friends would be just that:a private communication in which you knew exactly who you were talking to,what you were talking about,and whether what you were saying was being memorialized for eternity.Somewhere along the way,social mediaby prioritizing virality and permanencesapped conversations of this valuable context and choice.When we began to communicate online,we lost some of what made communication great:spontaneity,emotion,honestythe full range of human expression that makes us human in the first place.Table of Contents9We dont think digital communication has to be this way.Thats why choice matters.We build products and services that emphasize the context of a conversationwho,when,what,and where something is being said.If you dont have the autonomy to shape the context of a conversation,the conversation will simply be shaped by the permanent feeds that homogenize online conversations.When you read our Privacy Policy,we hope that youll notice how much we care about the integrity of personal communication.For starters,weve written our Privacy Policy in plain language because we think its important that everyone understands exactly how we handle their information.Otherwise,its hard to make informed choices about how you communicate.Weve also created a robust Privacy,Safety,and Policy Hub where we show that context and choice are more than talking points.There,we point out the many ways that users can control who sees their Snaps and Stories,and explain how long content will remain on our servers,how users can manage the information that we do have about them,and much more.This is where youll also find our Transparency Report in which we provide insight into these efforts and visibility into the nature and volume of content reported on our platform.We also understand that privacy policiesno matter how ambitiousare only as good as the people and practices behind those policies.When someone trusts us to transmit or store their information,we know we have a responsibility to protect that information and we work hard to keep it secure.New features go through an intense privacy-review processwe debate pros and cons,and we work hard to build products were proud of and that well want to use.We handle user information with the same care that we want for our family,our friends,and ourselves.CompetitionWe compete with other companies in every aspect of our business,particularly with companies that focus on mobile engagement and advertising.Many of these companies,such as Alphabet(including Google and YouTube),Apple,ByteDance(including TikTok),Meta(including Facebook,Instagram,Threads,and WhatsApp),Pinterest,and X(formerly Twitter),may have greater financial and human resources and,in some cases,larger user bases.Given the breadth of our product offerings,we also compete with companies that develop products or otherwise operate in the mobile,camera,communication,content,and advertising industries that offer,or will offer,products and services that may compete with Snapchat features or offerings.Our competitors span from internet technology companies and digital platforms,to traditional companies in print,radio,and television sectors to underlying technologies like default smartphone cameras and messaging.Additionally,our competition for engagement varies by region.For instance,we face competition from companies like Kakao,LINE,Naver(including Snow),and Tencent in Asia.We compete to attract and retain our users attention,both in terms of reach and engagement.Since our products and those of our competitors are typically free,we compete based on our brand and the quality and nature of our product offerings rather than on price.As such,we invest heavily in constantly improving and expanding our product lines.We also compete with other companies to attract and retain partners and advertisers,which depends primarily on our reach and ability to deliver a strong return on investment.Finally,we compete to attract and retain highly talented individuals,including software engineers,designers,and product managers.In addition to providing competitive compensation packages,we compete for talent by fostering a culture of working hard to create great products and experiences and allowing our employees to have a direct meaningful contribution to new and exciting projects.Seasonality in Our BusinessWe have historically seen seasonality in our business.Overall advertising spend tends to be strongest in the fourth quarter of the calendar year,and we have observed a similar pattern in our historical revenue.We have also experienced seasonality in our user engagement,generally seeing lower engagement during summer months and higher engagement in December.Intellectual PropertyOur success depends in part on our ability to protect our intellectual property and proprietary technologies.To protect our proprietary rights,we rely on a combination of intellectual property rights in the United States and other jurisdictions,including patents,trademarks,copyrights,trade secret laws,license agreements,internal procedures,and contractual provisions.We also enter into confidentiality and invention assignment agreements with our employees and Table of Contents10contractors and sign confidentiality agreements with third parties.Our internal controls are designed to restrict access to proprietary technology.As of December 31,2024,we had approximately 4,169 issued patents and approximately 3,263 filed patent applications in the United States and foreign countries relating to our Snapchat,Lens Studio,Spectacles and Snap OS products,augmented reality,AI and machine learning,and other technologies.Our issued patents will expire between 2025 and 2047.We may not be able to obtain protection for our intellectual property,and our existing and future patents,trademarks,and other intellectual property rights may not provide us with competitive advantages or distinguish our products and services from those of our competitors.We license content,trademarks,technology,and other intellectual property from our partners,and rely on our license agreements with those partners to use the intellectual property.We also enter into licensing agreements with third parties to receive rights to patents and other know-how.Third parties may assert claims related to intellectual property rights against our partners or us.Other companies and“non-practicing entities”that own patents,copyrights,trademarks,trade secrets,and other intellectual property rights related to the mobile,camera,communication,content,internet,and other technology-related industries frequently enter into litigation based on allegations of infringement,misappropriation,and other violations of intellectual property or other rights.As our business continues to grow and competition increases,we will likely face more claims related to intellectual property and litigation matters.Government RegulationWe are subject to many federal,state,local,and foreign laws and regulations,including those related to advertising,algorithms,anti-money laundering,competition,consumer protection,content regulation,data protection,electronic funds transfers,employment,encryption,gift cards,health and safety,import and export restrictions,intellectual property,communication,money transmission,privacy,protection of minors,rights of publicity,and taxation.These laws and regulations are constantly evolving and may be interpreted,applied,created,or amended in a manner that could harm our business.Like other companies in our industry,we face increasingly heightened scrutiny from both the United States and foreign governments with respect to our compliance with laws and regulations.Compliance with these laws and regulations has not had,and is not expected to have,a material effect on our capital expenditures,results of operations,and competitive position as compared to prior periods,and we do not currently anticipate material capital expenditures for environmental control facilities.We are also currently,and may in the future be,subject to regulatory orders or consent decrees,including the consent order that we entered into with the U.S.Federal Trade Commission,or FTC,in December 2014,which resolved an investigation into some of our early practices.That order requires,among other things,that we establish a robust privacy program to govern how we treat user data.During the 20-year lifespan of the order,we must complete biennial independent privacy audits.The FTC has continued to review our practices and in January 2025,announced the referral of a complaint to the Department of Justice,or the DOJ,pertaining to our deployment of our My AI feature and the allegedly resulting risk of harm to young users.Any enforcement action related to this matter,or any violation of existing or future regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties that could negatively affect our financial condition and results of operations.Furthermore,foreign data protection,privacy,consumer protection,content regulation,and other laws and regulations are often more restrictive than those in the United States.It is possible that certain governments may seek to block or limit our products or otherwise impose other restrictions that may affect the accessibility or usability of any or all our products for an extended period of time or indefinitely.Due to such laws and regulations,our products may not be available in all locations.Our public policy team monitors legal and regulatory developments in the United States,as well as many foreign countries,and communicates with policymakers and regulators in the United States and internationally.For additional information about government regulation applicable to our business,see“Risk Factors”in Part I,Item 1A and“Legal Proceedings”in Part I,Item 3 in this Annual Report on Form 10-K.Table of Contents11Information about Geographic Revenue and SegmentsInformation about geographic revenue and segments is set forth in Notes 2 and 19,respectively,of the notes to our consolidated financial statements included in“Financial Statements and Supplementary Data”in Part II,Item 8 in this Annual Report on Form 10-K.Available InformationOur website address is .Our Annual Report on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K,and amendments to these reports filed pursuant to Sections 13(a)and 15(d)of the Exchange Act are filed with the SEC.Such reports and other information filed or furnished by us with the SEC are available free of charge on our website at when such reports are available on the SECs website.We use our website,including ,as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.Information contained in,or accessible through,the websites referred to in this Annual Report on Form 10-K is not incorporated into this filing.Further,our references to website addresses are only as inactive textual references.Table of Contents12Item 1A.Risk Factors.You should carefully consider the risks and uncertainties described below,together with all the other information in this Annual Report on Form 10-K,including“Managements Discussion and Analysis of Financial Condition and Results of Operations”and the consolidated financial statements and the related notes.If any of the following risks actually occurs(or if any of those discussed elsewhere in this Annual Report on Form 10-K occurs),our business,reputation,financial condition,results of operations,revenue,and future prospects could be seriously harmed.The risks and uncertainties described below are not the only ones we face.Additional risks and uncertainties that we are unaware of,or that we currently believe are not material,may also become important factors that adversely affect our business.Unless otherwise indicated,references to our business being seriously harmed in these risk factors will include harm to our business,reputation,financial condition,results of operations,revenue,and future prospects.In that event,the market price of our Class A common stock could decline,and you could lose part or all of your investment.Risks Related to Our Business and IndustryOur ecosystem of users,advertisers,and partners depends on the engagement of our user base.Our user base growth rate has declined in the past and it may do so again in the future.If we fail to retain current users or add new users,or if our users engage less with Snapchat,our business would be seriously harmed.We had 453 million daily active users,or DAUs,on average in the quarter ended December 31,2024.We view DAUs as a critical measure of our user engagement,and adding,maintaining,and engaging DAUs have been and will continue to be necessary.Our DAUs and DAU growth rate have declined in the past and they may decline in the future due to various factors,including as the size of our active user base increases,as we achieve higher market penetration rates,as we face continued competition for our users and their time,or if there are performance issues with our service.In addition,as we achieve maximum market penetration rates among younger users in developed markets,future growth in DAUs will need to come from older users in those markets or from developing markets,which may not be possible or may be more difficult,expensive,or time-consuming for us to achieve.While we may experience periods when our DAUs increase due to products and services with short-term popularity,we may not always be able to attract new users,retain existing users,or maintain or increase the frequency and duration of their engagement if current or potential new users do not perceive our products to be fun,engaging,or useful.In addition,because our products typically require high bandwidth data capabilities for users to benefit from all of the features and capabilities of our application,many of our users live in countries with high-end mobile device penetration and high bandwidth capacity cellular networks with large coverage areas.We therefore do not expect to experience rapid user growth or engagement in regions with either low smartphone penetration or a lack of well-established and high bandwidth capacity cellular networks.As our DAU growth rate continues to slow or if the number of DAUs becomes stagnant,or we have a decline in DAUs,our financial performance will increasingly depend on our ability to elevate user activity or increase the monetization of our users.Snapchat is free and easy to join,the barrier to entry for new entrants in our business is low,and the switching costs to another platform are also low.Moreover,the majority of our users are 18-34 years old.This demographic may be less brand loyal and more likely to follow trends,including viral trends,than other demographics.These factors may lead users to switch to another product,which would negatively affect our user retention,growth,and engagement.Snapchat also may not be able to penetrate other demographics in a meaningful manner.Falling user retention,growth,or engagement could make Snapchat less attractive to advertisers and partners,which may seriously harm our business.In addition,we continue to compete with other companies to attract and retain our users attention.There are many factors that could negatively affect user retention,growth,and engagement,including if:users engage more with competing products instead of ours;our competitors continue to mimic our products or improve on them;we fail to introduce new and exciting products and services or those we introduce or modify are poorly received;our products fail to operate effectively or compatibly on the iOS or Android mobile operating systems;we are unable to continue to develop products that work with a variety of mobile operating systems,networks,and smartphones;we do not provide a compelling user experience because of the decisions we make regarding the type and frequency of advertisements that we display or the structure and design of our products;we are unable to combat bad actors,spam,or other hostile or inappropriate usage on our products;Table of Contents13there are changes in user sentiment about the quality or usefulness of our products in the short-term,long-term,or both;there are concerns about the privacy implications,safety,or security of our products and our processing of personal data;our content partners do not create content that is engaging,useful,or relevant to users;our content partners decide not to renew agreements or devote the resources to create engaging content,or do not provide content exclusively to us;advertisers and partners display ads that are untrue,offensive,or otherwise fail to follow our guidelines;our products are subject to increased regulatory scrutiny or approvals,including from foreign privacy regulators,or there are changes in our products that are mandated or prompted by legislation,regulatory authorities,executive actions,or litigation,including settlements or consent decrees,that adversely affect the user experience;technical or other problems frustrate the user experience or negatively impact users trust in our service,including by providers that host our platforms,particularly if those problems prevent us from delivering our product experience in a fast and reliable manner,or cyberattacks,breaches,or other security incidents that compromise our sensitive user data;we fail to provide adequate service to users,advertisers,or partners;we do not provide a compelling user experience to entice users to use the Snapchat application on a daily basis,or our users dont have the ability to make new friends to maximize the user experience;we,our partners,or other companies in our industry segment are the subject of adverse media reports or other negative publicity,some of which may be inaccurate or include confidential information that we are unable to correct or retract;we do not maintain our brand image or our reputation is damaged;orour current or future products reduce user activity on Snapchat by making it easier for our users to interact directly with our partners.Any decrease to user retention,growth,or engagement could render our products less attractive to users,advertisers,or partners,and would seriously harm our business.We generate substantially all of our revenue from advertising.The failure to attract new advertisers,the loss of advertisers,or a reduction in how much they spend could seriously harm our business.Substantially all of our revenue is generated from third parties advertising on Snapchat.For the years ended December 31,2024,2023,and 2022,advertising revenue accounted for approximately 91%,96%,and 99%of our total revenue,respectively.Even though we have introduced other revenue streams,including subscription models,we still expect advertising revenue to account for substantially all of our revenue in the foreseeable future.Most advertisers do not have long-term advertising commitments with us,and our efforts to establish long-term commitments may not succeed.Our advertising customers range from small businesses to well-known brands,including advertising resellers.Many of our customers spend a relatively small portion of their overall advertising budget with us,but some customers have devoted meaningful budgets that contribute more significantly to our total revenue.In addition,advertisers may view some of our advertising solutions as experimental and unproven,or prefer certain of our products over others.Advertisers,including our customers who have devoted meaningful advertising budgets to our product,will not continue to do business with us if we do not deliver advertisements in an effective manner,or if they do not believe that their investment in advertising with us will generate a competitive return relative to other alternatives.As our business continues to develop,there may be new or existing customers,including from different geographic regions,that contribute more significantly to our total revenue,and a loss of such customers or a significant reduction in how much they spend with us could adversely impact our business.Any economic or political instability,whether as a result of the macroeconomic climate or the implementation of tariffs by the United States or other governments,war or other armed conflict,terrorism,or otherwise,in a specific country or region,may negatively impact the global or local economy,advertising ecosystem,our customers and their budgets with us,or our ability to forecast our advertising revenue,and could seriously harm our business.Moreover,we rely heavily on our ability to collect,process,and disclose data and metrics to our customers so we can attract new customers and retain existing customers.Any restriction,whether by law,regulation,policy,or other Table of Contents14reason,on our ability to collect,process,and disclose data and metrics that our customers find useful would impede our ability to attract and retain advertisers.Regulators in many countries in which we operate or have users are increasingly scrutinizing and regulating the collection,use,and sharing of personal data related to advertising,which could materially impact our revenue and seriously harm our business.Many of these laws and regulations expand the rights of individuals to control how their personal data is collected and processed,and place restrictions on the use of personal data of teens.The processing of personal data for personalized advertising continues to be under increased scrutiny from regulators,which includes ongoing regulatory action against large technology companies like ours,the outcomes of which may be uncertain and subject to appeal.These laws may prohibit us and our customers from advertising to teens,including based on the profiling of personal data.Other legislative proposals and present laws and regulations may also apply to our or our advertisers activities and require significant operational changes to our business.These laws and regulations could have a material impact on the development and deployment of AI and machine learning in the context of our targeted advertising activities.Other laws to which we are or may become subject further regulate contextual,behavioral,interest-based,or targeted advertising,making certain online advertising activities more difficult and subject to additional scrutiny.These laws grant users the right to opt-out of sharing of their personal data for certain advertising purposes in exchange for money or other valuable consideration,or require parental consent to be obtained for the processing of personal data of users under a certain age and restrict tracking and use of teens data,including for advertising.Regulators have issued significant monetary fines in certain circumstances where the regulators alleged that appropriate consent was not obtained in connection with targeted advertising activities.In addition,legislative proposals and present laws and regulations in countries where we operate regulate the use of cookies and other tracking technologies,electronic communications,and marketing.Furthermore,in April 2021,Apple issued an iOS update that imposed heightened restrictions on our access and use of user data by allowing users to more easily opt-out of tracking of activity across devices.Additionally,Google has in the past implemented privacy controls on its Android devices and may in the future make changes to those privacy controls similar to Apples prior iOS update.The changes implemented by Apple have had,and similar changes,if implemented by Google or major web browsers,like Firefox,Safari,and Chrome,would have an adverse effect on our targeting,measurement,and optimization capabilities,and in turn our ability to target advertisements and measure the effectiveness of advertisements on our services.This has resulted in,and in the future is likely to continue to result in,reduced demand and pricing for our advertising products and could seriously harm our business.The longer-term impact of these changes on the overall mobile advertising ecosystem,our competitors,our business,and the developers,partners,and advertisers within our community remains uncertain,and depending on how we,our competitors,and the overall mobile advertising ecosystem adjusts,and how our partners,advertisers,and users respond,our business could be seriously harmed.Any alternative solutions we implement are subject to rules and standards set by the owners of such mobile operating systems which may be unclear,change,or be interpreted in a manner adverse to us and require us to halt or change our solutions,any of which could seriously harm our business.In addition,if we are unable to mitigate or respond to these and future developments,and alternative solutions do not become widely adopted by our advertisers,then our targeting,measurement,and optimization capabilities will be materially and adversely affected,which would in turn continue to negatively impact our advertising revenue.Our advertising revenue could also be seriously harmed by many other factors,including:diminished or stagnant growth,or a decline,in the total or regional number of DAUs on Snapchat;our inability to deliver advertisements to all of our users due to legal restrictions or hardware,software,or network limitations;a decrease in the amount of time spent on Snapchat,a decrease in the amount of content that our users share,or decreases in usage of our Camera,Visual Messaging,Map,Stories,and Spotlight platforms;our inability to create new products that sustain or increase the value of our advertisements;changes in our user demographics that make us less attractive to advertisers;lack of ad creative availability by our advertising partners;a decline in our available content,including if our content partners do not renew agreements,devote the resources to create engaging content,or provide content exclusively to us;decreases in the perceived quantity,quality,usefulness,or relevance of the content provided by us,our community,or partners;decreases in user response rate to application notifications received from Snapchat,whether due to decreased user appreciation for notifications generally or changes in the manner notifications are delivered by mobile operating systems,which may decrease user engagement;Table of Contents15increases in resistance by users to our collecting,using,and sharing their personal data for advertising-related purposes;changes in our analytics and measurement solutions,including what we are permitted to collect and disclose under the terms of Apples and Googles mobile operating systems,that demonstrate the value of our advertisements and other commercial content;competitive developments or advertiser perception of the value of our products that change the rates we can charge for advertising or the volume of advertising on Snapchat;product changes or advertising inventory management decisions we may make that change the type,size,frequency,or effectiveness of advertisements displayed on Snapchat or the method used by advertisers to purchase advertisements;adverse legal developments relating to advertising,including changes mandated or prompted by legislation,regulation,executive actions,or litigation regarding the collection,use,and sharing of personal data for certain advertising-related purposes;adverse media reports or other negative publicity involving us,our founders,our partners,or other companies in our industry;advertiser or user perception that content published by us,our users,or our partners is objectionable;the degree to which users skip advertisements and therefore diminish the value of those advertisements to advertisers;changes in the way advertising is priced or its effectiveness is measured;our inability,or perceived inability,to achieve an advertisers intended performance metric,measure the effectiveness of our advertising,or target the appropriate audience for advertisements,including due to metric estimates published by third parties that may differ from our own metrics;our inability to access,collect,and disclose users personal data,including advertising or similar deterministic identifiers that new and existing advertisers may find useful;difficulty and frustration from advertisers who may need to reformat or change their advertisements to comply with our guidelines;volatility in the equity markets,which may reduce our advertisers capacity or desire for aggressive advertising spending towards growth;andthe political,economic,and macroeconomic climate and the status of the advertising industry in general,including impacts related to labor shortages and disruptions,supply chain disruptions,banking instability,tariffs implemented by the United States or other governments,inflation,and as a result of war,terrorism,or armed conflict.Moreover,individuals are also increasingly aware of and resistant to the collection,use,and sharing of personal data in connection with advertising.Individuals are more aware of options and certain rights related to consent and other options to opt-out of such data processing,including through media attention about privacy and data protection.Some users have opted out of allowing us to combine certain data from third-party apps and websites with certain data from Snapchat for advertising purposes,which has negatively impacted our ability to collect or use certain user data and our advertising partners ability to deliver relevant content,all of which have in the past and could again in the future negatively impact our business.These and other factors could reduce demand for our advertising products,which may lower the prices we receive,or cause advertisers to stop advertising with us altogether.Either of these would seriously harm our business.Snapchat depends on effectively operating with mobile operating systems,hardware,networks,regulations,and standards that we do not control.Changes in our products or to those mobile operating systems,hardware,networks,regulations,or standards may seriously harm our user retention,growth,and engagement.Because Snapchat is used primarily on mobile devices,the application must remain interoperable with popular mobile operating systems,primarily Android and iOS,application stores,and related hardware,including mobile-device cameras.The owners and operators of such mobile operating systems and application stores,primarily Google and Apple,each have approval authority over whether to feature our core products on their application stores and make available to Table of Contents16consumers third-party products that compete with ours.Furthermore,there is no guarantee that any approval previously provided by such owner or operator will not be rescinded in the future.Additionally,mobile devices and mobile-device cameras are manufactured by a wide array of companies.Those companies have no obligation to test the interoperability of new mobile devices,mobile-device cameras,or related devices with Snapchat,and may produce new products that are incompatible with or not optimal for Snapchat.We have no control over these mobile operating systems,application stores,or hardware,and any changes may degrade our products functionality,or give preferential treatment to competitive products.For instance,Apples iOS 18,introduced in September 2024,makes it more difficult for us to access a Snapchatters contact book,which in turn could make it more difficult for us to connect Snapchatters with their close friends,potentially reducing engagement on our platform.Because these changes do not apply to Apples iMessage app,it may put us at a competitive disadvantage.Actions by government authorities may also impact our access to these systems or hardware and could seriously harm Snapchat usage.Our competitors that control the mobile operating systems and related hardware could make interoperability of our products more difficult or display their competitive offerings more prominently than ours.Additionally,our competitors that control the standards for the application stores could make Snapchat,or certain features of Snapchat,inaccessible for a potentially significant period of time or require us to make changes to maintain access.We plan to continue to introduce new products and features regularly,including some features that may only work on the latest systems and hardware,and have experienced that it takes significant time to optimize new products and features to function with the variety of existing mobile operating systems,hardware,and standards,impacting the popularity of such products,and we expect this trend to continue.Moreover,our products require high-bandwidth data capabilities.If the costs of data usage increase or access to cellular networks is limited,our user retention,growth,and engagement may be seriously harmed.Additionally,to deliver high-quality video and other content over mobile cellular networks,our products must work well with a range of mobile technologies,systems,networks,regulations,and standards that we do not control and which may be subject to future changes.In addition,the proposal or adoption of any laws,regulations,or initiatives that adversely affect the growth,popularity,or use of the internet,including laws governing internet neutrality,could decrease the demand for our products,including by impairing our ability to retain existing users or attract new users,make Snapchat a less attractive alternative to our competitors applications,and increase our cost of doing business.We may not successfully cultivate relationships with key industry participants or develop products that operate effectively with these technologies,systems,networks,regulations,or standards.If it becomes more difficult for our users to access and use Snapchat,if our users choose not to access or use Snapchat,or if our users choose to use products that do not offer access to Snapchat,our business and user retention,growth,and engagement could be seriously harmed.We rely on Google Cloud and Amazon Web Services,or AWS,for the vast majority of our computing,storage,bandwidth,and other services.Any disruption of or interference with our use of either platform would negatively affect our operations and seriously harm our business.Google and Amazon provide distributed computing infrastructure platforms for business operations,commonly referred to as a“cloud”computing service.We currently run the vast majority of our computing on Google Cloud and AWS and have built our software and computer systems to use computing,storage capabilities,bandwidth,and other services provided by Google Cloud and AWS.Our systems are not fully redundant on the two platforms.Any transition of the cloud services currently provided by either Google Cloud or AWS to the other platform or to another cloud provider would be difficult to implement and would cause us to incur significant time and expense.Given this,any significant disruption of or interference with Google Cloud or AWS,whether temporary,regular,or prolonged,would negatively impact our operations and our business would be seriously harmed.If our users or partners are not able to access Snapchat or specific Snapchat features,or encounter difficulties in doing so,due to issues or disruptions with Google Cloud or AWS,we may lose users,partners,or advertising revenue.The level of service provided by Google Cloud and AWS or similar providers may also impact our users,advertisers,and partners usage of and satisfaction with Snapchat and could seriously harm our business and reputation if the level of service decreases.Hosting costs also have and will continue to increase as our user base and user engagement grows and may seriously harm our business if we are unable to grow our revenues faster than the cost of utilizing the services of Google Cloud,AWS,or similar providers.In addition,Google or Amazon may take actions beyond our control that could seriously harm our business,including:discontinuing or limiting our access to its cloud platform;increasing pricing terms;terminating or seeking to terminate our contractual relationship altogether;Table of Contents17establishing more favorable relationships or pricing terms with one or more of our competitors;ormodifying or interpreting its terms of service or other policies in a manner that impacts our ability to run our business and operations.If we are unable to protect our intellectual property,the value of our brand and other intangible assets may be diminished,and our business may be seriously harmed.If we need to license or acquire new intellectual property,we may incur substantial costs.We aim to protect our confidential proprietary information,in part,by entering into confidentiality agreements and invention assignment agreements with our employees,consultants,advisors,and third parties who access or contribute to our proprietary know-how,information,or technology.We,however,cannot assure you that these agreements will be effective in controlling access to,or preventing unauthorized distribution,use,misuse,misappropriation,reverse engineering,or disclosure of our proprietary information,know-how,and trade secrets.These agreements may be breached,and we may not have adequate remedies for any such breach.Enforcing a claim that a party illegally disclosed or misappropriated a trade secret or know-how can be difficult,expensive,and time-consuming,and the outcome can be unpredictable.Furthermore,these agreements do not prevent our competitors or partners from independently developing offerings that are substantially equivalent or superior to ours.We also rely on trademark,copyright,patent,trade secret,and domain-name protection laws to protect our proprietary rights.In the United States and internationally,we have filed various applications to protect aspects of our intellectual property,and we currently hold a number of issued patents,trademarks,and copyrights in multiple jurisdictions.In the future,we may acquire additional patents or patent portfolios in the future,which could require significant cash expenditures.However,third parties may knowingly or unknowingly infringe our proprietary rights,third parties may challenge proprietary rights held by us,third parties may design around our proprietary rights or independently develop competing technology,and pending and future trademark,copyright,and patent applications may not be approved.Moreover,we cannot ensure that the claims of any granted patents will be sufficiently broad to protect our technology or platform and provide us with competitive advantages.Additionally,failure to comply with applicable procedural,documentary,fee payment,and other similar requirements could result in abandonment or lapse of the affected patent,trademark,or copyright application or registration.Moreover,a portion of our intellectual property has been acquired or licensed from one or more third parties.While we have conducted diligence with respect to such acquisitions and licenses,because we did not participate in the development or prosecution of much of the acquired intellectual property,we cannot guarantee that our diligence efforts identified and remedied all issues related to such intellectual property,including potential ownership errors,potential errors during prosecution of such intellectual property,and potential encumbrances that could limit our ability to enforce such intellectual property rights.Further,the laws of certain foreign countries do not provide the same level of protection of corporate proprietary information and assets such as intellectual property,trade secrets,know-how,and records as the laws of the United States.For instance,the legal systems of certain countries,particularly certain developing countries,do not favor the enforcement of patents and other intellectual property protection.As a result,we may be exposed to material risks of theft of our proprietary information and other intellectual property,including technical data,manufacturing processes,data sets,or other sensitive information,and we may also encounter significant problems in protecting and defending our intellectual property or proprietary rights abroad.In any of these cases,we may be required to expend significant time and expense to prevent infringement or to enforce our rights.Our efforts to enforce our intellectual property rights may be met with defenses,counterclaims,and countersuits attacking the validity and enforceability of our intellectual property rights,and,if such defenses,counterclaims,and countersuits are successful,we could lose valuable intellectual property rights.Our inability to protect our proprietary technology against unauthorized copying or use,as well as any costly litigation or diversion of our managements attention and resources,could impair the functionality of our platform,delay introductions of enhancements to our platform,result in our substituting inferior or more costly technologies into our platform,or harm our reputation and brand.In addition,we may be required to license additional technology from third parties to develop and market new platform features,which may not be on commercially reasonable terms,or at all,and would adversely affect our ability to compete.Although we have taken measures to protect our proprietary rights,there can be no assurance that others will not offer products,brands,content,or concepts that are substantially similar to ours and compete with our business.If we are unable to protect our proprietary rights or prevent unauthorized use or appropriation by third parties,the value of our brand and other intangible assets may be diminished,and competitors may be able to more effectively mimic our service and methods of operations.Any of these events could seriously harm our business.Table of Contents18Our two co-founders have control over all stockholder decisions because they control a substantial majority of our voting stock.Our two co-founders,Evan Spiegel and Robert Murphy,control over 99%of the voting power of our outstanding capital stock as of December 31,2024,and Mr.Spiegel alone can exercise voting control over a majority of our outstanding capital stock.As a result,Mr.Spiegel and Mr.Murphy,or in many instances Mr.Spiegel acting alone,have the ability to control the outcome of all matters submitted to our stockholders for approval,including the election,removal,and replacement of our directors and any merger,consolidation,or sale of all or substantially all of our assets.If Mr.Spiegels or Mr.Murphys employment with us is terminated,they will continue to have the ability to exercise the same significant voting power and potentially control the outcome of all matters submitted to our stockholders for approval.Either of our co-founders shares of Class C common stock will automatically convert into Class B common stock,on a one-to-one basis,nine months following his death or on the date on which the number of outstanding shares of Class C common stock held by such holder represents less than 30%of the Class C common stock held by such holder on the closing of our IPO,or 32,383,178 shares of Class C common stock.Should either of our co-founders Class C common stock be converted to Class B common stock,the remaining co-founder will be able to exercise voting control over our outstanding capital stock.Moreover,Mr.Spiegel and Mr.Murphy have entered into a proxy agreement under which each has granted to the other a voting proxy with respect to all shares of our Class B common stock and Class C common stock that each may beneficially own from time to time or have voting control over.The proxy would become effective on either founders death or disability.Accordingly,on the death or incapacity of either Mr.Spiegel or Mr.Murphy,the other could individually control nearly all of the voting power of our outstanding capital stock.In addition,in October 2016,we issued a dividend of one share of non-voting Class A common stock to all our equity holders,which will prolong our co-founders voting control because our co-founders are able to liquidate their holdings of non-voting Class A common stock without diminishing their voting control.Furthermore,in July 2022,our board of directors approved the future declaration and payment of a special dividend of one share of Class A common stock on each outstanding share of Snaps common stock,subject to certain triggering conditions,which triggering conditions were modified in connection with the effectiveness the settlement of a class action lawsuit in February 2024.In the future,our board of directors may,from time to time,decide to issue additional special or regular stock dividends in the form of Class A common stock,and if we do so our co-founders control could be further prolonged.This concentrated control could delay,defer,or prevent a change of control,merger,consolidation,or sale of all or substantially all of our assets that our other stockholders support.Conversely,this concentrated control could allow our co-founders to consummate such a transaction that our other stockholders do not support.In addition,our co-founders may make long-term strategic investment decisions for the company and take risks that may not be successful and may seriously harm our business.As our Chief Executive Officer,Mr.Spiegel has control over our day-to-day management and the implementation of major strategic investments of our company,subject to authorization and oversight by our board of directors.As board members and officers,Mr.Spiegel and Mr.Murphy owe a fiduciary duty to our stockholders and must act in good faith in a manner they reasonably believe to be in the best interests of our stockholders.As stockholders,even controlling stockholders,Mr.Spiegel and Mr.Murphy are entitled to vote their shares,and shares over which they have voting control,in their own interests,which may not always be in the interests of our stockholders generally.We have not elected to take advantage of the“controlled company”exemption to the corporate governance rules for companies listed on the New York Stock Exchange,or NYSE.Macroeconomic uncertainties,including labor shortages and disruptions,supply chain disruptions,banking instability,inflation,and recession risks,have in the past and may continue to adversely impact our business.Global economic and business activities have in the past and may continue to face widespread macroeconomic uncertainties,including labor shortages and disruptions,supply chain disruptions,banking instability,tariffs,inflation,and recession risks,which may continue for an extended period,and some of which have adversely impacted,and may continue to adversely impact,many aspects of our business.As some of our advertisers experienced downturns or uncertainty in their own business operations and revenue,they halted or decreased or may halt,decrease,or continue to decrease,temporarily or permanently,their advertising spending or may focus their advertising spending more on other platforms,all of which may result in decreased advertising revenue.Labor shortages and disruptions,supply chain disruptions,banking instability,and inflation have in the past and may continue to cause logistical challenges,increased input costs,inventory constraints,and liquidity uncertainty for our advertisers,which in turn may also halt or decrease advertising spending and may make it difficult to forecast our Table of Contents19advertising revenue.Any decline in advertising revenue or the collectability of our receivables could seriously harm our business.As a result of macroeconomic uncertainties,our partners and community who provide content or services to us may experience delays or interruptions in their ability to create content or provide services,if they are able to do so at all.Members of our community may also alter their usage of our products and services,particularly relative to prior periods when travel restrictions were in place.A decrease in the amount or quality of content available on Snapchat,or an interruption in the services provided to us,could lead to a decline in user engagement,which could seriously harm our business.To the extent that macroeconomic uncertainties continue to impact our business,many of the other risks described in these risk factors may be exacerbated.Exposure to geo-political conflicts and events could put our employees and partners at substantial risk,interrupt our operations,increase costs,create additional regulatory burdens,and have significant negative macroeconomic effects,any of which could seriously harm our business.Significant geo-political conflicts and events have had,and will likely continue to have,a substantial effect on our business and operations.We have had,and will likely continue to have,team members and their families in impacted regions who face substantial personal risk,unprecedented disruption of their lives,and uncertainty as to the future.We have provided emergency assistance and support to these team members and their families,and we expect to continue this support in the future.In addition,we have offices,hardware,and other assets in impacted regions that may be at risk of destruction or theft.We have incurred,and will likely continue to incur,costs to support our team members and reorganize our operations to address these ongoing challenges.In addition,our management has spent significant time and attention on these and related events.The ongoing disruptions to our team members,our management,and our operations could seriously harm our business.Generally,during times of war and other major conflicts,we,the third parties on which we rely,and our partners are vulnerable to a heightened risk of cyberattacks,including retaliatory cyberattacks,that could seriously disrupt our business.We have experienced,and may continue to experience,attempted cyberattacks on our products,systems,and networks,which we believe are related to conflicts.We may also face retaliatory attacks by governments,entities,or individuals who do not agree with our public expressions with regards to any conflicts or support for team members.Any such attack could cause disruption to our platform,systems,and networks,result in security breaches or data loss,damage our brand,or reduce demand for our services or advertising products.In addition,we may face significant costs(including legal and litigation costs)to prevent,correct,or remediate any such breaches.We may also be forced to expend additional resources monitoring our platform for evidence of disinformation or misuse in connection with the ongoing conflict.Geo-political conflicts and events are inherently unpredictable,evolve quickly,and may have negative long-term impacts.On a macroeconomic level,geo-political conflicts may disrupt trade,intensify problems in the global supply chain,and contribute to inflationary pressures.All of these factors may negatively impact the demand for advertising as companies face limited product availability,restricted sales opportunities,and condensed margins.Any pause or reduction in advertising spending in connection with geo-political conflicts or events could negatively impact our revenue and harm our business.If we do not develop successful new products or improve existing ones,our business will suffer.We may also invest in new lines of business that could fail to attract or retain users or generate revenue.Our ability to engage,retain,and increase our user base and to increase our revenue will depend heavily on our ability to successfully create new products,both independently and together with third parties.We may introduce significant changes to,or discontinue,our existing products or develop and introduce new and unproven products and services,including technologies with which we have little or no prior development or operating experience.These new products and updates may fail to increase the engagement of our users,advertisers,or partners,may subject us to increased regulatory requirements or scrutiny,and may even result in short-term or long-term decreases in such engagement by disrupting existing user,advertiser,or partner behavior or by introducing performance and quality issues.For example,in January 2023,we made changes to our advertising platform,which we believe will lay the foundation for future growth,but which have been disruptive to our customers and how some of them utilized our platform.The short-and long-term impact of any major change,or even a less significant change such as a refresh of the application or a feature change,is difficult to predict.Although we believe that these decisions will benefit the aggregate user experience and improve our Table of Contents20financial performance over the long term,we may experience disruptions or declines in our DAUs or user activity broadly or concentrated on certain portions of our application.Product innovation is inherently volatile,and if new or enhanced products fail to engage our users,advertisers,or partners,or if we fail to give our users meaningful reasons to return to our application,we may fail to attract or retain users or to generate sufficient revenue,operating margin,or other value to justify our investments,any of which may seriously harm our business in the short-term,long-term,or both.Because our products created new ways of communicating,they have often required users to learn new behaviors to use our products,or to use our products repeatedly to receive the most benefit.These new behaviors,such as swiping and tapping in the Snapchat application,are not always intuitive to users.This can create a lag in adoption of new products and new user additions related to new products.We believe this has not hindered our user growth or engagement,but that may be the result of a large portion of our user base being in a younger demographic and more willing to invest the time to learn to use our products most effectively.To the extent that future users,including those in older demographics,are less willing to invest the time to learn to use our products,and if we are unable to make our products easier to learn to use,our user growth or engagement could be affected,and our business could be harmed.We may also develop new products or initiatives that increase user engagement and costs without increasing revenue in the short-or long-term.In addition,we have invested,and expect to continue to invest,in new lines of business,new products,evolving the user experience,and other initiatives to increase our user base and user activity,and attempt to monetize the platform.For example,in 2022,we launched Snapchat ,a subscription product that gives subscribers access to exclusive,experimental,and pre-release features,and Snapchat for Web,a browser-based product that brings Snapchats signature capabilities to the web,in 2023,we launched My AI,an artificial intelligence powered chatbot,and in 2024,we began testing Simple Snapchat,a new and simplified version of our service.Such new lines of business,new products,evolving user experiences,and other initiatives may be costly,difficult to operate and monetize,increase regulatory scrutiny and product liability and litigation risk,and divert managements attention,and there is no guarantee that they will be positively received by our community,attract or retain users,generate sufficient revenue or operating margin,or provide positive returns on our investment.For example,Simple Snapchat offers several new features,such as reducing the number of tabs in the application and creating a unified content feed.Although we believe these changes will create an improved user experience,we are still testing and do not know how users or advertisers will adapt or respond to these changes,and whether these changes will ultimately improve our business.Any adverse response to these changes by users or advertisers could seriously harm our business.We frequently launch new products and the products that we launch may have technical issues that diminish the performance of our application,experience product failures,or become subject to product recalls.These performance issues or issues that we encounter in the future could impact our user engagement.In addition,new products or features that we launch may ultimately prove unsuccessful or no longer fit with our priorities,and may be eliminated in the future.Such eliminations may require us to reduce our workforce and incur significant expenses.In certain cases,new products that we develop may require regulatory approval prior to launch or may require us to comply with additional regulations or legislation,including laws that are rapidly changing.There is no guarantee that we will be able to obtain such regulatory approval,and our efforts to comply with these laws and regulations could be costly and divert managements time and effort and may still not guarantee compliance.If we do not successfully develop new approaches to monetization or meet the expectations of our users or partners,we may not be able to maintain or grow our revenue as anticipated or recover any associated development costs,and our business could be seriously harmed.Our business is highly competitive.We face significant competition that we anticipate will continue to intensify.If we are not able to maintain or improve our market share,our business could suffer.We
2025-04-24
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Yunji InvestorRoomYunji Announces Fourth Quarter and Fiscal Year 2024 Unaudited Financial ResultsHAN.
2025-04-24
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5星级
Technology Enables Better LivesCHECHE GROUPFourth Quarter&Full Year Ended 2024Earnings PresentationS.
2025-04-24
22页
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR 12(g)OF THE SECURITIESEXCHANGE ACT OF 1934 OR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934 For the fiscal year ended December 31,2024 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934 OR SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934 Date of event requiring this shell company report_ For the transition period from_to_ Commission File Number:001-41801 Cheche Group Inc.(Exact name of Registrant as specified in its charter)Not applicable Cayman Islands(Translation of Registrants name into English)(Jurisdiction of incorporation or organization)Lei Zhang8/F,Desheng Hopson Fortune Plaza13-1 Deshengmenwai AvenueXicheng District,Beijing 100088,China(86)10 5083-0911(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 TradingSymbol(s)Name of exchange on which registeredClass A ordinary shares,$0.00001 par value pershare CCG The NASDAQ Stock Market LLCWarrants,each exercisable for one Class A ordinaryshare at an exercise price of$11.50 per share CCGWW The NASDAQ Stock Market LLC Securities registered or to be registered pursuant to Section 12(g)of the Act:None(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act:None(Title of Class)Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by thisannual report:As of December 31,2024,there were(1)80,321,873 ordinary shares(excluding 709,432 Class A Ordinary Shares held in treasury),consistingof 61,725,369 Class A ordinary shares and 18,596,504 Class B ordinary shares,and(2)10,608,609 warrants to purchase 10,608,609 Class Aordinary shares issued and outstanding.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 or15(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 Actof 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subjectto 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 Rule405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required tosubmit and post 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 growthcompany.See definition of“large accelerated filer,”“accelerated filer,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filer Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if the registranthas elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuantto 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 itsAccounting Standards Codification after April 5,2012.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of itsinternal control over financial reporting over Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accountingfirm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrantincluded 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 basedcompensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAP International Financial Reporting Standards as issued by the International AccountingStandards BoardOther If“Other”has been checked in response to the previous question indicate by check mark which financial statement item the registrant haselected 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 theSecurities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.Yes No TABLE OF CONTENTS INTRODUCTION iiFORWARD-LOOKING STATEMENTS vPART I ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS 1ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE 1ITEM 3.KEY INFORMATION 1ITEM 4.INFORMATION ON THE COMPANY 68ITEM 4A.UNRESOLVED STAFF COMMENTS 124ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS 124ITEM 6.DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES 140ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 149ITEM 8.FINANCIAL INFORMATION 153ITEM 9.THE OFFER AND LISTING 154ITEM 10.ADDITIONAL INFORMATION 154ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 165ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 166PART II ITEM 13.DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIES 167ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 167ITEM 15.CONTROLS AND PROCEDURES 167ITEM 16.RESERVED 168ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT 168ITEM 16B.CODE OF ETHICS 168ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES 169ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 169ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 169ITEM 16F.CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT 169ITEM 16G.CORPORATE GOVERNANCE 169ITEM 16H.MINE SAFETY DISCLOSURE 169ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 169ITEM 16J.INSIDER TRADING POLICIES 170ITEM 16K.CYBERSECURITY 170PART III ITEM 17.FINANCIAL STATEMENTS 171ITEM 18.FINANCIAL STATEMENTS 171ITEM 19.EXHIBITS 171EXHIBIT INDEX 171 i INTRODUCTION Except as otherwise indicated or required by context and for purposes of this annual report on Form 20-F only:“Acquisition Closing”refers to the closing of the Acquisition Merger.“Acquisition Closing Date”refers to the date of closing of the Acquisition Merger.“Acquisition Merger”refers to the merger on the Closing Date of Merger Sub with and into CCT,with CCT surviving the merger as awholly owned subsidiary of the Company.“Acquisition Merger Effective Time”refers to the date and time at which the Acquisition Merger becomes effective.“Affiliated Entities”refers to the VIE,Beijing Cheche Technology Co.,Ltd.,and its subsidiaries,Cheche Insurance Sales&ServicesCo.,Ltd.(“Cheche Insurance”),Huicai Insurance Brokerage Co.,Ltd.and Cheche Zhixing(Ningbo)Car Service Co.,Ltd.“Amended and Restated Memorandum and Articles of Association”refers to our currently effective memorandum and articles ofassociation,which became effective on September 14,2023.“Backstop Private Placement”refers to the offer and sale to the Backstop Investor,an aggregate of 500,000 Class A Ordinary Shares ata purchase price equal to$10.00 per share,pursuant to the Backstop Agreement dated September 11,2023,by and among PrimeImpact,the Company and the Backstop Investor.“Business Combination”refers to the Initial Merger,the Acquisition Merger,and all other transactions contemplated by the BusinessCombination Agreement.“Business Combination Agreement”refers to that certain Business Combination Agreement,dated as of January 29,2023,by andamong Prime Impact,Merger Sub,the Company and CCT.“CAC”refers to the Cyberspace Administration of the PRC.“Cayman Companies Act”refers to the Companies Act(As Revised)of the Cayman Islands.“CCT”refers to Cheche Technology Inc.,its subsidiaries and,in the context of describing the operations and consolidated financialstatements,the Affiliated Entities.“Class A Ordinary Shares”refers to Class A Ordinary Shares,par value$0.00001 per share,of the Company,each of which will beentitled to one vote.“Class B Ordinary Shares”refers to Class B Ordinary Shares,par value$0.00001 per share,of the Company,each of which will beentitled to three votes.“Closing Date”refers to September 14,2023,the date on which the Initial Closing and the Acquisition Closing occurred.“Code”refers to the U.S.Internal Revenue Code of 1986,as amended.“CSRC”refers to the China Securities Regulatory Commission.“Exchange Act”refers to the Securities Exchange Act of 1934,as amended.“HFCAA”refers to the Holding Foreign Companies Accountable Act.ii “Hong Kong Subsidiaries”refers to Cheche Technology(HK)Limited and any other Hong Kong-incorporated subsidiary that we mayhave in the future.“Initial Merger”refers to the merger of Prime Impact with and into the Company,with the Company surviving the merger as a publiclytraded entity.“Initial Merger Effective Time”refers to the date and time at which the Initial Merger becomes effective.“Innoven Warrants”refers to the warrant to purchase 63,552 Class A Ordinary Shares assumed by us at the Acquisition MergerEffective Time.“insurance carriers”refers to companies that offer one or more types of insurance policies to individual consumers or corporatecustomers,either directly or through insurance agencies or brokers.Many insurance carriers in China maintain provincial andmunicipal branches,as under PRC Law,an insurance carrier can only issue auto insurance policies in the provinces,autonomousregions and municipalities where it is incorporated or has established branches.“insurance carrier customers”refers to provincial or municipal branches,as the case maybe,of insurance carriers that have entered intocontracts with us.“iResearch”refers to iResearch Inc.,a third-party research firm,which has prepared an industry report regarding our industry andmarket position in China.“Merger Sub”refers to Cheche Merger Sub Inc.“NEV”refers to new energy vehicle.“NFRA”refers to the National Financial Regulatory Administration,previously known as the China Banking and Insurance RegulatoryCommission(“CBIRC”).“Ordinary Shares”refers to the Class A Ordinary Shares and Class B Ordinary Shares of the Company.“PCAOB”refers to the Public Company Accounting Oversight Board.“PRC”or“China”refers to the Peoples Republic of China(including,for the avoidance of doubt,the Hong Kong SpecialAdministrative Region and the Macau Special Administrative Region),and only in the context of describing the industry matters,including those derived from the report of iResearch,and the PRC laws,rules,regulations,regulatory authorities,and any PRC entitiesor citizens under such rules,laws and regulations and other legal or tax matters in this annual report,excludes Taiwan,the Hong KongSpecial Administrative Region and the Macau Special Administrative Region.“PRC Subsidiaries”refers to Baodafang Technology Co.,Ltd.,Cheche Technology(Ningbo)Co.,Ltd.and any other PRC-incorporatedsubsidiary that we may have in the future.“Prime Impact”refers to Prime Impact Acquisition I.“Private Placement”refers to the offer and sale to the PIPE Investor,an aggregate of 1,300,000 Class A Ordinary Shares at a purchaseprice equal to$10.00 per share,pursuant to the Subscription Agreement dated September 11,2023,by and among the Company,PrimeImpact and the PIPE Investor.“Public Warrants”refers to the redeemable warrants,each entitling its holder to purchase one Class A Ordinary Share at an exerciseprice of$11.50 per share,subject to adjustment.“RMB”refers to Renminbi,the lawful currency of the PRC.iii “SaaS”refers to software as a service,a software licensing and delivery model in which software is licensed on a subscription basisand is centrally hosted.“SEC”refers to the Securities and Exchange Commission.“Securities Act”refers to the Securities Act of 1933,as amended.“Sponsor”refers to Prime Impact Cayman,LLC.“Sponsor Warrants”refers to the warrants held by the Sponsor,each entitling the Sponsor to purchase one Class A Ordinary Share at anexercise price of$11.50 per share,subject to adjustment.“U.S.GAAP”refers to accounting principles generally accepted in the United States of America.“VATS”refers to the value-added telecommunication services.“VIE”refers to Beijing Cheche Technology Co.,Ltd.,the variable interest entity that CCT consolidates through contractualarrangements.“Warrants”refers to,collectively,the Public Warrants and the Sponsor Warrants.“we,”“us,”“our,”“our company,”or“the Company”refer to Cheche Group Inc.and its subsidiaries and,in the context of describingthe operations and consolidated financial statements,the Affiliated Entities(as defined herein).“WFOE”or“Cheche Ningbo”refers to Cheche Technology(Ningbo)Co.,Ltd.,our wholly foreign owned subsidiary domiciled inChina.“$”refers to United States dollars,the lawful currency of the United States of America.iv FORWARD-LOOKING STATEMENTS This annual report contains“forward-looking statements”within the meaning of Section 27A of the Securities Act of 1933,asamended,and Section 21E of the Securities Exchange Act of 1934,as amended(or the“Exchange Act”)that involve substantial risks anduncertainties.All statements other than statements of historical facts contained in this annual report,including statements regarding our futurefinancial position,business strategy and plans and objectives of management for future operations,are forward-looking statements.In somecases,you can identify forward-looking statements by terminology such as“may,”“will,”“should,”“expect,”“plan,”“anticipate,”“could,”“intend,”“target,”“project,”“contemplate,”“believe,”“estimate,”“predict,”“potential”or“continue”or the negative of these terms or othersimilar expressions.Forward-looking statements include,without limitation,our expectations concerning the outlook for our business,productivity,plans and goals for future operational improvements and capital investments,operational performance,future market conditions oreconomic performance and developments in the capital and credit markets and expected future financial performance,as well as anyinformation concerning our possible or assumed future results of operations as set forth in this annual report.Forward-looking statements involve a number of risks,uncertainties and assumptions,and actual results or events may differmaterially from those projected or implied in those statements.Important factors that could cause such differences include,but are not limitedto:the outcome of any legal proceedings that have been or may be instituted against us;the ability to maintain the listing of the Class A Ordinary Shares on the Nasdaq;our markets are rapidly evolving and may decline or experience limited growth;our ability to retain and expand our customer base;our ability to compete effectively in the markets in which we operate;our relationships with insurance carriers,referral partners and consumers;failure to maintain and enhance our brand;failure to prevent security breaches or unauthorized access to our or our third-party service providers data;the rapidly changing and increasingly stringent laws,contractual obligations and industry standards relating to privacy,data protectionand data security;risks related to our corporate structure,in particular the VIE structure;and the other matters described in the section titled“Item 3.Key Information-D.Risk Factors.”We caution you against placing undue reliance on forward-looking statements,which reflect current beliefs and are based oninformation currently available to us as of the date a forward-looking statement is made.Forward-looking statements set forth herein speak onlyas of the date of this annual report.We do not undertake any obligation to revise forward-looking statements to reflect future events,changes incircumstances,or changes in beliefs.In the event that any forward-looking statement is updated,no inference should be made that we will makeadditional updates with respect to that statement,related matters,or any other forward-looking statements.Any corrections or revisions andother important assumptions and factors that could cause actual results to differ materially from forward-looking statements,includingdiscussions of significant risk factors,may appear,in our public filings with the SEC,which are accessible at www.sec.gov,and which you areadvised to consult.Market,ranking and industry data used throughout this annual report,including statements regarding market size,is based onindependent industry surveys and publications,including reports by iResearch Inc.These data involve a number of assumptions and limitations,and you are cautioned not to give undue weight to such estimates.While we are not aware of any misstatements regarding the industry datapresented herein,such estimates involve risks and uncertainties and are subject to change based on various factors,including those discussedunder the headings“Item 3.Key Information-D.Risk Factors”and“Item 5.Operating and Financial Review and Prospects”in this annualreport.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 Holding Company Structure and Contractual Arrangements with the VIE and Its Shareholders The VIE structure and its associated risks We are a Cayman Islands holding company with no substantive operations.We carry out our business through the VIE and itssubsidiaries in China,due to PRC regulatory restrictions on direct foreign ownership of companies that engage in VATS and other internetrelated business.The VIE structure was established through a series of agreements entered into between WFOE,the VIE and its shareholders,comprising an exclusive business cooperation agreement,an equity interest pledge agreement,an exclusive option agreement,the shareholderspower of attorney and spousal consent letters.The contractual arrangements allow us to(1)consolidate the financial results of the AffiliatedEntities,(2)receive substantially all of the economic benefits of the Affiliated Entities,(3)have the pledge right over the equity interests in theVIE as the pledgee to secure its fulfillment of obligations,and(4)have an exclusive option to purchase all or part of the equity interests andassets in the VIE when and to the extent permitted by PRC law.As a result of our direct ownership in WFOE and the contractual arrangementswith the VIE,we are the primary beneficiary of the VIE for accounting purposes,and,therefore,has consolidated the financial results of theAffiliated Entities into our consolidated financial statements in accordance with U.S.GAAP.The VIE structure involves unique risks to investors.It may not be as effective as direct ownership in providing us with control overthe VIE or its subsidiaries,and we may incur substantial costs to enforce the terms of the arrangements.The agreements under the contractualarrangements among WFOE,the VIE and its shareholders have not been tested in a court of law.There are also substantial uncertaintiesregarding the interpretation and application of current and future PRC laws,regulations and rules regarding our rights with respect to ourcontractual arrangements with the VIE and its shareholders.It is uncertain whether any new PRC laws or regulations relating to the VIEstructure will be adopted or,if adopted,what they would provide.The PRC regulatory authorities could disallow the VIE structure at any timein the future.If the PRC government deems that the contractual arrangements with the VIE do not comply with PRC regulatory restrictions onforeign investment in the relevant industries,or if these regulations or the interpretation of existing regulations change or are interpreteddifferently in the future,we could be subject to severe penalties or be forced to relinquish our interests in these operations.We,our subsidiariesand the Affiliated Entities,and investors of Class A Ordinary Shares face uncertainty with respect to potential future actions by the PRCgovernment that could affect the enforceability of the contractual arrangements with the VIE and,consequently,significantly affect the financialperformance of the Affiliated Entities and us as a whole.See“D.Risk FactorsRisks Related to Our Corporate Structure.”1 The following diagram illustrates our simplified corporate structure,including our principal subsidiaries,the VIE and its subsidiaries,as of the date of this annual report.(1)VIE equity interests holders include Lei Zhang,Zhendong Wang,Hangzhou Shunying Equity Investment Partnership(L.P.),ZhuhaiHengqin Huarong Zhifu Investment Management Co.,Ltd.,Beijing Cheche Technology Investment Center,LLP,Beijing Zhongjin HuicaiInvestment Management Co.,Ltd.,Shenzhen Ruiyuan Investment Enterprise,LLP,Huzhou Zhongze Jiameng Equity InvestmentEnterprise,LLP,Beijing Zhongyun Ronghui Investment Center,LLP and Guangzhou Lianzhan Enterprise Management Co.,Ltd.,whichhold approximately 35.6%,1.1%,8.8%,8.2%,9.8%,14.2%,8.0%,4.9%,8.8%and 0.6%of the equity interests in the VIE,respectively.Cash and Asset Flows through Organization Dividend Distribution and Taxation:In light of our holding company structure and the VIE structure,our ability to pay dividends to theshareholders,and to service any debt we may incur,may depend upon dividends paid by WFOE to us and service fees paid by the AffiliatedEntities to WFOE,despite that we may obtain financing at the holding company level through other methods.However,the WFOE and theAffiliated Entities in China are subject to certain statutory reserve and solvency conditions before they can distribute dividends or makepayment to us,which,if failed,may restrict their ability to pay dividends or make payment to us.Under PRC laws and regulations,WFOE ispermitted to pay dividends only out of their retained earnings,if any,as determined in accordance with PRC accounting standards andregulations.Furthermore,WFOE and the Affiliated Entities are required to make appropriations to certain statutory reserve funds or may makeappropriations to certain discretionary funds,which are not distributable as cash dividends except in the event of a solvent liquidation of thecompanies.The statutory reserve fund requires that annual appropriations of 10%of net after-tax income should be set aside prior to payment ofany dividends,until the aggregate amount of such fund reaches 50%of their registered capital.As a result of such restrictions under PRC lawsand regulations,our PRC Subsidiaries and the Affiliated Entities are restricted in their ability to transfer a portion of their net assets to us eitherin the form of dividends,loans or advances,which restricted portion amounted to RMB328.5 million and RMB370.5 million as of December31,2023 and 2024,respectively.As of the date of this annual report,none of us and our subsidiaries has made any dividends or distributions toour respective shareholder(s),including any U.S.investors,nor do we have any present plan to pay any cash dividends in the foreseeable future.Any determination to pay dividends in the future will be at the discretion of the respective our board of directors.As of the date of this annualreport,none of us,WFOE and the VIE intends to distribute earnings or settle amounts owed under the VIE agreements.Under Cayman Islandslaw,we may only pay dividends out of our profits,or out of monies otherwise available for dividend in accordance with the Cayman CompaniesAct,provided always that in no circumstances may a dividend be paid if this would result in us being unable to pay our debts as they fall due inthe ordinary course of business.2 Subject to the“passive foreign investment company”rules,the gross amount of any distribution that we make to a U.S.Holder(asdefined in“Certain Material U.S.Federal Income Tax Consequences”)with respect to the Class A Ordinary Shares(including any amountswithheld to reflect PRC withholding taxes)will be taxable as a dividend for United States federal income tax purposes,to the extent paid out ofour current or accumulated earnings and profits,as determined under United States federal income tax principles.Foreign Exchange Restriction:We,the PRC Subsidiaries and the Affiliated Entities are subject to restrictions on foreign exchange andour ability to transfer cash between entities,across borders,and to U.S.investors.Under PRC foreign exchange regulations,payments of currentaccount items,including profit distributions,interest payments and trade and service-related foreign exchange transactions,can be made inforeign currencies without prior approval of SAFE by complying with certain procedural requirements.However,approval from or registrationwith appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to paycapital expenses such as the repayment of loans denominated in foreign currencies.The PRC government imposes controls on the convertibilityof RMB into foreign currencies and the remittance of funds out of China,which may restrict the transfer of cash between us,the PRCSubsidiaries,the Affiliated Entities or the investors.Under PRC laws and regulations,the PRC Subsidiaries and the Affiliated Entities aresubject to certain restrictions with respect to payment of dividends or otherwise transfers of any of their net assets to us.Remittance ofdividends by the PRC Subsidiaries out of China is also subject to certain procedures with the banks designated by the PRC State Administrationof Foreign Exchange.These restrictions are benchmarked against the paid-up capital and the statutory reserve funds of the PRC Subsidiariesand the net assets of the VIE in which we do not have legal ownership.While there are currently no such restrictions on foreign exchange andour ability to transfer cash or assets between us and our Hong Kong subsidiary,if certain PRC laws and regulations,including existing laws andregulations and those enacted or promulgated in the future were to become applicable to the Hong Kong subsidiary in the future,and to theextent our cash or assets are in Hong Kong or a Hong Kong entity,such funds or assets may not be available due to interventions in or theimposition of restrictions and limitations on our ability to transfer funds or assets by the PRC government.Furthermore,there can be noassurance that the PRC government will not intervene or impose restrictions on us,our subsidiaries and the Affiliated Entities to transfer ordistribute cash within the organization,which could result in an inability of or prohibition on making transfers or distributions to entities outsideof mainland China and Hong Kong.See“D.Risk FactorsRisks Related to Doing Business in ChinaGovernmental control of currencyconversion may limit the ability of us,the PRC Subsidiaries and the Affiliated Entities to utilize our net revenues effectively and our ability totransfer cash among the group,across borders,and to investors and affect the value of your investment.”Transfer of Cash and Asset:Cash may be transferred within the group in the following manner:(1)we may transfer funds to oursubsidiaries,including the PRC Subsidiaries,by way of capital contributions,inter-group advances or loans;(2)we and our subsidiaries mayprovide loans to the VIE and vice versa;(3)funds may be transferred from the VIE to WFOE,as service fees for services contemplated by theVIE agreements;and(4)our subsidiaries,including WFOE,may make dividends or other distributions to us.Cash is transferred within thegroup to satisfy working capital requirement of the respective operating entities,and is managed by our finance department based on fundcontrol policy and procedure.Neither we nor our subsidiaries are able to make direct capital contributions to the VIE or its subsidiaries,and theVIE is not able to make dividends or other distributions to us.In 2022,cash in the form of loans in the amount of RMB34.8 million wastransferred from CCT and its PRC Subsidiaries to the Affiliated Entities.In 2023,the repayment of the loans in the amount of RMB63.5 millionwas transferred from the Affiliated Entities to CCT and its PRC Subsidiaries.In 2024,the repayment of the loans in the amount of RMB87.8million was transferred from the Affiliated Entities to CCT and its PRC Subsidiaries.As of the date of this annual report,no other transfers,dividends or distributions have been made among us,our subsidiaries and the VIE,or to investors;and no other cash flows and transfers ofother assets by type have occurred between us,the PRC Subsidiaries,and the VIE.3 As an offshore holding company,we may use the proceeds of our offshore fund-raising activities to provide loans or make capitalcontributions to the PRC Subsidiaries or provide loans to the VIE,in each case subject to the satisfaction of applicable regulatory requirements.See“Dividend Distribution and Taxation”and“Foreign Exchange Restriction.”Financial Information Related to the Affiliated Entities Cheche Group Inc.was incorporated in the Cayman Islands in January 2023 and did not carry out significant operations.CCT is thepredecessor of us and,therefore,we disclosed combined condensed financial statements of Cheche Group Inc.and CCT(collectively,the“Parent Company”)as follows.The following tables present the condensed consolidating schedule of financial information for the Parent Company,WFOE,CCTssubsidiaries(other than WFOE),the VIEs and its subsidiaries for the periods and as of the dates presented.Selected Condensed Consolidating Statements of Operations Data Year ended December 31,2024 ParentCompany Othersubsidiaries WFOE VIE and itssubsidiaries Eliminations Consolidatedtotals (RMB in thousands)Net revenues -548,561 1,459 2,934,011 (10,892)3,473,139 Earned from third-party customers -548,561 -2,924,578 -3,473,139 Earned from the intra-Grouptransactions(1)-1,459 9,433 (10,892)-Cost of revenues -(509,889)(1,236)(2,812,686)9,434 (3,314,377)Arising from non intra-Grouptransactions -(500,455)(1,236)(2,812,686)-(3,314,377)Arising from the intra-Grouptransactions(1)-(9,434)-9,434 -Selling and marketing expenses -(14,120)-(66,839)1,458 (79,501)General and administrativeexpenses(1)(24,307)(20,207)(280)(63,063)-(107,857)Research and development expenses -(20,821)-(17,126)-(37,947)Total operating costs and expense (24,307)(565,037)(1,516)(2,959,714)10,892 (3,539,682)Operating loss (24,307)(16,476)(57)(25,703)-(66,543)Share of loss from othersubsidiaries(2)(45,658)-45,658 -Share of loss of the WFOE(2)-(29,802)-29,802 -Share of loss of the VIE(2)-(29,819)-29,819 -Interest income from VIE(3)2,107 38 59 -(2,204)-Interest expense to WFOE(3)-(59)59 -Interest expense to Parent(3)-(2,107)2,107 -Interest expense to othersubsidiaries(3)-(38)38 -Others,net 6,856 582 15 (2,437)-5,016 Loss before income taxes (61,002)(45,658)(29,802)(30,344)105,279 (61,527)Income tax expense (234)-525 -291 Net(loss)/profit (61,236)(45,658)(29,802)(29,819)105,279 (61,236)4 Year ended December 31,2023 ParentCompany Othersubsidiaries WFOE VIE and itssubsidiaries Eliminations Consolidatedtotals (RMB in thousands)Net revenues -217,938 1,825 3,089,988 (8,333)3,301,418 Earned from third-party customers -217,938 174 3,083,306 -3,301,418 Earned from the intra-Grouptransactions(1)-1,651 6,682 (8,333)-Cost of revenues -(209,365)(3,964)(2,954,546)6,682 (3,161,193)Arising from non intra-Grouptransactions -(202,683)(3,964)(2,954,546)-(3,161,193)Arising from the intra-Grouptransactions(1)-(6,682)-6,682 -Selling and marketing expenses -(21,839)(32)(89,583)-(111,454)General and administrativeexpenses(1)(14,272)(17,328)(373)(109,063)1,651 (139,385)Research and development expenses -(22,359)-(34,808)-(57,167)Total operating costs and expense (14,272)(270,891)(4,369)(3,188,000)8,333 (3,469,199)Operating loss (14,272)(52,953)(2,544)(98,012)-(167,781)Share of loss from othersubsidiaries(2)(149,974)-149,974 -Share of loss of the WFOE(2)-(102,588)-102,588 -Share of loss of the VIE(2)-(100,142)-100,142 -Interest income from VIE(3)1,790 587 101 -(2,478)-Interest expense to WFOE(3)-(101)101 -Interest expense to Parent(3)-(1,790)1,790 -Interest expense to othersubsidiaries(3)-(587)587 -Others,net 3,024 4,984 (3)(177)-7,828 Loss before income taxes (159,432)(149,970)(102,588)(100,667)352,704 (159,953)Income tax expense (158)(4)-525 -363 Net loss (159,590)(149,974)(102,588)(100,142)352,704 (159,590)5 Year ended December 31,2022 CCT Othersubsidiaries WFOE VIE and itssubsidiaries Eliminations Consolidatedtotals (RMB in thousands)Net revenues -144,597 2,167 2,561,811 (29,516)2,679,059 Earned from third-party customers -144,597 560 2,533,902 -2,679,059 Earned from the intra-Grouptransactions(1)-1,607 27,909 (29,516)-Cost of revenues -(124,325)(2,947)(2,437,383)27,909 (2,536,746)Arising from non intra-Grouptransactions -(96,416)(2,947)(2,437,383)-(2,536,746)Arising from the intra-Grouptransactions(1)-(27,909)-27,909 -Selling and marketing expenses -(67,828)-(71,142)-(138,970)General and administrativeexpenses(1)(13,787)(14,820)(702)(41,648)1,607 (69,350)Research and development expenses -(20,544)-(29,402)-(49,946)Total operating costs and expense (13,787)(227,517)(3,649)(2,579,575)29,516 (2,795,012)Operating loss (13,787)(82,920)(1,482)(17,764)-(115,953)Share of income from othersubsidiaries(2)(77,878)-77,878 -Share of loss of the WFOE(2)-(25,142)-25,142 -Share of loss of the VIE(2)-(23,589)-23,589 -Interest income from VIE(3)1,692 674 93 -(2,459)-Interest expense to WFOE(3)-(93)93 -Interest expense to Parent(3)-(1,692)1,692 -Interest expense to othersubsidiaries(3)-(674)674 -Others,net (1,049)29,514 (164)(3,891)-24,410 Loss before income taxes (91,022)(77,874)(25,142)(24,114)126,609 (91,543)Income tax expense -(4)-525 -521 Net loss (91,022)(77,878)(25,142)(23,589)126,609 (91,022)6 Selected Condensed Consolidating Balance Sheets Data As of December 31,2024 ParentCompany Othersubsidiaries WFOE VIE and itssubsidiaries Eliminations Consolidatedtotals (RMB in thousands)ASSETS Current assets:Cash and cash equivalents 58,898 25,123 1,493 31,958 -117,472 Short-term investments 32,423 -3,000 -35,423 Accounts receivable,net -200,622 -781,857 -982,479 Prepayments and other current assets 4,642 9,009 210 31,575 -45,436 Amount due from Parent -3,016 (3,016)Amount due from VIE and itssubsidiaries(4)879 133,303 18,074 -(152,256)-Total current assets 96,842 368,057 19,777 851,406 (155,272)1,180,810 Non-current assets:Restricted cash -5,000 -5,000 Amount due from other subsidiaries(4)462,797 -(462,797)-Amount due from VIE and itssubsidiaries(4)187,505 40,000 -(227,505)-Property,equipment and leaseholdimprovement,net -129 -1,239 -1,368 Intangible assets,net -5,950 -5,950 Right-of-use assets -5,653 -5,653 Goodwill -84,609 -84,609 Other non-current assets 4,305 -225 -4,530 Total non-current assets 654,607 40,129 -102,676 (690,302)107,110 Total assets 751,449 408,186 19,777 954,082 (845,574)1,287,920 LIABILITIES AND INVESTEDEQUITY/SHAREHOLDERSEQUITY Current liabilities:Accounts payable -174,601 -551,214 -725,815 Short-term borrowings -20,000 -10,000 -30,000 Contract liabilities -1,656 -125 -1,781 Payroll and welfare payable -18,908 631 60,838 -80,377 Tax payable -4,933 1 7,077 -12,011 Accrued expenses and other currentliabilities 6,468 1,614 -17,166 -25,248 Short-term lease liabilities -3,037 -3,037 Amount due to other subsidiaries(4)-133,303 (133,303)-Amount due to VIE and itssubsidiaries(4)3,016 -(3,016)-Amount due to parent(4)-462,797 -879 (463,676)-Amount due to WFOE -14,874 (14,874)-Deficit in other subsidiaries(5)383,182 -(383,182)-Deficit in WOFE(5)-106,860 -(106,860)-Deficit in VIE and its subsidiaries(5)-126,004 -(126,004)-Total current liabilities 392,666 791,369 126,636 798,513 (1,230,915)878,269 Non-current liabilities:Deferred tax liabilities -1,488 -1,488 Long-term lease liabilities -2,137 -2,137 Amount due to parent(4)-187,505 (187,505)-Amount due to other subsidiaries(4)-40,000 (40,000)-Amount due to WFOE(4)-3,200 (3,200)-Long-term payables -45,811 -45,811 Deferred revenue -1,432 -1,432 Warrant 3,032 -3,032 Total non-current liabilities 3,032 -281,573 (230,705)53,900 Total liabilities 395,698 791,369 126,636 1,080,086 (1,461,620)932,169 Total shareholders deficit 355,751 (383,183)(106,859)(126,004)616,046 355,751 Total liabilities,mezzanine equity andshareholders equity 751,449 408,186 19,777 954,082 (845,574)1,287,920 7 As of December 31,2023 ParentCompany Othersubsidiaries WFOE VIE and itssubsidiaries Eliminations Consolidatedtotals (RMB in thousands)ASSETS Current assets:Cash and cash equivalents 119,033 36,769 1,260 86,330 -243,392 Short-term investments -21,248 -226 -21,474 Accounts receivable,net -20,125 -445,941 -466,066 Prepayments and other current assets 1,118 6,671 (163)41,695 -49,321 Amount due from other subsidiaries(4)-Amount due from Parent 2,972 (2,972)Amount due from WFOE 1,603 (1,603)Amount due from VIE and itssubsidiaries(4)1,520 159,709 -(161,229)-Total current assets 121,671 244,522 1,097 578,767 (165,804)780,253 Non-current assets:Restricted cash -5,000 -5,000 Amount due from other subsidiaries(4)455,638 -(455,638)-Amount due from VIE and itssubsidiaries(4)182,652 41,438 20,381 -(244,471)-Property,equipment and leaseholdimprovement,net -446 -1,221 -1,667 Intangible assets,net -8,050 -8,050 Right-of-use assets -3,182 -7,067 -10,249 Goodwill -84,609 -84,609 Other non-current assets 4,149 -4,149 Total non-current assets 642,439 45,066 20,381 105,947 (700,109)113,724 Total assets 764,110 289,588 21,478 684,714 (865,913)893,977 LIABILITIES AND INVESTEDEQUITY/SHAREHOLDERSEQUITY Current liabilities:Accounts payable -33,245 76 283,547 -316,868 Short-term borrowings -10,000 -10,000 -20,000 Contract liabilities -3,669 -626 -4,295 Salary and welfare benefits payable -15,093 638 57,878 -73,609 Tax payable -325 1 624 -950 Amounts due to related party -55,251 -55,251 Accrued expenses and other currentliabilities 11,310 2,564 381 11,504 -25,759 Short-term lease liabilities -1,647 -2,304 -3,951 Warrant 850 -850 Amount due to other subsidiaries(4)-157,128 (157,128)-Amount due to VIE and itssubsidiaries(4)2,972 2,581 1,603 -(7,156)-Amount due to parent(4)-1,520 (1,520)-Deficit in other subsidiaries(5)365,377 -(365,377)-Deficit in WOFE(5)-129,355 -(129,355)-Deficit in VIE and its subsidiaries(5)-148,134 -(148,134)-Total current liabilities 380,509 198,479 150,833 580,382 (808,670)501,533 Non-current liabilities:Deferred tax liabilities -2,013 -2,013 Long-term lease liabilities -848 -4,550 -5,398 Amount due to parent(4)-455,638 -182,652 (638,290)-Amount due to other subsidiaries(4)-41,438 (41,438)-Amount due to WFOE(4)-20,381 (20,381)-Deferred revenue -1,432 -1,432 Warrant 5,419 -5,419 Total non-current liabilities 5,419 456,486 -252,466 (700,109)14,262 Total liabilities 385,928 654,965 150,833 832,848 (1,508,779)515,795 Total shareholders equity 378,182 (365,377)(129,355)(148,134)642,866 378,182 Total liabilities,mezzanine equity andshareholders equity 764,110 289,588 21,478 684,714 (865,913)893,977 8 Summary Condensed Consolidating Cash Flows Data Year ended December 31,2024 ParentCompany othersubsidiaries WFOE VIE and itssubsidiaries Eliminations Consolidatedtotals (RMB in thousands)Net cash provided by/received fromtransactions with intra-groupcompanies(1)-(10,000)1,545 8,455 -Net cash provided by transactions withthird parties (26,291)(104,196)(18,471)34,824 -(114,135)Net cash(used in)/provided byoperating activities (26,291)(114,196)(16,926)43,279 -(114,135)Investments in and loans to WFOE -(351)-351 -Repayment of the investments in andloans from VIE and its subsidiaries -71,021 16,800 -(87,821)-Purchase of property,equipment andleasehold improvement -12 -(1,675)-(1,663)Loan provided to a third party -(10,000)-(10,000)Loan repaid by a third party -10,000 -10,000 Placement of short-term investments (161,739)(21,565)-(3,167)-(186,471)Proceeds from short-term investments 129,392 43,130 -172,522 Proceeds from disposal of fixed assets,intangible assets and other long-termassets -12 -12 Net cash provided by/(used in)investing activities (32,347)92,247 16,800 (4,830)(87,470)(15,600)Capital contribution from othersubsidiaries -351 -(351)-Repayment to other subsidiaries -(87,821)87,821 -Cash received from short-termborrowings from bank -20,000 -10,000 -30,000 Cash repayments of short-termborrowings to bank -(10,000)-(10,000)-(20,000)Cash repayments of short-termborrowings to related parties -(10,000)-(10,000)Cash repayments of short-termborrowings to Alta (3,055)-(3,055)Cash received from short-termborrowing from third party -5,000 -5,000 Net cash provided by/(used in)financing activities (3,055)10,000 351 (92,821)87,470 1,945 Effect of foreign exchange ratechanges on cash,cash equivalents andrestricted cash 1,558 303 9 -1,870 Net increase/(decrease)in cash andcash equivalents and restricted cash (60,135)(11,646)233 (54,372)-(125,920)Cash,cash equivalents and restrictedcash at the beginning of the period 119,033 36,769 1,260 91,330 -248,392 Cash,cash equivalents and restrictedcash at the end of the period 58,898 25,123 1,493 36,958 -122,472 (1)Represents the elimination of the intercompany licensing and other services charge at the consolidation level.In the year ended December31,2024,the total amount of the service fees that charged by VIE under the relevant agreements was RMB9.4 million.In the year endedDecember 31,2024,the total amount of the service fees that the other subsidiaries paid to VIE under the relevant agreements wasRMB10.0 million.(2)Represents the elimination of incurrence of losses by parent company,other subsidiaries and WFOE for their respective subsidiaries,WFOE and VIE and its subsidiaries.(3)Represents the elimination of interest income/expense from intercompany loans at the consolidation level.(4)Represents the elimination of intercompany balances among CCT,other subsidiaries,WFOE and the VIE and its subsidiaries.The balancesas of December 31,2024 were related to intercompany loans and prepayment related service charges under certain service agreements.(5)Represents the elimination of the deficit in other subsidiaries,WOFE and VIE and its subsidiaries by parent company,other subsidiariesand WFOE.9 Year ended December 31,2023 ParentCompany othersubsidiaries WFOE VIE and itssubsidiaries Eliminations Consolidatedtotals (RMB in thousands)Net cash provided by/received fromtransactions with intra-groupcompanies(1)-(35,000)-35,000 -Other operating activities (20,885)(114,715)480 108,170 -(26,950)Net cash(used in)/provided byoperating activities (20,885)(149,715)480 143,170 -(26,950)Investments in and loans to WFOE -(358)-358 -Repayment of the investments in andloans from VIE and its subsidiaries -63,485 -(63,485)-Purchase of property,equipment andleasehold improvement -(67)-(482)-(549)Placement of short-term investments -(42,496)-(226)-(42,722)Proceeds from short-term investments -56,071 -56,071 Proceeds from disposal of fixed assets,intangible assets and other long-termassets -22 -22 Net cash provided by/(used in)investing activities -76,635 -(686)(63,127)12,822 Proceeds from ordinary shares 137,908 -137,908 Capital contribution from othersubsidiaries -358 -(358)-Repayment to other subsidiaries -(63,485)63,485 -Cash received from short-termborrowings from bank -10,000 -10,000 -20,000 Cash repayments of short-termborrowings to third parties -(12,610)-(12,610)Cash repayments of financing cost -(4,953)-(4,953)Net cash provided by/(used in)financing activities 137,908 10,000 358 (71,048)63,127 140,345 Effect of foreign exchange ratechanges on cash,cash equivalents andrestricted cash 1,002 1,225 3 -2,230 Net increase/(decrease)in cash andcash equivalents and restricted cash 118,025 (61,855)841 71,436 -128,447 Cash,cash equivalents and restrictedcash at the beginning of the period 1,008 98,624 419 19,894 -119,945 Cash,cash equivalents and restrictedcash at the end of the period 119,033 36,768 1,260 91,331 -248,392 (1)Represents the elimination of the intercompany licensing and other services charge at the consolidation level.In the year ended December31,2023,the total amount of the service fees that charged by VIE under the relevant agreements was RMB6.7 million.In the year endedDecember 31,2023,the total amount of the service fees that the other subsidiaries paid to VIE under the relevant agreements wasRMB35.0 million.(2)Represents the elimination of incurrence of losses by parent company,other subsidiaries and WFOE for their respective subsidiaries,WFOE and VIE and its subsidiaries.(3)Represents the elimination of interest income/expense from intercompany loans at the consolidation level.(4)Represents the elimination of intercompany balances among CCT,other subsidiaries,WFOE and the VIE and its subsidiaries.The balancesas of December 31,2023 were related to intercompany loans and prepayment related service charges under certain service agreements.(5)Represents the elimination of the deficit in other subsidiaries,WOFE and VIE and its subsidiaries by parent company,other subsidiariesand WFOE.10 Year ended December 31,2022 CCT othersubsidiaries WFOE VIE and itssubsidiaries Eliminations Consolidatedtotals (RMB in thousands)Net cash provided by/received fromtransactions with intra-groupcompanies(1)-(17,200)-17,200 -Net cash provided by transactions withthird-parties (6,352)(65,656)(37)(86,816)-(158,861)Net cash used in operating activities (6,352)(82,856)(37)(69,616)-(158,861)Investments in and loans to othersubsidiaries(6)(137,207)-137,207 -Investments in and loans to VIE and itssubsidiaries(6)(34,823)-34,823 -Purchase of property,equipment andleasehold improvement -(208)(7)(1,025)-(1,240)Placement of short-term investments -(182,474)-(182,474)Cash received from maturities of short-term investments 63,757 147,651 -211,408 Net cash(used in)/provided byinvesting activities (108,273)(35,031)(7)(1,025)172,030 27,694 Cash payment for redemption of SeriesC convertible redeemable preferredshares(6)(137,202)-(137,202)Loans received from parentcompany(6)-137,207 -34,823 (172,030)-Loans received of short-termborrowings from bank -10,000 -10,000 Cash repayment of short-termborrowings to bank -(20,000)-(20,000)Cash repayment of long-termborrowings to a third party (11,840)-(11,840)Net cash provided by/(used in)financing activities (149,042)137,207 -24,823 (172,030)(159,042)Effect of foreign exchange ratechanges on cash,cash equivalents andrestricted cash 11,725 29,971 -1,074 -42,770 Net increase/(decrease)in cash andcash equivalents and restricted cash (251,942)49,291 (44)(44,744)-(247,439)Cash,cash equivalents and restrictedcash at the beginning of the period 252,950 49,333 463 64,638 -367,384 Cash,cash equivalents and restrictedcash at the end of the period 1,008 98,624 419 19,894 -119,945 (1)Represents the elimination of the intercompany licensing and other services charge at the consolidation level.In the year ended December31,2022,the total amount of the service fees that charged by VIE under the relevant agreements was RMB29.5 million.In the year endedDecember 31,2022,the total amount of the service fees that the other subsidiaries paid to VIE under the relevant agreements wasRMB17.2 million.(2)Represents the elimination of incurrence of losses by parent company,other subsidiaries and WFOE for their respective subsidiaries,WFOE and VIE and its subsidiaries.(3)Represents the elimination of interest income/expense from intercompany loans at the consolidation level.(4)Represents the elimination of intercompany balances among CCT,other subsidiaries,WFOE and the VIE and its subsidiaries.The balancesas of December 31,2022 were related to intercompany loans and prepayment related service charges under certain service agreements.(5)Represents the elimination of the deficit in other subsidiaries,WOFE and VIE and its subsidiaries by parent company,other subsidiariesand WFOE.(6)Represents the elimination of intra-group investments and loans related cash activities among CCT,other subsidiaries,and the VIE and itssubsidiaries.During the year ended December 31,2022,(i)CCT provided an aggregate of capital contribution of RMB137.2 million toother subsidiaries;(ii)CCT provided an intercompany loan of RMB34.8 million to the VIE and its subsidiaries.These transactions wereeliminated at the consolidation level.11 Our Operations in China and Permissions Required from the PRC Authorities for Our Operations We face various legal and operational risks and uncertainties related to doing business in China,as us,through WFOE and theAffiliated Entities,conducts our operations in China.We are subject to complex and evolving laws and regulations in China.The PRCgovernment has indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment inChina-based issuers,and initiated various regulatory actions and made various public statements,some of which are published with very shortnotice,including cracking down on illegal activities in the securities market,enhancing supervision over China-based companies listedoverseas,adopting new measures to extend the scope of cybersecurity reviews,and expanding efforts in anti-monopoly enforcement.Forexample,we face risks associated with regulatory approvals on overseas offerings and oversight on cybersecurity and data privacy,which mayimpact our ability to conduct certain business,accept foreign investments,or list and conduct offerings on a U.S.or other foreign stockexchange.These risks could result in a material adverse change in our operations,and significantly limit or completely hinder our ability tooffer or continue to offer securities to investors,or cause the value of such securities to significantly decline or be worthless.See“D.RiskFactorsRisks Related to Doing Business in China.”The Holding Foreign Companies Accountable Act We are subject to a number of prohibitions,restrictions and potential delisting risk under the Holding Foreign Companies AccountableAct(the“HFCAA”).Pursuant to the HFCAA and related regulations,if we have filed an audit report issued by a registered public accountingfirm that the Public Company Accounting Oversight Board(the“PCAOB”)has determined that it is unable to inspect and investigatecompletely,the Securities and Exchange Commission(the“SEC”)will identify us as a“Commission-identified Issuer,”and the trading of oursecurities on any U.S.national securities exchanges,as well as any over-the-counter trading in the United States,will be prohibited if we areidentified as a Commission-identified Issuer for two consecutive years.Our auditor,PricewaterhouseCoopers Zhong Tian LLP,is anindependent registered public accounting firm headquartered in Shanghai,China.In August 2022,the PCAOB,the China Securities RegulatoryCommission(the“CSRC”)and the Ministry of Finance of the PRC signed a Statement of Protocol(the“Statement of Protocol”),whichestablishes a specific and accountable framework for the PCAOB to conduct inspections and investigations of PCAOB-governed accountingfirms in mainland China and Hong Kong.On December 15,2022,the PCAOB announced that it was able to secure complete access to inspectand investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022.OnDecember 29,2022,the Consolidated Appropriations Act,2023(the“CAA”)was signed into law by President Biden.The CAA,among otherthings,reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA as it was originallypassed from three years to two,and thus,reduced the time before our securities may be prohibited from trading or delisted.The PCAOBvacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firmsheadquartered in mainland China and Hong Kong.However,whether the PCAOB will continue to be able to satisfactorily conduct inspectionsof PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainties and depends on anumber of factors out of us and our auditors control.The PCAOB continues to demand complete access in mainland China and Hong Kongmoving forward and is making plans to resume regular inspections in early 2023 and beyond,as well as to continue pursuing ongoinginvestigations and initiate new investigations as needed.The PCAOB has also indicated that it will act immediately to consider the need to issuenew determinations under the HFCAA if needed.Because the registered accounting firm of us is headquartered in Shanghai,China,if the PRCgovernment adopts positions at any time in the future that would prevent the PCAOB from continuing to inspect or investigate completelyaccounting firms headquartered in mainland China or Hong Kong,or if we fail to,among others,meet the PCAOBs requirements,includingretaining a registered public accounting firm that the PCAOB determines it is able to inspect and investigate completely,we will be identified asa“Commission-identified Issuer”following the filing of the annual report for the relevant fiscal year.In accordance with HFCAA,oursecurities will be delisted from the Nasdaq Stock Market,and will not be permitted for trading over the counter if we are identified as aCommission-identified Issuer for two consecutive years under the HFCAA and the CAA.See“D.Risk FactorsRisks Related to OurSecuritiesTrading in our securities on any U.S.stock exchange or the U.S.over-the-counter market may be prohibited under the HFCAA ifthe PCAOB is unable to inspect or investigate completely auditors located in China for two consecutive years.The delisting of our securities,orthe threat of being delisted,may materially and adversely affect the value of your investment.”12 Regulatory licenses for our operations in China Many aspects of our business depend on obtaining and maintaining licenses,approvals,permits or qualifications from PRC regulators.Obtaining such approvals,licenses,permits or qualifications depends on our compliance with regulatory requirements.PRC regulatoryauthorities also have relatively broad discretion to grant,renew and revoke licenses and approvals and to implement laws and regulations.Basedon PRC laws and regulations currently in effect and the legal advice of our PRC legal counsel,Han Kun Law Offices,and subject to differentinterpretations of these laws and regulations that may be adopted by PRC authorities,the PRC Subsidiaries and the Affiliated Entities haveobtained the following licenses and approvals necessary to operate in China as of the date of this annual report:(1)each of the PRC Subsidiariesand the Affiliated Entities has obtained a business license;(2)the VIE,through which the PRC Subsidiaries conduct their VATS business,hasobtained a value-added telecommunications license for internet information services;and(3)Cheche Insurance Sales&Service Co.,Ltd.hasobtained the insurance intermediary license.Apart from these licenses and approvals,the PRC Subsidiaries and the Affiliated Entities may notbe able to maintain existing licenses,permits and approvals and the government authorities may subsequently require the PRC Subsidiaries andthe Affiliated Entities to obtain any additional licenses,permits and approvals.If the PRC Subsidiaries and the Affiliated Entities fail to obtainthe necessary licenses,permits and approvals or inadvertently conclude that any permissions or approvals are not required,or if applicable laws,regulations,or interpretations change and the PRC Subsidiaries or the Affiliated Entities are required to obtain such permissions or approvals inthe future,the PRC Subsidiaries and the Affiliated Entities may be subject to fines,confiscation of revenues generated from incompliantoperations or the suspension of relevant operations.The PRC Subsidiaries and the Affiliated Entities may also experience adverse publicityarising from such non-compliance with government regulations that negatively impact us.See“D.Risk FactorsRisks Related to DoingBusiness in ChinaOur business is subject to complex and evolving laws and regulations,many of which are subject to change and uncertaininterpretation,which could result in changes to our business practices,reduced revenue and increased compliance costs or otherwise harm ourbusiness.Any failure to comply with laws or regulations may subject us to fines,injunctions and other penalties that could harm our business.”CAC Approval On July 6,2021,the General Office of the Central Committee of the Communist Party of China and the General Office of the StateCouncil jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law(the“Opinions”).TheOpinions stressed the need to strengthen the administration over illegal securities activities and the supervision over overseas listings byChinese companies.Effective measures,such as promoting the construction of relevant regulatory systems,will be taken to deal with the risksand incidents of China-related overseas listed companies.On December 28,2021,the CAC,jointly with 12 other governmental authorities,promulgated the revised Cybersecurity ReviewMeasures(2021),which became effective on February 15,2022.According to the Cybersecurity Review Measures(2021),critical informationinfrastructure operators that intend to purchase internet products and services which may have an adverse effect on national security must applyfor cybersecurity review.Meanwhile,online platform operators holding personal information of over one million users that intend to list theirsecurities on a foreign stock exchange must apply for cybersecurity review.In the meantime,the governmental authorities have the discretion toinitiate a cybersecurity review on any data processing activity if they deem such a data processing activity affects or may affect nationalsecurity.The specific implementation rules on cybersecurity review are subject to further clarification by subsequent regulations.On July 7,2022,the CAC promulgated the Measures for the Security Assessment of Cross-Border Transfer of Data,which took effecton September 1,2022.These measures aim to regulate cross-border transfers of data,requiring among other things,that data processors thatprovide data to overseas apply to CAC for security assessments if:(1)data processors provide important data to overseas parties;(2)criticalinformation infrastructure operators and data processors process personal information of more than one million individuals provide personalinformation to overseas parties;(3)data processors that have cumulatively provided personal information of 100,000 people or sensitivepersonal information of 10,000 people to overseas parties since January 1 of the previous year,provide personal information to overseas parties;and(4)other scenarios required by the CAC to apply for security assessments are met.In addition,these measures require data processors tocarry out self-assessments of risks of providing data to overseas parties before applying to the CAC for security assessments.On September 24,2024,the State Council promulgated the Regulations on the Administration of Cyber Data Security(the“Cyber DataSecurity Regulations”),which became effective on January 1,2025.The Cyber Data Security Regulations provide that network data processorsthat engage in network data processing activities which affect or may affect national security shall undergo a national security review inaccordance with relevant state regulations.13 Given that the above-mentioned newly promulgated laws,regulations and policies were recently promulgated or issued,theirinterpretation,application and enforcement are subject to substantial uncertainties.We believe that such requirement for cybersecurity reviewunder the revised Cybersecurity Review Measures(2021),are applicable to the PRC Subsidiaries and the VIE.As a network platform operatorwho possesses personal information of more than one million users for purposes of the Cybersecurity Review Measures(2021),we haveapplied for and completed a cybersecurity review with respect to our overseas listing pursuant to the Cybersecurity Review Measures(2021).CSRC Filing On February 17,2023,the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing byDomestic Companies(the“Overseas Listing Trial Measures”)and circulated five supporting guidelines,which became effective on March 31,2023.The Overseas Listing Trial Measures will comprehensively improve and reform the existing regulatory regime for overseas offering andlisting of PRC domestic companies securities and will regulate both direct and indirect overseas offering and listing of PRC domesticcompanies securities by adopting a filing-based regulatory regime.According to the Overseas Listing Trial Measures,PRC domestic companies that seek to offer and list securities in overseas markets,either in direct or indirect means,are required to fulfill the filing procedure with the CSRC and report relevant information.The OverseasListing Trial Measures provides that an overseas listing or offering is explicitly prohibited,if any of the following:(1)such securities offeringand listing is explicitly prohibited by provisions in laws,administrative regulations and relevant state rules;(2)the intended securities offeringand listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance withlaw;(3)the domestic company intending to make the securities offering and listing,or its controlling shareholder(s)and the actual controller,have committed relevant crimes such as corruption,bribery,embezzlement,misappropriation of property or undermining the order of thesocialist market economy during the latest three years;(4)the domestic company intending to make the securities offering and listing iscurrently under investigations for suspicion of criminal offenses or major violations of laws and regulations,and no conclusion has yet beenmade thereof;or(5)there are material ownership disputes over equity held by the domestic companys controlling shareholder(s)or by othershareholder(s)that are controlled by the controlling shareholder(s)and/or actual controller.The Overseas Listing Trial Measures also provides that if the issuer meets both the following criteria,the overseas securities offeringand listing conducted by such issuer will be deemed as indirect overseas offering by PRC domestic companies:(1)50%or more of any of theissuers operating revenue,total profit,total assets or net assets as documented in its audited consolidated financial statements for the mostrecent fiscal year is accounted for by domestic companies;and(2)the main parts of the issuers business activities are conducted in mainlandChina,or its main place(s)of business are located in mainland China,or the majority of senior management staff in charge of its businessoperations and management are PRC citizens or have their usual place(s)of residence located in mainland China.Where an issuer submits anapplication for initial public offering to competent overseas regulators,such issuer must file with the CSRC within three business days aftersuch application is submitted.In addition,the Overseas Listing Trial Measures provides that the direct or indirect overseas listings of the assetsof domestic companies through one or more acquisitions,share swaps,transfers or other transaction arrangements shall be subject to filingprocedures in accordance with the Overseas Listing Trial Measures,which filing shall be submitted within three business days after the issuersubmits its application documents relating to the initial public offering and/or listing or after the first public announcement of the relevanttransaction(if the submission of relevant application documents is not required).The Overseas Listing Trial Measures also requires subsequentreports to be filed with the CSRC on material events,such as change of control or voluntary or forced delisting of the issuer(s)who havecompleted overseas offerings and listings.14 Guidance for Application of Regulatory Rules-Overseas Offering and Listing No.1,promulgated by CSRC together with theOverseas Listing Trial Measures,provides that if a domestic enterprise completes an overseas offering through an overseas special purposesacquisition company,it shall submit the filing materials within three business days after such overseas special purposes acquisition companypublicly announces such acquisition transaction.In addition,according to the Notice on Administration for the Filing of Overseas Offering andListing by Domestic Enterprises published by CSRC on its official website on February 17,2023,companies that have already been listed onoverseas stock exchanges prior to March 31,2023 or the companies that have obtained the approval from overseas supervision administrationsor stock exchanges for its offering and listing prior to March 31,2023 and will complete their overseas offering and listing prior to September30,2023 are not required to make immediate filings for its listing,but are required to make filings for subsequent offerings in accordance withthe Overseas Listing Trial Measures.Companies that have already submitted an application for an initial public offering to overseas supervisionadministrations but have not yet obtained the approval from overseas supervision administrations or stock exchanges for the offering and listingprior to March 31,2023 may arrange for the filing within a reasonable time period and should complete the required CSRC filing procedure,thecompletion of which will be published on the CSRC website,before such companies overseas issuance and listing.We completed the filing procedures in connection with the Business Combination under the Overseas Listing Trial Measures onSeptember 14,2023,and the result of such CSRC approval was posted on the official website of the CSRC on the same date.Pursuant to theOverseas Listing Trial Measures,we may need to complete filing procedures for future offshore fund-raising activities,including conductingfollow-on offering in the United States.Any failure or perceived failure by us to comply with such filing requirements under the OverseasListing Trial Measures may result in forced rectification,warnings and fines against us and could materially hinder our ability to raise fundoverseas.See“D.Risk FactorsRisks Related to Doing Business in ChinaThe filing with the CSRC may be required in connection withfuture overseas fund-raising activities,and we cannot predict whether we will be able to obtain such approval or complete such filing.”On February 24,2023,the CSRC,the Ministry of Finance,the National Administration of State Secrets Protection and the NationalArchives Administration released the revised Provisions on Strengthening Confidentiality and Archives Administration of Overseas SecuritiesOffering and Listing by Domestic Companies(the“Archives Rules”),which became effective on March 31,2023.The Archives Rules regulateboth overseas direct offerings and overseas indirect offerings,providing that,among other things:in relation to the overseas listing activities of PRC enterprises,the PRC enterprises are required to strictly comply with the relevantrequirements on confidentiality and archives management,establish a sound confidentiality and archives system,and take necessarymeasures to implement their confidentiality and archives management responsibilities;during the course of an overseas offering and listing,if a PRC enterprise needs to publicly disclose or provide to securities companiesor securities service providers and overseas regulators,any materials that contain relevant state secrets,government work secrets orinformation that has a sensitive impact(i.e.,be detrimental to national security or the public interest if divulged),the PRC enterpriseshould complete the relevant approval/filing and other regulatory procedures;and working papers produced in the PRC by securities companies and securities service providers,which provide PRC enterprises withsecurities services during their overseas issuance and listing,should be stored in the PRC,and competent PRC authorities mustapprove the transmission of all such working papers to recipients outside the PRC.15 Any failure or perceived failure by us to comply with the Archives Rules and the confidentiality requirements and other PRC laws andregulations may result in us being held legally liable by competent authorities.A.Reserved B.Capitalization and Indebtedness Not applicable.C.Reasons for the Offer and Use of Proceeds Not applicable.D.Risk Factors Our business and our industry are subject to significant risks.You should carefully consider all of the information set forth in Thisannual report and in our other filings with the SEC,including the following risk factors,in evaluating our business.If any of the following risksactually occur,our business,financial condition,results of operations,and growth prospects would likely be materially and adversely affected.This annual report also contains forward-looking statements that involve risks and uncertainties.See the section entitled“Forward-LookingStatements.”Summary of Risk Factors Risks Related to Our Business and Industry Risks and uncertainties relating to our business and industry include,but are not limited to,the following:We operate in a highly competitive and rapidly evolving market,which makes it difficult to evaluate our prospects.Our business is subject to risks related to Chinas digital insurance and the automotive industries.Our business is subject to complex and evolving laws and regulations,many of which are subject to change and uncertaininterpretation,which could result in changes to our business practices,reduced revenue and increased compliance costs or otherwiseharm our business.Any failure to comply with laws or regulations may subject us to fines,injunctions and other penalties that couldharm our business.Failure to obtain or maintain permits necessary for our operations may subject us to regulatory penalties or require us to adjust ourbusiness model.We have historically incurred net losses and negative operating cash flows,and may not achieve or maintain profitability in the future.Our effort to expand into the non-auto insurance market and diversify our revenues may not be successful.Risks Related to Our Corporate Structure We carry out our business in China primarily through WFOE and our contractual arrangements with the Affiliated Entities.We aretherefore subject to various legal and operational risks and uncertainties related to our corporate structure,which could materially and adverselyaffect our operations,cause the value of our securities to significantly decline or become worthless.Such risks and uncertainties include,but arenot limited to,the following:16 If the PRC government determines that the contractual arrangements in relation to the VIE structure do not comply with PRCregulatory restrictions on foreign investment in certain industries,or if these regulations or the way they are interpreted change,we,thePRC Subsidiaries and the Affiliated Entities could be subject to severe penalties or be forced to relinquish their interests in thoseoperations,and the Class A Ordinary Shares may decline in value or become worthless.Contractual arrangements with the VIE may result in adverse tax consequences to us,the PRC Subsidiaries or the Affiliated Entities.We and the PRC Subsidiaries rely on contractual arrangements with the VIE and the VIEs shareholders to operate their business,which may not be as effective as direct ownership in providing operational control.Any failure by the VIE or its shareholders to perform their obligations under their contractual arrangements with WFOE wouldmaterially adversely affect the business,financial condition and results of operations of us and the PRC Subsidiaries.VIEs shareholders may have potential conflicts of interest with us,the PRC Subsidiaries and the Affiliated Entities,which maymaterially adversely affect the business and financial condition of us and the PRC Subsidiaries.We may rely principally on dividends and other distributions on equity paid by the PRC Subsidiaries to fund our cash and financingrequirements,and any limitation on the ability of the PRC Subsidiaries to pay dividends to us could adversely affect our ability toconduct our business.PRC regulations of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currencyconversion may delay or prevent us from using proceeds from offshore fund-raising activities,to make loans or additional capitalcontributions to the PRC Subsidiaries,which could materially adversely affect our liquidity and our ability to fund and expand ourbusiness.Risks Related to Doing Business in China We face various legal and operational risks and uncertainties related to being based in and having significant operations in China,andtherefore are subject to risks associated with doing business in China generally.Risks and uncertainties related to doing business in China couldresult in a material adverse change in our operations,significantly limit or completely hinder our ability to offer our securities to investors,andcause the value of our securities to significantly decline or become worthless.Such risks and uncertainties include,but not limited to,thefollowing:Chinese government has significant authority to intervene or influence our operations at any time,and to exert more control overofferings conducted overseas and/or foreign investment in China-based issuers.For details,see“D.Risk FactorsRisks Related toDoing Business in ChinaThe PRC government has significant authority to exert influence on the China operations of an offshoreholding company,and offerings conducted overseas and foreign investment in China-based issuers,such as us.Changes in Chinaseconomic,political or social conditions or government policies could have a material adverse effect on our business,results ofoperations,financial condition,and the value of our securities,”“Recent greater oversight by the CAC over data security,particularly for companies seeking to list on a foreign exchange,could significantly limit or completely hinder our ability in capitalraising activities and materially and adversely affect our business and the value of your investment,”“The filing with the CSRC maybe required in connection with future overseas fund-raising activities,and we cannot predict whether we will be able to obtain suchapproval or complete such filing.”17 Our securities may be delisted under the HFCAA if the PCAOB is unable to inspect auditors who are located in mainland China andHong Kong.For details,see“D.Risk FactorsRisks Related to Doing Business in ChinaThe PCAOB has historically beenunable to inspect our auditor in relation to their audit work performed for our financial statements included elsewhere in this annualreport,and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived investors with the benefits of suchinspections,”and“Trading in our securities on any U.S.stock exchange or the U.S.over-the-counter market may be prohibitedunder the HFCAA if the PCAOB is unable to inspect or investigate completely auditors located in China for two consecutive years.The delisting of our securities,or the threat of being delisted,may materially and adversely affect the value of your investment.”We are subject to impact from PRC economic,political and social conditions,as well as changes in any government policies,laws andregulations.For details,see“D.Risk FactorsRisks Related to Doing Business in ChinaThe PRC government has significantauthority to exert influence on the China operations of an offshore holding company,and offerings conducted overseas and foreigninvestment in China-based issuers,such as us.Changes in Chinas economic,political or social conditions or government policiescould have a material adverse effect on our business,results of operations,financial condition,and the value of our securities,”and“Adverse changes in economic and political policies of the PRC government could negatively impact Chinas overall economic growth,which could materially adversely affect our business.”We are subject to uncertainties with respect to the PRC legal system,including such relating to the enforcement of rules andregulations in China and the risk that rules and regulations can change quickly with little advance notice.For details,see“D.RiskFactorsRisks Related to Doing Business in ChinaUncertainties in the interpretation and enforcement of PRC laws,rules andregulations could materially adversely affect our business.”Risks Related to Our Securities The price of our securities may be volatile,and the value of our securities may decline.The Warrants to purchase Class A Ordinary Shares will increase the number of shares eligible for future resale in the public market andresult in dilution to our shareholders.A significant portion of our outstanding shares may be sold in the public market,which could cause the market price for our Class Aordinary Shares to decline.We are a foreign private issuer within the meaning of the rules under the Exchange Act,and as such we are not subject to U.S.proxyrules and are exempt from certain provisions applicable to U.S.domestic public companies.As a company incorporated in the Cayman Islands,we are permitted to adopt certain home country practices in relation to corporategovernance matters that differ significantly from the Nasdaq Stock Market corporate governance listing standards;these practices mayafford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq Stock Market corporate governancelisting standards.You may face difficulties in protecting your interests,and your ability to protect your rights through U.S.courts may be limited,because we are incorporated under the law of the Cayman Islands,and will conduct substantially all of our operations in China,and amajority of our directors and executive officers will reside outside of the United States.18 Risks Related to Our Business and Industry We operate in a highly competitive and rapidly evolving market,which makes it difficult to evaluate our prospects.We,through the VIE,commenced operations in September 2014.We operate in Chinas insurance industry,which is highlycompetitive and rapidly evolving.Other participants in the industry,including insurance carriers,insurance intermediaries,third-partyplatforms,referral partners and insurance consumers,may have difficulty distinguishing our platform from those of our competitors.As theindustry and our business develop,we may modify our business model or change our platform,services or products.These changes may notachieve expected results and may materially adversely affect our financial condition and results of operations.Our net revenue was RMB2,679.1 million,RMB3,301.4 million and RMB3,473.1 million in 2022,2023 and 2024,respectively.Wemay not achieve similar growth rates in future periods as we expand our operations.You should evaluate our business and prospects in light ofthe risks and challenges that we are likely to face as a company seeking to develop in a rapidly evolving market.Our business is subject to risks related to Chinas digital insurance and the automotive industries.Our business depends on the growth of Chinas digital insurance industry and in particular,Chinas digital auto insurance transactionindustry,which is relatively new and may not develop as expected.While the digital auto insurance transaction industry in China grew rapidlyin the past years,it may not increase at the same rate in future periods.The regulatory framework governing Chinas digital insurance industry is evolving and is expected to remain uncertain for theforeseeable future.A reversal of,or a slowdown in,Chinas digital insurance industry could reduce demand for our services and products fordigital insurance transactions and insurance SaaS solutions and adversely affect our growth prospects and profitability.We derive most of our revenues from providing auto insurance transaction services.As a result,our success depends on Chinasautomobile market.Decreased demand for automobiles could adversely affect the demand for auto insurance and,in turn,the number ofinsurance carrier customers,third-party platforms,referral partners,insurance intermediaries and consumers using our platform.Accordingly,ifthe automobile industry declines or fails to grow,our business,results of operations and financial condition could suffer.A downturn in general economic conditions in China could reduce consumer spending,negatively impacting the growth rates ofChinas automotive industry and the demand for auto insurance in China.Automobile purchasers are also sensitive to trends in the broadereconomy,including the cost of energy and gasoline,the availability and cost of credit,business and consumer confidence,stock marketvolatility and unemployment.In addition,the growing popularity of ride-hailing applications in China,could adversely affect automobilepurchases and decrease the demand for auto insurance in China.Our business is subject to complex and evolving laws and regulations,many of which are subject to change and uncertain interpretation,which could result in changes to our business practices,reduced revenue and increased compliance costs or otherwise harm our business.Any failure to comply with laws or regulations may subject us to fines,injunctions and other penalties that could harm our business.The insurance industry in China is subject to comprehensive government regulation and supervision.In recent years,the regulatoryframework governing Chinas insurance industry has changed significantly and may continue to change significantly in the future.See“Item 4.Information on the CompanyB.Business OverviewGovernment RegulationsRegulations of the Insurance Industry”for a discussion ofthe laws and regulations applicable to our operations.Some laws were recently amended,and their interpretation following such amendmentsremains unclear.Compliance with these laws and regulations can be difficult and costly.New laws or regulations or changes to laws andregulations can impose additional compliance costs,reduce our revenues,require us to change our operations to ensure compliance or otherwiseharm our business.19 In September 2020,the CBIRC(currently known as the NFRA)issued the Guiding Opinions on Implementing Comprehensive Reformof Auto Insurance.These opinions provided guidance for insurance carriers to(1)optimize actuarial and pricing practices,(2)expand protectioncoverages,and(3)enhance customer service quality for auto insurance.For commercial auto insurance products,insurance carriers must lowerthe cap on expense ratios from 35%to 25%of insurance premiums.Insurance carriers are also encouraged to optimize their cost structures tomaintain higher loss ratios,from 65%to 75%of commercial auto insurance premiums.As a result,insurance carriers received lower premiumsfrom selling commercial auto insurance,which adversely affected the service fees that we received from facilitating the sale of commercial autoinsurance through our Easy-Insur since October 2020,and through Insurance Marketplace between October 2020 and April 2024,when weceased to offer Insurance Marketplace due to strategic adjustment of our business.PRC regulatory authorities have published regulations requiring insurance carriers and insurance intermediaries to register salespersonsof insurance products with the CBIRC(currently known as the NFRA)before such salespersons begin practicing.Insurance intermediaries thatengage in sales activities of insurance products with unregistered salespersons may be subject to warnings,fines and other penalties byregulatory authorities.However,due to the lack of detailed interpretation,the exact definition and scope of“sales activities”is unclear.Considerable uncertainties exist with respect to the interpretation of existing laws and regulations and new laws and regulations governing salesactivities of insurance products.We may need to adjust our business model in response to evolving regulatory requirements.PRC government authorities have also become increasingly vigilant in enforcing laws and regulations governing the digital autoinsurance transaction industry.For example,pursuant to the Regulatory Measures for Risks in the Outsourcing of Information Technology byBanking and Insurance Institutions(the“Outsourcing Measures”)issued by the CBIRC(currently known as the NFRA)on December 30,2021,adoption of our SaaS solution services and products by insurance carriers and insurance intermediaries may be deemed as their outsourcing ofinformation services,and as a result,we must meet the outsourcing requirements of the Outsourcing Measures.We may from time to time berequired to conduct self-inspections and rectify any non-compliance with regulatory requirements.As of the date of this annual report,we haveconducted self-inspections in accordance with regulatory requirements and believes that we have rectified all material non-complianceidentified in these inspections.We may not have always been in full compliance with all applicable laws and regulations.For example,we used to offer insuranceconsumers small rewards to incentivize them to purchase insurance products through our platform.PRC regulators may deem these rewards tohave violated PRC laws and regulations,which prohibit insurance intermediaries from offering insurance consumers benefits not stipulated inthe relevant insurance contracts.We ceased offering these rewards to insurance consumers in late 2019.However,PRC regulators may imposeretroactive administrative penalties on us for past rewards.As of the date of this annual report,we are not aware of any active inquires orinvestigation by relevant regulators with respect to the imposition of retroactive administrative penalties on us for such historical practices.We invest significant time and resources to comply with regulatory requirements,which could divert the attention of our managementteam and key employees and adversely affect our business.Non-compliance with applicable regulations or requirements could subject us to,among others:(1)investigations,enforcement actions and sanctions;(2)mandatory changes to our business model or services;(3)mandatorydisgorgement of profits,fines and damages;(4)civil,administrative and criminal penalties or injunctions;(4)claims for damages by ecosystemparticipants and other third parties;(5)damage to our public image and market reputation;(6)invalidation or termination of contracts;and(7)loss of intellectual property rights.Any of the foregoing could materially adversely affect our business,financial condition and results of operations.20 Failure to obtain or maintain permits necessary for our operations may subject us to regulatory penalties or require us to adjust ourbusiness model.Many aspects of our business depend on obtaining and maintaining licenses,approvals,permits or qualifications from PRC regulators.Obtaining such approvals,licenses,permits or qualifications depends on our compliance with regulatory requirements.PRC regulatoryauthorities also have relatively broad discretion to grant,renew and revoke licenses and approvals and to implement laws and regulations.Based on PRC laws and regulations currently in effect and the legal advice of our PRC legal counsel,Han Kun Law Offices,andsubject to different interpretations of these laws and regulations that may be adopted by PRC authorities,the PRC Subsidiaries and the AffiliatedEntities have obtained the following licenses and approvals necessary to operate in China as of the date of this annual report:(1)each of thePRC Subsidiaries and the Affiliated Entities has obtained a business license;(2)the VIE,through which the PRC Subsidiaries conduct theirVATS business,has obtained a value-added telecommunications license for internet information services;and(3)Cheche Insurance Sales&Service Co.,Ltd.has obtained the insurance intermediary license.The PRC Subsidiaries and the Affiliated Entities may not be able to maintain existing licenses,permits and approvals and governmentauthorities may subsequently require the PRC Subsidiaries and the Affiliated Entities to obtain additional licenses,permits and approvals.If thePRC Subsidiaries and the Affiliated Entities fail to obtain the necessary licenses,permits and approvals or inadvertently conclude that anypermissions or approvals are not required,or if applicable laws,regulations,or interpretations change and the PRC Subsidiaries or the AffiliatedEntities are required to obtain such permissions or approvals in the future,the PRC Subsidiaries and the Affiliated Entities may be subject tofines,confiscation of revenues generated from incompliant operations or the suspension of relevant operations.The PRC Subsidiaries and theAffiliated Entities may also experience adverse publicity arising from such non-compliance with government regulations that negatively impactour brand.We have historically incurred net losses and negative operating cash flows,and may not achieve or maintain profitability in the future.We have incurred net losses since our inception.We incurred net losses of RMB91.0 million,RMB159.6 million and RMB61.2 millionin 2022,2023 and 2024,respectively.We had operating cash outflow of RMB158.9 million,RMB27.0 million and RMB114.1 million in 2022,2023 and 2024,respectively.We must grow our revenues to become profitable,and,even if we do,we may not maintain or increase ourprofitability.We expect to incur losses for the foreseeable future as we invest substantial financial and other resources in,among other things:investments in the development of new services and products and enhancing our existing service and product portfolio;expansion of our operations and infrastructure organically and through acquisitions and strategic partnerships;and general administration,including legal,risk management,accounting,and other expenses related to being a public company.These expenditures may not result in additional revenue or the growth of our business.Accordingly,we may not generate sufficientrevenue to offset our expected cost increases and achieve and sustain profitability.If we fail to achieve and sustain profitability,the market priceof our Class A Ordinary Shares could decline.21 Our effort to expand into the non-auto insurance market and diversify our revenues may not be successful.While we historically focused on the auto insurance market,we have expanded into the non-auto insurance market in recent years todiversify our revenues.Our management believes that as non-auto insurance market develops,insurance carriers offering auto-insuranceproducts are expected to have more opportunities to sell across different types of insurance products by utilizing their mature marketingchannels,and non-auto insurance products tend to have more favorable margins.However,we may incur significant costs in research anddevelopment,recruiting additional personnel and engaging more third-party service providers to develop our non-auto insurance business,andsuch investment may not generate expected returns.Moreover,the non-auto insurance market may not develop as we expect.If we fail todiversify our revenues,our revenues may grow at a slower rate than we anticipate,and our business,financial condition and results ofoperations may be adversely affected.We face intense competition and we may not be able to compete effectively.We face significant competition from companies that provide services and products for digital insurance transactions or insurance SaaSsolutions to insurance carriers and insurance intermediaries.In addition,insurance carriers can attract consumers directly through their ownsales and marketing teams,other traditional methods of distribution or digital distribution channels.Insurance carriers and insuranceintermediaries may also develop their own systems,instead of purchasing SaaS solution products from us or other vendors.We also expect thatnew competitors will enter Chinas digital insurance industry in China with competing platforms,services and products,and we may face newcompetitors as we expand into new insurance markets.We must develop new services and products to respond to our ecosystem participantsevolving needs.Our investments in new services and products may not be successful.See“If we fail to enhance and expand our services andproducts in a manner that responds to our ecosystem participants evolving needs,our business may be adversely affected.”Our competitors may have significantly more financial,technical,marketing and other resources than we have,and may devote greaterresources to develop,promote and support their platforms and services.In addition,they may have more extensive insurance industryrelationships than we have,longer operating histories and greater brand recognition.As a result,these competitors may be able to respond morequickly to new technologies,regulatory requirements and consumer demand.If insurance carriers,third-party platforms or insurance intermediaries compete directly with us or partner with our competitors,it maybe difficult for us to attract and retain referral partners,consumers and other ecosystem participants.This could reduce our revenues and marketshare and materially adversely affect our business,financial condition and results of operations.Our success also depends on our ability to keep pace with advances in technologies and improve our platform to address theincreasingly sophisticated and varied needs of our ecosystem participants;adapt our services and products to emerging industry standards andpractices;and comply with evolving regulatory requirements.Our efforts to adapt to changes in technology could require substantialinvestments.Our ability to sustain and grow our business will suffer if we fail to respond to advances in technology in a timely and cost-effective manner.Our competitors also may develop and market new technologies that render our platform less competitive,unmarketable or obsolete.For example,if our competitors develop platforms with similar or superior functionality to us,and the volume of transactions facilitated throughour platform declines,we may need to decrease our transaction service fees.If we cannot maintain our pricing structure due to competitivepressures,our revenues could decline or fail to grow as we expect.Competition may intensify as our competitors enter into business combinations or alliances or raise additional capital,or as establishedcompanies in other market segments or geographic markets expand into our market segments or geographic markets.Furthermore,current andfuture competitors could offer a different pricing model or undercut prices to increase market share.If we cannot compete successfully againstcurrent and future competitors,our business,results of operations and financial condition could deteriorate.22 If we fail to enhance and expand our services and products in a manner that responds to our ecosystem participants evolving needs,ourbusiness may be adversely affected.Our success depends on our ability to provide innovative services that make our platform useful for insurance carriers,third-partyplatforms,referral partners,insurance intermediaries and consumers.Accordingly,we must invest resources in technology and developments ofnew services and products to improve our platform.This may require significant investments in acquiring additional personnel,engaging third-party service providers and conducting research and development activities.We may not have the resources to make such investments.While we historically focused on the auto insurance market,we have expanded into the non-auto insurance market.We also began toprovide SaaS solution products to insurance intermediaries in December 2020 and to insurance carriers in March 2021,and we plan to furtherexpand our service and product offerings.See“Item 4.Information on the CompanyB.Business OverviewServices and Products.”Wehave limited experience in these new market segments,services and products,and our ecosystem participants may not respond favorably to newservices and products.If the services or products that we introduce fail to engage ecosystem participants,we may fail to generate sufficientrevenue or other value to justify our investments.If we fail to penetrate new insurance markets or introduce new services and products successfully,our revenues may grow at a slowerrate than we anticipate.Any of the foregoing could damage our reputation and materially adversely affect our business,financial condition andresults of operations.If we are unable to maintain and expand our local network,we may not be able to grow our business.We had a nationwide network of approximately 400 service personnel in 25 provinces,autonomous regions and municipalities inChina as of December 31,2024.Our service personnel negotiate service fees and other contract terms with insurance carrier customers andfacilitate the settlement and issuance of auto insurance policies to end consumers.We face significant challenges and risks in managing ourgeographically dispersed network.If one or more of our service personnel were to depart and join a competitor,they may divert business fromus to our competitor,which could materially adversely affect our business.As we grow our business,we need to expand the geographic reach of our network.This depends largely on our ability to meet localregulatory requirements and hire and retain service personnel with long-lasting relationships with insurance carriers and insuranceintermediaries.Failure to do so would prevent us from expanding our business and maintaining our market share.We may also need to seek additional business partners to assist in our expansion efforts.If we cannot successfully expand ournationwide network,our growth may be adversely impacted.In addition,the expansion of our nationwide network may not produce theexpected financial or results of operations.Any of the foregoing could materially adversely affect our business,financial condition and resultsof operations.If we cannot maintain and enhance our relationships with insurance carriers,our business,results of operations and financial conditioncould be materially adversely affected.We generate most of our revenues from services and products provided to insurance carriers and insurance intermediaries.Ourcontracts with insurance carrier customers for digital insurance transaction services and with insurance carrier customers and insuranceintermediaries for SaaS solution services typical
2025-04-24
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5星级
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM 20-F(Mark One)STATEMENT PU.
2025-04-24
184页
5星级
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 20-F(Mark One)REGISTRATION .
2025-04-24
327页
5星级
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR 12(g)OF THE SECURITIES EXCHANGE ACT OF 1934 OR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31,2024 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:001-38527 Uxin Limited(Exact name of Registrant as specified in its charter)N/A(Translation of Registrants name into English)Cayman Islands(Jurisdiction of incorporation or organization)21/F,Donghuang Building,No.16 Guangshun South AvenueChaoyang District,Beijing 100102Peoples Republic of China(Address of principal executive offices)Feng Lin,Chief Financial OfficerTelephone: 86 10 5691-6765Email:21/F,Donghuang Building,No.16 Guangshun South AvenueChaoyang District,Beijing 100102Peoples Republic of China(Name,Telephone,E-mail 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 registeredAmerican depositary shares(one American depositary share representing 300 Class A ordinary shares,par value US$0.0001 per share)UXIN The Nasdaq Stock Market LLC(The Nasdaq Global Select Market)Class A ordinary shares,par value US$0.0001 per share*The Nasdaq Stock Market LLC(The Nasdaq Global Select Market)*Not for trading,but only in connection with the listing on The Nasdaq Global Select Market of American depositary shares.Securities registered or to be registered pursuant to Section 12(g)of the Act:None(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act:None(Title of Class)Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report.56,340,671,538 Class A ordinary shares(excluding the 21,745,492 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reservedfor future issuances upon the exercise or vesting of awards granted under the Amended and Restated Plan),and 40,809,861 Class B ordinary shares,par valueUS$0.0001 per share,as of March 31,2024.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 theSecurities 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 duringthe 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 requirementsfor 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 ofRegulation 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 thedefinitions of“large accelerated filer,”“accelerated filer,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if the registrant has elected notto use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of theExchange Act.The term“new or revised financial accounting standard”refers to any update issued by the Financial Accounting Standards Board to its AccountingStandards Codification after April 5,2012.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal controlover 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 issuedits audit report.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 filingreflect 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 byany of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAP International Financial Reporting Standards as issued by the International Accounting StandardsBoard Other If“Other”has been checked in response to the previous question,indicate by check mark which financial statement item the registrant has elected to follow.Item 17 Item 18 If this is an annual report,indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12,13 or 15(d)of the Securities ExchangeAct of 1934 subsequent to the distribution of securities under a plan confirmed by a court.Yes No TABLE OF CONTENTS INTRODUCTION1 FORWARD-LOOKING INFORMATION2 PART I 3 Item 1.Identity of Directors,Senior Management and Advisers3Item 2.Offer Statistics and Expected Timetable3Item 3.Key Information3Item 4.Information on the Company57Item 4A.Unresolved Staff Comments88Item 5.Operating and Financial Review and Prospects89Item 6.Directors,Senior Management and Employees105Item 7.Major Shareholders and Related Party Transactions114Item 8.Financial Information117Item 9.The Offer and Listing118Item 10.Additional Information118Item 11.Quantitative and Qualitative Disclosures about Market Risk133Item 12.Description of Securities Other than Equity Securities134 PART II 135 Item 13.Defaults,Dividend Arrearages and Delinquencies135Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds135Item 15.Controls and Procedures135Item 16.RESERVED136Item 16A.Audit Committee Financial Expert136Item 16B.Code of Ethics136Item 16C.Principal Accountant Fees and Services136Item 16D.Exemptions from the Listing Standards for Audit Committees137Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers137Item 16F.Change in Registrants Certifying Accountant137Item 16G.Corporate Governance137Item 16H.Mine Safety Disclosure138Item 16I.Disclosure Regarding Foreign Jurisdiction that Prevent Inspections138Item.16J.Insider Trading Policies138Item 16K.Cybersecurity138 PART III 139 Item 17.Financial Statements139Item 18.Financial Statements139Item 19.Exhibits140 SIGNATURES147 i INTRODUCTION Unless otherwise indicated or the context otherwise requires:we changed our fiscal year end from December 31 to March 31 in April 2020 and filed a transition report on Form 20-F covering the three-month period from January 1,2020 through March 31,2020,or the Transition Period.Prior to such transition report on Form 20-F,we filed anannual report on Form 20-F covering the fiscal year ended December 31,2019.Unless otherwise noted,all references to years are to the calendaryear from January 1 to December 31 and references to our fiscal year or years are to the fiscal year or years which,prior to the Transition Period,ended December 31,and from and after the Transition Period,ended March 31.For the avoidance of doubt,“fiscal year of 2022”refer to theyear ended March 31,2022,“fiscal year of 2023”refer to the year ended March 31,2023,and“fiscal year of 2024”refer to the year endedMarch 31,2024;“ADSs”refer to the American depositary shares,each of which represents 300 Class A ordinary shares,par value US$0.0001 each;“former VIEs”refer to the former variable interest entities that have become our wholly owned subsidiaries after the Restructuring,which areYouxin Internet(Beijing)Information Technology Co.,Ltd.,and Youxin Yishouche(Beijing)Information Technology Co.,Ltd.;“GMV”refer to gross merchandise value of used cars as measured by gross selling price of used cars,excluding service fees and interests(ifany)charged;“Jiancebao(检测宝)”refer to our proprietary car inspection system;“NPS”refer to net percentages of promoters for our products and services(those who are willing to keep buying and refer us to others)againstdetractors(those who are not satisfied with and complain about our offerings);“ordinary shares”refer to our Class A and Class B ordinary shares,par value US$0.0001 per share;“senior convertible preferred shares”refer to our senior convertible preferred shares,which can be convertible into our Class A ordinary sharesat the currently applicable conversion price,par value US$0.0001;on March 27,2024,all of the Companys then issued and outstanding seniorconvertible preferred shares were converted into Class A ordinary shares;“RMB”and“Renminbi”refer to the legal currency of China,which is our reporting currency;“shares”refer to our ordinary shares and,where applicable,our senior convertible preferred shares,par value US$0.0001 per share;“US$,”“U.S.dollars,”“$,”and“dollars”refer to the legal currency of the United States;“Uxin”or“our platform”refer to our platform primarily for buying and selling used cars,which primarily consists of vehicle sales businessesunder our inventory-owning model for the fiscal year of 2021 and afterwards;“our WFOEs”refer to our wholly-owned subsidiaries in China;“Restructuring”refers to a series of restructuring transactions in March 2022 to terminate the historical contractual arrangements with the formerVIEs,which have become our wholly-owned subsidiaries;and “we,”“us,”“our company,”the“Company”and“our”refer to Uxin Limited,our Cayman Islands holding company,and its subsidiaries.Unless otherwise noted,all translations from Renminbi to U.S.dollars and from U.S.dollars to Renminbi in this annual report were made at a rate ofRMB7.2203 to US$1.00,the exchange rate on as of March 28,2024 set forth in the H.10 statistical release of the Board of Governors of the Federal ReserveSystem.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 thecase may be,at any particular rate,or at all.1 FORWARD-LOOKING INFORMATION This annual report on Form 20-F contains forward-looking statements that reflect our current expectations and views of future events.Thesestatements are made under the“safe harbor”provisions of the U.S.Private Securities Litigation Reform Act of 1995.You can identify these forward-lookingstatements 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 futureevents and financial trends that we believe may affect our financial condition,results of operations,business strategy and financial needs.These forward-looking statements include statements relating to,among other things:our goals and strategies;our ability to provide customers with high-quality used cars and other related products;our ability to provide quality services and compete effectively;our ability to effectively manage risks,including credit risks and fraud risks;our future business development,financial condition and results of operations;expected changes in our revenues,costs,expenses or expenditures;the expected growth of,and trends in,the market for our services;our expectations regarding demand for and market acceptance of our services;competition in our industry;relevant government policies and regulations relating to our industry;public health crisis,such as the COVID-19 pandemic,MERS,SARS,H1N1 flu,H7N9 flu,and avian flu;and general economic and business conditions in China 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 conjunctionwith the risk factors disclosed in“Item 3.Key InformationD.Risk Factors.”Those risks are not exhaustive.We operate in an evolving environment.Newrisks 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 business orthe 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 notundertake any obligation to update or revise the forward-looking statements except as required under applicable law.You should read this annual report andthe documents that we reference in this annual report completely and with the understanding that our actual future results may be materially different fromwhat we expect.2 PART I Item 1.Identity of Directors,Senior Management and Advisers Not applicable.Item 2.Offer Statistics and Expected Timetable Not applicable.Item 3.Key Information Our Holding Company Structure and Historical Contractual Arrangements with the Former VIEs Uxin Limited is not a Chinese operating company but a Cayman Islands holding company with operations primarily conducted by its PRCsubsidiaries and,historically,through contractual arrangements with the former VIEs in China.PRC laws and regulations restrict and impose conditions onforeign investment in value-added telecommunication services.In order to comply with PRC regulatory requirements,in the past we primarily operated thesebusinesses in China through Youxin Internet(Beijing)Information Technology Co.,Ltd.or Youxin Hulian,and Youxin Yishouche(Beijing)InformationTechnology Co.,Ltd.,or Yishouche,which we refer to as the former VIEs in this annual report.There were historical contractual arrangements among ourPRC subsidiaries,the former VIEs and their shareholders,which were effectively terminated on March 31,2022.As a result of the contractual arrangements,we were able to direct the activities of and derive economic benefits from the former VIEs and were considered the primary beneficiary of the former VIEs foraccounting purposes in accordance with Accounting Standards Condition topic 810 under Financial Accounting Standards Board(“FASB ASC 810”).Accordingly,we have consolidated the financial results of the former VIEs in our consolidated financial statements in accordance with U.S.GAAP.NeitherUxin Limited nor its investors has had an equity ownership in,direct foreign investment in,or control,other than as defined under U.S.GAAP,throughcontractual arrangements with,the former VIEs.The contractual arrangements were not equivalent to an equity ownership in the business of the former VIEsand their subsidiaries in China.As used in this annual report,“we,”“us,”“our company,”or“our”refers to Uxin Limited and its subsidiaries.Investors in ourADSs are not purchasing equity interest in our subsidiaries or the former VIEs in China but instead are purchasing equity interest in a holding companyincorporated in the Cayman Islands,Uxin Limited.3 The following diagram illustrates our corporate structure,including our principal subsidiaries as of the date of this annual report on Form 20-F:Historically,we,through Yougu and Youxinpai,were subject to a series of contractual arrangements with former VIEs and the shareholders of theformer VIEs until March 31,2022.These historical contractual agreements included equity interest pledge agreements,powers of attorney,exclusive business cooperation agreements,exclusive option agreements.We had evaluated the guidance in FASB ASC 810 and concluded that we were the primary beneficiary of the former VIEsbecause of these historical contractual arrangements.Accordingly,under U.S.GAAP,the financial statements of the former VIEs were consolidated as part ofour financial statements for the fiscal year ended March 31,2022 in this annual report.However,we consider revenues contributed by the former VIEs to beimmaterial to our financial performance during the historical periods.Revenues contributed by the former VIEs accounted for 0.1%of our total revenues forthe fiscal year ended March 31,2022.We recorded net loss contributed by the former VIEs of 2.9%for the fiscal year ended March 31,2022.Our business isprimarily conducted through our subsidiaries.In order to streamline our corporate structure and considering the changing regulatory environment,we have completed the Restructuring toterminate the contractual arrangements with both of the former VIEs which have become wholly owned subsidiaries of our Company.Pursuant to theRestructuring,our wholly owned subsidiaries that have contractual arrangements with the former VIEs and their respective shareholders have purchased allequity interests held by such shareholders in the former VIEs.Accordingly,all contractual arrangements that enabled such shareholders to direct the activitiesof and derive economic benefits from the former VIEs,were effectively terminated.As a result of the Restructuring,the former VIEs have become our whollyowned subsidiaries and we currently operate our business in China directly through our subsidiaries,rather than through any variable interest entity.See“Item4.Information on the CompanyC.Organizational StructureHistorical Contractual Agreements with the Former VIEs and Their Respective Shareholdersand the Related Termination Agreements.”However,prior to the Restructuring,our historical contractual arrangements may not be as effective as directownership in providing us with control over the former VIEs and the termination of these agreements may incur additional costs.There were and may also besubstantial uncertainties regarding the interpretation and application of current and future PRC laws,regulations and rules regarding the status of the rights ofour Cayman Islands holding company with respect to our historical contractual arrangements with the former VIEs and their shareholders.It is uncertainwhether any new PRC laws or regulations relating to VIE structures will be adopted or if adopted,what they would provide.If we or any of the former VIEs isfound to be or had been in violation of any existing or future PRC laws or regulations,or fail or had failed to obtain or maintain any of the required permits orapprovals,the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.See“Item 3.KeyInformationD.Risk FactorsRisks Related to Our Corporate StructureIf the PRC government determines that the historical contractual arrangementswith the former VIEs did not,or that our holding company structure do not,comply with PRC laws and regulations,or if these regulations change or areinterpreted differently in the future,our shares and/or ADSs may decline in value or become worthless.”4 Our corporate structure has been subject to unique risks associated with our holding company structure,including the historical contractualarrangements with the former VIEs.If the PRC government deems that our historical contractual arrangements with the former VIEs did not comply withPRC regulatory restrictions on foreign investment in the relevant industries,or that our holding company structure do not,comply with PRC laws andregulations,or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future,we could be subject to severepenalties.The PRC regulatory authorities could disallow our holding company structure which could lead to a material change in our operations and/or amaterial change in the value of our ADSs,and could cause the value of our ADSs to significantly decline or become worthless.Our holding company,ourPRC subsidiaries,and investors of our Company face uncertainty about potential future actions by the PRC government that could affect the enforceability ofthe historical contractual arrangements with the former VIEs and,consequently,may affect the historical financial performance of the former VIEs and ourCompany as a whole.For a detailed description of the risks associated with our corporate structure,please refer to risks disclosed under“Item 3.KeyInformationD.Risk FactorsRisks Related to Our Corporate StructureIf the PRC government determines that the historical contractual arrangementswith the former VIEs did not,or that our holding company structure do not,comply with PRC laws and regulations,or if these regulations change or areinterpreted differently in the future,our shares and/or ADSs may decline in value or become worthless.”We face various legal and operational risks and uncertainties related to doing business in China.Our business operations are primarily conducted inChina,and we are subject to complex and evolving PRC laws and regulations.The PRC government has,in recent years,issued statements and regulatoryactions relating to areas such as approvals on offshore offerings,anti-monopoly regulatory actions,and oversight on cybersecurity and data privacy.Forexample,On February 17,2023,the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by DomesticCompanies,or the Overseas Listing Trial Measures,and relevant five supporting guidelines,together as the New Overseas Listing Rules,which becameeffective on March 31,2023.According to the New Overseas Listing Rules,PRC domestic companies that seek to offer and list securities in overseas markets,either in direct or indirect means,are required to complete the filing procedure with the CSRC and report relevant information.In addition,an overseas-listedcompany must also submit the filing with respect to its follow-on offerings,issuance of convertible corporate bonds and exchangeable bonds,and otherequivalent offering activities,within the time frame specified by the Overseas Listing Trial Measures.We have been closely monitoring regulatorydevelopments in China regarding any necessary approvals,filings or reports from the CSRC,and we will take any and all actions necessary to complete thefiling with the CSRC if required.Please refer to“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaThe approvaland/or other requirements of the CSRC,the CAC,or other PRC governmental authorities may be required in connection with an offering under PRC rules,regulations or policies,and,if required,we cannot predict whether or how soon we will be able to obtain such approval,and,even if we obtain such approval,the approval could be rescinded.Any failure to obtain or delay in obtaining such approval for any future offshore securities offering,or a rescission ofobtained approval,would subject us to sanctions imposed by the CSRC or other PRC government authorities.”In addition,if future regulatory updatesmandate clearance of cybersecurity review or other specific actions to be completed by China-based companies listed on foreign stock exchanges,such as us,we face uncertainties as to whether such clearance can be timely obtained,or at all.Please refer to risks disclosed under“Item 3.Key InformationD.RiskFactorsRisks Related to Our Business and IndustryOur business generates and processes a large amount of data,and we are required to comply with PRCand other applicable laws relating to privacy and cybersecurity.The improper use or disclosure of data could have a material and adverse effect on ourbusiness and prospects.”Furthermore,the PRC anti-monopoly and competition laws and regulations are evolving,and there remains uncertainties as to howthe anti-monopoly laws,regulations and guidelines will impact our business and results of operations.Please refer to“Item 3.Key InformationD.RiskFactorsRisks Related to Our Business and IndustryOur business generates and processes a large amount of data,and we are required to comply with PRCand other applicable laws relating to privacy and cybersecurity”and“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryRisks Related to Doing Business in ChinaPRC rules on mergers and acquisitions may make it more difficult for us to pursue growth throughacquisitions.”PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in certain value-addedtelecommunication services,such as internet content provision services and online data processing and transaction processing businesses(operating e-commerce business).In order to comply with PRC regulatory requirements,in the past we primarily operated these businesses in China through the formerVIEs.We currently operate such businesses through our PRC subsidiaries,Yougu and Youhan,established in the Shanghai Pilot Free Trade Zone,which arenot subject to restrictions on foreign investors maximum shareholding percentage,according to the Notice of the Ministry of Industry and InformationTechnology on Removing the Restrictions on Foreign-owned Shareholding Percentage in Online Data Processing and Transaction Processing(operatingcommerce)Business in China(Shanghai)Pilot Free Trade Zone.Please refer to“Item 3.Key InformationD.Risk FactorsRisks Related to Our CorporateStructureIf the PRC government determines that the historical contractual arrangements with the former VIEs did not,or that our holding company structuredo not,comply with PRC laws and regulations,or if these regulations change or are interpreted differently in the future,our shares and/or ADSs may declinein value or become worthless.”These statements and regulatory actions may impact our ability to conduct certain businesses,accept foreign investments,orlist on a United States or other foreign exchange.These risks could result in a material adverse change in our operations and the value of our ADSs,significantly limit or completely hinder our ability to continue to offer securities to investors,or cause the value of such securities to significantly decline orbecome worthless.For a detailed description of risks related to doing business in China,please refer to risks disclosed under“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in China.”5 PRC governments significant authority in regulating our operations and its oversight and control over offerings conducted overseas by,and foreigninvestment in,China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.Implementation of industry-wide regulations,including data security or anti-monopoly related regulations,in this nature may cause the value of suchsecurities to significantly decline or be of little or no value.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to DoingBusiness in ChinaThe PRC governments oversight over our business operation could result in a material adverse change in our operations and the value ofour ADSs.”Risks and uncertainties arising from the legal system in China,including risks and uncertainties regarding the enforcement of laws and quicklyevolving rules and regulations in China,could result in a material adverse change in our operations and the value of our ADSs.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaUncertainties in the interpretation and enforcement of Chinese laws andregulations could limit the legal protections available to us.”As of the date of this annual report,laws and regulations in Hong Kong,including regulatory actions related to data security or anti-monopolyconcerns in Hong Kong,do not have a material impact on our ability to conduct business,accept foreign investment,or continue to list on a United Statesstock exchange.Permissions Required from the PRC Authorities We conduct our business in China primarily through our subsidiaries and historically,through former VIEs in China with which we had maintainedcontractual arrangements.Our operations in China are governed by PRC laws and regulations.In the opinion of Beijing DOCVIT Law Firm,our counsel as tocertain PRC legal matters,our PRC subsidiaries have obtained all requisite permissions and approvals from the PRC government authorities that are requiredfor the business operations of our PRC subsidiaries,namely(i)the Electronic Data Interchange license,or the EDI license,(ii)Registrations for Used CarDealers,and(iii)Registrations for Vehicle Maintenance and Repairs,with the details of all these licenses and permissions held by our PRC subsidiaries setforth below:License/Permission Holding Entity Issuing AuthorityElectronic Data Interchange license(EDI license)Youxin(Shaanxi)Information TechnologyGroup Co.,Ltd.Ministry of Industry and Information Technology ofthe Peoples Republic of ChinaRegistrations for Used Car Dealers Hefei Youquan Information Technology Co.,Ltd.The Administrative Department of Commerce ofAnhui Province of the Peoples Republic of ChinaRegistrations for Used Car Dealers Hefei Youxi Used Car Market ManagementCo.,Ltd.The Administrative Department of Commerce ofAnhui Province of the Peoples Republic of ChinaRegistrations for Used Car Dealers Youxin(Ningbo)Information Technology Co.,Ltd.The Administrative Department of Commerce ofAnhui Province of the Peoples Republic of ChinaRegistrations for Used Car Dealers Youxin(Hefei)Automobile IntelligentRemanufacturing Co.,Ltd.The Administrative Department of Commerce ofAnhui Province of the Peoples Republic of ChinaRegistrations for Used Car Dealers Hefei Youxin Automobile Maintenance Co.,Ltd.The Administrative Department of Commerce ofAnhui Province of the Peoples Republic of ChinaRegistrations for Used Car Dealers Youche(Hainan)Information Technology Co.,Ltd.The Administrative Department of Commerce ofHainan Province of the Peoples Republic of ChinaRegistrations for Used Car Dealers Youtang(Shaanxi)Information TechnologyCo.,Ltd.The Administrative Department of Commerce ofShaanxi Province of the Peoples Republic of ChinaRegistrations for Used Car Dealers Xian Yousheng Automobile Sales Service Co.,Ltd.The Administrative Department of Commerce ofShaanxi Province of the Peoples Republic of ChinaRegistrations for Used Car Dealers Youxin(Shaanxi)Information TechnologyGroup Co.,Ltd.The Administrative Department of Commerce ofShaanxi Province of the Peoples Republic of ChinaRegistrations for Vehicle Maintenance and Repair Xian Youcheng Vehicle Maintenance Co.,Ltd.Bureau of City Manage and Road Transport ofFengdongxincheng of the Peoples Republic ofChinaRegistrations for Vehicle Maintenance and Repair Hefei Youzhi Automobile Maintenance Co.,Ltd.Bureau of Road Transport of Hefei of the PeoplesRepublic of China Except for the permissions or approvals listed above that we have obtained,we,our PRC subsidiaries and the former VIEs,have not been required toapply for or obtain any other permission or approval from any PRC government authority with respect to the operation of our business,nor have we beendenied for or dismissed by any government authority of any application of permissions or approvals that are necessary to the operations of our business.Giventhe uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant government authorities,wemay be required to obtain additional licenses,permits,filings or approvals for the functions and services of our platform in the future.If we and our PRCsubsidiaries(i)do not receive or maintain any necessary permissions or approvals from PRC authorities to operate business or offer securities,(ii)inadvertently conclude that such permissions or approvals are not required,or(iii)if applicable laws,regulations,or interpretations change and we arerequired to obtain such permissions or approvals in the future,we cannot assure you that we will be able to obtain the necessary permissions or approvals in atimely manner,or at all,and such approvals may be rescinded even if obtained.Any such circumstance could subject us to penalties,including fines,suspension of business and revocation of the required licenses,significantly limit or completely hinder our ability to continue to offer securities to investors,and cause the value of such securities to significantly decline or be worthless.For more detailed information,see“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryFailure to obtain certain filings,approvals,licenses,permits and certificates required for our businessoperations may materially and adversely affect our business,financial condition and results of operations.”6 The PRC government has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreigninvestment in China-based issuers.On February 17,2023,the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering andListing by Domestic Companies,or the Overseas Listing Trial Measures,and relevant five supporting guidelines,together as the New Overseas Listing Rules,which became effective on March 31,2023.According to the New Overseas Listing Rules,PRC domestic companies that seek to offer and list securities inoverseas markets,either in direct or indirect means,are required to complete the filing procedure with the CSRC and report relevant information.In addition,an overseas-listed company must also submit the filing with respect to its follow-on offerings,issuance of convertible corporate bonds and exchangeablebonds,and other equivalent offering activities,within the time frame specified by the Overseas Listing Trial Measures.The New Overseas Listing Rules laidout the regulatory filing requirements for both direct and indirect overseas listings and clarify the determination criteria for indirect overseas listing in overseasmarkets.For more detailed information,see“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaThe approval and/orother requirements of the CSRC,the CAC,or other PRC governmental authorities may be required in connection with an offering under PRC rules,regulations or policies,and,if required,we cannot predict whether or how soon we will be able to obtain such approval,and,even if we obtain such approval,the approval could be rescinded.Any failure to obtain or delay in obtaining such approval for any future offshore securities offering,or a rescission ofobtained approval,would subject us to sanctions imposed by the CSRC or other PRC government authorities.”In the opinion of Beijing DOCVIT Law Firm,our counsel as to certain PRC legal matters,pursuant to the New Overseas Listing Rules which became effective on March 31,2023:(i)in connection withour historical issuance of securities to foreign investors,neither we nor our PRC subsidiaries or the former VIEs are required to obtain any prior permissionsor approvals from the CSRC,and(ii)should we decide to issue additional equity or equity-linked securities for listing overseas in the future,we are notrequired to obtain any permissions or approvals from any PRC government authorities,except for the requisite filing with the CSRC in connection with suchissuance.In the opinion of Beijing DOCVIT Law Firm,our counsel as to certain PRC legal matters,if we issue long-term debt securities in the future,we arenot required to obtain any permissions or approvals from the PRC government authorities,except that such issuance is subject to the quota requirement of theNational Development and Reform Commission,or the NDRC.In addition,on March 26,2024,we and Xin Gao Group Limited(“Xin Gao”)entered into ashare subscription agreement,pursuant to which we issued 1,440,922,190 senior convertible preferred shares to Xin Gao for a total consideration of US$7.0million.As of the date of this annual report,we have submitted the necessary filings to the CSRC for the issuance of senior convertible preferred shares to XinGao.For more information about the issuance of senior convertible preferred shares to Xin Gao,see“Item 4.Information on the CompanyA.History andDevelopment of the Company.”Additionally,in the opinion of Beijing DOCVIT Law Firm,our counsel as to certain PRC legal matters,we are not required to file any application forthe cybersecurity review by CAC for our historical issuance of securities to foreign investors on the grounds that:(i)the relevant regulations do not requirenetwork platform operators holding personal information of over one million users to file a supplementary application of cybersecurity review for theirhistorical issuance of securities to foreign investors that occurred before such regulations became effective;and(ii)our securities have already been listed onthe Nasdaq Global Select Market before such regulations became effective.Thus,Beijing DOCVIT Law Firm does not expect that,as of the date of thisannual report,we are required to file an application for the cybersecurity review by CAC for our historical issuance of securities to foreign investors.Furthermore,in the opinion of Beijing DOCVIT Law Firm,neither we nor our subsidiaries or the former VIEs are required to obtain prior permissions orapprovals from the PRC government authorities.Lastly,as of the date of this annual report,neither we nor our PRC subsidiaries or the former VIEs havereceived or were denied any permissions or approvals by the CSRC,the CAC or any other PRC government authorities relating to our historical issuance ofsecurities to foreign investors.The Holding Foreign Companies Accountable Act Pursuant to the Holding Foreign Companies Accountable Act,which was enacted on December 18,2020 and further amended by the ConsolidatedAppropriations Act,2023 signed into law on December 29,2022,or the HFCAA,if the SEC determines that we have filed audit reports issued by a registeredpublic accounting firm that has not been subject to inspections by the Public Company Accounting Oversight Board,or the PCAOB,for two consecutiveyears,the SEC shall prohibit our shares or ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the UnitedStates.Trading in our securities on U.S.markets,including Nasdaq Global Select Market,will be prohibited under the HFCAA if the PCAOB determines thatit is unable to inspect or investigate completely our auditor for two consecutive years.On December 16,2021,the PCAOB issued the HFCAA DeterminationReport to notify the SEC of its determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firmsheadquartered in mainland China and Hong Kong(the“2021 Determinations”),including our auditor.On August 29,2022,the SEC conclusively listed UxinLimited as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended March 31,2022.On December 15,2022,the PCAOB announced that it was able to conduct inspections and investigations completely of PCAOB-registered public accountingfirms headquartered in mainland China and Hong Kong in 2022.Accordingly,the PCAOB vacated its previous 2021 Determinations.As a result,we were notat risk of having our securities subject to a trading prohibition under the HFCAA unless a new determination is made by the PCAOB.However,whether thePCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered inmainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our,and our auditors,control,including positions takenby authorities of the PRC.The PCAOB is expected to continue to demand complete access to inspections and investigations regarding registered accountingfirms headquartered in mainland China and Hong Kong in the future and states that it has already made plans to resume regular inspections going forward.The PCAOB is required under the HFCAA to make its determination on an annual basis with regards to its ability to inspect and investigate completelyregistered accounting firms based in the mainland China and Hong Kong.The possibility of being a Commission-Identified Issuer and risk of delisting couldcontinue to adversely affect the trading price of our securities.If the PCAOB determines in the future that it no longer has full access to completely inspectand investigate registered accounting firms headquartered in mainland China and Hong Kong and we continue to use such accounting firm to conduct auditwork,we would be identified as a“Commission-Identified Issuer”under the HFCAA following the filing of the annual report for the relevant fiscal year,andif we were so identified for two consecutive years,trading in our securities on U.S.markets would be prohibited.For more details,see“Item 3.KeyInformationD.Risk FactorsRisks Related to Doing Business in ChinaThe PCAOB,in prior years,was unable to completely inspect and investigateregistered independent accounting firms in mainland China and Hong Kong,which includes our auditor.The inability of the PCAOB to conduct inspectionsover our auditor has deprived our investors of the benefits of such inspections in prior years and may continue to deprive investors of such benefits in thefuture should the PCAOB not continue to have the ability to completely inspect and investigate registered accounting firms in China”and“Item 3.KeyInformationD.Risk FactorsRisks Related to Doing Business in ChinaOur ADSs will be prohibited from trading in the United States under the HFCAAif the PCAOB is unable to inspect or investigate completely auditors located in China for two consecutive years.The delisting of our ADSs,or the threat oftheir being delisted,may materially and adversely affect the value of your investment.”7 Cash and Asset Flows through Our Organization Uxin Limited is a holding company with no operations of its own.We conduct our operations in China primarily through our PRC subsidiaries and,historically,through contractual arrangements with the former VIEs in China.Under the current laws of the Cayman Islands,we are not subject to tax onincome or capital gains.In addition,upon payments of dividends to our shareholders,no Cayman Islands withholding tax will be imposed.Under PRC law,Uxin Limited may provide funding to our PRC subsidiaries only through capital contributions or loans,and to the former VIEs onlythrough loans,subject to the satisfaction of applicable government registration and approval requirements.Loans by Uxin Limited to our PRC subsidiaries tofinance their activities cannot exceed statutory limits and must be registered with the local counterpart of SAFE and capital contributions to our PRCsubsidiaries are subject to approval by the Ministry of Commerce or its local counterparts.For more details,please refer to“Item 4.Information on theCompanyB.Business OverviewRegulationPRC regulations on loans and direct investments by offshore holding companies to PRC entities may delayor prevent us from making loans or additional capital contributions to our PRC entities.”For the fiscal years ended March 31,2022,2023 and 2024,UxinLimited and its subsidiaries incorporated in the Cayman Islands,British Virgin Islands and Hong Kong did not make any capital contribution or loans to ourPRC subsidiaries or the former VIEs,except that Xin HK Limited made capital contributions of RMB127.3 million,RMB116.4 million and RMB131.9million(US$18.3 million),respectively,to Youxin(Hefei)Automobile Intelligent Remanufacturing Co.,Ltd.,or Uxin Hefei,in the fiscal years ended March31,2022,2023 and 2024,and capital contributions of RMB34.5 million and RMB65.7 million(US$9.1million),respectively,to Youtang(Shaanxi)Information Technology Co.,Ltd.in the fiscal years ended March 31,2023 and 2024.UcarShow HK Limited made capital contributions of RMB3.5 million(US$0.5 million)to Youfang(Beijing)Information Technology Co.,Ltd.in the fiscal year ended March 31,2024.See“Item 3.Key InformationD.RiskFactorsRisks Related to Doing Business in ChinaPRC regulations on loans and direct investments by offshore holding companies to PRC entities maydelay or prevent us from making loans or additional capital contributions to our PRC entities”for details.Our PRC subsidiaries received RMB50.2 million from the former VIEs for the fiscal year ended March 31,2022,which include cash advances madeby the former VIEs to our PRC subsidiaries for the purchase of cars and/or services from third parties for daily operations.The former VIEs receivedRMB66.8 million from our PRC subsidiaries for the fiscal year ended March 31,2022,which include the repayment of aforementioned cash advances fordaily operations.See“Item 4.A.History and Development of the CompanyDivestitures of Our Loan Facilitation,Salvage Car and 2B Businesses.”Webelieve the amount of the cash flows between the former VIEs and our PRC subsidiaries were immaterial to our company for the fiscal year ended March 31,2022.For risks relating to our corporate structure,see“Item 3.Key InformationD.Risk FactorsSummary of Risk FactorsRisks Related to OurCorporate StructureIf the PRC government determines that the historical contractual arrangements with the former VIEs did not,or that our holdingcompany structure do not,comply with PRC laws and regulations,or if these regulations change or are interpreted differently in the future,our shares and/orADSs may decline in value or become worthless.”There were no other transfer of assets,dividends or distributions made between Uxin Limited,the former VIEs and our PRC subsidiaries and notransfer of cash or other assets,dividends or distributions made to U.S.investors for the fiscal years ended March 31,2022,2023 and 2024.See“Item 8.Financial InformationA.Consolidated Statements and Other Financial InformationDividend Policy.”8 Furthermore,cash transfers from our PRC subsidiaries to entities outside of mainland China are subject to PRC government controls on currencyconversion.As a result,cash in mainland China may not be available to fund operations or for other use outside of the PRC due to interventions in or theimposition of restrictions and limitations on the ability of us,our subsidiaries and the former VIEs to transfer cash or assets.Shortages in the availability offoreign currency may temporarily delay the ability of our PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us,orotherwise satisfy their foreign currency denominated obligations.There is no assurance the PRC government will not intervene in or impose restrictions on us,our subsidiaries and the former VIEs to transfer cash or assets.In view of the foregoing,to the extent cash in our business is held in mainland China or by amainland China entity,such cash may not be available to fund operations or for other use outside of mainland China.As of the date of this annual report,weare not aware of equivalent or similar restrictions or limitations in Hong Kong on cash transfers in,or out of,our Hong Kong entities.However,if certainrestrictions or limitations were to become applicable to cash transfers in and out of Hong Kong entities in the future,the funds in our Hong Kong entities maynot be available to fund operations or for other use outside of Hong Kong.For risks relating to the fund flows of our operations in China,see“Item 3.KeyInformationD.Risk FactorsSummary of Risk FactorsRisks Related to Doing Business in ChinaCash transfers from our PRC subsidiaries to entitiesoutside of mainland China are subject to PRC government controls on currency conversion.As a result,cash in mainland China may not be available to fundoperations or for other use outside of mainland China due to interventions in or the imposition of restrictions and limitations on the ability of us,our PRCsubsidiaries and the former VIEs to transfer cash or assets.There is no assurance the PRC government will not intervene in or impose restrictions on us andour subsidiaries to transfer cash or assets.Although currently we are not aware of equivalent or similar restrictions or limitations in Hong Kong on cashtransfers in,or out of,our Hong Kong entities,if certain restrictions or limitations in mainland China were to become applicable to cash transfers in and out ofHong Kong entities in the future,the funds in our Hong Kong entities,likewise,may not be available to fund operations or for other use outside of HongKong”and“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaGovernmental control of currency conversion may affectthe value of your investment”for details.Our Mainland China and Hong Kong subsidiaries and the former VIEs have incurred cumulative losses since inception.We have no current intentionto pay dividends to shareholders.Additionally,we have no intention to distribute earnings and our PRC subsidiaries have settled amounts with the formerVIEs under the historical VIE agreements.Our company has established a centralized cash management policy to direct how funds are transferred between Uxin Limited and our subsidiaries toimprove the efficiency and ensure the security of cash management.Such cash management policies are our management policy and adhere to the applicablelaws and regulations.Our companys cash management program is centralized within our funds and payment center.Funds are deployed to each operatingentity based on the budget and operating conditions of each operating entity.The funds and payment center is responsible for the centralized management ofcash inflows and outflows of our operating entities.Each cash requirement,after raised by an operating entity,is required to go through a review process byour funds and payment center.We will allocate the cash to the operating entity after the application for cash requirement is approved by the funds and paymentcenter.For purposes of illustration,the following discussion reflects the hypothetical taxes that might be required to be paid in Mainland China and HongKong,assuming that:(i)we have taxable earnings,and(ii)we determine to pay a dividend in the future:Tax calculation(1)Hypothetical pre-tax earnings(2)100.0%Tax on earnings at statutory rate of 25%(3)(25.0)%Net earnings available for distribution 75.0%Withholding tax at standard rate of 10%(4)(7.5)%Net distribution to Parent/Shareholders 67.5%Notes:(1)For purposes of this example,the tax calculation has been simplified.(2)The hypothetical pre-tax earnings are assumed to equal taxable income in China,without considering timing differences.(3)One of our subsidiaries in Mainland China qualifies for a 15%preferential income tax rate from 2020 to 2025.However,such rate is subject toqualification,is temporary in nature,and may not be available in a future period when distributions are paid.For purposes of this hypotheticalexample,the table above reflects a maximum tax scenario under which the full statutory rate would be effective.(4)The PRC Enterprise Income Tax Law imposes a withholding income tax of 10%on dividends distributed by a foreign invested enterprise to itsimmediate holding company outside of China.A lower withholding income tax rate of 5%is applied if the foreign-invested enterprises immediateholding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with China,subject to a qualification review atthe time of the distribution.For purposes of this hypothetical example,the table above assumes a maximum tax scenario under which the fullwithholding tax would be applied.9 If our existing PRC subsidiaries or any newly formed ones incur debt on their own behalf in the future,the instruments governing their debt mayrestrict their ability to pay dividends to us.In addition,our WFOEs are permitted to pay dividends to us only out of their retained earnings,if any,asdetermined in accordance with PRC accounting standards and regulations.Under PRC law,each of our subsidiaries and the former VIEs in China is requiredto 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 registeredcapital.In addition,our subsidiaries and the former VIEs may allocate a portion of their after-tax profits based on PRC accounting standards to discretionarysurplus funds at their discretion.The statutory reserve funds and the discretionary funds are not distributable as cash dividends.Remittance of dividends by awholly foreign-owned company out of China is subject to examination by the banks designated by SAFE.Some of our PRC subsidiaries will not be able topay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds.For restrictions and limitations on our ability todistribute earnings from our businesses,including subsidiaries and the former VIEs,to our Company and investors as well as the ability to settle amountsowed under historical VIE agreements,see“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaPRC regulations onloans and direct investments by offshore holding companies to PRC entities may delay or prevent us from making loans or additional capital contributions toour PRC entities.”A.Reserved B.Capitalization and Indebtedness Not applicable.C.Reasons for the Offer and Use of Proceeds Not applicable.D.Risk Factors Summary of Risk Factors Investing in the ADSs involves significant risks.You should carefully consider all of the information in this annual report before making aninvestment in the ADSs.Below please find a summary of the principal risks we face,organized under relevant headings.Risks Related to Our Business and Industry Risks and uncertainties related to our business and industry include,but are not limited to,the following:If we fail to provide a differentiated and superior customer experience,the size of our customer base and the number of transactions on ourplatform could decline,and our business would be materially and adversely affected;Failure to maintain or enhance customer trust in us could damage our reputation,reduce or slowdown the growth of our customer base,whichcould harm our business,financial condition and results of operations;We face intense competition,which may lead to loss of market share,reduced service fees and revenue,increased expenses,departures ofqualified employees,and disputes with competitors;We are not profitable and have negative cash flows from operations,which may continue in the future;10 Failure to acquire attractive inventory,whether due to supply,competition,or other factors,may have a material adverse effect on our business,sales,and results of operations;Failure to expeditiously sell our inventory could have a material adverse effect on our business,sales,and results of operations;If we are unable to effectively manage our growth or implement our business strategies,our business,results of operations and financialcondition may be materially and adversely affected;We rely,in part,on our marketing efforts for customer acquisition and achieving higher level of brand recognition.If we fail to conduct ourmarketing activities effectively and efficiently,our business could be harmed;Our business generates and processes a large amount of data,and we are required to comply with PRC and other applicable laws relating toprivacy and cybersecurity.The improper use or disclosure of data could have a material and adverse effect on our business and prospects;and We work with third-party service providers and business partners.Actions of third parties are outside of our control and could materially andadversely affect our reputation,business,financial condition and results of operations.Risks Related to Our Corporate Structure Risks and uncertainties related to our corporate structure include,but are not limited to,the following:If the PRC government determines that the historical contractual arrangements with the former VIEs did not,or that our holding companystructure do not,comply with PRC laws and regulations,or if these regulations change or are interpreted differently in the future,our sharesand/or ADSs may decline in value or become worthless.Risks Related to Doing Business in China Risks and uncertainties related to doing business in China include,but are not limited to,the following:Changes in Chinas economic,political or social conditions or government policies could have a material adverse effect on our business andoperations;The approval and/or other requirements of the CSRC,the CAC,or other PRC governmental authorities may be required in connection with anoffering under PRC rules,regulations or policies,and,if required,we cannot predict whether or how soon we will be able to obtain suchapproval,and,even if we obtain such approval,the approval could be rescinded.Any failure to obtain or delay in obtaining such approval forany future offshore securities offering,or a rescission of obtained approval,would subject us to sanctions imposed by the CSRC or other PRCgovernment authorities.As of the date of this annual report,we have not received any inquiry or notice or any objection in connection with ourhistorical issuance of securities to foreign investors from the CSRC,the CAC or any other PRC governmental authorities that have jurisdictionover our operations.However,given the current regulatory environment in the PRC,there remains uncertainty regarding the interpretation andenforcement of PRC laws,which can change quickly and subject to any future actions within the discretion of PRC authorities;The PRC government has significant oversight over our business operations in China,and may intervene in or influence our operations at anytime,or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers,which could result in amaterial change in our operations and/or the value of our securities.Any actions by the Chinese government to exert more oversight and controlover offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder ourability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.See“Item 3.Key InformationRisk FactorsRisks Related to Doing Business in ChinaThe PRC governments oversight over our businessoperation could result in a material adverse change in our operations and the value of our ADSs”for details;11 We face risks arising from the uncertainties with respect to the PRC legal system.Certain rules and regulations can change quickly,and theremay be risks and uncertainties regarding the interpretation and enforcement of PRC laws and regulations.These risks and uncertainties maymake it difficult for us to meet or comply with requirements under the applicable laws and regulations.See“Item 3.Key InformationRiskFactorsRisks Related to Doing Business in ChinaUncertainties in the interpretation and enforcement of Chinese laws and regulations couldlimit the legal protections available to us”for details;Our business is susceptible to changes in government policies,including policies on automobile purchases,ownership,taxation,vehicle titletransfers,and used car transactions across regions and provinces.Failure to adequately respond to such changes could adversely affect ourbusiness;You may experience difficulties in effecting service of legal process,enforcing foreign judgments or bringing actions against us or our directorsand management named in the annual report based on foreign laws;Cash transfers from our PRC subsidiaries to entities outside of mainland China are subject to PRC government controls on currency conversion.As a result,cash in mainland China may not be available to fund operations or for other use outside of mainland China due to interventions in orthe imposition of restrictions and limitations on the ability of us,our PRC subsidiaries and the former VIEs to transfer cash or assets.There is noassurance the PRC government will not intervene in or impose restrictions on us and our subsidiaries to transfer cash or assets.Althoughcurrently we are not aware of equivalent or similar restrictions or limitations in Hong Kong on cash transfers in,or out of,our Hong Kongentities,if certain restrictions or limitations in mainland China were to become applicable to cash transfers in and out of Hong Kong entities inthe future,the funds in our Hong Kong entities,likewise,may not be available to fund operations or for other use outside of Hong Kong.See“Item 3.Key InformationCash and Asset Flows through Our Organization”and“Item 3.Key InformationD.Risk FactorsRisks Related toDoing Business in ChinaGovernmental control of currency conversion may affect the value of your investment”for details;The PCAOB,in prior years,was unable to completely inspect and investigate registered independent accounting firms in mainland China andHong Kong,which includes our auditor.The inability of the PCAOB to conduct inspections over our auditor has deprived our investors of thebenefits of such inspections in prior years and may continue to deprive investors of such benefits in the future should the PCAOB not continue tohave the ability to completely inspect and investigate registered accounting firms in China;and Our ADSs will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act,or the HFCAA,if thePCAOB is unable to inspect or investigate completely auditors located in China for two consecutive years.The delisting of our ADSs,or thethreat of their being delisted,may materially and adversely affect the value of your investment.Risks Related to Our ADSs Risks and uncertainties related to our ADSs include,but are not limited to,the following:The trading price of the ADSs is likely to be volatile,which could result in substantial losses to investors;Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others frompursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial;The dual-class structure of our ordinary shares may adversely affect the trading market for our ADSs;If securities or industry analysts do not publish research or reports about our business,or if they adversely change their recommendationsregarding the ADSs,the market price for the ADSs and trading volume could decline;and The sale or availability for sale of substantial amounts of the ADSs could adversely affect their market price.12 Risks Related to Our Business and Industry If we fail to provide a differentiated and superior customer experience,the size of our customer base and the number of transactions on our platformcould decline,and our business would be materially and adversely affected.Providing a differentiated and superior online used car transaction experience for our customers,including both consumers and businesses,is criticalto our business.Our ability to provide a high-quality customer experience depends on a number of factors,including:our ability to provide customers with high-quality used cars and other related products;our ability to improve our existing service offerings and upgrade our platform;our ability to meet the diverse needs of our customers with ongoing innovation and new service offerings;our ability to maintain and improve operating efficiency,customer experience of online transactions and service quality of our offline networksand personnel;our ability to leverage technology and data to improve our services;our ability to adequately train and manage our employees;and our ability to effectively ensure the quality of services provided by our third-party service providers on our platform.We cannot guarantee that we can provide a differentiated and superior experience to our customers as our business continues to evolve.Our failure todo so would materially and adversely affect our business,financial condition and results of operations.Failure to maintain or enhance customer trust in us could damage our reputation,reduce or slowdown the growth of our customer base,which couldharm our business,financial condition and results of operations.Our reputation as a trusted leading e-commerce platform for buying and selling used cars in China is critical to our success.If we fail to maintain ahigh level of customer trust in our goods and services,our business,financial condition and results of operations could be materially and adversely affected.We work with third-party service providers to serve customers and fulfill the transactions made on our platform,such as car delivery,title transferand warranty services,which are the key to earn customer trust.If we fail to maintain a high level of customer satisfaction or fail to properly manage theseservices,our business,financial condition and results of the operations would be adversely affected.We provide trainings to our third-party service providersand require them to act in line with our operating and customer servicing standards.However,if these third-party service providers fail to maintain a highlevel of performance consistent with our requirements,the level of customer satisfaction and trust we enjoy may be harmed,and our business,financialcondition and results of the operations may be adversely affected.We have received in the past,and we may continue to receive in the future,communications or complaints alleging that cars listed on our platform orsold by us are defective or inconsistent with the information provided on our platform,or the services provided by our third-party service providers areunsatisfactory to our customers.The information we include in our car listings is collected and maintained by us,which may not be accurate or complete dueto human error,technological issues or misconduct.13 We face intense competition,which may lead to loss of market share,reduced service fees and revenue,increased expenses,departures of qualifiedemployees,and disputes with competitors.We face intense competition in the used car industry both online and offline.Our competitors may have significantly more resources than we do,including financial,technological,marketing and others and may be able to devote greater resources to the development and promotion of their platforms andservices.As a result,they may have deeper relationships with auto financing partners and other third-party service providers than we do.This could allowthem to develop new services,adapt more quickly to changes in technology and to undertake more extensive marketing campaigns,which may render ourplatform less attractive to customers and businesses and cause us to lose market share.Moreover,intense competition in the markets we operate in may reduceour gross profit margin for vehicle sales,lower our service fees,increase our operating expenses and capital expenditures,and lead to departures of ourqualified employees.We may also be harmed by negative publicity instigated by our competitors,regardless of its validity.We encountered and may in thefuture continue to encounter various disputes with our competitors,including lawsuits involving claims asserted under intellectual property laws,unfaircompetition laws and defamation which may adversely affect our business and reputation.Failure to compete with current and potential competitors couldmaterially harm our business,financial condition and our results of operations.There is substantial doubt as to our ability to continue as a going concern.The following factors raise substantial doubt as to our ability to continue as a going concern:We have incurred net losses since inception,and as of March 31,2024,we had an accumulated deficit in the amount of approximatelyRMB19,378.7 million(US$2,683.9 million);Our current liabilities exceeded our current assets by approximately RMB658.8 million(US$91.2 million)as of March 31,2024;Our cash balance as of March 31,2024 was approximately RMB23.3 million(US$3.2 million);and Our net cash used in operating activities was RMB262.4 million(US$36.3 million)in the fiscal year ended March 31,2024.Our ability to continue as a going concern is dependent on our managements ability to increase sales,achieve higher gross profit margin and controloperating costs and expenses to reduce operating cash outflows,as well as our financing arrangements,including but not limited to the renewal of existingborrowings and obtaining new debt and equity financings,which in turn,subjects us to various risks,including,among others,risks relating to our ability tomaintain and improve our liquidity and financial position.The audited consolidated financial statements included in this annual report on Form 20-F were prepared on the basis that we will continue as a goingconcern.Facts and circumstances including continuous losses,accumulated losses from operations,net cash used in operating activities and negative workingcapital raise substantial doubt as to our ability to continue as a going concern.Likewise,the report of our independent registered public accounting firmincludes a going concern paragraph that there is substantial doubt as to our ability to continue as a going concern.The audited financial statements do notinclude any adjustments that might result from the outcome of these uncertainties.If we become unable to continue as a going concern,we may have toliquidate our assets,and the value we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our auditedconsolidated financial statements.Our lack of cash resources and our potential inability to continue as a going concern may materially and adversely affect theprice of our ADSs and our ability to continue our operations.We are not profitable and have negative cash flows from operations,which may continue in the future.We have not been profitable since our inception in 2011.We incurred net losses of RMB143.2 million,RMB137.2 million and RMB369.5 million(US$51.2 million)in the fiscal years ended March 31,2022,2023 and 2024,respectively.In addition,we had negative cash flow from operating activities ofRMB845.0 million,RMB251.1 million and RMB262.4 million(US$36.3 million)in the fiscal years ended March 31,2022,2023 and 2024,respectively.We have taken several steps to improve our liquidity and cash position.For more information,see“B.Item 5.Operating and Financial Review andProspectsB.Liquidity and Capital ResourcesCash flows and working capital.”However,However,we cannot guarantee the effectiveness of thesemeasures.Additionally,we may need to continue to invest heavily in various aspects of our operations,such as labor,infrastructure,sales and marketing,tofacilitate the expansion of the offline regional markets in the future.These investments may not lead to revenue increase or generate positive cash flow,potentially straining our financial resources.14 We may incur additional losses and negative cash flow in the future for a number of reasons,including decreasing demand or slower than expectedincrease in demand for used cars and our services,increasing competition,weakness in the automotive retail industry in general,as well as other risksdiscussed herein,and we may incur unforeseen expenses,or encounter difficulties,complications and delays in generating revenue or achieving profitability.If our revenues decrease,we may not be able to reduce our costs and expenses proportionally in a timely manner because many of our costs and expenses arefixed.In addition,if we reduce our costs and expenses,we may limit our ability to acquire customers and grow our revenues.Accordingly,we may not be ableto achieve profitability and we may continue to incur additional losses in the future.If we are unable to effectively manage our growth or implement our business strategies,our business,results of operations and financial condition may bematerially and adversely affected.Our business and prospects depend in part on our ability to effectively manage our growth or implement our growth strategies.As part of ourbusiness strategies,we intend to increase our penetration in existing markets and expand into new geographic markets.Our experience in the markets in whichwe currently operate may not be applicable to other parts of China.We may not be able to leverage our experience to expand into new geographic markets inChina.As a result,our expansion and monetization strategies,including sales and marketing efforts designed to attract more consumers and businesses,maynot be successful.Furthermore,expanding into new geographical markets will require us to hire additional employees to cover these markets.We will incuradditional compensation and benefit costs,office rental expenses and other costs,as well as experience additional strain on our managerial resources.If we areunable to successfully expand and generate sufficient revenues to cover our increased costs and expenses,our business,financial condition and results ofoperations may be materially and adversely affected.Moreover,our business upgrade and expansion may lead to new challenges and risks.As a result,we need to continuously expand and enhance ourinfrastructure and technology,and improve our operational and financial systems,procedures and internal controls.We also need to train,manage andmotivate our employees.In addition,we need to maintain and expand our relationships with our customers,third-party service providers and other thirdparties.We cannot assure you that our personnel,infrastructure,systems,procedures and controls will be adequate to support our operations.Effectivelymanaging our growth is dependent on a number of other factors,including our ability to:providing high-quality and value-for-money used vehicles;continue to improve our existing full-range car purchasing service and customers satisfaction;launch new services and develop cross-selling opportunities;stabilize our costs and expenses and enhance our efficiency;achieve success with our used car superstores in Xian and Hefei,respectively,or Xian Superstore and Hefei Superstore;recruit and retain skilled and experienced employees;strengthen relationships with our business partners;enhance our risk management and internal control;upgrade our technology and continue to innovate;and maintain and enhance the network effects of our platform.If we fail to effectively manage our growth or implement our business strategies,our business,results of operations and financial condition may bematerially and adversely affected.Failure to acquire attractive inventory,whether due to supply,competition,or other factors,may have a material adverse effect on our business,sales,andresults of operations.Since September 2020,we have shifted to an inventory-owning model where we build-up and sell our own inventory of used cars.By switching toand adopting the inventory-owning model,our vehicle supply channels are expanded to include consumers who intend to sell their existing cars,4S shops,corporate clients and auction platforms.The transformation of our business model has enabled us to obtain better control over order flow and supply chainmanagement,which further strengthens our ability to maximize customer value through our dedicated approach:offering high-quality and value-for-moneyused cars alongside best-in-class purchasing services.However,there can be no assurance that the supply of high-quality and value-for-money used vehicleswill be sufficient to meet our needs.A reduction in the availability of or access to sources of desirable inventory could have a material adverse effect on ourbusiness,sales and results of operations.15 Additionally,we evaluate and predict mechanical soundness,consumer desirability and relative value as prospective inventory.If we fail to properlyassess vehicle condition before we purchase them,it could adversely affect our ability to acquire desirable inventory.Our ability to source vehicles could alsobe affected by fierce competition in our industry,both from e-commerce platform for used-car trading directly and through other used vehicle dealers directly.In addition,we remain dependent on others to sell us used vehicles,and there can be no assurance of an adequate supply of such vehicles on terms that areattractive to us.Failure to expeditiously sell our inventory could have a material adverse effect on our business,sales,and results of operations.Our purchases of used vehicles for building our own inventory are largely based on projected demand,which was primarily determined based on thethen existing market condition.If our projections turn out to be inaccurate or actual sales are materially less than our forecasts,we may experience an over-supply of used vehicle inventory,which will generally cause downward pressure on our sales prices and margins and increase our average days to sale.If wehave excess inventory or our average days to sale increases,we may be unable to liquidate such inventory at prices that allow us to meet margin targets or torecover our costs,which could have a material adverse effect on our results of operations.We work with third-party service providers and business partners.Actions of third parties are outside of our control and could materially and adverselyaffect our reputation,business,financial condition and results of operations.We work with third-party service providers to serve customers and fulfill the transactions made on our platform,such as auto financing,car delivery,title transfers,and other after-sales services.We carefully select our third-party service providers and business partners,but we are not able to control theiractions.If these third parties fail to perform as we expect,experience difficulty meeting our requirements or standards,fail to conduct their business ethically,fail to provide satisfactory services to our customers,receive negative press coverage,violate applicable laws or regulations,breach the agreements with us,orif the agreements we have entered into with the third parties are terminated or not renewed,our business and reputation could be damaged.In addition,if suchthird-party service providers cease operations,temporarily or permanently,face financial distress or other business disruptions,increase their fees,or if ourrelationships with them deteriorate,we could suffer from increased costs,be involved in legal or administrative proceedings with or against our third-partyservice providers and experience delays in providing customers with similar services until we find or develop a suitable alternative.In addition,if we are notsuccessful in identifying high-quality partners,or establishing cost-effective relationships with them,or effectively managing these relationships,our businessand results of operations would be materially and adversely affected.We rely,in part,on our marketing efforts for customer acquisition and achieving higher level of brand recognition.If we fail to conduct our marketingactivities effectively and efficiently,our business could be harmed.We may continue to invest substantial financial and other resources in marketing initiatives to grow our customer base.We currently carry out ourmarketing activities mainly by acquiring traffic through new media platforms with the goal of attracting more visitors to our platform.We face intensecompetition from our competitors who may have greater marketing resources than we do.If we fail to conduct our marketing activities effectively andefficiently,or if our traffic acquisition efforts and marketing campaigns are not successful,our growth,results of operations and financial condition could bematerially and adversely affected.Our business generates and processes a large amount of data,and we are required to comply with PRC and other applicable laws relating to privacy andcybersecurity.The improper use or disclosure of data could have a material and adverse effect on our business and prospects.Our business generates and processes a large quantity of data.We face risks inherent in handling and protecting large volume of data.In particular,we face a number of challenges relating to data from transactions and other activities on our platforms,including:protecting the data in and hosted on our system,including against attacks on our system by outside parties or fraudulent behavior or improper useby our employees;16 addressing concerns related to privacy and sharing,safety,security and other factors;and complying with applicable laws,rules and regulations relating to the collection,use,storage,transfer,disclosure and security of personalinformation,including any requests from regulatory and government authorities relating to these data.In general,we expect that data security and data protection compliance will receive greater attention and focus from regulators,both domestically andglobally,as well as attract continued or greater public scrutiny and attention going forward,which could increase our compliance costs and subject us toheightened risks and challenges associated with data security and protection.If we are unable to manage these risks,we could become subject to penalties,including fines,suspension of business and revocation of required licenses,and our reputation and results of operations could be materially and adverselyaffected.The PRC regulatory and enforcement regime with regard to data security and data protection is evolving and may be subject to differentinterpretations or significant changes.Moreover,different PRC regulatory bodies,including the Standing Committee of the NPC,the MIIT,the CAC,theMinistry of Public Security and the SAMR,have enforced data privacy and protections laws and regulations with varying standards and applications.See“Item 4.Information on the CompanyB.Business OverviewRegulationRegulations on Information Security and Privacy Protection.”The following areexamples of certain recent PRC regulatory activities in this area:Data Security In June 2021,the Standing Committee of the NPC promulgated the Data Security Law,which took effect in September 2021.The Data SecurityLaw,among other things,provides for security review procedure for data-related activities that may affect national security.In July 2021,thestate council promulgated the Regulations on Protection of Critical Information Infrastructure,which became effective on September 1,2021.Pursuant to this regulation,critical information infrastructure means key network facilities or information systems of critical industries or sectors,such as public communication and information service,energy,transportation,water conservation,finance,public services,e-government affairsand national defense science,the damage,malfunction or data leakage of which may endanger national security,peoples livelihoods and thepublic interest.In December 2021,the CAC,together with other authorities,jointly promulgated the Cybersecurity Review Measures,whichbecame effective on February 15,2022 and replaces its predecessor regulation.Pursuant to the Cybersecurity Review Measures,criticalinformation infrastructure operators that procure internet products and services must be subject to the cybersecurity review if their activitiesaffect or may affect national security.The Cybersecurity Review Measures further stipulates that critical information infrastructure operators ornetwork platform operators that hold personal information of over one million users shall apply with the Cybersecurity Review Office for acybersecurity review before any public offering at a foreign stock exchange.The competent regulatory authorities for each of the criticalindustries and sectors shall be responsible for formulating eligibility criteria and determining the identity of critical information infrastructureoperator in such industry or sector.As of the date of this annual report,no detailed rules or implementation rules have been issued by anyauthority and we have not been informed that we are a critical information infrastructure operator by any government authorities.Furthermore,the exact scope of“critical information infrastructure operators”under the current regulatory regime remains unclear,and the PRC governmentauthorities may have wide discretion in the interpretation and enforcement of the applicable laws.Therefore,it is uncertain whether we would bedeemed to be a critical information infrastructure operator under PRC law.If we are deemed to be a critical information infrastructure operatorunder the PRC cybersecurity laws and regulations,we may be subject to obligations in addition to what we have fulfilled under the PRCcybersecurity laws and regulations.17 In November 2021,the CAC released the Regulations on the Network Data Security(Draft for Comments),or the Draft Regulations.The DraftRegulations provide that data processors refer to individuals or organizations that,during their data processing activities such as data collection,storage,utilization,transmission,publication and deletion,have autonomy over the purpose and the manner of data processing.In accordancewith the Draft Regulations,data processors shall apply for a cybersecurity review for certain activities,including,among other things,(i)thelisting abroad of data processors that process the personal information of more than one million users and(ii)any data processing activity thataffects or may affect national security.However,there have been no clarifications from the relevant authorities as of the date of this annual reportas to the standards for determining whether an activity is one that“affects or may affect national security.”In addition,the Draft Regulationsrequires that data processors that process“important data”or are listed overseas must conduct an annual data security assessment by itself orcommission a data security service provider to do so,and submit the assessment report of the preceding year to the municipal cybersecuritydepartment by the end of January each year.If we are not able to comply with the cybersecurity and network data security requirements in atimely manner,or at all,we may be subject to government enforcement actions and investigations,fines,penalties,suspension of our non-compliant operations,or removal of our app from the relevant application stores,among other sanctions,which could materially and adverselyaffect our business and results of operations.As of the date of this annual report,the Draft Regulations was released for public comment only,and their respective provisions and anticipated adoption or effective date may be subject to change with substantial uncertainty.The DraftRegulation remains unclear on whether the relevant requirements will be applicable to companies that have been listed in the United States,including our company.Personal Information and Privacy The Anti-monopoly Guidelines for the Platform Economy Sector published by the Anti-monopoly Committee of the State Council,effective onFebruary 7,2021,prohibits collection of user information through coercive means by online platforms operators.In August 2021,the Standing Committee of the NPC promulgated the Personal Information Protection Law,which integrates the scattered ruleswith respect to personal information rights and privacy protection and took effect on November 1,2021.We update our privacy policies fromtime to time to meet the latest regulatory requirements of PRC government authorities and adopt technical measures to protect data and ensurecybersecurity in a systematic way.Nonetheless,the Personal Information Protection Law elevates the protection requirements for personalinformation processing,and many specific requirements of this law remain to be clarified by the CAC,other regulatory authorities,and courts inpractice.We may be required to make further adjustments to our business practices to comply with the personal information protection laws andregulations.Many of the data-related legislations are relatively new and certain concepts thereunder remain subject to interpretation by the regulators.If any datathat we possess belongs to data categories that are subject to heightened scrutiny,we may be required to adopt stricter measures for protection andmanagement of such data.The Cybersecurity Review Measures and the Draft Regulations remain unclear on whether the relevant requirements will beapplicable to companies that are already listed in the United States,such as us.We cannot predict the impact of the Cybersecurity Review Measures and theDraft Regulations,if any,at this stage,and we will closely monitor and assess any development in the rule-making process.If the Cybersecurity ReviewMeasures and the enacted version of the Draft Regulations mandate clearance of cybersecurity review and other specific actions to be taken by issuers like us,we face uncertainties as to whether these additional procedures can be completed by us timely,or at all,which may subject us to government enforcementactions and investigations,fines,penalties,suspension of our non-compliant operations,or removal of our app from the relevant application stores,andmaterially and adversely affect our business and results of operations.As of the date of this annual report,we have not been involved in any formalinvestigations on cybersecurity review made by the CAC on such basis.In general,compliance with the existing PRC laws and regulations,as well as additional laws and regulations that PRC regulatory bodies may enactin the future,related to data security and personal information protection,may be costly and result in additional expenses to us,and subject us to negativepublicity,which could harm our reputation and business operations.There are also uncertainties with respect to how such laws and regulations will beimplemented and interpreted in practice.In addition,regulatory authorities around the world have adopted or are considering a number of legislative and regulatory proposals concerning dataprotection.These legislative and regulatory proposals,if adopted,and the uncertain interpretations and application thereof could,in addition to the possibilityof fines,result in an order requiring that we change our data practices and policies,which could have an adverse effect on our business and results ofoperations.The European Union General Data Protection Regulation,or the GDPR,which came into effect on May 25,2018,includes operationalrequirements for companies that receive or process personal data of residents of the European Economic Area.The GDPR establishes new requirementsapplicable to the processing of personal data,affords new data protection rights to individuals and imposes penalties for serious data breaches.Individuals alsohave a right to compensation under the GDPR for financial or non-financial losses.Although we do not conduct any business in the European Economic Area,in the event that residents of the European Economic Area access our website or our mobile platform and input protected information,we may become subjectto provisions of the GDPR.18 Negative media coverage related to our business,regardless of its validity,could adversely affect our business,financial position and results of operations.Negative news or media coverage of our business,our employees,our third-party service providers and business partners,our directors andmanagement or our shareholders,including,without limitation,alleged failure to comply with applicable laws and regulations,alleged fraudulent car listings,alleged misrepresentation by our sales consultants or third-party service providers,breach of data security,failure to protect user privacy,inappropriatebusiness practices,disclosure of inaccurate operating data,negative information on blogs and social media websites,regardless of their validity,could damageour reputation.If we fail to correct or mitigate misinformation or negative information about us,including information spread through social media ortraditional media channels,customer trust in us may be undermined,which would have a material adverse effect on our business,results of operations andfinancial condition.Our limited operating history in certain of our services and the rapid evolution of our business model make it difficult for investors to evaluate ourbusiness and prospects.Our limited operating history in certain of our services and the rapid evolution of our business model mean that our historical growth is notnecessarily indicative of our future performance.We cannot assure you that our new product and service offerings will achieve the expected results or we willbe able to achieve similar results or grow at the same rate as we did in the past.As our business and Chinas used car industry continue to develop,we mayadjust our product and service offerings or modify our business model.For example,we have shifted to an inventory-owning model since September 2020,when we build-up and sell our own inventory.In addition,our first used car superstore in Xian has been in operation in March 2021 and our second used carsuperstore in Hefei has been in operation since November 2021.In December 2022,we had completed the relocation and upgrade of our Xian Superstore.The upgraded Xian Superstore reopened for business as the largest fully self-owned used car marketplace in Northwest China with a showroom capacity ofup to 3,000 vehicles to meet the used car consumption demand in the city of Xian and its surrounding areas.Starting from early 2018,we have started to fulfill online used car transactions for consumers,which we previously referred to as“2C cross-regionalbusiness”.With our online used-car-buying product and service offerings,we enable consumers to buy used cars online without the need to go to offlinedealerships or see the actual car when making the purchase.In addition,we entered into a binding term sheet,definitive agreements and supplementalagreements,in July 2019,September 2019 and April 2020,respectively,with Golden Pacer to divest our loan facilitation related business.Pursuant to theseries of agreements,we divested our entire 2C intra-regional business in which we facilitated offline used car transactions between consumers and dealers inlocal used car marketplaces,and ceased to provide loan facilitation related guarantee services in connection with our 2C online transaction business sinceNovember 2019.We also divested our salvage car related business to Boche in January 2020 as well as our 2B business to pursuant to definitiveagreements we entered into in March 2020.The transaction with Golden Pacer closed upon the signing of the supplemental agreements in April 2020,and thetransactions with Boche and closed in January 2020 and April 2020,respectively.Such developments or adjustments may not achieve expected resultsand may have a material and adverse impact on our financial condition and results of operations.The price of used cars sold on our platform and the fees we charge may fluctuate or decline in the future,and any material decrease in such price andfees would harm our business,financial condition and results of operations.Since the built up of our own inventory since September 2020,most of our revenues are derived from vehicle sales.Before we built our owninventory,most of our revenues were derived from the fees we charged from transactions on our platform,such as commission fee and value-added service feefrom our 2C business.Prior to the divestiture of our 2B business,we also generated transaction facilitation service fee from the 2B business.Maintaining andgrowing our revenues depends on a number of factors,including:our ability to offer high-quality and value-for-money used cars to our customers;our ability to deliver satisfactory online used car transaction experience to our customers;our ability to attract consumers to our platform;19 the average unit price of used cars sold on our platform,which may decrease if we adjust down the price range of used cars available on ourplatform or enter into lower-tier city markets,or as a result of declining selling prices of new cars;our ability to foster relationships with third-party service providers to provide services through our platform at attractive terms and prices to usand our customers;and fluctuation in other macro-economic changes.Any failure to adequately and promptly address any of these risks and uncertainties would materially and adversely affect our business and results ofoperations.Failure to obtain certain filings,approvals,licenses,permits and certificates required for our business operations may materially and adversely affect ourbusiness,financial condition and results of operations.Certain of our PRC subsidiaries used to engage in business activities that are not within their registered business scope.As of the date of this annualreport,we are not aware of any action,claim,or investigation being conducted or threatened by the State Administration for Market Regulation(formerlyknown as the State Administration for Industry and Commerce),or the SAMR,or its local branches with respect to such business activities.While we haveceased conducting such business activities,we cannot rule out the possibility that our past practice could be interpreted by the SAMR as“doing businessbeyond the business scope”and subject us to enforcement actions such as confiscation of any illegal gains,or imposition of fines.In addition,pursuant to relevant laws and regulations,as some of our PRC subsidiaries are regarded as operators of used car marketplaces and usedcar related business,these entities are required to complete filings with the Ministry of Commerce of the PRC,or the MOFCOM,at provincial level.ThesePRC subsidiaries have completed such required filings with the relevant authorities and we will strive to complete relevant filings if certain of our subsidiariescommence used car related business.However,there is no assurance we will be able to complete the filing in a timely manner,or at all.Failure to comply withthe filing requirements may subject our business to restriction,which would have an adverse impact on our business and results of operations.In addition,it is required by PRC laws and regulations for companies responsible for the construction projects to prepare environmental impactreport,environmental impact statement,or environmental impact registration form based on the different level of potential environmental impact of theprojects.The environmental impact reports(required if potentially serious environmental impact)and the environmental impact statements(required ifpotentially mild environmental impact)are subject to review and approval by the governmental authority and failure to satisfy such requirements may subjectone to discontinuation of the construction projects,fines of 1%to 5%of the total investment in the projects or an order of restoration.The environmentalimpact registration forms(required if very little environmental impact where environmental impact assessment is not necessary)are required to be filed withcompetent authority and failure to satisfy such requirement may subject one to fine
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR(g)OF THE SECURITIES EXCHANGE ACTOF 1934 OR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2024 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 OF1934 Date of event requiring this shell company report _ For the transition period from _ to_ Commission file number 001-42469 Uni-Fuels Holdings Limited(Exact name of Registrant as specified in its charter)N/A(Translation of Registrants name into English)Cayman Islands(Jurisdiction of incorporation or organization)15 Beach Road,Beach Centre#05-07Singapore 189677(Address of principal executive offices)Koh Kuan Hua,Chief Executive Officer15 Beach Road,Beach Centre#05-07Singapore 189677 65 6027 1250(Name,Telephone,E-mail 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(s)Name of each exchange on which registeredClass A Ordinary Shares,par value US$0.0001per share UFG The Nasdaq Stock Market LLC Securities registered or to be registered pursuant to Section 12(g)of the Act:None(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act:None(Title of Class)Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the periodcovered by the annual report:7,350,000 Class A Ordinary Shares and 22,650,000 Class B Ordinary Shares as of December 31,2024.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 toSection 13 or 15(d)of the Securities Exchange Act of 1934.Yes No Note Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d)of theSecurities Exchange Act of 1934 from their obligations under those Sections.Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the SecuritiesExchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file suchreports),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 submittedpursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period thatthe 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 anemerging growth company.See definition of“large accelerated filer,“accelerated filer,”and“emerging growth company”in Rule12b-2 of the Exchange Act.Large accelerated filer Non-accelerated filer Accelerated filer Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if theregistrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards 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 StandardsBoard 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 managements assessment of theeffectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)bythe registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of theregistrant 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-basedcompensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAP International Financial Reporting Standards as issued by the InternationalAccounting Standards Board Other If“Other”has been checked in response to the previous question,indicate by check mark which financial statement item theregistrant 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 theExchange 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)ofthe Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.Yes No TABLE OF CONTENTS SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS1PART I.2ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS2ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE2ITEM 3.KEY INFORMATION2ITEM 4.INFORMATION ON THE COMPANY26ITEM 4A.UNRESOLVED STAFF COMMENTS38ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS39ITEM 6.DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES46ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS53ITEM 8.FINANCIAL INFORMATION55ITEM 9.THE OFFER AND LISTING56ITEM 10.ADDITIONAL INFORMATION56ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK67ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES68PART II.68ITEM 13.DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIES68ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS68ITEM 15.CONTROLS AND PROCEDURES69ITEM 16.RESERVED70ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT70ITEM 16B.CODE OF ETHICS70ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES70ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES71ITEM 16E.PURCHASER OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS71ITEM 16F.CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT71ITEM 16G.CORPORATE GOVERNANCE71ITEM 16H.MINE SAFETY DISCLOSURE72ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS72ITEM 16J.INSIDER TRADING POLICIES72ITEM 16K.CYBERSECURITY72PART III.73ITEM 17.FINANCIAL STATEMENTS73ITEM 18.FINANCIAL STATEMENTS73ITEM 19.EXHIBITS73 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This annual report contains forward-looking statements that involve substantial risks and uncertainties.In some cases,youcan identify forward-looking statements by the words“may,”“might,”“will,”“could,”“would,”“should,”“expect,”“intend,”“plan,”“goal,”“objective,”“anticipate,”“believe,”“estimate,”“predict,”“potential,”“continue”and“ongoing,”or the negative ofthese terms,or other comparable terminology intended to identify statements about the future.These statements involve known andunknown risks,uncertainties and other important factors that may cause our actual results,levels of activity,performance orachievements to be materially different from the information expressed or implied by these forward-looking statements.Theforward-looking statements and opinions contained in this annual report are based upon information available to us as of the date ofthis annual report and,while we believe such information forms a reasonable basis for such statements,such information may belimited or incomplete,and our statements should not be read to indicate that we have conducted an exhaustive inquiry into,orreview of,all potentially available relevant information.Forward-looking statements include statements about:timing of the development of future business;capabilities of our business operations;expected future economic performance;competition in our market;continued market acceptance of our services and products;protection of our intellectual property rights;changes in the laws that affect our operations;inflation and fluctuations in foreign currency exchange rates;our ability to obtain and maintain all necessary government certifications,approvals,and/or licenses to conduct ourbusiness;continued development of a public trading market for our securities;the cost of complying with current and future governmental regulations and the impact of any changes in theregulations on our operations;managing our growth effectively;projections of revenue,earnings,capital structure and other financial items;fluctuations in operating results;dependence on our senior management and key employees;and other factors set forth under“Risk Factors.”You should refer to the section titled“Risk Factors”for a discussion of important factors that may cause our actual resultsto differ materially from those expressed or implied by our forward-looking statements.As a result of these factors,we cannotassure you that the forward-looking statements in this annual report will prove to be accurate.Furthermore,if our forward-lookingstatements prove to be inaccurate,the inaccuracy may be material.In light of the significant uncertainties in these forward-lookingstatements,you should not regard these statements as a representation or warranty by us or any other person that we will achieveour objectives and plans in any specified time frame,or at all.We undertake no obligation to publicly update any forward-lookingstatements,whether as a result of new information,future events or otherwise,except as required by law.You should read this annual report and the documents that we reference in this annual report completely and with theunderstanding that our actual future results may be materially different from what we expect.We qualify all of our forward-lookingstatements by these cautionary statements.1 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 3.A.Reserved 3.B.Capitalization and Indebtedness Not applicable.3.C.Reasons for the Offer and Use of Proceeds Not applicable.3.D.Risk Factors Risks Related to Our Business Our Group does not have a long operating history as an integrated group.Our Company was incorporated as a holding company on March 8,2024.While the businesses of our subsidiary havebeen in operation since October 2021,we do not have a long history of running an integrated group with standardized policies andprocedures as compared to our competitors and on which our past performance may be judged.Given our limited operating historyand the rapidly evolving market in which we compete,we may encounter operational,financial and other difficulties as weestablish and expand our operations,product and service developments,sales and marketing,technology and general andadministrative capabilities.We may incur losses in the future.For the years ended December 31,2024,2023 and December 31,2022,the Company recorded net income ofUS$171,597,US$1,211,787 and US$1,977,132,respectively.We anticipate that our operating expenses,together with the increasedgeneral administrative expenses of a public company,will increase in the foreseeable future as we seek to maintain and continue togrow our business,attract potential customers and further enhance our service offerings.These efforts may prove more expensivethan we currently anticipate,and we may not succeed in increasing our revenue sufficiently to offset these higher expenses.As aresult of the foregoing and other factors,we may incur net losses in the future and may be unable to achieve or maintain sufficientcash flows or profitability on a quarterly or annual basis for the foreseeable future.Our historical financial and operating results are not a guarantee of our future performance.Our annual and periodic financial results vary from year to year and from period to period,in response to a number offactors that we cannot predict,such as general business outlook and sentiment,economic market conditions,employment rates,inflation and interest rates and consumer confidence.As such,we believe that our annual and periodic financial results are not aguarantee of our future economic performance and undue reliance should not be placed on such results for future speculativepurposes.2 Global economy and international trade conditions are critical factors affecting the demand for marine fuel,and a decline ininternational trade could adversely affect our business,financial condition and results of operations.Global demand for marine fuels is primarily driven by the level of activity in the shipping industry,in particular thenumber of active vessels at sea.Economic downturns in one or more countries or regions,particularly in Asia,the United States,European Union and other countries or regions with consumer-oriented economies,have in the past,and could in the future,reduceinternational trade volumes,which directly affects the demand for shipping services,and,in turn,the demand for marine fuel.Thedownturns in global economy or reductions in international trade volume may reduce the demand for marine fuels which couldadversely affect our business,financial condition and results of operations.We may not be successful in expanding our business operations consistent with our strategies.Our future growth will depend on our ability to successfully implement our strategies and there can be no assurance thatwe will be able to grow our business as currently anticipated.Our future growth depends on a number of factors,including ourability to identify and capitalize on business opportunities that are in line with our strategies.We may decide to alter or discontinueaspects of our business strategies should the market develop differently than we have anticipated.As a result,our failure to executeour strategies successfully could adversely affect our business,financial condition and results of operations.Marine fuels prices may fluctuate due to factors out of our control.Any significant increase in marine fuels price mayadversely affect our working capital requirements and financial condition.These factors include,among others,global economicconditions,changes in global crude oil prices,expected and actual supply of and demand for marine fuel,political conditions,changes in laws and regulations related to environmental matters(including those mandating or incentivizing alternative energysources or otherwise addressing global climate change),changes in pricing or production controls by the Organization of thePetroleum Exporting Countries(OPEC),technological advances affecting energy consumption and supply,energy conservationefforts,price and availability of alternative fuels,and weather.The fluctuations in marine fuels prices,which are out of our control,may affect our working capital requirements.Sinceour operation scale is limited by our working capital,for a given period of time,if the marine fuels prices increase substantially as aresult of policies or controls imposed by the relevant regulatory authorities,we could purchase lesser marine fuels from oursuppliers with the same level of financial resources and same trade credit offered by our suppliers.We are therefore vulnerable tosuch unfavorable changes in government policies or controls on marine fuels prices.In the event that there is a significant increasein the price of marine fuel,we might require additional working capital in order to fulfil our customers purchasing requirements.To ensure a positive gross profit for each transaction for our marine fuels reselling business,we price our sales on a“costplus mark-up”basis,i.e.our sales margin,being the difference between the selling price per metric ton of marine fuels sold to ourcustomers and the corresponding purchase cost from our suppliers.Therefore,we will be able to generate more profit when weresell more marine fuels products in terms of quantity.If the marine fuels price increases significantly and we cannot obtainsufficient financial resources and improve our cash flow in time to ensure we can procure similar amount of marine fuels from oursuppliers,we may not be able to deliver as much marine fuels to customers as we could when the marine fuels price is at arelatively low level and our profitability may be adversely affected,and the requirement for additional working capital may tightenour operating cash flows,which may in turn adversely affect our financial condition.We are exposed to the risk that our competitors may undercut marine fuels prices,which would adversely affect our Groupsbusiness and financial results.If our competitors undercut marine fuels prices to increase their market share and we fail to effectively compete withthem,customers may choose to procure marine fuels supply from such competitors,causing a shortfall in our revenue that wouldadversely affect our business and financial results due to such intensified competitive environment.3 We may be exposed to the credit risks of our customers while we remain subject to satisfying payment obligations to oursuppliers,which would adversely affect our financial condition.Our financial position and profitability are dependent to a large extent on the creditworthiness of our customers and theirability to settle the outstanding amount owed to our Group in accordance with the credit periods we have granted to them.Thepayment terms of our customers typically range from 30 to 60 days.Meanwhile,the payment terms to our suppliers range fromcash on delivery to 30 days.Should we experience any delays or difficulties in collecting payments from our customers,while remaining obligated tosatisfy our ongoing payment obligations to our suppliers,we may be required to consider alternative sources of financing and/ordefer on our own payment obligations.This may have a negative impact on the cash flow of our Group and we may haveinsufficient working capital to run our day-to-day operations.The failure of timely delivery of marine fuels to our customers would adversely affect our Groups reputation,business,financial condition and results of operations.Marine fuels suppliers are responsible for handling the physical distribution of marine fuels to customers.The failure ofthird parties to physically deliver the marine fuels in accordance with the contractual terms would arise from various causes,including but not limited to,interruption of their business,such as,bunker barge engine failure with no alternative bunker bargesavailable.We might need to arrange another supplier to handle the physical delivery of marine fuel,which may cause delay inmeeting our customers requirements.In the event that no other supplier is available to handle the physical delivery,ourrelationship with our customers may be adversely affected and we may be subject to claims and other liabilities,which,in turn,would have an adverse effect on our business,financial condition and results of operations.We believe that the reputation we have built over the years serves a significant role in attracting customers and securingour customers orders.Whether or not we can maintain or promote our reputation depends largely on our ability to provide marinefuels supply to our customers in a timely manner.If we fail to meet their needs or are unable to deliver marine fuels requested bythem at the designated port in a timely manner,our customers may no longer perceive our services to be of a high quality and ourreputation would be adversely affected.This will,in turn,adversely affect our business,financial condition and results ofoperations.Material disruptions in the availability or supply of marine fuels would have an adverse effect on our business,financialcondition and results of operations.Our business depends on our ability to successfully source and arrange physical delivery of marine fuels to our customersvessels.There are a number of factors out of our control that would materially disrupt the availability or supply of marine fuels orour ability to arrange physical delivery in a timely manner.If our suppliers do not have sufficient supply of marine fuels atdesignated ports to meet our customers needs and we cannot find any alternative suppliers,we may lose our customers,which mayadversely affect the profitability of our business.If the marine fuels we purchase from our suppliers fail to meet the contractual quality specifications we have agreed to supplyto our customers,it would have an adverse effect on our business,financial condition and results of operations.We source marine fuels from various suppliers.Although we take measures to ensure the quality of the marine fuels thatwe supply,if the marine fuels that we arrange for supplying our customers vessels fail to meet the specifications we have agreed towith our customers,we would incur significant liabilities should a customer initiate a claim or a lawsuit against us and we areunable to initiate a claim or a lawsuit against our suppliers.We may not always have effective remedies available to us against oursuppliers if they supply marine fuels that fail to meet contractual specifications,and any attempt to enforce our rights would becostly and time consuming.It would also harm our relationships with our customers,jeopardize our reputation and expose ourGroup to potential claims.As a result,our financial condition and results of operations would be adversely affected.4 We may be exposed to the risk of our customers not fulfilling their performance obligations,which would adversely affect ourGroups reputation,business,financial condition and results of operations.We derive our profits from our reselling business by charging a sales margin on top of our costs of purchase for each tonof marine fuels we supply to our customers.There may be instances where we may be exposed to unwarranted risk because ourcustomers default on their performance obligations,such as in the event of a cancellation of supply.In such circumstances,we willpass the costs associated with the non-performance to our customers as per the terms of our sales agreement.However,there is noguarantee that our customers will compensate us in accordance with the terms of our sales agreement.In the event we are unable tocollect compensation from our customers,we may seek alternative remedies to resolve such issues with our customers,which mayinclude legal action.In this instance,if the market price of marine fuels drops below the price we paid to our supplier,we couldincur losses.Depending on the severity of our customers non-performance,our relationship with our suppliers and our reputationin the marine fuels market may be jeopardized.To mitigate this,we may need to compensate our suppliers,even if it meansincurring losses,thus,adversely affect our Groups reputation,business,financial condition and results of operations.We are exposed to concentration of credit risk with respect to accounts receivable.As of December 31,2024,there was one customer whose receivables accounted for 10%or more of our total balances ofaccounts receivable and it accounted for approximately 12%of the total balances of receivables from customers.As of December31,2023,there was one customer whose receivables accounted for 10%or more of our total balances of accounts receivable and itaccounted for approximately 15%of the total balances of receivables from customers.As of December 31,2022,two customerscollectively accounted for a significant portion of the Groups total balances of accounts receivable,representing approximately65%and 29%of the total balances of receivables from customers,respectively.All accounts receivable for the fiscal year endedDecember 31,2023 and 2022 had been collected subsequently.The aforementioned single customer from 2023 was not one of thetwo customers from 2022.Of these four customers,only the customer who accounted for 65%of the total balances of receivablesfrom customers as of December 31,2022 is a related party(i.e.Sea Oil Petroleum Pte Ltd).Dependence on a limited number ofcustomers for a substantial portion of receivables increases our vulnerability to credit risk.Any adverse developments,such asdeterioration in the financial health of these key customers,payment delays,or defaults,could negatively impact our cash flows,liquidity,and financial performance.We also cannot assure you that we will not see less concentration of accounts receivable in thefuture.In such case,if any of these customers defaults on its payment obligations to us,we will not be able to recover the relatedaccounts receivable,and our business,financial condition and results of operations may be materially and adversely affected.We source marine fuels from a limited number of third-party vendors,and the loss of any of these vendors would negativelyimpact our business.We did not enter into any long-term written agreements or supply contracts with our vendors for the years endedDecember 31,2024,2023 and 2022.Instead,our transactions are executed through individual purchase orders on a per-transactionbasis.As such,there is no long-term supply commitments from our vendors and they are not contractually obligated to supply to usa fixed quantity of marine fuels over any specific period.Although we do not enter into written agreements or supply contracts,wesource marine fuels from a limited number of third-party vendors.For the year ended December 31,2024,one vendor accountedfor 10%or more of the Groups cost of revenues.Cost of revenues charged by the vendor for the year ended December 31,2024represented 17%of the Groups cost of revenues for that year.For the year ended December 31,2023,one vendor accounted for10%or more of the Groups cost of revenues.Cost of revenues charged by the vendor for the year ended December 31,2023represented 13%of the Groups cost of revenues for that year.For the year ended December 31,2022,two vendors accounted for10%or more of the Groups cost of revenues.Cost of revenues charged by these two vendors for the year ended December 31,2022 represented 60%and 25%of the Groups cost of revenues for that year,respectively.Due to concentration of vendors,anyinterruption of the operations of our vendors,any failure of our vendors to accommodate our fast growing business scale,anytermination or suspension of our supply arrangements,any change in cooperation terms,or the deterioration of cooperativerelationships with these vendors may materially and adversely affect our results of operations.We cannot assure you that we wouldbe able to find replacement vendors on commercially reasonable terms or a timely basis.5 We are exposed to risks in connection with our use of derivatives,which,if not properly managed,could have a materialadverse effect on our business,financial condition and results of operations.We may be exposed to fluctuating marine fuels prices primarily arising from varying derivative instruments such ashedging an index related swap for certain transactions that we enter with our customers and our suppliers.These swaps allow us tomanage price risk by locking in future prices based on market indices.However,we may be exposed to risks when the physicalmarine fuels products that we buy or sell do not correspond exactly with the underlying swap such as the product type,tenor andquantity.For instance,we may be exposed to losses in the event the actual delivered quantity of the physical marine fuels productis lesser than the quantity of the swap position we have originally traded,and the current value of the swap is lower than the pricewe originally entered into.We may also be subjected to margin calls in the event of excessive price movements that is tradingagainst our favor,thus,negatively impact our operating cash flow.As a result,our business,financial condition and results ofoperations would be adversely affected.Our business is dependent on our ability to obtain financing to meet our working capital requirements and fund our futuregrowth.We require a significant amount of working capital to operate our business and fund our future growth.We rely on creditarrangements with financial institutions and suppliers as a significant source of liquidity for our working capital requirementsbeyond our operating cash flow.Our principal sources of liquidity to finance our day-to-day operations are from the financingprovided by a financing institution,our Major Shareholders and cashflow from operating activities.We have obtained facilitiesfrom Bangkok Bank Public Company Limited Singapore Branch with an aggregate limit of US$1,500,000.As of December 31,2024 and December 31,2023,only the trade financing facilities were drawn down,which amounted to US$1,510,249 andUS$1,195,149,respectively.As of October 2024,the facility we received from Bangkok Bank Public Company Limited SingaporeBranch is no longer active and we have obtained a banking facility with United Overseas Bank Limited for an aggregate limit ofUS$4,000,000.We believe that substantial tightening of credit available from our suppliers or the global credit markets could affectour ability to obtain credit as and when we need it on commercially reasonable terms or at all and,consequently,could require us toscale back our operations and negatively affect our future development and growth.Even if we are able to obtain financing,therestrictions creditors may place on our operations and our increased level of indebtedness could limit our operational freedom,adversely affecting our business,financial condition and results of operations.Failure to adapt to market trends in the marine fuels industry would adversely affect our business.Alternative fuels,such as liquefied natural gas(“LNG”),biofuel,methanol and ammonia are almost free of sulfur orsulfur free and can be used alone or either in combination with conventional marine fuels to achieve decarbonization of shippingtransportation and the enhancement of environmental protection.Governments could enact legislation or regulations that attempt tocontrol or limit greenhouse gas emissions such as carbon dioxide.Such laws or regulations could impose costs tied to carbonemissions,operational requirements or restrictions,or additional charges to fund energy efficiency activities.They could alsoprovide a cost advantage to alternative fuels,impose costs or restrictions on end users of marine fuel,or result in other costs orrequirements,such as costs associated with the adoption of new infrastructure and technology to respond to new mandates.Theoptions to comply with tightened environmental protection laws may include switching to alternative fuels such as LNG,biofuel,methanol and ammonia.If alternative fuels such as LNG,biofuel,methanol and ammonia become the major marine fuels in the future,there is noassurance that we would be able to adapt to such trends and our business and financial results would be adversely affected.Greenhouse gas emissions or other legislation or regulations intended to address climate change could increase our operatingcosts,adversely affecting our financial results,growth,cash flows and results of operations.National,regional and/or state legislative and/or regulatory initiatives may attempt to control or limit the causes of climatechange,including greenhouse gas emissions,such as carbon dioxide and methane.Such laws or regulations could impose costs tiedto greenhouse gas emissions,operational requirements or restrictions,or additional charges to fund energy efficiency activities.They could also provide a cost advantage to alternative energy sources,impose costs or restrictions on end users of marine fuel,orresult in other costs or requirements,such as costs associated with the adoption of new infrastructure and technology to respond tonew mandates.The focus on climate change could adversely impact the reputation of fossil fuel products or services.Theoccurrence of the foregoing events could put upward pressure on the cost of marine fuels relative to other energy sources,increaseour costs and the prices we charge to customers,reduce the demand for marine fuels or cause fuel switching to other energy orenergy saving sources,and impact the competitive position of marine fuels and the ability to serve new or existing customers,adversely affecting our business,results of operations and cash flows.6 The risk of disintermediation in the marine fuels industry chain could materially and adversely affect our business,results ofoperations,financial condition and business prospects.We operate as an integrated service provider of marine fuels solutions through our reselling and brokering operatingmodels,where we provide one-stop marine fuels solutions through our global supply network for customers who purchase marinefuels products in different regions around the world.We believe we play an important role in the supply chain of the marine fuelsindustry primarily because we are able to aggregate the demand of marine fuels products in different regions around the world,which allows our suppliers,in particular physical distributors,to focus on their core business activities of transacting largervolumes of recurring transactions in the areas where they operate,while we manage the complicated downstream marine fuelsdistribution activities of reselling and marketing to numerous shipping companies located in different countries of varying scalesand sizes,granting trade credit to customers,providing market intelligence,and operational expertise.However,there is no guarantee that such industry landscape will continue to persist or that our suppliers or customers willcontinue to rely on us as a reseller and broker to sell or procure the desired marine fuels products.If,for whatever reasons,ourcustomers decide to bypass us to buy marine fuels products directly from our marine fuels suppliers,disintermediation would becreated and our value as a reseller and broker in the supply chain would be diminished.Our business,results of operations,financial condition and business prospects would be materially and adversely affected should there emerge such trend ofdisintermediation.Industry consolidation may give our competitors advantage over us,which could result in a loss of customers and/or areduction of our revenue.Some of our competitors have made or may make acquisitions or enter into partnerships or other strategic relationships inorder to offer more comprehensive services or achieve greater economies of scale.In addition,new entrants not currentlyconsidered competitors may enter our market through acquisitions,partnerships or strategic relationships.Many potential entrantsmay have competitive advantages over us,such as greater name recognition,longer operating histories,more varied services andlarger marketing budgets,as well as greater financial,technical and other resources.Industry consolidation may result in practicesthat make it more difficult for us to compete effectively,including on the basis of price,sales and marketing programs or servicesfunctionality.These pressures could result in a reduction in our revenue.Significant fluctuations in foreign exchange rates could materially affect our results of operations.Nearly all of our revenues and costs of sales are denominated in U.S.dollars.However,payments of local operating costs,office rental,local taxes and local employee compensation may be denominated in the local currency.From time to time,we mayalso pay certain of our suppliers in the local currency.As our consolidated financial statements are prepared in U.S.dollars,we facea currency translation risk to the extent that the assets,liabilities,revenues and expenses of our subsidiaries are denominated incurrencies other than the U.S.dollar.Our largest exposure is Singapore dollars since our operating expenses are denominated inSingapore dollars.Significant fluctuations in foreign exchange rates could have a material adverse effect on our business,financialcondition and results of operations.Our suppliers may source their marine fuels products from sanctioned countries,which could have a material adverse effect onour business,financial condition,and results of operations.We are a reseller and broker of marine fuels products based in Singapore and we source our marine fuels products fromphysical distributors located in different regions around the world.However,although we have conducted and will continue toconduct due diligence on our suppliers,there is no guarantee that our suppliers will not source their marine fuels products fromsanctioned countries.Sanctions are typically imposed as a tool of foreign policy and may target countries that engage in activitiesthat are perceived as a threat to international peace and security.These activities may include,but are not limited to,human rightsabuses,nuclear proliferation,terrorism,or other illegal activities.Such sanctions may be imposed by the United Nations,theEuropean Union,or the United States government,among others,and may prohibit or restrict trade with certain countries orentities,including those engaged in human rights abuses,terrorism,or other illegal activities.If our suppliers violate such sanctionsby sourcing marine fuels products from sanctioned countries,it may cause adverse impact on the stability of our marine fuelssupply,which could adversely affect our overall results of operations and financial condition.In addition to the operational andfinancial consequences,violations of sanctions can also lead to reputational damage.Our customers,investors,shareholders andother stakeholders may perceive us as a company that engages in unethical or illegal activities,which could have a negative impacton our business operations and relationships.This,in turn,could lead to a loss of customers,a decline in revenue,and a decrease inour share price.We have adopted various measures to mitigate this risk.However,there can be no assurance that we will be able tocompletely eliminate this risk.7 Any lack of requisite approvals,licenses or permits applicable to our business,or any non-compliance with relevant laws andregulations,may have a material and adverse effect on our business,financial condition,results of operations and prospects.Our business is subject to governmental supervision and regulation by various Singapore governmental authoritiesincluding,but not limited to,Workplace Safety and Health Act 2006 of Singapore,Workplace Safety and Health(GeneralProvisions)Regulations of Singapore,Workplace Safety and Health(Risk Management)regulations of Singapore,amongst others.Such government authorities promulgate and enforce laws and regulations that cover a variety of business activities that ouroperations concern,such as trading of marine fuel,among other things.These regulations in general regulate the entry into,thepermitted scope of,as well as approvals,licenses and permits for,the relevant business activities.In addition to obtaining necessary approvals,licenses and permits for conducting our business,we must comply withrelevant laws and regulations.Our businesses are subject to various and complex laws and regulations,extensive governmentregulations and supervision.We may not be fully informed of all and new requirements under relevant laws and regulations in atimely manner,and even if we become aware of new requirements,due to uncertainties in their interpretations and implementation,it will be difficult for us to determine what actions or omissions would be deemed as violations of applicable laws and regulations.We may also not be able to respond to evolving laws and regulations and take appropriate action in time to adjust our businessmodel.As a result,we may be in violation or non-compliance with such laws and regulations.Due to the uncertainties in the regulatory environment of the industries in which we operate,there can be no assurancethat we have obtained or applied for all the approvals,permits and licenses required for conducting our business and all activities inSingapore,or that we would be able to maintain our existing approvals,permits and licenses or obtain any new approvals,permitsand licenses if required by any future laws or regulations.If we fail to obtain and maintain approvals,licenses or permits requiredfor our business,or to comply with relevant laws and regulations,we could be subject to liabilities,fines,penalties and operationaldisruptions,or we could be required to modify our business model,which could materially and adversely affect our business,financial condition and results of operations.Also,failure of the Company to comply with industry regulations,such as the International Convention for the Preventionof Pollution from Ships(“MARPOL”),even if not mandatory,could result in reputational damage.Non-compliance may also leadto increased regulatory scrutiny,operational disruptions,and loss of customer trust.These consequences could have a materialadverse effect on our financial condition,results of operations,and reputation.8 Any damage to the reputation and recognition of our brand name,including negative publicity against us,may materially andadversely affect our business operations and prospects.We use our trade name“Uni-Fuels”as our brand,which plays a critical role in our business operations.It serves as ourunique identifier in the market and represents not only our products and services but also the goodwill and network we have builtover time.We depend on our reputation and brand name in many aspects of our business operations.As“Uni-Fuels”gainsrecognition,we believe it would create a network effect customers would recommend us to others,suppliers would recognize ourbrand,and industry partners would collaborate more readily.However,we cannot assure you that we will be able to maintain apositive reputation or brand name for all of our products and services in the future.Our reputation and brand name may bematerially and adversely affected by a number of factors,many of which are beyond our control,including:adverse associations with third party suppliers from whom we procure marine fuels,including with respect to thequality of their marine fuels;lawsuits and regulatory investigations against us or otherwise relating to our services or industry;improper or illegal conduct by our employees,suppliers and others parties,that is not authorized by us;and adverse publicity associated with us,our services or our industry,whether founded or unfounded.Moreover,fuel spills by other industry participants or other environmental incidents may garner negative press,potentiallycasting a shadow over the entire marine fuel industry.Such incidents could lead to heightened regulatory scrutiny,increasedoperational costs,and damage to the industrys reputation,all of which may adversely affect our financial performance and stockprice.Any damage to our brand name or reputation as a result of these or other factors may cause our services to be perceivedunfavorably by customers and the existing and prospective employees,suppliers and others parties,and our business operations andprospects could be materially and adversely affected as a result.Our insurance may not provide adequate coverage for all potential losses and claims relating to our business operations and/orassets,and any uninsured losses incurred,may be substantial and therefore adversely affect our operations and financialresults.We maintain insurance coverage against,among other things,physical property of the Company,public liability insurancesuch as fire insurance,insurance for work injury that also includes third party bodily injury that occurs within our office premises,medical insurance policies that cover outpatient,hospitalization,surgical and dental,personal accident insurance,as well asbusiness travel insurance for our employees.However,our insurance coverage may not adequately protect us against all potentialclaims,damages and liabilities that we may incur in the course of our business operations,which may result in an adverse effect onour business.If we are held responsible for any damages,liabilities or losses and our insurance is insufficient or unavailable tocover the claims,there would be an adverse effect on our business,results of operations and financial position.In addition,there is no guarantee that insurance coverage will always be available to us at economically favorablepremiums(or at all)or that,in the event of a claim,the level of insurance currently maintained by us or in the future is or will beadequate or cover the entire claim/liability.We may be subject to liabilities which have not been insured adequately at all.Anyuninsured risks may result in substantial costs and the diversion of resources,which could adversely affect our results of operationsand financial condition.With respect to losses which are covered by our insurance policies,it may be a difficult and lengthy process to recoversuch losses from insurers.In addition,we may be unable to recover the amount from the insurer.Even we are able to recovercertain losses from our insurers,our premiums might increase and it might be hard for us to renew our insurance policies.Therefore,if we are held liable for uninsured losses or amounts and claims for insured losses exceeding our insurance coverage,our operations and financial results may be adversely affected.Our future strategic acquisitions,investments and partnerships could pose various risks,increase our leverage,dilute existingshareholders and significantly impact our ability to expand our overall profitability.Acquisitions involve inherent risks,such those relating to increased leverage and debt service requirements and post-acquisition integration challenges,which could have a material and adverse effect on our results of operations and/or cash flow andcould strain our human resources.We may be unable to successfully implement effective cost controls or achieve expectedsynergies as a result of a future acquisition.Acquisitions may result in our assumption of unexpected liabilities and the diversion ofmanagements attention from the operation of our business.Acquisitions may also result in our having greater exposure to theindustry risks of the businesses underlying the acquisition.Strategic investments and partnerships with other companies expose usto the risk that we may not be able to control the actions of our investees or partners,which could decrease the amount of benefitswe realize from a particular relationship.We are also exposed to the risk that our partners in strategic investments andinfrastructure may encounter financial difficulties that could lead to a disruption of investee or partnership activities,or animpairment of assets acquired,which could adversely affect future reported results of operations and shareholders equity.Acquisitions may subject us to new or different regulations or tax consequences which could have an adverse effect on ouroperations.9 In addition,we may be unable to obtain the financing necessary to complete acquisitions on attractive terms or at all.If weraise additional funds through future issuances of equity or convertible debt securities,our existing shareholders could suffersignificant dilution,and any new equity securities we issue could have rights,preferences and privileges superior to those ofholders of our Class A Ordinary Shares.Future equity financings would also decrease our earnings per share and the benefitsderived by us from such new ventures or acquisitions might not outweigh or exceed their dilutive effect.Any additional debtfinancing we secure could involve restrictive covenants relating to our capital raising activities and other financial and operationalmatters,which may make it more difficult for us to obtain additional capital or to pursue business opportunities.Realization of anyof the foregoing risks associated with future strategic acquisitions,investments and partnerships could materially and adverselyaffect our business,results of operations and financial condition.Our ability to operate effectively could be impaired if we fail to attract and retain our key management and employees.Our success depends,in part,upon the continuing contributions of key management and employees and our continuingability to attract,develop,motivate and retain highly qualified and skilled personnel.The loss of the services of any of our keymanagement and employees or the failure to attract or replace qualified personnel may have a material and adverse effect on ourbusiness.Negative publicity relating to our Group or our Directors,Executive Officers or Major Shareholders may materially andadversely affect our reputation and Share price.Negative publicity or announcements relating to our Group or any of our Directors,Executive Officers or MajorShareholders,whether with or without merit,may materially and adversely affect the reputation and goodwill of our Group in ourindustry,consequently affecting our relationships with our customers and car dealers.In addition,such negative publicity mayaffect market perception of our Group and the performance of our Share price.Negative publicity or announcements may include,among others,newspaper reports of accidents at our work places,unsuccessful attempts in joint ventures,acquisitions or take-overs,any involvement we may have in litigation or insolvencyproceedings,and unfavorable or negative articles on any of our Directors,Executive Officers or Major Shareholders.Any claimsand legal actions brought forward by our customers may also have a negative impact on our brand image.If our customers,suppliers or sub-contractors subsequently lose confidence in us,this could result in the termination of business relationships orfewer referrals or invitations to tender or quote for the services we provide or other contracts.To this end,our business,financialcondition,results of operations and prospects may be adversely impacted.We may be involved in legal proceedings arising from our business operations from time to time which adversely affect ourbusiness,financial condition and results of operations.We are currently not involved in any legal proceedings.We may be subject to disputes with and subject to claims from ourcustomers,suppliers,employees or third parties from time to time through the ordinary course of our business.There is noassurance that we may resolve every instance of a dispute through negotiation and/or mediation with the relevant parties involved.Legal proceedings can involve substantial costs,including the costs associated with defending ourselves or initiating legalproceedings against other parties in the interests of our Group.In the event of an unfavorable outcome from such legal proceedings,we may be liable to incur significant costs and damages which may adversely affect our business,financial condition and results ofoperations.10 Regional or global conflicts may materially and adversely affect our business and results of operations.The outbreak of war in Ukraine in early 2022 has already affected global economic markets,including a dramatic increasein the price of oil and gas,and the uncertain resolution of this conflict could result in protracted and/or severe damage to the globaleconomy.Russias military interventions in Ukraine have led to,and may lead to,additional sanctions being levied by the UnitedStates,European Union and other countries against Russia.Russias military incursion and the resulting sanctions could adverselyaffect global energy and financial markets and thus could affect the global markets,our customers businesses and potentially ourbusiness.As at the date of this report,to the best knowledge of the Company,we(i)do not have any direct business or contractswith any Russian or Ukraine entity as a supplier or customer,(ii)do not have any knowledge whether any our customers orsuppliers have any direct business or contracts with any Russian entity,(iii)our business segments,lines of service,projects,oroperations are not materially impacted by supply chain disruptions by the war in Ukraine,and(iv)have not been financiallyaffected by the war in Ukraine.Similarly,the war in Gaza is unpredictable and may expand into a regional or even possibly a global conflict.To date,thisnewest chapter in the long Middle East conflict has not resulted in any material adverse impact on the Company,but a prolongedconflict and/or significant escalation of hostilities would likely cause disruption in international relations and global trade,which inturn would likely adversely affect our business and the price of our Class A Ordinary Shares.The extent and duration of the military action,sanctions and resulting market disruptions are impossible to predict,butcould be substantial.Any such disruptions caused by regional or global conflicts or resulting sanctions may magnify the impact ofother risks described in this section.We cannot predict the progress or outcome of the situation in any regional or global conflicts,as conflicts and governmental reactions are rapidly developing and beyond their control.Prolonged unrest,intensified militaryactivities or more extensive sanctions could have a material adverse effect on the global economy,and such effect could in turnhave a material adverse effect on our business,financial condition,results of operations,and prospects.We do not anticipate any new or heightened risk of potential cyberattacks by state actors or others due to these regional orglobal conflicts,and we have not taken any actions to mitigate such potential risks.Our board of directors will continue to monitorany potential risks that might arise due to regional or global conflicts which are specific to the Company,including but not limitedto risks related to cybersecurity,sanctions,and supply chain,suppliers,or service providers in affected regions as well as risksconnected with ongoing or halted operations or investments in affected regions.Tariff wars and trade uncertainties could adversely affect our operations and financial performance.We face risks to our operations,financial condition,and results of operations from ongoing tariff wars and tradeuncertainties affecting global markets.On April 2,2025,President Trump issued an Executive Order imposing a 10%customs dutyon all goods imported into the US,effective April 5,2025,with higher duties up to 50%on imports from specific countries.Tariffscan delay or disrupt the flow of marine fuels and related products,affecting not only our ability to serve shipping companiesefficiently but also complicating additional shipping services that we occasionally provide.In our sales transactions,timelydelivery is paramount,and any disruptions could damage customer trust.In our brokerage business,even though third-partysuppliers handle the fulfillment,any market instability could lead to reduced transaction volumes and lower commission rates.Additionally,trade-related volatility in commodity prices and foreign exchange rates could complicate financial forecasting andlead to revenue instability.There can be no assurance that we can fully counteract the adverse effects of trade disruptions.Theevolving nature of global tariff policies,including the potential for further escalation or broader economic downturns,couldexacerbate these challenges and have a material adverse effect on our business,financial performance,and growth prospects.Risks specific to our brokerage services Our revenue generated from brokerage services heavily relies on one-off commission income,and there is no guarantee ofrecurring sales from our existing customers.Our revenue generated from brokerage services is primarily generated through commission for acting as intermediarybetween marine fuels suppliers and customers.This commission is largely one-off,and tied to each individual transaction.We havedeveloped various marketing channels to generate recurring business from existing customers,referrals,and direct marketing.However,we cannot guarantee that we will be able to generate increasing commission from recurring customers or successfullyarrange marine fuels supply between new suppliers and customers.Our commission income is vulnerable to fluctuations given theone-off nature of a large portion of our commissions,and our financial position may be negatively affected if we are unable tomaintain or grow our commission income.11 Our brokerage income is tied to the successful completion of transactions between suppliers and buyers,the process of whichwe have no control over.The Companys brokerage revenue hinges entirely on facilitating successful transactions between marine fuels buyers andsuppliers.Any disruption in this transactional process poses a significant risk to us.For instance,if a customer encounters financialdifficulties and fails to complete a transaction,the company may not receive its brokerage fee despite having invested time andresources in facilitating the deal.Similarly,if a fuel supplier experiences logistical challenges or fails to meet contractualobligations,transactions may be delayed or canceled,resulting in lost brokerage opportunities for the Company.Moreover,the brokerage process itself can be complex and time-consuming,involving negotiation,documentation,andcoordination between multiple parties.Any delays or inefficiencies in this process can not only strain customer relationships butalso impact the Companys ability to generate timely revenue.Additionally,disputes between customers and suppliers,whetherrelated to pricing,quality,or delivery,can lead to transactional breakdowns and potential legal entanglements,further complicatingthe brokerage process and jeopardizing the companys income stream.We are subject to counterparty risks.As an intermediary between marine fuels suppliers and customers,our brokerage business relies heavily on establishingand maintaining relationships with both suppliers and customers.There is inherent risk associated with the creditworthiness,reliability and integrity of these counterparties.Failure of a customer to fulfil payment obligations or of a supplier to delivercontracted marine fuels quantities could lead to financial losses,contractual disputes and damage to the Companys reputation.Additionally,unforeseen events such as supplier insolvency or customer default could impact the Companys ability to facilitatetransactions effectively,thereby affecting revenue generation.Technology and Cybersecurity Risks Information technology failures and data security breaches could have an adverse effect on our business,financial conditionand results of operations.We rely upon our information technology and communications systems to support key business functions and the efficientoperation of these systems is critical to our business.Our information technology systems,including our back-up systems andexternal cloud services,could be damaged or interrupted by power outages,computer or telecommunications failures,viruses,security breaches,natural disasters,and/or errors by our employees,service providers or vendors.A significant disruption in thefunctioning of these systems could damage our reputation,impair our ability to conduct our business,impact our credit and riskexposure decisions,cause us to lose customers,subject us to litigation and/or require us to incur significant expense to address andremediate or otherwise resolve these issues,which could have an adverse effect on our business,financial condition and results ofoperations.Increased dependence on technology may hinder the Companys business operations and adversely affect its financial conditionand results of operations if such technologies fail.The Company has implemented or acquired a variety of technological tools including both Company-owned informationtechnology and technological services provided by outside parties.These tools and systems support critical functions includingcustomer relationship management,contractual documentation and financial reporting,among others.The failure of these or othersimilarly important technologies,or the Companys inability to have these technologies supported,updated,expanded,or integratedinto other technologies,could hinder its business operations and adversely impact its financial condition and results of operations.12 Although the Company has,when possible,developed alternative sources of technology and built redundancy into itscomputer networks and tools,there can be no assurance that these efforts would protect against all potential issues related to theloss of any such technologies.Cyber-attacks or acts of cyber-terrorism could disrupt our business operations and information technology systems or result inthe loss or exposure of confidential or sensitive customer,employee or Company information.Our business operations and information technology systems may be vulnerable to an attack by individuals ororganizations intending to disrupt our business operations and information technology systems,even though the Company hasimplemented policies,procedures and controls to prevent and detect these activities.We use our information technology systems tomanage our marine fuels trading and brokerage operations and other business processes.Disruption of those systems couldadversely impact our ability to safely deliver marine fuels to our customers or serve our customers timely.Accordingly,if such anattack or act of terrorism were to occur,our operations and financial results could be adversely affected.In addition,we use our information technology systems to protect confidential or sensitive customer,employee andCompany information developed and maintained in the normal course of our business.Any attack on such systems that wouldresult in the unauthorized release of customer,employee or other confidential or sensitive data could have a material adverse effecton our business reputation,increase our costs and expose us to additional material legal claims and liability.If such an attack or actof terrorism were to occur,our operations and financial results could be adversely affected.Risks Related to Doing Business in Singapore We are subject to the laws of Singapore,which differ in certain material respects from the laws of the United States.We are required to comply with the laws of Singapore,certain of which are capable of extra-territorial application,as wellas the constitution of our Singapore operating subsidiary.In particular,we are required to comply with certain provisions of theSecurities and Futures Act 2001 of Singapore(the“SFA”),which prohibit certain forms of market conduct and informationdisclosures,and impose criminal and civil penalties on corporations,directors and officers in respect of any breach of suchprovisions.The laws of Singapore and of the United States differ in certain significant respects.The application of Singapore law,inparticular,the Companies Act may,in certain circumstances,impose more restrictions on us,our directors and officers than wouldotherwise be applicable to U.S.corporations,including those incorporated in Delaware.For example,the Companies Act requires adirector to act with reasonable degree of diligence in the discharge of the duties of his or her office and,in certain circumstances,imposes liability for specified contraventions of particular statutory requirements or prohibitions.Additionally,under theEmployment of Foreign Manpower Act 1990 of Singapore,we are also required to ensure that each foreign worker employed by ushas a valid work pass,and in particular,the number of foreign workers employed under certain work passes(e.g.Work Permits andS Pass holders)are subject to a quota and certain other limitations.Generally,we are also required to take out mandatory insurancefor accidents which arise in the course of an employees employment under the Work Injury Compensation Act 2019 of Singapore.Any adverse material changes to the Singapore market(whether localized or resulting from global economic or otherconditions)such as the occurrence of an economic recession,pandemic or widespread outbreak of an infectious disease(suchas COVID-19),could have a material adverse effect on our business,results of operations and financial condition.During the fiscal years ended December 31,2024 and December 31,2023,all of our revenue was derived from ouroperations in Singapore.Any adverse circumstances affecting the Singapore market,such as an economic recession,epidemicoutbreak or natural disaster or other adverse incident,may adversely affect our business,financial condition,results of operationsand prospects.Any downturn in the industry which we operate in resulting in the postponement,delay or cancellation of contractsand delay in recovery of receivables is likely to have an adverse impact on our business and profitability.13 Uncertain global economic conditions have had and may continue to have an adverse impact on our business in the formof lower net sales due to weakened demand,unfavorable changes in product price/mix,or lower profit margins.For example,global economic downturns may adversely impact some of our customers who are particularly sensitive to business and consumerspending.During economic downturns or recessions,there can be a heightened competition and increased pressure to reducebrokerage and trading fees as our customers may reduce their demand for our services.If we reduce brokerage and trading feessignificantly,the result could be a negative impact on our financial condition or results of operations,profitability and cash flows.An epidemic or outbreak of communicable diseases may also adversely affect our business,financial condition,results ofoperations and prospects.The COVID-19 epidemic resulted in a global health crisis,causing disruptions to social and economicactivities,business operations and supply chains worldwide,including in Singapore.Measures taken by the Singapore governmentto tackle the spread of COVID-19 have included,among others,border closures,quarantine measures and lockdown measures.Asof the date of this report,the COVID-19 outbreak and related government measures did not adversely affect our business.However,in the event of a resurgence of COVID-19,if a substantial number of our employees are infected with and/or aresuspected of having COVID-19,and our employees are required to be quarantined and/or hospitalized,this may disrupt our abilityto render services which may have a material adverse effect on our business operations and reputation of our Group.We are subject to risks associated with operating in the rapidly evolving Southeast Asia,and we might therefore be exposed tovarious risks inherent in operating and investing in the region.We derive majority of our revenue from our operations in countries located in Southeast Asia,and we intend to continue todevelop and expand our business and penetration in the region.Our operations in Southeast Asia are subject to various risks relatedto the economic,political and social conditions of the countries in which we operate,including risks related to the following:currencies may be devalued or may depreciate or currency restrictions or other restraints on transfer of funds may beimposed;the effects of inflation within Southeast Asia generally and/or within any specific country in which we operate mayincrease our cost of operations;health epidemics,pandemics or disease outbreaks(including the COVID-19 outbreak)may affect our operations anddemand for our services.For example,if the ports in certain Southeast Asia regions do not operate,no orders will bereceived from customers with vessels based in those ports,which could affect our revenue;and political changes may lead to changes in the business,legal and regulatory environments in which we operate.Volatile political situations in certain Southeast Asian countries could impact our business.For example,in Myanmar,following the military taking power in February 2021,there have been and continue to be mass protests andinstability disrupting business activities.In Thailand,the risk of protest movements continues to exist and mayincrease political instability.In addition,presidential elections are due to take place Indonesia in 2024,whereelections in the past have led to uncertainty,impacting markets and leading to unrest.In Malaysia,there have beenseveral changes in the governing party in the past few years.Any disruptions in our business activities or volatility or uncertainty in the economic,political or regulatory conditions inthe markets we operate in could adversely affect our business,financial condition,results of operations and prospects.14 We may be exposed to liabilities under applicable anti-corruption laws and any determination that we violated these laws couldhave a materially adverse effect on our business.We are subject to various anti-corruption laws,including the Prevention of Corruption Act 1960,which prohibits anyperson from making improper gratification as an inducement to or reward for any person doing or forbearing to do anything inrespect of any matter or transaction,or any member,officer or servant of a public body doing or forbearing to do anything inrespect of any matter or transaction in which such public body is concerned.We may conduct business in countries and regions thatare generally recognized as potentially more corrupt business environments.Activities in these countries create the risk ofunauthorized payments or offers of payments by one of our employees or agents that could be in violation of various anti-corruption laws.We cannot provide assurance that our internal controls and compliance systems will always protect us from actscommitted by our employees or agents.If our employees or agents violate our policies or we fail to maintain adequate recordkeeping and internal accounting practices to accurately record our transactions,we may be subject to regulatory sanctions.Violations of the Prevention of Corruption Act 1960 or other anti-corruption laws,or allegations of any such acts,could damageour reputation and subject us to civil or criminal investigations in the United States and in other jurisdictions.Those and any relatedshareholder lawsuits could lead to substantial civil and criminal,monetary and nonmonetary penalties and cause us to incursignificant legal and investigatory fees which could adversely affect our business,consolidated financial condition and results ofoperations.Risks Related to Our Ordinary Shares An active trading market for our Class A Ordinary Shares may not develop and could affect the trading price of our Class AOrdinary Shares.Prior to our initial public offering in January 2025(the“IPO”),there has been no public market for our Class A OrdinaryShares.Although our Class A Ordinary Shares are listed on Nasdaq Capital Market,there can be no assurance that there will be anactive,liquid public market for our Class A Ordinary Shares after the Offering.The lack of an active market may impair yourability to sell your Class A Ordinary Shares at the time you wish to sell them or at a price that you consider reasonable.The lack ofan active market may also reduce the fair market value of your Class A Ordinary Shares.An inactive market may also impair ourability to raise capital to continue to fund operations by selling Class A Ordinary Shares and may impair our ability to acquire othercompanies or technologies by using our Class A Ordinary Shares as consideration.The dual-class structure of our Ordinary Shares has the effect of concentrating voting control with those shareholders who heldour Class B Ordinary Shares.This ownership will limit or preclude your ability to influence corporate matters,including theelection of directors,amendments of our organizational documents,and any merger,consolidation,sale of all or substantiallyall of our assets,or other major corporate transactions requiring shareholder approval,and that may adversely affect thetrading price of our Class A Ordinary Shares.Each Class B Ordinary Share has ten votes per share,and our Class A Ordinary Shares,which are listed on Nasdaq,haveone vote per share.Our Major Shareholders,which together hold 100%of our issued and outstanding Class B Ordinary Shares,own shares representing approximately 95.87%of the voting power of our outstanding Ordinary Shares.In addition,because of theten-to-one voting ratio between our Class B and Class A Ordinary Shares,the holders of our Class B Ordinary Shares couldcontinue to control a majority of the combined voting power of our Ordinary Shares and therefore control all matters submitted toour shareholders for approval until converted by the holders of our Class B Ordinary Shares.This concentrated control may limit orpreclude your ability to influence corporate matters for the foreseeable future,including the election of directors,amendments ofour organizational documents and any merger,consolidation,sale of all or substantially all of our assets or other major corporatetransactions requiring shareholder approval.In addition,this concentrated control may prevent or discourage unsolicitedacquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our shareholders.As aresult,such concentrated control may adversely affect the market price of our Class A Ordinary Shares.15 Future transfers by holders of Class B Ordinary Shares will generally result in those shares converting to Class A OrdinaryShares,subject to limited exceptions as specified in our amended and restated memorandum and articles of association,such astransfers to family members and certain transfers effected for estate planning purposes.The conversion of Class B Ordinary Sharesto Class A Ordinary Shares will have the effect,over time,of increasing the relative voting power of those holders of Class BOrdinary Shares who retain their shares in the long term.As a result,it is possible that one or more of the persons or entitiesholding our Class B Ordinary Shares could gain significant voting control as other holders of Class B Ordinary Shares sell orotherwise convert their shares into Class A Ordinary Shares.We cannot predict the effect that our dual-class structure may have on the market price of our Class A Ordinary Shares.We cannot predict whether our dual-class structure will result in a lower or more volatile market price of our Class AOrdinary Shares,adverse publicity or other adverse consequences.For example,certain index providers have announced andimplemented restrictions on including companies with multiple-class share structures in certain of their indices.In July 2017,FTSERussell announced that it would require new constituents of its indices to have greater than 5%of the companys voting rights inthe hands of public stockholders,and S&P Dow Jones announced that it would no longer admit companies with multiple-classshare structures to certain of its indices.Affected indices include the Russell 2000 and the S&P 500,S&P MidCap 400 and S&PSmallCap 600,which together make up the S&P Composite 1500.Also in 2017,MSCI,a leading stock index provider,openedpublic consultations on its treatment of no-vote and multi-class structures and temporarily barred new multi-class listings fromcertain of its indices;however,in October 2018,MSCI announced its decision to include equity securities“with unequal votingstructures”in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria.Under suchannounced and implemented policies,the dual-class structure of our Ordinary Shares would make us ineligible for inclusion incertain indices and,as a result,mutual funds,exchange-traded funds and other investment vehicles that attempt to passively trackthose indices would not invest in our Class A Ordinary Shares.These policies are relatively new and it is unclear what effect,if any,they will have on the valuations of publicly-traded companies excluded from such indices,but it is possible that they may adverselyaffect valuations,as compared to similar companies that are included.Due to the dual-class structure of our Ordinary Shares,wewill likely be excluded from certain indices and we cannot assure you that other stock indices will not take similar actions.Giventhe sustained flow of investment funds into passive strategies that seek to track certain indices,exclusion from certain stock indiceswould likely preclude investment by many of these funds and could make our Class A Ordinary Shares less attractive to otherinvestors.As a result,the market price of our Class A Ordinary Shares could be adversely affected.Our share price may fluctuate significantly in the future and you may lose all or part of your investment,and litigation may bebrought against us.The prices at which our Class A Ordinary Shares trade may fluctuate significantly and rapidly as a result of,among others,the following factors,some of which are beyond our control:variation in our results of operations;perceived prospects and future plans for our business and the general outlook of our industry;changes in securities analysts estimates of our results of operations and recommendations;announcements by us of significant contracts,acquisitions,strategic alliances or joint ventures or capitalcommitments;the valuation of publicly-traded companies that are engaged in business activities similar to ours;additions or departures of key personnel;fluctuations in stock market prices and volume;involvement in litigation;general economic and stock market conditions;and discrepancies between our actual operating results and those expected by investors and securities analysts.16 There is no guarantee that our Class A Ordinary Shares will appreciate in value or even maintain the price at which youpurchased the Class A Ordinary Shares.You may not realize a return on your investment in our Class A Ordinary Shares and youmay even lose your entire investment in our Class A Ordinary Shares.In addition,the stock markets have from time to time experienced significant price and volume fluctuations that haveaffected the market prices of securities.These fluctuations often have been unrelated or disproportionate to the operatingperformance of publicly-traded companies.In the past,following periods of volatility in the market price of a particular companyssecurities,an investor may lose all or part of his or her investment,and litigation has sometimes been brought against thatcompany.If similar litigation is instituted against us,it could result in substantial costs and divert our senior managementsattention and resources from our core business.We intend to grant employee share options and other share-based awards in the future.We will recognize any share-basedcompensation expenses in our consolidated statements of comprehensive loss.Any additional grant of employee share optionsand other share-based awards in the future may have a material adverse effect on our results of operation.We have adopted the Uni-Fuels Holdings Limited 2024 Share Incentive Plan,or the 2024 Incentive Plan,for the purposeof granting share-based compensation awards to our employees,directors and consultants to incentivize their performance andalign their interests with ours.Awards may be granted under the 2024 Incentive Plan for up to 15%of the Companys issued andoutstanding Class A Ordinary Shares as of the date of our IPO or as of December 31 of the prior calendar year.As of the date ofthis report,no awards have been granted under the 2024 Incentive Plan.As a result of potential future grants,we expect to incursignificant share-based compensation expenses in the future.The amount of these expenses is based on the fair value of the share-based awards.We account for compensation costs for all share options using a fair-value based method and recognize expenses inour consolidated statements of profit or loss and other comprehensive income.The expenses associated with share-basedcompensation will decrease our profitability,perhaps materially,and the additional securities issued under share-basedcompensation plans will dilute the ownership interests of our shareholders.However,if we limit the scope of our share-basedcompensation plan,we may not be able to attract or retain key personnel who expect to be compensated by options.Certain recent initial public offerings of companies with public floats comparable to our anticipated public float haveexperienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company.We mayexperience similar volatility,which may make it difficult for prospective investors to assess the value of our Class A OrdinaryShares.In addition to the risks addressed above in“Our Class A Ordinary Share price may fluctuate significantly in the futureand you may lose all or part of your investment,and litigation may be brought against us,”our Class A Ordinary Shares may besubject to extreme volatility that is seemingly unrelated to the underlying performance of our business.Recently,companies withcomparable public floats and initial public offering sizes have experienced instances of extreme stock price run-ups followed byrapid price declines,and such stock price volatility was seemingly unrelated to the respective companys underlying performance.Although the specific cause of such volatility is unclear,our anticipated public float may amplify the impact the actions taken by afew shareholders have on the price of our Class A Ordinary Shares,which may cause our share price to deviate,potentiallysignificantly,from a price that better reflects the underlying performance of our business.Should our Class A Ordinary Sharesexperience run-ups and declines that are seemingly unrelated to our actual or expected operating performance and financialcondition or prospects,prospective investors may have difficulty assessing the rapidly changing value of our Class A OrdinaryShares.In addition,investors of our Class A Ordinary Shares may experience losses,which may be material,if the price of ourOrdinary Shares declines or if such investors purchase shares of our Class A Ordinary Shares prior to any price decline.Holders of our Class A Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sellat depressed prices due to low volume trading.Broad market fluctuations and general economic and political conditions may alsoadversely affect the market price of our Class A Ordinary Shares.As a result of this volatility,investors may experience losses ontheir investment in our Ordinary Shares.Furthermore,the potential extreme volatility may confuse the public investors of the valueof our stock,distort the market perception of our stock price and our Companys financial performance and public image andnegatively affect the long-term liquidity of our Class A Ordinary Shares,regardless of our actual or expected operatingperformance.If we encounter such volatility,including any rapid stock price increases and declines seemingly unrelated to ouractual or expected operating performance and financial condition or prospects,it will likely make it difficult and confusing forprospective investors to assess the rapidly changing value of our Class A Ordinary Shares and understand the value thereof.17 We may have conflicts of interest with our Major Shareholders and,because of our Major Shareholders significant ownershipinterest in our company,we may not be able to resolve such conflicts on terms favorable to us.Our Major Shareholders beneficially own 69.88%of our outstanding Shares,representing 95.87%of our total votingpower in the aggregate.Accordingly,our Major Shareholders are our controlling shareholder and may have significant influence indetermining the outcome of any corporate actions or other matters that require shareholder approval,such as mergers,consolidations,change of our name,and amendments of our amended and restated memorandum and articles of association.The concentration of ownership and voting power may cause transactions to occur in a way that may not be beneficial toyou as a holder of our Class A Ordinary Shares and may prevent us from doing transactions that would be beneficial to you.Conflicts of interest may arise between our Major Shareholders or any of its controlling shareholders and us in a number of areasrelating to our past and ongoing relationships.Potential conflicts of interest that we have identified include the following:Our board members or executive officers may have conflicts of interest.Koh Kuan Hua is also the CompanysCEO and Director.As a result,these overlapping relationships could create or appear to create conflicts ofinterest when he is faced with decisions with potentially different implications for either or both of them and us.Sale of Class A Ordinary Shares or assets in our company.Upon expiration of the lock-up period and subject tocertain restrictions under relevant securities laws and stock exchange rules,as well as other relevant restrictions,our Major Shareholders may decide to sell all or a portion of our Class A Ordinary Shares that they hold to a thirdparty,thereby giving that third party substantial influence over our business and our affairs.In addition,ourMajor Shareholders may decide to sell all or a portion of our Shares in the event of default of our MajorShareholders under any applicable debt or other obligations or otherwise becomes insolvent.Such a sale of ourShares or our assets could be contrary to the interests of our employees or our other shareholders.In addition,ourMajor Shareholders may also discourage,delay,or prevent a change in control of our company,which coulddeprive our shareholders of an opportunity to receive a premium for their Shares as part of a sale of our Companyand might reduce the price of our Shares.Our Class A Ordinary Shares may trade under US$4.00 per share and thus would be known as“penny stock”.Trading in pennystocks has certain restrictions and these restrictions could negatively affect the price and liquidity of our Class A OrdinaryShares.Our Class A Ordinary Shares may trade below US$4.00 per share.As a result,our Class A Ordinary Shares would beknown as“penny stock”,which is subject to various regulations involving disclosures to be given to you prior to the purchase ofany penny stock.The SEC has adopted regulations which generally define a“penny stock”to be any equity security that has amarket price of less than US$4.00 per share,subject to certain exceptions.Depending on market fluctuations,our Class A OrdinaryShares could be considered to be“penny stock”.A penny stock is subject to rules that impose additional sales practice requirementson broker/dealers who sell these securities to persons other than accredited investors.For transactions covered by these rules,thebroker/dealer must make a special suitability determination for the purchase of these securities.In addition,a broker/dealer mustreceive the purchasers written consent to the transaction prior to the purchase and must also provide certain written disclosures tothe purchaser.Consequently,the“penny stock”rules may restrict the ability of broker/dealers to sell our Class A Ordinary Shares,and may negatively affect the ability of holders of our Class A Ordinary Shares to resell them.These disclosures require you toacknowledge that you understand the risks associated with buying penny stocks and that you can absorb the loss of your entireinvestment.Penny stocks generally do not have a very high trading volume.Consequently,the price of the shares is often volatileand you may not be able to buy or sell your shares when you want to.18 We may require additional funding in the form of equity or debt for our future growth which will cause dilution inShareholders equity interest.We may pursue opportunities to grow our business through joint ventures,strategic alliance,acquisitions or investmentopportunities,following the Offering.However,there can be no assurance that we will be able to obtain additional funding onterms that are acceptable to us or at all.If we are unable to do so,our future plans and growth may be adversely affected.An issue of Class A Ordinary Shares or other securities to raise funds will dilute Shareholders equity interests and may,inthe case of a rights issue,require additional investments by Shareholders.Further,an issue of Class A Ordinary Shares below thethen prevailing market price will also affect the value of the Class A Ordinary Shares then held by investors.Dilution in Shareholders equity interests may occur even if the issue of shares is at a premium to the market price.Inaddition,any additional debt funding may restrict our freedom to operate our business as it may have conditions that:limit our ability to pay dividends or require us to seek consents for the payment of dividends;increase our vulnerability to general adverse economic and industry conditions;require us to dedicate a portion of our cash flow from operations to repayments of our debt,thereby reducing theavailability of our cash flow for capital expenditures,working capital and other general corporate purposes;and limit our flexibility in planning for,or reacting to,changes in our business and our industry.Volatility or uncertainty of the credit markets could limit our ability to borrow funds or cause our borrowings to be moreexpensive in the future.As such,we may be forced to pay unattractive interest rates,thereby increasing our interest expense,decreasing our profitability and reducing our financial flexibility if we take on additional debt financing.Investors may not be able to participate in future issues or certain other equity issues of our Shares.In the event that we issue new Shares,we will be under no obligation to offer those Shares to our existing Shareholders atthe time of issue,except where we elect to conduct a rights issue.However,in electing to conduct a rights issue or certain otherequity issues,we will have the discretion and may also be subject to certain regulations as to the procedures to be followed inmaking such rights available to Shareholders or in disposing of such rights for the benefit of such Shareholders and making the netproceeds available to them.In addition,we may not offer such rights to our existing Shareholders having an address in jurisdictionsoutside of Singapore.Accordingly,certain Shareholders may be unable to participate in future equity offerings by us and may experiencedilution in their shareholdings as a result.We have no immediate plans to pay dividends.We plan to reinvest all of our future earnings,to the extent we have earnings,in order to expand our product and servicesofferings and to cover operating costs and capital needs,and to otherwise become and remain competitive.We do not plan to payany cash dividends with respect to our securities in the foreseeable future.As we are a company with a limited operating history,we may not be able to generate,at any time,sufficient surplus cash that would be available for distribution to the holders of ourShares as a dividend.Therefore,you should not expect to receive immediate cash dividends on the Shares we are offering.Consequently,investors may need to rely on sales of their Shares after price appreciation,which may never occur,as the only wayto realize any future gains on their investment.In addition,the laws of the Cayman Islands impose restrictions on our ability todeclare and pay dividends.19 If we fail to meet applicable listing requirements,Nasdaq may delist our Class A Ordinary Shares from trading,in which casethe liquidity and market price of our Class A Ordinary Shares could decline.We cannot assure you that we will be able to meet the continued listing standards of Nasdaq in the future.If we fail tocomply with the applicable listing standards and Nasdaq delists our Class A Ordinary Shares,we and our Shareholders could facesignificant material adverse consequences,including:a limited availability of market quotations for our Class A Ordinary Shares;reduced liquidity for our Class A Ordinary Shares;a determination that our Class A Ordinary Shares are“penny stock”,which would require brokers trading in ourClass A Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activityin the secondary trading market for our Class A Ordinary Shares;a limited amount of news about us and analyst coverage of us;and a decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in thefuture.The National Securities Markets Improvement Act of 1996,which is a federal statute,prevents or pre-empts the statesfrom regulating the sale of certain securities,which are referred to as“covered securities.”Because we expect that our Class AOrdinary Shares will be listed on Nasdaq,such securities will be covered securities.Although the states are pre-empted fromregulating the sale of our securities,the federal statute does allow the states to investigate companies if there is a suspicion of fraud,and,if there is a finding of fraudulent activity,then the states can regulate or bar the sale of covered securities in a particular case.Further,if we were no longer listed on Nasdaq,our securities would not be covered securities and we would be subject toregulations in each state in which we offer our securities.We will incur significant expenses and devote other significant resources and management time as a result of being a publiccompany,which may negatively impact our financial performance and could cause our results of operations and financialcondition to suffer.We will incur significant legal,accounting,insurance and other expenses as a result of being a public company.Laws,regulations and standards relating to corporate governance and public disclosure for public companies,including the Dodd-FrankAct of 2010,the Sarbanes-Oxley Act,regulations related thereto and the rules and regulations of the SEC and Nasdaq,willsignificantly increase our costs as well as the time that must be devoted to compliance matters.We expect that compliance withthese laws,rules,regulations and standards will substantially increase our expenses,including our legal and accounting costs,andmake some of our operating activities more time-consuming and costly.These new public company obligations also will requireattention from our senior management and could divert their attention away from the day-to-day management of our business.Wealso expect these laws,rules,regulations and standards to make it more expensive for us to obtain director and officer liabilityinsurance,and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain thesame or similar coverage.As a result,it may be more difficult for us to attract and retain qualified persons to serve on our Board ofDirectors or as officers.As a result of the foregoing,we expect a substantial increase in legal,accounting,insurance and certainother expenses in the future,which will negatively impact our financial performance and could cause our results of operations andfinancial condition to suffer.Furthermore,if we are unable to satisfy our obligations as a public company,we could be subject todelisting of our Shares,fines,sanctions and other regulatory actions and potential civil litigation.20 If we fail to maintain an effective system of disclosure controls and internal controls over financial reporting,our ability totimely produce accurate financial statements or comply with applicable regulations could be impaired.The Sarbanes-Oxley Act requires,among other things,that we maintain effective internal disclosure controls andprocedures over our financial reporting.We are continuing to develop and refine our disclosure controls and other procedures thatare designed to ensure that information required to be disclosed by us in our reports that we will file with the SEC will be recorded,processed,summarized,and reported within the time periods and as otherwise specified in SEC rules,and that information requiredto be disclosed in reports under the Exchange Act is accumulated and communicated to our principal Executive Officers andfinancial officers.We are also continuing to improve our internal controls over financial reporting.Ensuring that we have effective disclosure controls and procedures and internal controls over financial reporting in placeso that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be re-evaluated frequently.Our internal controls over financial reporting is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements in accordance with U.S.GAAP.Beginning with oursecond annual report on Form 20-F after we become a company whose securities are publicly listed in the United States,we will berequired,pursuant to Section 404 of the Sarbanes-Oxley Act,to make a formal assessment of the effectiveness of our internalcontrols over financial reporting,and once we cease to be an emerging growth company,we will be required to include anattestation report on internal controls over financial reporting issued by our Independent Registered Public Accounting Firm.During our evaluation of our internal controls,if we identify one or more material weaknesses in our internal controls overfinancial reporting,we will be unable to assert that our internal controls over financial reporting are effective.We cannot assureyou that there will not be material weaknesses or significant deficiencies in our internal controls over financial reporting in thefuture.Any failure to maintain internal controls over financial reporting could severely inhibit our ability to accurately report ourfinancial condition,or results of operations.Based upon that evaluation,our management has concluded that,as of December 31,2024,our disclosure controls andprocedures were not effective as our management has identified the following“material weaknesses”in our internal control overfinancial reporting,as defined in the standards established by the PCAOB,and other control deficiencies.We and our auditor haveidentified the following material weaknesses in our internal controls over financial reporting:(a)lack of appropriate levels ofaccounting knowledge and experience to address complex U.S.GAAP accounting issues and related disclosures,in accordancewith U.S.GAAP and SEC financial reporting requirements;(b)lack of a functional internal audit department or personnel thatmonitors the consistencies of the preventive internal control procedures as well as adequate policies and procedures in internalaudit function;and(c)lack of proper IT control environment,risk assessment and control activities related to Access/LogicalSecurity,Change Management,Operation Security,Cyber Security and Service Organization Management.We intend toimplement measures designed to improve our internal control over financial reporting and IT control to address the underlyingcauses of these material weaknesses,including i)mandate continuing professional development requirements for accounting staffto stay current with changes in U.S.GAAP;ii)setting up a financial and system control framework with formal documentation ofpolices and controls in place;and iii)setting up an IT team and imp
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(B)OR 12(G)OF THE SECURITIES EXCHANGE ACTOF 1934 OR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2024 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 ACTOF 1934 For the transition period from to Commission file number:001-41840 WEBUY GLOBAL LTD(Exact name of Registrant as specified in its charter)Cayman Islands(Jurisdiction of incorporation or organization)35 Tampines Street 92Singapore 528880(Address of principal executive offices)Bin Xue,Chief Executive Officer 65 8859 9762vincentwebuy.global35 Tampines Street 92Singapore 528880(Name,Telephone,E-mail 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(s)Name of each exchange on which registeredClass A ordinary shares,par value$0.0000462 per share WBUY The Nasdaq Stock Market LLC(NasdaqCapital Market)Securities registered or to be registered pursuant to Section 12(g)of the Act:None Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act:None Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the periodcovered by the annual report:72,270,053 Class A ordinary shares and 21,395,400 Class B ordinary shares issued and outstanding as ofDecember 31,2024,and 602,256 Class A ordinary shares and 178,296 Class B ordinary shares as of the date of this report.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 toSection 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 SecuritiesExchange 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 and posted on its corporate Web site,if any,everyInteractive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during thepreceding 12 months(or for such shorter period that the registrant was required to submit and post 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 emerginggrowth company.See definition of“large accelerated filer,”“accelerated filer,”and“emerging growth company”in Rule 12b-2 of theExchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if theregistrant has elected not to use the extended transition period for complying with any new or revised financial accounting standardsprovided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectivenessof its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registeredpublic accounting fi rm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of theregistrant included in the fi ling 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 basedcompensation received by any of the registrants 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 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 registranthas 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 SecuritiesExchange Act of 1934).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)ofthe Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.Yes No Table of Contents PagePART I I?em 1.I?en?y?f D?e?,Sen?Managemen?an?A?e?1 I?em 2.Offe?S?a?an?Expe?e?T?me?a?le1 I?em 3.Key Inf?ma?n1 I?em 4.Inf?ma?n?n?e C?mpany23I?em 4A.Un?e?l?e?S?aff C?mmen?40I?em 5.Ope?a?ng an?F?nan?al Re?ew an?P?pe?41I?em 6.D?e?,Sen?Managemen?an?Empl?yee?50I?em 7.Ma?S?a?e?l?e?an?Rela?e?Pa?y T?an?a?n?61I?em 8.F?nan?al Inf?ma?n61I?em 9.T?e Offe?an?L?ng62I?em 10.A?nal Inf?ma?n62I?em 11.Q?an?a?e an?Q?al?a?e D?l?e?A?Ma?ke?R?k77I?em 12.De?p?n?f Se?e?O?e?an Eq?y Se?e?78 PART II I?em 13.Defa?l?,D?en?A?ea?age?an?Del?nq?en?e?79I?em 14.Ma?e?al M?f?a?n?e R?g?f Se?y H?l?e?an?U?e?f P?ee?79I?em 15.C?n?l?an?P?e?e?79I?em 16.Re?e?e?80I?em 16A.A?C?mm?ee F?nan?al Expe?80I?em 16B.C?e?f E?80I?em 16C.P?n?pal A?n?an?Fee?an?Se?e?80I?em 16D.Exemp?n?f?m?e L?ng S?an?a?f?A?C?mm?ee?80I?em 16E.P?a?e?f Eq?y Se?e?y?e I?e?an?Aff?l?a?e?P?a?e?80I?em 16F.C?ange?n Reg?an?Ce?fy?ng A?n?an?81I?em 16G.C?p?a?e G?e?nan?e81I?em 16H.M?ne Safe?y D?l?e81I?em 16I.D?l?e Rega?ng F?e?gn J?n?a?P?e?en?In?pe?n?.81I?em 16J.In?e?T?a?ng P?l?e?81I?em 16K.Cy?e?e?y81 PART III I?em 17.F?nan?al S?a?emen?82I?em 18.F?nan?al S?a?emen?82I?em 19.Ex?82 i Conventions Used in this Annual Report Except where the context otherwise requires and for purposes of this annual report only,references to:“New Retail”are to New Retail International Pte Ltd.,a wholly owned subsidiary of WeBuy;“BBPL”are to Bear&Bear Pte Ltd.,a wholly owned subsidiary of New Retail;“PTBK”are to PT Buah Kita Retail,a wholly owned subsidiary of PTWB;“PTWB”are to PT Webuy Social Indonesia a 95%owned subsidiary of New Retail;“PTWT”are to PT Webuy Travel Indonesia,a 70%owned subsidiary of PTWB;“Subsidiaries”are to The Shopaholic Bear Pte Ltd.,Bear Bear Pte Ltd.,and PT Webuy Social Indonesia;“TSB”are to The Shopaholic Bear Pte Ltd.,a wholly owned subsidiary of New Retail;“WTPL”are to Webuy Travel Pte.Ltd.,a wholly owned subsidiary of New Retail.“WAPL”are to Webuy Advisory Pte Ltd,a wholly owned subsidiary of New Retail;“WPI”are to Webuy Prime Indonesia,a 99%owned subsidiary of New Retail;“WTPL”are to Webuy Travel Pte.Ltd.,a wholly owned subsidiary of New Retail;“TWW”are to PT Travel With Webuy,a 99%owned subsidiary of WTPL;“Subsidiaries”are to New Retail International Pte Ltd.,The Shopaholic Bear Pte Ltd.,Bear Bear Pte Ltd.,and PT WebuySocial Indonesia,PT Buah Kita Retail,PT Webuy Travel Indonesia,Webuy Travel Pte.Ltd.,Webuy Advisory Pte Ltd,WebuyPrime Indonesia,Webuy Travel Pte.Ltd.,and PT Travel With Webuy;“We”,“us”,“our”,the“Company”,and“our company”are to WeBuy and its subsidiaries;“WeBuy”are to WEBUY GLOBAL LTD,an exempted company with limited liability incorporated under the laws of theCayman Islands;and This annual report contains translations of the foreign currency amounts into US dollar amounts at specified rates solely for theconvenience of the reader.All reference to“US dollars”,“USD”,“US$”or“$”are to United States dollars.The relevant exchangerates for our major businesses are listed below:December31,2024 December 31,2023 December 31,2022 Period Ended USD:Singapore Dollar(“SGD”)exchange rate 1.3669 1.3207 1.3402 Period Average USD:SGD exchange rate 1.3362 1.3426 1.3789 Period Ended USD:Indonesian Rupiah(“IDR”)exchange rate 16,268.10 15,389.35 15,604.03 Period Average USD:IDR exchange rate 15,860.43 15,233.65 14,847.64 Period Ended USD:Malaysian Ringgit(“MYR”)exchange rate 4.4014 Period Average USD:MYR exchange rate 4.3985 We obtained the industry and market data used in this annual report or any document incorporated by reference from industrypublications,research,surveys and studies conducted by third parties and our own internal estimates based on our managementsknowledge and experience in the markets in which we operate.We did not,directly or indirectly,sponsor or participate in thepublication of such materials,and these materials are not incorporated in this annual report other than to the extent specifically cited inthis annual report.We have sought to provide current information in this annual report and believe that the statistics provided in thisannual report remain up-to-date and reliable,and these materials are not incorporated in this annual report other than to the extentspecifically cited in this annual report.ii SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS Certain matters discussed in this report may constitute forward-looking statements for purposes of the Securities Act of 1933,asamended(the“Securities Act”),and the Securities Exchange Act of 1934,as amended(the“Exchange Act”),and involve known andunknown risks,uncertainties and other factors that may cause our actual results,performance or achievements to be materiallydifferent from the future results,performance or achievements expressed or implied by such forward-looking statements.The words“expect,”“anticipate,”“intend,”“plan,”“believe,”“seek,”“estimate,”and similar expressions are intended to identify such forward-looking statements.Our actual results may differ materially from the results anticipated in these forward-looking statements due to avariety of factors,including,without limitation,those discussed under“Item 3.Key InformationRisk Factors,”“Item 4.Informationon the Company,”“Item 5.Operating and Financial Review and Prospects,”and elsewhere in this report,as well as factors which maybe identified from time to time in our other filings with the Securities and Exchange Commission(the“SEC”)or in the documentswhere such forward-looking statements appear.All written or oral forward-looking statements attributable to us are expressly qualifiedin their entirety by these cautionary statements.The forward-looking statements contained in this report reflect our views and assumptions only as of the date this report is signed.Except as required by law,we assume no responsibility for updating any forward-looking statements.iii PART I It?1.I?t?t?of D?cto?s,S?o?M?t?A?s?s Not applicable for annual reports on Form 20-F.It?2.Off?St?t?st?cs?E?p?ct?T?t?Not applicable for annual reports on Form 20-F.It?3.K?I?fo?t?o?Overview Investing in our securities involves a high degree of risk.Please carefully consider the risks discussed under“Item 3.Key Information D.Risk Factors”in this annual report beginning on page 2.We provide the following disclosure to help investors better understandour operations in China and the associated risks.WEBUY GLOBAL LTD,or WEBUY,is a holding company incorporated in Cayman Islands.As a holding company with no materialoperations,WEBUY conducts a substantial majority of its operations through its subsidiaries established in Singapore or Indonesia.However,neither the holding company nor any of the Companys subsidiaries conduct any operations through contractualarrangements with a variable interest entity.Investors in our Class A ordinary shares should be aware that they may never directly holdequity interests in the Singapore or Indonesia operating entities,but rather purchasing equity solely in WEBUY GLOBAL LTD,ourCayman Islands holding company.Furthermore,shareholders may face difficulties enforcing their legal rights under United Statessecurities laws against our directors and officers who are located outside of the United States.Our equity structure is a direct holding structure.Below is a chart illustrating our corporate structure:3.A.Reserved 3.B.Capitalization and Indebtedness Not applicable for annual reports on Form 20-F.3.C.Reasons for the Offer and Use of Proceeds Not applicable for annual reports on Form 20-F.1 3.D.Risk Factors Summary of Risk Factors Investing in our Class A ordinary shares involves significant risks.Below please find a summary of the principal risks we face,organized under relevant headings.These risks are discussed more fully under“Item 3.Key InformationD.Risk Factors”beginningon page 2 of this annual report.Risks Related to Our Business and Industry We operate in a competitive environment and may lose market share and customers if we fail to compete effectively(page 3).We may face challenges in expanding our product offerings(page 4).If we are unable to manage our growth or execute our strategies effectively,our business and prospects may be materially andadversely affected(page 4).Our limited operating history makes it difficult to evaluate our business and prospects,and we may not be able to sustain ourhistorical growth rates(page 5).If we or our suppliers fail to obtain and maintain the licenses,permits or approvals required by the jurisdictions we operate,our business,financial condition,and results of operations may be materially and adversely impacted(page 7).As a public company,we are obligated to develop and maintain proper and effective internal controls over financial reporting,and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our companyand,as a result,the value of our Class A ordinary shares(page 8).We are an“emerging growth company”within the meaning of the Securities Act and may take advantage of certain reduceddisclosure and governance requirements applicable to emerging growth companies which may cause our ordinary shares to beless attractive to investors(page 7).If we are unable to maintain a strong customer base that attracts new customers and repeat purchases from existingcustomers,or if we are unable to build and sustain an integrated ecosystem for the goods we carry,our business,financialcondition and results of operations may be materially and adversely affected(page 10).If we fail to anticipate our customers needs and provide offerings to attract and retain customers,or fail to adapt our servicesor business model to changing needs of our customers or emerging industry standards,our business may be materially andadversely affected(page 10).If we fail to recruit new Group Leaders or keep our existing Group Leaders motivated,our business may suffer(page 11).Risks Related to Our Securities We do not intend to pay dividends for the foreseeable future(page 18).Our management has broad discretion to determine how to use the funds raised in this offering and may use them in ways thatmay not enhance our results of operations or the price of our ordinary shares(page ).Because we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable toU.S.issuers,you will have less protection than you would have if we were a domestic issuer(page ).The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided toshareholders of corporations incorporated in the United States(page 21).Risks Related to Countries Where We Operate Developments in the social,political,regulatory and economic environment in the countries where we operate,may have amaterial and adverse impact on us(page 22).Disruptions in the international trading environment may seriously decrease our international sales(page 22).Natural events,wars,terrorist attacks and other acts of violence involving any of the countries in which we or our clientshave operations could adversely affect our operations and client confidence(page 22).2 Risks Related to our Business and Industry Any harm to our brand or reputation may materially and adversely affect our business and results of operations.We believe that the recognition and reputation of our Webuy brand among our customers and suppliers have contributed significantlyto the growth and success of our business.Maintaining and enhancing such brand recognition and reputation is critical to attractingnew customers and suppliers to our platform,and to preserve and deepen the engagement with our existing customers and suppliers aswell as to mitigate legislative or regulatory scrutiny,litigation,government investigations and adverse public sentiment.Negativepublicity,whether or not justified,can spread rapidly through social media.To the extent that we are unable to respond timely andappropriately to negative publicity,our reputation and brand can be harmed.Many factors,including those beyond our control,areimportant to maintaining and enhancing our brand.These factors include our ability to:provide a superior shopping experience to customers;maintain the authenticity,quality and diversity of our product offerings in sufficient quantities;maintain the efficiency,reliability and security of our fulfillment services and payment systems;maintain or improve buyer satisfaction with our after-sale services;enhance brand awareness through marketing and brand promotion activities;preserve our reputation and goodwill in the event of any negative publicity involving our product authenticity and quality,customer service,cybersecurity,data protection,authorization to sell products or other issues affecting it;and maintain positive relationships with our suppliers and other service providers.Any public perception(i)that counterfeit or infringing products are sold on our platform,(ii)that we,or our third-party serviceproviders,do not provide satisfactory customer service or(iii)that we infringe upon any brand owners intellectual property rightscould damage our reputation,diminish our brand value,undermine our credibility and adversely impact our business.If we are unableto maintain our reputation,enhance our brand recognition or increase positive awareness of our website,products and services,wemay be difficult to maintain and grow our customer base,and our business and growth prospects may be materially and adverselyaffected.We operate in a competitive environment and may lose market share and customers if we fail to compete effectively.The e-commerce industry in the Asia Pacific region is competitive.We face significant competition from existing,well-established,and low-cost alternatives,and we expect to face competition from new market entrants in the future.In addition,within each of themarkets where we offer our services,the cost to switch between service providers is low.Customers have a propensity to shift to thelowest-cost or highest-quality provider,and suppliers have a propensity to shift to the platform with the highest earnings potential.Aswe and our competitors introduce new products and services,and as existing services and products evolve,we expect to becomesubject to additional competition.In addition,our competitors may adopt features of our offerings,which would reduce our ability todifferentiate our offerings from those of our competitors,or they may adopt innovations that suppliers and customers value morehighly than ours,which would render our offerings less attractive.See“Our Business Competition.”In addition,new technologiesmay increase or even transform the competitive landscape in the e-commerce industry.New competitive business models may appear,such as business models based on new forms of social media,and we may not adapt quickly enough,or at all,to changing industrytrends.Increased competition may reduce our margins,market share and brand recognition,or result in significant losses.For example,whenwe set prices,we consider how competitors have set prices for the same or similar products.When they cut prices or offer additionalincentives to compete with it,we may have to lower our own prices or offer comparable incentives or risk losing market share.Whenwe have products that do not sell,we often reduce prices to clear inventory.In addition,credible suppliers are crucial in broadeningour product listings,and we compete with other companies for these suppliers.We also compete on the basis of non-price terms.For example,we offer free home deliveries for orders above a certain minimumvalue and aim to make deliveries available within one(1)business day(while providing customers with the option to place orders upto seven(7)days in advance).We plan to employ a variety of strategies to shorten delivery times,such as increased monitoring of ourdelivery service partners performance.If we are unable to maintain the reliability of,and continue to provide short delivery times,wemay lose any competitive advantage.3 Some of our current or future competitors may have longer operating histories,greater brand recognition,better supplier relationshipsand sourcing expertise,including larger customer bases or greater financial,technical or marketing resources than we do.Thosesmaller companies or new entrants may be acquired by,receive investment from or enter into strategic relationships with well-established and well-financed companies or investors which would help enhance their competitive positions.As a result,suchcompetitors may be able to respond more quickly and effectively than us to new or changing opportunities,technologies,consumerpreferences,regulations,or standards,which may render our offerings less attractive.The markets in which we compete have attractedsignificant investments from a wide range of funding sources.Some of our competitors are subsidiaries or affiliates of large globalcompanies which may subsidize their losses or provide them with additional resources to compete with us.As a result,many of ourcompetitors are well capitalized and have the resources to offer discounted services,supplier incentives and customer promotions,aswell as to develop innovative offerings and alternative pricing models which may be more attractive to customers than those that weoffer.Increased competition may reduce our profitability,market share,customer base,and brand recognition.We cannot assure you that wewill be able to compete successfully against current or future competitors,and competitive pressures may have a material and adverseeffect on our business,financial condition and results of operations.We may face challenges in expanding our product offerings We currently offer a wide range of products on our platform,including food and beverage,fresh produce,as well as lifestyle and otherpersonal care items.Expansion into diverse new product categories and increasing our product offerings involve new risks andchallenges.Our lack of familiarity with these products and lack of relevant buyer data relating to these products may make it moredifficult for us to anticipate buyer demand and preferences and to inspect and control quality and ensure proper handling,storage anddelivery by our merchants.Our suppliers may experience higher return rates on new products,receive more buyer complaints aboutsuch products and face costly product liability claims as a result of selling such products,which would harm our brand and reputationas well as our financial performance.We may also be involved in disputes with the suppliers in connection with these claims andcomplaints.As we broaden our product offerings,we will need to work with a large number of new suppliers and partners efficiently and establishand maintain mutually beneficial relationships with our existing and new suppliers and partners.To support our growth and ourexpansion,we will need to devote management,operating,financial and human resources which may divert our attention fromexisting businesses,incur upfront costs,and implement a variety of new and upgraded management,operating,financial and humanresource systems,procedures and controls.There is no assurance that we will be able to implement all of these systems,proceduresand control measures successfully or address the various challenges in expanding our future businesses and operations effectively.If we are unable to manage our growth or execute our strategies effectively,our business and prospects may be materially andadversely affected.Our business has grown substantially since its inception in 2019.We continue to introduce new lines of business and plan to continueto grow our business.In addition,in the past few years,we have expanded into new markets and increased our product offerings.Expanding our business has entailed and will continue to entail significant risks as we work with new suppliers,expand into newmarkets and offer new products.As the business grows and our product offerings increase,we will need to continue to work with alarge number of merchants and an even larger number of individual sellers efficiently and establish and maintain mutually beneficialrelationships with them.We will also need to perform sufficient due diligence and other checks to prevent the sale of unsatisfactory orinfringing goods on our platform.To support our growth,we also plan to implement a variety of new and upgraded managerial,operating,financial and human resource systems,procedures and controls.All of these efforts will require significant financial,managerial and human resources.In addition,our number of employees has increased since our inception,and may continue toincrease in the future.We cannot assure you that we will be able to effectively manage our growth or to implement desired systems,procedures and controls successfully,particularly as the size of our organization grows,or that our system will perform as expected orthat our new business initiatives will be successful.If we are not able to manage our growth or execute our strategies effectively,ourgrowth may be interrupted and our business and prospects may be materially and adversely affected.4 Our limited operating history makes it difficult to evaluate our business and prospects,and we may not be able to sustain ourhistorical growth rates.We commenced our online business in 2019 and have a limited operating history.Since inception,we have experienced rapid growthin our business.Our revenue increased from US$44,560,418 in fiscal year 2022 to US$61,686,170 in fiscal year 2023.However,infiscal year 2024,our revenue declined to US$58,303,835 primarily due to a decrease in fruit imports in Indonesia.We have incurredoperating losses every year since inception.Our business has undergone significant changes each year since its inception,includingthrough acquisitions and the introduction of new products and services,and therefore our historical growth rate may not be indicativeof future performance.We cannot assure you that we will be able to achieve similar results or grow at a similar rate as we have in thepast.Growth may slow,revenue may decline and losses may increase for a number of possible reasons,some of which are beyond ourcontrol,including decreased consumer spending,greater competition,declining growth of our overall market or industry in the AsiaPacific region,negative perceptions about product quality or authenticity,fulfilment bottlenecks,sourcing difficulties,emergence ofalternative business models,changes in government policies,tax policies or general economic conditions.Our limited operatinghistory makes it difficult to evaluate our prospects and the risks and challenges we may encounter,and we may not have sufficientexperience in addressing the risks to which companies operating in rapidly evolving markets may be exposed.If our growth ratedeclines,investors perceptions of our business and business prospects may be adversely affected and the market price of our securitiescould decline.You should consider our prospects in light of the risks and uncertainties that fast-growing companies with a limitedoperating history may encounter.We have a history of losses,operating losses and negative cash flow from operating activities,and we may continue to incur lossesand operating losses,and experience negative cash flow from operating activities,in the future.We have incurred significant losses and negative cash flow from operating activities since our inception.For the year ended December31,2024,2023 and 2022,we had a negative cash flow of$5,625,283,$7,160,538 and$4,117,551,respectively.We cannot assure youthat we will be able to generate profits,operating profits or positive cash flow from operating activities in the future or that we will beable to continue to obtain financing on acceptable terms or at all.Our ability to achieve profitability and positive cash flow fromoperating activities will depend on a mix of factors,some of which are beyond our control,including our ability to grow and retain ourbuyer and seller base,our ability to secure favorable commercial terms from suppliers,our ability to spot trends in the e-commerceindustry,accurately perceive our customers demands,and manage our product mix accordingly and our ability to expand our newlines of business and offer value-added services with higher profit margins.In addition,we intend to continue to invest heavily in theforeseeable future in order to grow our business in the Asia Pacific e-commerce market.As a result,we believe that we may continueto incur losses for some time in the future.The report of our independent registered public accounting firm that accompanies our audited consolidated financial statements alsocontains a going concern qualification in which such firm expressed substantial doubt about our ability to continue as a going concern.Our consolidated financial statements do not include any adjustments that might take place if we are unable to continue as a goingconcern.If we are unable to continue as a going concern,holders of our securities might lose their entire investment.Although we planto attempt to raise additional capital through one or more private placements or public offerings,the doubts raised relating to ourability to continue as a going concern may make our shares an unattractive investment for potential investors.These factors,amongothers,may make it difficult to raise any additional capital and may cause us to be unable to continue to operate our business.Failure to safeguard private and confidential information of our customers and protect our network against security breachescould damage our reputation and brand and substantially harm our business and results of operations.Our business generates and processes a large quantity of data.An important challenge to the e-commerce industry in general,is thesafekeeping and secure transmission of private and confidential information over public networks.Through third-party cloudcomputing service providers such as Amazon Web Services,we maintain a large database of confidential and private information as aresult of customers placing orders and inputting payment and contact information online,all through our mobile application.Inaddition,we accept a variety of payment methods such as major credit cards networks,bank transfers and third party payment serviceproviders,and online payments are settled through third-party online payment services.We also share certain personal informationabout our customers with contracted delivery partners,such as their names,addresses,phone numbers and transaction records in orderto facilitate pickups and deliveries.Maintaining complete security for the storage and transmission of confidential information in oursystem presents us with significant challenges.5 We have adopted strict security policies and measures,including encryption technology,to protect our proprietary data and customerinformation.However,advances in technology and the sophistication of cyber-attackers,new discoveries in cryptography or otherdevelopments could result in a compromise or breach of the technology that we use to protect confidential information,which couldlead to third parties illegally obtaining private and confidential information we hold as a result of our customers use of our mobileapplication,which could significantly affect consumer confidence in our platform and harm our business.We may not be able toprevent third parties,especially hackers or other individuals or entities engaging in similar activities,from illegally obtaining suchconfidential or private information we hold with respect to our customers on our platform.Such individuals or entities obtainingconfidential or private information may further engage in various other illegal activities using such information.In addition,we have limited control or influence over the security policies or measures adopted by third-party providers of onlinepayment services through which our customers may elect to make or accept payments.Any negative publicity on our mobileapplications safety or privacy protection mechanisms and policies,and any claims asserted against us or fines imposed upon it as aresult of actual or perceived failures,could have a material and adverse effect on our public image,reputation,financial condition andresults of operations.Any compromise of our information security,or the information security measures of our contracted third-partycouriers or third-party online payment service providers,could have a material and adverse effect on our reputation,business,prospects,financial condition and results of operations.Practices regarding the collection,use,storage and transmission of personal information by companies operating over the internet andmobile platforms have recently come under increased public scrutiny in the various jurisdictions in which we and our subsidiariesoperate.In addition to already existing stringent laws and regulations in such jurisdictions applicable to the solicitation,collection,processing,sharing or use of personal or consumer information,we may become subject to newly enacted laws and regulations thatcould affect how we store,process and share data with our customers,suppliers and third-party sellers.Compliance with anyadditional laws could be expensive,and may place restrictions on the conduct of our business and the manner in which we interactwith our customers.Any failure to comply with applicable regulations could also result in regulatory enforcement actions against us.Significant capital,managerial resources and other resources may be required to protect against information security breaches or toalleviate problems caused by such breaches or to comply with our privacy policies or privacy-related legal obligations.The resourcesrequired may increase over time as the methods used by cyber-attackers and others engaged in online criminal activities areincreasingly sophisticated and constantly evolving.Any failure or perceived failure by us to prevent information security breaches orto comply with privacy policies or privacy-related legal obligations,or any compromise of security that results in the unauthorizedrelease or transfer of personally identifiable information or other customer data,could cause our customers to lose trust in us and couldexpose us to legal claims.Any perception by the public that e-commerce or the privacy of customer information is becoming increasingly unsafe or vulnerableto attacks could inhibit the growth of online luxury retail and other online services generally,which could have a material and adverseeffect on our financial condition and results of operations.We rely on commercial banks and third-party online payment service providers for payment processing on our platform.If thesepayment services are restricted or curtailed in any way or become unavailable to us or our buyers for any reason,our business maybe materially and adversely affected.All online payments for products sold on our platform are settled through third-party online payment service providers.Our businessdepends on the billing,payment and escrow systems of these payment service providers to maintain accurate records of payments ofsales proceeds by buyers and collect such payments.If the quality,utility,convenience or attractiveness of these payment processingand escrow services declines,or we have to change the pattern of using these payment services for any reason,the attractiveness ofour platform could be materially and adversely affected.Businesses involving online payment services are subject to a number of risks that could materially and adversely affect third-partyonline payment service providers ability to provide payment processing and escrow services to us,including:dissatisfaction with these online payment services or decreased use of their services by buyers and merchants;increasing competition,including from other established internet companies,payment service providers and companiesengaged in other financial technology services;6 changes to rules or practices applicable to payment systems that link to third-party online payment service providers;breach of buyers personal information and concerns over the use and security of information collected from buyers;service outages,system failures or failures to effectively scale the system to handle large and growing transaction volumes;increasing costs to third-party online payment service providers,including fees charged by banks to process transactionsthrough online payment channels,which would also increase our costs of revenues;and failure to manage funds accurately or loss of funds,whether due to employee fraud,security breaches,technical errors orotherwise.Certain commercial banks may impose limits on the amounts that may be transferred by automated payment from buyers bankaccounts to their linked accounts with third-party online payment services.We cannot predict whether these and any additionalrestrictions that could be put in place would have a material adverse effect on our platform.If we or our suppliers fail to obtain and maintain the licenses,permits or approvals required by the jurisdictions we operate,ourbusiness,financial condition,and results of operations may be materially and adversely impacted.We are required to hold a number of licenses and permits in connection with our business operation,including fresh fruits andvegetables import license,meat and fish products import license,and processed food products and food appliances import license.Wehave in the past held,and currently hold,all material licenses and permits described above.As of the date of this annual report,wehave not received any notice of warning or been subject to penalties or other disciplinary action from the relevant governmentalauthorities regarding the conducting of our business without the above-mentioned approvals and permits.However,new laws andregulations may be adopted from time to time to require additional licenses and permits other than those we currently have,and toaddress new issues that arises from time to time in the jurisdictions in which we operate.Although we endeavor to comply with allapplicable laws and regulations,there is no assurance that we can timely react to the evolving requirements,or that we will not besubject to any penalties in the future.We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reducedreporting requirements.We are an“emerging growth company”,as defined in the JOBS Act,and we may take advantage of certain exemptions from variousrequirements applicable to other public companies that are not emerging growth companies including,most significantly,not beingrequired to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we are anemerging growth company.As a result,if we elect not to comply with such auditor attestation requirements,our investors may nothave access to certain information they may deem important.The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accountingstandards until such date that a private company is otherwise required to comply with such new or revised accounting standards.Pursuant to the JOBS Act,we have elected to take advantage of the benefits of this extended transition period for complying with newor revised accounting standards as required when they are adopted for public companies.As a result,our operating results andfinancial statements may not be comparable to the operating results and financial statements of other companies who have adopted thenew or revised accounting standards.After we are no longer an“emerging growth company,”we expect to incur significant expenses and devote substantial managementeffort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules andregulations of the SEC,which may adversely affect our financial condition and results of operations.We may lose our foreign private issuer status in the future,which could result in significant additional costs and expenses to us.As discussed above,we are a foreign private issuer under the Exchange Act,and therefore,we are not required to comply with all ofthe periodic disclosure and current reporting requirements of the Exchange Act.The determination of foreign private issuer status ismade annually on the last Business Day of an issuers most recently completed second fiscal quarter,and,accordingly,the nextdetermination will be made with respect to us on June 30,2023.In the future,we would lose our foreign private issuer status if(1)more than 50%of our outstanding voting securities are owned by U.S.residents and(2)a majority of our Directors or executiveofficers are U.S.citizens or residents,or we fail to meet additional requirements necessary to avoid the loss of foreign private issuerstatus.If we lose our foreign private issuer status,we will be required to file with the SEC periodic reports and registration statementson U.S.domestic issuer forms,which are more detailed and extensive than the forms available to a foreign private issuer.We will alsohave to comply with U.S.federal proxy requirements,and our officers,Directors and 10%shareholders will become subject to theshort-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act.In addition,we will lose our ability to relyupon exemptions from certain corporate governance requirements under the listing rules of the Nasdaq.As a U.S.listed publiccompany that is not a foreign private issuer,we will incur significant additional legal,accounting and other expenses that we will notincur as a foreign private issuer.7 As a result of being a public company,we are obligated to develop and maintain proper and effective internal controls overfinancial reporting,and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence inour company and,as a result,the value of our ordinary shares.We are required,pursuant to Section 404 of the Sarbanes-Oxley Act,to furnish a report by management on,among other things,theeffectiveness of our internal control over financial reporting.This assessment will need to include disclosure of any materialweaknesses identified by our management in our internal control over financial reporting.In addition,our independent registeredpublic accounting firm will be required to attest to the effectiveness of our internal control over financial reporting.We are required todisclose changes in internal control over financial reporting that have materially affected,or are reasonably likely to materially affect,our internal control over financial reporting on an annual basis.We have commenced the costly and challenging process of compiling the system and processing documentation necessary to performthe evaluation needed to comply with Section 404,and we may not be able to complete our evaluation,testing,and any requiredremediation in a timely fashion.Our compliance with Section 404 will require that we incur substantial accounting expense andexpend significant management efforts.In addition,as our business continues to grow in size and complexity,we are improving ourprocesses and infrastructure to help ensure we can prepare financial reporting and disclosures within the timeline required for a publiccompany.We may need to hire additional accounting and financial staff with appropriate public company experience and technicalaccounting knowledge to compile the system and process documentation necessary to perform the evaluation needed to comply withSection 404.In addition,prior to completing our internal control assessment under Section 404,we may become aware of and disclosematerial weaknesses that will require timely remediation.Due to our significant growth,we face challenges in timely andappropriately designing controls in response to evolving risks of material misstatement.During the evaluation and testing process ofour internal controls,if we identify one or more material weaknesses in our internal control over financial reporting,we will be unableto assert that our internal control over financial reporting is effective.We cannot assure you that there will not be material weaknesses in our internal control over financial reporting in the future.Anyfailure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financialcondition or operating results.If we are unable to conclude that our internal control over financial reporting is effective,or if ourindependent registered public accounting firm determines we have a material weakness in our internal control over financial reporting,we could lose investor confidence in the accuracy and completeness of our financial reports,the market price of our ordinary sharescould decline,and we could be subject to sanctions or investigations by the stock exchange on which our securities are listed,the SECor other regulatory authorities.Failure to remedy any material weakness in our internal control over financial reporting,or toimplement or maintain these and other effective control systems required of public companies,could also restrict our future access tothe capital markets.We have granted and may continue to grant options and other types of awards under our share incentive plan,which may result inincreased share-based compensation expenses.We have granted and may continue to grant options and other types of awards to key employees,directors and consultants toincentivize their performance and align their interests with ours,which may result in increased share-based compensation expenses.We recognize share-based compensation expenses in our consolidated financial statements in accordance with U.S.GAAP.OnJanuary 1,2021,we have granted 4,269,200 ordinary shares to our key employees with a vesting period of 20 months.As a result,wehave incurred share-based compensation expenses in the year ended December 31,2021 until the third quarter of 2022 in connectionwith these grants.We believe the granting of share-based compensation is of significant importance to our ability to attract and retainkey personnel and employees,and we will continue to grant share-based compensation to employees in the future.However,as aresult,our expenses associated with share-based compensation may increase,which may have an adverse effect on our results ofoperations.We may re-evaluate the vesting schedules,lock-up period,exercise price or other key terms applicable to the grants underour currently effective share incentive plans from time to time.If we choose to do so,we may experience substantial change in ourshare-based compensation expenses in the reporting periods following this offering.On December 16,2024,the Company a 2024 equity incentive plan(the“2024 Plan”)to motivate,attract and retain directors,consultants or key employees to exert their best efforts on behalf of the Company and link their personal interests to those of theCompanys shareholders.The 2024 Plan has a maximum number of 4,200,000 Class A ordinary shares of the Company available forissuance pursuant to all awards under the 2024 Plan.On December 20,2024,the Company issued 4,200,000 Class A ordinary sharesunder 2024 Plan to certain employees of the Company as compensation for their continued service in the Company.Fluctuations in exchange rates between and among the Singapore dollar,the Australian dollar,the Euro,as well as othercurrencies in which we do business,may adversely affect our operating results.We operate in various countries in the Asia Pacific region,including Singapore and Indonesia,among other countries.We makeinventory purchases primarily in SGD,IDR,RMB and U.S.dollars,incurs employee compensation expenses and administrativeexpenses primarily in Singapore dollars,and incur certain other expenses in various other currencies.We derive a significant portionof our revenue from sales denominated in Singapore dollars as well as in various local currencies other than the Singapore dollar.8 Our margins may be affected and we may otherwise be affected by foreign exchange differences in connection with fluctuations in thevalue of currencies against the Singapore dollar and managing multiple currency exposures.For example,we must pay fees to convertproceeds in foreign currencies to Singapore dollars.In addition,foreign exchange controls may restrict us from repatriating incomeearned in certain foreign countries to Singapore.Any such delay in revenue repatriation may cause us to incur losses due to thevolatility of these currencies compared to the Singapore dollar.Because we report our results in Singapore dollars,the difference inexchange rates in one period compared to another directly impacts period-to-period comparisons of our operating results.Becausecurrency exchange rates have been especially volatile in the recent past,these currency fluctuations may make it difficult for us topredict our results.Our Indonesia subsidiary generates primarily all of its revenue in the Indonesian Rupiah,which is freelyconvertible and transferable,except that Indonesian banks may not transfer Indonesian Rupiah to persons outside of Indonesia andmay not conduct certain transactions with non-residents.As a result,any restriction on currency exchange may limit the ability of ourIndonesia subsidiary to use its Indonesian Rupiah revenues to pay dividends to us.Limitations on the ability of our subsidiaries to paydividends or make any other payments to us could materially and adversely limit our ability to grow,make investments or acquisitionsthat could be beneficial to our business,pay dividends,or otherwise fund and conduct our business.The value of these currencies is affected by,among other things,changes in political and economic conditions,and the foreignexchange policies in the respective countries.It is difficult to predict how market forces or government policies may impact theexchange rates between these currencies and the U.S.dollar in the future.Significant revaluation of these currencies may have a material and adverse effect on your investment.Currently,we have notimplemented any comprehensive strategy to mitigate risks related to the impact of fluctuations in currency exchange rates.Implementing hedging strategies can prove costly.Even if we were to implement hedging strategies,not every exposure is or can behedged,and,where hedges are put in place based on expected foreign exchange exposure,they are based on forecasts which may varyor which may later prove to have been inaccurate.Failure to hedge successfully or anticipate fluctuations in the value of currenciesand other currency risks accurately could adversely affect our operating results.As we expand our business internationally,we will face additional business,political,regulatory,operational,financial andeconomic risks,any of which could increase our costs and hinder our growth.We expect to continue to devote significant resources to international expansion in the Asia Pacific region through organic growth.Expanding our business internationally will require considerable management attention and resources and is subject to the particularchallenges of operating a rapidly growing business in an environment of multiple languages,cultures,customs and legal andregulatory systems.Entering new international markets or expanding our operations in existing international markets will involvesubstantial cost,and our ability to gain market acceptance in any particular market is uncertain.There can be no assurance that we willbe able to successfully grow our business internationally.For example,we may become subject to risks that we have not faced beforeor an increase in the risks that we currently face,including risks associated with:localizing our operations and platform,and gaining customer acceptance;recruiting and retaining talented and capable management and employees in various countries;language barrier and cultural differences;negotiating agreements that are economically beneficial to us and protective of our rights,such as contracting with variousthird parties for the localization of our services;competition from home-grown businesses with significant local market share and a better understanding of consumerpreferences;protecting and enforcing our intellectual property rights;the inability to extend proprietary rights in our brand,content or technology into new jurisdictions;complying with applicable foreign laws and regulations,such as those relating to intellectual property,privacy,consumerprotection,e-commerce,customs and anti-money laundering;9 currency exchange rate fluctuations,and foreign exchange controls that might restrict or prevent us from repatriating incomeearned in foreign countries;challenges in maintaining internal controls and managing accounting personnel in the countries where we operate;protectionist laws and business practices that favor local businesses in some countries;various forms of online fraud,such as credit card fraud;foreign and local tax consequences;political,economic and social instability;and higher costs associated with doing business internationally.Any failure to meet the challenges associated with international expansion could materially and adversely affect our business,financial condition and results of operations.If we are unable to maintain a strong customer base that attracts new customers and repeat purchases from existing customers,orif we are unable to build and sustain an integrated ecosystem for the goods we carry,our business,financial condition and resultsof operations may be materially and adversely affected.Our future growth depends on our ability to continue to attract new customers and retain existing customers,which is important to thegrowth and profitability of our business.More importantly,our future growth also depends on our ability to leverage our platform andbuild an integrated ecosystem for the goods we carry(which at present,would be groceries and lifestyle products)where customersare able to enjoy direct cost savings arising from the group-buy business model.We leverage social networks as a tool for customeracquisition and engagement.Although buyers can access our platform and make team purchases without using social networks,weleverage social networks,such as Facebook,TikTok and Whatsapp,to enable customers to share product information and theirpurchase experiences with their friends,family,and other social contacts to generate low-cost organic traffic.We may fail to establishor maintain relationships with additional social network operators to support the growth of our business on economically viable terms,or at all.Any interruption to or discontinuation of our relationships with major social network operators may severely and negativelyimpact our ability to continue growing our customer base,and may have a material adverse effect on our business,financial conditionand results of operations.To remain competitive,we must continue to enhance and improve the responsiveness,functionality and features of our platform.Theinternet and the e-commerce markets are characterized by rapid technological evolution,changes in consumer requirements andpreferences,frequent introductions of new products,features and services embodying new technologies and the emergence of newindustry standards and practices,any of which could render our existing technologies and systems obsolete.Our success will depend,in part,on our ability to identify,develop and adapt to new technologies useful in our business,and respond to technological advancesand emerging industry standards and practices,in particular with respect to mobile internet,in a cost-effective and timely way.Wecannot assure you that we will be successful in these efforts.If we fail to anticipate our customers needs and provide offerings to attract and retain customers,or fail to adapt our services orbusiness model to changing needs of our customers or emerging industry standards,our business may be materially and adverselyaffected.The e-commerce market in which we operate as well as needs and preferences of consumers are constantly evolving.We must stayabreast of emerging consumer preferences and anticipate upcoming trends in order to continuously respond to such changes to remaincompetitive and maintain our market position.In addition,maintaining effective marketing is important for our business.Weincreasingly plan to use technology to enable our systems to make recommendations to customers based on past purchases or on goodsviewed but not purchased.Our ability to make individually tailored recommendations is dependent on our business intelligencesystem,which tracks,collects and analyzes our customers browsing and purchasing behavior,to provide accurate and reliableinformation.We believe that customers choose to utilize our platform because we offer a dynamic and interactive shoppingexperience,and a wide selection of goods.If we are unable to continue to provide a seamless user experience across different accesspoints,our customers may choose to utilize alternative platforms offered by our competitors.Furthermore,we may not always be ableto anticipate the demand and preferences of our customers accurately.Any inability to adapt to these changes promptly may result in afailure to capture new customers or retain existing customers,the occurrence of which would materially and adversely affect ourbusiness,financial condition and results of operations.If our customer base diminishes,it could cause existing suppliers and partners to perceive our platform as less valuable and leave ourplatform.In addition,potential suppliers and partners could be deterred from joining us.Suppliers may also regard us as less valuablefor various other reasons,such as the perceived ineffectiveness of our marketing efforts or the emergence of alternative platforms thatcharge lower commissions and fees.Any of the above scenarios in turn may materially and adversely affect our business,financialcondition and results of operations.10 If our senior management is unable to work together effectively or efficiently,or if we lose their service,our business may beseverely disrupted.Our success depends heavily upon the continued services of our management.In particular,we rely on the expertise and experience ofMr.Bin Xue,our Founder and Chief Executive Officer,and other executive officers.If our senior management cannot work togethereffectively or efficiently,our business may be severely disrupted.If one or more members of our senior management were unable orunwilling to serve in their current positions,we might not be able to locate an appropriate replacement,if at all,and our business,financial condition and results of operations may be materially and adversely affected.If any member of our senior management joinsa competitor or forms a competing business,we may lose customers,suppliers,know-how and key professionals and staff.Our seniormanagement has entered into employment agreements with us,which contain confidentiality and non-competition provisions.Therecan be no assurance that any such non-competition provision will be enforceable in the Singapore courts.In addition,under theseagreements,members of our senior management team can resign by giving us prior notice or through forfeiture of compensationduring the notice period in lieu of giving prior notice.We currently do not maintain any insurance coverage for loss of keymanagement personnel.If any dispute arises between our senior management and us,especially one that results in any resignation,wemay suffer negative publicity and erosion of investor confidence,and we may have to incur substantial costs and expenses in order toenforce such agreements,or we may be unable to enforce them at all.We depend on talented,experienced and committed personnel to grow and operate our business,and if we are unable to recruit,train,motivate and retain qualified personnel or sufficient workforce while controlling our labor costs,our business may bematerially and adversely affected.A fundamental driver of our continued success is our ability to recruit,train and retain qualified personnel with deep experience in theecommerce industry,particularly in areas of technology,authentication,marketing and operations.For example,we face difficultyrecruiting experienced technology personnel,whose responsibility is to design and maintain user-friendly mobile applications.Our senior management and mid-level managers are instrumental in implementing our business strategies,executing our businessplans and supporting our business operations and growth.The effective operation of our managerial and operating systems,fulfillmentservices,customer service centers and other back office functions also depends on the knowledge and diligence of our managementand employees.Since the online e-commerce industry is characterized by high demand and intense competition for talent,we canprovide no assurance that we will be able to attract or retain qualified staff or other highly skilled employees that we will need toachieve our strategic objectives.We plan to hire additional employees both in our technology department,in order to enhance userexperience for all our online touch points,and in our finance department.We have observed an overall tightening of the labor marketand an emerging trend of shortage of labor supply and this requires us to be more creative and pro-active in our talent sourcing ratherthan only depending on traditional recruitment channels.Failure to obtain experienced and dedicated employees may lead tounderperformance of these functions and cause disruption to our business.Labor costs in the countries in which we operate haveincreased with the economic development in the Asia Pacific region.In addition,our ability to train and integrate new employees intoour operations may also be limited and may not meet the demand for our business growth in a timely fashion,if at all,and rapidexpansion may impair our ability to maintain a dynamic corporate culture.Furthermore,additional employees that we plan to hire maybe located at our offices and facilities outside Singapore.As a result,we may have less control over these employees,and we mayexperience increased difficulty in integrating them into our corporate culture.If we fail to recruit new Group Leaders or keep our existing Group Leaders motivated,our business may suffer.Our Group Leaders are key in acquiring and retaining customers,and particular,in facilitating customer engagement which is crucialin developing and maintaining the dynamic and interactive experience that our platform strives to deliver.If we are unable to retain asufficient number of Group Leaders such as would allow us to effectively and efficiently engage with the community,gather feedbackin a timely manner,and assist with tail-end logistics,our business and growth could be disrupted.We cannot assure that the incentives currently offered by us to Group leaders can continue to motivate and retain our Group Leaders inthe future,or that potential competitors with greater financial resources will not adopt a similar business model as us while offeringour Group Leaders greater incentives to perform similar roles on their platforms.11 The proper functioning of our information technology platform is essential to our business.Any failure to maintain thesatisfactory performance of our mobile application and systems could materially and adversely affect our business and reputation.The satisfactory performance,reliability and availability of our technology platform are critical to our success and our ability to attractand retain customers and suppliers,and provide superior customer service.All of our sales of products are made online through ourmobile application,and the fulfillment services we provide to customers are coordinated through our mobile application.Any systeminterruptions caused by telecommunications failures,computer viruses,software errors,third party services,cloud computingproviders,cyberattacks or other attempts to harm our systems that result in the unavailability or slowdown of our mobile applicationor reduced orders and fulfillment performance could reduce the volume of products sold and the attractiveness of product offerings onour mobile application.Our cloud servers may also be vulnerable to computer viruses,physical or electronic break-ins and similardisruptions,which could lead to system interruptions,mobile application slowdown or shutdown,delays or errors in transactionprocessing,loss of valuable data or the inability to accept and fulfill orders.Even though we have not experienced in the past,we mayexperience cyber-attacks and unexpected interruptions in the future.We can provide no assurance that our current securitymechanisms will be sufficient to protect our information technology systems from any third-party intrusions,viruses or cyberattacks,information or data theft or other similar activities.Any such future occurrences could reduce customer satisfaction,damage ourreputation and result in a material decrease in our revenue.Additionally,we must continue to upgrade and improve our technologyplatform to support our business growth,and failure to do so could impede our growth.However,we cannot assure you that we will besuccessful in executing these system upgrades,improvement strategies or updates by our third party technology service providers.Inparticular,our systems may experience windows of down time during upgrades,and the new technologies or infrastructures may notbe fully integrated with the existing systems on a timely and reliable basis,if at all.Surges in online traffic associated withpromotional activities and holiday seasons in the past,among others,could strain our platform and result in unexpected downtime ifour server is unable to handle the volume of traffic.While we have implemented procedures to add server capacity prior to suchevents,there can be no assurance that our servers will not be overloaded in the future due to the popularity of sales events or for anyother reason.If our existing or future technology platform does not function properly,it could cause system disruptions and slowresponse times,affecting data transmission,which in turn could materially and adversely affect our business,financial condition andresults of operations.Any deficiencies in the internet infrastructure of any particular country in which we operate or any disruption in ourarrangements with third-party providers of communications and storage capacity could impair our ability to sell products over ourmobile applications,which could cause us to lose customers and harm our operating results.The majority of our sales of products and services are made online through our mobile application,and the fulfillment services weprovide to our customers are related to their purchases through our mobile application.Our business depends on the performance andreliability of the internet infrastructure in the Asia Pacific countries in which we operate.The availability of our mobile applicationdepends on telecommunications carriers and other third-party providers of communications and storage capacity,including bandwidthand server storage,among other things.If we are unable to enter into and renew agreements with these providers on acceptable terms,or if any of our existing agreements with such providers are terminated as a result of our breach or otherwise,our ability to provide ourservices to our customers could be adversely affected.Service interruptions prevent our buyers and sellers from accessing our mobileapplication,and frequent interruptions could frustrate them and discourage them from attempting to place orders,which could causeus to lose customers and harm our operating results.If we fail to adopt new technologies or adapt our mobile application and systems to changing customer requirements or emergingindustry standards,our business may be materially and adversely affected.To remain competitive,we must continue to enhance and improve the responsiveness,functionality and features of our mobileapplication.The internet and the online retail industry are characterized by rapid technological evolution,changes in customerrequirements and preferences,frequent introductions of new products and services embodying new technologies and the emergence ofnew industry standards and practices,any of which could render our existing technologies and systems obsolete.Our success willdepend,in part,on its ability to identify,develop,acquire or license leading technologies useful in our business,and respond totechnological advances and emerging industry standards and practices,such as mobile internet,in a cost-effective and timely manner.The development of mobile applications and other proprietary technology entails significant technical and business risks.We cannotassure you that we will be able to use new technologies effectively or adapt our mobile application,proprietary technologies andsystems to meet customer requirements or emerging industry standards.If we are unable to adapt in a cost-effective and timely mannerin response to changing market conditions or customer requirements,whether for technical,legal,financial or other reasons,ourbusiness prospects,financial condition and results of operations may be materially and adversely affected.12 Customer growth and activity on mobile devices depends upon effective use of mobile operating systems,networks and standardsthat we do not control.We have seen an increase in the use of mobile devices by buyers to place orders and by sellers to showcase their products,and weexpect this trend to continue.To optimize the mobile shopping experience,we guide our customers to download our mobileapplication to their devices as opposed to accessing our sites from an internet browser on their mobile device.As new mobile devicesand platforms are released,it is difficult to predict the problems we may encounter in developing applications for these alternativedevices and platforms,and we may need to devote significant resources to the development,support and maintenance of suchapplications.In addition,our future growth and our results of operations could suffer if we experience difficulties in the future inintegrating our mobile application into mobile devices or if problems arise with our relationships with providers of mobile operatingsystems or mobile application download stores,if our applications receive unfavorable treatment compared to competing applicationson the download stores,or if we face increased costs to distribute or have customers use our mobile application.We are furtherdependent on the interoperability of our sites with popular mobile operating systems that we do not control,such as iOS and Android,and any changes in such systems that degrade the functionality of our sites or give preferential treatment to competitive products couldadversely affect the usage of our sites on mobile devices.In the event that it is more difficult for our customers to access and use ourmobile application on their mobile devices,or if our customers choose not to access or to use our mobile application on their mobiledevices or to use mobile products that do not offer access to our mobile application,our customer growth could be harmed and ourbusiness,financial condition and operating results may be adversely affected.The wide variety of payment methods that we accept subjects us to third-party payment processing-related risks.We accept payments using a variety of methods,including major credit card networks,bank transfers and payment gateways such asStripe,PayNow and Reddot.For certain payment methods,including credit cards,we pay transaction fees,which may increase overtime and increase our operating costs and lower our profit margins.We may also be subject to fraud and other illegal activities inconnection with the various payment methods we offer.We also rely on third parties to provide payment processing services.If theseservice providers fail to provide adequate services or if our relationships with them were to terminate,we and our suppliers ability toaccept payments could be adversely affected,and our business could be harmed.One of our payment service providers hasexperienced a network failure in the past,and we cannot assure you that similar incidents will not occur in the future.We are alsosubject to various rules,regulations and requirements,regulatory or otherwise,governing electronic funds transfers,which couldchange or be reinterpreted to make it difficult or impossible for us to comply.If we fail to comply with these rules or requirements,wemay be subject to fines and higher transaction fees and lose our ability to accept credit card payments from our customers,processelectronic funds transfers or facilitate other types of online payments,and our business,financial condition and results of operationscould be materially and adversely affected.We do not have,and may be unable to obtain,sufficient insurance to insure against certain business risks.As a result,we may beexposed to significant costs and business disruption.The insurance industry in certain jurisdictions where we operate is not yet fully developed,and many forms of insurance protectioncommon in more developed countries are not available on comparable or commercially acceptable terms,if at all.We do not currentlymaintain insurance coverage for business interruption,product liability,or loss of key management personnel.We do not holdinsurance policies to cover for any losses resulting from counterparty and credit risks and fraudulent transactions,nor for losses fromcyberattacks,software failures and data loss.Our lack of insurance coverage or reserves with respect to business-related risks mayexpose us to substantial losses.As to those risks for which we have insurance coverage,the insurance payouts we are entitled to incase of an insured event are subject to deductibles and other customary conditions and limitations.For instance,we cannot rule out thepossibility that natural disasters,fire or theft would destroy valuable inventory in one or more logistics centers,in which case thedamages we suffer may exceed the insurance payouts to which we would be entitled.This,and various other scenarios,if materialized,could materially and adversely affect our business,financial condition and results of operations.13 We may be the subject of anti-competitive,harassing,or other detrimental conduct by third parties including complaints toregulatory agencies,negative blog postings,negative comments on social media and the public dissemination of maliciousassessments of our business that could harm our reputation and cause us to lose market share,customers and revenues andadversely affect the price of our ordinary shares.In the future we may be the target of anti-competitive,harassing,or other detrimental conduct by third parties.Such conduct includescomplaints,anonymous or otherwise,to regulatory agencies.We may be subject to government or regulatory investigation as a resultof such third-party conduct and may be required to expend significant time and incur substantial costs to address such third-partyconduct,and there is no assurance that we will be able to conclusively refute each of the allegations within a reasonable period oftime,or at all.Additionally,allegations,directly or indirectly against us,may be posted in internet chat-rooms or on blogs or websitesby anyone,whether or not related to us,on an anonymous basis.Consumers value readily available information concerning retailers,manufacturers,and their goods and services and often act on such information without further investigation or verification and withoutregard to its accuracy.The availability of information on social media platforms and devices is virtually immediate,as is its impact.Social media platforms and devices immediately publish the content their subscribers and participants post,often without filters orchecks on the accuracy of the content posted.Information posted may be inaccurate and adverse to us,and it may harm our financialperformance,prospects or business.Given that the comments and posts on social media also tend to spread broadly and quickly,theharm may be immediate without affording us an opportunity for redress or correction.Our reputation may be negatively affected as aresult of the public dissemination of anonymous allegations or malicious statements about our business,which in turn may cause us tolose market share,customers and revenues and adversely affect the price of our securities.We may be(or become)classified as a passive foreign investment company,or PFIC,for U.S.federal income tax purposes,whichcould subject United States investors in our ordinary shares to significant adverse U.S.federal income tax consequences.We will be classified as a“passive foreign investment company,”or“PFIC”if,in the case of any particular taxable year,either(a)75%or more of our gross income for such year consists of certain types of“passive”income or(b)50%or more of the averagequarterly value of our assets(as determined on the basis of fair market value)held during such year produce or are held for theproduction of passive income(the“asset test”).No determination has been made as to whether we were a PFIC for a prior taxableperiod.It is possible that we may become a PFIC for the current taxable year.Because the value of our assets for purposes of the assettest will generally be determined by reference to the market price of our ordinary shares,fluctuations in the market price of ourordinary shares may cause us to become a PFIC for the current taxable year or subsequent taxable years.The determination of whetherwe will be or become a PFIC will also depend,in part,on the composition of our income and assets,which will be affected by how,and how quickly,we use our liquid assets and the cash raised in this offering.Under circumstances where we determine not to deploysignificant amounts of cash for active purposes,our risk of being classified as a PFIC may substantially increase.For this purpose,wewill be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any othercorporation in which we own,directly or indirectly,25%or more(by value)of the stock.Because there are uncertainties in theapplication of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year,there canbe no assurance that we will not be a PFIC for the current taxable year or any future taxable year.If we are classified as a PFIC in any taxable year,a U.S.Holder(as defined in“Taxation Material United States Federal IncomeTax Considerations to U.S.Holders”)may incur significantly increased U.S.income tax on gain recognized on the sale or otherdisposition of our ordinary shares and on the receipt of distributions on the shares to the extent such gain or distribution is treated as an“excess distribution”under the U.S.federal income tax rules and such holders may be subject to burdensome reporting requirements.Further,if we are classified as a PFIC for any year during which a U.S.Holder holds our ordinary shares,we generally will continue tobe treated as a PFIC for all succeeding years during which such U.S.Holder holds our ordinary shares.For more information see“Taxation Material United States Federal Income Tax Considerations to U.S.Holders Passive Foreign Investment CompanyConsiderations.”14 We could face uncertain tax liabilities in various jurisdictions where it operates,and suffer adverse financial consequences as aresult.We believe we are in compliance with all applicable tax laws in the various jurisdictions where we are subject to tax,but our taxliabilities,including any arising from restructuring transactions,could be uncertain,and we could suffer adverse tax and otherfinancial consequences if tax authorities do not agree with our interpretation of the applicable tax laws.Although we are domiciled inSingapore,we and our subsidiaries collectively operate in multiple tax jurisdictions and pay income taxes according to the tax laws ofthese jurisdictions.Various factors,some of which are beyond our control,determine our effective tax rate and/or the amount we arerequired to pay,including changes in or interpretations of tax laws in any given jurisdiction and changes in geographical allocation ofincome.We accrue income tax liabilities and tax contingencies based upon our best estimate of the taxes ultimately expected to bepaid after considering our knowledge of all relevant facts and circumstances,existing tax laws,our experience with previous auditsand settlements,the status of current tax examinations and how the tax authorities view certain issues.Such amounts are included inincome taxes payable or deferred income tax liabilities,as appropriate,and are updated over time as more information becomesavailable.We believe that we are filing tax returns and paying taxes in each jurisdiction where we are required to do so under the lawsof such jurisdiction.However,it is possible that the relevant tax authorities in the jurisdictions where we do not file returns may assertthat we are required to file tax returns and pay taxes in such jurisdictions.There can be no assurance that our subsidiaries will not betaxed in multiple jurisdictions in the future,and any such taxation in multiple jurisdictions could adversely affect our business,financial condition and results of operations.In addition,we may,from time to time,be subject to inquiries from tax authorities of therelevant jurisdictions on various tax matters,including challenges to positions asserted on income and withholding tax returns.Wecannot be certain that the tax authorities will agree with our interpretations of the applicable tax laws,or that the tax authorities willresolve any inquiries in our favor.To the extent the relevant tax authorities do not agree with our interpretation,we may seek to enterinto settlements with the tax authorities which may require significant payments and may adversely affect our results of operations orfinancial condition.We may also appeal against the tax authorities determinations to the appropriate governmental authorities,but wecannot be sure we will prevail.If we do not prevail,we may have to make significant payments or otherwise record charges(or reducetax assets)that could adversely affect our results of operations,financial condition and cash flows.Similarly,any adverse orunfavorable determinations by tax authorities on pending inquiries could lead to increased taxation on us that may adversely affect ourbusiness,financial condition and results of operations.You may face difficulties protecting your interests,and your ability to protect your rights through the U.S.federal courts may belimited because a substantial portion of our assets are in Singapore and several of our directors and executive officers resideoutside the United States.Since we are incorporated in the Cayman Islands,several of our officers,and directors,reside outside the United States.In addition,asubstantial portion of their assets and our assets are located outside of the United States.As a result,you may have difficulty servinglegal process within the United States upon us or our directors and officers who reside outside of the United States.You may also havedifficulty enforcing,both in and outside of the United States,judgments you may obtain in U.S.courts against us or our directors andofficers who reside outside of the United States in any action,including actions based upon the civil liability provisions ofU.S.Federal or state securities laws.Furthermore,you may not be able to enforce any judgments outside of the United States againstus or against any of our directors and officers who are not residents of the United States,in original actions or in actions forenforcement of judgments of U.S.courts,of liabilities based solely upon the civil liability provisions of the U.S.federal securitieslaws.As a result,you may have more difficulty in protecting your interests through actions against us,our management,or our majorshareholders than would shareholders of a corporation with a larger portion of its assets in the United States or with more directors orofficers resident in the United States.We may need to raise capital in addition to this offering,which may not be available on favorable terms,if at all,and which maycause dilution to holders of our ordinary shares,restrict our operations or adversely affect our ability to operate and continue ourbusiness.If we need to raise additional funds,we cannot be certain that we will be able to obtain additional financing on favorable terms,if atall,and any additional financings could result in additional dilution to holders of our ordinary shares.Debt financing,if available,mayinvolve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt,expending capital,or declaring dividends,or which impose on us that limit our ability to achieve our business objectives.If we needadditional capital and cannot raise it on acceptable terms,we may not be able to meet our business objectives,our stock price may falland you may lose some or all of your investment.15 Our indebtedness could have important consequences to you.Our indebtedness could have important consequences to you.For example,it could:limit our ability to obtain additional financing for working capital,capital expenditures,acquisitions and other generalcorporate requirements;require us to dedicate a portion of our cash flow from operations to payments on our debt,thereby reducing the availability ofour cash flow for operations and other purposes;limit our flexibility in planning for,or reacting to,changes in our business and the industry in which we operate;and place us at a competitive disadvantage compared to competitors that may have proportionately less debt and greater financialresources.If we were to default on our obligations,we could be required to dispose of material assets or operations to meet our debt service andother obligations,and the value realized on such assets or operations will depend on market conditions and the availability of buyers.Accordingly,any such sale may not,among other things,be for a sufficient dollar amount.If we were to otherwise attempt to sellmaterial assets or operations,the foregoing encumbrances may limit our ability to dispose of material assets or operations.In the eventthat our debtors enforced their rights to our assets,we may have to discontinue our business,and our investors could lose all or a partof their investment in us.There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financingwill be available for use when needed or,if available,that it can be obtained on commercially reasonable terms.If we are not able toobtain the additional financing on a timely basis,we will not be able to meet our other obligations as they become due and we will beforced to scale down or perhaps even cease our operations.Global economic conditions could materially adversely impact demand for our products and services.Our operations and performance depend significantly on economic conditions.Global economic conditions continue to be subject tovolatility arising from international geopolitical developments(such as the war in Ukraine),global economic phenomenon(includingrising inflation rates),general financial market turbulence and natural phenomena(such as the COVID-19 pandemic).Uncertaintyabout global economic conditions could result in customers postponing purchases of our products and services in response to tighter credit,unemployment,negative financialnews and/or declines in income or asset values and other macroeconomic factors,which could have a material negative effecton demand for our products and services;and third-party suppliers being unable to produce components for our products in the same quantity or on the same timeline orbeing unable to deliver such parts and components as quickly as before or subject to price fluctuations,which could have amaterial adverse effect on our production or the cost of such production;and accordingly,on our business,results ofoperations or financial condition.Access to public financing and credit can be negatively affected by the effect of these events on the Singapore,U.S.and global creditmarkets.The health of the global financing and credit markets may affect our ability to obtain equity or debt financing in the futureand the terms at which financing or credit is available to us.These instances of volatility and market turmoil could adversely affect ouroperations,our ability to conduct any future offerings on a national U.S.exchange(or at all)and the trading price of our ordinaryshares if we ever conduct such an offering.16 A severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and financialcondition.Any prolonged slowdown in the Chinese or global economy may have a negative impact on our business,results of operations andfinancial condition.In particular,general economic factors and conditions in China or worldwide,including the general interest rateenvironment and unemployment rates,may affect our customers participation in forex trading.Economic conditions in China aresensitive to global economic conditions.There is considerable uncertainty over the long-term effects of the monetary and fiscalpolicies adopted by the central banks and financial authorities of some of the worlds leading economies,including the United Statesand China.If present Chinese and global economic uncertainties persist,many of our customers may reduce the service they requirefrom us.Adverse economic conditions could also reduce the number of customers seeking our service,as well as their ability to makepayments.Should any of these situations occur,our net revenues will decline,and our business and financial conditions will benegatively impacted.Additionally,continued turbulence in the international markets may adversely affect our ability to access thecapital markets to meet liquidity needs.General economic,political and social conditions affect the United States,Europe and other global markets and our business.Inparticular,U.S.,European and other global markets,as well as our access to financing,may be affected by factors,including economicgrowth or its sustainability,persistent inflation,supply chain disruptions,employment levels,work stoppages,labor shortages andlabor disputes,labor costs,wage stagnation,energy prices,oil,gas and fuel prices,fluctuations or other significant changes in bothdebt and equity capital markets and currencies,liquidity of the global financial markets,the growth of global trade and commerce,trade policies,the availability and cost of capital and credit(including as a result of increased interest rates)and investor sentiment andconfidence.Additionally,global markets may be adversely affected by the current or anticipated impact of cyber incidents orcampaigns,military conflict,including the Russia-Ukraine conflict as well as the Hamas-Israel conflict and rising tensions betweenChina and Taiwan and the relationship between China and the United States,or other geopolitical uncertainty and instability.Theongoing spread of variants of infectious diseases,such as the COVID-19 virus,may interrupt,or delay,our clinical trial activities,regulatory reviews,manufacturing activities and supply chain.The COVID-19 outbreak delayed enrollment in our clinical trials due toprioritization of hospital resources towards the outbreak or other factors,and some patients may be unwilling to enroll in our trials orbe unable to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services,which woulddelay our ability to conduct clinical trials or release clinical trial results and could delay our ability to obtain regulatory approvals andcommercialize our product candidates.Any sudden or prolonged market downturn in the United States or elsewhere could adverselyaffect our business,results of operations and financial condition,including capital and liquidity levels.17 A severe or prolonged downturn in the global economy could materially and adversely affect our business and financial condition.General economic,political and social conditions affect the United States,Europe and other global markets and our business.Inparticular,U.S.,European and other global markets,as well as our access to financing,may be affected by factors,including economicgrowth or its sustainability,persistent inflation,supply chain disruptions,employment levels,work stoppages,labor shortages andlabor disputes,labor costs,wage stagnation,energy prices,oil,gas and fuel prices,fluctuations or other significant changes in bothdebt and equity capital markets and currencies,liquidity of the global financial markets,the growth of global trade and commerce,trade policies,the availability and cost of capital and credit(including as a result of increased interest rates)and investor sentiment andconfidence.Additionally,global markets may be adversely affected by the current or anticipated impact of cyber incidents orcampaigns,military conflict,including the Russia-Ukraine conflict as well as the Hamas-Israel conflict and rising tensions betweenChina and Taiwan and the relationship between China and the United States,or other geopolitical uncertainty and instability.Theongoing spread of variants of infectious diseases,such as the COVID-19 virus,may interrupt,or delay,our clinical trial activities,regulatory reviews,manufacturing activities and supply chain.The COVID-19 outbreak delayed enrollment in our clinical trials due toprioritization of hospital resources towards the outbreak or other factors,and some patients may be unwilling to enroll in our trials orbe unable to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services,which woulddelay our ability to conduct clinical trials or release clinical trial results and could delay our ability to obtain regulatory approvals andcommercialize our product candidates.Any sudden or prolonged market downturn in the United States or elsewhere could adverselyaffect our business,results of operations and financial condition,including capital and liquidity levels.Risks Relating to Our Securities An active trading market for our Class A ordinary shares may not be maintained and the trading price for our Class A ordinaryshares may fluctuate significantly.We cannot assure you that a liquid public market for our ordinary shares will be maintained.If an active public market for our ordinaryshares is not maintained,the market price and liquidity of our ordinary shares may be materially and adversely affected.The publicoffering price for our ordinary shares in the public offering was determined by negotiation between us and the underwriter based uponseveral factors,and we can provide no assurance that the trading price of our ordinary shares after the public offering will not declinebelow the public offering price.As a result,investors in our ordinary shares may experience a significant decrease in the value of theirshares.We do not intend to pay dividends for the foreseeable future.We currently intend to retain any future earnings to finance the operation and expansion of our business,and we do not expect todeclare or pay any dividends in the foreseeable future.As a result,you may only receive a return on your investment in our ordinaryshares if the market price of our ordinary shares increases.The market price of our Class A ordinary shares can be volatile and can fluctuate substantially,which could result in substantiallosses for purchasers of our Ordinary Shares in this offering.The market price of our ordinary shares can be highly volatile.Accordingly,you may be unable to sell your Class A ordinary shares ator above the offering price.18 The wide fluctuations of the market price of our Class A ordinary shares may happen because of broad market and industry factors,including the performance and fluctuation of the market prices of other companies with business operations located mainly inSingapore that have listed their securities in the United States.In addition to market and industry factors,the price and trading volumefor the ordinary shares may be highly volatile for factors specific to our own operations,including the following:variations in our revenues,earnings,cash flow;fluctuations in operating metrics;announcements of new investments,acquisitions,strategic partnerships or joint ventures by us or our competitors;announcements of new solutions and services and expansions by us or our competitors;termination or non-renewal of contracts or any other material adverse change in our relationship with our key customers orstrategic investors;changes in financial estimates by securities analysts;detrimental negative publicity about us,our competitors or our industry;additions or departures of key personnel;release of lockup or other transfer restrictions on our outstanding equity securities or sales of additional equity securities;regulatory developments affecting us or our industry;and potential litigation or regulatory investigations.We may experience extreme stock price volatility,including any stock-run up,unrelated to our actual or expected operatingperformance,financial condition or prospects,making it difficult for prospective investors to assess the rapidly changing value ofour Class A ordinary shares.In addition to the risks addressed above,our Class A ordinary shares may be subject to extreme volatility that is seemingly unrelated tothe underlying performance of our business.In particular,our ordinary shares may be subject to rapid and substantial price volatility,low volumes of trades and large spreads in bid and ask prices,given that we will have relatively small public floats.Such volatility,including any stock-run up,may be unrelated to our actual or expected operating performance,financial condition or prospects.Holders of our Class A ordinary shares may also not be able to readily liquidate their investment or may be forced to sell at depressedprices due to
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR 12(g)OF THE SECURITIES EXCHANGE ACT OF 1934 or ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2024 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 001-42004 NEWGENIVF GROUP LIMITED(Exact name of Registrant as specified in its charter)(Translation of Registrants name into English)British Virgin Islands(Jurisdiction of incorporation or organization)36/39-36/40,13th Floor,PS TowerSukhumvit 21 Road(Asoke)Khlong Toei Nuea Sub-districtWatthana District,Bangkok 10110,Thailand(Address of Principal Executive Offices)Mr.Wing Fung Alfred Siu,Chief Executive Officer1/F,Pier 2,CentralHong Kong,999077Tel: 1(212)537-4406Email:Newgenivf.IR(Name,Telephone,E-mail 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 registeredClass A ordinary shares,no par value per share NIVF The Nasdaq Stock Market LLC(The NasdaqCapital Market)Warrants to purchase Class A ordinary shares NIVFW The Nasdaq Stock Market LLC(The NasdaqCapital Market)Securities registered or to be registered pursuant to Section 12(g)of the Act.(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act.(Title of Class)Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by theannual report.The number of NewGenIvf Group Limiteds outstanding:(i)Class A Ordinary Shares,no par value,was 1,138,519 as of December 31,2024,afterretrospective application of the reverse stock split in February 2025;(ii)Class B Ordinary Shares,no par value,was none as of December 31,2024;and(iii)Preferred Shares,no par value,was none as of December 31,2024.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)ofthe Securities Exchange Act of 1934.Yes No Note Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d)of the Securities Exchange Actof 1934 from their obligations under those Sections.Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of1934 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 suchfiling requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for suchshorter period that the registrant was required to submit and post 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 growthcompany.See definition of“large accelerated filer,“accelerated filer,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if the registrant haselected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(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 itsAccounting Standards Codification after April 5,2012.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internalcontrol over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm thatprepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant included inthe 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 compensationreceived by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAP International Financial Reporting Standards as issued by the International AccountingStandards Board Other If“Other”has been checked in response to the previous question,indicate by check mark which financial statement item the registrant has elected tofollow.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 SecuritiesExchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.Yes No TABLE OF CONTENTS I INTRODUCTIONii CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSiii Part I 1 Item 1Identity of Directors,Senior Management and Advisers1 Item 2Offer Statistics and Expected Timetable1 Item 3Key Information1 Item 4Information on the Company28 Item 4AUnresolved Staff Comments45 Item 5Operating and Financial Review and Prospects45 Item 6Directors,Senior Management and Employees60 Item 7Major Shareholders and Related Party Transactions67 Item 8Financial Information67 Item 9The Offer and Listing68 Item 10Additional Information68 Item 11Quantitative and Qualitative Disclosures about Market Risk77 Item 12Description of Securities Other Than Equity Securities78 Part II 79 Item 13Defaults,Dividend Arrearages and Delinquencies79 Item 14Material Modifications to the Rights of Security Holders and Use of Proceeds79 Item 15Controls and Procedures79 Item 16Reserved80 Item 16AAudit Committee Financial Expert80 Item 16BCode of Ethics81 Item 16CPrincipal Accountant Fees and Services81 Item 16DExemptions from the Listing Standards for Audit Committees82 Item 16EPurchases of Equity Securities by the Issuer and Affiliated Purchasers82 Item 16FChange in Registrants Certifying Accountant82 Item 16GCorporate Governance83 Item 16HMine Safety Disclosure84 Item 16IDisclosure Regarding Foreign Jurisdictions That Prevent Inspections84 Item 16JInsider Trading Policies84 Item 16KCybersecurity84 Part III 85 Item 17Financial Statements85 Item 18Financial Statements85 Item 19Exhibits85SIGNATURES87 i INTRODUCTION In this annual report,except where the context otherwise requires and for purposes of this annual report only:“ASCA”means A SPAC I Acquisition Corp.,a British Virgin Islands business company.“A SPAC I Mini Acquisition Corp.”means A SPAC I Mini Acquisition Corp.,a British Virgin Islands business company.“Business Combination”means the transactions contemplated by the Merger Agreement,pursuant to which(i)ASCA reincorporated to the BritishVirgin Islands by merging with and into the Company;and(ii)Merger Sub merged with and into Legacy NewGenIvf,resulting in LegacyNewGenIvf being a wholly-owned subsidiary of the Company.“BVI”means British Virgin Islands.“Class A Ordinary Share”means Class A ordinary shares of the Company,no par value.“Class B Ordinary Share”means Class B ordinary shares of the Company,no par value.“Preferred Ordinary Shares”means Preferred ordinary shares of the Company,no par value.“Closing”means the consummation of the Business Combination,which occurred on April 3,2024.“Company”means NewGenIvf Group Limited,a British Virgin Islands business company,the surviving entity of the Business Combination.“Legacy NewGenIvf”means NewGenIvf Limited,a Cayman Islands exempted company,which became a wholly owned subsidiary of ASCA uponthe Closing.“Merger Agreement”means the Merger Agreement entered into on February 15,2023,and as amended on June 12,2023 and December 6,2023,between ASCA,A SPAC I Mini Acquisition Corp.,Merger Sub,Legacy NewGenIvf,and certain shareholders of Legacy NewGenIvf,pursuant towhich the Reincorporation Merger and Acquisition Merger were consummated.“Merger Sub”means A SPAC I Mini Sub Acquisition Corp.,a Cayman Islands exempted company and former wholly-owned subsidiary of ASPAC I Mini Acquisition Corp.“NewGenIvf”means NewGenIvf Group Limited,a British Virgin Islands business company,the surviving entity of the Business Combination,unless the context so requires.“Preferred Shares”means preferred shares of the Company,no par value.“Reincorporation Merger”means the first step of the Business Combination which occurred pursuant to the Merger Agreement,in which ASCAreincorporated to the British Virgin Islands by merging with and into NewGenIvf.“US$,”“USD,”“U.S.dollars,”or“dollars”are to the legal currency of the United States.ii CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 20-F(including information incorporated by reference herein,the“Report”)is being filed by NewGenIvf GroupLimited,a British Virgin Islands business company.Unless otherwise indicated,“we,”“us,”“our,”the“Company,”“NewGenIvf”and similarterminology refer to NewGenIvf Group Limited and its subsidiaries.References to“Legacy NewGenIvf”and“NewGenIvf Limited”refer toNewGenIvf Limited,a Cayman Islands exempted company which existed before the Business Combination.This Report contains or may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933,as amended(the“Securities Act”),and Section 21E of the Securities Exchange Act of 1934,as amended(the“Exchange Act”)that involve significant risks anduncertainties.All statements other than statements of historical facts are forward-looking statements.These forward-looking statements includeinformation about our possible or assumed future results of operations or our performance.Words such as“expects,”“intends,”“plans,”“believes,”“anticipates,”“estimates,”and variations of such words and similar expressions areintended to identify the forward-looking statements.The risk factors and cautionary language referred to or incorporated by reference in this Reportprovide examples of risks,uncertainties and events that may cause actual results to differ materially from the expectations described in our forward-looking statements.Readers are cautioned not to place undue reliance on these forward-looking statements,which speak only as of the date of this Report.Althoughwe believe that the expectations reflected in such forward-looking statements are reasonable,there can be no assurance that such expectations willprove to be correct.These statements involve known and unknown risks and are based upon a number of assumptions and estimates which areinherently subject to significant uncertainties and contingencies,many of which are beyond our control.Actual results may differ materially fromthose expressed or implied by such forward-looking statements.We undertake no obligation to publicly update or revise any forward-lookingstatements contained in this Report,or the documents to which we refer readers in this Report,to reflect any change in our expectations with respectto such statements or any change in events,conditions or circumstances upon which any statement is based.iii 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 A.Reserved B.Capitalization and indebtedness Not applicable.C.Reasons for the offer and use of proceeds Not applicable.D.Risk Factors Risks Related to NewGenIvfs Business and Industry We may not be able to continue operating as a going concern.As of December 31,2024,the Companys cash and cash equivalents stood at approximately US$457,740.While the Company does not haveimmediate challenges to settle its obligations when payments become due,the Company can make no assurance that it will have sufficient capital tobridge potential financial and liquidity shortfalls.The Company is always closely monitoring the market for opportunities and has also been carrying out various fundraising projects to improvethe Companys cash flow position.As of this report date,all promissory notes as of December 31,2024 have been settled,and convertible bondscomprising the Initial Note,the First Mandatory Additional Note,and the Second Mandatory Additional Note,have been converted into shares in theCompany.A further US$2,000,000 of the Third Mandatory Additional Note was issued subsequent to the 2024 yearend and remains outstanding.Moreover,the Company has access to an equity line of credit facility of up to US$100,000,000 from White Lion Capital,of which approximatelyUS$7.1 million has been drawn and become equity to date.As of this report date,the Company holds$2.48m cash in bank and a cash deposit of$1mwith a trading platform company.The Company can make no assurance that required financings will be available for the amounts needed,or on terms commercially acceptable tothe Company,if at all.If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidityshortfall,there would likely be a material adverse effect on the Company and its financial statements.The consolidated financial statements do not reflect adjustments that would be necessary if the going concern basis was not appropriate.If thegoing concern basis was not appropriate for these consolidated financial statements,then adjustments would be necessary in the carrying value of theassets and liabilities,the reported revenues and expenses,and the balance sheet classifications used.These adjustments could be material.1 The fertility market in which NewGenIvf participates is competitive,and if NewGenIvf does not continue to compete effectively,its results ofoperations could be materially and adversely affected.The market for NewGenIvfs solutions is competitive and is likely to attract increased competition,which could make it hard for it to succeed.NewGenIvf faces significant competition from other fertility companies and other players in the fertility market.Some of NewGenIvfs competitorsare more established,have a longer operating history and a larger client base,benefit from greater brand recognition and have substantially greaterfinancial,technical and marketing resources than NewGenIvf does.NewGenIvfs competitors may compete with NewGenIvf in a variety of ways,including seeking to develop or integrating solutions and services that may become more efficient or appealing to NewGenIvfs existing andpotential clients,achieving superior clinical outcomes,having access to a network of more high-quality fertility specialists,establishing morecomprehensive data reporting and sharing systems,conducting brand promotions and other marketing activities,and making investments in andacquisitions of NewGenIvfs business partners.While NewGenIvf believes that one of its key competitive advantages is its ability to provide a broadrange of services,and NewGenIvf does not believe any competitors have developed a similar broad range services in Asia Pacific at this time,current or future competitors may be successful in doing so in the future.If current or future competitors are successful at developing a similar broadrange of services,NewGenIvfs financial performance may be negatively impacted.In addition,NewGenIvf believes that there is growing awareness of the demand for fertility services.As the fertility services field gains moreattention,more competitors may be drawn into the market.NewGenIvf also could be adversely affected if NewGenIvf fails to identify or effectivelyrespond to changes in market dynamics.As a result of any of these factors,NewGenIvf may not be able to continue to compete successfully againstits current or future competitors,and this competition could result in the decrease in its client base and market share and the failure of its platform tocontinue to maintain market acceptance,which would materially and adversely affect its business,financial condition and results of operations.NewGenIvf has a limited operating history with its current platform of solutions,which makes it difficult to predict its future prospects,financialperformance and results of operations.The predecessor entity of the Company prior to the Business Combination in April of 2024,NewGenIvf Limited,a Cayman Islands exemptedcompany,was established in 2019,and although its subsidiary First Fertility PGS Center Limited launched fertility services in 2014,has a limitedoperating history.As a result of its limited operating history with its current platform of solutions,as well as a limited amount of time serving amajority of its client base,its ability to accurately forecast its future results of operations,key operating data,net revenue,cash flows,and operatingmargins is limited and subject to a number of uncertainties,including its ability to plan for and model future growth.NewGenIvfs historical revenuegrowth should not be considered indicative of its future performance.Further,in future periods,its revenue growth could slow or decline for anumber of reasons,including risks,challenges and uncertainties that NewGenIvf has encountered and may continue to encounter that are frequentlyexperienced by companies at an early stage,slowing demand for its solutions and fertility services in general,changes in utilization trends by itsclients,general economic slowdown,an increase in unemployment,an increase in competition,changes to health care trends and regulations,changes to science relating to the fertility market,a decrease in the growth of the fertility market,or its failure,for any reason,to continue to takeadvantage of growth opportunities.If NewGenIvfs assumptions regarding these risks and uncertainties and its future revenue growth are incorrect orchange,or if it does not address these risks successfully,its operating and financial results could differ materially from its expectations,and itsbusiness could suffer.NewGenIvfs marketing efforts depend significantly on its ability to receive positive references from its existing clients.NewGenIvfs marketing efforts depend significantly on its ability to call on its current clients to provide positive references to new,potentialclients.Given its limited number of long-term clients,the loss or dissatisfaction of any client could substantially harm its brand and reputation,inhibit the market adoption of its offering and impair its ability to attract new clients and maintain existing clients.Any of these consequences couldhave an adverse effect on its business,financial condition and results of operations.2 As a public reporting company,we are subject to filing deadlines for reports that we file pursuant to the Exchange Act,and our failure to timelyfile such reports may have material adverse consequences on our business.In the past,we have not been able to,and may continue to be unable to produce timely financial statements,and file these financial statements aspart of a periodic report in a timely manner with the SEC.For example,we failed to timely file with the SEC the requisite Form 20-F for the yearended December 31,2023.Consequently,we were not compliant with the periodic reporting requirements under the Exchange Act at such time.Wecannot guarantee that in the future our reporting will always be timely.Our failure to timely file future periodic reports with the SEC could subject usto enforcement action by the SEC and shareholder lawsuits and could eventually result in the delisting of our Class A Ordinary Shares from Nasdaq,regulatory sanctions from the SEC,and/or the breach of covenants in our credit facilities or of any preferred equity or debt securities we may issue inthe future,any of which could have a material adverse impact on our operations and your investment in our Class A Ordinary Shares,and our abilityto register with the SEC public offerings of our securities for our benefit or the benefit of our security holders.Additionally,our failure to file ourpast periodic reports and future periodic reports has resulted in and could result in investors not receiving adequate information regarding us withwhich to make investment decisions.As a result,investors may not have access to current or timely financial information about our business.If we are unable to continue to meet the listing requirements of Nasdaq,our Class A Ordinary Shares will be delisted.On October 8,2024,the Company received a deficiency letter(“Bid Price Deficiency Letter”)from the Listing Qualifications Department(the“Staff”)of Nasdaq notifying the Company that it is currently not in compliance with the closing bid price requirement under Nasdaq Listing Rule5450(a)(1)(the“Minimum Bid Price Rule”).The Bid Price Deficiency Letter stated that,for the preceding 30 consecutive business days,theCompanys Class A Ordinary Shares did not meet the minimum closing bid price of$1 per share pursuant to the Minimum Bid Price Rule.TheCompany has an initial compliance period of 180 calendar days,or until April 7,2025 to regain compliance with the Minimum Bid Price Rule.TheDeficiency letter stated that if at any time the closing bid price of the Companys Class A Ordinary Shares is at least$1 for a minimum of tenconsecutive business days,Nasdaq will provide the Company written confirmation of compliance with this requirement,as applicable.On February11,2025,the Company effected a 1-for-20 reverse stock split of its issued and unissued shares(the“Reverse Stock Split”).The effect of the reversestock split was to consolidate every 20 issued and unissued shares into one share.On February 27,2025,the Company received a notification letterfrom Nasdaq,indicating that the closing bid price of the Companys securities had been at$1.00 per share or greater for 10 consecutive businessdays from February 11,2025 to February 26,2025,and the Company had regained compliance with the Minimum Bid Price Rule.Notwithstandingthe foregoing,if within one year of the Reverse Stock Split,the Companys Class A Ordinary Shares fall below$1.00 per share for 30 consecutivebusiness days,or if within a two-year period from the Reverse Stock Split,the Company effects one or more reverse stock splits with a cumulativeratio of 250 shares or more to one,then Nasdaq may not provide us with an additional compliance period under its amended Listing Rule 5810(c)(3)(A)(iv)and our common stock could be delisted immediately.On May 24,2024,the Company received a Deficiency Letter from the Listing Qualifications Department(the“Staff”)of Nasdaq notifying theCompany that,for the preceding 35 consecutive business days,the Class A Shares did not meet the minimum market value of listed securities(”MVLS”)requirement for continued listing on Nasdaq pursuant to Nasdaq Listing Rules 5450(b)(2)(A).In accordance with Nasdaq Rule 5810(c)(3)(C),the Company has been provided an initial period of 180 calendar days,or until November 20,2024,the Compliance Date,to regain compliancewith the MVLS Requirement.If,at any time before the Compliance Date,the MVLS for the Class A Shares is at least$50,000,000 for a minimum often consecutive business days,the Staff will provide the Company written confirmation of compliance with the MVLS Requirement.In the event theCompany does not regain compliance with the above requirement prior to the expiration of the compliance period,it will receive written notificationthat its securities are subject to delisting.On May 24,2024,the Company received a Deficiency Letter from the Staff of Nasdaq notifying the Company that,for the preceding 35consecutive business days,the Companys Class A Ordinary Shares did not meet the minimum market value of publicly held shares(“MVPHS”)requirement of$15,000,000 for continued listing on Nasdaq pursuant to Nasdaq Listing Rules 5450(b)(2)(C).In accordance with Nasdaq Rule5810(c)(3)(D),the Company has until the Compliance Date to regain compliance with the MVPHS Requirement.If,at any time before theCompliance Date,the MVPHS for the Class A Shares is at least$15,000,000 for a minimum of ten consecutive business days,the Staff will providethe Company written confirmation of compliance with the MVPHS Requirement.In the event the Company does not regain compliance with theabove requirement prior to the expiration of the compliance period,it will receive written notification that its securities are subject to delisting.Alternatively,the Company may apply to transfer the Companys securities to The Nasdaq Capital Market.3 On November 21,2024,the Company received a notice from the Staff of Nasdaq notifying the Company that its securities are subject todelisting due to the MVPHS Deficiency and MLVS Deficiency.The Company requested a hearing to appeal the delisting determination before theNasdaq Hearings Panel(the“Panel”)on November 27,2024.On November 29,2024,the Company received a formal notice from Nasdaq that thePanel will consider its appeal at an oral hearing on January 28,2025(the“Hearing”).On February 19,2025,the Company received written decisionfrom the Panel,which granted an extension,allowing the Company additional time to regain compliance with the Nasdaq Stock Markets(“Nasdaq”or the“Exchange”)continued listing requirements,subject to meeting specific compliance criteria within designated timeframes.On February 11,2025,the Company carried out the Reverse Stock Split.The effect of the reverse stock split was to consolidate every 20 issued and unissued sharesinto one share.On February 27,2025,the Company received a notification letter from Nasdaq,indicating that the closing bid price of the Companyssecurities had been at$1.00 per share or greater for 10 consecutive business days from February 11,2025 to February 26,2025,and the Companyhad regained compliance with the Minimum Bid Price Rule.In addition,on February 27,2025,the Company received a confirmation from Nasdaqthat its application to transfer its listing to the Nasdaq Capital Market had been approved and that the Companys securities would be transferred tothe Nasdaq Capital Market at the opening of business on February 28,2025.On March 10,2025,the Company received a confirmation letter fromNasdaq confirming that it has demonstrated compliance with all of Nasdaqs listing requirements,as required in the Panels decision letter datedFebruary 19,2025.If we are unable to achieve and maintain compliance with such listing standards or other Nasdaq listing requirements in the future,our Class AOrdinary Shares could be delisted from Nasdaq.A delisting of our Class A Ordinary Shares and our inability to list on another national securitiesmarket could negatively impact us by:(i)reducing the liquidity and market price of our Class A Ordinary Shares;(ii)reducing the number ofinvestors willing to hold or acquire our Class A Ordinary Shares,which could negatively impact our ability to raise equity financing;(iii)limitingour ability to use certain registration statements to offer and sell freely tradable securities,thereby limiting our ability to access the public capitalmarkets;and(iv)impairing our ability to provide equity incentives to our employees.If NewGenIvf is unable to attract new clients,its business,financial condition and results of operations would be adversely affected.To increase its revenue,NewGenIvf must continue to attract new clients.NewGenIvfs ability to do so depends in large part on the success of itssales and marketing efforts,and the success of references through existing clients.Potential clients may seek out other options;therefore,NewGenIvf must demonstrate that its solutions are valuable and superior to alternatives.If NewGenIvf fails to provide high-quality solutions andconvince clients of the benefits of its model and value proposition,NewGenIvf may not be able to attract new clients.If the markets forNewGenIvfs solutions decline or grow more slowly than it expects,or if the number of clients that contract with it for its solutions declines or failsto increase as it expects,its financial results could be harmed.As the markets in which NewGenIvf participate mature,fertility solutions and servicesevolve and competitors begin to enter into the market and introduce differentiated solutions or services that are perceived to compete with itssolutions,particularly if such competing solutions are adopted by its competitors,its ability to sell its solutions could be impaired.As a result ofthese and other factors,NewGenIvf may be unable to attract new clients,which would have an adverse effect on its business,financial condition andresults of operations.NewGenIvfs business depends on its ability to maintain its existing client demographics.Any failure to do so would harm its business,financialcondition and results of operations.As part of its growth strategy,NewGenIvf is focused on maintaining its services within its existing client demographics.NewGenIvf mainlycompetes with mid-level private clinics and hospitals,which have improved and developed their services and equipment over the years.In additionto private clinics and hospitals already existing,foreign medical companies may also enter the markets where NewGenIvf operates.Such foreignmedical companies may be well-placed to compete with NewGenIvf due to their larger network size,reputation as global players and access to moreadvanced technology and financial resources.The expansion of existing competitors in the industry may erode NewGenIvfs existing market shareor decrease its traditional client pool.There can be no assurance that NewGenIvf will be able to compete effectively and therefore its future businessgrowth may suffer.4 A significant reduction in the utilization of NewGenIvfs solutions could have an adverse effect on its business,financial condition and results ofoperations.A significant reduction in the number of clients using NewGenIvfs solutions could adversely affect its business,financial condition and resultsof operations.Factors that could contribute to a reduction in the use of its solutions include:general economic downturn that results in adversefinancial conditions;regulatory changes;failure to adapt and respond effectively to changing medical landscape,changing regulations,changingclient needs,requirements or preferences;negative publicity,through social media or otherwise and news coverage.If NewGenIvf fails to offer high-quality support,its reputation could suffer.NewGenIvf relies on its client account management personnel and the patient navigators(the“PNs”)to resolve client issues and help clientsrealize the full benefits that its solutions and services provide.High-quality support is also important for the renewal and expansion of its services toexisting clients.The importance of its support functions will increase as NewGenIvf expands its business and pursue new clients.If NewGenIvf doesnot help its clients quickly resolve issues and provide effective ongoing supports,its ability to maintain and expand its offerings to existing and newclients could suffer,and its reputation with existing or potential clients could suffer.Further,to the extent that NewGenIvf is unsuccessful in hiring,training and retaining adequate PNs and client account management personnel,its ability to provide adequate and timely support to its clients wouldbe negatively impacted,and its clients satisfaction with its solutions and services would be adversely affected.NewGenIvfs failure to effectively develop and expand its marketing and sales capabilities could harm its ability to increase its client base andachieve broader market acceptance of solutions NewGenIvf provides.NewGenIvfs ability to increase its client base and achieve broader market acceptance of solutions it provides will depend to a significant extenton its ability to expand its marketing and sales capabilities.NewGenIvf plans to continue expanding its direct sales force and to dedicate significantresources to sales and marketing programs,including direct sales,inside sales,targeted direct marketing,advertising,digital marketing,e-newsletterand conference sponsorships.All of these efforts will require it to invest significant financial and other resources.Its business and results ofoperations could be harmed if its sales and marketing efforts do not generate significant increases in revenue.NewGenIvf may not achieveanticipated revenue growth from expanding its sales and marketing efforts if it is unable to hire,develop,integrate and retain talented and effectivesales personnel,if its new and existing sales personnel,on the whole,are unable to achieve desired productivity levels in a reasonable period of time,or if its sales and marketing programs are not effective.NewGenIvf may experience net losses and may not sustain profitability in the future.NewGenIvf experienced significant revenue decrease from 2019 to 2020,due to the impact of COVID-19.NewGenIvf is not certain whether itwill obtain sufficient levels of sales to sustain its growth or maintain profitability in the future.NewGenIvf also expects its costs and expenses toincrease in future periods,which could negatively affect its future results of operations if its revenue does not increase accordingly.In particular,NewGenIvf intends to continue to incrementally expand its sales and client account management teams to educate potential clients and drive newclient adoption.NewGenIvf also expects to incur additional costs as it introduces new solutions and services to enhance its comprehensive fertilityoffering.NewGenIvf will also face increased compliance costs associated with growth,the expansion of its client base and being a public company.NewGenIvfs efforts to grow its business may be costlier than it expects,and NewGenIvf may not be able to increase its revenue enough to offset itsincreased operating expenses.NewGenIvf may incur significant losses in the future for a number of reasons,including the other risks describedherein,and unforeseen expenses,difficulties,complications and delays,and other unknown events.If NewGenIvf is unable to sustain profitability,the value of its business and common stock may significantly decrease.5 NewGenIvfs future revenue may not grow at the rates it historically has,or at all.NewGenIvf has experienced growth since its business operations started in 2014.Revenue and NewGenIvfs client base may not grow at thesame rates they historically have,or they may decline in the future.NewGenIvfs future growth will depend,in part,on its ability to:continue to attract new clients and/or maintain existing clients;price its solutions and services effectively so that it is able to attract new clients,expand sales to its existing clients and maintainprofitability;provide its clients with client support that meets their needs,including through dedicated PNs;maintain successful collection of applicable receivable balances;retain and maintain relationships with high-quality and respected fertility specialists;attract and retain highly qualified personnel to support all clients;and increase awareness of its brand and successfully compete with other competitors.NewGenIvf may not successfully accomplish all or any of these objectives,which may affect its future revenue,and which makes it difficult forit to forecast its future results of operations.In addition,if the assumptions that NewGenIvf uses to plan its business are incorrect or change inreaction to changes in its market,it may be difficult for it to maintain profitability.NewGenIvfs shareholders should not rely on its revenue for anyprior quarterly or annual periods as any indication of its future revenue or revenue growth.In addition,NewGenIvf expects to continue to expend substantial financial and other resources on:sales and marketing;technology infrastructure,including systems architecture,scalability,availability,performance and security;and general administration,including increased legal and accounting expenses associated with being a public company.These investments may not result in increased revenue growth in its business.If NewGenIvf is unable to increase its revenue at a rate sufficientto offset the expected increase in its costs,its business,financial position,and results of operations will be harmed,and NewGenIvf may not be ableto maintain profitability over the long term.Additionally,NewGenIvf may encounter unforeseen operating expenses,difficulties,complications,delays and other unknown factors that may result in losses in future periods.If its revenue growth does not meet its expectations in future periods,NewGenIvf may not maintain profitability in the future,its business,financial position and results of operations may be harmed.NewGenIvfs interim and annual results may fluctuate significantly and may not fully reflect the underlying performance of NewGenIvfsbusiness.NewGenIvfs interim and annual results of operations,including the levels of NewGenIvfs revenues,expenses,net(loss)/income and other keymetrics,may vary significantly in the future due to a variety of factors,some of which are outside of NewGenIvfs control,and period-to-periodcomparisons of NewGenIvfs operating results may not be meaningful,especially given NewGenIvfs limited operating history.Accordingly,theresults for any one fiscal half-year or any one fiscal year are not necessarily an indication of future performance.Fluctuations in interim and/orannual financial results may adversely affect the price of NewGenIvfs ordinary shares.Factors that may cause fluctuations in NewGenIvfs interimand annual financial results include:NewGenIvfs ability to attract new customers and maintain relationships with existing customers;changes in NewGenIvfs products and services offered and introduction of new services and products;6 the amount and timing of operating expenses related to marketing and the maintenance and expansion of NewGenIvfs business,operationsand infrastructure;general economic,industry and market conditions;and the timing of expenses related to the development or acquisition of technologies or businesses.If the estimates and assumptions NewGenIvf uses to determine the size of the target markets for its services are inaccurate,its future growth ratemay be impacted and its business would be harmed.Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that maynot prove to be accurate.Market opportunity estimates and growth forecasts included in this prospectus,including those NewGenIvf has generateditself,are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate,including the risksdescribed in this prospectus.Even if the markets in which NewGenIvf competes achieve the forecasted growth,its business could fail to grow atsimilar rates,if at all.NewGenIvfs estimates of the market opportunity for its services are based on the assumption that the purpose-built,data-driven and disruptivefertility services platform with the plan design NewGenIvf offers will be attractive to clients.Clients may pursue alternatives or may not see thevalue in providing enhanced fertility-related services.In addition,NewGenIvf believes that it is expanding the size of the fertility market asNewGenIvf enhances demand and increase awareness for fertility services.If these assumptions prove inaccurate,or if the increase in awareness offertility services attracts potential competitors to the market and results in greater competition,NewGenIvfs business,financial condition and resultsof operations could be adversely affected.It is difficult to predict the demand for NewGenIvfs solutions,the entry of competitive solutions or the future growth rate and size of thefertility market.The expansion of the fertility market depends on a number of factors,including,but not limited to:the continued trend of individualsstarting families later in life,increase in the number of single mothers by choice,adoption of non-traditional paths to parenthood and continued de-stigmatization of infertility.If there is a reduction in demand caused by a lack of client acceptance,weakening economic conditions,data security or privacy concerns,governmental regulation,competing offerings or otherwise,the market for its solutions and services might not continue to develop or might developmore slowly than NewGenIvf expects,which would adversely affect its business,financial condition and results of operations.NewGenIvf may not be able to successfully manage its growth,and if NewGenIvf is not able to grow efficiently,its business,financial conditionand results of operations could be harmed.As usage of its solutions grows,NewGenIvf will need to devote additional resources to improving and maintaining its infrastructure.In addition,NewGenIvf will need to appropriately scale its internal business systems and its client account management and services personnel to serve itsgrowing client base.Any failure of or delay in these efforts could result in reduced client satisfaction,resulting in decreased sales to new clients andlower renewal and utilization rates by existing clients,which could hurt its revenue growth and its reputation.Even if NewGenIvf is successful inthese efforts,they will require the dedication of management time and attention.NewGenIvf could also face inefficiencies or service disruptions as aresult of its efforts to scale its internal infrastructure.NewGenIvf cannot be sure that the expansion and improvements to its internal infrastructurewill be effectively implemented on a timely basis,and such failures could harm its business,financial condition and results of operations.7 If NewGenIvfs new solutions and services are not adopted by its clients,or if it fails to innovate and develop new offerings that are adopted by itsclients,its revenue and results of operations may be adversely affected.To date,NewGenIvf has derived a substantial majority of its revenue from sales of its fertility services.As NewGenIvf operates in an evolvingindustry,its long-term results of operations and continued growth will depend on its ability to successfully develop and market new successfulsolutions and services to its clients.If its existing clients do not value and/or are not willing to make additional payments for such new solutions orservices,it could adversely affect its business,financial condition and results of operations.If NewGenIvf is unable to predict clients preferences,ifthe markets in which NewGenIvf participates change,including in response to government regulation,or if NewGenIvf is unable to modify itssolutions and services on a timely basis,NewGenIvf may lose clients.Its results of operations would also suffer if its innovations were notresponsive to the needs of the clients,appropriately timed with market opportunity or effectively brought to market.If NewGenIvf fails to adapt and respond effectively to the changing medical landscape,changing regulations,changing client needs,requirements or preferences,its offerings may become less competitive.The market in which NewGenIvf competes is subject to a changing medical landscape and changing regulations,as well as changing clientneeds,requirements and preferences.The success of its business will depend,in part,on its ability to adapt and respond effectively to these changeson a timely basis.NewGenIvfs business strategy may not effectively respond to these changes,and NewGenIvf may fail to recognize and positionitself to capitalize upon market opportunities.NewGenIvf may not have sufficient advance notice and resources to develop and effectivelyimplement an alternative strategy.There may be scientific or clinical changes that require it to change its solutions or that make its solutions lesscompetitive in the marketplace.If there are sensitivities to its model or its existing competitors and new entrants create new disruptive businessmodels and/or develop new solutions that clients prefer to its solutions,NewGenIvf may lose clients,and its results of operations,cash flows and/orprospects may be adversely affected.The future performance of NewGenIvfs business will depend in large part on its ability to design andimplement market appropriate strategic initiatives,some of which will occur over several years in a dynamic industry.If these initiatives ofNewGenIvf do not result in met objectives,NewGenIvfs results of operations could be adversely affected.If NewGenIvf fails to maintain and enhance its brand,its ability to expand its client base will be impaired and its business,financial conditionand results of operations may suffer.The growth of NewGenIvfs business partially depends on the recognition of NewGenIvfs brand and reputation.NewGenIvf believes thatmaintaining and enhancing its brand is important to support the marketing and sale of its existing and future solutions to new clients and expandsales of its solutions to existing clients.NewGenIvf also believes that the importance of brand recognition will increase as competition in its marketincreases.Successfully maintaining and enhancing its brand will depend largely on the effectiveness of its marketing efforts,its ability to providereliable services that continue to meet the needs of its clients at competitive prices,its ability to maintain its clients trust,its ability to continue todevelop new solutions,and its ability to successfully differentiate its platform from competitive solutions and services.NewGenIvfs brandpromotion activities may not generate client awareness or yield increased revenue,and even if they do,any increased revenue may not offset theexpenses NewGenIvf incurs in building its brand.If NewGenIvf fails to successfully promote and maintain its brand,its business,financial conditionand results of operations may suffer.If NewGenIvf fails to retain and motivate members of its management team or other key employees,or fails to attract additional qualifiedpersonnel to support its operations,its business and future growth prospects could be harmed.NewGenIvfs success and future growth depend largely upon the continued services of its management team and its other key employees.Fromtime to time,there may be changes in its executive management team or other key employees resulting from the hiring or departure of thesepersonnel.Its executive officers and other key employees are employed on an at-will basis,which means that these personnel could terminate theiremployment with it at any time.The loss of one or more of its executive officers,or the failure by its executive team to effectively work with itsemployees and lead its company,could harm its business.In addition,to execute its growth plan,NewGenIvf must attract and retain highly qualified personnel.Competition for these personnel is intense,especially for experienced medical officers and scientific staffs and sales and client account management personnel.There is no guaranteeNewGenIvf will be able to attract such personnel or that competition among potential employers will not result in increased salaries or other benefits.From time to time,NewGenIvf has experienced,and NewGenIvf expects to continue to experience,difficulty in hiring and retaining employees withappropriate qualifications.Many of the companies with which NewGenIvf competes for experienced personnel have greater resources thanNewGenIvf has.If NewGenIvf hires employees from competitors or other companies,their former employers may attempt to assert that theseemployees or NewGenIvf has breached their legal obligations,resulting in a diversion of its time and resources.In addition,prospective and existingemployees often consider the value of the equity awards they receive in connection with their contribution to the company.If the perceived value ofits equity awards declines,experiences significant volatility,or increases such that prospective employees believe there is limited upside to the valueof its equity awards,it may adversely affect its ability to recruit and retain key employees.If NewGenIvf fails to attract new personnel or fails toretain and motivate its current personnel,its business and future growth prospects could be harmed.8 Furthermore,in order to attract and retain key personnel and employees,NewGenIvf may increase the compensation amounts or share-basedawards for NewGenIvfs executive officers from time to time.As a result,NewGenIvfs expenses associated with the compensation may increase,which may also have an adverse effect on its results of operations.NewGenIvfs Share Incentive Plan allows NewGenIvf to enhance its ability to attract and retain exceptionally qualified individuals and agentsand to encourage them to acquire a proprietary interest in the companys growth and performance.Competition for highly skilled personnel andagents is often intense and NewGenIvf may incur significant costs or may not be successful in attracting,integrating,or retaining qualified personneland agents to fulfill NewGenIvfs current or future needs.NewGenIvf believes that the granting of share-based awards is of significant importance toNewGenIvfs ability to attract and retain agents,key personnel and employees,and NewGenIvf will continue to grant share-based awards in thefuture.In addition,NewGenIvf may,with the approval of its Compensation Committee and the Board,revise the terms of,and increase the size of,its share incentive plan,to ensure that it is able to attract and retain agents,key personnel and employees.On March 31,2025,NewGenIvfs Boardapproved certain amendments to its Share Incentive Plan,including the increase of the size of the share incentive plan to 20%of the outstandingshares of the Company from time to time.As a result,NewGenIvfs expenses associated with share-based compensation may increase,which mayhave an adverse effect on NewGenIvfs results of operations.The amended share incentive plan is available as Exhibit 4.21.To successfully market and sell its services and products in Asia-Pacific markets,NewGenIvf must address many international business riskswith which NewGenIvf has limited experience.NewGenIvfs business is subject to risks in connection with changes in international,national and local economic and market conditions,including the effects of global financial crises,effects of terrorist acts and war and global pandemics.Such economic changes could negativelyimpact infertile couples abilities to pay for fertility treatments around the world.NewGenIvfs strategy is to increase its international presence in Asia-Pacific countries and its international sales are subject to a number ofrisks,including:increased competition as a result of more products and procedures receiving regulatory approval or otherwise free to market in internationalmarkets;longer accounts receivable payment cycles and difficulties in collecting accounts receivable;reduced or varied protection for intellectual property rights in some countries;export restrictions,trade regulations,and foreign tax laws;fluctuations in currency exchange rates;foreign certification and regulatory clearance or approval requirements;customs clearance and shipping delays;political,social,and economic instability abroad,terrorist attacks,and security concerns in general;preference for locally provided services;potentially adverse tax consequences,including the complexities of foreign value-added tax systems;the burdens of complying with a wide variety of foreign laws and different legal standards;and increased financial accounting and reporting burdens and complexities.If one or more of these risks are realized,its business,financial condition and results of operations could be adversely affected.9 Ethical,legal and social concerns related to the use of assisted reproductive technology could reduce demand for the fertility services provided bythe medical facilities in NewGenIvfs network,and thus may adversely affect the business,financial conditions and results of operations of themedical facilities in its network.Patient sentiment and distrust of the use of assisted reproductive technology may lead to less demand for fertility services.Assisted reproductivetechnologies,including genetic testing,technologies used for surrogacy and egg donation and gender selection,have raised ethical,legal and socialissues regarding privacy and the appropriate uses of the resulting information.Government authorities could,for social or other purposes,limit orregulate the use of assisted reproductive technology to certain conditions.Similarly,these concerns may lead patients to refuse to use,or physiciansto be reluctant to order,assisted reproductive services even if permissible.These and other ethical,legal and social concerns may limit marketacceptance of fertility services or reduce patient demand for such services,either of which could have a material adverse effect on the business,financial condition and results of operations of the medical facilities in NewGenIvfs network,and NewGenIvf itself.NewGenIvf is reliant on revenue from international clients.Fertility services revenue from international clients are an important part of NewGenIvfs revenue,though NewGenIvf is expanding rapidly intothe local markets.The number of international clients travelling to Thailand,Cambodia and Kyrgyzstan to seek fertility services may,however,beaffected by a number of factors,including the economic status of the foreign clients country of origin,the relative exchange rate of the clients homecurrency to the relevant authorities,which may affect the cost of treatment,natural disasters,pandemics like COVID-19,and political tension or actsof terrorism in such countries and the region.For example,the COVID-19 has had resulted in a number of countries declaring a state of emergencyand a number of countries,including the countries in Asian Pacific,imposing extensive travel restrictions,which in turn caused a decrease in thenumbers of internal clients traveling to Thailand,Cambodia or Kyrgyzstan for treatments.These events could cause a postponement or a reduction in the number of clients traveling to Thailand,Cambodia or Kyrgyzstan,and could inturn affect revenues from international clients,which is the significant contributor in terms of volume.A decline in the medical tourism industry mayhave a material adverse effect on NewGenIvfs financial condition and results of operations.Fluctuations in exchange rates could have a material and adverse effect on NewGenIvfs results of operations and the value of your investment.NewGenIvfs reporting currency is U.S.dollars.The functional currency of NewGenIvf and its subsidiaries include Hong Kong dollar(“HK$”),Thai baht(“THB”)and United States dollar(“USD”).Accordingly,fluctuations in the value of HK$and THB relative to the USD could affect itsresults of operations due to translational remeasurements.As its international operations expand,an increasing portion of its revenue and operatingexpenses may be denominated in non-HK$and THB currencies.Accordingly,NewGenIvfs revenue and operating expenses will becomeincreasingly subject to fluctuations due to changes in foreign currency exchange rates.If NewGenIvf is not able to successfully hedge against therisks associated with currency fluctuations,NewGenIvfs business,financial condition and results of operations could be materially adverselyaffected.Governmental control of currency conversion may limit NewGenIvfs ability to utilize NewGenIvfs net revenue effectively and affect the value ofyour investment.NewGenIvfs revenue and expenses for its businesses are substantially denominated in THB,which are currently not freely convertiblecurrencies.A portion of such revenue must be converted into other currencies in order to meet its foreign currency obligations.For example,NewGenIvfs subsidiaries will need to obtain foreign currency to make payments of declared dividends,if any,on its shares.Under the existing foreign exchange regulations in Thailand,NewGenIvf will be able to make current account foreign exchange transactions.However,in the future,governments may take measures,at its discretion,to restrict access to foreign currencies for capital account and currentaccount transactions under certain circumstances.If such measures are implemented,NewGenIvf may not be able to pay dividends in foreigncurrencies to holders of its shares.Foreign exchange transactions under its capital account are subject to significant foreign exchange controls andrequire certain approvals.These limitations could affect our ability to obtain foreign exchange through offshore financing.10 The value of the THB against the U.S.dollar and other currencies fluctuates,and is subject to changes resulting from policies of the Thailandand other governments,and depends to a large extent on domestic and international economic and political developments as well as supply anddemand in the local market.For example,the Bank of Thailand,which is the central bank of Thailand,is responsible for formulating andimplementing monetary policies in the country to maintain the price stability and promote economic stability and sustainable growth.The Bank ofThailand imposes(four)measures in preventing THB fluctuation.Those are measures to limit THB liquidity,to curb capital inflows,to limit theflows on Non-resident Bank Account and Non-resident Baht for Securities,and to limit the flows on Non-Deliverable Forward transactions.With anincreased floating range of the THBs value against foreign currencies and a more market-oriented mechanism for determining the mid-pointexchange rates,the THB may further appreciate or depreciate significantly in value against the U.S.dollar or other foreign currencies in the long-term,depending on the fluctuation of the basket of currencies against which it is currently valued,or it may be permitted to enter into a full float,which may also result in a significant appreciation or depreciation of the THB against the U.S.dollar or other foreign currencies.It cannot be assuredthat THB will not experience significant appreciation or depreciation against the U.S.dollar or other foreign currencies in the future.Furthermore,NewGenIvf is also currently required to obtain approvals before converting significant sums of foreign currencies into THB.All ofthese factors could materially and adversely affect its business,results of operations,financial condition and prospects,and could reduce the valueof,and dividends payable on,its shares in foreign currency terms.Sales of a substantial number of our securities in the public market by our existing securityholders could cause the market price of our Class AOrdinary Shares to decrease significantly.As of the date of this Report,we have registered up to 8,971,263 Class A Ordinary Shares(after accounting for the Reverse Stock Split)forresale under the registration statements numbered 333-281964 and 333-283421,which represents a substantial percentage of our issued andoutstanding Class A Ordinary Shares.The sale of such securities in the public market by the Selling Securityholders,or the perception that thosesales might occur,could depress the market price of our Class A Ordinary Shares,and could impair our ability to raise capital through the sale ofadditional equity securities.We are unable to predict the effect that such sales may have on the prevailing market price of our Class A OrdinaryShares.Our dual-class voting structure may limit your ability to influence corporate matters and could discourage others from pursuing any change ofcontrol transactions that holders of our Class A Ordinary Shares may view as beneficial.Our authorized and issued ordinary shares are divided into Class A Ordinary Shares and Class B Ordinary Shares.Each Class A Ordinary Shareis entitled to one(1)vote,while each Class B Ordinary Share is entitled to one hundred(100)votes with all Ordinary Shares voting together as asingle class on most matters.Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof,whileClass A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances.Only Class A Ordinary Shares are listed andtraded on NASDAQ,and we intend to maintain the dual-class voting structure.Mr.Wing Fung Alfred Siu and Ms.Hei Yue Tina Fong beneficiallyown all of the issued Class B Ordinary Shares.As of the date of this Report,these Class B Ordinary Shares constitute approximately 2.73%of ourtotal issued and outstanding shares and 73.76%of the aggregate voting power of our total issued and outstanding shares due to the disparate votingpowers associated with our dual-class share structure.As a result of the dual-class share structure and the concentration of control,holders of Class BOrdinary Shares have considerable influence over matters such as decisions regarding election of directors and other significant corporate actions.Such holders may take actions that are not in the best interest of us or our other shareholders.This concentration of control may discourage,delay,orprevent a change in control of us,which could have the effect of depriving our other shareholders of the opportunity to receive a premium for theirshares as part of a sale of us and may reduce our share price.This concentrated control will limit the ability of holders of Class A Ordinary Shares toinfluence corporate matters and could discourage others from pursuing any potential merger,takeover,or other change of control transactions thatholders of Class A Ordinary Shares may view as beneficial.Substantially all of NewGenIvfs assets and operations are located in Thailand,Cambodia and Kyrgyzstan and they are subject to economic,legal and regulatory uncertainties in such countries.Substantially all of NewGenIvfs operations and assets are based in Thailand,Cambodia and Kyrgyzstan.As a result,its businesses andoperations are subject to the changing economic conditions prevailing from time to time in such countries.Since 2020,Thailands economy has beenexperiencing a slowdown.According to the World Bank Group,the GDP growth rate of Thailand declined to minus 6.1%in 2020 and recovered to1.9%in 2023 and 2.4%in 2024 but still lower than the previously growth in historical years.Meanwhile,Cambodias post-pandemic economicrecovery has gained momentum,but remains uneven.Traditional growth drivers,especially manufacturing and agricultural commodities exports,have fully recovered.However,while travel and tourism have improved,the sector remains well below pre-COVID-19 levels.The subsequentimpact also caused the vendors and customers preference change,lower the willingness travelling to Kyrgyzstan for surrogacy services.Theeconomy is projected to grow,underpinned by merchandise exports and domestic economic activity.NewGenIvf also derives a substantial portion of its revenue from Chinese clients and as such,its maintenance of PRC-sourced revenues andaccess to new and existing clients from the PRC are also subject to the economic conditions of China.However,the near-term growth prospects ofthe PRC economy are unclear due to the uncertain effects of ongoing economic stress caused by trade and national security policies,and the elevatedlevels of private and public indebtedness,among others.According to the National Statistics Bureau of the PRC,growth rate of Chinas GDP for theyear 2022 slowed down to 3.0%on a year-on-year basis compared to the growth rate of approximately 8.4%for the year 2021.In 2023,ChinasGDP grew 5.2%while Chinas 2024 GDP growth rate was 5%.A prolonged downturn in the PRC economy generally could materially and adverselyaffect NewGenIvfs results of operations.11 Factors that may adversely affect the economy and conditions in such countries include:political instability;global economic conditions;exchange rate fluctuations and the exchange control policy of the banks;a prolonged period of inflation or increase in regional interest rates;changes in taxation;changes in government policies affecting import and export volumes;decline in tourism;natural disasters,including tsunamis,earthquakes,fires,floods,drought and similar events;a potential recurrence or outbreak of avian influenza,severe acute respiratory syndrome or other infectious or contagious diseases likeCOVID-19 in Asian countries,and governmental policies to address such outbreak;scarcity of credit or other financing,resulting in lower demand for products and services provided by companies in the region;increases in oil prices and other commodity prices;decreased consumer confidence;other external recessions or potential economic downturns in the United States,Asia or other parts of the world;and other regulatory,political or economic developments in or affecting the countries including but not limited to tariff policies of the U.S.andEU.The economic conditions in Thailand,Cambodia,Kyrgyzstan and China are also affected by global economic conditions.The global creditmarkets have experienced,and may continue to experience,volatility and liquidity disruptions,which have resulted in the consolidation,failure ornear failure of a number of institutions in the banking and insurance industries.There remains a concern that a return of the debt crisis in Europe,thepolitical unrest in the Middle East and Eastern Europe as well as rumors or threats or actual terrorist attacks or conflicts in the Middle East,Southeast Asia,Eastern Europe or other regions will impinge upon the health of the global financial system.These or other such events couldadversely affect NewGenIvfs business,financial condition,results of operations and prospects.There is no assurance that the economies and social conditions of Thailand,Cambodia,Kyrgyzstan and China will meet current projections orimprove in the future.Any instability or economic downturn could have a material adverse effect on NewGenIvfs business,financial condition,results of operations and prospects.Failure to comply with the terms of future financing arrangements could result in default,which could have an adverse effect on NewGenIvfscash flow and liquidity.NewGenIvf may from time to time enter into credit facilities and debt financing arrangements containing financial and other covenants thatcould,among other things,restrict NewGenIvfs business and operations.If NewGenIvf breaches any of these covenants,including the failure tomaintain certain financial ratios,NewGenIvfs lenders may be entitled to accelerate NewGenIvfs debt obligations.Any default under the creditfacility could result in the repayment of these loans prior to maturity as well as the inability to obtain additional financing,which in turn may have amaterial adverse effect on NewGenIvfs cash flow and liquidity.12 NewGenIvf requires a significant amount of capital to fund its operations and growth.If NewGenIvf cannot obtain sufficient capital onacceptable terms,its business,financial condition,and prospects may be materially and adversely affected.NewGenIvf requires a significant amount of capital and resources for its operations and continued growth.NewGenIvf expects to makesignificant investments to fund operations,laboratory upgrades,among other things,which may significantly increase NewGenIvfs net cash used inoperating activities.In addition,NewGenIvf will continue to invest in laboratory and facilities which are fundamental to NewGenIvfs businessoperation and future growth.However,NewGenIvf cannot assure you that these investments will generate the optimal returns,if at all.To date,NewGenIvf has historically funded its cash requirements primarily through operational,capital contributions from its shareholders and short-term orlong-term borrowings.If these resources are insufficient to satisfy NewGenIvfs cash requirements,NewGenIvf may seek to raise funds throughadditional equity offering or debt financing or additional bank facilities.NewGenIvfs ability to obtain additional capital in the future,however,issubject to a number of uncertainties,including those relating to its future business development,financial condition,and results of operations,general market conditions for financing activities by companies in its industry,and macro-economic and other conditions in Thailand,Cambodia,Kyrgyzstan and globally.If NewGenIvf cannot obtain sufficient capital on acceptable terms to meet its capital needs,NewGenIvf may not be able toexecute its growth strategies,and NewGenIvfs business,financial condition,and prospects may be materially and adversely affected.The defects in certain leased property interests and failure to register certain lease agreements may materially and adversely affect NewGenIvfsbusiness,financial condition,results of operations,and prospects.NewGenIvf leases premises in Thailand,Cambodia and Kyrgyzstan in various locations.With respect to property leased by First Fertility PGSCenter in Thailand,the lessors did not have or provide NewGenIvf with property ownership certificates or other documents evidencing their rights tolease such premises to First Fertility PGS Center.Therefore,NewGenIvf cannot assure that it will not be subject to any challenges,lawsuits,or otheractions taken against First Fertility PGS Center with respect to its leased premises for which the relevant lessors do not have valid title or right tolease.If First Fertility PGS Centers lessors right to lease premises is successfully challenged by any third party,First Fertility PGS Centers leaseagreements may not be enforceable and NewGenIvf may be forced to vacate the premises and relocate to a different location.Under suchcircumstances,NewGenIvf expects to incur relocation costs of up to THB3 million and expects that there would not be material business interruptioncosts,if any.In addition,the failure of the lessor to provide sufficient legal evidence of its right to lease the premises has prevented First Fertility PGS Centerfrom registering the clinic with the Bangkok Metropolitan Authority(“BMA”)as required under the Public Health Act B.E.2535(1992)(the“PHA”).Under Section 71 of the PHA,First Fertility PGS Center and its directors are subject to imprisonment of up to 6(six)months and a fine ofup to THB50,000,or both.The BMA could also order First Fertility PGS Center to stop operating the clinic which would require relocation of theclinic if First Fertility PGS Center could not make the necessary registration.Under such circumstances,First Fertility PGS Center expects to incurrelocation costs of up to THB3 million and expects that there would not be material business interruption costs,if any.Only one of NewGenIvfs directors or officers,namely Ms.Fong,Hei Yue Tina,is also a director of First Fertility PGS Center.NewGenIvfbelieves that if First Fertility PGS Centers directors,including Ms.Fong,are found guilty of the above offence and subject to imprisonment,theresulting impact on NewGenIvfs business,results of operations and financial conditions would be limited,as Ms.Fong has limited involvement inthe day-to-day management of First Fertility PGS Centers operations and Mr.Siu,Wing Fung Alfred and the other directors and officers ofNewGenIvf and its subsidiaries would be able to keep operating the groups and First Fertility PGS Centers activities with limited disruptions.Further,a second clinic has been set up in a separate location which will mitigate the risk of interruptions to operations 13 NewGenIvf currently has no insurance coverage for its operations.The assisted reproductive medical facilities in NewGenIvfs network are exposed to potential liabilities that are inherent to the provision ofservices.Medical and other liabilities may not be fully covered by insurance and the medical facilities may face claims in excess of the insurancecoverage or claims which are not covered by insurance due to other policy limitations or exclusions or where the medical facilities in NewGenIvfsnetwork have failed to comply with the terms of the policy.Any uninsured risks may result in substantial costs and the diversion of resources,whichcould adversely affect its results of operations and financial condition.The insurance industries in Thailand,Cambodia and Kyrgyzstan are still at early stages of development,and insurance companies in Thailand,Cambodia and Kyrgyzstan currently offer limited business-related insurance products.NewGenIvf does not currently maintain insurance.NewGenIvf cannot assure you that the medical facilities in its network will be able to obtain and/or maintain medical liability insurance onacceptable terms or without substantial premium increases or at all in the future.In addition,as NewGenIvfs business expands,the cost for each medical facility in its network and NewGenIvf to maintain an adequate level ofinsurance may become increasingly high.NewGenIvf cannot ensure that the medical facilities in its network will be able to locate or purchaseappropriate insurance to cover the expanding operations in time,on commercially reasonable terms or at all.Any significant uninsured loss couldhave material and adverse effects on the financial condition and results of operations of the medical facilities in NewGenIvfs network,and thus mayaffect its business,results of operations and financial condition.Moreover,NewGenIvf does not currently maintain professional malpractice liability insurance for its physicians and nurses.As a result,NewGenIvf may be subject to medical disputes and claims arising under relevant laws from time to time,which could cause substantial damage toNewGenIvf if not covered by professional malpractice liability insurance.Any dispute with clients,or any legal proceeding involving the physiciansof the medical facilities or medical professionals,regardless of its merit or eventual outcome,could result in significant legal costs and financialand/or reputational damages to the medical facilities and NewGenIvf and materially and adversely affect the business,financial condition and resultsof operations of the medical facilities in NewGenIvfs network,and further affect its business,financial condition,results of operations andprospects.NewGenIvf may not be successful in adapting to technological developments,which may affect its business and results of operations.It is possible that new technologies could be developed or scientific advances made by NewGenIvfs competitors,or elsewhere and licensed toNewGenIvfs competitors,which cannot be replicated by NewGenIvf without significant capital expenditure or at all,or that replace or reduce therequirement for assisted reproductive services,ultrasound or specialized diagnostics.The consequences for NewGenIvf of the development of newtechnologies could include lower or loss of revenues,loss of market position and reduced prospects of NewGenIvf.If its computer systems,or those of its providers,specialty pharmacies or other downstream vendors lag,fail or suffer security breaches,NewGenIvf may incur a material disruption of its services,which could materially impact its business and the results of operations.NewGenIvfs businesses in Thailand,Cambodia and Kyrgyzstan are increasingly dependent on critical,complex and interdependent informationtechnology systems to support business processes as well as internal and external communications.NewGenIvfs success is therefore dependent inpart on its ability to secure,integrate,develop,redesign and enhance its(or contract with vendors to provide)technology systems that support itsbusiness strategy initiatives and processes in a compliant,secure,and cost and resource efficient manner.If NewGenIvf or its providers,specialtypharmacies or other downstream vendors have an issue with its or their respective technology systems,it may result in a disruption to its operationsor downstream disruption to its relationships with its clients or its selective network of high-quality fertility specialists.Additionally,if NewGenIvfchooses to insource any of the services currently handled by a third party,it may result in technological or operational disruptions.14 In addition,despite the implementation of security measures,its internal computer systems,and those of its provider clinics,specialtypharmacies or other downstream vendors,are potentially vulnerable to damage from malicious intrusion,malware,computer viruses,unauthorizedaccess,natural disasters,terrorism,war and telecommunication and electrical failures.While NewGenIvf is not aware that it has experienced anysuch system failure,accident or security breach to date,if such an event were to occur and cause interruptions in its operations,it could result in amaterial disruption to its ability to operate and deliver its solutions.In addition,to the extent that any disruption or security breach were to result in aloss or inappropriate disclosure of confidential information,NewGenIvf could incur liability.See“Risks Related to GovernmentRegulation NewGenIvf operates in a highly regulated industry and must comply with a significant number of complex and evolving requirements.Any lack of requisite approvals,licenses,or permits applicable to NewGenIvfs business may have a material and adverse impact on NewGenIvfsbusiness,financial condition,and results of operations Data Protection and Breaches.”Risks Related to NewGenIvfs Relationships with Third Parties NewGenIvfs business depends on its ability to maintain its network of high-quality fertility specialists and other healthcare providers.IfNewGenIvf is unable to do so,its future growth would be limited and its business,financial condition and results of operations would be harmed.NewGenIvfs performance and success is dependent upon its continued ability to maintain a credentialed network of high-quality fertilityspecialists,including its senior management team,other key employees,as well as research and development and operation maintenance personnel,many of whom are difficult to replace.Fertility specialists could refuse to contract,demand higher payments or take other actions that could result inhigher medical costs,less attractive service for its clients or difficulty meeting regulatory or accreditation requirements.Identifying high-qualityfertility specialists,credentialing and negotiating contracts with them and evaluating,monitoring and maintaining its network,requires significanttime and resources.Competition in the healthcare industry for qualified employees is intense.NewGenIvf may need to offer higher compensationand other benefits in order to attract and retain key personnel in the future,which could increase NewGenIvfs compensation expenses,includingstock-based compensation.NewGenIvfs continued ability to compete effectively depends on NewGenIvfs ability to attract new employees and toretain and motivate NewGenIvfs existing employees.If NewGenIvf is not successful in maintaining its relationships with top fertility specialists,these fertility specialists may refuse to renew their contracts with it,and potential competitors may be effective in onboarding these or other high-quality fertility specialists to create a similarly high-quality network.There may be additional shifts in the fertility specialty provider space as thefertility market matures,and high-quality fertility specialists may become more demanding in re-negotiating to remain in its network.Its ability todevelop and maintain satisfactory relationships with high-quality fertility specialists also may be negatively impacted by other factors not associatedwith it,such as regulatory changes impacting providers or consolidation activity among hospitals,physician groups and healthcare providers.Inaddition,certain organizations of physicians,such as practice management companies(which group together physician practices for administrativeefficiency),may change the way in which healthcare providers do business with it and may compete directly with it,which could adversely affect itsbusiness,financial condition and results of operations.NewGenIvf intends to grant,and may continue to grant,options and other types of awards,which may result in increased share-based compensation expenses.NewGenIvfs Share Incentive Plan will allow NewGenIvf to enhance its ability to attract and retain exceptionally qualified individuals andagents and to encourage them to acquire a proprietary interest in the companys growth and performance.Competition for highly skilled personneland agents is often intense and NewGenIvf may incur significant costs or may not be successful in attracting,integrating,or retaining qualifiedpersonnel and agents to fulfill NewGenIvfs current or future needs.NewGenIvf believes that the granting of share-based awards is of significantimportance to NewGenIvfs ability to attract and retain agents,key personnel and employees,and NewGenIvf will continue to grant share-basedawards in the future.In addition,NewGenIvf may,with the approval of its Compensation Committee and the Board,revise the terms of,and increasethe size of,its share incentive plan,to ensure that it is able to attract and retain agents,key personnel and employees.On March 31,2025,NewGenIvfs Board approved certain amendments to its Share Incentive Plan,including the increase of the size of the share incentive plan to 20%ofthe outstanding shares of the Company from time to time.As a result,NewGenIvfs expenses associated with share-based compensation mayincrease,which may have an adverse effect on NewGenIvfs results of operations.The amended share incentive plan is available as Exhibit 4.32.15 Meanwhile,the retirement or loss of certain specialists,scientific staff or other key personnel,the activities of competitors,the introduction of acompeting service that is perceived to be superior to the services provided by NewGenIvf,or other events which impact NewGenIvfs reputationcould adversely affect NewGenIvfs relationships with fertility specialists.For example,one specialist who was previously engaged by NewGenIvfbrought a lawsuit against NewGenIvf regarding disputed remuneration,which resulted in a settlement for NewGenIvf to compensate the specialistwith a sum of approximately US$98,000.Also,fertility specialists relationship with NewGenIvf could affect their behaviors in recommendingNewGenIvfs services or referring patients to NewGenIvf,which could in turn adversely impact the number of patients treated by NewGenIvf andadversely impact on its financial performance,market position and prospects.In addition,the perceived value of NewGenIvfs solutions and its reputation may be negatively impacted if the services provided by fertilityspecialists or other healthcare providers are not satisfactory to NewGenIvfs clients,including as a result of error that could result in litigation.Forexample,if fertility specialist or other healthcare provider releases sensitive information of its clients,it could incur additional expenses and give riseto litigation against NewGenIvf.Any such issue with one of its providers may expose it to public scrutiny,adversely affect its brand and reputation,expose it to litigation or regulatory action,and otherwise make its operations vulnerable.Further,if its services result in less than favorableoutcomes,this could cause it to fail to meet its contractually guaranteed specified service metrics,and NewGenIvf could be obligated to provide theclient with a fee reduction or a second chance for free,depending on their contract terms.The failure to maintain its selective network of high-quality fertility specialists or the failure of those specialists to meet and exceed its clients expectation,may result in a loss of or inability to grow ormaintain its client base,which could adversely affect its business,financial condition and results of operations.The medical facilities and professionals in NewGenIvfs network could become the subject of litigation,allegations and other claims,andNewGenIvf is not insured against these liabilities.NewGenIvf relies on the physicians and other medical professionals of the assisted reproductive medical facilities in its network to make properclinical decisions regarding the diagnosis and treatment of clients.However,NewGenIvf does not have full and direct control over every step ofclinical activities undertaken at each of the medical facilities.In addition,physicians and medical professionals outside NewGenIvfs network mayintroduce patients to NewGenIvf and conduct medical treatments and/or procedures for such patients in NewGenIvfs facilities.NewGenIvf entersinto independent contractor agreements with such physicians and medical professionals and treats such patients as NewGenIvfs own patients.Assuch,NewGenIvf will have to bear any liabilities arising from their medical treatments and/or procedures conducted in NewGenIvfs facilities.Anyincorrect clinical decision or malpractice on the part of physicians and other medical professionals(including those from outside of its network),orany failure by the medical facilities in its network to properly manage their clinical activities may result in unsatisfactory treatment outcomes,patientinjury or even death,which could lead to disputes with patients and/or their families or the medical professionals,including those from outside itsnetwork.In its experience,moreover,clients of fertility treatments tend to be more demanding on the medical services received.In addition,therelevant laws governing medical disputes and claims grant claimants liberal rights in bringing claims against physicians and other medicalprofessionals practicing in the jurisdiction.As a result,the medical facilities in its network may be subject to medical disputes and claims arisingunder relevant laws,from time to time,which could generate substantial damages imposed on such facilities if not covered by professional liabilityinsurance.Any dispute with its patients and/or their families or the medical professionals,including those from outside its network,or any legalproceeding involving the physicians of the medical facilities or medical professionals,including those from outside its network,regardless of itsmerit or eventual outcome,could result in significant legal costs and reputational damage to the medical facilities and materially and adversely affectthe business,financial condition and results of operations of the medical facilities in its network,and further affect its business,financial conditionand results of operations.16 The assisted reproductive medical facilities in NewGenIvfs network have limited control over the quality of the pharmaceuticals,medicalequipment,medical consumables and other supplies used in its operations,and cannot guarantee that the products in use are not defective orcounterfeit.NewGenIvf also has no control over independent sub-contractors and cannot guarantee the services thereof.The assisted reproductive medical facilities in NewGenIvfs network procure a variety of pharmaceuticals,medical equipment,consumables andother supplies in NewGenIvfs operations from third-party suppliers.As the medical facilities in NewGenIvfs network do not engage in the directmanufacture of such supplies,NewGenIvf cannot assure you that such supplies are free of defects and meet relevant quality standards or,in the caseof imported supplies,verify the origin of such products.In addition,there may be counterfeit pharmaceutical products manufactured without properlicenses or approvals or fraudulently mislabeled with respect to their content or manufacturer in the pharmaceutical markets.In some cases,theseproducts are very similar in appearance to the authentic products.The quality control checks and processes may not be able to identify all counterfeitpharmaceutical products in the inventory.Any sale of such products by the medical facilities in NewGenIvfs network,regardless of its knowledge asto their authenticity,may subject the medical facilities to administrative sanctions,civil claims,negative publicity or reputational damage.NewGenIvf cannot assure you that the medical facilities in our network will be able to successfully claim full indemnity from such manufacturers ofcounterfeit pharmaceutical products.NewGenIvf also cannot assure you that the medical facilities in our network will not encounter incidents relating to defective products,or thatsuch incidents will not materially and adversely affect our network of medical facilities.If the products provided by NewGenIvfs suppliers aredefective,of poor quality or are otherwise unsafe or ineffective,the medical facilities in NewGenIvfs network could be subject to liability claims,complaints or adverse publicity,any of which would materially and adversely affect its results of operations and reputation.NewGenIvf cannotassure you that the medical facilities in NewGenIvfs network will find suitable replacement suppliers on commercially acceptable terms or at all.The suppliers are also subject to extensive laws,rules and regulations.If any suppliers violate applicable laws,rules and regulations,NewGenIvfs reputation or procurement may be materially and adversely affected.In addition,the medical facilities in NewGenIvfs network maybe exposed to reputational damages or even liabilities for defective goods provided by the suppliers or negative publicity associated with anysuppliers,and the business and results of operations of the medical facilities in NewGenIvfs network and NewGenIvf could suffer as a result.Independent sub-contractors and/or agents that work with NewGenIvf are also subject to extensive laws,rules,and regulations.If any sub-contractor and/or agent violates any applicable laws,rules,regulations or breaches any agreements,NewGenIvfs reputation may be materially andadversely affected and NewGenIvf may be penalized by regulatory or other parties.In addition,NewgenIvfs clients may engage Newgens sub-contractors and/or agents for ongoing services or additional services following the termination of contracts with NewGenIvf.NewGenIvf has nocontrol over the services provided by sub-contractors and cannot assure the quality of such services or ensure compliance with applicable laws,rulesand regulations.In addition,the services provided by independent sub-contractors may expose NewGenIvf to public scrutiny,adversely affect itsbrand and reputation,expose it to litigation or regulatory action,and otherwise make its operations vulnerable if such independent sub-contractorsfail to meet their contractual obligations or to comply with applicable laws or regulations.If NewGenIvf loses its relationship with one or more key pharmaceutical manufacturers,its business and results of operations could be adverselyaffected.NewGenIvf maintains contractual relationships with select pharmaceutical manufacturers in Thailand,Cambodia and Kyrgyzstan.Theconsolidation of pharmaceutical manufacturers and,laboratory service providers,the shortages of drugs provided by such manufacturers,thetermination or material alteration of its contractual relationships,or its failure to renew such contracts could have a material adverse effect on itsbusiness and results of operations.Adoption of new laws,rules or regulations or changes in,or new interpretations of,existing laws,rules orregulations,relating to any of these programs could materially adversely affect its business and results of operations.17 NewGenIvf has engaged in transactions with related parties,and such transactions present potential conflicts of interest that could have anadverse effect on its business and results of operations.NewGenIvf has entered into a number of transactions with related parties.NewGenIvf may in the future enter into additional transactions withits related parties.Interests of these related parties may not necessarily be aligned with NewGenIvfs or The Companys interests and the interests ofits other shareholders.For example,conflicts of interest may arise in connection with decisions regarding the transaction arrangements which may beless favorable to NewGenIvf than similar arrangements negotiated with unaffiliated third parties.Conflicts of interest may also arise in connectionwith the exercise of contractual remedies,such as the treatment of events of default.As a result,those related party transactions,individually or inthe aggregate,may have an adverse effect on NewGenIvfs business and results of operations.NewGenIvf may be subject to claims and allegations relating to intellectual property and other causes.NewGenIvf may from time to time receive claims that NewGenIvf infringes on the intellectual property rights of others.Moreover,NewGenIvfmay be subject to claims by third parties who maintain that NewGenIvfs service providers technology infringes third-partys intellectual propertyrights.If NewGenIvf fails to successfully defend against such claim or does not prevail in such litigation,it could be required to modify,redesign orcease operating,pay monetary amounts as damages or enter into royalty or licensing arrangements with the valid intellectual property holders.Anyroyalty or licensing arrangements that NewGenIvf may seek in such circumstances may not be available to it on commercially reasonable terms or atall.Also,if NewGenIvf acquires technology licenses from third parties,NewGenIvfs exposure to infringement actions may increase becauseNewGenIvf must rely upon these third parties to verify the origin and ownership of such technology.This exposure to liability could result indisruptions in NewGenIvfs business that could materially and adversely affect NewGenIvfs results of operations.Some of NewGenIvfs employees may have been previously employed at other companies,including NewGenIvfs competitors.NewGenIvfmay hire additional personnel to expand its development team and technical support team as its business grows.To the extent these employees wereinvolved in the development of content or technology similar to NewGenIvfs at their former employers,NewGenIvf may become subject to claimsthat these employees or NewGenIvf has appropriated these employees former employers proprietary information or intellectual properties.IfNewGenIvf fails to successfully defend such claims against itself,NewGenIvf may be exposed to liabilities which could have a material adverseeffect on its business.NewGenIvf is currently not a party to any material legal or administrative proceedings but may subject to legal or administrative actions fordefamation,negligence,copyright and trademark infringement,unfair competition,breach of service terms,or other purported injuries resulting fromthe content NewGenIvf provides or the nature of NewGenIvfs services.Such legal and administrative actions,with or without merits,may beexpensive and time-consuming and may result in significant diversion of resources and management attention from NewGenIvfs businessoperations.Furthermore,such legal or administrative actions may adversely affect NewGenIvfs brand image and reputation.Certain data and information in this prospectus relied on by NewGenIvf were obtained from third-party data and polls.These metrics were notindependently verified by NewGenIvf and may not be accurate.Certain numbers and information in this prospectus were obtained and provided from numerous sources including management data,third-partydata or numbers generally estimated by calculating infertile couples,fertility tourism number,etc.to generally assess potential customer numbers inAsia-Pacific countries.These metrics were not independently verified.Such databases,third-party information,and calculations may not accurately reflect actualstatistics or numbers and NewGenIvf does not have access to specific rating numbers.Similarly,any statistical data in any third-party publicationsalso include projections based on a number of assumptions.If any one or more of the assumptions underlying the market data is later found to beincorrect,actual results may differ from the projections based on these assumptions.18 Risks Related to Government Regulation NewGenIvf operates in a highly regulated industry and must comply with a significant number of complex and evolving requirements.Any lackof requisite approvals,licenses,or permits applicable to NewGenIvfs business may have a material and adverse impact on NewGenIvfsbusiness,financial condition,and results of operations.The operations of NewGenIvf are subject to various laws,rules and regulations at the national,regional and local levels in Thailand,Cambodia,Kyrgyzstan and other applicable jurisdictions.Such laws and regulations mainly relate to(i)the licensing of local and foreign medical professionals,nursing professionals,medical technology professionals,pharmaceutical professions and other applicable licensing;(ii)the licensing,registration,and accreditation of medical facilities,laboratories,including but not limited to the licensing,registration,and accreditation of persons performingrelated activities;(iii)the privacy and security of confidential patient medical records;(iv)the corporate practice of medicine;(v)healthcare fraudand abuse laws;(vi)the donation and transplantation of human cells,tissues and organs;(vii)potential prohibition on surrogacy or providingintermediary assistance in surrogacy;and(viii)licensing and approval of the accommodation provided as parts of the services.NewGenIvf has attempted to structure its operations to comply with laws,regulations and other requirements applicable to it directly and to itsclients and vendors,but there can be no assurance that its operations will not be challenged or impacted by regulatory authorities or enforcementinitiatives,or that the relevant authorities in each jurisdiction could impose higher standards or requirements,which NewGenIvf may have difficultyto adhere to,e.g.Medical Facilities Act B.E.2541(1998)and Protection of a Child Born by Medically Assisted Reproductive Technology Act B.E.2558(2015)for Thailand jurisdiction,Law on Reproduction Rights and on Guarantees of Their Realization of July 4,2015 No.148,Law on statusof medical worker of May 28,2013 No.81 and Temporary Regulation on Procedure of Licensing Private Medical Activity approved by theresolution of government of April 4,2017 No.203 for Kyrgyz Republic.NewGenIvf in the future may become involved in governmentalinvestigations,audits,reviews and assessments.Any determination by a court or agency that NewGenIvfs solutions or services violate,or cause itsclients to violate,applicable laws,regulations or other requirements could subject it or its clients to civil,criminal,or administrative penalties.Such adetermination also could require it to change or terminate portions of its business,disqualify it from serving clients that do business with governmententities,or cause it to refund some or all of its service fees or otherwise compensate its clients.In addition,failure to satisfy laws,regulations orother requirements could adversely affect demand for its so
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Q4 2024 Earnings SlidesFebruary4,20252Forward-Looking Statements&Non-GAAP Financial Measures This pr.
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Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington D.C.20549_FORM 20-F_(Mark.
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR 12(g)OF THE SECURITIES EXCHANGE ACT OF1934 OR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2024 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _ to _ 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 _ Commission File Number:001-41972 BitFuFu Inc.(Exact name of Registrant as specified in its charter)Not applicable Cayman Islands(Translation of Registrants name into English)(Jurisdiction of incorporation or organization)9 Temasek BoulevardSuntec Tower 2,#13-01Singapore 038989(Address of Principal Executive Offices)Leo Lu,Chief Executive OfficerTelephone: 65 6252 75699 Temasek BoulevardSuntec Tower 2,#13-01Singapore 038989(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(s)Name of exchange on which registeredClass A ordinary shares,par valueUS$0.0001 per share FUFU Nasdaq Capital Market(The Nasdaq Stock Market LLC)Warrants,each exercisable for threefourths(3/4)of Class A ordinary share FUFUW Nasdaq Capital Market(The Nasdaq Stock Market LLC)Securities registered or to be registered pursuant to Section 12(g)of the Act:None(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act:None(Title of Class)Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period coveredby the annual report.As of December 31,2024,there were 163,106,615 ordinary shares issued and outstanding,being the sum of(i)28,106,615 Class Aordinary shares and(ii)135,000,000 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 13or 15(d)of the Securities Exchange Act of 1934.Yes No Note Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d)of the SecuritiesExchange Act of 1934 from their obligations under those Sections.Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the SecuritiesExchange 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 toRule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant wasrequired 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 emerginggrowth company.See definition of“large accelerated filer,”“accelerated filer,”and“emerging growth company”in Rule 12b-2 of theExchange Act.Large accelerated filerAccelerated filerNon-accelerated filer Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if theregistrant has elected not to use the extended transition period for complying with any new or revised financial accounting standardsprovided 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 toits Accounting Standards Codification after April 5,2012.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness ofits internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered publicaccounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrantincluded 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-basedcompensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAP International Financial Reporting Standards as issued by the InternationalAccounting Standards BoardOther If“Other”has been checked in response to the previous question indicate by check mark which financial statement item the registrant haselected 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 ExchangeAct).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 theSecurities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.Yes No TABLE OF CONTENTS PageCERTAIN TERMS AND CONVENTIONSiiCAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSivPART I1ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS1ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE1ITEM 3.KEY INFORMATION1ITEM 4.INFORMATION ON THE COMPANY47ITEM 4A.UNRESOLVED STAFF COMMENTS68ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS68ITEM 6.DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES86ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS93ITEM 8.FINANCIAL INFORMATION94ITEM 9.THE OFFER AND LISTING95ITEM 10.ADDITIONAL INFORMATION96ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK104ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES104PART II105ITEM 13.DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIES105ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS105ITEM 15.CONTROLS AND PROCEDURES105ITEM 16.RESERVED106ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT106ITEM 16B.CODE OF ETHICS106ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES107ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES107ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS107ITEM 16F.CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT107ITEM 16G.CORPORATE GOVERNANCE107ITEM 16H.MINE SAFETY DISCLOSURE108ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS108ITEM 16J.INSIDER TRADING POLICIES108ITEM 16K.CYBERSECURITY108PART III110ITEM 17.FINANCIAL STATEMENTS110ITEM 18.FINANCIAL STATEMENTS110ITEM 19.EXHIBIT110 i CERTAIN TERMS AND CONVENTIONS Except as otherwise indicated or required by context,references in this annual report on Form 20-F for the fiscal year endedDecember 31,2024(the“Report”)to“we,”“us,”“our,”“our company”and“the Company”are to BitFuFu Inc.,a Cayman Islandsexempted company with limited liabilities and its subsidiaries.References to“Amended and Restated Memorandum and Articles of Association”are to our Amended and RestatedMemorandum and Articles of Association adopted by a special resolution of the Company passed on February 29,2024(asmay be amended from time to time);References to“Arisz”are to Arisz Acquisition Corp.;References to“Arisz Common Stock”are to common stock of Arisz;References to“Arisz Rights”are to rights of Arisz,each right entitling the holder thereof to receive one-twentieth(1/20)ofone share of Arisz Common Stock upon the consummation of an initial business combination of Arisz;References to“Arisz Warrants”are to redeemable warrants of Arisz,each entitling the holder thereof to purchase three-fourths(3/4)of one share of Arisz Common Stock at a price of US$11.50 per whole common stock,subject to adjustment;References to“Bitmain”are to Bitmain Technologies Ltd.,a world-leading cryptocurrency mining hardware manufacturerand a related party to a shareholder of the Company;References to“BTC,”“ETH,”“BCH”and“USDT”are to Bitcoin,Ethereum,Bitcoin Cash and Tether,respectively;References to“Business Combination”are to the transaction contemplated under the Merger Agreement,including but notlimited to(i)the merger of Arisz with and into the Company(the“Redomestication Merger”),with the Company survivingthe Redomestication Merger as a publicly traded entity(the time at which the Redomestication Merger became effective isthe“Redomestication Merger Effective Time”);and(ii)Merger Sub merged with and into Finfront(the“AcquisitionMerger”),with Finfront surviving the Acquisition Merger as a wholly owned subsidiary of the Company;References to“Chardan”are to Chardan Capital Markets,LLC;References to“China”or“mainland China”are to the Peoples Republic of China,excluding,for the purpose of this Reportonly,Taiwan,Hong Kong Special Administrative Region and Macau Special Administrative Region;References to“Class A ordinary shares”are to the Class A ordinary shares of BitFuFu Inc.,par value US$0.0001 per share;References to“Class B ordinary shares”are to the Class B ordinary shares of BitFuFu Inc.,par value US$0.0001 per share;References to“Closing”are to the closing of the Business Combination,which occurred on February 29,2024;References to“Companies Act”are to Cayman Islands Companies Act(2025 Revision),as amended;References to“ET”or“Ethereal Singapore”are to Ethereal Tech Pte.Ltd.,a subsidiary of BitFuFu Inc.,which wasincorporated under the laws of Singapore;References to“Ethereal US”are to Ethereal Tech US Corporation,a subsidiary of BitFuFu Inc.,which was incorporatedunder Delaware law;ii References to“Exchange Act”are to the Securities Exchange Act of 1934,as amended;References to“Finfront”are to Finfront Holding Company,a wholly owned subsidiary of the Company;References to“hash calculation”are to solving cryptographic hash functions on specific blockchain;References to“hash rate”are to the amount of hash calculations that could be processed per second;References to“Investment Company Act”are to the Investment Company Act of 1940,as amended;References to“JOBS Act”are to Jumpstart Our Business Startups Act;References to“Merger Agreement”are to the agreement and plan of merger,dated as of January 21,2022(as amended as ofApril 4,2022,October 10,2022,April 24,2023 and July 28,2023),by and between Arisz and Finfront,as supplemented bythe joinder agreement by and among the Company,Finfront,Merger Sub and Arisz,dated April 4,2022 and the supplementaljoinder agreement by and among the Company,Finfront,Merger Sub and Arisz,dated December 20,2023;References to“Merger Sub”are to Boundary Holding Company;References to“Nasdaq”are to The Nasdaq Stock Market LLC;References to“ordinary shares”are to the Class A ordinary shares and Class B ordinary shares of BitFuFu Inc.;References to“PIPE”are to private investment in public equity;References to“PIPE Shares”are to the Class A ordinary shares issued to the accredited investors(the“Subscribers”)in thePIPE;References to“SEC”are to the Securities and Exchange Commission;References to“Securities Act”are to the Securities Act of 1933,as amended;References to“Sponsor”are to Arisz Investments LLC,a Delaware limited liability company affiliated with Ariszs chairmanand chief executive officer;References to“U.S.dollars,”“$,”or“US$”are to the legal currency of the United States;References to“U.S.GAAP”or“GAAP”are to accounting principles generally accepted in the United States;References to“Unit Purchase Option”are to the option,dated November 17,2021,issued to Chardan,for$100.00,topurchase up to 115,000 units(the“Option Units”)exercisable at$11.50 per unit commencing on the closing of a BusinessCombination.The Unit Purchase Option may be exercised for cash or on a cashless basis,at the holders option.Each OptionUnit,upon issuance,contains one Class A Ordinary Share,one Warrant and one right,which upon automatic conversionentitles the holder thereof to receive one-twentieth(1/20)of one Class A Ordinary Shares;and References to“Warrant”are to the warrants of the Company,each entitling its holder thereof to purchase three fourths(3/4)of one Class A ordinary share at an exercise price of US$11.50 per whole share,subject to adjustment.iii CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Report contains“forward-looking statements”within the meaning of Section 27A of the Securities Act and Section 21E ofthe Exchange Act that involve substantial risks and uncertainties.All statements other than statements of historical facts contained in thisReport,including statements regarding our future financial position,business strategy and plans and objectives of management for futureoperations,are forward-looking statements.In some cases,you can identify forward-looking statements by terminology such as“may,”“will,”“should,”“expect,”“plan,”“anticipate,”“could,”“intend,”“target,”“project,”“contemplate,”“believe,”“estimate,”“predict,”“potential”or“continue”or the negative of these terms or other similar expressions.Forward-looking statements include,withoutlimitation,our expectations concerning the outlook for our business,productivity,plans and goals for future operational improvements andcapital investments,operational performance,future market conditions or economic performance and developments in the capital andcredit markets and expected future financial performance,as well as any information concerning our possible or assumed future results ofoperations as set forth in this Report.Forward-looking statements also include statements regarding the expected benefits of the BusinessCombination.Forward-looking statements involve a number of risks,uncertainties and assumptions,and actual results or events may differmaterially from those projected or implied in those statements.Important factors that could cause such differences include,but are notlimited to:expectations regarding our strategies and future financial performance,including our future business plans or objectives,prospective performance and opportunities and competitors,revenues,customer acquisition and retention,products andservices,pricing,marketing plans,operating expenses,market trends and acceptance,liquidity,cash flows and uses of cash,capital expenditures,and our ability to invest in growth initiatives and pursue acquisition opportunities;price fluctuations of digital assets,in particular that of Bitcoin;anticipated trends,growth rates,and challenges in the digital assets industry in general and the markets in which we operate;our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business inSingapore,the United States and other international markets;the outcome of any legal proceedings that may be instituted against us and others;the ability to recognize the anticipated benefits of the Business Combination;our management and board composition;our ability to maintain listing status on Nasdaq;our ability to innovate,develop and provide services and products that meet the expectations of our customers;the possibility that we may be adversely affected by other economic,business,and/or competitive factors;litigation and regulatory enforcement risks,including the diversion of management time and attention and the additionalcosts and demands on our resources;and the other matters described in the section titled“Item 3.Key InformationD.Risk Factors.”We caution you against placing undue reliance on forward-looking statements,which reflect current beliefs and are based oninformation currently available to us as of the date a forward-looking statement is made.Forward-looking statements set forth herein speakonly as of the date of this Report.We do not undertake any obligation to revise forward-looking statements to reflect future events,changes in circumstances,or changes in beliefs.In the event that any forward-looking statement is updated,no inference should be madethat we will make additional updates with respect to that statement,related matters,or any other forward-looking statements.Anycorrections or revisions and other important assumptions and factors that could cause actual results to differ materially from forward-looking statements,including discussions of significant risk factors,may appear,in our public filings with the SEC,which are accessibleat www.sec.gov,and which you are advised to consult.Market,ranking and industry data used throughout this Report,including statements regarding market size,is based onindependent industry surveys and publications.These data involve a number of assumptions and limitations,and you are cautioned not togive undue weight to such estimates.While we are not aware of any misstatements regarding the industry data presented herein,suchestimates involve risks and uncertainties and are subject to change based on various factors,including those discussed under the headings“Item 3.Key InformationD.Risk Factors”and“Item 5.Operating and Financial Review and Prospects”in this Report.iv 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 A.Reserved B.Capitalization and Indebtedness Not applicable.C.Reasons for the Offer and Use of Proceeds Not applicable.D.Risk Factors Our business and our industry are subject to significant risks.You should carefully consider all of the information set forth in thisReport and in our other filings with the SEC,including the following risk factors,in evaluating our business.Any of the following risks orany additional risks not presently known to us or that we currently deem immaterial may materially and adversely affect our business,financial condition,results of operations,and growth prospects.In that event,the trading price of our securities could decline,and youcould lose all or portion of your investment.This Report also contains forward-looking statements that involve risks and uncertainties.Seethe section entitled“Cautionary Note Regarding Forward-Looking Statements.”Summary of Risk Factors Risks Related to Our Business Risks and uncertainties relating to our business include,but are not limited to,the following:our limited operating history and rapid growth making it difficult to evaluate our business and prospects;our ability to innovate and provide services and products that meet the expectations of our customers;price fluctuations of digital assets,in particular that of Bitcoin;our ability to compete effectively against current and future competitors;our reliance on a limited number of suppliers to provide us with digital asset mining equipment,hosting facilities,and otherproducts or services critical to our business;our customer concentration;and risks related to power supply,including increases in power costs and power outage.1 Risks Related to Our Operations Risks and uncertainties relating to our operations include,but are not limited to,the following:security breaches,threats and attacks affecting us or the digital asset industry;system failure or other service disruptions of our system;our ability to maintain relevant licenses and permits;our reliance on third-party service providers to safeguard and manage certain digital assets;risks related to loss of digital assets;involvement in legal or other disputes;risks related to prepayments and deposits to suppliers and account receivables from customers;and uncertainties with respect to the accounting treatment of digital assets.Risks Related to Our Industry Risks and uncertainties relating to our industry include,but are not limited to,the following:adverse changes in the regulatory and policy environment of digital assets and relevant industry players in multiplejurisdictions;concerns about greenhouse gas emissions,global climate change and other ESG issues;changes to the method of validating blockchain transactions;increase in mining difficulty and reduced economic returns of digital asset mining activities;reduced demand for blockchain technology,blockchain networks and digital assets;and fraud,hacking or other adverse events to the digital asset networks.Risks Related to the Regulatory Framework Risks and uncertainties relating to the regulatory framework include,but are not limited to,the following:current and future legislation imposing greater restrictions on the digital assets;determination of us as an investment company under the Investment Company Act and relevant regulatory requirements;requirement to register as money services business or similar compliance requirements;a digital assets being determined as a“security”under relevant laws,and the related registration and other compliancerequirements;and difficulties in securing relationship with financial institutions due to our operations in the digital asset industry.Risks Related to Our Securities Risks and uncertainties relating to our securities include,but are not limited to,the following:uncertainty in the development of an active trading market for our shares;price volatility of our shares;2 sale or availability for sale of substantial amounts of our shares;potential additional dilution resulted from the exercise of warrants;warrant may expire worthless,as they may never be in the money;potential dilution for existing shareholders upon our issuance of additional shares;potential treatment of our company as a passive foreign investment company;our dual-class structure and impact on relevant shareholders ability to influence corporate matters;our Amended and Restated Memorandum and Articles of Association and Cayman Islands law may have the effect ofdiscouraging lawsuits against our directors and officers;anti-takeover provisions contained in our Amended and Restated Memorandum and Articles of Association,as well asprovisions of Cayman Islands law,could impair a takeover attempt;exemptions from requirements applicable to other public companies due to our status as an emerging growth company;difficulties in effecting service of legal process,enforcing foreign judgments or bringing actions against us or ourmanagement named in this Report based on foreign laws;ability to maintain the listing of our securities on Nasdaq in the future;and exemptions from certain corporate governance requirement under the Corporate Governance Rules of Nasdaq due to ourstatus as a“controlled company.”Risks Related to Our Business Our limited operating history and rapid growth may make it difficult to evaluate our business and prospects,and our historical resultsmay not be indicative of our future performance.We have a short operating history and have experienced rapid growth in terms of revenue,number of customers and total cloud-mining capacity,or the capacity to provide hash calculations,since our establishment in December 2020.In particular,our revenuesincreased from US$198.2 million in 2022 to US$284.1 million in 2023,and further to US$463.3 million in 2024.Because of our limitedoperating history and historical data,as well as the limited visibility into future demand trends,our limited operating history and rapidgrowth may not be indicative of our future performance,and we may not be able to accurately forecast our future performance and growthpotentials and budget our costs and operating expenses accordingly.Our business may be affected by the rapidly evolving the digital asset industry,in particular the fluctuation of Bitcoin price,andthe changes in demand or order patterns for our services and products as a result.We may not be able to accurately forecast the longer-term development of the digital assets industry,and as result,may experience fluctuations in orders in the future.Our limited historicalresults of operations could make it difficult to assess the impact of seasonal factors on our business.If we are unable to increase our accessto mining capacities and hosting capacities to meet any increases in demand due to seasonality or other factors,our total revenue andprofitability and our reputation among customers would be materially and adversely affected.3 If we fail to continually innovate and to provide services and products that meet the expectations of our customers,we may not be ableto attract new customers or retain existing customers,and hence our business and results of operations may be adversely affected.The industries in which we operate and intend to operate in the future are characterized by constant changes,including rapidtechnological evolution,continual shifts in customer demands,frequent introductions of new services,products and solutions,and constantemergence of new industry standards and practices.Our success will depend,in part,on our ability to respond to these changes in a cost-effective and timely manner,which requires us to anticipate the emergence of new technologies and assess their market acceptance.Research and development activities are inherently uncertain,and it may be difficult to commercialize the research anddevelopment results,which could result in excessive expenses or delays.Given the fast pace with which blockchain has been and willcontinue to be developed,we and our business partners may not be able to timely upgrade technologies in an efficient and cost-effective manner,or at all.In addition,new developments in blockchain and digital assets could render our services and products obsoleteor unattractive.If we are unable to keep up with the technological developments and anticipate market trends,or if new technologiesrender our technologies,services and products obsolete,customers may no longer be attracted to our offerings.As a result,our business,results of operations and financial condition would be materially and adversely affected.Our results of operations may be significantly impacted by digital asset price fluctuations,and our business,results of operations andfinancial condition could be materially and adversely affected by a significant drop in the prices of digital assets and Bitcoin inparticular.The demand for,and pricing of,our services and products are determined primarily by the expected economic return of digitalasset mining activities,in particular those of Bitcoin,which in turn is significantly affected by expectations with respect to their prices,among other factors.The price of Bitcoin has experienced significant fluctuations over its short existence and may continue to fluctuatesignificantly in the future.For example,the price of Bitcoin ranged from approximately US$16,000 to approximately US$46,000 in 2022,from approximately US$17,000 to approximately US$44,000 in 2023,and from approximately US$42,000 to approximately US$106,500in 2024,and have continued to experience significant volatility since then,reaching approximately US$81,600 as of March 31,2025,according to Google Finance.In 2022 and 2023,a number of companies in the digital asset industry have declared bankruptcy,includingCore Scientific,Celsius,Voyager Digital,Three Arrows Capital,BlockFi,FTX,and Genesis Holdco.Those bankruptcy proceedingscontributed,at least in part,to further price decreases in Bitcoin observed during those periods,and a loss of investor confidence in thedigital asset industry,which in turn may materially and adversely affect the demand of our cloud-mining services and mining equipment,as well as the profitability of our self-mining business.Given the volatility of the price of digital assets,we cannot assure you that the price of Bitcoin or other digital assets will remainhigh enough to sustain the demand for our services and products or that their prices will not decline significantly in the future.Variousfactors,mostly beyond our control,could impact the prices of digital assets,including:the limited use of digital assets as payment currencies,as compared with fiat currencies;government and quasi-government regulation of digital assets and their use,or restrictions on or regulation of access to andoperations of digital asset transactions;changes in consumer demographics and market trends;the maintenance and development of open-source software protocols or similar digital asset systems;the availability and popularity of other forms or payment methods,including new means of using fiat currencies;general economic conditions and the regulatory environment relating to digital assets;and negative consumer perception of digital assets,in particular Bitcoin.4 If the price of digital assets or network transaction fees drop,the expected economic return of mining activities will diminish,resulting in a decrease in demand for our services and products.We may need to adjust our pricing strategy to respond to changes inmarket demand.The future of digital assets and their prices are subject to a high degree of uncertainty.If transaction fees become too high,users may be discouraged from using digital assets,which will decrease the transaction volume of the digital asset network.In addition,any power shortage due to government control measures or other reasons,or increase in energy costs,would raise the mining costs.Theseinstances could affect our customers expected economic return for mining activities,which in turn,would adversely affect the demand forand pricing of our services and products.Furthermore,fluctuations in the price of digital assets may affect the value of our fixed assets or inventories,which primarilyconsist of Bitcoin miners,as well as the provision we make to the inventory as we manage inventory level based on,among others,forecasts for sales and service provisions.As we may increase our procurement volume for the launch of new services or products or dueto expected surge of demand,a significant drop in the price of digital assets can lead to a lower expected sales price and excessiveinventories,which in turn will lead to impairment losses with respect to such inventories.A significant drop in the price of digital assetsmay also subject us to impairment loss for digital assets held for our own account.For example,we recorded impairment losses on digitalassets of US$12.9 million,US$7.0 million,and nil in 2022,2023,and 2024,respectively,when the price of Bitcoin declined significantlyagainst its carrying value.As of January 1,2024,we have early adopted fair value measurement in accordance with ASU 2023-08,resulting in a fair value gain of US$37.6 million recorded in 2024.As a result,any future significant reductions in the price of Bitcoin andother digital assets will likely have a material and adverse effect on our results of operations and financial condition.We hold stablecoins for our business operations,and are subject to the risks associated with stablecoins.We hold stablecoins,in particular USDT,for our business operations.As of December 31,2022,2023 and 2024,the total value ofUSDT that we held for our own account was approximately US$55,515,US$60,860 and US$4,817,051 respectively.For example,we mayreceive USDT as payments for our cloud-mining service,and other digital assets such as BTC and ETH received by us as servicepayments are automatically converted into USDT.Since October 2022,we have begun to convert our USDT into U.S.dollars and depositthem with banking institutions on a timely basis according to our treasury management strategy.See“Item 4.Information on the CompanyB.Business OverviewDigital Assets.”A stablecoin is a digital asset that seeks to maintain a stable value and is backed by an asset orportfolio of assets,such as fiat currency like the U.S.dollars.There is a risk that the stablecoin issuer does not hold the correspondingasset underlying each stablecoin in circulation and is therefore unable to fulfill one-for-one redemptions.In addition,many stablecoinissuers are unregulated and do not provide transparent disclosure regarding their compliance with applicable licensing and regulatoryrequirements or the financial institutions that hold the underlying stable assets.Some have also argued that stablecoins may be involved inmoney laundering.On February 17,2021,the New York Attorney General entered an agreement with USDTs operators,requiring them tocease any further trading activity with New York persons and pay US$18.5 million in penalties for false and misleading statements maderegarding the assets backing USDT.Volatility in stablecoins,operational issues with stablecoins(for example,technical issues that prevent settlement),concernsabout the sufficiency of any reserves that support stablecoins,or regulatory concerns about stablecoin issuers or intermediaries,such ascrypto asset spot markets,that support stablecoins,could also affect,among others,the value,credentials,exchangeability and liquidity ofstablecoins.If any of these events affecting stablecoins we hold were to occur,the value of the affected stablecoins we hold couldmaterially decline,and we may not be able to timely convert digital assets into other viable forms,which could materially and adverselyaffect our results of operations,financial condition and future prospects.We may not be able to compete effectively against our current and future competitors,which could have a material adverse effect onour business,financial condition and results of operations.The digital asset industry is highly innovative,rapidly evolving and characterized by competition,experimentation,frequentintroductions of new services and products and uncertain and evolving industry and regulatory requirements.We expect competition tofurther intensify in the future as existing and new competitors introduce new products or enhance existing services and products.Wecompete against numerous developers,owners and operators in the blockchain industry worldwide.Some of our current and futurecompetitors may have greater brand recognition,longer operating histories,stronger marketing,technical and financial resources andaccess to greater and less expensive power than we do.Our current and future competitors may vary in size,service offerings andgeographic presence.In addition,many companies in the digital asset industry are consolidating,which could further increase their marketshares.If we are unable to compete successfully,or if solidifying our competitive advantages requires us to incur significant costs,ourbusiness,financial condition and results of operations could be adversely affected.5 We compete with our competitors in multiple aspects,including pricing,service quality and user experience,reputation,relationship with suppliers,power resources,ability to obtain replacement for miners or hosting facilities,technical and software expertise,and financial resources.Some of our competitors may be able to:develop superior products or services,gain greater market acceptance and expand their service offerings more efficiently orrapidly;adapt to new or emerging technologies and changes in customer requirements more quickly;obtain more favorable terms from the suppliers and procure mining equipment,electricity and other supplies in a more cost-efficient manner;identify and acquire desirable properties that we are interested in from developers;offer services at prices below current market rates or below the prices we currently charge our customers;take advantage of acquisition and other opportunities more readily;and adopt more aggressive pricing policies and devote greater resources to the promotion,marketing and sales of their services.In addition,we may face pricing pressure with respect to our services and products.Prices for our services are affected by avariety of factors,including supply and demand conditions and pricing pressures from our competitors.We may be required to lower ourprices to remain competitive,which may decrease our profit margins and could have a material adverse effect on our business,financialcondition and results of operations.We rely on a limited number of suppliers to provide us with digital asset mining equipment,hosting facilities,and other products orservices critical to our business operations.We may not be able to obtain such supplies at competitive prices during times of highdemand,which could have a material adverse effect on our business,financial condition and results of operations.We rely on a limited number of suppliers to provide us with products and services,including but not limited to miners,hash ratesand hosting facilities,at economical prices.For the years ended December 31,2022,2023 and 2024,our purchases from top threesuppliers accounted for 84%,83%,and 81%of our total cost of revenue in the same periods,respectively.Particularly,we purchased andleased miners from and gained access to hosting facilities in a number of regions and countries through collaborations with Bitmain,ourlargest supplier in 2024.In 2022,2023 and 2024,costs attributed to agreements with Bitmain,as a percentage of our total cost of revenue,was approximately 52%,61%and 41%,respectively.If we are unable to maintain business relationship with our suppliers such as Bitmainand the other key suppliers,our operations could be disrupted,and our business,financial condition and results of operations would beadversely affected.We may not be unable to obtain miners and hosting services from other suppliers at commercially reasonable term in atimely manner,or at all.Our ability to meet the increasing demand of our services and products and grow our business is dependent,inlarge part,on the availability of advanced mining equipment and hosting resources offered to us at commercially reasonable prices.Theprice and availability of such mining equipment fluctuate with the price of Bitcoin or other digital assets.Higher digital asset prices tend toincrease the demand for mining equipment and thus increase the cost to acquire or lease such equipment.In addition,as more companies seek to enter the digital asset mining industry,the demand may outpace supply and createshortages,and we cannot assure you that such key miner suppliers will be able to keep pace with any surge in the demand for miningequipment.These key suppliers may also prioritize the order of our competitors,in which case we may experience difficulties in securingminer supply.Further,as these key suppliers typically can determine the terms of supply agreements,we have limited bargaining power innegotiating the terms of supply agreements or may have little or no recourse in the event a key miner supplier defaults on our deliverycommitments.Defects,malfunctions,errors and breakdown of these miners may occur from time to time,and we cannot assure you thatwe or our suppliers can take remedial measures in a timely manner.Historically,an increase in interest and demand for digital assets hasled to a shortage of hosting and transaction processing hardware and increased prices on the market.We may experience difficulty inobtaining new mining equipment to satisfy the demand of our customers,which may have a material adverse impact on the demand forour revenue.If we are not able to obtain a sufficient number of miners at favorable prices,our growth expectations,liquidity,financialcondition and results of operations will be materially and adversely affected.6 We also rely on Bitmain to provide the miner hosting services under certain hosting service cooperation arrangements,throughwhich Bitmain sources a limited number of hosting facilities to host miners and provide services related to maintenance and technicalsupport,electricity,network and security.These hosting facilities may demand for upward adjustments of their service fees,includingelectricity cost,which we may not be able to pass on to our customers.We cannot assure you that it can continue to maintain cooperationwith these hosting facilities,or the services provided by these parties always meet the level of quality,efficiency and timeliness necessaryfor us to render satisfactory hosting services to our customers.Such hosting facilities may experience interruption or other incidents fromtime to time,and may be unable to provide services to us.We may not be able to obtain alternative hosting facility supplies in a timemanner and/or at commercially viable terms.If we are unable to effectively address these risks,our ability to serve customers will beaffected,and our brand image,reputation and financial performance may be materially and adversely affected.Our self-mining operations utilize third-party mining pools to receive mining rewards from a given network.Mining pools allowmining participants to combine their hash calculations,which increases the chances of solving a block and receive rewards of a givennetwork.The rewards are distributed by the pool operator,based on our contribution of hash calculations to the pool.We are dependent onthe accuracy of mining pool operators to accurately record the total hash calculations provided to the pool for a given Bitcoin or otherdigital asset mining application in order to assess the proportion of hash calculations contributed by us.While we have internal methods oftracking both our hash calculations provided,the mining pool operator uses its own record-keeping method to determine our effectivecontribution of hash calculations.We have limited recourse against the mining pool operator if we determine the proportion of the rewardpay out by a mining pool operator is incorrect.If we are unable to consistently obtain accurate proportionate rewards from such miningpool operators,we may experience reduced reward for our efforts,which would have an adverse effect on our business and operations.We have derived a substantial portion of our revenue from sales to a limited number of customers,which may expose us to risksrelating to customer concentration.Our customers include both enterprises and individuals.We have derived a substantial portion of our revenue from sales to alimited number of customers.In 2022,2023 and 2024,sales to our largest customer accounted for 17%,15%and 14%of our total revenuein the same periods,respectively.Chainup Technic Limited and its related parties were our largest customer in 2022 and 2023,and Vistra(BVI)Limited was our largest customer in 2024.Additionally,in 2022,2023 and 2024,sales to our top three customers accounted for31%,26%and 31%of our total revenue in the same periods,respectively.Although we continually seek to diversify our customer base,we cannot assure you that the proportion of revenue contribution from our major customers to our total revenue will decrease in the future.Dependence on a limited number of major customers to our total revenue exposes us to risks of substantial losses if any of them reduces orceases business collaboration with us.Specifically,any one of the following events,among others,may cause material fluctuations ordeclines in our revenue,and have a material and adverse effect on our business,results of operations,financial condition and prospects:a decline in the business of one or more of our major customers;the decision by one or more of the major customers to shift to our competitors;the reduction in the price of our services and products agreed by one or more of our major customers;the failure or inability of any of the major customers to make timely payment to us;or regulatory development that may negatively affect the business of one or more of our major customers or digital asset miningactivities in general.7 It may not be possible for us to accurately predict the future demand from our major customers,and it may fail to maintainrelationships with these major customers or to do business with them at the same or increased levels.If any of the foregoing were to occur,and we are unable to expand our business with other existing customers or attract new customers in a timely manner or at all,our business,financial condition,results of operations and prospects may be materially and adversely affected.Mining digital assets requires significant electric power,and the inability to obtain power resources at commercially viable terms couldhave a material adverse effect on our business,financial condition and results of operations.Our operations require a significant amount of electric power to power and cool the mining equipment.Power costs represent asignificant component underlying our cost of revenue.The amount of power required by us will increase commensurate with the increasein demand for our services and products and mining equipment we operate for ourselves and our customers.Power costs and availabilityare also vulnerable to seasonality,with increased costs primarily in the summer months.We also face risks of outages and power griddamage as a result of inclement weather,animal incursion,and other events out of our control.We cannot assure you that the facilitieshosting our miners will be able to deliver sufficient power to meet the growing needs of our business on commercially reasonable terms.Currently,part of our power costs are covered in our service framework agreement with Bitmain,which may demand for changes to termsof the service framework agreement,including an upward adjustment to the electricity cost.In addition,we may incur additionalelectricity costs based on specific orders under such framework arrangements,which may include periodic price adjustment mechanismwith reference to local electricity price index.We may not be able to pass on such increase in electricity costs to our customers.Failure byour counterparty to perform its obligation under the contract terms may affect our ability to provide services to our customers and disruptour business operations.Any significant increase in the power costs could have a material adverse effect on our business,financialcondition and results of operations.Power outage may result in disruption of our business.Our business is vulnerable to disruptions and power outages resulting from weather,animal incursions,accidents,equipmentfailures,curtailments,acts of war,sabotage and other events.We rely on third-party hosting facility providers to host our miners,andcannot assure you that these hosting facilities have backup power generators to maintain our operations in the event of a power outage.Disruption of our business could impact our ability to generate and maintain the power levels necessary to provide cloud-mining servicesto customers and mine digital assets for ourselves,which could have a material adverse effect on our business,financial condition andresults of operations.Delays in the expansion of existing facilities or establishment of new facilities,or significant cost overruns could adversely affect ourbusiness.The equipment used for digital asset mining and transaction processing require the use of facilities with a highly specializedinfrastructure and considerable and reliable electric power.We expand our business operations by increasing our mining equipment,andexpanding cooperation with providers of our existing facilities to gain access to higher mining capacity.We cannot assure you that ourhosting facility providers could obtain access to such suitable land to expand hosting capacity,as such suppliers need to work closely withlocal governments to obtain necessary permits and local power suppliers for power supplies.Delays in actions that require the assistanceof such third parties,in receiving required permits and approvals or in mediations with local communities,if any,may negatively impactsuch hosting facility providers construction timelines and budget or result in any new facilities not being completed at all.We cannotassure you that we will not experience quality issues in any expansion or upgrades of those facilities.All of these risks could cause us to beunable to run our mining operations in a way that is technologically advanced,economical and energy efficient and temperaturecontrolled,which will adversely affect our business,financial condition and results of operations.If we experience significant delays in thesupply of power and facility spaces required to support our expansion,our ability to deliver services and expand operations will bematerially and adversely affected.8 The average selling prices of our services and products may fluctuate from time to time,which may in turn adversely affect ourprofitability.The digital asset industry is characterized by rapid launches of new services and products,continuous technologicaladvancements and changing market trends and customer preferences,all of which may cause fluctuations in the average selling prices ofour services and products over time.We may have to significantly lower the average selling prices of our services and products to retaincustomers.However,such significant decreases in average selling prices may not be offset by a corresponding decrease in the prices of theequipment and properties,and our profitability may be materially and adversely affected.Increases in hosting costs,power costs other important cost items may cause us to mine digital assets less cost-efficiently,which mayreduce our operating and profit margins,and adversely affect our business,financial condition and results of operations.We incurred cost of revenue of US$162.0 million,US$271.4 million and US$433.6 million in 2022,2023 and 2024,respectively,and realized a gross profit margin of 18.3%,4.5%and 6.4%in the same periods,respectively.We achieved a net profit of US$2.4 million,US$10.5 million and US$54.0 million in 2022,2023 and 2024,respectively.We expect our cost of revenue to continue representing asubstantial portion of our total revenue.If we do not manage those costs effectively,our operating and profit margins may be reduced,andour business,financial condition and results of operations may be adversely affected.We face risks associated with the expansion of our operations globally,and if we are unable to effectively manage these risks,theycould impair our ability to expand our business abroad.As we continue to grow our business and expand our operations globally,we will continue to sell our services and products intonew jurisdictions in which we may have limited or no experience and in which our brands may be less recognized.The expansion exposesus to a number of risks,including,but are not limited to:high cost of investment to establish a presence in a new market and manage international operations;competition from unfamiliar markets,including with competitors who are more dominant and have stronger ties withcustomers and greater financial and other resources;foreign currency exchange rate fluctuations;regulatory differences and difficulties in ensuring compliance with multi-national legal requirements and multi-national operations;changes in economic,legal,political or other local conditions in new markets;our limited customer base and limited sales and relationships with international customers;challenges in providing customer services and support in these markets;difficulties in and costs of overseas operations while complying with the different commercial,legal and regulatoryrequirements of the international markets in which we offer our services and products;difficulty in ensuring that our customers comply with the sanctions imposed by the Office of Foreign Assets Control in theUnited States and regulators in other countries and regions,on various foreign states,organizations and individuals;inability to obtain,maintain or enforce intellectual property rights;inability to effectively enforce contractual or legal rights or intellectual property rights in certain jurisdictions where weoperate;and governmental policies favoring domestic companies in certain foreign markets or trade barriers including exportrequirements,tariffs,taxes and other restrictions and charges.9 In particular,a worldwide trend in favor of nationalism and protectionist trade policy,as well as other potential international tradedisputes could cause turbulence in international markets.These government policies or trade barriers could increase the prices of ourproducts and make us less competitive in such countries.If we are unable to effectively manage these risks,the ability to expand ourbusiness abroad will be impaired,which could have a material and adverse effect on our business,financial condition,results of operationsand prospects.If we fail to accurately estimate the factors for our contract pricing,we may generate lower profit than expected or incur losses onthose contracts,which could have a material adverse effect on our business,financial condition and results of operations.Our service contracts are generally priced based on various internal and external factors,such as miner costs,the technologicalcontents of our services,costs of hosting miners,market price of digital assets,price of competitors,the expected economic return ofdigital asset mining,the service and cost recovery model,and the market demand.Our ability to set favorable prices at our desired marginsand accurately estimate costs,among other factors,has a significant impact on our profitability.We may be unable to maintain ourbargaining power,and our profit margin may be driven down by market conditions or other factors.If we see higher pricing pressure dueto intensified competition from other competitors,decrease in prices to our customers in the end market or any other reasons,or if weotherwise lose bargaining power due to weaker demand for our services and products,we may need to reduce our prices and lower ourprofit margins.Moreover,we may not be able to accurately estimate our costs or pass on all or part of any increase in our costs of minerand hosting facilities,to our customers.As a result,our results of operations and financial condition could be materially and adverselyaffected.Our future success depends on our ability to keep pace with rapid technological changes that could make our current or futuretechnologies less competitive or obsolete.Rapid,significant and disruptive technological changes continue to impact the digital asset industry.Services and productsoffered by us may become less marketable due to demand for new processes and technologies,including,without limitation:(i)customerdemand for miners with higher hash rate or for new types of digital assets;(ii)new processes to deliver power to,or eliminate heat from,miners;(iii)customer demand for additional cloud-mining or hosting capacity;(iv)new technology that permits higher levels of criticalload and heat removal than the facilities are currently designed to provide;(v)limited power supply to support new,updated or upgradedtechnology;and(vi)a shift to more power-efficient transaction validation protocols.In addition,the systems that connect miners managedby us to the internet and other external networks may become insufficient,including with respect to latency,reliability and diversity ofconnectivity.We may not be able to adapt to changing technologies,identify and implement new alternatives successfully or meetcustomer demands for new processes or technologies in a timely and cost-effective manner,if at all,which would have a material adverseeffect on our business,financial condition and results of operations.Even if we succeed in adapting to new processes and technologies,there is no assurance that our use of such new processes ortechnology would have a positive impact on our financial performance.For example,we could incur substantial additional costs if weneed to materially improve the miner fleet engaged through the implementation of new systems or new server technologies that requirelevels of critical load and heat removal that the current or future facilities hosting are not designed to provide.In addition,our newservices and products could be superior than our prior services and products,and customers could switch away from our prior services andproducts that could have higher revenue or better margins for the new services and products.Therefore,the adaptation to new processesand technologies could result in lower revenue,lower margins and/or higher costs,which could have a material adverse effect on ourbusiness,financial condition and results of operations.In addition,our competitors or others might develop technologies that are more effective than our current or future technologies,or that render our technologies less competitive or obsolete.Further,many of our competitors may have superior financial and humanresources deployed toward research and development efforts.We may not be able to effectively keep pace with relevant technologicalchanges.If competitors introduce superior technologies,and we cannot make upgrades to our hardware or software to remain competitive,it could have a material adverse effect on our business,financial condition and results of operations.10 If we are unable to maintain or enhance our brand recognition,our business,financial condition and results of operations may bematerially and adversely affected.Maintaining and enhancing the recognition,image and acceptance of our brand are important to our ability to differentiate ourservices from and to compete effectively with our peers.Our brand image,however,could be jeopardized if we fail to maintain highservice quality,pioneer and keep pace with evolving technology trends,or timely meet the demand for our services.If we fail to promoteour brand or to maintain or enhance our brand recognition and awareness among our customers,or if we are subject to events or negativeallegations affecting our brand image or the publicly perceived position of our brand,our business,financial condition and results ofoperations could be adversely affected.Our business is capital intensive,and failure to obtain the necessary capital when needed may force us to delay,limit or terminate ourexpansion efforts or other operations,which could have a material adverse effect on our business,financial condition and results ofoperations.The costs of operating,maintaining and owning miners and facilities are substantial.Mining equipment experience ordinary wearand tear from operation and may also face more significant malfunctions caused by factors which may be beyond our control.Additionally,as the technology evolves,we may acquire or utilize newer models of mining equipment to remain competitive in themarket.Over time,those mining equipment which are no longer functional also needs to be replaced with new mining equipment.The upgrading process requires substantial investment,and we may face challenges in doing so on a timely and cost-effective basis based on availability of new mining equipment and our access to adequate capital resources.If we are unable to obtainadequate numbers of new and replacement mining equipment at scale,we may be unable to remain competitive in our highly competitiveand evolving industry.Moreover,we need additional facilities to increase our capacity for more mining equipment.The costs of operating andmaintaining facilities and growing our operations may increase in the future,which may make it more difficult for us to expand ourbusiness and to operate the facilities while maintaining or improving our profit margin.We will need to raise additional funds through equity or debt financings in order to meet our operating and capital needs.Additional debt or equity financing may not be available when needed or,if available,may not be available on satisfactory terms.As ofDecember 31,2024,we had pledged 633 Bitcoins as collateral for our loans or other financing arrangements.A significant and permanentdrop in the value of digital assets,in particular Bitcoin,may cause us to lose the ability to do so in the future.In addition,any futuredisruption in the digital asset industry may destabilize the price of Bitcoin and affect investor confidence in the digital asset industry,which may materially and adversely impair our ability to raise capital in the future.An inability to generate sufficient cash from operationsor to obtain additional debt or equity financing would adversely affect our results of operations.Additionally,if this happens,we and ourcustomers may not be able to mine digital assets as efficiently or in similar amounts as our competitors and,as a result,our business andfinancial condition and results of operations could suffer.Any failure to meet the necessary quality standards of our services and products could adversely affect our reputation,business andresults of operation.The quality of our services and products is critical to the success of our business and depends significantly on the effectiveness ofour and our suppliers quality control.In our efforts to meet new market trends and adopt new technologies,we and our suppliers may nothave adequate time to go through rigorous quality control and assurance procedures,which could result in instances where our servicesand products cannot reach the required performance standard.These instances could result in our customers suffering losses and harm totheir experience and continuous engagement with us.Defects may also result in additional costs for remediation and rework.As a result,our reputation,business and results of operations may be materially and adversely affected.11 Any global systemic economic and financial crisis could negatively affect the prices of digital assets,and in turn our business,resultsof operations,and financial condition.Any prolonged slowdown in the global economy may have a negative impact on our business,results of operations and financialcondition.For example,the global financial markets have experienced significant disruptions since 2008 and the United States,Europeand other economies have experienced periods of recession.The recovery from the lows of 2008 and 2009 has been uneven and there arenew challenges.The global outbreak of COVID-19 had a severe and negative impact on the global economy and financial markets from2020 through 2022,and the global macroeconomic environment still faces numerous challenges.There is considerable uncertainty overthe long-term effects of the monetary and fiscal policies adopted by the central banks and financial authorities of some of the worldsleading economies,including the United States and China.There have also been concerns over the significant potential changes toUnited States trade policies,treaties and tariffs,all of which have resulted in market volatility.Additionally,the Russia-Ukraine conflict,the Hamas-Israel conflict and the attacks on shipping in the Red Sea have heightened geopolitical tensions across the world.The impact ofthe Russia-Ukraine conflict on Ukraine food exports has contributed to increases in food prices and thus to inflation more generally.Therewere and could be in the future a number of domino effects from such turmoil on our business,including significant decreases in ordersfrom our customers;insolvency of key suppliers resulting in delays or interruptions of key supplies;inability of customers to financepurchases of our services and products and/or customer insolvencies;and other counterparty failures negatively impacting our operations.Any systemic economic or financial crisis could cause revenues for the digital assets industry as a whole to decline dramatically and couldmaterially and adversely affect our business,results of operations and financial condition.We may engage in acquisitions or strategic alliances in the future that could disrupt our business,result in increased expenses,andreduce our financial resources,and such acquisitions or strategic alliances may not be successfully implemented or generate positiveresults as expected.Although we have limited experience in acquisitions or strategic alliances in the past,we may look for potential acquisitions orstrategic alliances in the future to expand our business.However,we may not be able to find suitable acquisition candidates,completeacquisitions on favorable terms,if at all,or integrate any acquired business,products or technologies into our operations.If we docomplete such acquisitions,they may still be viewed negatively by customers or investors and they may not enable us to strengthen ourcompetitive position or achieve our strategic goals.In addition,any acquisitions that we make could lead to difficulties in integratingpersonnel,technologies and operations from the acquired businesses and in retaining and motivating key personnel from these businesses.Moreover,acquisitions or strategic alliances may disrupt our ongoing operations,divert management from day-to-day responsibilities andincrease our expenses.Future acquisitions or strategic alliances may reduce our cash available for operations and other uses and couldresult in increases in amortization expenses related to identifiable intangible assets acquired,potentially dilutive issuances of equitysecurities or the incurrence of debt.We cannot predict the number,timing or size of future acquisitions or strategic alliances,or theirsuccessful implementation or the effect that any such might have on our results of operations and financial condition.Risks Related to Our Operations We may be vulnerable to security breaches,or be exposed to cybersecurity threats,which could disrupt our operations,subject us tocustomers claims,and materially and adversely affect our business,financial condition and results of operations.We receive,process,store and transmit,often electronically,the data of our customers,much of which is confidential.Unauthorized access to our computer systems or stored data could result in the theft,including cyber-theft,or improper disclosure ofconfidential information,and the deletion or modification of records could cause interruptions in our operations.These cyber-security risksincrease when we transmit information from one location to another,including over the internet or other electronic networks.Despite thesecurity measures we have implemented,our miners,systems and procedures,and those of our third-party service providers,may bevulnerable to security breaches,acts of vandalism,software viruses,misplaced or lost data,programming or human errors or other similarevents which may disrupt our delivery of services or expose the confidential information of our customers.Any security breach involvingthe misappropriation,loss or other unauthorized disclosure or use of confidential information of our customers or others,whether by us ora third party,could subject us to civil and criminal penalties,have a negative impact on our reputation,or expose us to liability to ourcustomers,third parties or government authorities.12 A party who is able to compromise the physical security measures protecting the facilities supporting our operations could causeinterruptions or malfunctions in our operations and misappropriate our property or the property of our customers.We may be required toexpend significant capital and resources or replace existing hosting facility suppliers to protect against such threats or to alleviate problemscaused by breaches in security.As techniques used to breach security change frequently and are often not recognized until launchedagainst a target,we cannot assure you that we or our hosting facility suppliers will be able to implement new security measures in a timelymanner or,if and when implemented,these measures would not be circumvented.Any breaches that may occur could expose us toincreased risk of lawsuits,regulatory penalties,loss of existing or potential customers,harm to our reputation and increases in securitycosts,which could have a material adverse effect on our business,financial condition and results of operations.In addition,any assertions of alleged security breaches or system failures made against us or our hosting facility suppliers,whether true or not,could harm our reputation,cause us to incur substantial legal fees to defend against such claims,or otherwise have amaterial adverse effect on our business,financial condition and results of operations.Such claims,irrespective of the outcomes or themerits,would likely be time-consuming and costly to defend and could divert significant resources and management attention.We couldalso incur significant payment of damages or expenses,or otherwise be restricted from operating our business.Any such claim or potentiallitigation,including the resources incurred in connection therewith,could have a material adverse effect on our business,financialcondition and results of operations.Furthermore,security breaches,computer malware and computer hacking attacks have been a prevalent concern in the digitalasset exchange market.Any security breach caused by hacking,which involves efforts to gain unauthorized access to information orsystems,or to cause intentional malfunctions or loss or corruption of data,software,hardware or other computer equipment,and theinadvertent transmission of computer viruses,could harm our business operations or result in loss of our assets.Moreover,the threats to network and data security are increasingly diverse and sophisticated.Despite our efforts and processes toprevent breaches,our computer servers and computer systems may be vulnerable to cybersecurity risks,including denial-of-service attacks,physical or electronic break-ins,employee theft or misuse and similar disruptions from unauthorized tampering with ourcomputer servers and computer systems.The preventive actions we take to reduce the risk of cyber incidents and protect our informationtechnology and networks may be insufficient to repel a major cyber-attack in the future.To the extent that any disruption or securitybreach results in a loss or damage to our network,in unauthorized disclosure of confidential information or in a loss of our digital assets,itcould cause significant damage to our reputation,lead to claims against us and ultimately have a material adverse effect on our business,financial condition and results of operations.Additionally,we may be required to incur significant costs to protect against damage causedby these disruptions or security breaches in the future.Any failure in our critical systems could lead to disruptions in our businesses and could harm our reputation and result in financialpenalty and legal liabilities,which would reduce our revenue and have a material adverse effect on our business,financial conditionand results of operations.The critical systems underlying our services and products could experience failure,such as a breakdown in critical system,equipment or services,routers,switches or other equipment.The facilities hosting our miners could experience power supply or networkconnectivity issues.Such failure,whether or not within our control,could interrupt our service provision,and adversely affect ourcustomers operation and cause equipment damage,all of which could significantly disrupt our normal business operations,harm ourreputation and reduce our revenue.Any such failure or downtime could impact mining rewards generated by us and reduce theprofitability of our customers.The total destruction or severe impairment of any of the facilities we operate could result in significantservice downtime and loss of customer data.Since our ability to attract and retain customers depends on our ability to provide highlyreliable service,even minor interruptions in our service could harm our reputation and negatively impact our revenue and profitability.Theservices we provide are subject to failures resulting from numerous factors,including:power loss;equipment failure;13 human error or accidents;theft,sabotage and vandalism;failure by us or our suppliers to provide adequate service or maintain the equipment;network connectivity downtime and fiber cuts;service interruptions resulting from server relocation;security breaches;improper maintenance;physical,electronic and cybersecurity breaches;animal incursions;fire,earthquake,hurricane,tornado,flood and other natural disasters;extreme temperatures;water damage;public health emergencies;and terrorism.Moreover,service interruptions and equipment failures may expose us to potential legal liability.Any disruption in our servicescould result in lost profits of or other indirect or consequential damages to our customers.Although our customer contracts typicallycontain provisions limiting our liability for breach of such agreements,there can be no assurance that a court would enforce anycontractual limitations on our liability in the event that one of our customers brings a lawsuit against us as the result of a serviceinterruption that they may ascribe to us.The outcome of any such lawsuit would depend on the specific facts of the case and any legal andpolicy considerations that we may not be able to mitigate.In such cases,we could be liable for substantial damages,which would as aresult have a material adverse effect on our business,financial condition and results of operations.Any failure to obtain or renew any approvals,licenses,permits or certifications necessary to our operations could materially andadversely affect our business,reputation,results of operations and prospects.In accordance with the laws and regulations in the jurisdictions in which we operate,we are required to maintain variousapprovals,licenses,permits and certifications to operate our business.Complying with such laws and regulations may require substantialexpense,and any non-compliance may expose us to liability.In the event of non-compliance,we may have to incur significant expensesand divert substantial management time to rectify the incidents.In the future,if we fail to obtain all the necessary approvals,licenses,permits and certifications,we may be subject to fines or the suspension of operations at the production facilities and research anddevelopment facilities that do not have all the requisite approvals,licenses,permits and certifications,which could materially andadversely affect our business,reputation,results of operations and prospects.See“Item 4.Information on the CompanyB.BusinessOverviewGovernment Regulation”for further details on the requisite approvals,licenses,permits and certifications necessary for ourbusiness operations.14 We cannot assure you that we will be able to fulfill all the conditions necessary to obtain the required government approvals,orthat relevant government officials will always,if ever,exercise their discretion in our favor,or that we will be able to adapt to any newlaws,regulations and policies.There may also be delays on the part of government authorities in reviewing our applications and grantingapprovals,whether due to the lack of human resources or the imposition of new rules,regulations,government policies or theirimplementation,interpretation and enforcement.If we are unable to obtain,or experience material delays in obtaining,necessarygovernment approvals,our operations may be substantially disrupted,which could materially and adversely affect our business,financialcondition and results of operations.We rely on third-party service providers to safeguard and manage certain digital assets.Loss of private keys,security breach andhacking attempts could cause the loss and theft of such digital assets,and materially and adversely impact our business,financialcondition and results of operations.We accumulate Bitcoin mined through our self-mining operations,and will exchange Bitcoin for fiat currencies at establishedcryptocurrency exchanges,such as Coinbase,to satisfy our working capital needs.We also receive other digital assets,such as BTC,ETH,BCH and USDT,as payments for our cloud-mining service and hosting services.Digital assets that are received as service paymentswould be automatically converted into USDT.Since October 2022,we have begun to convert USDT into U.S.dollars and deposit themwith banking institutions on a timely basis according to our treasury management strategy.Prior to December 2022,we held digital assetspre-paid by customers for their anticipated purchase of services,and temporarily held mining rewards of customers on their behalf if suchcustomers do not have their own digital asset wallets.Digital assets held for customers are stored at custodial wallets maintained by Coinbase and Cobo Wallet,which protect suchdigital assets through dual authentication security mechanism.Currently,most of digital assets mined by us are held in cold wallet,whichis a physical device that holds digital assets offline and aims to prevent hackers from being able to access digital assets via traditionalinternet-hacking means.The digital assets temporarily held on customers behalf and for our own account are not insured or guaranteed byany government or government agency.Since December 2022,we no longer temporarily held digital assets for our customers.As of December 31,2024,we held 3.77Bitcoins and approximately 16,970 USDTs that are to be returned to our customers,excluding 225 Bitcoins pledged by our customers ascollateral to secure credit from us.To the extent that customers digital assets still remain in custodial wallets maintained by Coinbase andCobo Wallet,we rely on such service providers to safeguard such customers digital assets.The security measures designed to prevent,detect,and mitigate inappropriate access to these custodial wallets by internal or external threats may not be adequate to protect againstloss of digital assets due to theft or security leakage.It is possible that employees or service providers could act contrary to our policies,orothers could circumvent security measures of us or our service providers to improperly access our systems or documents,or the systems ordocuments of our service providers,and improperly access,obtain,or misuse the digital assets that we hold for our customers account.The methods used to obtain unauthorized access,disable,or degrade service or sabotage systems are also constantly changing andevolving,and may be difficult to anticipate or detect for long periods of time.We also face risks of destruction or loss associated withusing offline cold wallet,and may experience difficulties in recovering our digital assets when the associated private keys are lost orleaked.Any security incident resulting in a compromise of our or our customers digital assets could result in substantial costs to us andrequire us to notify,and potentially compensate impacted customers.Such incidents could also subject us to litigation,significant financiallosses,damage our reputation,and adversely affect our business,financial condition and results of operations.In addition,we or our customers may temporarily lose access to digital assets as a result of software or systems upgrades ormaintenance.In this case,we or our customers would likely rely on third parties to assist in restoring such access,and we cannot provideany assurance that such third parties will be able to restore access on a timely basis,or at all.Any temporary loss for us or our customerscould have a material adverse effect on our business,financial condition and results of operations.15 Digital asset transactions are irrevocable and,if stolen or incorrectly transferred,digital assets may be irretrievable.Any loss ordestruction of a private key required to access a digital asset is also irreversible.Typically,digital asset transactions are not,from an administrative perspective,reversible without the consent and activeparticipation of the recipient of the transaction or,in theory,control or consent of a majority of the processing power on the applicablenetwork.Once a transaction has been confirmed and verified in a block that is added to the network blockchain,an incorrect transfer of adigital asset or a theft of a digital asset generally will not be reversible and we and our customers may not be capable of seekingcompensation for any such transfer or theft.Although transfers of any digital assets we or our customers hold will regularly be made to orfrom vendors,consultants,services providers,etc.,it is possible that,through computer or human error,or through theft or criminal action,such digital assets could be transferred from them in incorrect amounts or to unauthorized third parties.To the extent that we or ourcustomers are unable to seek a corrective transaction with such third party or are incapable of identifying the third party that has receivedsuch digital assets through error or theft,we or our customers will be unable to revert or otherwise recover the incorrectly transferreddigital assets.Moreover,reversion or other corrective or recovery methods of such digital assets may also take a significant time and maynot result in full recovery of the incorrectly transferred digital assets or sufficient compensation the relevant economic loss.To the extentthat we or our customers are unable to seek redress for such error or theft,such loss could have a material adverse effect on our business,financial condition and results of operations.Digital assets are each accessible and controllable only by the possessor of both the unique public key and private key associatedwith the digital asset,wherein the public and private keys are held in an offline or online digital wallet.To the extent a private key is lost,destroyed or otherwise compromised and no backup of the private key is available,we or our customers will be unable to access theapplicable digital asset associated with that private key and the private key cannot be restored.As a result,any digital assets associatedwith such key could be irretrievably lost.Any loss of private keys relating to digital wallets used to store the applicable digital assets couldhave a material adverse effect on our business,financial condition and results of operations.We deposit certain fund and digital assets with cryptocurrency exchanges.If such cryptocurrency exchanges become bankrupt orotherwise unable to remit stored fund and digital assets,we may lose these assets,and our business,financial condition and results ofoperations may be adversely affected.Historically,we deposited certain fund and digital assets with cryptocurrency exchanges that are not banking institutions.Forinstance,we had deposited cash and digital assets in account maintained at FTX,which filed for bankruptcy in November 2022.Theability of a cryptocurrency exchange to safeguard our fund is dependent on our internal control,operations,liquidity,and financialcondition,as well as our proper maintenance,use,and safekeeping of our fund and assets.Any failure by such cryptocurrency exchange tomaintain the necessary controls or to manage our digital assets and funds appropriately and in compliance with applicable regulatoryrequirements could result in loss of our fund.We cannot assure you that we can be adequately compensated by such cryptocurrencyexchange in the event that we suffer loss in our fund deposited with it.Moreover,to the extent that cryptocurrency exchanges or other trading venues are involved in fraud or experience securityfailures or other operational issues,this could result in a reduction in cryptocurrency prices.Cryptocurrency market prices depend,directlyor indirectly,on the prices set on exchanges and other trading venues,which are new and,in most cases,largely unregulated as comparedto established,regulated exchanges for securities,derivatives and other currencies.For example,during the past three years,severalcryptocurrency exchanges have been closed or been sued due to fraud,business failure or security breaches.For instance,inNovember 2022,FTX Group cryptocurrency exchange,one of the largest cryptocurrency exchanges in the world,filed for voluntaryChapter 11 bankruptcy proceedings in the United States,following reports published just days earlier that FTX was facing liquiditychallenges.As of the time of such bankruptcy filing,we deposited US$2.1 million and 480 units of Bitcoins in our account maintained atFTX.Since the voluntary bankruptcy proceeding of FTX,we have suspended our transactions with FTX.In many of aforementionedinstances,the customers of the closed exchanges are not compensated or made whole for the partial or complete losses of their accountbalances.As a result of the FTX bankruptcy proceeding,we recorded impairment loss on assets held by FTX of US$9.8 million in 2022(remeasured using the carrying value of Bitcoin as of December 31,2022).We did not record any impairment loss on assets held by FTXin 2023 and 2024.In addition,while smaller exchanges are less likely to have the infrastructure and capitalization that provide largerexchanges with additional stability,larger exchanges may be more likely to be appealing targets for hackers and malware and may be morelikely to be targets of regulatory enforcement action.In November 2023,Binance Holdings Limited(“Binance”),the entity that operatesthe worlds largest cryptocurrency exchange,B,pleaded guilty and agreed to pay over$4 billion to resolve the U.S.JusticeDepartments investigation into violations related to the Bank Secrecy Act(“BSA”),failure to register as a money transmitting business,and the International Emergency Economic Powers Act.Binances founder and chief executive officer also pleaded guilty to failing tomaintain an effective anti-money laundering program,in violation of the BSA and resigned as chief executive officer of Binance.16 We have been and may continue to be involved in legal and other disputes from time to time arising out of our operations,includingdisputes with our suppliers,customers,business partners,competitors or employees.We have been and may continue to be,from time to time,involved in disputes with various parties arising out of our operations,including our suppliers,customers,business partners,competitors or employees.These disputes may lead to protests or legal or otherproceedings and may result in damage to our reputation,substantial costs and diversion of resources and managements attention from ourcore business activities.Ethereal Singapore is named as a defendant in a lawsuit filed on November 6,2023,in the United States Bankruptcy Court for theDistrict of Delaware,the venue of which has been transferred to the U.S.District Court for the Southern District of New York.The lawsuitrelates to an alleged agreement to sell at a discount of Ethereal Singapores creditor claim against FTXs bankruptcy estate.The plaintiffseeks specific performance by Ethereal Singapore to complete the transfer of the subject claim to the plaintiff or,alternatively,damages inan amount equal to the difference between the alleged purchase prices of the subject claim and the ultimate amounts distributed by theFTX bankruptcy estate on the account of that claim.As discussed elsewhere in this Report,as a result of the FTX bankruptcy proceeding,we recorded 100%impairment loss for the claim of US$9.8 million in 2022(remeasured using the carrying value of Bitcoin as ofDecember 31,2022)on assets,including the underlying assets of this lawsuits subject claim,held at FTX.As of December 31,2024,thelawsuit has been discontinued and the matter has been fully settled.On September 11,2024,a holder of certain Warrants,or the Warrant Holder,commenced a litigation against the Company in theUnited States District Court for Southern District of New York,alleging that the Company breached the warrant agreement between Ariszand Continental Stock Transfer&Trust Company by failing to honor the Warrant Holders attempts on March 4,2024 to exercise a portionof the Warrants it holds.We dispute the allegations and filed a motion to dismiss on December 18,2024.That motion is fully briefed andawaiting a decision from the court.We intend to defend the lawsuit vigorously but we cannot predict the outcome at this time due to itsearly stage.In addition,we may encounter compliance issues with regulatory bodies in the ordinary course of our business operations,andtherefore may face legal or administrative proceedings or other unfavorable consequences that may result in liabilities and cause delays toour service delivery.Such proceedings or disputes could have a material adverse effect on our business,financial condition,results ofoperations or cash flows.The facilities from which we provide our services may be located on property whose owner has not obtained the approval of relevantauthorities,and we may be ordered to relocate from that property.The landlord of facilities from which we provide our services may need to obtain approval from the relevant governmentauthorities for the buildings or other sites.If they fail to do so,such property may be considered to be in violation of relevant zoning lawsand the government may order the demolition or relocation.If we are evicted from such property,we may need to find alternativeproperties and relocate to such facilities.Unless we are able to make timely alternative arrangements for relocating,we may not be able toprovide the services a under our agreements with customers and fulfill our contract obligations,which may have a material and adverseeffect on our business,reputation,results of operations and financial condition and incur liabilities.17 Our prepayments and deposits to suppliers may subject us to counterparty risk associated with such suppliers and negatively affect ourliquidity and cash position.We are generally required to make prepayment for our hash rate supplies in advance and deposits for miner purchases ahead ofdelivery in order to secure the desired capacity.As such,we are subject to counterparty risk exposure to our suppliers.Any failure by thosesuppliers to perform their contractual obligations in a timely manner and/or in accordance with our requested standard,quality or quantitymay result in us not being able to fulfill customers demand accordingly.In such event,we may not be able to receive the refund ofprepayments in a timely manner or at all.Furthermore,such prepayments and deposits may put pressure on our operating cash flowconditions and if the cash outflows for the prepayments and deposits significantly exceed the cash inflows during any period,our futureliquidity and cash position will also be adversely affected.If we experience difficulty in collecting our account receivables,our liquidity,financial condition and results of operations would benegatively impacted.We derive our revenues primarily from the sale of services and products to customers and are subject to customer counterpartyrisks such as our customers inability to pay.We cannot assure you that we will be able to collect our account receivables on a timely basis,and our account receivable turnover days may increase,which in turn could materially and adversely affect our liquidity,financialcondition and results of operations.Because there has been limited precedent set for financial accounting for Bitcoin and other digital assets,the determinations that wehave made for how to account for digital assets transactions are subject to change.Because there has been limited precedent set for the financial accounting for Bitcoin and other digital assets and related revenuerecognition and limited official guidance has been provided by the Financial Accounting Standards Board or the SEC,it is unclear howcompanies may in the future be required to account for digital asset transactions and assets and related revenue recognition.A change inregulatory or financial accounting standards could result in the necessity to change the accounting methods we currently intend to employin respect of our anticipated revenues and assets and restate any financial statements produced based on those methods.Such a restatementcould adversely affect our business,prospects,financial condition and results of operation.We may not be able to adequately protect our intellectual property rights and other proprietary rights,which could have a materialadverse effect on business,financial condition and results of operations.We may not be able to obtain adequate protection for all of our existing and future intellectual property and other proprietaryrights in every country in which we operate.Protecting our intellectual property rights and other proprietary rights may require significantfinancial,managerial and operational resources.Moreover,the steps that we may take to protect our intellectual property and otherproprietary rights may not be adequate to protect such rights or prevent third parties from infringing or misappropriating such rights.Anyof our intellectual property rights and other proprietary rights,whether registered,unregistered,issued or unissued,may be challenged byothers or invalidated through administrative proceedings and/or litigation.In addition,despite our efforts,we may not be able to preventthird parties from infringing upon,misappropriating or otherwise violating our intellectual property rights and other proprietary rights.Wemay initiate claims,administrative proceedings and/or litigation against others for infringement,misappropriation or violation of ourintellectual property rights or other proprietary rights to enforce and/or maintain the validity of such rights.Any such action,if initiated,whether or not it is resolved in our favor,could result in significant expense to us,and divert the time and attention of our personnel,which may have a material adverse effect on our business,financial condition and results of operations.We may face intellectual property infringement claims or other related disputes,which could be time-consuming,costly to defend orsettle and result in the loss of significant rights and lower sales.We may be subject to infringement claims from time to time or otherwise become aware of potentially relevant patents or other IPrights held by other parties that may cover some of our technology,services and products.Patent litigation has increased in recent yearsowing to increased assertions made by IP licensing entities and increasing competition in our markets.Additionally,we may enter intolicensing agreements with third parties for the use of their proprietary technologies,primarily software development tools,in thedevelopment of our services and products.As with any business relationship,we may face disputes and lawsuits related to suchagreements.As our operations continue to grow in size and scale,the likelihood of becoming involved in IP related lawsuits and disputesto protect or defend our IP rights and the use of third-party IP rights will increase.In addition,it is extremely difficult for us to monitor allof the patent applications that have been filed by others and whether,if such pending patents are granted,such patents would have amaterial and adverse effect on our business if our product and service offering were to infringe upon them.18 Other third parties may file claims against us alleging that our services,products,processes,or technologies infringe third-party patents or IP rights.Regardless of their merits or resolutions,such claims could be costly to defend or settle and could divert theefforts and attention of our management and technical personnel.We do not know whether we could prevail in any such proceeding giventhe complex technical issues and inherent uncertainties involved in IP litigation.In addition,we may be required to indemnify and defendour customers or other business partners from third-party infringement claims and to pay damages in the case of adverse rulings.As such,claims of this sort also could harm our relationships with those parties.If any pending or future proceedings result in an adverse outcome,we could be required to cease our business operations or provision of our services,which could have a material adverse effect on ourbusiness,financial condition and results of operations.The loss of any member of our senior management team,or our failure to attract,train and retain qualified personnel,especially ourR&D and technical personnel,could impair our ability to grow our business and effectively execute our business strategy.Since our inception,the growth and expansion of our business operations have been dependent upon the business strategies andforesight of our senior management.Our future success also depends,in large part,on the continued contributions of our seniormanagement team.In addition,our future success depends on our ability to retain,attract and incentivize qualified personnel,especiallyour R&D and technical personnel.The process of hiring employees with the combination of skills and characteristics required toimplement our strategy can be extremely competitive and time-consuming.We cannot assure you that we will be able to attract adequatepersonnel as we continue to pursue our business strategies.Moreover,we cannot assure you that we will be able to retain key existing employees.The loss of any of our senior managementor R&D team members could harm our ability to implement our business strategies and respond to the rapidly changing market conditionsin which we operate,or could result in other operating risks.The loss of one or more of our key employees or our inability to retain,attractand motivate qualified personnel,could have a material adverse effect on our business,financial condition and results of operations.We may be subject to fines and other administrative penalties resulting from our business operations,which could materially andadversely affect our business,financial condition and results of operation.Our current operations are primarily subject to the regulations in Singapore and the United States.These relevant regulatoryauthorities have broad powers to adopt regulations and other requirements affecting or restricting our operations,including the regulationof digital assets and mining operations,as well as tax policies.Moreover,these relevant regulatory authorities possess significant powersto enforce applicable regulatory requirements in the event of our non-compliance,including the imposition of fines,sanctions or therevocation of licenses or permits to operate our business.If we face administrative fines or penalties concerning our operations or oursubsidiaries,it could have a material adverse impact on our business,financial condition and results of operation.We have granted,and may continue to grant,equity incentives under the 2022 Share Incentive Plan,which could adversely affect ourresults of operations.We have assumed the 2022 Share Incentive Plan of Finfront upon the completion of the Business Combination.Pursuant to theassumed 2022 Share Incentive Plan(the“2022 Share Incentive Plan”),we have granted,and may continue to grant,share-based awards toour employees,directors or consultants to incentivize their performance and align their interests.The maximum aggregate number ofordinary shares that may be issued under the 2022 Share Incentive Plan is 7,500,000 ordinary shares.As of December 31,2024,6,512,781restricted shares had been granted under the 2022 Share Incentive Plan,with 10,919 restricted shares forfeited.We may continue to grantshare-based compensation in the future pursuant to the 2022 Share Incentive Plan or other share incentive plans that we adopt from time totime.We are required to account for share-based compensation expenses in accordance with the applicable accounting standards.TheFinancial Accounting Standards Board Accounting Standards Codification Topic 718,CompensationStock Compensation generallyrequires a company to recognize,as an expense,the fair value of share options and other equity incentives to employees based on the fairvalue of equity awards on t
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Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_FORM 10-K_(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2024ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROM TOCommission File Number 001-38017_SNAP INC.(Exact name of registrant as specified in its charter)_Delaware45-5452795(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)3000 31st Street,Santa Monica,California 90405(Address of principal executive offices,including zip code)(310)399-3339(Registrants telephone number,including area code)_Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredClass A Common Stock,par value$0.00001 per shareSNAPNew York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the Registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d)of the Act.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 preceding12 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,a smaller reporting company,or emerging growth company.See the definition of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financialreporting 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.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 thecorrection 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 theregistrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant,based on the closing price of the shares of Class A commonstock on the New York Stock Exchange on June 28,2024,the last business day of the Registrants most recently completed second fiscal quarter,was approximately$21.5 billion.As of January 31,2025,the Registrant had 1,442,210,767 shares of Class A common stock,22,523,290 shares of Class B common stock,and 231,626,943 shares of Class Ccommon stock outstanding.Auditor Firm Id:42 Auditor Name:Ernst&Young LLP Auditor Location:Los Angeles,CA,United StatesTable of ContentsTABLE OF CONTENTSPageNote Regarding Forward-Looking Statements1Risk Factor Summary3Note Regarding User Metrics and Other Data5PART IItem 1.Business6Item 1A.Risk Factors13Item 1B.Unresolved Staff Comments52Item 1C.Cybersecurity52Item 2.Properties53Item 3.Legal Proceedings53Item 4.Mine Safety Disclosures54PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities55Item 6.Reserved56Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations57Item 7A.Quantitative and Qualitative Disclosures About Market Risk75Item 8.Financial Statements and Supplementary Data77Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure116Item 9A.Controls and Procedures116Item 9B.Other Information117Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections117PART IIIItem 10.Directors,Executive Officers and Corporate Governance118Item 11.Executive Compensation124Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters140Item 13.Certain Relationships and Related Transactions,and Director Independence143Item 14.Principal Accountant Fees and Services146PART IVItem 15.Exhibit and Financial Statement Schedules147Item 16.Form 10-K Summary150Signatures151iiTable of ContentsNOTE REGARDING FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,as amended,or the Securities Act,and Section 21E of the Securities Exchange Act of 1934,as amended,or the Exchange Act,about us and our industry that involvesubstantial risks and uncertainties.All statements other than statements of historical facts contained in this report,including statements regarding guidance,ourfuture results of operations or financial condition,our future stock repurchase programs or stock dividends,business strategy and plans,user growth andengagement,product initiatives,objectives of management for future operations,and advertiser and partner offerings,are forward-looking statements.In somecases,you can identify forward-looking statements because they contain words such as“anticipate,”“believe,”“contemplate,”“continue,”“could,”“estimate,”“expect,”“going to,”“intend,”“may,”“plan,”“potential,”“predict,”“project,”“should,”“target,”“will,”or“would”or the negative of these words or othersimilar terms or expressions.We caution you that the foregoing may not include all of the forward-looking statements made in this report.You should not rely on forward-looking statements as predictions of future events.We have based the forward-looking statements contained in thisAnnual Report on Form 10-K primarily on our current expectations and projections about future events and trends,including our financial outlook,macroeconomic uncertainty,and geo-political events and conflicts,that we believe may continue to affect our business,financial condition,results ofoperations,and prospects.These forward-looking statements are subject to risks,uncertainties,and other factors described under“Risk Factor Summary”below,“Risk Factors”in Part I,Item 1A,and elsewhere in this Annual Report on Form 10-K,including among other things:our financial performance,including our revenues,cost of revenues,operating expenses,and our ability to attain and sustain profitability;our ability to generate and sustain positive cash flow;our ability to attract and retain users and partners;our ability to attract and retain advertisers;our ability to compete effectively with existing competitors and new market entrants;our ability to effectively manage our growth and future expenses;our ability to comply with modified or new laws,regulations,and executive actions applying to our business;our ability to maintain,protect,and enhance our intellectual property;our ability to successfully expand in our existing market segments and penetrate new market segments;our ability to attract and retain qualified team members and key personnel;our ability to repay or refinance outstanding debt,or to access additional financing;future acquisitions of or investments in complementary companies,products,services,or technologies;andthe potential adverse impact of climate change,natural disasters,health epidemics,macroeconomic conditions,and war or other armed conflict on ourbusiness,operations,and the markets and communities in which we and our partners,advertisers,and users operate.Moreover,we operate in a very competitive and rapidly changing environment.New risks and uncertainties emerge from time to time,and it is notpossible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Annual Report on Form 10-K.The results,events,and circumstances reflected in the forward-looking statements may not be achieved or occur,and actual results,events,or circumstancescould differ materially from those described in the forward-looking statements.In addition,statements that“we believe”and similar statements reflect our beliefs and opinions on the relevant subject.These statements are based oninformation available to us as of the date of this Annual Report on Form 10-K.And while we believe that information provides a reasonable basis for thesestatements,that information may be limited or incomplete.Our statements should not be read to indicate that we have conducted an exhaustive inquiry into,orreview of,all relevant information.These statements are inherently uncertain,and investors are cautioned not to unduly rely on these statements.1Table of ContentsThe forward-looking statements made in this Annual Report on Form 10-K relate only to events as of the date on which the statements are made.Weundertake no obligation to update any forward-looking statements made in this report to reflect events or circumstances after the date of this report or to reflectnew information or the occurrence of unanticipated events,including future developments related to geo-political events and conflicts and macroeconomicconditions,except as required by law.We may not actually achieve the plans,intentions,or expectations disclosed in our forward-looking statements,and youshould not place undue reliance on our forward-looking statements.Our forward-looking statements do not reflect the potential impact of any futureacquisitions,dispositions,joint ventures,restructurings,legal settlements,or investments.Investors and others should note that we may announce material business and financial information to our investors using our websites(),filings with the U.S.Securities and Exchange Commission,or SEC,webcasts,press releases,investor letters,and conference calls.We usethese mediums,including Snapchat and our website,to communicate with our members and the public about our company,our products,and other issues.It ispossible that the information that we make available may be deemed to be material information.We therefore encourage investors and others interested in ourcompany to review the information that we make available on our websites.2Table of ContentsRisk Factor SummaryOur business is subject to significant risks and uncertainties that make an investment in us speculative and risky.Below we summarize what webelieve are the principal risk factors but these risks are not the only ones we face,and you should carefully review and consider the full discussion of our riskfactors in the section titled“Risk Factors,”together with the other information in this Annual Report on Form 10-K.1.Our Strategy and Advertising BusinessWe operate in a highly competitive and rapidly changing environment so we must continually innovate our products and evolve our business modelfor us to succeed.We emphasize rapid innovation and prioritize long-term user engagement over short-term financial conditions or results if we believe that it willbenefit the aggregate user experience and improve our financial performance over the long term.Although we have achieved profitability in certain periods,wehave a history of operating losses and,as a result of our long-term focus,we may prioritize investments and expenses we believe are necessary for our long-term growth over achieving short-term profitability.Investments in our future,including through new products or acquisitions,are inherently risky and may notpay off,which would adversely affect our ability to settle the principal and interest payments on our outstanding convertible senior notes or other indebtednesswhen due,and further delay or hinder our ability to sustain profitability.This in turn would hinder our ability to secure additional financing to meet our currentand future financial needs on favorable terms,or at all.We generate substantially all of our revenue from advertising.Our advertising business is most effective when our advertisers succeed.Driving theirsuccess requires continual investment in our advertising products and may be hindered by competitive challenges and various legal,regulatory,and operatingsystem changes that make it more difficult for us to achieve and demonstrate a meaningful return for our advertisers.For example,on-going changes to privacyand data protection laws and mobile operating systems continue to present issues for us in measuring the effectiveness of advertisements on our services.Additionally,individuals are becoming increasingly resistant to the processing of personal data to deliver behavioral,interest-based,or targeted advertisements,and regulators are likewise scrutinizing such data processing activities,which could reduce the demand for our products and services and threaten our primaryrevenue stream.Alternative methods,to the extent we can develop such methods in compliance with current or future privacy and data protection laws,mobileoperating system requirements,and other requirements,may take time to develop and be adopted by our advertisers and users,and may not be as effective asprior methods.We believe that this impact on our targeting,measurement,and optimization capabilities has negatively affected and may continue to negatively affectour operating results.In addition,our advertising business is seasonal,volatile,and cyclical,which could result in fluctuations in our quarterly revenues andoperating results,including the expectations of our business prospects.Our business and operations have been,and in the future could be,adversely affected by events beyond our control,such as health epidemics and geo-political events and conflicts.In addition,macroeconomic factors like labor shortages and disruptions,supply chain disruptions,banking instability,tariffs,andinflation have in the past and may continue to cause logistical challenges,increased input costs,and inventory constraints for our advertisers,which in turn mayalso halt or decrease advertising spending,and harm our business.2.Our Community and CompetitionWe need to continually innovate and create new products,and enhance our existing products,to attract,retain,and grow our global community.Products that we create may fail to attract or retain users or partners,or to generate meaningful revenue,if any.In addition,we have and expect to continue toexpand organically and through acquisitions,including in international markets,which we may not be able to effectively manage or scale.If our communitydoes not see the value in our products or brand,or if competitors offer better alternatives,our community could easily switch to other services.Although wehave experienced rapid growth in our community over the last few years,we have also experienced declines and there can be no assurance that declines wonthappen again.Many of our competitors have significantly more resources and larger market shares than we do,which gives them advantages over us that can make itmore difficult for us to succeed.3Table of Contents3.Our PartnersWe primarily rely on Google,Apple,and Amazon to provide their mobile operating systems and other services for our applications and other coreservices,including our platform.If these partners do not provide their services as we expect,terminate their services,or change the terms,or their interpretationof the terms,of our agreements,or change the functionality of their mobile operating systems in ways that are adverse to us,our service may be interrupted andour product experience could be degraded,which may harm our reputation,increase our costs,or make it harder for us to sustain profitability.Many other partsof our business depend on partners,including content partners and advertising partners,so our success depends on our ability to attract and retain thesepartners.4.Our Technology and RegulationOur business is complex and success depends on our ability to rapidly innovate,the interoperability of our service on many different smartphones andmobile operating systems,and our ability to safeguard sensitive user data.Because our systems and our products are constantly changing,we are susceptible todata breaches,cyberattacks,security incidents,bugs,and other vulnerabilities and errors in how our products work and are measured.We may also fail tomaintain effective processes that report our metrics or financial results.Given the complexity of the systems involved and the rapidly changing nature ofmobile devices and operating systems,we expect to encounter issues,particularly if we continue to expand in parts of the world where mobile data systems andconnections are less stable.We are also subject to complex and evolving federal,state,local,and foreign laws and regulations regarding privacy,data protection,biometricprocessing,content regulation,artificial intelligence,or AI,taxes,and other matters,which are subject to change and have uncertain interpretations.Given thenature of our business,we are particularly susceptible to changes in such laws regarding privacy and data protection,which may require us to change ourproducts and may impact our revenue stream.Any actual or perceived failure to comply with such legal and regulatory obligations,including in connectionwith our consent decree with the U.S.Federal Trade Commission,may lead to costly litigation or otherwise adversely impact our business.We also must actively protect our intellectual property.We are subject to various legal proceedings,claims,class actions,inquiries,and investigationsrelated to our intellectual property,which may be costly or distract management.We also rely on a variety of statutory and common-law frameworks for thecontent we provide our users,including the Digital Millennium Copyright Act,the Communications Decency Act,and the fair-use doctrine,each of which hasbeen subject to adverse judicial,political,and regulatory scrutiny in recent times.5.Our Team and Capital StructureWe need to attract and retain a high caliber team to maintain our competitive position.We may incur significant costs and expenses in maintaining andgrowing our team,and may lose valuable members of our team as we compete globally,including with our competitors,for key talent.A substantial portion ofour employment costs is paid in our common stock,the price of which has been volatile,and our ability to attract and retain talent may be adversely affected ifour shares decline in value.Our two co-founders,who serve as our Chief Executive Officer and Chief Technology Officer,control over 99%of the voting power of ouroutstanding capital stock,which means they control substantially all outcomes submitted to stockholders.Class A common stockholders have no voting rights,unless required by Delaware law.This concentrated control may result in our co-founders voting their shares in their best interest,which might not always be inthe interest of our stockholders generally.4Table of ContentsNOTE REGARDING USER METRICS AND OTHER DATAWe define a Daily Active User,or DAU,as a registered and logged-in Snapchat user who visits Snapchat through our applications or websites at leastonce during a defined 24-hour period.We calculate average DAUs for a particular quarter by adding the number of DAUs on each day of that quarter anddividing that sum by the number of days in that quarter.DAUs are broken out by geography because markets have different characteristics.We define averagerevenue per user,or ARPU,as quarterly revenue divided by the average DAUs.For purposes of calculating ARPU,revenue by user geography is apportionedto each region based on our determination of the geographic location in which advertising impressions are delivered,as this approximates revenue based onuser activity.This allocation differs from our components of revenue disclosure in the notes to our consolidated financial statements,where revenue is based onthe billing address of the advertising customer.For information concerning these metrics as measured by us,see“Managements Discussion and Analysis ofFinancial Condition and Results of Operations.”Unless otherwise stated,statistical information regarding our users and their activities is determined by calculating the daily average of the selectedactivity for the most recently completed quarter included in this report.While these metrics are determined based on what we believe to be reasonable estimates of our user base for the applicable period of measurement,there are inherent challenges in measuring how our products are used across large populations globally.For example,there may be individuals who attempt tocreate accounts for malicious purposes,including at scale,even though we forbid that in our Terms of Service and Community Guidelines.We implementmeasures in our user registration process and through other technical measures to prevent,detect,and suppress that behavior,although we have not determinedthe number of such accounts.Changes in our products,infrastructure,mobile operating systems,or metric tracking system,or the introduction of new products,may impact ourability to accurately determine active users or other metrics and we may not determine such inaccuracies promptly.We also believe that we dont capture alldata regarding each of our active users.Technical issues may result in data not being recorded from every users application.For example,because someSnapchat features can be used without internet connectivity,we may not count a DAU because we dont receive timely notice that a user has opened theSnapchat application.This undercounting may increase as we grow in Rest of World markets where users may have poor connectivity.We do not adjust ourreported metrics to reflect this underreporting.We believe that we have adequate controls to collect user metrics,however,there is no uniform industrystandard.We continually seek to identify these technical issues and improve both our accuracy and precision,including ensuring that our investors and otherscan understand the factors impacting our business,but these technical issues and new issues may continue in the future,including if there continues to be nouniform industry standard.Some of our demographic data may be incomplete or inaccurate.For example,because users self-report their dates of birth,our age-demographic datamay differ from our users actual ages.And because users who signed up for Snapchat before June 2013 were not asked to supply their date of birth,we mayexclude those users from our age demographics or estimate their ages based on a sample of the self-reported ages that we do have.If our active users provideus with incorrect or incomplete information regarding their age or other attributes,then our estimates may prove inaccurate and fail to meet investorexpectations.We count a DAU only when a user visits Snapchat through our applications or websites and only once per user per day.We believe this methodologymore accurately measures our user engagement.We have multiple pipelines of user data that we use to determine whether a user has visited Snapchat throughour applications or websites during a particular day.This provides redundancy in the event one pipeline of data were to become unavailable for technicalreasons,and also gives us redundant data to help measure how users interact with our application.If we fail to maintain an effective analytics platform,our metrics calculations may be inaccurate.We regularly review,have adjusted in the past,andare likely in the future to adjust our processes for calculating our internal metrics to improve their accuracy.As a result of such adjustments,our DAUs or othermetrics may not be comparable to those in prior periods.Our measures of DAUs may differ from estimates published by third parties or from similarly titledmetrics of our competitors due to differences in methodology or data used.5Table of ContentsPART IItem 1.Business.OverviewSnap Inc.is a technology company.We believe the camera presents the greatest opportunity to improve the way people live and communicate.Wecontribute to human progress by empowering people to express themselves,live in the moment,learn about the world,and have fun together.Our flagship product,Snapchat,is a visual messaging application that enhances your relationships with friends,family,and the world.Visualmessaging is a fast,fun way to communicate with friends and family using augmented reality,video,voice,messaging,and creative tools.Snaps are deleted bydefault to mimic real-life conversations,so there is less pressure to look popular or perfect when creating and sending images on Snapchat.By reducing thefriction typically associated with creating and sharing content,Snapchat has become one of the most used cameras in the world.The camera is a powerful tool for communication and the entry point for augmented reality experiences.By opening directly to the camera,Snapchatempowers our community to express themselves instantly and offers millions of augmented reality Lenses for self expression,learning,and play.In the waythat the flashing cursor became the starting point for most products on desktop computers,we believe the camera screen will be the starting point for mostproducts on smartphones.This is because images created by smartphone cameras contain more context and richer information than other forms of input liketext entered on a keyboard.Given the magnitude of this opportunity,we are investing and innovating to continue to deliver products and services that aredifferentiated and that are better able to reflect and improve our life experiences.SnapchatSnapchat is our core mobile device application and contains five distinct tabs,complemented by additional tools that function outside of theapplication.With a breadth of visual messaging and content experiences available within the application,Snapchatters can interact with any or all of the fivetabs.Camera:The Camera is a powerful tool for communication and the entry point for augmented reality experiences in Snapchat.Snapchat opensdirectly to the Camera,making it easy to create a Snap and send it to friends.Our augmented reality,or AR,capabilities within our Camera allow for creativityand self-expression.We offer millions of Lenses,created by both us and our community,along with creative tools and licensed music and audio clips,whichmake it easy for people to personalize and contextualize their Snaps.We also offer voice and scanning technology within our Camera.While Snaps are deletedby default to mimic real-life conversations,Snapchatters can save their creativity through a searchable collection of Memories stored on both their Snapchataccount and their mobile device.Visual Messaging:Visual Messaging is a fast,fun way to communicate with friends and family using AR,video,voice,messaging,and creative tools.We also offer My AI,our AI-powered chatbot,which helps our community foster creativity and connection with friends,receive real-world recommendations,and learn more about their interests and favorite subjects.They can also communicate through our proprietary personalized avatar tool,Bitmoji,and itsassociated contextual stickers and images,which integrate seamlessly into both mobile devices and desktop browsers.Snap Map:Snap Map is a live and highly personalized map that allows Snapchatters to connect with friends and explore what is going on in their localarea.Snap Map makes it easy to locate nearby friends who choose to share their location,view a heatmap of recent Snaps posted to Our Story by location,andlocate local businesses.Places,rich profiles of local businesses that include information such as store hours and reviews,overlay specialized experiences fromselect partners on top of Snap Map,and allow Snapchatters to take direct actions from Snap Map,such as sharing a favorite store,ordering takeout,or makinga reservation.Stories:Stories are a fun way to stay connected,and feature content from friends,our community,and our content partners.Friends Stories allowSnapchatters to express themselves in narrative form through photos and videos,shown in chronological order,to their friends.The Discover section of this tabdisplays curated content based on a Snapchatters subscriptions and interests,and features news and entertainment from both our creator community andpublisher partners.We also offer Public Profiles as a way for our creator community and our advertising partners to memorialize and scale their content and ARLenses on our platform.6Table of ContentsSpotlight:Spotlight showcases the best of Snapchat,helping people discover new creators and content in a personalized way.Here we surface themost entertaining Snaps from our community all in one place,which becomes tailored to each Snapchatter over time based on their preferences and favorites.The Trending page allows Snapchatters to discover and engage with popular topics and genres.We are currently testing a new and simplified version of Snapchat referred to as Simple Snapchat,which organizes the tabs into three core experiencesfocused on communicating with friends,using the camera,and watching entertaining content.In addition to our core Snapchat product,we offer Snapchat ,our subscription service that provides subscribers access to exclusive,experimental,andpre-release features.Snapchat offers a variety of features from allowing Snapchatters to customize the look and feel of their app to giving special insights intotheir friendships.We also offer Snapchat for Web,a browser-based product that brings Snapchats signature capabilities to the web.Spectacles are our wearable AR glasses,which overlay computing over the world and extend the immersive AR Lenses experience beyond Snapchat.Spectacles are powered by Snap OS,a new purpose-built operating system with a natural interface that uses your hands and voice without the need for physicalcontrollers.Spectacles are available to professional and hobbyist developers through our Spectacle Developer Program to create AR experiences through LensStudio,our free AR development and distribution tool.Our Partner EcosystemMany elements and features of Snapchat are enhanced by our expansive partner ecosystem that includes developers,creators,publishers,andadvertisers,among others.We help them create and bring diverse content and experiences into Snapchat,leverage Snapchat capabilities in their ownapplications and websites,and use advertising to promote these and other experiences to our large,engaged,and differentiated user base.We seek to reward ourpartner ecosystem for their creativity,and continue to support them as they grow their audience and build their business on Snapchat.Developers are able to integrate with Snapchat and its core technologies,like Snaps AR Camera and Bitmoji,through a variety of tools.Creative Kitgives developers and their communities a seamless sharing experience from their app directly to Snapchat.Through Camera Kit,our partners can embed SnapsAR platform directly into their application,extending the use of AR beyond self-expression and communication use cases.We also provide developers aturnkey suite of tools and services that enable them to create AR Lenses and track the performance of those through analytics.Finally,developers can bring aninclusive mode of identity and expression to their apps and games with our Bitmoji for Developers APIs.AR creators can use Lens Studio,our powerful desktop application designed for creators and developers,to build Lenses and AR experiences forSnapchatters.Spotlight creators can utilize our content creation tools to reach millions of Snapchatters and build their businesses through various monetizationopportunities.Our Creator Marketplace connects both AR and Spotlight creators directly with our advertising partners.We provide monetizable opportunitiesthrough programs like the Snap Lens Network and Spectacles Lens Fund,which provide grants to support AR product development across many industries.Werecognize and reward top performing Lenses through our Lens Creator Rewards program.We also support our content creator community through a number ofprograms,including advertising revenue sharing on our mid-roll advertisements in Snap Stars Stories and Spotlight.Publisher partners can expand their audiences and monetize content through our Discover section.In addition,we work with varioustelecommunications providers and original equipment manufacturers,particularly as we build our presence in new markets.Our Advertising ProductsWe connect both brand and direct response advertisers to Snapchatters globally.Our ad products are built on the same foundation that makes ourconsumer products successful.This means that we can take the things we learn while creating our consumer products and apply them to building innovativeand engaging advertising products familiar to our community.7Table of ContentsAR Ads:Advertising through Snaps AR tools unlocks the ability to reach a unique audience in a highly differentiated way through AR Lenses.ARLenses are designed through our camera to take advantage of the reach and scale of our augmented reality platform to create visually engaging 3D experiences,including the ability to visualize and try on products such as beauty,apparel,accessories,and footwear.AR Lenses can be memorialized on Snapchat,throughPublic Profiles that aggregate content and lenses in a single,easy to find place.Snap Ads:We let advertisers tell their stories the same way our users do,using full screen videos with sound.These also allow advertisers to integrateadditional experiences and actions directly within these advertisements,including watching a long-form video,visiting a website,or installing an app.SnapAds include the following:Single Image or Video Ads:These are full screen ads that are skippable,and can contain an attachment to enable Snapchatters to swipe up and takeaction.Story Ads:Story Ads are branded tiles that live within the Discover section of the Stories tab that can be either video ads or a series of 3 to 20 images.Collection Ads:Collection Ads feature four tappable tiles to showcase multiple products,giving Snapchatters a frictionless way to browse and buy.Dynamic Ads:Dynamic ads leverage our machine learning algorithm to match a product catalog to serve the right ad to the right Snapchatter at theright time.Commercials:Commercials are non-skippable for six seconds,but can last up to three minutes.These ads appear within Snapchats curated content.Sponsored Snaps:Sponsored Snaps allow advertisers to communicate visually with the Snapchat community through sponsored messages within thechat tab.Promoted Places:Promoted Places allow businesses to use the Snap Map to suggest sponsored places of interest to Snapchatters by highlighting thebrands locations on the Snap Map with a promoted pin.Campaign Management and Delivery:We aim to continually improve the way these ad formats are purchased and delivered.We have invested heavilyto build our self-serve advertising platform,which provides automated,sophisticated,and scalable ad buying and campaign management.We offer the ability to bid for advertisements that are designated to drive Snapchatters to:visit a website,make a purchase,visit a local business,callor text a business,watch a story or video,download an app,or return to an app,among others.Additionally,our delivery framework continues to optimizerelevance of ads across the entire platform by determining the best ad to show to any given user based on their real-time and historical attributes and activity.This decreases the number of wasted impressions while improving the effectiveness of the ads that are shown to our community.This helps advertisers increasetheir return on investment by providing more refined targeting,the ability to test and learn with different creatives or campaign attributes in real time,and thedynamics of our self-serve pricing.Measuring Advertising Effectiveness:We offer first-party measurement solutions and we support our advertising partners preferred third-partymeasurement solutions to provide a vast array of analytics on campaign attributes like reach,frequency,demographics,and viewability;changes in perceptionslike brand favorability or purchase intent;and lifts in actual behavior like purchases,foot traffic,app installs,and online purchases.TechnologyOur research and development efforts focus on product development,advertising technology,and large-scale infrastructure.Product Development:We work relentlessly and invest deliberately to create and improve products for our community and our partners.We develop awide range of products related to visual messaging and storytelling that are powered by a variety of new technologies.Advertising Technology:We constantly develop and expand our advertising products and technology.In an effort to provide a strong and scalablereturn on investment to our advertisers,our advertising technology roadmap centers around improving our delivery framework,measurement capabilities,andself-serve tools.8Table of ContentsLarge-scale Infrastructure:We spend considerable resources and investment on the underlying architecture that powers our products,such asoptimizing the delivery of billions of videos to hundreds of millions of people around the world every day.We currently partner with third party providers tosupport the infrastructure for our growing needs.These partnerships have allowed us to scale quickly without upfront physical infrastructure costs,allowing usto focus our efforts on product innovation.Employees and CultureWe seek to be a force for good through our products,our work to strengthen our communities,our efforts to make a positive impact on the planet,andour inclusive workplace.Supporting Our Team:Our values at Snap are being kind,smart,and creative,and we put those values into action through how we support our teamand how our team supports one another.Council,which is a practice of active listening that promotes open-mindedness and cultivates empathy and compassionamong participants,helps us build and sustain a community steeped in integrity,connection,collaboration,creativity,and kindness.Our talent developmentprograms seek to unlock potential by helping team members advance,learn,and grow in a fair and equitable way at Snap.We focus on the health and well-being of our employees through programs and benefits that support their physical,emotional,and financial fitness.To attract and retain the best talent,we offerchallenging work in an environment that enables our employees to have a direct meaningful contribution to new and exciting projects.Underlying these valuesis our commitment to ethical conduct where we work to instill in our team that acting with integrity means being your whole self,being honest,and doing theright thing.Diversity,Equity,and Inclusion:Snap has long supported Diversity,Equity and Inclusion,or DEI,so that every team member uses their uniquebackgrounds,experiences,and abilities to build products that uplift the lived experiences of Snapchatters globally.To aid in our mission,we publish a DiversityAnnual Report that discusses our diversity,equity,and inclusion strategy.This report outlines our beliefs around the idea that an inclusive workplace andinclusive products are central to achieving that purpose.This report is excerpted in our broader CitizenSnap Report that details the work were doing to supportour communities,our planet,and our team,and is available on our website at .Human Capital:As part of our human capital resource objectives,we seek to recruit,retain,and incentivize our highly talented existing and futureemployees.We believe that creating an inclusive environment where team members can grow,develop,and be their true selves is critical to attracting andretaining talent.Our compensation philosophies also align to that belief.Our compensation philosophy is based around building a culture of ownership and high performance by putting both impact and our values at thecenter of our performance feedback process and pay outcomes.We utilize equity as part of our compensation practices to drive a long-term orientation andhave committed to paying a minimum living wage for all employees globally.As of December 31,2024,we had 4,911 full-time employees,of whom approximately 52%are in engineering roles involved in the design,development,support,and manufacture of new and existing products and processes.Climate Change:Our commitment to combating climate change remains unchanged.In 2021,we adopted a set of science-based emissions reductiontargets which were validated by the Science Based Targets Initiative.Additionally,in 2021,we achieved carbon neutrality with the purchase of carbon offsetsfor our historical operations from our founding in 2011 through 2020.Since then,weve maintained our carbon-neutral status each year through the purchase ofcarbon offsets for emissions attributable to us.Our Commitment to PrivacyOur approach to privacy is simple:Be upfront,offer choices,and never forget that our community comes first.We built Snapchat as an antidote to the context-less communication that has plagued“social media.”Not so long ago,a conversation among friendswould be just that:a private communication in which you knew exactly who you were talking to,what you were talking about,and whether what you weresaying was being memorialized for eternity.Somewhere along the way,social mediaby prioritizing virality and permanencesapped conversations of thisvaluable context and choice.When we began to communicate online,we lost some of what made communication great:spontaneity,emotion,honestythe fullrange of human expression that makes us human in the first place.9Table of ContentsWe dont think digital communication has to be this way.Thats why choice matters.We build products and services that emphasize the context of aconversationwho,when,what,and where something is being said.If you dont have the autonomy to shape the context of a conversation,the conversationwill simply be shaped by the permanent feeds that homogenize online conversations.When you read our Privacy Policy,we hope that youll notice how much we care about the integrity of personal communication.For starters,wevewritten our Privacy Policy in plain language because we think its important that everyone understands exactly how we handle their information.Otherwise,itshard to make informed choices about how you communicate.Weve also created a robust Privacy,Safety,and Policy Hub where we show that context andchoice are more than talking points.There,we point out the many ways that users can control who sees their Snaps and Stories,and explain how long contentwill remain on our servers,how users can manage the information that we do have about them,and much more.This is where youll also find our TransparencyReport in which we provide insight into these efforts and visibility into the nature and volume of content reported on our platform.We also understand that privacy policiesno matter how ambitiousare only as good as the people and practices behind those policies.Whensomeone trusts us to transmit or store their information,we know we have a responsibility to protect that information and we work hard to keep it secure.Newfeatures go through an intense privacy-review processwe debate pros and cons,and we work hard to build products were proud of and that well want touse.We handle user information with the same care that we want for our family,our friends,and ourselves.CompetitionWe compete with other companies in every aspect of our business,particularly with companies that focus on mobile engagement and advertising.Many of these companies,such as Alphabet(including Google and YouTube),Apple,ByteDance(including TikTok),Meta(including Facebook,Instagram,Threads,and WhatsApp),Pinterest,and X(formerly Twitter),may have greater financial and human resources and,in some cases,larger user bases.Given thebreadth of our product offerings,we also compete with companies that develop products or otherwise operate in the mobile,camera,communication,content,and advertising industries that offer,or will offer,products and services that may compete with Snapchat features or offerings.Our competitors span frominternet technology companies and digital platforms,to traditional companies in print,radio,and television sectors to underlying technologies like defaultsmartphone cameras and messaging.Additionally,our competition for engagement varies by region.For instance,we face competition from companies likeKakao,LINE,Naver(including Snow),and Tencent in Asia.We compete to attract and retain our users attention,both in terms of reach and engagement.Since our products and those of our competitors aretypically free,we compete based on our brand and the quality and nature of our product offerings rather than on price.As such,we invest heavily in constantlyimproving and expanding our product lines.We also compete with other companies to attract and retain partners and advertisers,which depends primarily on our reach and ability to deliver astrong return on investment.Finally,we compete to attract and retain highly talented individuals,including software engineers,designers,and product managers.In addition toproviding competitive compensation packages,we compete for talent by fostering a culture of working hard to create great products and experiences andallowing our employees to have a direct meaningful contribution to new and exciting projects.Seasonality in Our BusinessWe have historically seen seasonality in our business.Overall advertising spend tends to be strongest in the fourth quarter of the calendar year,and wehave observed a similar pattern in our historical revenue.We have also experienced seasonality in our user engagement,generally seeing lower engagementduring summer months and higher engagement in December.Intellectual PropertyOur success depends in part on our ability to protect our intellectual property and proprietary technologies.To protect our proprietary rights,we relyon a combination of intellectual property rights in the United States and other jurisdictions,including patents,trademarks,copyrights,trade secret laws,licenseagreements,internal procedures,and contractual provisions.We also enter into confidentiality and invention assignment agreements with our employees and10Table of Contentscontractors and sign confidentiality agreements with third parties.Our internal controls are designed to restrict access to proprietary technology.As of December 31,2024,we had approximately 4,169 issued patents and approximately 3,263 filed patent applications in the United States andforeign countries relating to our Snapchat,Lens Studio,Spectacles and Snap OS products,augmented reality,AI and machine learning,and other technologies.Our issued patents will expire between 2025 and 2047.We may not be able to obtain protection for our intellectual property,and our existing and futurepatents,trademarks,and other intellectual property rights may not provide us with competitive advantages or distinguish our products and services from thoseof our competitors.We license content,trademarks,technology,and other intellectual property from our partners,and rely on our license agreements with those partnersto use the intellectual property.We also enter into licensing agreements with third parties to receive rights to patents and other know-how.Third parties mayassert claims related to intellectual property rights against our partners or us.Other companies and“non-practicing entities”that own patents,copyrights,trademarks,trade secrets,and other intellectual property rights related tothe mobile,camera,communication,content,internet,and other technology-related industries frequently enter into litigation based on allegations ofinfringement,misappropriation,and other violations of intellectual property or other rights.As our business continues to grow and competition increases,wewill likely face more claims related to intellectual property and litigation matters.Government RegulationWe are subject to many federal,state,local,and foreign laws and regulations,including those related to advertising,algorithms,anti-moneylaundering,competition,consumer protection,content regulation,data protection,electronic funds transfers,employment,encryption,gift cards,health andsafety,import and export restrictions,intellectual property,communication,money transmission,privacy,protection of minors,rights of publicity,and taxation.These laws and regulations are constantly evolving and may be interpreted,applied,created,or amended in a manner that could harm our business.Like othercompanies in our industry,we face increasingly heightened scrutiny from both the United States and foreign governments with respect to our compliance withlaws and regulations.Compliance with these laws and regulations has not had,and is not expected to have,a material effect on our capital expenditures,resultsof operations,and competitive position as compared to prior periods,and we do not currently anticipate material capital expenditures for environmental controlfacilities.We are also currently,and may in the future be,subject to regulatory orders or consent decrees,including the consent order that we entered into withthe U.S.Federal Trade Commission,or FTC,in December 2014,which resolved an investigation into some of our early practices.That order requires,amongother things,that we establish a robust privacy program to govern how we treat user data.During the 20-year lifespan of the order,we must complete biennialindependent privacy audits.The FTC has continued to review our practices and in January 2025,announced the referral of a complaint to the Department ofJustice,or the DOJ,pertaining to our deployment of our My AI feature and the allegedly resulting risk of harm to young users.Any enforcement action relatedto this matter,or any violation of existing or future regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties thatcould negatively affect our financial condition and results of operations.Furthermore,foreign data protection,privacy,consumer protection,content regulation,and other laws and regulations are often more restrictive thanthose in the United States.It is possible that certain governments may seek to block or limit our products or otherwise impose other restrictions that may affectthe accessibility or usability of any or all our products for an extended period of time or indefinitely.Due to such laws and regulations,our products may not beavailable in all locations.Our public policy team monitors legal and regulatory developments in the United States,as well as many foreign countries,andcommunicates with policymakers and regulators in the United States and internationally.For additional information about government regulation applicable to our business,see“Risk Factors”in Part I,Item 1A and“Legal Proceedings”inPart I,Item 3 in this Annual Report on Form 10-K.11Table of ContentsInformation about Geographic Revenue and SegmentsInformation about geographic revenue and segments is set forth in Notes 2 and 19,respectively,of the notes to our consolidated financial statementsincluded in“Financial Statements and Supplementary Data”in Part II,Item 8 in this Annual Report on Form 10-K.Available InformationOur website address is .Our Annual Report on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K,andamendments to these reports filed pursuant to Sections 13(a)and 15(d)of the Exchange Act are filed with the SEC.Such reports and other information filed orfurnished by us with the SEC are available free of charge on our website at when such reports are available on the SECs website.We useour website,including ,as a means of disclosing material non-public information and for complying with our disclosure obligations underRegulation FD.Information contained in,or accessible through,the websites referred to in this Annual Report on Form 10-K is not incorporated into this filing.Further,our references to website addresses are only as inactive textual references.12Table of ContentsItem 1A.Risk Factors.You should carefully consider the risks and uncertainties described below,together with all the other information in this Annual Report on Form 10-K,including“Managements Discussion and Analysis of Financial Condition and Results of Operations”and the consolidated financial statements and therelated notes.If any of the following risks actually occurs(or if any of those discussed elsewhere in this Annual Report on Form 10-K occurs),our business,reputation,financial condition,results of operations,revenue,and future prospects could be seriously harmed.The risks and uncertainties described below arenot the only ones we face.Additional risks and uncertainties that we are unaware of,or that we currently believe are not material,may also become importantfactors that adversely affect our business.Unless otherwise indicated,references to our business being seriously harmed in these risk factors will include harmto our business,reputation,financial condition,results of operations,revenue,and future prospects.In that event,the market price of our Class A commonstock could decline,and you could lose part or all of your investment.Risks Related to Our Business and IndustryOur ecosystem of users,advertisers,and partners depends on the engagement of our user base.Our user base growth rate has declined in the past and itmay do so again in the future.If we fail to retain current users or add new users,or if our users engage less with Snapchat,our business would beseriously harmed.We had 453 million daily active users,or DAUs,on average in the quarter ended December 31,2024.We view DAUs as a critical measure of our userengagement,and adding,maintaining,and engaging DAUs have been and will continue to be necessary.Our DAUs and DAU growth rate have declined in thepast and they may decline in the future due to various factors,including as the size of our active user base increases,as we achieve higher market penetrationrates,as we face continued competition for our users and their time,or if there are performance issues with our service.In addition,as we achieve maximummarket penetration rates among younger users in developed markets,future growth in DAUs will need to come from older users in those markets or fromdeveloping markets,which may not be possible or may be more difficult,expensive,or time-consuming for us to achieve.While we may experience periodswhen our DAUs increase due to products and services with short-term popularity,we may not always be able to attract new users,retain existing users,ormaintain or increase the frequency and duration of their engagement if current or potential new users do not perceive our products to be fun,engaging,oruseful.In addition,because our products typically require high bandwidth data capabilities for users to benefit from all of the features and capabilities of ourapplication,many of our users live in countries with high-end mobile device penetration and high bandwidth capacity cellular networks with large coverageareas.We therefore do not expect to experience rapid user growth or engagement in regions with either low smartphone penetration or a lack of well-established and high bandwidth capacity cellular networks.As our DAU growth rate continues to slow or if the number of DAUs becomes stagnant,or we havea decline in DAUs,our financial performance will increasingly depend on our ability to elevate user activity or increase the monetization of our users.Snapchat is free and easy to join,the barrier to entry for new entrants in our business is low,and the switching costs to another platform are also low.Moreover,the majority of our users are 18-34 years old.This demographic may be less brand loyal and more likely to follow trends,including viral trends,thanother demographics.These factors may lead users to switch to another product,which would negatively affect our user retention,growth,and engagement.Snapchat also may not be able to penetrate other demographics in a meaningful manner.Falling user retention,growth,or engagement could make Snapchatless attractive to advertisers and partners,which may seriously harm our business.In addition,we continue to compete with other companies to attract andretain our users attention.There are many factors that could negatively affect user retention,growth,and engagement,including if:users engage more with competing products instead of ours;our competitors continue to mimic our products or improve on them;we fail to introduce new and exciting products and services or those we introduce or modify are poorly received;our products fail to operate effectively or compatibly on the iOS or Android mobile operating systems;we are unable to continue to develop products that work with a variety of mobile operating systems,networks,and smartphones;we do not provide a compelling user experience because of the decisions we make regarding the type and frequency of advertisements that we displayor the structure and design of our products;we are unable to combat bad actors,spam,or other hostile or inappropriate usage on our products;13Table of Contentsthere are changes in user sentiment about the quality or usefulness of our products in the short-term,long-term,or both;there are concerns about the privacy implications,safety,or security of our products and our processing of personal data;our content partners do not create content that is engaging,useful,or relevant to users;our content partners decide not to renew agreements or devote the resources to create engaging content,or do not provide content exclusively to us;advertisers and partners display ads that are untrue,offensive,or otherwise fail to follow our guidelines;our products are subject to increased regulatory scrutiny or approvals,including from foreign privacy regulators,or there are changes in our productsthat are mandated or prompted by legislation,regulatory authorities,executive actions,or litigation,including settlements or consent decrees,thatadversely affect the user experience;technical or other problems frustrate the user experience or negatively impact users trust in our service,including by providers that host ourplatforms,particularly if those problems prevent us from delivering our product experience in a fast and reliable manner,or cyberattacks,breaches,orother security incidents that compromise our sensitive user data;we fail to provide adequate service to users,advertisers,or partners;we do not provide a compelling user experience to entice users to use the Snapchat application on a daily basis,or our users dont have the ability tomake new friends to maximize the user experience;we,our partners,or other companies in our industry segment are the subject of adverse media reports or other negative publicity,some of which maybe inaccurate or include confidential information that we are unable to correct or retract;we do not maintain our brand image or our reputation is damaged;orour current or future products reduce user activity on Snapchat by making it easier for our users to interact directly with our partners.Any decrease to user retention,growth,or engagement could render our products less attractive to users,advertisers,or partners,and would seriouslyharm our business.We generate substantially all of our revenue from advertising.The failure to attract new advertisers,the loss of advertisers,or a reduction in how muchthey spend could seriously harm our business.Substantially all of our revenue is generated from third parties advertising on Snapchat.For the years ended December 31,2024,2023,and 2022,advertising revenue accounted for approximately 91%,96%,and 99%of our total revenue,respectively.Even though we have introduced other revenuestreams,including subscription models,we still expect advertising revenue to account for substantially all of our revenue in the foreseeable future.Mostadvertisers do not have long-term advertising commitments with us,and our efforts to establish long-term commitments may not succeed.Our advertising customers range from small businesses to well-known brands,including advertising resellers.Many of our customers spend arelatively small portion of their overall advertising budget with us,but some customers have devoted meaningful budgets that contribute more significantly toour total revenue.In addition,advertisers may view some of our advertising solutions as experimental and unproven,or prefer certain of our products overothers.Advertisers,including our customers who have devoted meaningful advertising budgets to our product,will not continue to do business with us if we donot deliver advertisements in an effective manner,or if they do not believe that their investment in advertising with us will generate a competitive returnrelative to other alternatives.As our business continues to develop,there may be new or existing customers,including from different geographic regions,thatcontribute more significantly to our total revenue,and a loss of such customers or a significant reduction in how much they spend with us could adverselyimpact our business.Any economic or political instability,whether as a result of the macroeconomic climate or the implementation of tariffs by the UnitedStates or other governments,war or other armed conflict,terrorism,or otherwise,in a specific country or region,may negatively impact the global or localeconomy,advertising ecosystem,our customers and their budgets with us,or our ability to forecast our advertising revenue,and could seriously harm ourbusiness.Moreover,we rely heavily on our ability to collect,process,and disclose data and metrics to our customers so we can attract new customers and retainexisting customers.Any restriction,whether by law,regulation,policy,or other14Table of Contentsreason,on our ability to collect,process,and disclose data and metrics that our customers find useful would impede our ability to attract and retain advertisers.Regulators in many countries in which we operate or have users are increasingly scrutinizing and regulating the collection,use,and sharing of personal datarelated to advertising,which could materially impact our revenue and seriously harm our business.Many of these laws and regulations expand the rights ofindividuals to control how their personal data is collected and processed,and place restrictions on the use of personal data of teens.The processing of personaldata for personalized advertising continues to be under increased scrutiny from regulators,which includes ongoing regulatory action against large technologycompanies like ours,the outcomes of which may be uncertain and subject to appeal.These laws may prohibit us and our customers from advertising to teens,including based on the profiling of personal data.Other legislative proposals and present laws and regulations may also apply to our or our advertisersactivities and require significant operational changes to our business.These laws and regulations could have a material impact on the development anddeployment of AI and machine learning in the context of our targeted advertising activities.Other laws to which we are or may become subject further regulatecontextual,behavioral,interest-based,or targeted advertising,making certain online advertising activities more difficult and subject to additional scrutiny.These laws grant users the right to opt-out of sharing of their personal data for certain advertising purposes in exchange for money or other valuableconsideration,or require parental consent to be obtained for the processing of personal data of users under a certain age and restrict tracking and use of teensdata,including for advertising.Regulators have issued significant monetary fines in certain circumstances where the regulators alleged that appropriate consentwas not obtained in connection with targeted advertising activities.In addition,legislative proposals and present laws and regulations in countries where weoperate regulate the use of cookies and other tracking technologies,electronic communications,and marketing.Furthermore,in April 2021,Apple issued an iOS update that imposed heightened restrictions on our access and use of user data by allowing users tomore easily opt-out of tracking of activity across devices.Additionally,Google has in the past implemented privacy controls on its Android devices and may inthe future make changes to those privacy controls similar to Apples prior iOS update.The changes implemented by Apple have had,and similar changes,ifimplemented by Google or major web browsers,like Firefox,Safari,and Chrome,would have an adverse effect on our targeting,measurement,andoptimization capabilities,and in turn our ability to target advertisements and measure the effectiveness of advertisements on our services.This has resulted in,and in the future is likely to continue to result in,reduced demand and pricing for our advertising products and could seriously harm our business.The longer-term impact of these changes on the overall mobile advertising ecosystem,our competitors,our business,and the developers,partners,and advertisers withinour community remains uncertain,and depending on how we,our competitors,and the overall mobile advertising ecosystem adjusts,and how our partners,advertisers,and users respond,our business could be seriously harmed.Any alternative solutions we implement are subject to rules and standards set by theowners of such mobile operating systems which may be unclear,change,or be interpreted in a manner adverse to us and require us to halt or change oursolutions,any of which could seriously harm our business.In addition,if we are unable to mitigate or respond to these and future developments,and alternativesolutions do not become widely adopted by our advertisers,then our targeting,measurement,and optimization capabilities will be materially and adverselyaffected,which would in turn continue to negatively impact our advertising revenue.Our advertising revenue could also be seriously harmed by many otherfactors,including:diminished or stagnant growth,or a decline,in the total or regional number of DAUs on Snapchat;our inability to deliver advertisements to all of our users due to legal restrictions or hardware,software,or network limitations;a decrease in the amount of time spent on Snapchat,a decrease in the amount of content that our users share,or decreases in usage of our Camera,Visual Messaging,Map,Stories,and Spotlight platforms;our inability to create new products that sustain or increase the value of our advertisements;changes in our user demographics that make us less attractive to advertisers;lack of ad creative availability by our advertising partners;a decline in our available content,including if our content partners do not renew agreements,devote the resources to create engaging content,orprovide content exclusively to us;decreases in the perceived quantity,quality,usefulness,or relevance of the content provided by us,our community,or partners;decreases in user response rate to application notifications received from Snapchat,whether due to decreased user appreciation for notificationsgenerally or changes in the manner notifications are delivered by mobile operating systems,which may decrease user engagement;15Table of Contentsincreases in resistance by users to our collecting,using,and sharing their personal data for advertising-related purposes;changes in our analytics and measurement solutions,including what we are permitted to collect and disclose under the terms of Apples and Googlesmobile operating systems,that demonstrate the value of our advertisements and other commercial content;competitive developments or advertiser perception of the value of our products that change the rates we can charge for advertising or the volume ofadvertising on Snapchat;product changes or advertising inventory management decisions we may make that change the type,size,frequency,or effectiveness ofadvertisements displayed on Snapchat or the method used by advertisers to purchase advertisements;adverse legal developments relating to advertising,including changes mandated or prompted by legislation,regulation,executive actions,or litigationregarding the collection,use,and sharing of personal data for certain advertising-related purposes;adverse media reports or other negative publicity involving us,our founders,our partners,or other companies in our industry;advertiser or user perception that content published by us,our users,or our partners is objectionable;the degree to which users skip advertisements and therefore diminish the value of those advertisements to advertisers;changes in the way advertising is priced or its effectiveness is measured;our inability,or perceived inability,to achieve an advertisers intended performance metric,measure the effectiveness of our advertising,or target theappropriate audience for advertisements,including due to metric estimates published by third parties that may differ from our own metrics;our inability to access,collect,and disclose users personal data,including advertising or similar deterministic identifiers that new and existingadvertisers may find useful;difficulty and frustration from advertisers who may need to reformat or change their advertisements to comply with our guidelines;volatility in the equity markets,which may reduce our advertisers capacity or desire for aggressive advertising spending towards growth;andthe political,economic,and macroeconomic climate and the status of the advertising industry in general,including impacts related to labor shortagesand disruptions,supply chain disruptions,banking instability,tariffs implemented by the United States or other governments,inflation,and as a resultof war,terrorism,or armed conflict.Moreover,individuals are also increasingly aware of and resistant to the collection,use,and sharing of personal data in connection with advertising.Individuals are more aware of options and certain rights related to consent and other options to opt-out of such data processing,including through mediaattention about privacy and data protection.Some users have opted out of allowing us to combine certain data from third-party apps and websites with certaindata from Snapchat for advertising purposes,which has negatively impacted our ability to collect or use certain user data and our advertising partners ability todeliver relevant content,all of which have in the past and could again in the future negatively impact our business.These and other factors could reduce demand for our advertising products,which may lower the prices we receive,or cause advertisers to stopadvertising with us altogether.Either of these would seriously harm our business.Snapchat depends on effectively operating with mobile operating systems,hardware,networks,regulations,and standards that we do not control.Changesin our products or to those mobile operating systems,hardware,networks,regulations,or standards may seriously harm our user retention,growth,andengagement.Because Snapchat is used primarily on mobile devices,the application must remain interoperable with popular mobile operating systems,primarilyAndroid and iOS,application stores,and related hardware,including mobile-device cameras.The owners and operators of such mobile operating systems andapplication stores,primarily Google and Apple,each have approval authority over whether to feature our core products on their application stores and makeavailable to16Table of Contentsconsumers third-party products that compete with ours.Furthermore,there is no guarantee that any approval previously provided by such owner or operatorwill not be rescinded in the future.Additionally,mobile devices and mobile-device cameras are manufactured by a wide array of companies.Those companieshave no obligation to test the interoperability of new mobile devices,mobile-device cameras,or related devices with Snapchat,and may produce new productsthat are incompatible with or not optimal for Snapchat.We have no control over these mobile operating systems,application stores,or hardware,and anychanges may degrade our products functionality,or give preferential treatment to competitive products.For instance,Apples iOS 18,introduced in September2024,makes it more difficult for us to access a Snapchatters contact book,which in turn could make it more difficult for us to connect Snapchatters with theirclose friends,potentially reducing engagement on our platform.Because these changes do not apply to Apples iMessage app,it may put us at a competitivedisadvantage.Actions by government authorities may also impact our access to these systems or hardware and could seriously harm Snapchat usage.Ourcompetitors that control the mobile operating systems and related hardware could make interoperability of our products more difficult or display theircompetitive offerings more prominently than ours.Additionally,our competitors that control the standards for the application stores could make Snapchat,orcertain features of Snapchat,inaccessible for a potentially significant period of time or require us to make changes to maintain access.We plan to continue tointroduce new products and features regularly,including some features that may only work on the latest systems and hardware,and have experienced that ittakes significant time to optimize new products and features to function with the variety of existing mobile operating systems,hardware,and standards,impacting the popularity of such products,and we expect this trend to continue.Moreover,our products require high-bandwidth data capabilities.If the costs of data usage increase or access to cellular networks is limited,our userretention,growth,and engagement may be seriously harmed.Additionally,to deliver high-quality video and other content over mobile cellular networks,ourproducts must work well with a range of mobile technologies,systems,networks,regulations,and standards that we do not control and which may be subject tofuture changes.In addition,the proposal or adoption of any laws,regulations,or initiatives that adversely affect the growth,popularity,or use of the internet,including laws governing internet neutrality,could decrease the demand for our products,including by impairing our ability to retain existing users or attractnew users,make Snapchat a less attractive alternative to our competitors applications,and increase our cost of doing business.We may not successfully cultivate relationships with key industry participants or develop products that operate effectively with these technologies,systems,networks,regulations,or standards.If it becomes more difficult for our users to access and use Snapchat,if our users choose not to access or useSnapchat,or if our users choose to use products that do not offer access to Snapchat,our business and user retention,growth,and engagement could beseriously harmed.We rely on Google Cloud and Amazon Web Services,or AWS,for the vast majority of our computing,storage,bandwidth,and other services.Anydisruption of or interference with our use of either platform would negatively affect our operations and seriously harm our business.Google and Amazon provide distributed computing infrastructure platforms for business operations,commonly referred to as a“cloud”computingservice.We currently run the vast majority of our computing on Google Cloud and AWS and have built our software and computer systems to use computing,storage capabilities,bandwidth,and other services provided by Google Cloud and AWS.Our systems are not fully redundant on the two platforms.Anytransition of the cloud services currently provided by either Google Cloud or AWS to the other platform or to another cloud provider would be difficult toimplement and would cause us to incur significant time and expense.Given this,any significant disruption of or interference with Google Cloud or AWS,whether temporary,regular,or prolonged,would negatively impact our operations and our business would be seriously harmed.If our users or partners are notable to access Snapchat or specific Snapchat features,or encounter difficulties in doing so,due to issues or disruptions with Google Cloud or AWS,we maylose users,partners,or advertising revenue.The level of service provided by Google Cloud and AWS or similar providers may also impact our users,advertisers,and partners usage of and satisfaction with Snapchat and could seriously harm our business and reputation if the level of service decreases.Hosting costs also have and will continue to increase as our user base and user engagement grows and may seriously harm our business if we are unable togrow our revenues faster than the cost of utilizing the services of Google Cloud,AWS,or similar providers.In addition,Google or Amazon may take actions beyond our control that could seriously harm our business,including:discontinuing or limiting our access to its cloud platform;increasing pricing terms;terminating or seeking to terminate our contractual relationship altogether;17Table of Contentsestablishing more favorable relationships or pricing terms with one or more of our competitors;ormodifying or interpreting its terms of service or other policies in a manner that impacts our ability to run our business and operations.If we are unable to protect our intellectual property,the value of our brand and other intangible assets may be diminished,and our business may beseriously harmed.If we need to license or acquire new intellectual property,we may incur substantial costs.We aim to protect our confidential proprietary information,in part,by entering into confidentiality agreements and invention assignment agreementswith our employees,consultants,advisors,and third parties who access or contribute to our proprietary know-how,information,or technology.We,however,cannot assure you that these agreements will be effective in controlling access to,or preventing unauthorized distribution,use,misuse,misappropriation,reverse engineering,or disclosure of our proprietary information,know-how,and trade secrets.These agreements may be breached,and we may not haveadequate remedies for any such breach.Enforcing a claim that a party illegally disclosed or misappropriated a trade secret or know-how can be difficult,expensive,and time-consuming,and the outcome can be unpredictable.Furthermore,these agreements do not prevent our competitors or partners fromindependently developing offerings that are substantially equivalent or superior to ours.We also rely on trademark,copyright,patent,trade secret,and domain-name protection laws to protect our proprietary rights.In the United States andinternationally,we have filed various applications to protect aspects of our intellectual property,and we currently hold a number of issued patents,trademarks,and copyrights in multiple jurisdictions.In the future,we may acquire additional patents or patent portfolios in the future,which could require significant cashexpenditures.However,third parties may knowingly or unknowingly infringe our proprietary rights,third parties may challenge proprietary rights held by us,third parties may design around our proprietary rights or independently develop competing technology,and pending and future trademark,copyright,andpatent applications may not be approved.Moreover,we cannot ensure that the claims of any granted patents will be sufficiently broad to protect our technologyor platform and provide us with competitive advantages.Additionally,failure to comply with applicable procedural,documentary,fee payment,and othersimilar requirements could result in abandonment or lapse of the affected patent,trademark,or copyright application or registration.Moreover,a portion of our intellectual property has been acquired or licensed from one or more third parties.While we have conducted diligence withrespect to such acquisitions and licenses,because we did not participate in the development or prosecution of much of the acquired intellectual property,wecannot guarantee that our diligence efforts identified and remedied all issues related to such intellectual property,including potential ownership errors,potentialerrors during prosecution of such intellectual property,and potential encumbrances that could limit our ability to enforce such intellectual property rights.Further,the laws of certain foreign countries do not provide the same level of protection of corporate proprietary information and assets such asintellectual property,trade secrets,know-how,and records as the laws of the United States.For instance,the legal systems of certain countries,particularlycertain developing countries,do not favor the enforcement of patents and other intellectual property protection.As a result,we may be exposed to materialrisks of theft of our proprietary information and other intellectual property,including technical data,manufacturing processes,data sets,or other sensitiveinformation,and we may also encounter significant problems in protecting and defending our intellectual property or proprietary rights abroad.In any of thesecases,we may be required to expend significant time and expense to prevent infringement or to enforce our rights.Our efforts to enforce our intellectualproperty rights may be met with defenses,counterclaims,and countersuits attacking the validity and enforceability of our intellectual property rights,and,ifsuch defenses,counterclaims,and countersuits are successful,we could lose valuable intellectual property rights.Our inability to protect our proprietarytechnology against unauthorized copying or use,as well as any costly litigation or diversion of our managements attention and resources,could impair thefunctionality of our platform,delay introductions of enhancements to our platform,result in our substituting inferior or more costly technologies into ourplatform,or harm our reputation and brand.In addition,we may be required to license additional technology from third parties to develop and market newplatform features,which may not be on commercially reasonable terms,or at all,and would adversely affect our ability to compete.Although we have takenmeasures to protect our proprietary rights,there can be no assurance that others will not offer products,brands,content,or concepts that are substantiallysimilar to ours and compete with our business.If we are unable to protect our proprietary rights or prevent unauthorized use or appropriation by third parties,the value of our brand and other intangible assets may be diminished,and competitors may be able to more effectively mimic our service and methods ofoperations.Any of these events could seriously harm our business.18Table of ContentsOur two co-founders have control over all stockholder decisions because they control a substantial majority of our voting stock.Our two co-founders,Evan Spiegel and Robert Murphy,control over 99%of the voting power of our outstanding capital stock as of December 31,2024,and Mr.Spiegel alone can exercise voting control over a majority of our outstanding capital stock.As a result,Mr.Spiegel and Mr.Murphy,or in manyinstances Mr.Spiegel acting alone,have the ability to control the outcome of all matters submitted to our stockholders for approval,including the election,removal,and replacement of our directors and any merger,consolidation,or sale of all or substantially all of our assets.If Mr.Spiegels or Mr.Murphys employment with us is terminated,they will continue to have the ability to exercise the same significant votingpower and potentially control the outcome of all matters submitted to our stockholders for approval.Either of our co-founders shares of Class C common stockwill automatically convert into Class B common stock,on a one-to-one basis,nine months following his death or on the date on which the number ofoutstanding shares of Class C common stock held by such holder represents less than 30%of the Class C common stock held by such holder on the closing ofour IPO,or 32,383,178 shares of Class C common stock.Should either of our co-founders Class C common stock be converted to Class B common stock,theremaining co-founder will be able to exercise voting control over our outstanding capital stock.Moreover,Mr.Spiegel and Mr.Murphy have entered into aproxy agreement under which each has granted to the other a voting proxy with respect to all shares of our Class B common stock and Class C common stockthat each may beneficially own from time to time or have voting control over.The proxy would become effective on either founders death or disability.Accordingly,on the death or incapacity of either Mr.Spiegel or Mr.Murphy,the other could individually control nearly all of the voting power of ouroutstanding capital stock.In addition,in October 2016,we issued a dividend of one share of non-voting Class A common stock to all our equity holders,which will prolong ourco-founders voting control because our co-founders are able to liquidate their holdings of non-voting Class A common stock without diminishing their votingcontrol.Furthermore,in July 2022,our board of directors approved the future declaration and payment of a special dividend of one share of Class A commonstock on each outstanding share of Snaps common stock,subject to certain triggering conditions,which triggering conditions were modified in connectionwith the effectiveness the settlement of a class action lawsuit in February 2024.In the future,our board of directors may,from time to time,decide to issueadditional special or regular stock dividends in the form of Class A common stock,and if we do so our co-founders control could be further prolonged.Thisconcentrated control could delay,defer,or prevent a change of control,merger,consolidation,or sale of all or substantially all of our assets that our otherstockholders support.Conversely,this concentrated control could allow our co-founders to consummate such a transaction that our other stockholders do notsupport.In addition,our co-founders may make long-term strategic investment decisions for the company and take risks that may not be successful and mayseriously harm our business.As our Chief Executive Officer,Mr.Spiegel has control over our day-to-day management and the implementation of major strategic investments ofour company,subject to authorization and oversight by our board of directors.As board members and officers,Mr.Spiegel and Mr.Murphy owe a fiduciaryduty to our stockholders and must act in good faith in a manner they reasonably believe to be in the best interests of our stockholders.As stockholders,evencontrolling stockholders,Mr.Spiegel and Mr.Murphy are entitled to vote their shares,and shares over which they have voting control,in their own interests,which may not always be in the interests of our stockholders generally.We have not elected to take advantage of the“controlled company”exemption to thecorporate governance rules for companies listed on the New York Stock Exchange,or NYSE.Macroeconomic uncertainties,including labor shortages and disruptions,supply chain disruptions,banking instability,inflation,and recession risks,havein the past and may continue to adversely impact our business.Global economic and business activities have in the past and may continue to face widespread macroeconomic uncertainties,including labor shortagesand disruptions,supply chain disruptions,banking instability,tariffs,inflation,and recession risks,which may continue for an extended period,and some ofwhich have adversely impacted,and may continue to adversely impact,many aspects of our business.As some of our advertisers experienced downturns or uncertainty in their own business operations and revenue,they halted or decreased or may halt,decrease,or continue to decrease,temporarily or permanently,their advertising spending or may focus their advertising spending more on other platforms,allof which may result in decreased advertising revenue.Labor shortages and disruptions,supply chain disruptions,banking instability,and inflation have in thepast and may continue to cause logistical challenges,increased input costs,inventory constraints,and liquidity uncertainty for our advertisers,which in turnmay also halt or decrease advertising spending and may make it difficult to forecast our19Table of Contentsadvertising revenue.Any decline in advertising revenue or the collectability of our receivables could seriously harm our business.As a result of macroeconomic uncertainties,our partners and community who provide content or services to us may experience delays or interruptionsin their ability to create content or provide services,if they are able to do so at all.Members of our community may also alter their usage of our products andservices,particularly relative to prior periods when travel restrictions were in place.A decrease in the amount or quality of content available on Snapchat,or aninterruption in the services provided to us,could lead to a decline in user engagement,which could seriously harm our business.To the extent that macroeconomic uncertainties continue to impact our business,many of the other risks described in these risk factors may beexacerbated.Exposure to geo-political conflicts and events could put our employees and partners at substantial risk,interrupt our operations,increase costs,createadditional regulatory burdens,and have significant negative macroeconomic effects,any of which could seriously harm our business.Significant geo-political conflicts and events have had,and will likely continue to have,a substantial effect on our business and operations.We havehad,and will likely continue to have,team members and their families in impacted regions who face substantial personal risk,unprecedented disruption of theirlives,and uncertainty as to the future.We have provided emergency assistance and support to these team members and their families,and we expect to continuethis support in the future.In addition,we have offices,hardware,and other assets in impacted regions that may be at risk of destruction or theft.We haveincurred,and will likely continue to incur,costs to support our team members and reorganize our operations to address these ongoing challenges.In addition,our management has spent significant time and attention on these and related events.The ongoing disruptions to our team members,our management,and ouroperations could seriously harm our business.Generally,during times of war and other major conflicts,we,the third parties on which we rely,and our partners are vulnerable to a heightened risk ofcyberattacks,including retaliatory cyberattacks,that could seriously disrupt our business.We have experienced,and may continue to experience,attemptedcyberattacks on our products,systems,and networks,which we believe are related to conflicts.We may also face retaliatory attacks by governments,entities,or individuals who do not agree with our public expressions with regards to any conflicts or support for team members.Any such attack could cause disruptionto our platform,systems,and networks,result in security breaches or data loss,damage our brand,or reduce demand for our services or advertising products.Inaddition,we may face significant costs(including legal and litigation costs)to prevent,correct,or remediate any such breaches.We may also be forced toexpend additional resources monitoring our platform for evidence of disinformation or misuse in connection with the ongoing conflict.Geo-political conflicts and events are inherently unpredictable,evolve quickly,and may have negative long-term impacts.On a macroeconomic level,geo-political conflicts may disrupt trade,intensify problems in the global supply chain,and contribute to inflationary pressures.All of these factors maynegatively impact the demand for advertising as companies face limited product availability,restricted sales opportunities,and condensed margins.Any pauseor reduction in advertising spending in connection with geo-political conflicts or events could negatively impact our revenue and harm our business.If we do not develop successful new products or improve existing ones,our business will suffer.We may also invest in new lines of business that could failto attract or retain users or generate revenue.Our ability to engage,retain,and increase our user base and to increase our revenue will depend heavily on our ability to successfully create newproducts,both independently and together with third parties.We may introduce significant changes to,or discontinue,our existing products or develop andintroduce new and unproven products and services,including technologies with which we have little or no prior development or operating experience.Thesenew products and updates may fail to increase the engagement of our users,advertisers,or partners,may subject us to increased regulatory requirements orscrutiny,and may even result in short-term or long-term decreases in such engagement by disrupting existing user,advertiser,or partner behavior or byintroducing performance and quality issues.For example,in January 2023,we made changes to our advertising platform,which we believe will lay thefoundation for future growth,but which have been disruptive to our customers and how some of them utilized our platform.The short-and long-term impact ofany major change,or even a less significant change such as a refresh of the application or a feature change,is difficult to predict.Although we believe thatthese decisions will benefit the aggregate user experience and improve our20Table of Contentsfinancial performance over the long term,we may experience disruptions or declines in our DAUs or user activity broadly or concentrated on certain portionsof our application.Product innovation is inherently volatile,and if new or enhanced products fail to engage our users,advertisers,or partners,or if we fail togive our users meaningful reasons to return to our application,we may fail to attract or retain users or to generate sufficient revenue,operating margin,or othervalue to justify our investments,any of which may seriously harm our business in the short-term,long-term,or both.Because our products created new ways of communicating,they have often required users to learn new behaviors to use our products,or to use ourproducts repeatedly to receive the most benefit.These new behaviors,such as swiping and tapping in the Snapchat application,are not always intuitive to users.This can create a lag in adoption of new products and new user additions related to new products.We believe this has not hindered our user growth orengagement,but that may be the result of a large portion of our user base being in a younger demographic and more willing to invest the time to learn to useour products most effectively.To the extent that future users,including those in older demographics,are less willing to invest the time to learn to use ourproducts,and if we are unable to make our products easier to learn to use,our user growth or engagement could be affected,and our business could be harmed.We may also develop new products or initiatives that increase user engagement and costs without increasing revenue in the short-or long-term.In addition,we have invested,and expect to continue to invest,in new lines of business,new products,evolving the user experience,and otherinitiatives to increase our user base and user activity,and attempt to monetize the platform.For example,in 2022,we launched Snapchat ,a subscriptionproduct that gives subscribers access to exclusive,experimental,and pre-release features,and Snapchat for Web,a browser-based product that bringsSnapchats signature capabilities to the web,in 2023,we launched My AI,an artificial intelligence powered chatbot,and in 2024,we began testing SimpleSnapchat,a new and simplified version of our service.Such new lines of business,new products,evolving user experiences,and other initiatives may be costly,difficult to operate and monetize,increase regulatory scrutiny and product liability and litigation risk,and divert managements attention,and there is noguarantee that they will be positively received by our community,attract or retain users,generate sufficient revenue or operating margin,or provide positivereturns on our investment.For example,Simple Snapchat offers several new features,such as reducing the number of tabs in the application and creating aunified content feed.Although we believe these changes will create an improved user experience,we are still testing and do not know how users or advertiserswill adapt or respond to these changes,and whether these changes will ultimately improve our business.Any adverse response to these changes by users oradvertisers could seriously harm our business.We frequently launch new products and the products that we launch may have technical issues that diminish theperformance of our application,experience product failures,or become subject to product recalls.These performance issues or issues that we encounter in thefuture could impact our user engagement.In addition,new products or features that we launch may ultimately prove unsuccessful or no longer fit with ourpriorities,and may be eliminated in the future.Such eliminations may require us to reduce our workforce and incur significant expenses.In certain cases,newproducts that we develop may require regulatory approval prior to launch or may require us to comply with additional regulations or legislation,including lawsthat are rapidly changing.There is no guarantee that we will be able to obtain such regulatory approval,and our efforts to comply with these laws andregulations could be costly and divert managements time and effort and may still not guarantee compliance.If we do not successfully develop new approachesto monetization or meet the expectations of our users or partners,we may not be able to maintain or grow our revenue as anticipated or recover any associateddevelopment costs,and our business could be seriously harmed.Our business is highly competitive.We face significant competition that we anticipate will continue to intensify.If we are not able to maintain or improveour market share,our business could suffer.We face significant competition in almost every aspect of our business both domestically and internationally,especially because our products andservices operate across a broad list of categories,including camera,visual messaging,content,and augmented reality.Our competitors range from smaller ornewer companies to larger,more established companies such as Alphabet(including Google and YouTube),Apple,ByteDance(including TikTok),Kakao,LINE,Meta(including Facebook,Instagram,Threads,and WhatsApp),Na
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM 20-F REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR 12(g)OF THE SECURITIES EXCHANGE ACT OF 1934 OR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2024.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.For the transition period from to Commission file number 001-35158 Phoenix New Media Limited(Exact name of Registrant as specified in its charter)Cayman Islands(Jurisdiction of incorporation or organization)Floor 25,Tower B,POSCO CenterHongtai East StreetWangjing,Chaoyang District,Beijing 100102Peoples Republic of China(Address of principal executive offices)Contact Person:Mr.Edward LuChief Financial Officer(86 10)6067-6869Floor 25,Tower B,POSCO CenterHongtai East StreetWangjing,Chaoyang District,Beijing 100102Peoples Republic of China(Name,Telephone,E-mail 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(s)Name of each exchange on which registeredAmerican Depositary Shares,each representing forty-eightClass A ordinary shares FENGNew York Stock Exchange,Inc.Class A ordinary shares,par value$0.01 per share*N/A New York Stock Exchange,Inc.*Not for trading,but only in connection with the registration of American Depositary Shares representing such Class A ordinary shares pursuant to the requirements of the Securities and Exchange Commission.Securities registered or to be registered pursuant to Section 12(g)of the Act:None Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act:None Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report.259,191,877 Class A ordinary shares were outstanding as of December 31,2024 317,325,360 Class B ordinary shares were outstanding as of December 31,2024 Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No If this report is an annual or transition report,indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934.Yes No Note Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934 from their obligations under those Sections.Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or an emerging growth company.See 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 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 managements 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.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 registrants executive ocers 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 issuedby the International Accounting Standards Board Other If“Other”has been checked in response to the previous question,indicate by check mark which financial statement item the registrant has elected to follow.Item 17 Item 18 If this is an annual report,indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 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 NoPHOENIX NEW MEDIA LIMITED FORM 20-F ANNUAL REPORTFISCAL YEAR ENDED DECEMBER 31,2024 Page PART I4ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS4ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE4ITEM 3.KEY INFORMATION4ITEM 4.INFORMATION ON THE COMPANY61ITEM 4A.UNRESOLVED STAFF COMMENTS97ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS97ITEM 6.DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES111ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS117ITEM 8.FINANCIAL INFORMATION120ITEM 9.THE OFFER AND LISTING121ITEM 10.ADDITIONAL INFORMATION122ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK128ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES129PART II131ITEM 13.DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIES131ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS131ITEM 15.CONTROLS AND PROCEDURES131ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT132ITEM 16B.CODE OF ETHICS132ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES132ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES133ITEM 16E.PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS133ITEM 16F.CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT133ITEM 16G.CORPORATE GOVERNANCE133ITEM 16H.MINE SAFETY134ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS134ITEM 16J.INSIDER TRADING POLICIES134ITEM 16K.CYBERSECURITYPART III137ITEM 17.FINANCIAL STATEMENTS137ITEM 18.FINANCIAL STATEMENTS137ITEM 19.EXHIBIT INDEX1371Conventions that Apply to this Annual Report on Form 20-FIn this annual report,unless otherwise indicated:“ADSs”refers to our American depositary shares,each of which represents forty-eight Class A ordinary shares and“ADRs”refers to the American depositary receipts that may evidence our ADSs;“China”or“PRC”refers to the Peoples Republic of China,and only in the context of describing specific laws and regulations adopted by the PRC and other legal or tax matters applicable only to mainland China,excludes Hong Kong,Macau and Taiwan;“Class A ordinary shares”refer to our Class A ordinary shares,par value US$0.01 per share;“Class B ordinary shares”refer to our Class B ordinary shares,par value US$0.01 per share,each of which shall be entitled to 1.3 votes on all matters subject to shareholders vote;“Fenghuang On-line”refers to Fenghuang On-line(Beijing)Information Technology Co.,Ltd.,a wholly foreign-owned PRC entity and an indirect wholly-owned subsidiary of our company;“Fenghuang Ronghe”refers to Beijing Fenghuang Ronghe Investment Co.,Ltd.,a PRC domestic company and one of the VIEs;“Fengyu Network”refers to Beijing Fengyu Network Technology Co.,Ltd.,a PRC domestic company and a subsidiary of Tianying Jiuzhou;“Huanyou Tianxia”refers to Beijing Huanyou Tianxia Technology Co.,Ltd.,a PRC domestic company and an indirect subsidiary of Tianying Jiuzhou;“ordinary shares”refer to our Class A ordinary shares and Class B ordinary shares,collectively;“Phoenix TV”refers to Phoenix Media Investment(Holdings)Limited;“Phoenix TV(BVI)”refers to Phoenix Satellite Television(B.V.I.)Holding Limited,a wholly owned direct subsidiary of Phoenix TV,which directly owned 55.0%of our share capital as of March 31,2025;“Phoenix TV Group”refers to Phoenix TV and its subsidiaries and variable interest entities,not including our company;“PRC subsidiaries”refer to Fenghuang On-line(Beijing)Information Technology Co.,Ltd.,Beijing Fenghuang Yutian Software Technology Co.,Ltd.,Fenghuang Feiyang(Beijing)New Media Information Technology Co.,Ltd.,Beijing Fenghuang Borui Software Technology Co.,Ltd.and any other companies established in the PRC in which we hold direct or indirect certain equity interest and whose financial results are consolidated into our financial statements in accordance with U.S.GAAP;and unless otherwise specified herein,references to“PRC subsidiaries”in this annual report do not include the companies established in the PRC in which we do not hold directly or indirectly any equity interest but whose financial results are consolidated into our financial statements as variable interest entities in accordance with U.S.GAAP;“RMB”or“Renminbi”refers to the legal currency of China;“$”,“dollars”,“US$”and“U.S.dollars”refer to the legal currency of the United States;“Tianying Jiuzhou”refers to Beijing Tianying Jiuzhou Network Technology Co.,Ltd.,a PRC domestic company and one of the VIEs;“VIEs”refer to Beijing Fenghuang Ronghe Investment Co.,Ltd.and Beijing Tianying Jiuzhou Network Technology Co.,Ltd.,each of which is a PRC domestic company.Significant part of our operations in China are conducted by the VIEs,in which we do not own any equity interest,through contractual arrangements.We treat both of these two PRC domestic companies as variable interest entities and have consolidated their financial results in our financial statements in accordance with generally accepted accounting principles in the United States,or U.S.GAAP;“we”,“us”,“our company”,“our”and“Phoenix New Media”refer to Phoenix New Media Limited,a Cayman Islands company and its subsidiaries,and,in the context of describing our operations and consolidated financial information,its VIEs in China,including but not limited to Tianying Jiuzhou and Fenghuang Ronghe;and“Yifeng Lianhe”refers to Yifeng Lianhe(Beijing)Technology Co.,Ltd.,a PRC domestic company wholly owned by Fenghuang Ronghe.2On May 23,2022,we effected a change of the ratio of our ADSs to Class A ordinary shares from the then ADS ratio of one(1)ADS to eight(8)Class A ordinary shares to a new ADS ratio of one(1)ADS to forty-eight(48)Class A ordinary shares.Unless otherwise indicated,ADSs and per ADS amount in this annual report have been retroactively adjusted to reflect the change in ratio for all periods presented.This annual report contains statistical data that we obtained from various government and private publications.We have not independently verified the data in these reports and database.Statistical data in these publications also include projections based on a number of assumptions.If any one of the assumptions underlying the statistical data turns out to be incorrect,actual results may differ from the projections based on these assumptions.This annual report on Form 20-F includes our audited consolidated financial statements for the years ended December 31,2022,2023 and 2024,and as of December 31,2023 and 2024.Our ADSs are listed on the New York Stock Exchange under the symbol“FENG.”Unless otherwise noted,all translations from Renminbi to U.S.dollars and from U.S.dollars to Renminbi in this annual report are made at a rate of RMB7.2993 to US$1.00,the exchange rate in effect as of December 31,2024 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.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.3Forward-Looking InformationThis annual report on Form 20-F contains forward-looking statements that involve risks and uncertainties.All statements other than statements of historical facts are forward-looking statements.These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results,performance or achievements to be materially different from those expressed or implied by the forward-looking statements.You can identify these forward-looking statements by words or phrases such as“aim,”“anticipate,”“believe,”“estimate,”“expect,”“intend,”“likely to,”“may,”“plan,”“will”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,operating results,business strategy and financial needs.These forward-looking statements include:our growth strategies,including without limitation strategies to grow particular products or services;our future business development,operating results and financial condition;expected changes in our revenues,including in components of our total revenues,and cost or expense items;our ability to continue and manage the expansion of our operations;andchanges in general economic and business conditions in China.The forward-looking statements made in this annual report on Form 20-F relate only to events or information as of the date on which the statements are made in this annual report on Form 20-F.We undertake no obligation to update or revise publicly any forward-looking statements,whether as a result of new information,future events or otherwise,after the date on which the statements are made or to reflect the occurrence of unanticipated events.You should read this annual report on Form 20-F and the documents that we reference in this annual report on Form 20-F and have filed as exhibits hereto with the understanding that our actual future results may be materially different from what we expect.You should not rely upon forward-looking statements as predictions of future events.Other sections of this annual report on Form 20-F include additional factors that could adversely impact our business and financial performance.Moreover,we operate in an evolving environment.New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties,nor can we assess the impact of all factors on our business or the extent to which any factor,or combination of factors,may cause actual results to differ materially from those contained in any forward-looking statements.4PART IITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERSNot required.ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLENot required.ITEM 3.KEY INFORMATIONOur Corporate StructureThe following diagram illustrates our corporate structure as of December 31,2024,including our subsidiaries,the VIEs and their subsidiaries that are significant subsidiaries as defined in rule 1-02(w)of Regulation S-X:Our Corporate Structure and Contractual Arrangements with the VIEsPhoenix New Media Limited is not an operating company in China but a Cayman Islands holding company,which has no equity ownership in the VIEs,with operations primarily conducted by our PRC subsidiaries and through contractual arrangements with the VIEs based in China.Currently,VIEs are(i)Fenghuang Ronghe and(ii)Tianying Jiuzhou.Under the PRC laws and regulations,the operation and provision of internet information services to the public,value-added telecommunication-based online marketing,internet audio visual program services and internet culture operations(except for music)in the PRC is subject to foreign investment restrictions and license requirements.Therefore,we operate such businesses in China through the VIEs,and rely on contractual arrangements among our PRC subsidiaries,the VIEs and their respective shareholders to control the business operations of the VIEs.Revenue contributed by the VIEs and their subsidiaries accounted for 44.5%,43.4%and 47.9%of our total revenues for the years ended December 31,2022,2023 and 2024,respectively.As used in this annual report,“we,”“us,”“our company,”“our”and“Phoenix New Media”refer to Phoenix New Media Limited,a Cayman Islands company and its subsidiaries,and,in the context of describing its operations and consolidated financial information,its VIEs in China,including but not limited to Tianying Jiuzhou and Fenghuang Ronghe.Investors in our ADSs are not purchasing equity interest in our operating entities in China,but instead are 5purchasing an equity interest in Phoenix New Media Limited,a Cayman Islands holding company.The VIEs are consolidated with our results of operations for accounting purposes.However,we do not own equity interest in Fenghuang Ronghe or Tianying Jiuzhou.Furthermore,Phoenix New Media Limited,as our holding company,does not conduct operating activities other than holding investment in certain of our equity investees.Our PRC subsidiaries,the VIEs and their respective shareholders have entered into a series of contractual agreements,including loan agreements,equity pledge agreements,exclusive equity option agreements,exclusive technical consulting and service agreements,voting right entrustment agreements,and spousal consent letters.Terms contained in the contractual arrangements with each of the VIEs and their respective shareholders are substantially similar.For more details of these contractual arrangements,see“Item 4.Information on the CompanyC.Organizational StructureContractual Arrangements with the VIEs.”The contractual arrangements may not be as effective as ownership in providing us with control over the VIEs.If the VIEs or their shareholders fail to perform their respective obligations under these contractual arrangements,our recourse to the assets held by the VIEs is indirect and we may have to incur substantial costs and expend significant resources to enforce such arrangements in reliance on legal remedies under PRC law.These remedies may not always be effective,particularly in light of uncertainties regarding the interpretation and enforcement of the relevant laws and regulations.Furthermore,in connection with litigation,arbitration or other judicial or dispute resolution proceedings,assets under the name of any of record holder of equity interest in the VIEs,including such equity interest,may be put under court custody.As a consequence,we cannot be certain that the equity interest will be disposed pursuant to the contractual arrangement or ownership by the record holder of the equity interest.See“D.Risk FactorsRisks Relating to Our Corporate StructureWe rely on contractual arrangements with the VIEs in China,and their shareholders,for our business operations,which may not be as effective in providing operational control or enabling us to derive economic benefits as through ownership of controlling equity interest,”and“D.Risk FactorsRisks Relating to Our Corporate StructureThe shareholders of the VIEs may have potential conflicts of interest with us.”Our corporate structure is subject to risks associated with our contractual arrangements with the VIEs.Investors may never directly hold equity interest in the VIEs.If the PRC government finds that the agreements that establish the structure for operating our business do not comply with PRC laws and regulations,or if these regulations or their interpretations change in the future,we could be subject to severe penalties,forced to relinquish our interests in those operations or required to restructure our ownership structure or operations,including terminating the contractual arrangements with the VIEs or deregistering the equity pledge of the VIEs,which in turn would affect our ability to consolidate,derive economic interests from,or exert effective control over the VIEs and thus have a material effect on our operations and result in the value of our ADSs diminishing substantially and our ADSs may become worthless.Our holding company,our PRC subsidiaries,the VIEs,and investors of our company face uncertainty regarding potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIEs and,consequently,significantly affect the financial performance of the VIEs and our company as a whole.There are also substantial uncertainties regarding the interpretation and application of current and future PRC laws,regulations and rules regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the VIEs and their respective shareholders.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 any of the VIEs 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 in accordance with the applicable laws and regulations to take action in dealing with such violations or failures.See“D.Risk FactorsRisks Relating to Our Corporate StructureIf the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC governmental restrictions on foreign investment in Internet businesses,or if these regulations or the interpretation of existing regulations change in the future,we would be subject to severe penalties or be forced to relinquish our interests in those operations,”and“D.Risk FactorsRisks Relating to Doing Business in ChinaUncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure,corporate governance and business operations.”We face various legal and operational risks and uncertainties associated with being based in or having our operations primarily in China and the countrys complex and evolving laws and regulations.For example,we face risks associated with regulatory approvals on offerings conducted overseas by and foreign investment in China-based issuers,the use of the VIEs,anti-monopoly regulatory actions,and oversight on cybersecurity and data privacy,which may impact our ability to conduct certain businesses,accept foreign investments,or list on a United States or other foreign exchange outside of China.These risks could result in a material adverse change in our operations and the value of our ADSs,significantly limit or completely hinder our ability to offer or continue to offer securities to investors,or cause the value of such securities to significantly decline or become worthless.For a detailed description of risks related to doing business in China,see“D.Risk FactorsRisks Related to Doing Business in China.”Furthermore,the Holding Foreign Companies Accountable Act,as amended,or the HFCA Act,may affect our ability to maintain our listing on the New York Stock Exchange,or NYSE.See“D.Risks FactorsRisks Relating to Doing Business in China If the PCAOB determines that it is unable to inspect or investigate completely our auditor at any point in the future,our ADSs may be 6prohibited from trading in the United States under the HFCA Act,and any such trading prohibition on our ADSs or threat thereof may materially and adversely affect the price of our ADSs and value of your investment.”The Holding Foreign Companies Accountable ActPursuant to the HFCA Act,if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has a branch or office that is located in a foreign jurisdiction and the U.S.Public Company Accounting Oversight Board,or the PCAOB,has determined that it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction,the SEC will identify us as a“covered issuer”,or SEC-identified issuer,shortly after we file with the SEC a report required under the Securities Exchange Act of 1934,or the Exchange Act(such as our annual report on Form 20-F)that includes an audit report issued by such accounting firm,and if we are so identified for two consecutive years,the SEC will prohibit our securities(including our shares or the ADSs)from being traded on a national securities exchange or in the over-the-counter trading market in the United States.On December 16,2021,the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong,including our auditor.In May 2022,the SEC conclusively listed us as an SEC-identified Issuer under the HFCA Act following the filing of our annual report on Form 20-F for the fiscal year ended December 31,2021.On December 15,2022,the PCAOB issued a report that vacated its December 16,2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.As such,we were not identified as an SEC-identified Issuer under the HFCA Act after we filed our annual report on Form 20-F for the year ended December 31,2022.However,the PCAOB may change its determination as to whether it can inspect and investigate completely audit firms in mainland China and Hong Kong,among other jurisdictions,at any time.If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC,we may be identified as an SEC-identified Issuer again.There can be no assurance that we will not be identified as an SEC-identified Issuer in the future,and if we are so identified for two consecutive years,our securities will become subject to the prohibition on trading under the HFCA Act.See“Item 3.Key InformationD.Risk FactorsRisks Relating to Doing Business in China If the PCAOB determines that it is unable to inspect or investigate completely our auditor at any point in the future,our ADSs may be prohibited from trading in the United States under the HFCA Act,and any such trading prohibition on our ADSs or threat thereof may materially and adversely affect the price of our ADSs and value of your investment.”Permissions Required from the PRC Authorities for Our OperationsWe conduct our business primarily through our PRC subsidiaries and the VIEs in China.Our business operations in China are governed by PRC laws and regulations.As of the date of this annual report,our PRC subsidiaries and the VIEs have received all material permissions that are,or may be,required for our business operations in China,and no material permission has been denied from us by relevant authorities in China,except those as disclosed in“D.Risk FactorsRisks Relating to Our Business and IndustryOur lack of an Internet audio-visual program transmission license has exposed,and may continue to expose,us to administrative sanctions,including the banning of our paid mobile video services and video advertising services,which would materially and adversely affect our business and results of operation,”“D.Risk FactorsRisks Relating to Our Business and IndustryOur lack of an Internet news license may expose us to administrative sanctions,including an order to cease our Internet information services or to cease the Internet access services provided by third parties to us.In 2024,the vast majority of our total revenues were derived from Internet information services and services that relied on Internet access services from third parties,”“D.Risk FactorsRisks Relating to Our Business and IndustryFailure to obtain NRTAs approval for introducing and broadcasting foreign television programs could have a material adverse effect on our ability to conduct our business,”“D.Risk FactorsRisks Relating to Our Business and IndustryFailure to obtain certain permits for our advertising services that contain drug-related information would subject us to penalties,”and“D.Risk FactorsRisks Relating to Our Business and IndustryIf we fail to obtain or maintain all applicable permits and approvals,or fail to comply with PRC regulations,relating to Internet publishing services,our ability to conduct our digital reading business and certain other businesses could be affected and we could be subject to penalties and other administrative sanctions.”Given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant government authorities,we may be required to obtain additional licenses,permits,filings or approvals for the functions and services of our platform in the future.In connection with our issuance of securities to foreign investors,under currently effective PRC laws,regulations and regulatory rules,as of the date of this annual report,we,our PRC subsidiaries and the VIEs,(i)are not required to obtain permissions from the China Securities Regulatory Commission,or the CSRC,(ii)have not been involved in any cybersecurity review initiated by the Cyberspace Administration of China,or the CAC,and(iii)have not received or were denied such requisite permissions by any PRC authority.7However,the PRC government has recently indicated an intent to exert more oversight and regulating over offerings that are conducted overseas and/or foreign investment in China-based issuers.For more detailed information,see“D.Risk FactorsRisks Relating to Doing Business in ChinaThe approval,filing or other requirements of the CSRC,CAC or other PRC government authorities may be required under PRC law in connection with our issuance of securities overseas.Our failure to obtain these approvals,if required,could have a material adverse effect on our business,operating results,reputation and trading price of our ADSs.”Cash and Asset Flows through Our OrganizationUnder PRC law,we may provide funding to our PRC subsidiaries only through capital contributions or loans,and to the VIEs and their subsidiaries only through loans,subject to satisfaction of applicable government registration and approval requirements.For risks relating to the fund flows of our operations in China,see“Item 3.Key InformationRisk FactorsRisks Related to Doing Business in ChinaWe rely on dividends and other distributions on equity from our PRC subsidiaries to fund any cash and financing requirements we have,and any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business.”Phoenix New Media Limited transfers cash to our wholly-owned Hong Kong subsidiaries,by making capital contributions or providing loans,and our Hong Kong subsidiaries transfer cash to our PRC subsidiaries by making capital contributions or providing loans to them.Because Phoenix New Media Limited and our subsidiaries have the power to direct the activities that most significantly impact the economic performance of the VIEs and provide them with economic benefits of the VIEs through contractual arrangements,they are not able to make direct capital contribution to the VIEs and their subsidiaries.However,they may transfer cash to the VIEs and their subsidiaries by loans or by making payment to the VIEs and their subsidiaries for inter-group transactions.Prior to January 1,2022,Phoenix New Media Limited,through its intermediate holding companies,provided capital contribution of RMB527.7 million to its subsidiaries in China.In 2022,Qieyiyou(Beijing)Information Technology Co.,Ltd.,or Qieyiyou,terminated the contractual agreements with Beijing Chenhuan Technology Co.,Ltd.,or Chenhuan.In 2023,our subsidiaries returned capital contribution of RMB19.7 million to Phoenix New Media Limited.As of January 1,2022,our subsidiaries had debt financing from Phoenix New Media Limited of RMB834.6 million and the VIEs and their subsidiaries had debt financing from our subsidiaries of RMB255.9 million.Our subsidiaries received RMB0.06 million of debt financing from Phoenix New Media Limited in 2022,repaid RMB10.3 million of debt financing to Phoenix New Media Limited in 2023 and received RMB15.9 million(US$2.2 million)of debt financing from Phoenix New Media Limited in 2024.The VIEs and their subsidiaries repaid RMB77.6 million of debt financing to our subsidiaries in 2022,received RMB229.9 million of debt financing from our subsidiaries in 2023 and repaid RMB41.2 million(US$5.6 million)of debt financing to our subsidiaries in 2024.For the years ended December 31,2022,2023 and 2024,there were no dividends or distributions were made to Phoenix New Media Limited by our subsidiaries.Under PRC laws and regulations,our PRC subsidiaries and the VIEs and their subsidiaries are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to us.Remittance of dividends by a wholly foreign-owned enterprise out of China is also subject to examination by the banks designated by SAFE.The amounts restricted include the paid-up capital and the statutory reserve funds of our PRC subsidiaries and the VIEs and their subsidiaries,totaling RMB409.3 million,RMB481.2 million and RMB424.8 million(US$58.2 million)as of December 31,2022,2023 and 2024,respectively.Furthermore,cash transfers from our PRC subsidiaries to entities outside of China are subject to PRC government regulations of currency conversion.Shortages in the availability of foreign currency may temporarily delay the ability of our PRC subsidiaries and VIEs and their subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us,or otherwise satisfy their foreign currency denominated obligations.For risks relating to the fund flows of our operations in China,see“Item 3.Key InformationRisk FactorsRisks Relating to Doing Business in ChinaWe rely on dividends and other distributions on equity from our PRC subsidiaries to fund any cash and financing requirements we have,and any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business.”We do not have a cash management policy to dictate how funds are transferred between the VIEs and their subsidiaries and our subsidiaries.Phoenix New Media Limited has no present plan to pay any cash dividends on our ordinary shares in the foreseeable future.We currently intend to retain most,if not all,of our available funds and any future earnings to operate and expand our business.See“Item 8.Financial InformationA.Consolidated Statements and Other Financial InformationDividend Policy.”For PRC and United States federal income tax considerations of an investment in our ADSs,see“Item 10.Additional InformationE.Taxation.”For the years ended December 31,2022,2023 and 2024,no assets other than cash were transferred through our organization.8Taxation on Dividends or DistributionsPhoenix New Media Limiteds source of dividend partly comes from dividends paid by our PRC subsidiaries,including the primary beneficiary of the VIEs,which in part depends on payments received from the VIEs under the contractual arrangements with the VIEs.None of our subsidiaries has declared or paid any dividend or distribution to Phoenix New Media Limited.Phoenix New Media Limited does not have any present plan to pay any cash dividends on its ordinary shares in the foreseeable future and we currently intend to retain most,if not all,of our available funds and any future earnings to fund the development and growth of our business.The undistributed earnings that are subject to dividend tax are expected to be indefinitely reinvested for the foreseeable future.For purposes of illustration,the following discussion reflects the hypothetical taxes that we might be required to pay within mainland China,assuming that:(i)we have taxable earnings,and(ii)we determine to pay a dividend in the future:Tax calculation(1)Hypothetical pre-tax earnings(2)100.0%Tax on earnings at statutory rate of 25%(3)(25.0)%Net earnings available for distribution75.0%Withholding tax at standard rate of 10%(4)(7.5)%Net distribution to Parent/Shareholders67.5%Notes:(1)For purposes of this example,the tax calculation has been simplified.The hypothetical book pre-tax earnings amount,not considering timing differences,is assumed to equal taxable income in China.(2)Under the terms of VIE agreements,our PRC subsidiaries may charge the VIEs for services provided to VIEs.These service fees shall be recognized as expenses of the VIEs,with a corresponding amount as revenues by our PRC subsidiaries and eliminate in consolidation.For income tax purposes,our PRC subsidiaries and VIEs file income tax returns on a separate company basis.The service fees paid are recognized as a tax deduction by the VIEs and as income by our PRC subsidiaries and are tax neutral.(3)Certain of our subsidiaries and the VIEs qualify for a 15%preferential income tax rate in China.However,such rate is subject to qualification,is temporary in nature,and may not be available in a future period when distributions are paid.For purposes of this hypothetical example,the table above reflects a maximum tax scenario under which the full statutory rate would be effective.(4)The PRC Enterprise Income Tax Law imposes a withholding income tax of 10%on dividends distributed by a foreign invested enterprise,or FIE,to its immediate holding company outside of China.A lower withholding income tax rate of 5%is applied if the FIEs immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with China,subject to a qualification review at the time of the distribution.For purposes of this hypothetical example,the table above assumes a maximum tax scenario under which the full withholding tax would be applied.The table above has been prepared under the assumption that all profits of the VIEs will be distributed as fees to our PRC subsidiaries under tax neutral contractual arrangements.If,in the future,the accumulated earnings of the VIEs exceed the service fees paid to our PRC subsidiaries(or if the current and contemplated fee structure between the inter-company entities is determined to be non-substantive and disallowed by Chinese tax authorities),the VIEs could make a non-deductible transfer to our PRC subsidiaries for the amounts of the stranded cash in the VIEs.This would result in such transfer being non-deductible expenses for the VIEs but still taxable income for the PRC subsidiaries.Our management believes that there is only a remote possibility that this scenario would happen.9Financial Information Related to the VIEs The following tables present the condensed consolidating schedule of financial performance,financial position and cash flows for the VIEs and other entities for the periods and as of the dates presented.Selected Condensed Consolidated Statements of Operations DataFor the Year Ended December 31,2024Phoenix New Media LimitedOther SubsidiariesPrimary Beneficiary of the VIEsThe VIEs and the VIEs SubsidiariesEliminating AdjustmentsConsolidated TotalsRMB(in thousands)Inter-company revenues(1)(4)23,68851,49011,400(86,578)Third-party revenues366,867336,828703,695Inter-company cost of revenues(1)(4)(18,600)(67,290)85,890Third-party cost of revenues(243,640)(14,974)(176,375)(434,989)Gross profit128,31536,516104,563(688)268,706Total operating expenses(8,979)(133,965)(74,507)(116,664)688(333,427)Loss from operations(8,979)(5,650)(37,991)(12,101)(64,721)(Loss)/income from non-operations(2,556)21,2131,926(4,163)16,420Share of(loss)/income from the subsidiaries(2)(42,019)(52,389)7,21387,195Loss from the VIEs(2)(16,324)16,324Loss before tax(53,554)(36,826)(45,176)(16,264)103,519(48,301)Income tax(expense)/benefit(5,193)548(4,645)Net loss(53,554)(42,019)(45,176)(15,716)103,519(52,946)Net income attributable to noncontrolling interests(608)(608)Net loss attributable to Phoenix New Media Limited(53,554)(42,019)(45,176)(16,324)103,519(53,554)For the Year Ended December 31,2023Phoenix New Media LimitedOther SubsidiariesPrimary Beneficiary of the VIEsThe VIEs and the VIEs SubsidiariesEliminating AdjustmentsConsolidated TotalsRMB(in thousands)Inter-company revenues(1)(4)10,75633,28540,136(84,177)Third-party revenues391,735300,285692,020Inter-company cost of revenues(1)(4)(60,419)(23,035)83,454Third-party cost of revenues(228,735)(21,876)(213,534)(464,145)Gross profit113,33711,409103,852(723)227,875Total operating expenses(16,902)(123,335)(81,102)(133,138)905(353,572)Loss from operations(16,902)(9,998)(69,693)(29,286)182(125,697)(Loss)/income from non-operations(3,237)29,6004,581(1,204)(182)29,558Share of(loss)/income from the subsidiaries(2)(82,357)(99,969)3,462178,864Loss from the VIEs(2)(34,857)34,857Loss before tax(102,496)(80,367)(96,507)(30,490)213,721(96,139)Income tax expense(2,458)(10,518)(12,976)Net loss(102,496)(82,825)(96,507)(41,008)213,721(109,115)Net loss attributable to noncontrolling interests4686,1516,619Net loss attributable to Phoenix New Media Limited(102,496)(82,357)(96,507)(34,857)213,721(102,496)10For the Year Ended December 31,2022Phoenix New Media LimitedOther SubsidiariesPrimary Beneficiary of the VIEsThe VIEs and the VIEs SubsidiariesEliminating AdjustmentsConsolidated TotalsRMB(in thousands)Inter-company revenues(1)(4)6,8628,19926,392(41,453)Third-party revenues435,987(8)349,728785,707Inter-company cost of revenues(1)(4)(26,368)(13,714)40,082Third-party cost of revenues(243,133)(55,817)(249,555)(548,505)Gross profit173,348(47,626)112,851(1,371)237,202Total operating expenses(16,945)(141,735)(108,785)(171,803)10,631(428,637)(Loss)/income from operations(16,945)31,613(156,411)(58,952)9,260(191,435)(Loss)/income from non-operations(33,291)22,1237,7178,033(9,260)(4,678)Share of(loss)/income from the subsidiaries(2)(123,773)(178,684)21,380281,077Loss from the VIEs(2)(30,712)30,712Loss before tax(174,009)(124,948)(158,026)(50,919)311,789(196,113)Income tax benefit/(expense)64,357(1,706)7227,02170,394Net loss(109,652)(126,654)(157,304)(43,898)311,789(125,719)Net loss attributable to noncontrolling interests2,88113,18616,067Net loss attributable to Phoenix New Media Limited(109,652)(123,773)(157,304)(30,712)311,789(109,652)11Selected Condensed Consolidated Balance Sheets DataAs of December 31,2024Phoenix New Media LimitedOther SubsidiariesPrimary Beneficiary of the VIEsThe VIEs and the VIEs SubsidiariesEliminating AdjustmentsConsolidated TotalsRMB(in thousands)ASSETSCash and cash equivalents480356,241186,52264,336607,579Term deposits and short-term investments398,73229,611428,343Restricted cash9,7619,761Accounts receivable,net225,773101,022326,795Amounts due from related parties70,5571815,66676,404Amount due from inter-company entities(3)962,552782,504424,125206,412(2,375,593)Property and equipment,net1,6641,9787984,440Intangible assets,net1,2491,66010,81413,723Available-for-sale debt investments313313Investment in the subsidiaries(2)488,251126,835387,010(1,002,096)Contractual interests in the VIEs(2)(368,690)368,690Equity investments,net13,00072,43685,436Deferred income tax assets,net38,67024,58863,258Operating lease right-of-use assets,net33,4525,84817,49156,791Prepayment and other assets3,60914,4185,23015,82739,084Total assets1,455,2052,063,095643,864558,762(3,008,999)1,711,927LIABILITIES AND SHAREHOLDERS EQUITY/(DEFICIT)LiabilitiesAccounts payable100,3116044,299144,670Taxes payable107,718(7,045)75,259175,932Amount due to inter-company entities(3)278,9131,242,837110,704743,143(2,375,597)Accrued expenses and other liabilities1,025118,98231,300126,608277,915Total liabilities279,9381,569,848135,019989,309(2,375,597)598,517Total Phoenix New Media Limited shareholders equity/(deficit)1,175,267493,247508,845(368,690)(633,402)1,175,267Non-controlling interests(61,857)(61,857)Total shareholders equity/(deficit)(2)1,175,267493,247508,845(430,547)(633,402)1,113,410Total liabilities and shareholders equity/(deficit)1,455,2052,063,095643,864558,762(3,008,999)1,711,92712As of December 31,2023Phoenix New Media LimitedOther SubsidiariesPrimary Beneficiary of the VIEsThe VIEs and the VIEs SubsidiariesEliminating AdjustmentsConsolidated TotalsRMB(in thousands)ASSETSCash and cash equivalents21,538332,03362,878110,958527,407Term deposits and short-term investments249,157142,511167,097558,765Restricted cash7,0497,049Accounts receivable,net209,04584,809293,854Amounts due from related parties26,240131,20457,445Amount due from inter-company entities(3)897,329594,615422,71555,006(1,969,665)Property and equipment,net2,4443,5141,2797,237Intangible assets,net1,7042,52815,81820,050Available-for-sale debt investments309309Investment in the subsidiaries(2)535,839177,186379,797(1,092,822)Contractual interests in the VIEs(2)(353,798)353,798Equity investments,net13,00088,221101,221Deferred income tax assets,net42,32927,84170,170Operating lease right-of-use assets,net33,7565,70828,48667,950Prepayment and other assets6,83817,6714,04118,73747,287Total assets1,461,8531,699,180669,895636,505(2,708,689)1,758,744LIABILITIES AND SHAREHOLDERS EQUITY/(DEFICIT)LiabilitiesAccounts payable84,820337,310122,133Taxes payable106,692(8,794)72,581170,479Amount due to inter-company entities(3)235,681845,52399,009789,452(1,969,665)Accrued expenses and other liabilities1,160122,27027,692151,387302,509Total liabilities236,8411,159,305117,9101,050,730(1,969,665)595,121Total Phoenix New Media Limited shareholders equity/(deficit)1,225,012540,837551,985(353,798)(739,024)1,225,012Non-controlling interests(962)(60,427)(61,389)Total shareholders equity/(deficit)(2)1,225,012539,875551,985(414,225)(739,024)1,163,623Total liabilities and shareholders equity/(deficit)1,461,8531,699,180669,895636,505(2,708,689)1,758,74413Selected Condensed Consolidated Cash Flows DataFor the Year Ended December 31,2024Phoenix New Media LimitedOther SubsidiariesPrimary Beneficiary of the VIEsThe VIEs and the VIEs SubsidiariesEliminating AdjustmentsConsolidated TotalsRMB(in thousands)Net cash(used in)/provided by transactions with inter-company entities(151)213,268(213,117)Net cash(used in)/provided by transactions with other entities(4,497)(41,811)(77,199)79,204(44,303)Net cash(used in)/provided by operating activities(4,497)(41,962)136,069(133,913)(44,303)Loans paid to inter-company entities(3)(101,735)(167,640)(142,504)411,879Other investing activities(143,798)139,068132,248127,518Net cash(used in)/provided by investing activities(245,533)(28,572)(10,256)411,879127,518(Repayment of)/proceeds from loans from inter-company entities(3)(15,736)310,14416,147101,324(411,879)Other financing activities(825)(1,076)(1,901)Net cash(used in)/provided by financing activities(16,561)310,14416,147100,248(411,879)(1,901)For the Year Ended December 31,2023Phoenix New Media LimitedOther SubsidiariesPrimary Beneficiary of the VIEsThe VIEs and the VIEs SubsidiariesEliminating AdjustmentsConsolidated TotalsRMB(in thousands)Net cash(used in)/provided by transactions with inter-company entities(41,003)45,888(4,885)Net cash(used in)/provided by transactions with other entities(20,850)42,194(87,351)5,180(60,827)Net cash(used in)/provided by operating activities(20,850)1,191(41,463)295(60,827)Loans(paid to)/repaid by inter-company entities(3)(19,354)294,37772,427(347,450)Return of capital from subsidiaries19,72219,718(39,440)Other investing activities2,437666,648(26,411)(154,830)487,844Net cash provided by/(used in)investing activities22,159667,012267,966(82,403)(386,890)487,844Proceeds from/(repayment of)loans from inter-company entities(3)10,332(366,804)(148,401)157,423347,450Return of capital to parent companies(19,722)(19,718)39,440Other financing activities(655)(655)Net cash provided by/(used in)financing activities9,677(386,526)(168,119)157,423386,890(655)For the Year Ended December 31,2022Phoenix New Media LimitedOther SubsidiariesPrimary Beneficiary of the VIEsThe VIEs and the VIEs SubsidiariesEliminating AdjustmentsConsolidated TotalsRMB(in thousands)Net cash(used in)/provided by transactions with inter-company entities(73,131)27,36345,768Net cash used in transactions with other entities(20,974)(76,278)(153,051)(62,108)(312,411)Net cash used in operating activities(20,974)(149,409)(125,688)(16,340)(312,411)Loans paid to inter-company entities(3)(133,771)(381,921)(77,751)593,443Other investing activities(2,437)(219,029)371,01779,148228,699Net cash(used in)/provided by investing activities(2,437)(352,800)(10,904)1,397593,443228,699(Repayment of)/proceeds from loans from inter-company entities(3)(64)459,672133,712123(593,443)Other financing activitiesNet cash(used in)/provided by financing activities(64)459,672133,712123(593,443)14Notes:(1)It represents the elimination of the inter-company service charge at the consolidation level.(2)It represents the elimination of the investment among Phoenix New Media Limited,other subsidiaries,primary beneficiary of the VIEs,and the VIEs and subsidiaries of the VIEs as well as share of loss from subsidiaries and VIEs.(3)It represents the elimination of inter-company balances,transactions and cash flows among Phoenix New Media Limited,other subsidiaries,primary beneficiary of the VIEs,and the VIEs and subsidiaries of the VIEs.(4)For the years ended December 31,2022,2023 and 2024,the VIEs have incurred RMB13.5 million,RMB23.0 million and RMB67.3 million(US$9.2 million),respectively,in fees related to technical services provided to the subsidiaries and subsidiaries concurrently recognized same amounts as revenues.A.ReservedB.Capitalization and IndebtednessNot required.C.Reasons for the Offer and Use of ProceedsNot required.D.Risk FactorsSummary of Risk FactorsInvesting in our ADSs involves significant risks.You should carefully consider all of the information in this prospectus before making an investment in our ADSs.Below please find a summary of the material risks we face,organized under relevant headings.Risks Relating to Our Business and IndustryRisks and uncertainties relating to our business and industry include,but are not limited to,the following:Due to the rapidly evolving market in which we operate,our historical results may not be indicative of our future performance and there can be no assurance that we will be able to meet internal or external expectations of future performance.(Page 19)We expect to continue to rely on advertising to drive a significant portion of our future revenues,and if we fail to retain existing advertisers or attract new advertisers for our advertising services,our business,operating results and growth prospects could be materially affected.(Page 20)We rely in part on application marketplaces,Internet search engines,navigation sites,web browsers and other social media platforms to drive traffic to our PC websites,mobile applications,mobile websites and third-party platform accounts,and if we fail to appear near the top of such search results or rankings,traffic to our PC websites,mobile applications,mobile websites and third-party platform accounts could decline and our business and operating results could be adversely affected.(Page 20)If we are unable to successfully expand our mobile strategy and increase our mobile advertising revenues,our business,operating results and growth prospects could be materially affected.(Page 21)Newsfeed advertising is an important mobile advertising format in China.If we are unable to successfully develop our newsfeed advertising solution and adapt to new changes in advertising formats and trends,our mobile advertising revenues may be materially and adversely affected.(Page 21)Any failure to retain large advertising agencies or attract new agencies on reasonable terms could materially and adversely affect our business.If advertising agencies demand higher service fees,our gross margin may be negatively affected.(Page 21)If we fail to continue to anticipate user preferences and provide high quality content that attracts and retains users,or if we have to cease providing certain content in order to comply with changing regulatory requirements,we may not be able to generate sufficient user traffic to remain competitive.(Page 22)15If we have to limit or suspend our services in order to comply with changing and increasingly stringent regulatory requirements,our business,financial condition and results of operation may be materially adversely affected.(Page 22)If we fail to successfully develop and introduce new products and services to meet the preferences of users,our competitive position and ability to generate revenues could be harmed.(Page 22)We intend to continue to explore new business opportunities,and such new businesses may not deliver the expected benefits.(Page 23)Devices such as mobile phones,tablets and other Internet-enabled mobile devices,are widely used to access the Internet,we have to continue to develop products and applications for such devices if we are to maintain or increase our market share and revenues,and we may not be successful in doing so.(Page 23)We operate in highly competitive markets and we may not be able to compete successfully against our competitors.(Page 23)We have contracted with third-party content providers and we may lose users and revenues if these relationships deteriorate or arrangements are terminated.If third-party content providers increase their content licensing fees,our operating results may be negatively affected.(Page 23)We may not be able to continue to receive the same level of support from Phoenix TV Group in the future.We could lose our license and priority over any third party to use Phoenix TV Groups content and licensed trademarks,which could have an adverse effect on our business and operating results.(Page 23)Any negative development in Phoenix TVs market position,harm to Phoenix TVs brand or operations,or regulatory actions or legal proceedings affecting Phoenix TVs intellectual properties on which our business relies could materially and adversely affect our business and operating results.(Page 24)Negative publicity,rumors or media coverage of our company,our affiliates or business partners could materially and adversely affect our reputation,business and financial condition.(Page 25)If we are unable to keep pace with rapid technological changes in the PC and mobile Internet industries,our business may suffer.(Page 25)Our lack of an Internet audio-visual program transmission license has exposed,and may continue to expose,us to administrative sanctions,including the banning of our paid mobile video services and video advertising services,which would materially and adversely affect our business and results of operation.(Page 25)Our lack of an Internet news license may expose us to administrative sanctions,including an order to cease our Internet information services or to cease the Internet access services provided by third parties to us.In 2024,the vast majority of our total revenues were derived from Internet information services and services that relied on Internet access services from third parties.(Page 26)Failure to obtain NRTAs approval for introducing and broadcasting foreign television programs could have a material adverse effect on our ability to conduct our business.(Page 26)Failure to obtain certain permits for our advertising services that contain drug-related information would subject us to penalties.(Page 27)If we fail to obtain or maintain all applicable permits and approvals,or fail to comply with PRC regulations,relating to Internet publishing services,our ability to conduct our digital reading business and certain other businesses could be affected and we could be subject to penalties and other administrative sanctions.(Page 27)Our business and operating results may be harmed by service disruptions,or by our failure to timely and effectively scale and adapt our existing technology and infrastructure.(Page 27)Security breaches or computer virus attacks could have a material adverse effect on our business prospects and operating results.(Page 27)We are subject to a variety of laws and other obligations regarding cybersecurity,data security and personal information protection in China,and our failure to comply with any of them could result in proceedings against us by governmental entities or others and harm our public image and reputation,which could have a material adverse effect on our business,results of operations and financial condition.(Page 28)New technologies could block our advertisements and desktop clients,and mobile applications may enable technical measures that could limit our traffic growth and new monetization opportunities.(Page 29)16If we fail to maintain effective internal control over financial reporting,our ability to accurately and timely report our financial results in accordance with U.S.GAAP may be materially and adversely affected.In addition,investor confidence in us and the market price of our ADSs may decline significantly.(Page 30)Our quarterly revenues and operating results may fluctuate,which makes our operating results difficult to predict and may cause our quarterly operating results to fall short of expectations.(Page 30)The VIEs and their respective shareholders do not own all the trademarks used in their value-added telecommunications services,which may subject them to revocation of their licenses or other penalties or sanctions.(Page 30)We may be adversely affected by the complexity,uncertainties and changes in PRC regulation of Internet businesses and companies,including limitations on our ability to own key assets,such as our PC websites,mobile applications,mobile websites and third-party platform accounts.(Page 31)Our advertising and content distribution business,including UGC,are regulated by the relevant PRC laws and regulations and competent government authorities.If such business operations are considered inappropriate by the competent government authorities,we may be subject to penalties or we may have to interrupt or stop the operation of our PC websites,mobile applications,mobile websites and third-party platform accounts.(Page 32)Content provided on our PC websites,mobile applications,mobile websites and third-party platform accounts may expose us to libel or other legal claims,which may result in costly legal damages.(Page 33)Advertisements on our PC websites,mobile applications,mobile websites and third-party platform accounts may subject us to penalties and other administrative actions.(Page 33)Ineffective implementation of the separation of our advertising sales and regulatory compliance functions may result in insufficient supervision over the content of advertisements shown on our PC websites,mobile applications,mobile websites and third-party platform accounts and may subject us to penalties or administrative actions.(Page 34)We prioritize product innovation and user experience over short-term operating results,which may harm our revenue and operating results.(Page 34)The continuing and collaborative efforts of our senior management,key employees and other employees are crucial to our success,and our business may be harmed if we were to lose their services.(Page 34)Our business and reputation may be harmed by the misconduct or errors of our employees or their failure to perform their duties.(Page 35)We have been in the past and may continue to be subject to complaints,claims,controversies,regulatory actions and legal proceedings,which could have a material adverse effect on our results of operation,financial condition,liquidity,cash flows and reputation.(Page 35)We have granted,and may continue to grant,stock options,restricted shares and restricted share units under our share incentive plans or adopt new share incentive plans in the future,which may result in increased share-based compensation.(Page 35)We have been and expect we will continue to be exposed to intellectual property infringement and other claims,including claims based on content posted on our PC websites,mobile applications,mobile websites and third-party platform accounts,which could be time-consuming and costly to defend and may result in substantial damage awards and/or court orders that may prevent us from continuing to provide certain of our existing services.(Page 36)We may not be able to adequately protect our intellectual property,which could cause us to be less competitive.(Page 37)The discontinuation of any of the preferential tax treatments available to us in China could materially and adversely affect our operating results and financial condition.(Page 37)We have limited business insurance coverage.(Page 38)A prolonged slowdown in the global or PRC economies may materially and adversely affect our operating results,financial condition,prospects and future expansion plans.(Page 38)PRC regulations establish complex procedures for certain acquisitions of PRC companies by foreign investors,which could make it more difficult for us to pursue growth through acquisitions in China.(Page 38)We believe we are not an investment company pursuant to Section 3(b)(1)under the Investment Company Act of 1940,as amended,or the 1940 Act,because we believe we are primarily engaged in a non-investment company business,but 17there can be no assurances that the SEC or the courts will agree with our view.(Page 39)We intend to conduct our business activities to maintain compliance with the 1940 Act and that may negatively impact our ability to operate our business as contemplated.Moreover,if we were deemed an“investment company”under 1940 Act,we could be required to take remedial actions that would further interfere operating our business as contemplated.If we are unable to successfully complete necessary remedial actions,we may face severe legal consequences associated with the operation of an unregistered investment company.(Page 39)We believe we were a passive foreign investment company for 2024,and that there is a material risk that we may be classified as a passive foreign investment company for the current and future taxable years,which could result in adverse United States federal income tax consequences to United States Holders(as defined below).(Page 40)Our strategy of acquiring complementary assets,technologies and businesses may fail and may result in equity or earnings dilution.(Page 40)Failure of our business strategies through our subsidiaries,affiliates and other business alliance partners could negatively affect our financial condition,operating results and reputation.(Page 41)We may have conflicts of interest with some of the affiliated companies we have invested in and,because some of our board members and executive officers may hold positions or have other interests in such companies,we may not be able to resolve such conflicts on terms favorable for us.(Page 42)We face risks related to natural disasters,health epidemics and other outbreaks,which could significantly disrupt our operations.(Page 42)Risks Relating to Our Corporate StructureRisks and uncertainties relating to our corporate structure include,but are not limited to,the following:Phoenix TV(BVI)owns our Class B ordinary shares with 1.3 votes per share,allowing it and Phoenix TV to exercise control over matters subject to shareholder approval,and their interests may not be aligned with the interests of our other shareholders.(Page 43)We may have conflicts of interest with Phoenix TV and,because of Phoenix TVs controlling beneficial ownership interest in our company,may not be able to resolve such conflicts on terms favorable for us.(Page 43)If the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC governmental restrictions on foreign investment in Internet businesses,or if these regulations or the interpretation of existing regulations change in the future,we would be subject to severe penalties or be forced to relinquish our interests in those operations.(Page 43)We rely on contractual arrangements with the VIEs in China,and their shareholders,for our business operations,which may not be as effective in providing operational control or enabling us to derive economic benefits as through ownership of controlling equity interest.(Page 44)The shareholders of the VIEs may have potential conflicts of interest with us.(Page 45)The contractual arrangements with the VIEs may be subject to scrutiny by the PRC tax authorities and may result in a finding that we owe additional taxes or are ineligible for tax exemption,or both,which could substantially increase our taxes owed and thereby reduce our net income.(Page 45)We rely on dividends and other distributions on equity from our PRC subsidiaries to fund any cash and financing requirements we have,and any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business.(Page 45)Strengthened scrutiny over acquisition and disposition transactions by the PRC tax authorities may have a negative impact on us or your disposition of our shares or ADS.(Page 46)Risks Relating to Doing Business in ChinaWe are subject to risks and uncertainties relating to doing business in China in general,including,but are not limited to,the following:Adverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.(Page 47)18Uncertainties with respect to the PRC legal system could limit the protections available to you and us.(Page 48)Fluctuations in exchange rates of the Renminbi could materially affect our reported operating results.(Page 48)The ability of U.S.authorities to bring actions for violations of U.S.securities law and regulations against us,our directors,executive officers or the expert named in this annual report may be limited and therefore you may not be afforded the same protection as provided to investors in U.S.domestic companies.(Page 48)You may experience difficulties in effecting service of legal process,enforcing foreign judgments or bringing original actions in China,based on United States or other foreign laws,against us,our directors,executive officers or the experts named in this annual report and therefore you may not be able to enjoy the protection of such laws in an effective manner.(Page 49)PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the net proceeds from any offshore financing that we may undertake in the future to make loans or additional capital contributions to our PRC subsidiaries and the VIEs.(Page 49)If the PRC government finds that our PRC beneficial owners are subject to the SAFE registration requirement under SAFE Circular 37 and the relevant implementing rules and our PRC beneficial owners fail to comply with such registration requirements,such PRC beneficial owners may be subject to personal liability,our ability to acquire PRC companies or to inject capital into our PRC subsidiaries may be limited,our PRC subsidiaries ability to distribute profits to us may be limited,or our business may be otherwise materially and adversely affected.(Page 50)Failure to comply with PRC regulations regarding the registration requirements for stock incentive plans may subject the plan participants or us to fines and other legal or administrative sanctions.(Page 51)The approval,filing or other requirements of the CSRC,CAC or other PRC government authorities may be required under PRC law in connection with our issuance of securities overseas.Our failure to obtain these approvals,if required,could have a material adverse effect on our business,operating results,reputation and trading price of our ADSs.(Page 51)The approval of MOFCOM may be required in connection with the establishment of our contractual arrangements with the VIEs.Our failure to obtain this approval,if required,could have a material adverse effect on our business,operating results,reputation and trading price of our ADSs.(Page 52)Governmental regulations of currency conversion may affect the value of your investment.(Page 53)Dividends we receive from our PRC subsidiaries located in the PRC may be subject to PRC withholding tax.(Page 53)We may be deemed a PRC resident enterprise under the CIT Law and be subject to the PRC taxation on our worldwide income.(Page 53)Dividends payable by us to our foreign investors and gain on the sale of our ADSs or ordinary shares may become subject to taxes under PRC tax laws.(Page 53)We may be required to register our operating offices not located at our residence addresses as branch companies under PRC law.(Page 54)We could be adversely affected by political tensions between the United States and China.(Page 54)The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.(Page 55)If the PCAOB determines that it is unable to inspect or investigate completely our auditor at any point in the future,our ADSs may be prohibited from trading in the United States under the HFCA Act,and any such trading prohibition on our ADSs or threat thereof may materially and adversely affect the price of our ADSs and value of your investment.(Page 55)Proceedings instituted by the SEC against certain PRC-based accounting firms,including our independent registered public accounting firm,could result in financial statements being determined to not be in compliance with the requirements of the Exchange Act.(Page 56)Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure,corporate governance and business operations.(Page 56)Risks Relating to Our ADSs19Risks relating to our ADSs include,but not limited to,the following:The market price for our ADSs may be volatile which could result in a loss to you.(Page 57)Substantial future sales or perceived sales of our ADSs in the public market could cause the price of our ADSs to decline.(Page 57)We fell below the continued listing requirements of the New York Stock Exchange in the past.If we fall below any of the continued listing requirements in the future and cannot regain compliance in time,our ADSs may be delisted and the liquidity and the trading price of our ADSs could be materially and adversely affected.(Page 57)Our dual-class ordinary share structure with different voting rights could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.(Page 58)Anti-takeover provisions in our articles of association may discourage a third party from offering to acquire our company,which could limit your opportunity to sell your ADSs at a premium.(Page 58)As a foreign private issuer,we are permitted to,and we may,rely on exemptions from certain NYSE corporate governance standards applicable to U.S.issuers.This may afford less protection to holders of our ordinary shares and ADSs.(Page 58)As a foreign private issuer,we are not subject to U.S.proxy rules and are subject to Exchange Act reporting obligations that,to some extent,are more lenient and less frequent than those of a U.S.issuer.(Page 58)We are a Cayman Islands company and,because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than under U.S.law,you may have less protection of your shareholder rights than you would under U.S.law.(Page 59)Legislation enacted in the Cayman Islands and the British Virgin Islands as to economic substance may affect our corporate structure and cause us to incur additional compliance costs.(Page 59)Judgments obtained against us by our shareholders may not be enforceable.(Page 60)Holders of ADSs must act through the depositary to exercise their rights as shareholders of our company.(Page 60)The depositary for our ADSs will give us a discretionary proxy to vote our ordinary shares underlying your ADSs if you do not vote at shareholders meetings,except in limited circumstances,which could adversely affect your interests.(Page 60)You may be subject to limitations on transfers of your ADSs.(Page 60)Your right to participate in any future rights offerings may be limited,which may cause dilution to your holdings and you may not receive cash dividends or other distributions if it is impractical to make them available to you.(Page 60)Risks Relating to Our Business and IndustryDue to the rapidly evolving market in which we operate,our historical results may not be indicative of our future performance and there can be no assurance that we will be able to meet internal or external expectations of future performance.The Internet industry is rapidly evolving and new products,new business models and new players emerge on a regular basis,and we may not be able to achieve results or growth in future periods as we expected.Due to the rapidly evolving market in which we operate,our historical year-over-year and quarter-over-quarter trends may not provide an accurate or reliable indication of our future performance.For certain lines of our business,we have experienced growth trends in the past and for other lines of our business,we have experienced declining trends.Our ability to achieve profitability depends on,among other factors,the growth of the Internet advertising market and mobile Internet services industry in China,our ability to maintain cooperative relationships with Phoenix TV and mobile operators,our ability to control our costs and expenses and the continued relevance and usage of our various paid services.We may not be able to achieve or sustain profitability on a quarterly or annual basis.Accordingly,our historical performance may not be indicative of our future performance.In addition,our online advertising business may suffer from price competition from other online advertising companies.We may have to reduce our profit margins or operate at a loss in order to adequately fund critical innovations that we believe will create value for our company and strengthen our market position over the long term.In the past our operating results have failed to meet expectations of industry analysts and investors,and our future operating results may also fail to meet such expectations.There can be no assurance that we will be able to meet internal or external expectations of future performance,and our share price may decline as a result of any failure to meet such expectations.20We expect to continue to rely on advertising to drive a significant portion of our future revenues,and if we fail to retain existing advertisers or attract new advertisers for our advertising services,our business,operating results and growth prospects could be materially affected.In 2022,2023 and 2024,we generated 88.7%,89.5%and 89.6%of our total revenues from advertising services,respectively.Going forward,we expect our net advertising revenues to continue to contribute the majority of our total revenues.Our ability to generate and maintain substantial advertising revenues will depend on a number of factors,many of which are ultimately beyond our control,including but not limited to:the acceptance of online(including mobile and PC-based)advertising as an effective way for advertisers to market their businesses;the maintenance and enhancement of our brand;the maintenance and development of advertising technology,such as the maintenance of advertising data base and advertising placement platform,and the ability to prevent computer virus attack;the maintenance and development of our programmatic advertising platforms.We launched our self-developed demand-side platform,or DSP,Fengyu(“凤羽”)in 2017.In addition,we launched Fengyi(“凤翼”)in 2018,another customizable marketing solution,catering to premium advertising demands to help our brand advertising clients track and improve the performance of their applications.Besides,we also launched Fengfei(“凤飞”),an advertising platform enables mobile application developers with less traffic to access our commercial resources,advertising data,and service capabilities through a set of advertising monetization solutions.The global macroeconomic uncertainties,more stringent local regulations on advertisements and more intense competition may slowdown the growth of our programmatic advertising platforms.Our ability to maintain and upgrade Fengyu,Fengyi,Fengfei and their related platforms,such as data management platform and advertisement exchange platform,is crucial to our advertising services and we cannot assure you that such revenue generated from our programmatic advertising platforms will not decline in the future;the development of independent and reliable means of measuring online traffic and verifying the effectiveness of our online advertising services;the development and retention of a large user base with attractive demographics for advertisers;andour ability to have continued success with innovative advertising services.Our advertisers may choose to reduce or discontinue their business with us if they believe their advertising spending has not generated or would not generate enough sales to end customers or has not improved or would not effectively improve their brand recognition.In addition,certain technologies could potentially be developed and applied to block the display of our online advertisements and other marketing products on PC websites,mobile applications,mobile websites and third-party platform accounts,which may in turn cause us to lose advertisers and adversely affect our operating results.Moreover,changes in government policies could restrict or curtail our online advertising services.Failure to retain our existing advertisers or attract new advertisers for our advertising services could seriously harm our business,operating results and growth prospects.We rely in part on application marketplaces,Internet search engines,navigation sites,web browsers and other social media platforms to drive traffic to our PC websites,mobile applications,mobile websites and third-party platform accounts,and if we fail to appear near the top of such search results or rankings,traffic to our PC websites,mobile applications,mobile websites and third-party platform accounts could decline and our business and operating results could be adversely affected.We rely on application marketplaces,such as Apples iOS App Store,and other handset manufactures Android App Store,to drive downloads of mobile applications of our products,including ifeng News,ifeng Video and our digital reading applications.In the future,iOS App Store,Android stores or other operators of application marketplaces may make changes to their marketplaces,which could hinder or impede access to our products and services.We also depend in part on Internet search engines,navigation sites and web browsers,such as Baidu,Sougou,Hao123,Hao360,UC Browser,360 Browser and Cheetah Browser,to drive traffic to our PC websites and referrals to our mobile applications,mobile websites and third-party platform accounts.For example,when a user types an inquiry into a search engine,we rely on a high organic search result ranking of our webpages in these search results to refer users to our websites.However,our ability to maintain high organic search result rankings is not totally within our control.Our competitors search engine optimization,or SEO,efforts may result in their websites receiving a higher search result page ranking than ours,or Internet search engines could revise their methodologies in a way that would adversely affect our search result rankings.If Internet search engines modify their search algorithms or other methodologies in ways that are detrimental to us,or if our competitors SEO efforts are more successful than ours,the growth in our user base could be adversely affected.In addition,navigation websites or web browsers might reduce the recommendation of our products for various reasons from time to time.We also rely on other social media platforms,such as Weixin,Weibo,Douyin and Kuaishou,to generate effective traffic and active 21interactions among users.If any of these social media platforms stops offering its service to us,we may not be able to locate alternative platforms of similar scale to provide similar services in a timely manner.Any reduction in the number of users directed to our PC websites,mobile applications,mobile websites and third-party platform accounts through application marketplaces,Internet search engines,navigation sites,web browsers and other social media platforms could harm our business and operating results.If we are unable to successfully expand our mobile strategy and increase our mobile advertising revenues,our business,operating results and growth prospects could be materially affected.Use of mobile devices has overtaken personal computer devices as the primary way for consumption of news and other media content by consumers in China.This shift towards mobile has brought with it both challenges and opportunities.Given the decline in PC-based advertising revenue with traffic,our ability to maintain and increase our mobile advertising revenues will be critical to our future business prospects.While we are taking measures to expand our user base across our various mobile applications,optimize our targeting technology and integrate next-generation high-efficiency advertising solutions,there can be no assurance that these measures will be effective.User preferences and behaviors on mobile devices are rapidly evolving and we may not be able to successfully adapt to these changes.The variety of technical and other configurations across different mobile devices,platforms and applications also increases the challenges associated with our mobile expansion.Although we have taken strict control over operating expenses,we still incurred certain traffic acquisition costs to maintain our user growth trajectory.Our traffic acquisition expenses may increase in the future,which will adversely impact our financial results.Our mobile strategy is also subject to risks relating to changes in government policies,regulations or their enforcement with respect to mobile Internet services and applications.Any change to laws and regulations applicable to the mobile Internet industry,such as those relating to content,user privacy,pricing,copyrights and distribution,may impede the growth of mobile Internet in China or make it more difficult for us to carry out our mobile advertising business.If we cannot successfully grow our user base and capitalize on emerging monetization opportunities on mobile devices,we may not be able to maintain or grow our advertising revenues,which could materially and adversely affect our operating results and growth prospects.Newsfeed advertising is an important mobile advertising format in China.If we are unable to successfully develop our newsfeed advertising solution and adapt to new changes in advertising formats and trends,our mobile advertising revenues may be materially and adversely affected.Newsfeed advertising is the practice of constantly updating lists of advertisements alongside news and information.It effectively helps mobile applications enlarge their advertising inventory by inserting advertisements into the flow of content,while improving the user experience based on native appearance and contextual relevance,implying greater monetization potential.We expect newsfeed advertising to remain an important mobile advertising format in China.While we had developed and added newsfeed advertising into our mobile applications and mobile websites in late 2016,we are facing an increasingly competitive environment.For example,several mobile applications of other companies,such as QQ news(Tencent),Sina News,NetEase News,Sohu News,and Jinri Toutiao are all competing in newsfeed advertising.If we are unable to successfully develop our newsfeed advertising solution and deliver better return on investment,or ROI,to our advertising clients,our future mobile advertising revenues may be materially and adversely affected.Except for newsfeed advertising,we believe that more types of innovative mobile advertising formats may emerge in the future.If we are unable to swiftly develop and adapt to new changes in advertising formats and trends,our mobile advertising revenues may be materially and adversely affected.Any failure to retain large advertising agencies or attract new agencies on reasonable terms could materially and adversely affect our business.If advertising agencies demand higher service fees,our gross margin may be negatively affected.A majority of our net advertising revenues in China were derived from advertising agencies in 2022,2023 and 2024.We primarily serve our advertisers through advertising agencies and rely on these agencies for sourcing our advertisers and collecting advertising revenue.In consideration for these agencies services,the agencies earn advertising agency service fees,which are deducted from our gross advertising revenues.While advertising agencies in China commonly increase their agency service fees on a sliding scale basis along with increased volume of business,if our agency service fees increase at a materially disproportional rate relative to our gross advertising revenues,our operating results may be negatively affected.We do not have long-term or exclusive arrangements with these agencies,and we cannot assure you that we will continue to maintain favorable relationships with them.If we fail to maintain favorable relationships with large advertising agencies or attract additional agencies,we may not be able to retain existing advertisers or attract new advertisers and our business and operating results could be materially and adversely affected.Over the years,there has been some consolidation among advertising agencies in China.If the consolidation trend continues and the market is effectively controlled by a small number of large advertising agencies,such advertising agencies may be in a position to demand higher advertising agency service fees based on increased bargaining power,which could reduce our net advertising revenues.22If we fail to continue to anticipate user preferences and provide high quality content that attracts and retains users,or if we have to cease providing certain content in order to comply with changing regulatory requirements,we may not be able to generate sufficient user traffic to remain competitive.Our success depends on our ability to generate sufficient user traffic through the provision of attractive content.If we are not able to license or otherwise obtain popular premium content(such as we-media content,professionally-generated content,or PGC and user-generated content,or UGC,etc.)at commercially reasonable terms,if our desired premium content becomes exclusive to our competitors,or if we are not able to continue to use Phoenix TVs content,the attractiveness of our offerings to users may be severely impaired.We may also be prevented from providing certain content to our users due to regulatory requirements or sanctions.For example,we received a public notice issued by the State Administration of Press,Publication,Radio,Film and Television of the Peoples Republic of China,or the SAPPRFT,on June 22,2017 in connection with our and certain other Internet companies regulatory non-compliances.The notice required us to suspend our ifeng video and audio services due to our lack of the Internet audio-visual program transmission license and our certain commentary programs that violates government regulations.We have cooperated with SAPPRFT to make the necessary changes to our ifeng video and audio services.We are not sure whether our video and audio services that provide other content will be ordered to suspend again in the future.We also produce content in-house,and intend to continue to invest resources in producing original content.If we are unable to continue to procure premium and distinctive licensed content or produce in-house content that meets users tastes and preferences,we may lose users,and our operating results may suffer.In addition,we rely on our team of skilled editors to edit and repackage our sourced content in a timely and professional manner for our users and any deterioration in our editing teams capabilities or losses in personnel may materially and adversely affect our operating results.If our content fails to cater to the needs and preferences of our users,we may suffer from reduced user traffic and our business and operating results may be materially and adversely affected.If we have to limit or suspend our services in order to comply with changing and increasingly stringent regulatory requirements,our business,financial condition and results of operation may be materially adversely affected.Recently,regulatory authorities in China have increased their supervision of content platforms similar to our website and mobile applications.In addition to the contents that are considered to be violating PRC laws and regulations,such oversight tends to pay more attention to content that is or may be deemed misleading,obscene,pornographic,detrimental,and/or contradicting to social values and moral prevailing in China.A finding of such violation by the regulatory authority may cause the operator of the platform to be subject to penalties and other administrative actions.We have received and may continue to face regulatory inquiries and oral warnings from relevant regulatory authorities from time to time.In a couple of instances,the regulatory authority has ordered suspension of downloads of our mobile applications and prohibited us from providing any update to some of our content for a short period of time.Started on September 26,2018,we temporarily suspended the services provided through our ifeng News mobile application and wireless application protocol website,or WAP website,as well as our general news and finance channel on for two weeks,and our technology channel on for 30 days,in compliance with a notice from the regulatory authority directing us to do so.In addition,in February 2020,we temporarily suspended the services of the“finance”channel on our website and two channels on our ifeng News mobile application for 15 days in compliance with a notice from the regulatory authority directing us to do so.We cannot assure you that similar events will not occur in the future.In particular,we may have to limit or suspend some or all of our services due to changing regulatory requirements or new government initiatives from time to time.We cannot predict the duration or potential impact of such limitation or suspension either.Any of these events could severely impair the attractiveness of our applications and websites to users,reduce our user traffic and affect our revenue,and our business,financial condition and results of operation may be materially adversely affected.If we fail to successfully develop and introduce new products and services to meet the preferences of users,our competitive position and ability to generate revenues could be harmed.The preferences of viewers are continuously evolving and we must continue to develop new products and services.If we fail to react to changes in user preferences in a timely manner or fall behind our competitors in providing innovative products and services,we may lose user traffic,which would negatively affect our operating results.In addition,the planned timing or introduction of new products and services is subject to risks and uncertainties.Actual timing may differ materially from original plans.Unexpected technical,operational,distribution or other problems could delay or prevent the introduction of one or more of our new products or services.Moreover,we cannot assure you that our new products and services will achieve widespread market acceptance or generate incremental revenues.At the same time,other new media providers may be more successful in developing more attractive products and services.If our efforts to develop market and sell new products and services to the market are not successful,our financial position,operating results and cash flows could be materially adversely affected,the price of our ordinary shares could decline and you could lose part or all of your investment.23In addition,due to the tightened regulations in the media industry,the services that we may provide to users may be subject to limitations and we may not be able to roll out new products and services under such regulatory environment.We have been continuously adjusting our business in response to such regulatory changes.However,if we fail to successfully diversify our products and services,our business,financial condition and operating results may be adversely affected.We intend to continue to explore new business opportunities,and such new businesses may not deliver the expected benefits.To grow our business,we intend to continue to explore new business opportunities in addition to our core media content business.For example,we launched our e-commerce business in 2020 to leverage our user base.If we experience initial success with the new business,we may decide to invest certain amounts of capital to grow the business.We cannot assure you that our new business initiatives will be successful.We may make significant capital expenditures to develop new businesses,and our managements attention may be diverted.We may also incur significant cost to comply with the laws and regulations that apply to such new businesses.Any failure of our efforts to pursue new business opportunities could have a material adverse effect on our business,prospects,financial condition and results of operations.Devices such as mobile phones,tablets and other Internet-enabled mobile devices,are widely used to access the Internet,we have to continue to develop products and applications for such devices if we are to maintain or increase our market share and revenues,and we may not be successful in doing so.Devices such as mobile phones,tablets,wearable devices and other Internet-enabled mobile devices are widely used in China and in overseas markets to access the Internet.We believe that,for our business to be successful,we will need to continue to design,develop,promote and operate new products and applications that will be compatible with such devices and attractive to users.The design and development of new products and applications may not be successful.We may encounter difficulties with the development and installation of such new products and applications for mobile devices,and such products and applications may not function smoothly.As new devices are released or updated,we may encounter difficulties in developing and upgrading our products or applications for use on mobile devices and we may need to devote significant resources to the creation,support and maintenance of such products or applications for mobile devices,and we may not be successful in doing so.If these efforts are unsuccessful and we are thereby unable to maintain or increase our market share and revenues,our business,operating results and growth prospects could be materially and adversely affected.We operate in highly competitive markets and we may not be able to compete successfully against our competitors.We face significant competition in the new media industry in China,including competition from major Internet portals,mobile news and information application operators,Internet video companies,online video sites of major TV broadcasters,online digital reading companies,interactive and social network service providers,mobile Internet services providers and other companies with strong media,online video and paid services businesses.Some of our competitors have longer operating histories and significantly greater financial resources than we do,which may allow them to attract and retain more users and advertisers.Our competitors may compete with us in a variety of ways,including by obtaining exclusive online distribution rights for popular content,conducting more aggressive brand promotions and other marketing activities and making acquisitions to increase their user bases.If any of our competitors achieves greater market acceptance or are able to offer more attractive online content,interactive services or paid services than us,our user traffic and our market share may decrease,which may result in a loss of advertisers and have a material and adverse effect on our business,financial condition and operating results.We also face competition from traditional advertising media such as television,newspapers,magazines,billboards and radio.We have contracted with third-party content providers and we may lose users and revenues if these relationships deteriorate or arrangements are terminated.If third-party content providers increase their content licensing fees,our operating results may be negatively affected.We have relied and will continue to rely mostly on third parties for the content we distribute across our channels.If these parties fail to develop and maintain high-quality and engaging content or raise their licensing fees,or if a large number of our existing relationships are terminated,we could lose users and advertisers and our brand could be materially harmed.If such license fees increase significantly in the future,our income from operations may be negatively affected.In addition,the Chinese government has the ability to restrict or prevent state-owned media from cooperating with us in providing certain content to us,which,if exercised,would result in a significant decrease in the amount of content we are able to source for our PC websites,mobile applications,mobile websites and third-party platform accounts and negatively impact our operating results.We may not be able to continue to receive the same level of support from Phoenix TV Group in the future.We could lose our license and priority over any third party to use Phoenix TV Groups content and licensed trademarks,which could have an 24adverse effect on our business and operating results.Phoenix TV is a leading global Chinese language TV network broadcasting premium content globally and into China.In November 2009,our PRC subsidiary,Fenghuang On-line,entered into a cooperation agreement with Phoenix TV,or the Pho
2025-04-24
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As filed with the Securities and Exchange Commission on April,2025UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 20-FANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OFTHE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2024 Commission File Number:001-33422Empresa Distribuidora y Comercializadora Norte S.A.(EDENOR)(Exact name of Registrant as specified in its charter)Distribution and Marketing Company of the North S.A.Argentine Republic(Translation of Registrants name into English)(Jurisdiction of incorporation or organization)Avenida Del Libertador 6363Ciudad de Buenos Aires,C1428ARGBuenos Aires,Argentina(Address of principal executive offices)German RanftlTel.: 54 11 4346 5510/Fax: 54 11 4346 5325 Avenida Del Libertador 6363(C1428ARG)Buenos Aires,ArgentinaChief Financial Officer(Name,Telephone,E-mail 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 SymbolName of each exchangeon which registeredClass B Common Shares American Depositary Shares,orADSs,evidenced by American Depositary Receipts,eachrepresenting 20 Class B Common SharesEDN EDNNew York Stock Exchange,Inc.*New York Stock Exchange,Inc.*Not for trading,but only in connection with the registration of American Depositary Shares,pursuant to the requirements of the Securities and ExchangeCommission._Securities registered or to be registered pursuant to Section 12(g)of the Act:NoneSecurities for which there is a reporting obligation pursuant to Section 15(d)of the Act:N/AIndicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report:462,292,111 Class ACommon Shares,442,210,385 Class B Common Shares and 1,952,604 Class C Common 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 Sections 13 or 15(d)of the Securities Exchange Act of1934.Yes No Note:Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934 from their obligations underthose Sections.Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports)and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 ofthis 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“largeaccelerated filer,”“accelerated filer,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.(Check one):Large Accelerated FilerAccelerated FilerNon-Accelerated FilerEmerging Growth CompanyIf 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 extendedtransition 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 afterApril 5,2012.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reportingunder 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.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 ofan 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 registrantsexecutive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAP International Financial Reporting Standards as issued by the International Accounting Standards Board Other If“Other”has been checked in response to the previous question,indicate by check mark which financial statement item the registrant has elected to follow:Item 17 Item 18 If this is an annual report,indicate by check mark whether the registrant is a shell company(as defined by Rule 12b-2 of the Exchange Act).Yes No Table of Contents PART IItem 1.Identity of Directors,Senior Management and Advisors1Item 2.Offer Statistics and Expected Timetable1Item 3.Key Information1Item 4.Information on the Company35Item 4A.Unresolved Staff Comments85Item 5.Operating and Financial Review and Prospects85Item 6.Directors,Senior Management and Employees124Item 7.Major Shareholders and Related Party Transactions136Item 8.Financial Information140Item 9.The Offer and Listing147Item 10.Additional Information152Item 11.Quantitative and Qualitative Disclosures about Market Risk189Item 12.Description of Securities Other than Equity Securities191 PART IIItem 13.Defaults,Dividend Arrearages and Delinquencies193Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds194Item 15.Controls and Procedures194Item 16A.Audit Committee Financial Expert196Item 16B.Code of Ethics 196Item 16C.Principal Accountant Fees and Services196Item 16D.Exemptions from the Listing Standards for Audit Committees197Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers197Item 16F.Change in Registrants Certifying Accountant197Item 16G.Corporate Governance197Item 16H.Mine Safety Disclosures207Item 16I.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.207Item 16J.Insider Trading Policies207Item 16K.Cybersecurity207 PART IIIItem 17.Financial Statements209Item 18.Financial Statements209Item 19.Exhibits209 Index to Financial StatementsF-1 Table of Contents PART IItem 1.Identity of Directors,Senior Management and AdvisorsNot applicable.Item 2.Offer Statistics and Expected TimetableNot applicable.Item 3.Key InformationIn this annual report,except as otherwise specified,references to“we”,“us”,“our”and the“Company”are references to Empresa Distribuidora y ComercializadoraNorte S.A.(EDENOR S.A.),or“Edenor”.For more information,see“Item 4Information on the CompanyHistory and Development of the Company.”FORWARD-LOOKING STATEMENTSThis annual report includes forward-looking statements,principally under the captions“Item 3.Key Information-Risk Factors”,“Item 4.Information on theCompany”and“Item 5.Operating and Financial Review and Prospects”.We have based these forward-looking statements largely on our current beliefs,expectations andprojections about future events and financial trends affecting our business.Forward-looking statements may also be identified by words such as“believes”,“expects”,“anticipates”,“projects”,“intends”,“should”,“seeks”,“estimates”,“future”or similar expressions.Many important factors,in addition to those discussed elsewhere in thisannual report,could cause our actual results to differ materially from those expressed or implied in our forward-looking statements,including,among other things:economic and geopolitical developments in regional or global markets,including Russias continued invasion of Ukraine and the ongoing military conflictbetween Israel and Hamas;uncertainties related to current or future Government interventions,proposed legislation or legal actions;high depreciation of the Peso;the impact of high rates of inflation on our costs;changes and volatility in local,regional and global markets;the role of Argentinas Federal Government in the RT and the recognition of the Companys regulatory credits;general political,economic,social,demographic and business conditions in the Republic of Argentina(“Argentina”)and,particularly,in the geographicmarket we serve;the impact of a new tariff segmentation applicable to our users;the treatment of tariff updates according to the Tariff Review Process(“RT”),or the former Integral Tariff Revision process(Revisin Tarifaria Integral or“RTI”)and any awarded transitory adjustment that has yet to be implemented;the evolution of energy losses and the impact of fines,and penalties and uncollectible debt;the impact of regulatory reform and changes in the regulatory environment in which we operate;electricity shortages;the high temperatures and extreme climate registered over the last years which affects the provision of transport and distribution energy services;potential disruption or interruption of our service;the revocation or amendment of our concession by the granting authority;1 Table of Contents our ability to implement our capital expenditure plan,including our ability to arrange financing when required and on reasonable terms;andadditional matters identified in“Risk Factors”.Forward-looking statements speak only as of the date they were made,and we undertake no obligation to update publicly or to revise any forward-looking statementsafter we file this annual report because of new information,future events or other factors.In light of these limitations,undue reliance should not be placed on forward-lookingstatements contained in this annual report.PRESENTATION OF FINANCIAL INFORMATIONWe are a stock corporation(sociedad annima)incorporated under the laws of the Republic of Argentina.Unless otherwise stated,references to the financial results of“Edenor”are to the consolidated financial results of Edenor.We hold a concession to distribute electricity on an exclusive basis in the northwestern part of the greater BuenosAires metropolitan area and in the northern part of the City of Buenos Aires,comprising an area of 4,637 square kilometres and a population of approximately 9 million people.This annual report includes our audited restated consolidated financial statements for the years ended December 31,2024,2023 and 2022.and the notes thereto(the“Financial Statements”)which are set forth on pages F-1 through F-84 of this annual report.The Financial Statements,which were prepared in accordance with International Financial Reporting Standards(“IFRS”)as issued by the International AccountingStandards Board(“IASB”),have been approved by resolution of the Board of Directors meeting held on March 7,2025 and have been audited by an independent registeredpublic accounting firm.Argentina has been considered a high-inflation economy for accounting purposes according to the IAS 29“Financial reporting in hyperinflationary economies”sinceJuly 1,2018.Therefore,the financial information included in this annual report for all the periods reported are presented on the basis of constant Argentine Pesos as ofDecember 31,2024.See“Item 3.Key Information Risk FactorsThe Peso currently qualifies as a currency of a hyperinflationary economy and we are required to restateour historical financial statements in accordance with IFRS,in terms of the measuring unit current at the end of the reporting year,which could adversely affect our results ofoperations and financial condition”,“Item 5.Operating and Financial Review and ProspectsFactors Affecting Our Results of Operations”and Note 3 to our FinancialStatements.We maintain our accounting records and prepare our financial statements in Argentine Pesos,which is our functional currency.Certain amounts and ratios contained in this annual report(including percentage amounts)may have been rounded up or down to facilitate the summation of the tablesin which they are presented.The effect of this rounding is not material.These rounded amounts and ratios may also be included within the text of this annual report.2 Table of Contents EXCHANGE RATESIn 2024,the Argentine Peso continued to depreciate against the U.S.Dollar.According to the exchange rate information published by Banco de la Nacin Argentina(“Banco Nacin”),the Argentine Peso depreciated by 27.7%against the U.S.Dollar,in nominal terms.The following table sets forth the high,low,average and period-end exchange rates for the periods indicated,expressed in Pesos per U.S.Dollar and not adjusted forinflation.When preparing our financial statements,we utilize the selling exchange rates for U.S.Dollars quoted by the Banco Nacin to translate our U.S.Dollar denominatedassets and liabilities into Pesos.There can be no assurance that the Peso will not further depreciate or appreciate in the future.The Federal Reserve Bank of New York does notreport a noon buying rate for Pesos.For more information regarding depreciation,see“Item 3.Key InformationRisk FactorsFactors Relating to ArgentinaFluctuations inthe value of the Peso could adversely affect the Argentine economy and,which could,in turn adversely affect our results of operations.”In this annual report,except as otherwise specified,references to“U.S.$”and“Dollars”are to U.S.Dollars,and references to“Ps.”,“AR$”and“Pesos”are toArgentine Pesos.Solely for the convenience of the reader,we have converted certain amounts included in this annual report from Pesos into Dollars using,for the informationprovided as of December 31,2024,the selling exchange rate reported by the Banco Nacin,as of December 31,2024,which was Ps.1,032.00 to U.S.$1.00 unless otherwiseindicated.These conversions should not be considered representations that any such amounts have been,could have been or could be converted into U.S.Dollars at that or atany other exchange rate.On April 21,2025,the exchange rate was Ps.1,094 to U.S.$1.00.As a result of fluctuations in the Dollar Peso exchange rate,the exchange rate at suchdate may not be indicative of current or future exchange rates.Low High Average Period End (Pesos per U.S.Dollar)Year ended December 31,2020 59.82 84.15 70.87(1)84.15 2021 84.15 105.20 95.13(1)102.72 2022 102.72 177.16 131.08(1)177.16 2023 177.16 808.45 280.92(1)808.45 2024 808.45 1,032.00 916.42(1)1,032.00 Month November-24 993.00 1,011.50 1,001.33(2)1,011.50 December-24 1,011.50 1,032.00 1,021.90(2)1,032.00 January-25 1,032.00 1,053.50 1,042.82(2)1,053.50 February-25 1,053.50 1,064.75 1,058.04(2)1,064.75 March-25 1,064.25 1,074.00 1,068.77(2)1,074.00 _ Source:Selling exchange rate Banco Nacin (1)Represents the average of the latest daily selling exchange rate for each period.(2)Represents the average of the latest daily selling exchange rate for each month.3 Table of Contents RISK FACTORS The following summarizes some,but not all,of the risks provided below.Please carefully consider all of the information discussed in this Item 3.D.“Risk Factors”of thisannual report for a more thorough description of these and other risks:Risks Related to ArgentinaA global or regional financial crisis and unfavorable credit and market conditions may negatively affect our liquidity,users,business,and results of operations.Changes in U.S.trade and other policies under the new U.S.administration may adversely impact our business,financial condition,and results of operations.The Argentine economy remains vulnerable and any significant decline may adversely affect our business,results of operations,and financial condition.Economic and political developments in Argentina,and future policies of the Argentine Government may affect the economy as well as the operations of the energydistribution industry,including Edenor.If high levels of inflation continue,the Argentine economy and our results of operations could be adversely affected.The Peso currently qualifies as a currency of a hyperinflationary economy and we are required to restate our historical financial statements in accordance with IFRS,interms of measuring unit current at the end of the reporting year,which could adversely affect our results of operations and financial condition.Argentinas ability to obtain financing from international markets could be limited,which may impair its ability to implement reforms and foster economic growth and,consequently,affect our business,results of our operations and growth prospects.Fluctuations in the value of the Peso could adversely affect the Argentine economy and could in turn adversely affect our results of operations.Intervention by the Argentine Government may adversely affect the Argentine economy and,as a result,our business and results of operations.Argentine public expenditures may adversely affect the Argentine economy.The Argentine economy remains vulnerable to external shocks that could be caused by significant economic difficulties facing Argentinas major regional tradingpartners,or by more general“contagion”effects.Such external shocks and“contagion”effects could have a material adverse effect on Argentinas economic growthand,therefore,on our results of operations and financial condition.The Argentine economy and finance may be adversely affected as a consequence of a tariffs that could be imposed by the United States of America and other countriesto goods and services from Argentina.The Argentine economy and finance may be adversely affected as a consequence of a decrease in the international prices of commodities that Argentina exports.Any downgrade in the credit rating or rating outlook of Argentina could adversely affect the rating and the market price of our ADS,our Class B common shares andour corporate debt,affecting also our liquidity.Risks Relating to the Electricity Distribution SectorThe Argentine Government has intervened in the electricity sector in the past and may continue to intervene.There is uncertainty as to what other measures the Argentine Government may adopt in connection with tariffs on public services and their impact on the Argentineeconomy.4 Table of Contents Energy shortages may act as a brake on growing demand for electricity and disrupt distribution companies ability to deliver electricity to their customers,which couldresult in customer claims and material penalties imposed on these companies.If the demand for energy is increased suddenly,the difficulty in increasing the capacity of distribution companies in a short or medium term could adversely affect theCompany,which in turn could result in customer complaints and substantial fines for any interruptions.The exclusivity of electricity distribution in our service area may be adversely affected by technological or other changes in the energy distribution industry,whichcould have a material adverse effect on our business.Risks Relating to Our BusinessWe operate our business pursuant to our Concession Agreement granted by the Argentine Government,the revocation or termination of which would have a materialadverse effect on our business.Downgrades in our credit ratings could have negative effects on our funding costs and business operations.Our business is subject to risks arising from natural disasters,catastrophic accidents,terrorist attacks and cybersecurity incidents.Additionally,our businesses aresubject to the risk of mechanical or electrical failures and any resulting unavailability may affect our ability to fulfil our contractual commitments and thus adverselyaffect our business and financial performance.Our operations could cause environmental risks and any change in environmental laws,climate change legislation or regulations restricting emissions of greenhousegases(“GHGs”)and legal frameworks promoting an increase in the participation of energies from renewable sources could significantly impact our business and resultin increased operating costs.Changes in weather conditions or the occurrence of severe weather(whether or not caused by climate change or natural disasters),could adversely affect ouroperations and financial performance.Failure or delay to negotiate further improvements to our tariff structure,including increases in our distribution margin,and/or to have our tariffs adjusted to reflectincreases in our distribution costs in a timely manner or at all,have affected and may continue to affect our capacity to perform our commercial obligations and couldalso have a material adverse effect on our ability to perform our financial obligations.Our distribution tariffs may be subject to challenges by Argentine consumer and other groups.We have been,and may continue to be,subject to fines and penalties that could have a material adverse effect on our financial condition and results of operations.The increase in illegal constructions and unsanctioned urbanizations within our Concession area may affect the Companys ability to distribute energy to its customers,as well as produce an increase in public safety risks.If we are unable to control our energy losses,especially the theft of energy,our results of operations could be adversely affected.Under the Concession Agreement,the Argentine Government could foreclose on its pledge over our Class A common shares under certain circumstances,which couldhave a material adverse effect on our business and financial condition.Default by the Argentine Government could lead to termination of our concession,and have a material adverse effect on our business and financial condition.The expiration of the management period could result in the sale of the Companys controlling interest.We may be unable to import certain equipment to meet growing demand for electricity,which could lead to a breach of our Concession Agreement and could have amaterial adverse effect on our operations and financial position.5 Table of Contents We employ a largely unionized labor force and could be subject to an organized labor action,including work stoppages that could have a material effect on ourbusiness.We could incur material labor liabilities in connection with our outsourcing that could have an adverse effect on our business and on our results of operations.We are subject to anti-corruption,anti-bribery,anti-money laundering and antitrust laws and regulations in Argentina.Any violation thereunder could have a materialadverse effect on our reputation and the results of our operation.We are involved in various legal proceedings which could result in unfavorable decisions for us,which could in turn have a material adverse effect on our financialposition and results of operations.In the event of an accident or other event not covered by our insurance,we could face significant losses that could materially adversely affect our business and resultsof operations.We currently are not able to effectively hedge our currency risk in full and,as a result,a devaluation of the Peso may have a material adverse effect on our results ofoperations and financial condition.A substantial number of our assets are not subject to attachment or foreclosure and the enforcement of judgments obtained against us by our shareholders may besubstantially limited.We may not be able to raise the funds necessary to repay our commercial debt with CAMMESA,our major supplier.We may not have the ability to collect the amounts corresponding to the energy sales for neighborhoods that must be financed by the Argentine Government,theProvince of Buenos Aires and the Autonomous City of Buenos Aires.All of our outstanding financial indebtedness contains bankruptcy,reorganization proceedings and expropriation events of default,and we may be required to repay allof our outstanding debt upon occurrence of any such events.We may not have the ability to raise the funds necessary to finance a change of control offering as required by our Senior Notes.Cybersecurity events,such as interruptions or failures in our information technology systems as well as cyber-attacks,could adversely affect our business,financialcondition,results of operations and cash flows.Risks relating to our ADSs and Class B common sharesThe New York Stock Exchange and/or ByMA may suspend trading and/or delist our ADSs and Class B common shares,upon the occurrence of certain events relatingto our financial situation.Restrictions on the movement of capital out of Argentina may impair the ability of holders of ADSs to receive dividends and distributions on,and the proceeds of anysale of,the Class B common shares underlying the ADSs,which could affect the market value of the ADSs.Our shareholders ability to receive cash dividends may be limited.Holders of ADSs may be unable to exercise voting rights with respect to the Class B common shares underlying the ADSs at our shareholders meetings.Our shareholders may be subject to liability for certain votes of their securities.A potential nationalization or expropriation of 51%of our capital stock,represented by Class A shares,may limit the ability of Class B shares to participate in theBoard of Directors.If we fail to maintain an effective system of internal controls,we may be unable to accurately report our financial results or prevent fraud and investor confidence andthe market price of our securities may be adversely impacted.6 Table of Contents Provisions of Argentine securities laws could deter takeover attempts and have an adverse impact on the price of our shares and ADSs.Risks Related to ArgentinaOverviewWe are a stock corporation(sociedad annima)incorporated under the laws of the Republic of Argentina and all of our revenues are earned in Argentina and all of ouroperations,facilities,and users are located in Argentina.Accordingly,our financial condition and results of operations depend to a significant extent on macroeconomic,regulatory,political and financial conditions prevailing in Argentina,including growth rates,inflation rates,currency exchange rates,taxes,interest rates,and other local,regional and international events and conditions that may affect Argentina in any manner.For example,a slowdown in economic growth or economic recession could lead to adecreased demand for electricity in our concession area or a decline in the purchasing power of our users,which,in turn,could lead to a decrease in collection rates from ourusers or increased energy losses due to illegal use of our service.Several factors have impacted the Argentine economy in the recent past,and may continue to impact it in thefuture,including among others,inflation rates,exchange rates,commodity prices,public debt,amendments to the tax regime and policies on trade and fiscal balances.Our activity is highly regulated and subject to uncertainties due to political and economic factors,changes in legislation,termination and modification of contractualrights,prices control and currency fluctuations,among others.We cannot assure that the Argentine Government will not adopt policies that could adversely affect the Argentine economy or our business,financial condition orresults of operations.In addition,we cannot assure you that future economic,regulatory,social and political developments in Argentina will not impair our business,financialcondition or results of operations,or cause the market value of our Senior Notes,our ADSs and Class B common shares to decline.A global or regional financial crisis and unfavorable credit and market conditions may negatively affect our liquidity,users,business,and results of operationsThe effects of a global or regional financial crisis and related turmoil in the global financial system may have a negative impact on our business,ability to access creditand the international capital markets,financial condition and results of operations,which is likely to be more severe on an emerging market economy,such as Argentina.See“Item 3.Key InformationRisk FactorsFactors Relating to ArgentinaArgentinas ability to obtain financing from international markets could be limited,which mayimpair its ability to implement reforms and foster economic growth and,consequently,affect our business,results of our operations and growth prospects”.Global economic and financial crises negatively affect emerging economies like Argentinas.Additionally,abrupt changes in monetary and fiscal policies or foreignexchange regimes could rapidly affect local economic output,while lack of appropriate levels of investment in certain economy sectors could reduce long-term growth.Accessto the international financial markets could be limited.Consequently,an increase in public spending not correlated with an increase in public revenues could affect Argentinasfiscal results and generate uncertainties that might affect the economys growth levels.In recent years,several trading partners of Argentina(such as Brazil,Europe and China)have experienced significant slowdowns or recession periods in theireconomies.While the vast majority of economies recovered during 2021 and 2022 after the global COVID-19 pandemic,if such slowdowns or recessions were to recur,thismay impact the demand for products coming from Argentina and hence affect its economy.Additionally,there is uncertainty as to how the trade relationship between theMercosur member States will unfold,in particular between Argentina and Brazil.We cannot predict the effect on the Argentine economy and our operations of trade disputesthat may arise between Argentina and Brazil,or in case either country decided to exit the Mercosur or undertake negotiations for free trade agreements with third nations asidefrom Mercosur.7 Table of Contents In addition,the global macroeconomic environment faces various challenges.There is considerable uncertainty over the long-term effects of the monetary and fiscalpolicies adopted by the central banks and financial authorities of some of the worlds leading economies,including the United States,Europe and China.Some of thesemonetary measures negatively impacted financial markets during 2023 and 2024.Since October 2023,an armed conflict between Israel and Hamas-led Palestinian militant groups has taken place primarily in and around the Gaza Strip,with clashesspilling over into the West Bank and the Israel-Lebanon borderThere have been concerns about unrest and terrorist threats in the Middle East,Europe and Africa and over the conflicts involving Israel,Iran,Ukraine,Russia,Syriaand North Korea.There have also been concerns regarding the relationship among China and other Asian countries,could lead to or exacerbated potential conflicts in relation toterritorial disputes,and the possibility of a economic conflict between the United States and China.In February 2022,Russian troops invaded Ukraine.Although the severity and duration of the ongoing military action are unpredictable,the conflict in Ukraine,Russias prior annexation of Crimea,the recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions inUkraine have led to sanctions being levied by the United States,the European Union and other countries against Russia.Russias military incursion and the market volatilitythat followed have adversely affected and may continue to affect the global economy and financial markets and thus could affect our business,financial condition or results ofoperations.The extent and duration of the military action,sanctions and resulting market disruptions are difficult to predict,but could be substantial.Any such disruptioncaused by Russian military action or resulting sanctions may magnify the impact of other risks described in this annual report and may result in compliance and operationalchallenges for the Company.Further escalation of such armed conflict could lead to supply disruptions and higher energy costs,among others,which could adversely affect ourresults of operations.The effects of an economic crisis on our users and on us cannot be predicted.Weak global and local economic conditions,together with increased international tensionand oil&gas constraints,could lead to reduced demand or lower prices for energy,hydrocarbons and related oil products and petrochemicals,which could have a negativeeffect on our revenues.Economic factors such as unemployment,inflation and the unavailability of credit could also have a material adverse effect on the demand for energyand,therefore,on our business,financial condition and results of operations.The financial and economic situation in Argentina or in other countries in Latin America,such asBrazil,may also have a negative impact on us and third parties with whom we do,or may do,business.Changes in U.S.trade and other policies under the new U.S.administration may adversely impact our business,financial condition,and results of operationsThe administration of U.S.President Donald Trump has introduced significant changes in trade policies,including the imposition of new tariffs and other traderestrictions that could affect cross-border commerce.On February 1,2025,President Trump issued an executive order imposing tariffs on imports from Canada,Mexico,andChina,with additional measures under consideration.While the tariffs on Mexico and Canada are currently delayed,these tariffs,along with potential retaliatory actions bythese and other countries,could disrupt global trade flows,impact the cost and availability of Edenor equipment and technology,and increase operational costs for companiesreliant on international supply chains.8 Table of Contents Further,on February 10,2025,President Donald Trump issued proclamations re-imposing and expanding 25%tariffs on imported steel and aluminum products underSection 232 of the Trade Expansion Act of 1962.These measures,effective as of March 12,2025,raise aluminum tariffs from 10%to 25%,reimpose tariffs on countries thatwere previously exempted,and expand coverage to derivative products.On March 20,2025,the administration announced a further tightening of tariff enforcement,includingenhanced customs scrutiny and retroactive duties on select product classifications,creating additional uncertainty for importers.On April 2025,the Trump administrationannounced the implementation of reciprocal tariffs,with varying impact on different countries.However,on April 9,2025 Trump declared a 90-day pause on most of thesetariffs,except for China.These evolving trade measures could increase the cost of critical electricity distribution infrastructure and equipment,particularly for companies like us that rely onimports for infrastructure expansion and maintenance.Additionally,heightened scrutiny on tariff classifications and increased enforcement measures by U.S.authorities couldlead to further supply chain disruptions and additional costs.We offer a range of services,including electricity distribution,frequency regulation and voltage control We are dependent on imported electricity distributionequipment to provide many of these services.Given our reliance on imported electricity distribution equipment,changes in U.S.trade policies that cause disruption in theinternational market may materially adversely impact our costs and ability to import such equipment.For example,if our access to key suppliers or technology is restricted,orif our customers face economic constraints due to increased costs of goods and services resulting from international tariffs,trade restrictions,or changes in U.S.or foreigngovernment regulations,our financial condition and results of operations could be materially and adversely affected.In addition,to the extent that changes in the political environment due to the imposition of tariffs or other measures negatively impact us or the markets in which weoperate,our business,financial condition,and results of operations could be materially and adversely affected.Given the expanding scope of trade restrictions and theuncertainty surrounding future policies of the Trump administration,we can provide no assurances regarding the full extent of any potential impact.The Argentine economy remains vulnerable and any significant decline may adversely affect our business,results of operations,and financial conditionThe Argentine economy has experienced significant volatility in recent decades,characterized by periods of low or negative growth,high levels of inflation andcurrency depreciation.Sustainable economic growth in Argentina depends on a variety of factors including the international demand for Argentine exports,the stability andcompetitiveness of the Peso against foreign currencies,confidence among consumers and foreign and domestic investors and a stable rate of inflation,national employmentlevels and the circumstances of Argentinas regional trade partners.The Argentine macroeconomic environment,in which we operate,remains vulnerable,as reflected by thefollowing economic conditions:according to the recent data published by the Argentina National Statistics and Census Institute(Instituto Nacional de Estadsticas y Censos,“INDEC”),for the yearended December 31,2024,Argentinas real GDP decreased by 1.7%compared to the same period in 2023;inflation remains high(117.8%during 2024 as reported by the INDEC in March 2025)and may continue at those levels in the future,while regulated tariffs may lagbehind;investment as a percentage of GDP remains low to sustain meaningful growth rates;9 Table of Contents protests or strikes may adversely affect the stability of the political,social and economic environment and may negatively impact the global financial marketsconfidence in the Argentine economy;energy or natural gas supply by generators may not be sufficient to supply increased industrial activity(thereby limiting industrial development)and consumption,mostly at peak demand such as in the winter season;andunemployment and informal employment remain high,which could have a bearing on energy theft levels potentially impacting our results and operations.As in the recent past,Argentinas economy may be adversely affected if political and social pressures inhibit the implementation by the Argentine Government ofpolicies designed to control inflation,generate growth and enhance consumer and investor confidence,or if policies implemented by the Argentine Government that aredesigned to achieve these goals are not successful.These events could materially affect our financial condition and results of operations,or cause the market value of our SeniorNotes,our ADSs and our Class B common shares to decline.Also,the Peso was the most appreciated currency in the world in 2024.It has been subject to significant depreciation against the U.S.dollar in the past and may besubject to fluctuations in the future.We cannot predict whether and to what extent the value of the Peso could depreciate or appreciate against the U.S.Dollar and the way inwhich any such fluctuations could affect our business.The value of the Peso compared to other currencies is dependent,in addition to other factors listed above,on the level ofinternational reserves maintained by the Central Bank of the Republic of Argentina(Banco Central de la Repblica Argentina,the“Central Bank”or“BCRA”),which have alsoshown significant fluctuations in recent years.As of December 31,2024,the international reserves of the BCRA totaled U.S.$29,612 million.The Peso appreciated in real termsby 40%against the U.S.Dollar during the year ended December 31,2024.Since 2019,as a result of the economic instability,economic uncertainty,and rising inflation rates,Argentine administrations and the BCRA adopted a series ofmeasures reinstating foreign exchange controls,which applied with respect to access to the foreign exchange market by residents for savings and investment purposes abroad,the payment of external financial debts,the payment of dividends in foreign currency abroad,payments of goods and services in foreign currencies,payments of imports ofgoods and services.On April 11,2025 the Central Bank released Communication“A”8226 which included a substantial flexibilization of the foreign exchange restrictions then in force,particularly for individuals.In terms of companies,the rules entailed substantial flexibilization of the foreign exchange restrictions as they relate to(i)imports of goods andservices as from April 14,2025;and(ii)the payment of dividends derived from income accrued as of January 1,2025.Moreover,on April 16,2025,the Central Bank released Communication“A”8230 which included substantial flexibilization of foreign exchange restrictions,applicable to both individuals and legal entities,as they relate to funds transferred to Argentina and settled in the MLC from April 14,2025 onwards.Those additionalflexibilization consisted of removing the requirement of Central Bank approval for(i)the repayment of principal of intercompany financial indebtedness for funds disbursedand settled for pesos through the MLC on or after April 14,2025 to the extent that the average maturity of the indebtedness exceeds 180 days;(ii)the repatriation of directinvestment by non-residents when the investment was made and settled for pesos in the MLC after April 14,2025 and the repatriation is done at least 180 days after thatsettlement;and(iii)the payment of dividends,interest or repayment of principal on portfolio investments made by non-residents provided that the funds to make those portfolioinvestments where settled for pesos through the MLC on or after April 14,2025 and the payment of dividends,interest or repayment of principal is done at least 180 days afterthat settlement.Although the relaxation of the foreign exchange controls has been substantial,certain material restrictions for accessing Argentinas foreign exchange market continueto apply to non-individuals and there can be no assurances regarding future modifications to the exchange controls regime.Exchange controls could adversely affect ourfinancial condition or results of operations and our ability to meet our foreign currency obligations and execute our financing plans.The success of these or other measures that the BCRA may implement in the future,is uncertain and fluctuation in value of the Peso or our inability to acquire foreigncurrency could have a material adverse effect on our financial condition and results of operations.We cannot predict whether,and to what extent,the value of the Peso maydepreciate or appreciate against the U.S.Dollar or other foreign currencies,and how these uncertainties will affect the demand for electricity.Furthermore,no assurance can begiven that,in the future,no additional currency or foreign exchange restrictions or controls will be imposed or reimposed.Existing and future measures may negatively affectArgentinas international competitiveness,discouraging foreign investments and lending by foreign investors or increasing foreign capital outflow which could have an adverseeffect on economic activity in Argentina,and which in turn could adversely affect our business and results of operations.We cannot predict how these conditions will affect thedemand for services provided by Edenor or our ability to meet our liabilities denominated in currencies other than the Peso,including our Senior Notes.Any restrictions ontransferring funds abroad imposed or reimposed by the Government could undermine our ability to pay dividends on our ADSs or make payments(of principal or interest)under our outstanding indebtedness in U.S.Dollars,as well as to comply with any other obligation denominated in foreign currency.10 Table of Contents Economic and political developments in Argentina,and future policies of the Argentine Government may affect the economy as well as the operations of theenergy distribution industry,including EdenorThe Argentine Government has historically exercised significant influence over the economy,and our Company has operated in a highly regulated environment.TheArgentine Government may promulgate numerous,far-reaching regulations affecting the economy and electricity companies in particular.From the moment the current administration came to power,the reduced legislative representation obtained by La Libertad Avanza in the National Congress haslimited its ability to promote acts of Congress,having to negotiate with the opposition on different points in each bill to obtain the support of the opposition.At the same time,certain circumstances led the opposition to join forces and promote laws that the administration had previously publicly rejected,some of which were the subject matter ofpresidential vetoes and unsuccessful attempts by Congress to override the presidential veto.By way of example,Law 27,742(the“Bases Law”)enacted in July 2024,whichincluded structural modifications in energy matters obtained votes from different political parties.Also,by way of example the opposition in Congress was successful in passinglaws opposed by the current administration such as the reform of the retirement and pension system or the increase in universities budgets,which were later vetoed by thePresident.As of the date of this annual report,we cannot predict the impact that the measures and the political situation described above will have on the Argentine economy ingeneral or if the measures the Bases Law foresees in deregulating Argentinas economy and privatizing publicly owned enterprises may be carried out.The Company cannot assure whether other events,such as the implementation of new government policies,could have an adverse impact on the Companys operationsand financial results.In the event of any economic,social or political crisis,companies operating in Argentina may face the risk of strikes,expropriation,nationalization,mandatoryreformation of existing contracts,and changes in taxation policies,including tax increases and retroactive tax claims.In addition,Argentine courts have ruled on modificationson rules related to labor matters,requiring companies to assume greater responsibility for costs and risks associated with subcontracted labor and the calculation of salaries,severance payments and social security contributions.Since we operate in a context in which the governing law and applicable regulations change frequently,also as a result ofchanges in government administration,it is difficult to predict if and how our activities will be affected by such changes.We cannot assure you that future legal reforms oreconomic,regulatory,social and political developments in Argentina will not adversely affect our business,financial condition or results of operations,or cause the decrease ofthe market value of our securities.If the high levels of inflation continue,the Argentine economy and our results of operations could be adversely affectedHistorically,inflation has materially undermined the Argentine economy and the Argentine Governments ability to create conditions that allow growth.In recentyears,Argentina has confronted inflationary pressures,evidenced by significantly higher fuel,energy and food prices,among other factors.Despite the decline recorded in inflation indices,during the first quarter of 2025,according to data published by INDEC,Consumers Price Index(“CPI”)rates were3.7%,2.4%and 2.2%for March,February and January 2025,while for 2024,2023,and 2022 were 117.8%,211.4%,and 94.8%respectively.The Argentine Governmentsadjustments to electricity and gas tariffs,as well as the increase in the price of gasoline have affected prices,creating additional inflationary pressure.Even when the value ofthe Peso is stabilized,we cannot assure that through new fiscal and monetary policies an increase in inflation rates will occur.11 Table of Contents A high inflation rate environment affects Argentinas foreign competitiveness by diluting the effects of the Peso depreciation,negatively impacting employment andthe level of economic activity and undermining confidence in Argentinas banking system,which may further limit the availability of domestic and international credit tobusinesses.In turn,a portion of the Argentine debt continues to be adjusted by the Stabilization Coefficient(Coeficiente de Estabilizacin de Referencia,or“CER”),a currencyindex,that is strongly correlated with inflation.Therefore,any significant increase in inflation would cause an increase in the Argentine external debt and consequently inArgentinas financial obligations,which could exacerbate the stress on the Argentine economy.A continuing inflationary environment could undermine our results ofoperations,adversely affect our ability to finance the working capital needs of our businesses on favorable terms,and adversely affect our results of operations and cause themarket value of our Senior Notes,our ADSs and our Class B common shares to decline.The Peso currently qualifies as a currency of a hyperinflationary economy and we are required to restate our historical financial statements in accordance withIFRS,in terms of the measuring unit current at the end of the reporting year,which could adversely affect our results of operations and financial conditionThe Peso currently qualifies as a currency of a hyperinflationary economy and we are required to restate our historical financial statements by applying inflationaryadjustments to our financial statements.Pursuant to IAS 29“Financial Reporting in Hyperinflationary Economies”,the financial statements of entities whose functional currency is that of a hyperinflationaryeconomy must be restated for the effects of changes in a suitable general price index.IAS 29 does not prescribe when hyperinflation arises,but includes several characteristicsof hyperinflation.The IASB does not identify specific hyperinflationary jurisdictions.However,in June 2018,the International Practices Task Force of the Centre for Quality(“IPTF”),which monitors“highly inflationary countries”,categorized Argentina as a country with projected three-year cumulative inflation rate greater than 100%.Additionally,some of the other qualitative factors of IAS 29 were present,providing prima facie evidence that the Argentine economy was hyperinflationary for the purposes ofIAS 29.Therefore,Argentine companies using IFRS are required to apply IAS 29 to their financial statements for periods ending on and after July 1,2018.Any further inflation adjustments into our financial statements may have effects on our business,results of operations and financial condition.Argentinas ability to obtain financing from international markets could be limited,which may impair its ability to implement reforms and foster economic growthand,consequently,affect our business,results of our operations and growth prospectsArgentinas history of defaults on its debt and related litigation may reoccur in the future and prevent Argentine companies such as us from accessing the internationalcapital markets readily or may result in higher costs and more onerous terms for such financing,and may therefore negatively affect our business,results of operations,financialcondition,the value of our securities,and our ability to meet our financial obligations.Following the default on its external debt in 2001,Argentina sought to restructure its outstanding debt through exchange offers in 2005 and again in 2010.Holders ofapproximately 93%of Argentinas defaulted debt participated in the exchanges.Nonetheless,a number of bondholders held out from the exchange offers and pursued legalactions against Argentina.In 2016,the Argentine Government settled several claims holders of defaulted bonds,ending more than 15 years of litigation.12 Table of Contents In 2018,the Argentine Government sought financial assistance from the International Monetary Fund(the“IMF”)and the IMFs Executive Board approved a three-year Stand-By Arrangement(SBA)for Argentina amounting to U.S.$50 billion,on June 20,2018,allowing the Argentine authorities to immediately draw U.S.$15 billion underthe SBA.In 2020,the Argentine Government reached an agreement with private creditors to renegotiate certain debt conditions as maturity dates and interest rates applicable forthe following years.On April 21,2020,Argentina invited holders of approximately U.S.$66.5 billion aggregate principal amount of its foreign currency external bonds toexchange such bonds for new bonds.The invitation contemplated the use of collective action clauses included in the terms and conditions of such bonds,whereby the decisionby certain majorities would bind holders that did not tender into the exchange offer.On August 31,2020,Argentina announced that it had obtained the bondholder consentsrequired to exchange and or modify 99.01%of the aggregate principal amount outstanding of all series of eligible bonds invited to participate in the exchange offer.Therestructuring settled on September 4,2020.As a result of the invitation,the average interest rate paid on Argentinas foreign currency external bonds was lowered to 3.07%,with a maximum rate of 5.0%,compared to an average interest rate of 7.0%and maximum rate of 8.28%prior to the invitation.In addition,the aggregate amount outstandingof Argentinas foreign currency external bonds was reduced by 1.9%and the average maturity of such bonds was extended.On June 22,2021,the Minister of Economy announced that the Argentine Government had obtained a“time bridge”within the framework of the Paris Clubnegotiations,consequently avoiding default.The understanding provides that the Argentine Government will have until March 31,2022 to reach a restructuring agreement withthe Paris Club members,which was further extended until July 31,2022.On October 28,2022,the Minister of Economy announced a new agreement with the Paris Club,which was an addendum to the Paris Club 2014 Settlement Agreement.This new agreement recognized a principal amount of U.S.$1.97 billion,extending the repayment periodto thirteen semi-annual installments,starting in December 2022 to be repaid in full by September 2028.As part of the agreement,the interest rate applicable to the first threeinstallments was reduced from 9%to 3.9%,with subsequent gradual increases to 4.5%.The payment profile implies semi-annual payments averaging U.S.$170 million(principal and interest included).After two years,Argentina will have repaid 40%of the principal amount outstanding.On January 28,2022,the IMF and the Argentine authorities reached an understanding on key policies as part of their ongoing discussions on an IMF-supportedprogram for the refinancing of U.S.$44.1 billion debt which was set to mature in 2022 and 2023.On March 4,2022,the Argentine Government reached a staff-level agreementwith the IMF and a bill was sent to the Argentine Congress.On March 11,2022,the lower house of the Argentine Congress passed and sent to the Senate the bill that supportsthe agreement between Argentina and the IMF.On March 17,2022,the Senate approved the agreement“Program of Extended Facilities”between the Argentine Governmentand the IMF,following the Argentine Congress endorsement of the understanding with the IMF,and on March 25,the Program of Extended Facilities was approved by theExecutive Board of the IMF.As a result,the Law No.27,668 was passed on March 18,2022,and consequently the Program of Extended Facilities was approved,allowing the IMF to pay outU.S.$44.500 million.This agreement includes an obligation to develop an energetic plan,that focuses on improving energy efficiency,and researching for a cleaner and cheaperway to produce and distribute electricity among other goals to achieve.Furthermore,the law reinforces Argentinas commitment to create a new subsidy segmentation scheme,concentrated on improving the energy distribution as well as protecting the low-and middle-income users.Currently,the Program of Extended Facilities has been extended until December 31,2024 and a recalibration of planned disbursements under the current program wasalso approved.The agreement,which runs from January 2022 to the end of 2024,had 10 quarterly reviews to determine compliance with targets.In return,the IMF is drawingthe funds to repay the maturities of the original agreement up to a total of SDR 31.914 billion(the IMFs official currency),equivalent to about U.S.$45 billion.The repaymentof this second loan will be made in 12 semi-annual instalments between 2026 and 2032,unless it is renegotiated again.13 Table of Contents Additionally,the agreements between the Argentine government,the Paris Club,and the IMF have been fundamental for restructuring Argentinas debt and stabilizingits economy.See“Argentinas ability to obtain financing from international markets is limited,which could affect its capacity to implement reforms and sustain economicgrowth.”During 2024 and 2025,the Argentine government was engaged in negotiations with the IMF for a new IMF program with additional financing and,on April 11,2025both the Argentine Government and the IMF announced an agreement for a 48-month extended arrangement under the existing Extended Fund Facility(EFF)amounting toSDR 15.267 billion(equivalent to about US$20,000 million)(the“2025 IMF Agreement”),allowing Argentina an immediate disbursement of about US$12,000 million,to befollowed by a first review planned for June 2025 with an associated disbursement of about US$2,000 million.The arrangement with the IMF is part of a program that foreseesother multilateral and bilateral organizations increasing their financing by an additional USD 8 billion(USD 6 billion from multilateral organizations and USD 2 billion throughthe extension of the repo arrangement signed with international banks in January 2025).However,the success of these programs will depend on the continued implementation of economic reforms and the political support needed to maintainmacroeconomic stability and sustainable economic growth.We cannot assure the Argentine government will be successful in its implementation of the program agreed with theIMF,which could affect the Argentine governments ability to implement reforms and public policies and boost economic growth,or the impact the result of such program willhave in Argentinas ability to access international capital markets(and indirectly in our own ability to access those markets).Moreover,the long-term impact of these measures and any future measures taken by the Argentine government on the Argentine economy,as a whole and in theenergy sector remains uncertain.It is possible that such reforms could be disruptive to the economy and adversely affect the Argentine economy and the energy industry,andconsequently,our business,results of operations and financial condition.We are also unable to predict the measures that the Argentine government may adopt in the future,andhow they will impact on the Argentine economy and our results of operations and financial condition.Fluctuations in the value of the Peso could adversely affect the Argentine economy and could in turn adversely affect our results of operationsThe Peso suffered important fluctuations during the last years.Even though in 2024,the Peso was the most appreciated currency in the word,we are unable to predictthe future value of the Peso against the U.S.Dollar.If the Peso devaluates further,any negative effects on the Argentine economy could have adverse consequences on ourbusiness,our results of operations and the market value of our ADSs,including as measured in U.S.Dollars.Following the announcement of the 2025 IMF Agreement and therelaxation in some of the foreign exchange regulations in Argentina,the Government implemented a free float currency administration program whereby the value of the Pesoagainst the U.S.Dollar would be determined by market forces within a certain floating band,with a floor of 1000 Pesos per each Dollar and a ceiling of 1400 Pesos per eachDollar,which floor and ceiling will adjust monthly at a rate of-1%and 1%,respectively.Thus,widening the free-floating band each month.To avoid the Peso Dollarexchange rate to fall below or move beyond the rates of the free-floating band,the Argentine Central Bank may intervene in the market to hold the exchange rate within theband,as adjusted at any time.Fluctuations in the value of the Peso,even within the free-floating band,may adversely affect the Argentine economy,our financial condition and results of operations.The Peso has been subject to significant depreciation against the U.S.Dollar in the past and may be subject to further fluctuation in the future within the free-floating band oreven beyond it.A depreciation of the Peso against major foreign currencies may also have an adverse impact on our capital expenditure program and increase the Peso amountof our trade liabilities and financial debt denominated in foreign currencies.The depreciation of the Peso may have a negative impact on the ability of certain Argentinebusinesses to service their foreign currency-denominated debt,lead to high inflation,significantly reduce real wages,jeopardize the stability of businesses whose successdepends on domestic market demand,including public utilities and the financial industry and adversely affect the Argentine Governments and our ability to honor its foreigndebt obligations and our debt obligations denominated in currencies other than the Peso.14 Table of Contents Intervention by the Argentine Government may adversely affect the Argentine economy and,as a result,our business and results of operationsIn the recent past,the Argentine Government intervened in the economy,including through the implementation of expropriation and nationalization measures,pricecontrols and exchange controls,among others.Measures already adopted by the Argentine Government as well as those that may be implemented in the future could be negatively impact the economy andpotentially harm,our business.In particular,we have no control over the reforms to the regulatory framework governing our operations and cannot assure that such reforms,ifenacted,will be beneficial if these measures fail to achieve their intended objectives they could adversely affect the Argentine economy as well as the Companys business,financial condition and results of operations and its ability to repay the Senior Notes.Even though the current administration has announced that it plans to scrap exchange controls and has implemented substantial relaxation of them following the 2025IMF Agreement,those controls continue to exist and new exchange controls could be introduced in the future which,along with any other then existing transfer restrictions,could in turn,affect our ability to access the international capital markets.Such restrictions and measures may generate political and social tensions and deteriorate theArgentine Governments public finances,as has occurred in the past,generating an adverse effect on economic activity and,in consequence,adversely affect our business andthe result of our operations,and cause the market value of our Senior Notes,our ADSs and our Class B common shares to decline.See“Item 10.Additional InformationExchange Controls.”Moreover,we cannot predict the measures that may be adopted by the current or any future government,such as expropriation,nationalization,forced renegotiation ormodification of existing contracts,new taxation policies,changes in laws,regulations and policies affecting foreign trade and investments,restrictions to transfers to othercountries or to capitals movement,or exclude that an important fluctuation of the Peso may have a material adverse effect on the Argentine economy and,as a consequence,adversely affect our financial condition,our results of operations or cause the market value of our Senior Notes,our ADSs and our Class B common shares to decline.Argentine public expenditure may affect the Argentine economyPublic expenditure increased throughout the last decade in Argentina.The Argentine Government adopted several measures to finance its public expenditure.The new administration has implemented a reduction of public spending,including energy and transportation subsidies,and a significant reduction in the transfer offederal funds to the provinces.However,high public expenditure levels could reoccur in the future.As of the date of this annual report,we cannot predict how the measures that the Argentine Government has applied and may continue to apply will impact theArgentine economy,and,in turn,our business,our financial condition and the results of our operations.15 Table of Contents The Argentine economy remains vulnerable to external shocks that could be caused by significant economic difficulties facing Argentinas major regional tradingpartners,or by more general“contagion”effects.Such external shocks and“contagion”effects could have a material adverse effect on Argentinas economic growth and,therefore,on our results of operations and financial conditionAlthough economic conditions vary from country to country,investors perceptions of events occurring in certain countries have in the past substantially affected,andmay continue to substantially affect,capital flows into and investments in securities of issuers from other countries,including Argentina.There can be no assurance that theArgentine financial system and securities markets will not be adversely affected by policies that may be adopted by foreign governments or the Argentine Government in thefuture.Argentina can also be adversely affected by negative economic or financial events that take place in other countries,subsequently affecting our operations and financialcondition,including our ability to repay our debt at maturity.Argentinas economy is vulnerable to external shocks.For example,economic slowdowns,especially in Argentinas major trading partners such as Brazil,have led todeclines in Argentine exports in the past.Specifically,fluctuations in the price of commodities sold by Argentina and a significant fluctuation of the Peso against the U.S.Dollarcould harm Argentinas competitiveness and affect its exports.In addition,international investors reactions to events occurring in one market may result in a“contagion”effectwhich could lead to an entire region or class of investment being disfavored by international investors.Additionally,financial and securities markets in Argentina are alsoinfluenced by economic and market conditions in other markets worldwide.The situation of the U.S.economy and the economic measures taken by the federal administration could adversely affect the economy of developing countries,including Argentina.The U.S.economy has recently registered its highest inflation rates over the last decades,although inflation appears to be falling faster in the United Statesthan in other economies.We cannot predict the decisions and policies that the U.S.administration will adopt in the future,which could generate uncertainty in the internationalmarkets and could have a negative effect on developing economies,such as Argentina.In sum,international investors perceptions of events occurring in one market may generate a“contagion”effect by which an entire region or class of investment isdisfavored by international investors.Argentina could be adversely affected by negative economic or financial developments in other emerging and developed countries,whichin turn may have material adverse effects on the Argentine economy and,indirectly,on our business,financial condition and results of operations,and the market value of ourADSs and Class B common shares.The Argentine economy and finance may be adversely affected as a consequence of a decrease in the international prices of commodities that Argentina exportsThe global commodities market is characterized by its volatility.Commodities exports have contributed significantly to the Argentine Governments revenues.Accordingly,the Argentine economy has remained relatively dependent on the price of its exports(mainly soy beans and derivatives thereof).A sustained decrease in the international price of the main commodities exported by Argentina,or any future climate event or condition may have an adverse effect onthe agriculture,and therefore on the Argentine Governments revenues and its capacity to comply with the payments on its public debt,eventually generating recessive orinflationary pressures,and in turn affecting our business,financial situation and the results of our operations.Failure to adequately address actual and perceived risks of institutional deterioration and corruption may adversely affect Argentinas economy and financialconditionA lack of a solid and transparent institutional framework for contracts with the Argentine Government and its agencies and corruption allegations have affected andcontinue to affect Argentina.Argentina ranked 99 of 180 in the Transparency Internationals 2024 Corruption Perceptions Index.16 Table of Contents In the past,various investigations into allegations of money laundering and corruption being conducted by the Office of the Argentine Federal Prosecutor,including thelargest such investigation,known as Los Cuadernos de las Coimas(the“Notebooks Investigation”)have negatively impacted the Argentine economy and political environment.Recognizing that the failure to address these issues could increase the risk of political instability,distort decision-making processes and adversely affect Argentinasinternational reputation and ability to attract foreign investment,the Argentine Government announced several measures aimed at strengthening Argentinas institutions andreducing corruption.These measures have included the reduction of criminal sentences in exchange for cooperation with the government in corruption investigations,increasedaccess to public information,the seizing of assets from corrupt officials,increasing the powers of the Anticorruption Office(Oficina Anticorrupcin),submitting a bill for theissuance of a new public ethic law,among others.The Argentine Governments ability to implement any of these initiatives is uncertain as it would be subject to independentreview by the judicial branch,as well as legislative support from opposition parties.We cannot estimate the impact that current or future anti-corruption initiatives and investigations may have on the Argentine economy.Similarly,it is not possible topredict the duration or how far-reaching the effects of any investigation might be,particularly in the energy sector,or if there will be any future investigation in this or otherindustry.In turn,the decrease in investor confidence resulting from any of these,among other issues,could have a significant adverse effect on the growth of the Argentineeconomy,which could,in turn,harm our business,our financial condition and operational results and affect the trading price of our Class B common shares and ADSs.Any downgrade in the credit rating or rating outlook of Argentina could adversely affect the rating and the market price of our ADS,our Class B common sharesand our corporate debt,affecting also our liquidityOn June 24,2021,Morgan Stanley Capital International(“MSCI”)announced the reclassification of Argentina to the standalone or independent category with effect asof November 2021,thus being excluded from the MSCI indexes.In June 2019,Argentina had entered the emerging market category.According to MSCI,the main reason forthis downgrade lied in the reinstatement of exchange controls,which have been in force since September 2019 until April 11,2025.There can be no assurance that Argentinas credit rating or rating outlook will not be downgraded further in the future,which could have an adverse effect both on therating and the market price of our ADS,our Class B common shares and our Senior Notes,affecting our own liquidity.Risks Relating to the Electricity Distribution SectorThe Argentine Government has intervened in the electricity sector in the past,and may continue to interveneHistorically,the Argentine Government has exerted a significant influence on the economy,including the energy sector,and companies such as us that operate in suchsector have done so in a highly regulated context that aims mainly at guaranteeing the supply of domestic demand.To address the Argentine economic crisis,from time to time the Argentine Government adopted several regulations and intervened in the electricity sector,which madea number of material changes to the regulatory framework applicable to the electricity sector.These changes severely affected electricity generation,distribution andtransmission companies and included,among other:the freezing of nominal distribution margins,the revocation of adjustment and inflation indexation mechanisms for tariffs,alimitation on the ability of electricity distribution companies to pass on to the user increases in costs due to regulatory charges,and the introduction of a new price-settingmechanism in the Wholesale Electric Market(Mercado Elctrico Mayorista or“WEM”)which had a significant impact on electricity generators and generated substantial pricedifferences within the market.From time to time,the Argentine Government intervened in this sector by,for example,granting temporary nominal margin increases,proposinga new social tariff regime for residents of poverty-stricken areas,the removing discretionally subsidies,creating specific charges to raise funds that were transferred togovernment-managed trust funds that finance investments in generation and distribution infrastructure and the investments for the construction of new generation plants and theexpansion of existing transmission and distribution networks.17 Table of Contents On December 16,2023,by means of Decree No.55/2023,the government declared an emergency in the energy sector and instructed the Secretariat of Energy toimplement a course of actions in relation to each segment of electricity generation,transmission and distribution.It also determined the start of a comprehensive tariff review,and provided for the continuity of ENREs intervention.Likewise,the proposed Omnibus Act also includes the unification of the gas and electricity governmental bodies whichwould continue the agencys intervention.Through Executive Order No 1023/2024,the Federal Government extended the emergency of the national energy sector with respectto the generation,transport and distribution segments of electricity under federal jurisdiction,until July 9,2025 and the ENREs intervention was prolonged until theestablishment and appointment of the Board of Directors of the Nacional Gas and Electricity Regulatory Entity.The Secretariat of Energy of the Ministry of Economy is empowered to redetermine the structure of subsidies in force in order to ensure end users access to basic andessential consumption of:(i)electricity under Laws Nos.15,336 and 24,065,as supplemented,amended and regulated;and(ii)natural gas under Laws Nos.17,319 and 24,076,as supplemented,amended and regulated,respectively.This benefit shall mainly consider a percentage of the income of the cohabiting group,individually or jointly forelectricity and natural gas,to be established by the regulations.For the purpose of calculating the cost of basic consumption,the tariffs in force at each supply point shall beconsidered.The aforementioned Secretariat of Energy shall be empowered to define the specific mechanisms for the allocation and effective collection of subsidies by users,determining the roles and tasks to be performed in a mandatory manner by the different public actors,concessionary companies,and other actors or agents that make up thesystems of the public service in question,in their capacity as primary responsible parties.In addition,within the framework of the emergency in the National Electricity Sector established by Decree No.55/2023,the SE has been instructed to prepare,putinto effect and implement a program of necessary and indispensable actions in relation to the segments included in the aforementioned emergency,in order to establish pricesanction mechanisms under competitive and free access conditions,maintain income levels in real terms and cover investment needs,so as to guarantee the continuousprovision of public electricity and natural gas transmission and distribution services under appropriate technical and economic conditions for providers and users of allcategories.However,we cannot assure whether the implementation of the program would regularize the operating deficit of the WEMs power and energy compensation fundsand accounts.See“Item 4Information on the CompanyThe Argentine Electricity IndustryThe Wholesale Electricity Market(WEM)Operation of the WEM”.On February 16,2024 ENRE issued Resolution No.102/2024 notifying the new tariff table and the values per category of the of own distribution costs(“CPD”,alsoreferred as value added for distribution(“VAD”).Low-income consumers(categorized as N2)saw an increase of around 70%.Meanwhile,middle-income consumers(knownas N3)saw an increase of around 65%,although for the last universe if they exceed 600 KW/h the jump will be in the area of 130%.Lastly,high income consumers(N1)sawan increase of around 150%.18 Table of Contents Additionally,through Decree No.465/2024 issued on May 27,2024,the Executive Branch established a new regime based on the creation of Basic Energy Baskets,taking into account users geographical location,energy resources,family composition,and the impact of electricity costs on their income.Until this new regime was going tobe implemented,the decree provides for a transition period with a gradual reduction of subsidies.In alignment with this,the National Subsidy Regime categorizes users intothree groups(N1,N2,and N3)based on their economic capacity to pay the full cost of energy.Through Decree No.465/2024,the Executive Branch also extended the emergency in the national energy sector and postponed the deadline for the implementation ofthe new tariff structure until July 9,2025.Additionally,Decree No.1023/2024 extended the intervention of the ENRE.Further,on January 7,2025,by means of Resolution No.6/2025,the ENRE approved the revised schedule for the Electricity Distribution Tariff Review Program underfederal jurisdiction.In line with this,we submitted our tariff proposal on January 27.2025.Following the previously approved schedule,ENRE Resolution No.79/2025 calledfor a public hearing on February 27,2025,after which the ENRE settled the new date for the approval of the new tariff scheme on March 31,2025.However,on March 31,2025,by means of Resolution 223/2025 the ENRE modified the date foreseen for the approval of the new electricity rate schedules to April 30,2025.Nevertheless,the Company has still not been able to resolve the income deficit or recover its credits against the Federal Government resulting from the freeze onelectricity rates and,thus,if the RT does not contemplate such Edenors regulatory credits,our ability to cover any further increase of our costs could be affected and may havea direct negative impact on our results of operations.There is uncertainty as to what other measures the Argentine Government may adopt in connection with tariffs on public services and their impact on theArgentine economyAs explained in other risk factors in this annual report,following the economic crisis of 2001-2002,the subsequent freeze on electricity rates in Pesos and thesignificant depreciation of the Argentine Peso against the U.S.Dollar,there was a lack of acknowledgement by governmental authorities of the actual increasing cost of ouroperations.Since the RTI process was completed by 2017,all other transitional adjustment resulted in lower determinations based on a Net Replacement Value(“NVR”)methodology over a slightly lower base capital than the one we had submitted in our proposals.For more information,please refer to“The Argentine Government hasintervened in the electricity sector in the past,and may continue to intervene”A full RT process has yet to be completed.Notwithstanding the measures recently adopted as provisory increase of electricity rates,there is uncertainty as to whatmeasures the Argentine Government may adopt in connection with tariffs,whether tariffs will be updated in connection with the RT,and from time to time to reflect ourincrease in operating costs,and their impact on demand.Likewise,no assurance can be given that any future reduction in subsidies will not increase our clients delinquencyrates or a delay in our collections.Electricity demand may be affected by tariff increases,which could lead distribution companies,such as us,to record lower revenuesDuring 2024,and for the first time in 10 years,electricity demand in Argentina decreased 0.5%compared to 2023.From 2013 through 2023,electricity demand inArgentina increased by 12.5%,which in part reflects the relative low cost,in real terms,of electricity to users due to the freezing of tariffs and therefore the distributionmargins,the establishment of subsidies in the purchase price of energy and the elimination of the inflation adjustment provisions in distribution concessions.19 Table of Contents In 2024,the Companys electricity demand amounted to 26,827GWh,which represented a 3crease compared to 2023,while the WEM demand amounted to140,227GWh(-0.5%year-on-year).The variation in the Companys demand was mainly due to temperature,elasticity,price and the level of economic activity.We cannot make any assurance that any future increases in the cost of electricity will not have a material adverse effect on electricity demand or result in a decline incollections from users.In this respect,we cannot assure you that these measures or any future measure will not lead electricity companies,like us,to record lower revenues andresults of operations,which may,in turn,have a material adverse effect on the market value of our ADSs and Class B common shares.Energy shortages may act as a brake on growing demand for electricity and disrupt distribution companies ability to deliver electricity to their customers,whichcould result in customer claims and material penalties imposed on these companiesThe recurring economic crises and the resulting emergency measures have had and continue to have a material adverse effect on other energy sectors.In addition,voltage breakdowns have occurred and continue to occur due to failure in the transportation system,and lack of carriers investments.As a result,the supply of energy to our company could be affected and any failures in the transportation system could also jeopardize our distribution network,which,in turn,could prevent us,from experiencing continued growth in our business and could lead to failures to provide electricity to customers.Under Argentine law,distributioncompanies are responsible to their customers for any disruption in the supply of electricity.As a result,distribution companies may face customer claims and fines and penaltiesfor disruptions caused by energy shortages even when these are attributable to generators and transportation companies unless the relevant Argentine authorities determine thatenergy shortages constitute force majeure.To date,the Argentine authorities have not been called upon to decide under which conditions energy shortages may constitute forcemajeure.In the past,however,the Argentine authorities have recognized the existence of force majeure only in limited circumstances,such as internal malfunctions at thecustomers facilities,extraordinary meteorological events(such as major storms)and third-party work in public thoroughfares.We cannot make assurances that we will notexperience a lack of energy supply that could adversely affect our business,financial condition and results of operations,as well as our ability to repay our debts.If the demand for energy is increased suddenly,the difficulty in increasing the capacity of distribution companies in a short or medium term could adversely affectthe Company,which in turn could result in customer complaints and substantial fines for any interruptionsIn recent years,the increase in electricity demand was greater than the structural increase in electricity distribution capacities,which led to power shortages anddisruptions,in certain occasions.A sustained increase in electricity demand could generate future shortages.In addition,the condition of the Argentine electricity market hasprovided little incentive to generators and distributors to further invest in increasing their generation and distribution capacity,respectively,which would require material long-term financial commitments.In 2022,2023,and 2024,the increase in the capacity of our own facilities resulting from the investment process was higher than the increase indemand,and the service quality indicators have continued improving.Regarding the coming years,there is uncertainty about the availability of resources to continue with thisprocess.With respect to generation,depending on the availability of water and fuels,supply could be affected.For these cases,as long as ENRE Resolutions No.63/2017 and3/2025 remain applicable,we are exempted from liability against users.Additionally,according to Argentine law,distribution companies,such as us,are responsible to their users for any disruption in the supply of electricity.Consequently,customers can direct their claims to the distribution companies.Also,distribution companies are subject to fines and penalties for service disruptions caused by energyshortages,unless the respective Argentine authorities determine that energy shortages constitute force majeure events.As a result,we could face user claims and fines andpenalties for service disruptions caused by energy shortages unless the relevant Argentine authorities determine that energy shortages constitute force majeure.20 Table of Contents We cannot assure that we will not experience a lack in the supply of energy or that any claims,fines,penalties or government intervention will not have a materiallyadverse effect on our financial condition and results of operations and cause the market value of our Senior Notes,our Senior Notes,ADSs and Class B common shares todecline.The exclusivity of electricity distribution in our service area may be adversely affected by technological or other changes in the energy distribution industry,whichcould have a material adverse effect on our business.Although our concession grants us the exclusive right to distribute electric energy within our service area,this exclusivity may be revoked in whole or in part iftechnological developments make it possible for energy distribution to evolve from its current condition of natural monopoly to a competitive business.In no event does thetotal or partial revocation of our exclusive distribution rights entitle us to claim or obtain reimbursement or indemnification.Although,to our knowledge,there are no currentprojects to introduce new technologies in the medium or long term that could reasonably modify the composition of the electricity distribution business,we cannot assure youthat future developments will not allow competition in our sector that would adversely affect the exclusivity right granted to us under our concession.Any total or partial loss ofour exclusive right to distribute electricity within our service area would likely lead to increased competition and result in lower revenues,which could have a material adverseeffect on our financial condition,our results of operations and the market value of our Class B shares and our ADSs.Risks Relating to Our BusinessWe operate our business pursuant to our Concession Agreement granted by the Argentine Government,the revocation or termination of which would have amaterial adverse effect on our businessWe conduct our business pursuant to our concession agreement dated August 5,1992(“Concession Agreement”)granted by the Argentine Government.Suchagreement contains several requirements regarding the operation of our business and compliance with laws and regulations.Compliance with our obligations under ourConcession Agreement is secured by a pledge of our Class A common shares in favor of the Argentine Government.Accordingly,upon the occurrence of specified events ofdefault under our Concession Agreement,the Argentine Government would be entitled to foreclose on its pledge on our Class A common shares,which would have a severenegative impact on our ability to operate a material portion of our business,and as a result,our results of operations would be materially adversely affected.Finally,ourConcession Agreement also generally provides for termination in the case of our insolvency or bankruptcy.If our Concession Agreement is terminated or if the ArgentineGovernment forecloses its pledge over Class A common shares,we may not be able to continue to operate as a going concern,and in turn our consolidated results of operationswould be materially adversely affected and the market value of our Class B common shares and ADSs could decline.Downgrades in our credit ratings could have negative effects on our funding costs and business operationsCredit ratings are assigned to the Company.The credit ratings are based on information furnished by us or obtained by the credit rating agencies from independentsources and are also influenced by the credit ratings of Argentine Government bonds and general views regarding the Argentine financial system as a whole.The credit ratingsare subject to revision,suspension or withdrawal by the credit rating agencies at any time.A downgrade,suspension or withdrawal in our credit ratings could result in,amongothers,the following:(i)increased funding costs and other difficulties in raising funds;(ii)the need to provide additional collateral in connection with financial markettransactions;and(iii)the termination or cancellation of existing agreements.As a result,our business,financial condition and results of operations could be materially andadversely affected.21 Table of Contents Our business is subject to risks arising from natural disasters,catastrophic accidents,terrorist attacks,and cybersecurity incidents.Additionally,our businessesare subject to the risk of mechanical or electrical failures and any resulting unavailability may affect our ability to fulfil our demand and thus adversely affect our businessand financial performanceThe electric power distribution infrastructure that we rely on,may be damaged by flooding,hurricanes,strong windstorms,fires,earthquakes,extreme weathertemperatures,heat waves and other catastrophic disasters arising from natural or accidental or intentional human causes.We could experience severe business disruptions,significant decreases in revenues based on lower demand arising from catastrophic events,or significant additional costs to us not otherwise covered by insurance policies.There may be an important time lag between a major accident,catastrophic event or terrorist attack and our definitive recovery from our insurance policies,which typicallycarry non-recoverable deductible amounts.In addition,any of these events could cause adverse effects on the energy demand of some of our customers and of consumersgenerally in the affected market.Some of these considerations,could have a material adverse effect on our business,financial condition and our result of operations.Additionally,our assets are subject to the risk of mechanical or electrical failures and may experience periods of unavailability affecting our ability to fulfil our energydemand.Any unplanned unavailability of our energy demand,so we could be subject to fines and penalties.We cannot assure that any other event in the Argentine network willnot affect our facilities and consequently their availability to fulfil our energy demand and our operational results.Our operations could cause environmental risks and any change in environmental laws,climate change legislation or regulations restricting emissions ofgreenhouse gases(“GHGs”)and legal frameworks promoting an increase in the participation of energies from renewable sources could significantly impact our businessand result in increased operating costsIn December 1993,Argentina approved the United Nations Framework Convention on Climate Change(“UNFCCC”)through Law No.24,295.The UNFCCC,whichentered into force on March 21,1994,deals with the stabilization of the GHGs concentrations in the atmosphere at a level that would prevent dangerous anthropogenicinterference with the climate system.On June 20,2001,Argentina approved the Kyoto Protocol to the UNFCCC(“Protocol”),which entered into force on February 16,2005.This Protocol deals with thereduction of certain Greenhouse Gases(“GHGs”)(carbon dioxide,methane,nitrous oxide,hydrofluorocarbons,perfluorocarbons and sulphur hexafluoride)in the atmosphere.On April 29,2015,Argentina approved the Doha Amendment through Law No.27,137,which entered into force in 2015.Later,the 2015 United Nations Climate Change Conference adopted by consensus the Paris Agreement,which is known to be the successor of the Protocol.Theagreement deals with GHG emission reduction measures,targets to limit global temperature increases and requires countries to review and“represent a progression”in theirintended nationally determined contributions.Countries agreed they will aim to achieve the long term goal to limit global warming to well below 2C above pre-industriallevels,and pursue efforts to further limit the temperature increase to 1.5C.On October 5,2016,the threshold for entry into force of the Paris Agreement was achieved.International treaties together with increased public awareness related to climate change may result in increased regulation to reduce or mitigate GHG emissions.Under FederalLaw No.27,270,dated September 1,2016,Argentina approved the Paris Agreement.22 Table of Contents Furthermore,Argentine Law No.26,190,as amended and complemented by Law No.27,191 and its implementing decrees,established a legal framework whichpromotes an increase in the participation of energies from renewable sources in Argentinas electricity market.During 2023 the 28th Conference of the Parties(COP 28),also known as the Climate Summit,took place.Under the umbrella of COP28,198 countries have signed theDubai Agreement.Said agreement recognizes the need for deep,rapid and sustained reductions in GHG,and states that said gases must be reduced by 43%by 2030 and 60%by2035,from 2019 levels,and achieve net zero carbon dioxide emissions by 2050.It also sets the 2030 target of tripling global renewable energy capacity and doubling the globalaverage annual rate of improvement in energy efficiency.Compliance with legal and regulatory changes relating to climate change,including those resulting from the implementation of international treaties,may in the futureincrease our costs to operate and maintain our facilities,install new emission controls on our facilities and administer and manage any GHG emissions program.More stringentenvironmental regulations can result in the imposition of costs associated with GHG emissions,either through environmental agency requirements relating to mitigationinitiatives or through other regulatory measures such as GHG emissions taxation and market creation of limitations on GHG emissions that have the potential to increase ouroperating costs.Some of our operations are subject to environmental risks that could arise unexpectedly and cause material adverse effects on our results of operations and financialcondition.In addition,the occurrence of any of these risks could lead to personal injury,loss of life,environmental damage,repair and expenses,equipment damage andliability in civil and administrative proceedings.We cannot assure you that we will not incur additional costs related to environmental issues in the future,which couldadversely affect our results of operations and financial condition.In addition,we cannot ensure that our insurance coverage is sufficient to cover the losses that could potentiallyarise from these environmental risks.In addition,we are subject to a broad range of environmental legislation in Argentina.Local,provincial and national authorities in Argentina may implement newenvironmental laws and regulations and may require us to incur higher costs to comply with new standards.The imposition of more stringent regulatory and permitrequirements in relation to our operators in Argentina could significantly increase the costs of our activity.We cannot predict the general effects of the implementation of any new environmental laws and regulations on our financial condition and results of operations.Changes in weather conditions or the occurrence of severe weather(whether or not caused by climate change or natural disasters),could adversely affect ouroperations and financial performanceWeather conditions have influenced and in the future may influence the demand for electricity,our ability to provide it and the costs of providing it.In particular,severe weather may adversely affect our results of operations by causing significant demand increases,which we may be unable to meet without a significant increase inoperating costs.This could strongly impact the continuity of our services and our quality indicators.For example,the exceptional heat wave that occurred in January 2022 andMarch 2023 and the thunderstorms occurred in December 2023 affected the continuity of our services,both in the low voltage and medium voltage networks.See“Item 4.Information on the CompanyBusiness OverviewQuality StandardsEdenor Concession”.Furthermore,any such disruptions in the provision of our services could exposeus to fines and orders to compensate those users affected by any such power cuts,as has occurred in the past(see“Item 4.Information on the CompanyBusiness OverviewQuality StandardsFines and Penalties”).Our financial condition,results of operations and cash flows could therefore be negatively affected by increased operating costs,litigation or decreases in revenue relating to changes in weather conditions and severe weather.23 Table of Contents Failure or delay to negotiate further improvements to our tariff structure,including increases in our distribution margin,and/or to have our tariffs adjusted toreflect increases in our distribution costs in a timely manner or at all,have affected and may continue to affect our capacity to perform our commercial obligations andcould also have a material adverse effect on our ability to perform our financial obligationsSince the execution of the agreement entered into between us and the Argentine Government on February 13,2006,relating to the adjustment and renegotiation of theterms of our Concession Agreement(“Acta Acuerdo sobre la Adecuacin del Contrato de Concesin del Servicio Pblico de Distribucin y Comercializacin de EnergaElctrica”or the“Adjustment Agreement”)and as required by the Argentine Government,we were engaged in an RTI with the ENRE through February 1,2017.The Adjustment Agreement contemplated a cost adjustment mechanism for the transitional period during which an RTI process was being conducted.However,no RTIwas completed since then.Furthermore,on December 16,2023,by means of Decree No.55/2023,the government determined the start of a comprehensive RT to be implemented beforeDecember 31,2024,and provided for the continuity of ENREs intervention.Through Decree No.465/2024,the Executive Branch extended the emergency in the national energy sector and postponed the deadline for the implementation of thenew tariff structure until July 9,2025.Additionally,Decree No.1023/2024 extended the intervention of the ENRE.Further,on January 7,2025,by means of Resolution No.6/2025,the ENRE approved the revised schedule for the Electricity Distribution Tariff Review Program underfederal jurisdiction.In line with this,we submit
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR 12(g)OF THE SECURITIES EXCHANGE ACT OF 1934ORANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2024.ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934ORSHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company reportFor the transition period from to Commission file number:001-38923Gaotu Techedu Inc.(Exact name of Registrant as specified in its charter)N/A(Translation of Registrants name into English)Cayman Islands(Jurisdiction of incorporation or organization)5F,Gientech Building,17 East Zone,10 Xibeiwang East RoadHaidian District,Beijing 100193Peoples Republic of China(Address of principal executive offices)Nan Shen,Chief Financial OfficerE-mail:5F,Gientech Building,17 East Zone,10 Xibeiwang East RoadHaidian District,Beijing 100193Peoples Republic of ChinaTelephone: 86 10 8282-6826(Name,Telephone,E-mail 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 classTrading Symbol(s)Name of each exchange on which registeredAmerican Depositary Shares,every threerepresenting two Class A ordinary shares,par value US$0.0001 per shareGOTUNew York Stock ExchangeClass A ordinary shares,par value US$0.0001 per share*New York Stock Exchange(1)*Not for trading,but only in connection with the listing on the New York Stock Exchange of our American depositary shares,every three American depositary shares representing two Class A ordinary shares.Securities registered or to be registered pursuant to Section 12(g)of the Act.None(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act.None(Title of Class)Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report.As of December 31,2024,there were 168,623,225 ordinary shares outstanding,being the sum of 95,317,937 Class A ordinary shares and 73,305,288 Class B ordinary shares.Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No If this report is an annual or transition report,indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934.Yes NoNote Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934 from their obligations under those Sections.Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes NoIndicate 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 NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or an emerging growth company.See definition of“large accelerated filer,”“accelerated filer,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.The term“new or revised financial accounting standard”refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5,2012.Indicate by check mark whether the registrant has filed a report on and attestation to its managements 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.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 registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAP International Financial Reporting Standards as issued by the International Accounting Standards Board Other If“Other”has been checked in response to the previous question,indicate by check mark which financial statement item the registrant has elected to follow.Item 17 Item 18If 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 No4TABLE OF CONTENTSINTRODUCTION.5FORWARD-LOOKING INFORMATION.6PART I.7ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERS.7ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE.7ITEM 3.KEY INFORMATION.7ITEM 4.INFORMATION ON THE COMPANY.71ITEM 4A.UNRESOLVED STAFF COMMENTS.111ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS.111ITEM 6.DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES.125ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.132ITEM 8.FINANCIAL INFORMATION.133ITEM 9.THE OFFER AND LISTING.134ITEM 10.ADDITIONAL INFORMATION.134ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.149ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.150PART II.151ITEM 13.DEFAULTS,DIVIDEND ARREARAGES AND DELINQUENCIES.151ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.152ITEM 15.CONTROLS AND PROCEDURES.152ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT.154ITEM 16B.CODE OF ETHICS.154ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES.154ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.154ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.155ITEM 16F.CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT.155ITEM 16G.CORPORATE GOVERNANCE.155ITEM 16H.MINE SAFETY DISCLOSURE.156ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.156ITEM 16J.INSIDER TRADING POLICIES.156ITEM 16K.CYBERSECURITY.156PART III.157ITEM 17.FINANCIAL STATEMENTS.157ITEM 18.FINANCIAL STATEMENTS.157ITEM 19.EXHIBITS.1585INTRODUCTION Unless otherwise indicated and except where the context otherwise requires,references in this annual report to:“ADRs”are to the American depositary receipts that may evidence the ADSs;“ADSs”are to the American depositary shares,every three of which represent two Class A ordinary shares;“Beijing Lexuebang”are to Beijing Lexuebang Network Technology Co.,Ltd.;“Beijing Yuexuebang”are to Beijing Yuexuebang Network Technology Co.,Ltd.;“Class A ordinary shares”are to our Class A ordinary shares,par value US$0.0001 per share;“Class B ordinary shares”are to our Class B ordinary shares,par value US$0.0001 per share;“gross billings”for a specific period are to the total amount of cash received for the sale of course offerings,net of the total amount of refunds in such period;“Gaotu,”“we,”“us,”“our company”and“our”are to Gaotu Techedu Inc.,our Cayman Islands holding company and its subsidiaries,and in the context of describing our operations and consolidated financial information,the VIE(as defined below)and its subsidiaries;“NYSE”are to the New York Stock Exchange;“paid courses”are to our courses that are charged not less than RMB99.00 per course in fees;“paid course enrollments”for a certain period are to the cumulative number of paid courses enrolled in and paid for by our students,including multiple paid courses enrolled in and paid for by the same student;“RMB”and“Renminbi”are to the legal currency of mainland China;“US$,”“U.S.dollars,”“$,”and“dollars”are to the legal currency of the United States;“VIE”or“Beijing Gaotu”are to Gaotu Education Technology Co.,Ltd.,formerly known as Beijing BaiJia Technology Co.,Ltd.,or Beijing BaiJia Hulian Technology Co.,Ltd.The VIE is a domestic company incorporated in mainland China in which we do not have any equity ownership but whose financial results have been consolidated into our consolidated financial statements based solely on contractual arrangements in accordance with U.S.GAAP.See“Item 4.Information on the CompanyC.Organizational Structure”for an illustrative diagram of our corporate structure;“WFOEs”are to Beijing Lexuebang,Beijing Yuexuebang and Wuhan Yuexuebang,which are wholly foreign owned entities under PRC law;and“Wuhan Yuexuebang”are to Wuhan Yuexuebang Network Technology Co.,Ltd.We present our financial results in RMB.We make no representation that any RMB or U.S.dollar amounts could have been,or could be,converted into U.S.dollars or RMB,as the case may be,at any particular rate,or at all.The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign exchange and through restrictions on foreign trade.This annual report contains translations of certain foreign currency amounts into U.S.dollars for the convenience of the reader.Unless otherwise stated,all translations of Renminbi into U.S.dollars were made at the rate at RMB7.2993 to US$1.0000,the exchange rate as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System in effect as of December 31,2024.6FORWARD-LOOKING INFORMATIONThis annual report contains forward-looking statements that involve risks and uncertainties.These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results,performance or achievements to be materially different from those expressed or implied by the forward-looking statements.These statements are made under the“safe harbor”provisions of the U.S.Private Securities Litigations Reform Act of 1995.You can identify these forward-looking statements by words or phrases such as“may,”“will,”“expect,”“anticipate,”“aim,”“estimate,”“intend,”“plan,”“believe,”“likely to”or other similar expressions.We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition,results of operations,business strategy and financial needs.These forward-looking statements include,but are not limited to,statements about:government policies and regulations relating to our industry;our goals and strategies;our ability to retain and increase the number of students and expand our service offerings;our future business development,financial condition and results of operations;expected changes in our revenues,costs or expenditures;competition in our industry;general economic and business conditions globally and in China;andassumptions underlying or related to any of the foregoing.You should read this annual report and the documents that we refer to in this annual report and have filed as exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect.Other sections of this annual report discuss factors which could adversely impact our business and financial performance.Moreover,we operate in an evolving environment.New risk factors emerge from time to time and it is not possible for our management to predict all risk factors,nor can we assess the impact of all factors on our business or the extent to which any factor,or combination of factors,may cause actual results to differ materially from those contained in any forward-looking statements.We qualify all of our forward-looking statements by these cautionary statementsYou should not rely upon forward-looking statements as predictions of future events.The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report.Except as required by law,we undertake no obligation to update or revise publicly any forward-looking statements,whether as a result of new information,future events or otherwise,after the date on which the statements are made or to reflect the occurrence of unanticipated events.7PART I.ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERSNot applicable.ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLENot applicable.ITEM 3.KEY INFORMATIONOur Holding Company Structure and Contractual Arrangements with the VIE Gaotu Techedu Inc.is not an operating company in mainland China but a Cayman Islands holding company with operations primarily conducted through(i)our subsidiaries incorporated in mainland China,or mainland China subsidiaries,and(ii)contractual arrangements with the VIE,namely Gaotu Education Technology Co.,Ltd.,and its subsidiaries based in mainland China.The following diagram illustrates our corporate structure,including our principal subsidiaries,the VIE and its principal subsidiaries,as of the date of this annual report:Note:(1)Shareholders of Beijing Gaotu and their respective shareholdings in Beijing Gaotu and relationship with our company are Larry Xiangdong Chen(98.28%),chairman of our board of directors and our chief executive officer,and Bin Luo(1.72%),our employee.8Gaotu Techedu Inc.is a Cayman Islands holding company with operations primarily conducted through(i)its mainland China subsidiaries and(ii)the VIE,namely Beijing Gaotu,and its subsidiaries based in mainland China.By purchasing the ADSs,investors are purchasing interests in our Cayman Islands holding company,as opposed to interests in our mainland China subsidiaries or the VIE and its subsidiaries based in mainland China.The VIE structure involves unique risks to investors of our Cayman Islands holding company.See“Item 3.Key InformationD.Risk FactorsRisks Related to our Corporate Structure”for more details.The laws and regulations of mainland China prohibit,restrict or impose conditions on foreign direct investment in operating companies of certain industries.As of the date of this annual report,in terms of our operating entities,based on the opinion of our PRC counsel,Tian Yuan Law Firm,pursuant to the Special Administrative Measures(Negative List)for the Access of Foreign Investment,or the Negative List,(i)foreign investors cannot make direct investment in the VIE because the VIE engages in audio and video services in mainland China,and(ii)foreign investors are restricted from owning more than 50%of the equity interests in each of the VIE and Shanghai Gaotu YunJi Education Technology Co.,Ltd.,or Shanghai Gaotu,one of the subsidiaries of the VIE,because the VIE and Shanghai Gaotu engage in internet content business,value-added telecommunication-based online marketing business and mobile application distribution business in mainland China.Accordingly,we operate these businesses in mainland China through the VIE,and such structure is used to provide investors with exposure to foreign investment in the VIE and Shanghai Gaotu where laws and regulations in China mainland prohibit direct foreign investment in the VIE and restrict direct foreign investment from constituting more than 50%of the equity interests in Shanghai Gaotu,and rely on contractual arrangements among our mainland China subsidiaries,the VIE and its shareholders to control the business operations of the VIE and its subsidiaries,including Shanghai Gaotu.The VIE is consolidated for accounting purposes,but is not an entity in which our Cayman Islands holding company,or our investors,own equity.Revenues contributed by the VIE accounted for 100%,100%and 99.99%of our total revenues for the years ended December 31,2022,2023 and 2024,respectively.As used in this annual report,“we,”“us,”“our company,”“our,”or“Gaotu”refers to Gaotu Techedu Inc.,its subsidiaries,and,in the context of describing our operations and consolidated financial information,the VIE,namely Beijing Gaotu,and its subsidiaries.Investors in our ADSs are not purchasing equity interest in the VIE in mainland China,but instead are purchasing equity interest in a holding company incorporated in the Cayman Islands,and may never directly hold equity interests in the VIE in mainland China.Our subsidiaries,the VIE and its shareholders have entered into a series of contractual agreements.These contractual arrangements:enable us to receive the economic benefits that could potentially be significant to the VIE in consideration for the services provided by our subsidiaries;effectively assigned all of the voting rights underlying the nominee shareholders equity interest in the VIE to us;andenable us to hold an exclusive option to purchase all or part of the equity interests in the VIE when and to the extent permitted by the laws of mainland China.A series of contractual agreements,including equity interest pledge agreement,exclusive call option agreement,exclusive management services and business cooperation agreement,powers of attorney and spousal consent letters,have been entered into by and among our subsidiaries,the VIE and its shareholders.For more details of these contractual arrangements,see“Item 4.Information on the CompanyC.Organizational StructureContractual Arrangements with the VIE and Its Shareholders.”Terms contained in each set of contractual arrangements with the VIE and its shareholders are substantially similar.Despite the lack of legal majority ownership,our Cayman Islands holding company is considered the primary beneficiary of the VIE and consolidates the VIE and its subsidiaries as required by Accounting Standards Codification Topic 810,Consolidation.Accordingly,we treat VIE as a consolidated entity under the accounting principles generally accepted in the United States,or U.S.GAAP,and we consolidate the financial results of the VIE in our consolidated financial statements in accordance with U.S.GAAP.Neither Gaotu Techedu Inc.nor its investors has an equity ownership in,direct foreign investment in,or control through such ownership or investment of,the VIE,and the contractual arrangements are not equivalent to an equity ownership in the business of the VIE.The following is a summary of the currently effective contractual arrangements by and among Beijing Lexuebang,Wuhan Yuexuebang and Beijing Yuexuebang,which we refer to collectively as the WFOEs,and the VIE and its shareholders.9 Equity Interest Pledge Agreement.Under the equity interest pledge agreement among the WFOEs,the VIE and its shareholders,the VIEs shareholders pledged all of their equity interests of the VIE to the WFOEs as security for performance of the obligations of the VIE and its shareholders under the exclusive call option agreement,the exclusive management services and business cooperation agreement and the powers of attorney.If any of the specified events of default occurs,the WFOEs may exercise the right to enforce the pledge immediately.The WFOEs may transfer all or any of its rights and obligations under the equity interest pledge agreement to its designee(s)at any time.The agreement will remain in effect until the fulfillment of all the obligations under the exclusive call option agreement,the exclusive management services and business cooperation agreement and the powers of attorney.We have registered the equity interest pledge under the equity interest pledge agreement in relation to the VIE with the relevant office of the State Administration for Market Regulation,or the SAMR,in accordance with the PRC Civil Code.Exclusive Management Services and Business Cooperation Agreement.Pursuant to the exclusive management services and business cooperation agreement among the WFOEs,the VIE and the shareholders of the VIE,the WFOEs has the exclusive right to provide or designate any third-party to provide,among other things,education management consultancy services,permission of intellectual property rights,technological support and business support to the VIE and its subsidiaries.In exchange,the VIE and its subsidiaries pay service fees to the WFOEs in an amount determined by the WFOEs in its sole discretion.Without the prior written consent of the WFOEs,the VIE and its subsidiaries cannot accept services provided by or establish similar cooperation relationship with any third-party.The WFOEs owns the exclusive intellectual property rights created as a result of the performance of this agreement unless otherwise provided by the laws or regulations of mainland China.The agreement will remain effective unless unanimously agreed by the parties concerned or unilaterally terminated by the WFOEs with a written notice.Unless otherwise required by applicable laws of mainland China,the VIE and its shareholders do not have any right to terminate the agreement.Exclusive Call Option Agreement.Under the exclusive call option agreement among the WFOEs,the VIE and its shareholders,each of the shareholders of the VIE irrevocably granted the WFOEs a right to purchase,or designate a third-party to purchase,all or any part of their equity interests in the VIE at a purchase price equal to the lowest price permissible by the then-applicable laws and regulations of mainland China at WFOEs sole and absolute discretion to the extent permitted by the laws of mainland China.The shareholders of the VIE shall promptly give all considerations they received from the exercise of the options to the WFOEs or its designee(s).The VIE and its shareholders covenant that,without the WFOEs prior written consent,they will not,among other things,(i)create any pledge or encumbrance on their equity interests in the VIE;(ii)transfer or otherwise dispose of their equity interests in the VIE;(iii)change the VIEs registered capital;(iv)amend the VIEs articles of association;(v)sell,transfer,license or otherwise dispose of any of the VIEs assets or allow any encumbrance of any assets,except for the disposal or the encumbrances of the assets that are treated as necessary for their daily business operations with the value of the assets involved in a single transaction not exceeding RMB100,000;(vi)cause the VIE to enter into any major contracts or terminate any material contracts to which the VIE is a party;(vii)declare or distribute dividends;(viii)terminate,liquidate or dissolve the VIE;or(ix)allow the VIE to incur,inherit,guarantee or permit any debts,except for those payables incurred in the ordinary or usual course of business but not incurred by way of borrowing.The agreement will remain effective until terminated by the WFOEs at its discretion or the entire equity interests in the VIE have been transferred to the WFOEs or its designee(s).Powers of Attorney.Pursuant to the powers of attorney executed by the VIEs shareholders,each of them irrevocably authorized the WFOEs or its designee(s)to act on their respective behalf as exclusive agent and attorney,to the extent permitted by law,with respect to all rights of shareholders concerning all the equity interest held by each of them in the VIE,including but not limited to proposing to convene or attend shareholder meetings,signing the resolutions and minutes of such meetings,exercising all the rights as shareholders(including but not limited to voting rights,nomination rights,appointment rights,the right to receive dividends and the right to sell,transfer,pledge or dispose of all the equity held in part or in whole).Spousal Consent Letters.Pursuant to the spousal consent letters executed by the spouses of certain shareholders of the VIE,the signing spouses unconditionally and irrevocably agreed that the equity interest in the VIE held by and registered in the name of their spouses be disposed of in accordance with the exclusive call option agreement,the exclusive management services and business cooperation agreement,the equity interest pledge agreement and the powers of attorney described above,and that their spouses may perform,amend or terminate such agreements without their additional consent.Additionally,the signing spouses agreed not to assert any rights over the equity interest in the VIE held by their spouses.In addition,in the event that the signing spouses obtains any equity interest in the VIE held by their spouses for any reason,they agree to be bound by and sign any legal documents substantially similar to the contractual arrangements described above,as may be amended from time to time.10 However,the contractual arrangements may not be as effective as direct ownership in providing us with control over the VIE and we may incur substantial costs to enforce the terms of the arrangements.As such,the VIE structure involves unique risks to investors of our Cayman Islands holding company.In addition,uncertainties in the legal system of mainland China may limit our ability,as a Cayman Islands holding company,to enforce these contractual arrangements.Meanwhile,there are very few precedents as to how contractual arrangements in the context of a VIE should be interpreted or enforced by the courts of mainland China.Should legal actions become necessary,we cannot guarantee that the court will rule in favor of the enforceability of the VIE contractual arrangements.In the event we are unable to enforce these contractual arrangements,or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements,we may not be able to exercise the voting rights in the VIE that these contractual arrangements assigned to us,and our ability to conduct our business may be materially adversely affected.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureWe rely on contractual arrangements with the VIE and its shareholders for our business operations,which may not be as effective as direct ownership in providing operational control”and“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureThe shareholders of the VIE may have actual or potential conflicts of interest with us,which may materially and adversely affect our business and financial condition.”There are also uncertainties regarding the interpretation and application of current and future laws,regulations and rules of mainland China regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the VIE and its nominee shareholders.It is uncertain whether any new laws or regulations of mainland China relating to variable interest entity structures will be adopted or if adopted,what they would provide.If we or the VIE is found to be in violation of any existing or future laws or regulations of mainland China,or fail to obtain or maintain any of the required permits or approvals,the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.If the PRC government deems that our contractual arrangements with the VIE do not comply with regulatory restrictions of mainland China on foreign investment in the relevant industries,or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.Since administrative and court authorities of mainland China have significant discretion in interpreting and implementing statutory provisions and contractual terms,it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy.Our Cayman Islands holding company,our mainland China subsidiaries and VIE,and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIE and,consequently,significantly affect the financial performance of the VIE and our company as a whole.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureIf the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with mainland Chinas regulations relating to the relevant industries,or if the determinations,changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIE that conduct our operations,our securities may decline in value or become worthless”and“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureUncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure,corporate governance,business,financial condition and results of operations.”Our corporate structure is subject to risks associated with our contractual arrangements with the VIE.Our company and its investors may never have a direct ownership interest in the businesses that are conducted by the VIE.Uncertainties in the legal system of mainland China could limit our ability to enforce these contractual arrangements,and these contractual arrangements have not been tested in a court of law.If the PRC government finds that the agreements that establish the structure for operating our business in mainland China do not comply with the laws and regulations of mainland China,or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future,we and the VIE could be subject to severe penalties or be forced to relinquish our interests in those operations.This would result in the VIE being deconsolidated.The necessary licenses to conduct business in mainland China are held by the VIE.All of our revenues are generated by the VIE.An event that results in the deconsolidation of the VIE would have a material effect on our operations and result in the value of the securities of our company diminish substantially or even become worthless.Our company,our mainland China subsidiaries and VIE,and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the VIE and,consequently,significantly affect the financial performance of the VIE and our company as a whole.Gaotu Techedu Inc.may not be able to repay its indebtedness,and the Class A ordinary shares or ADSs of our company may decline in value or become worthless,if we are unable to assert our contractual control rights over the assets of our mainland China subsidiaries and VIE that conduct all or substantially all of our operations.For a detailed description of the risks associated with our corporate structure,please refer to risks disclosed under“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate Structure.”11 Other Risks related to Our PRC OperationsWe face various legal and operational risks and uncertainties associated with being based in or having our operations in China,and we are subject to complex and evolving laws and regulations of mainland China.For example,we face risks associated with regulatory approvals,the use of the VIE,anti-monopoly regulatory actions,and oversight on cybersecurity and data privacy.These risks could result in a material adverse change in our operations and the value of our ADSs,significantly limit or completely hinder our ability to continue to offer securities to investors,or cause the value of such securities to significantly decline or become worthless.For a detailed description of risks related to doing business in China,“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in China.”PRC governments significant authority in regulating our operations and its oversight and control over offerings conducted overseas by,and foreign investment in,mainland China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.Implementation of industry-wide regulations,including data security or anti-monopoly related regulations,in this nature may cause the value of such securities to significantly decline or become worthless.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaThe PRC governments significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.”Risks and uncertainties arising from the legal system in mainland China,including risks and uncertainties regarding the enforcement of laws and that rules and regulations in the mainland China can change quickly with little advance notice,could result in a material adverse change in our operations and the value of our ADSs.For more details,see“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaUncertainties with respect to the legal system of mainland China could adversely affect us.”The Holding Foreign Companies Accountable ActPursuant to the Holding Foreign Companies Accountable Act,which was enacted on December 18,2020 and further amended by the Consolidated Appropriations Act,2023 signed into law on December 29,2022,if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years,the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.On December 16,2021,the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong,including our auditor.In May 2022,the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA because we filed an annual report on Form 20-F for the year ended December 31,2021.On December 15,2022,the PCAOB issued a report that vacated its December 16,2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.As of the date of this annual report,the PCAOB has not issued any new determination that it is unable to inspect or investigate completely registered public accounting firms headquartered in any jurisdiction.For this reason,we do not expect to be identified so after we file this annual report on Form 20-F for the fiscal year ended December 31,2024.Each year,the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong,among other jurisdictions.If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the Securities and Exchange Commission,we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year,and if we were so identified for two consecutive years,we would become subject to the prohibition on trading under the HFCAA.See“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaThe PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.”and“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaOur ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.The delisting of the ADSs,or the threat of their being delisted,may materially and adversely affect the value of your investment.”12Cash Flows through Our OrganizationGaotu Techedu Inc.is a holding company with no material operations of its own.We conduct our operations primarily through our mainland China subsidiaries,the VIE and its subsidiaries in mainland China.As a result,Gaotu Techedu Inc.s ability to pay dividends depends upon dividends paid by our mainland China subsidiaries.If our existing mainland China subsidiaries or any newly formed ones incur debt on their own behalf in the future,the instruments governing their debt may restrict their ability to pay dividends to us.In addition,current regulations of mainland China permit our mainland China subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits,if any,determined in accordance with mainland Chinas accounting standards and regulations.Furthermore,each of our mainland China subsidiaries and the VIE is required to set aside at least 10%of its after-tax profits each year,if any,to fund a statutory reserve until such reserve reaches 50%of its registered capital.These reserves are not distributable as cash dividends.Our subsidiaries ability to distribute dividends is based upon their distributable earnings.We have established stringent controls and procedures for cash flows within our organization.Each transfer of cash between our Cayman Islands holding company and subsidiaries,the VIE or the subsidiaries of the VIE is subject to internal approval.The controls and procedures on cash transfers in the policy adhere to applicable regulatory requirements and is not contractual in nature.For the applicable regulatory requirements,see“Item 4.Information on the CompanyB.Business OverviewGovernment RegulationsRegulation Related to Foreign Exchange.”The cash inflows of the Cayman Islands holding company were primarily generated from the proceeds we received from our public offerings of ordinary shares and other financing activities.For the years ended December 31,2022,2023 and 2024,the Cayman Islands holding company did not provide capital contributions to our subsidiaries.For the years ended December 31,2022,2023 and 2024,the Cayman Islands holding company provided loans of RMB303.2 million,RMB250.7 million and RMB74.2 million(US$10.2 million),respectively,to our subsidiaries,and received repayments of RMB100.0 million,RMB402.8 million and RMB325.5 million (US$44.6 million),respectively.For the years ended December 31,2022,2023 and 2024,the VIE did not receive,or repay any loans provided by the Cayman Islands holding company.For the years ended December 31,2022,2023 and 2024,no assets other than cash were transferred between our Cayman Islands holding company and subsidiaries,the VIE or its subsidiaries,no subsidiaries paid dividends or made other distributions to the holding company,and no dividends or distributions were paid or made to U.S.investors.We currently intend to retain most,if not all,of our available funds and any future earnings to operate and expand our business.See the condensed consolidating schedule for the VIE and other entities in“Financial Information Related to the VIE”and our audited consolidated financial statements and their related notes included in this annual report beginning on page F-1.”Pursuant to the Exclusive Management Services and Business Cooperation Agreement between the WFOEs,the VIE and its shareholders,the amount of service fee and payment method should be determined by the WFOEs in its sole discretion.Under this agreement,for the years ended December 31,2022,2023 and 2024,the WFOEs charged RMB131.4 million,RMB125.7 million and RMB145.7 million(US$20.0 million)service fees from the VIE,respectively.We plan to continue to determine the amount of service fee and payment method with the VIE and its shareholders based on our evaluation of their working capital needs,and settle fees under the contractual arrangements accordingly in the future.13As a Cayman Islands holding company,we may receive dividends from our mainland China subsidiaries.Under the Enterprise Income Tax Law of the PRC,and related regulations,dividends,interests,rent or royalties payable by a foreign-invested enterprise,such as our mainland China subsidiaries,to any of its foreign non-resident enterprise investors,and proceeds from any such foreign enterprise investors disposition of assets(after deducting the net value of such assets)are subject to a 10%withholding tax,unless the foreign enterprise investors jurisdiction of incorporation has a tax treaty with mainland China that provides for a reduced rate of withholding tax.The Cayman Islands,where Gaotu Techedu Inc.,the direct parent company of the WFOEs,is incorporated,does not have such a tax treaty with mainland China.Hong Kong has a tax arrangement with mainland China that provides for a 5%withholding tax on dividends subject to certain conditions and requirements,such as the requirement that the Hong Kong resident enterprise own at least 25%of the mainland China enterprise distributing the dividend at all times within the 12-month period immediately preceding the distribution of dividends and be a“beneficial owner”of the dividends.For example,BaiJiaHuLian HK Holdings Limited,or BaiJiaHuLian HK,which directly owns Beijing Lexuebang,is incorporated in Hong Kong.However,if BaiJiaHuLian HK is not considered to qualify for any conditions and requirements under applicable tax circulars,and such dividends would be subject to withholding tax at a rate of 10%.If our mainland China subsidiaries declare and distribute profits to us,such payments will be subject to withholding tax,which will increase our tax liability and reduce the amount of cash available to our company.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureWe may rely on dividends paid by our mainland China subsidiaries to fund cash and financing requirements.Any limitation on the ability of our mainland China subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of our ADSs and our ordinary shares.”for more details.If our holding company in the Cayman Islands or any of our subsidiaries outside of mainland China were deemed to be a“resident enterprise”under the PRC Enterprise Income Tax Law,it would be subject to enterprise income tax on its worldwide income at a rate of 25%.See“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaIf we are classified as a mainland China resident enterprise for income tax purposes,such classification could result in unfavorable tax consequences to us and our non-domestic shareholders or the ADS holders.”For purposes of illustration,the following discussion reflects the hypothetical taxes that might be required to be paid within mainland China,assuming that:(i)we have taxable earnings,and(ii)we determine to pay dividends in the future.Tax calculation(1)Hypothetical pre-tax earnings(2)100%Tax on earnings at statutory rate of 25%(3)(25%)Net earnings available for distribution75%Withholding tax at standard rate of 10%(4)(7.5%)Net distribution to Parent/Shareholders67.5%Notes:(1)For purposes of this example,the tax calculation has been simplified.The hypothetical book pre-tax earnings amount,not considering timing differences,is assumed to equal taxable income in mainland China.(2)Under the terms of VIE agreements,our mainland China subsidiaries may charge the VIE for services provided to the VIE.These service fees shall be recognized as expenses of the VIE,with a corresponding amount as service income by our mainland China subsidiaries and eliminate in consolidation.For income tax purposes,our mainland China subsidiaries and VIE files income tax returns on a separate company basis.The service fees paid are recognized as a tax deduction by the VIE and as income by our mainland China subsidiaries and are tax neutral.(3)Certain of our subsidiaries and VIE qualifies for a 15%preferential income tax rate in mainland China.However,such rate is subject to qualification,is temporary in nature,and may not be available in a future period when distributions are paid.For purposes of this hypothetical example,the table above reflects a maximum tax scenario under which the full statutory rate would be effective.(4)The PRC Enterprise Income Tax Law and related regulations impose a withholding income tax of 10%on dividends distributed by a foreign invested enterprise to its immediate holding company outside of mainland China.A lower withholding income tax rate of 5%is applied if the foreign invested enterprises immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with mainland China,subject to a qualification review at the time of the distribution.For purposes of this hypothetical example,the table above assumes a maximum tax scenario under which the full withholding tax would be applied.14The table above has been prepared under the assumption that all profits of the VIE will be distributed as fees to our mainland China subsidiaries under tax neutral contractual arrangements.If,in the future,the accumulated earnings of the VIE exceed the service fees paid to our mainland China subsidiaries(or if the current and contemplated fee structure between the intercompany entities is determined to be non-substantive and disallowed by Chinese tax authorities),the VIE could make a non-deductible transfer to our mainland China subsidiaries for the amounts of the stranded cash in the VIE.This would result in such transfer being non-deductible expenses for the VIE but still taxable income for the mainland China subsidiaries.Our management believes that there is only a remote possibility that this scenario would happen.In addition,our mainland China subsidiaries,the VIE and its subsidiaries generate their revenue primarily in Renminbi,which is not freely convertible into other currencies.As a result,any restriction on currency exchange may limit the ability of our mainland China subsidiaries to pay dividends to us.There is no assurance that the mainland China government will not intervene in or impose restrictions on the ability of Gaotu Techedu Inc.,its subsidiaries,the VIE and its subsidiaries to transfer cash or assets.To the extent cash or assets in the business is in mainland China or a mainland China entity,the funds or assets may not be available to fund operations or for other use outside of mainland China due to interventions in or the imposition of restrictions and limitations on the ability of Gaotu Techedu Inc.,its subsidiaries,or the VIE and its subsidiaries by the mainland China government to transfer cash or assets.As of the date of this annual report,there is no equivalent or similar restriction or limitation in Hong Kong on cash or assets transfers in,or out of,our Hong Kong entities.However,if restrictions or limitations were to become applicable to cash or assets transfers in and out of Hong Kong entities in the future,the funds or assets in our Hong Kong entities may not be available to fund operations or for other use outside of Hong Kong.For more details,see“Item 3.Key InformationD.Risk FactorsSummary of Risk FactorsRisks Related to Our Corporate Structure,”“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureWe may rely on dividends paid by our mainland China subsidiaries to fund cash and financing requirements.Any limitation on the ability of our mainland China subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of our ADSs and our ordinary shares”and“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaMainland Chinas regulation of loans to and direct investment in mainland China entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to or make additional capital contributions to our mainland China subsidiaries and consolidated variable interest entity,which could materially and adversely affect our liquidity and our ability to fund and expand our business.”15Permissions Required from the PRC Authorities for Our OperationsWe conduct our business primarily through our subsidiaries and the VIE in mainland China.Our operations in mainland China are governed by laws and regulations of mainland China.As of the date of this annual report,except for issues with respect to the License for Online Transmission of Audio-Visual Programs,the Online Publishing Services Permit and the Permit for Publication,Printing,Reproduction,Importation or Distribution,based on the opinion of our PRC legal counsel,Tian Yuan Law Firm,we believe our mainland China subsidiaries,the VIE and its subsidiaries have obtained all the requisite permissions and approvals from the PRC government authorities for the business operations of our holding company,its subsidiaries and the VIE in mainland China,including,among others,the Value-added Telecommunications Business Operation Licenses for information services via internet,known as ICP Licenses,the Permit for Production and Operation of Radio and TV Programs,the Private School Operating Permits regarding academic and non-academic tutoring services,the Travel Agency Operation Permit and Permits for Operating Publications.For issues with respect to the License for Online Transmission of Audio-Visual Programs,the Online Publishing Services Permit and the Permit for Publication,Printing,Reproduction,Importation or Distribution,see“D.Risk FactorsRisks Related to Our Business and IndustryWe face uncertainties with respect to the development of regulatory requirements on operating licenses and permits for our education services in mainland China.Failure to obtain or renew requested licenses or permits in a timely manner or obtain newly required ones due to adverse changes in regulations or policies could have a material adverse impact on our business,financial condition and results of operations.”Our mainland China subsidiaries,the VIE and its subsidiaries have not been denied for any permission or approval from any PRC government authority with respect to the operation of our business.As of the date of this annual report,under current PRC laws,regulations and rules,based on the opinion of our PRC counsel,Tian Yuan Law Firm,we,our mainland China subsidiaries,the VIE and its subsidiaries are not required to obtain permissions from the China Securities Regulatory Commission,or the CSRC,or go through cybersecurity review by the Cyberspace Administration of China,or the CAC,or obtain permission or approval from other PRC government authorities with respect to the operation of our business,except for the permissions or approvals listed above that have been obtained and issues with respect to the License for Online Transmission of Audio-Visual Programs and the Online Publishing Services Permit.However,given the uncertainties of interpretation and implementation of laws and regulations and the enforcement practice by the government authorities,we may be required to obtain additional licenses,permits,filings or approvals for the functions and services of our platform at the present stage or in the future.If we,our mainland China subsidiaries,the VIE and its subsidiaries(i)do not receive or maintain any necessary permissions or approvals from PRC authorities to operate business or offer securities,(ii)inadvertently conclude that such permissions or approvals are not required,or(iii)if applicable laws,regulations,or interpretations change and we are required to obtain such permissions or approvals in the future,we cannot assure you that we will be able to obtain the necessary permissions or approvals in a timely manner,or at all,and such approvals may be rescinded even if obtained.Any such circumstance could subject us to penalties,including fines,suspension of business and revocation of required licenses,significantly limit or completely hinder our ability to continue to offer securities to investors,and cause the value of such securities to significantly decline or become worthless.For more detailed information,see“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryWe face uncertainties with respect to the development of regulatory requirements on operating licenses and permits for our education services in mainland China.Failure to obtain or renew requested licenses or permits in a timely manner or obtain newly required ones due to adverse changes in regulations or policies could have a material adverse impact on our business,financial condition and results of operations”and“D.Risk FactorsRisks Related to Our Business and IndustryOur business is subject to complex and evolving laws and regulations of mainland China regarding cybersecurity,information security,privacy and data protection.Many of these laws and regulations are subject to change and uncertain interpretation,and any failure or perceived failure to comply with these laws and regulations could result in claims,changes to our business practices,negative publicity,legal proceedings,increased cost of operations,or declines in user growth or engagement,or otherwise harm our business.”Based on the opinion of our PRC counsel,Tian Yuan Law Firm,under current PRC laws,regulations and regulatory rules,we,our mainland China subsidiaries,the VIE and its subsidiaries may be required to obtain permissions from the CSRC,and may be required to go through cybersecurity review by the CAC,in connection with any future offering and listing in an overseas market.As of the date of this annual report,we have not been subject to any cybersecurity review made by the CAC.16The Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies,or the Trial Measures,and five supporting guidelines,and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies,pursuant to which(i)a major PRC operating entity designated by us may be required to be file with the CSRC,in connection with any follow-on offering and other certain activities as required by the Trial Measures;and(ii)we may be required to report relevant information to the CSRC after the occurrence of certain events.On the same day,the CSRC also held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies,which,among others,clarifies that prior to the effectiveness of the Trial Measures,domestic companies that have already completed the overseas offering and listing are not required to complete the filing procedure at the current stage,but shall complete the filing procedure upon the occurrence of certain matters,such as follow-on offering of securities,as required in the Trial Measures.Therefore,based on the opinion of our PRC counsel,Tian Yuan Law Firm,under the Trial Measures,we are not required to file to the CSRC of our previous offering and listing on the NYSE,but could be subject to the filing and reporting requirements to the CSRC with respect to future offerings and occurrence of certain events.If we fail to complete the filing procedures or conceals any material fact or falsifies any major content in its filing documents for any follow-on offering and other certain activities as required by the Trial Measures,we may be subject to administrative penalties,such as order to rectify,warnings,fines or other actions that may materially and adversely affect our business,financial condition,results of operations,and prospects,as well as the trading price of our ADSs.For more detailed information,see“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaThe filing with the CSRC may be required in connection with our future follow-on offerings and the occurrence of certain activities under the laws of mainland China,and we cannot predict whether we will be able to complete such filing”and“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryOur business is subject to complex and evolving laws and regulations of mainland China regarding cybersecurity,information security,privacy and data protection.Many of these laws and regulations are subject to change and uncertain interpretation,and any failure or perceived failure to comply with these laws and regulations could result in claims,changes to our business practices,negative publicity,legal proceedings,increased cost of operations,or declines in user growth or engagement,or otherwise harm our business.”A.ReservedSelected Consolidated Financial Data The following selected consolidated statements of operations for the years ended December 31,2022,2023 and 2024 and selected consolidated balance sheet data as of December 31,2023 and 2024 and selected consolidated cash flows data for the years ended December 31,2022,2023 and 2024 have been derived from our audited consolidated financial statements included in this annual report beginning on page F-1.The following selected consolidated statement of operations for the year ended December 31,2020 and 2021,selected consolidated balance sheet data as of December 31,2020,2021 and 2022,and selected consolidated cash flows data for the year ended December 31,2020 and 2021 have been derived from our audited consolidated financial statements that are not included in this annual report.Our consolidated financial statements are prepared and presented in accordance with U.S.GAAP.Despite the lack of legal majority ownership,our Cayman Islands holding company is considered the primary beneficiary of the VIE and its subsidiaries and consolidates the VIE and its subsidiaries as required by Accounting Standards Codification topic 810,Consolidation.Accordingly,we treat the VIE and its subsidiaries as our consolidated entities under U.S.GAAP and we consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements in accordance with U.S.GAAP.Our historical results for any period are not necessarily indicative of results to be expected for any future period.The selected consolidated financial data should be read in conjunction with,and are qualified in their entirety by reference to,our audited consolidated financial statements and related notes and“Item 5.Operating and Financial Review and Prospects”below.Our consolidated financial statements are prepared and presented in accordance with U.S.GAAP.17For the Year Ended December 31,20202021202220232024RMBRMBRMBRMBRMBUS$(in thousands,except for share amounts and per share data)Selected Consolidated Statements of OperationsNet revenues7,124,7446,561,7472,498,2142,960,8134,553,556623,835Cost of revenues(1)(1,762,548)(2,397,604)(701,050)(790,207)(1,454,917)(199,323)Gross profit5,362,1964,164,1431,797,1642,170,6063,098,639424,512Operating expensesSelling expenses(1)(5,816,214)(5,129,267)(1,179,760)(1,501,200)(2,963,736)(406,030)Research and development expenses(1)(734,450)(1,252,877)(445,117)(462,043)(648,063)(88,784)General and administrative expenses(1)(566,565)(720,253)(290,339)(356,369)(668,673)(91,608)Impairment loss on long-lived assets(52,544)Impairment loss on goodwill(43,300)Disposal loss on assets(146,245)Total operating expenses(7,117,229)(7,344,486)(1,915,216)(2,319,612)(4,280,472)(586,422)Loss from operations(1,755,033)(3,180,343)(118,052)(149,006)(1,181,833)(161,910)Interest income3,37231,46021,37075,82970,3849,643Realized gains from investments70,40365,76342,26431,23025,3023,466Other income,net(2)253,64620,90651,88554,47145,8256,278(Loss)/income before provision for income tax and share of results of equity investees(1,427,612)(3,062,214)(2,533)12,524(1,040,322)(142,523)Income tax benefits/(expenses)34,619(40,949)15,705(10,657)(8,632)(1,183)Share of results of equity investees63(302)(9,165)Net(loss)/income(1,392,930)(3,103,465)13,172(7,298)(1,048,954)(143,706)Net(loss)/income attributable to Gaotu Techedu Inc.s ordinary shareholders(1,392,930)(3,103,465)13,172(7,298)(1,048,954)(143,706)Net(loss)/income per ordinary shareBasic(8.72)(18.17)0.08(0.04)(6.12)(0.84)Diluted(8.72)(18.17)0.07(0.04)(6.12)(0.84)Weighted average shares used in net(loss)/income per shareBasic159,725,779170,790,979172,254,080173,725,790171,412,125171,412,125Diluted159,725,779170,790,979175,991,484173,725,790171,412,125171,412,125Note:(1)Share-based compensation expenses are in cost of revenues and operating expenses as follows:For the Year Ended December 31,20202021202220232024RMBRMBRMBRMBRMBUS$(in thousands)Share-based compensation expensesCost of revenues66,422118,14542,49012,9597,003959Selling expenses18,03944,4026,6598,6039,2671,270Research and development expenses94,952130,62039,17217,0128,9421,225General and administrative expenses59,03352,09234,33319,77928,0053,837Total238,446345,259122,65458,35353,2177,291(2)The amount of other expenses from 2020 to 2024 have been combined with other income.18The following table presents our selected consolidated balance sheets data as of December 31,2020,2021,2022,2023 and 2024:As of December 31,20202021202220232024RMBRMBRMBRMBRMBUS$(in thousands)Cash and cash equivalents355,224728,934819,911636,0521,321,118180,992Restricted cash168,1892233,9015,222715Short-term investments7,331,2682,774,0002,923,8642,253,9101,845,242252,797Total current assets8,457,2483,936,7864,166,4773,586,7073,639,812498,651Long-term investments530,7291,029,632922,740126,415Total assets10,685,7925,024,6664,876,1755,413,3095,828,077798,441Current liabilities4,197,3921,760,2681,609,2221,973,2843,260,603446,700Total liabilities4,955,9372,143,7241,780,3462,307,0443,894,613533,559Total shareholders equity5,729,8552,880,9423,095,8293,106,2651,933,464264,882The following table presents our selected consolidated cash flow data for the years ended December 31,2020,2021,2022,2023 and 2024:For the Year Ended December 31,20202021202220232024RMBRMBRMBRMBRMBUS$(in thousands)Selected Consolidated Cash Flow Data:Net cash generated from/(used in)operating activities603,273(4,185,807)54,545353,697258,00735,347Net cash(used in)/generated from investing activities(5,596,304)4,812,502(158,385)(423,978)620,82185,052Net cash generated from/(used in)financing activities5,272,100(100,614)(90,480)(205,302)(28,126)Effect of exchange rate changes2,18815,81826,65010,781(17,139)(2,349)Net increase/(decrease)in cash,cash equivalents and restricted cash281,257541,899(77,190)(149,980)656,38789,924Cash,cash equivalents and restricted cash at beginning of year73,967355,224897,123819,933669,95391,783Cash,cash equivalents and restricted cash at end of year355,224897,123819,933669,9531,326,340181,707Financial Information Related to the VIE The following tables present the condensed consolidating schedule of financial position for the VIE and other entities as of the dates presented.“Gaotu Techedu Inc.”is our Cayman Islands holding company.“Other Subsidiaries”refer to the sum of BaiJiaHuLian HK,Shanghai Chuxuebang Network Technology Co.,Ltd,Chengdu Yuexuebang Network Technology Co.,Ltd and Wuhan Lexuebang Network Technology Co.,Ltd.“VIE and VIEs Subsidiaries”refer to the sum of Beijing Gaotu and all of its subsidiaries in mainland China.19Selected Condensed Consolidated Statements of Comprehensive Income Information For the year ended December 31,2024GaotuTecheduInc.OthersubsidiariesWFOEsVIE andVIEsSubsidiariesEliminationConsolidatedTotalsUS$US$US$US$US$US$(in thousands)Third-party revenues4047623,748623,835Inter-company revenues164,5847,604(172,188)Total costs and expenses(2,716)(736)(161,041)(793,440)172,188(785,745)(Loss)/income from subsidiaries and VIE(144,077)(143,392)(151,809)439,278Income from non-operations3,087134,73511,55219,387(Loss)/income before income tax expenses(143,706)(144,075)(143,484)(150,536)439,278(142,523)Income tax benefits/(expenses)(2)92(1,273)(1,183)Net(loss)/income(143,706)(144,077)(143,392)(151,809)439,278(143,706)For the year ended December 31,2023GaotuTecheduInc.OthersubsidiariesWFOEsVIE andVIEsSubsidiariesEliminationConsolidatedTotalsUS$US$US$US$US$US$(in thousands)Third-party revenues417,022417,022Inter-company revenues4134,29018,861(153,155)Total costs and expenses(1,194)221(112,734)(477,457)153,155(438,009)(Loss)/income from subsidiaries and VIE(4,002)(2,479)(31,454)37,935Income/(loss)from non-operations4,168(1,748)7,30813,02322,751(Loss)/income before income tax expenses(1,028)(4,002)(2,590)(28,551)37,9351,764Share of results of equity investees(1,291)(1,291)Income tax benefits/(expenses)111(1,612)(1,501)Net(loss)/income(1,028)(4,002)(2,479)(31,454)37,935(1,028)For the year ended December 31,2022GaotuTecheduInc.OthersubsidiariesWFOEsVIE andVIEsSubsidiariesEliminationConsolidatedTotalsUS$US$US$US$US$US$(in thousands)Third-party revenues362,207362,207Inter-company revenues102,0339,365(111,398)Total costs and expenses(1,277)(1,615)(90,939)(396,890)111,398(379,323)Income/(loss)from subsidiaries and VIE6,6047,243(8,912)(4,935)(Loss)/income from non-operations(3,417)9805,30213,88416,749Income/(loss)before income tax expenses1,9106,6087,484(11,434)(4,935)(367)Income tax(expenses)/benefits(4)(241)2,5222,277Net income/(loss)1,9106,6047,243(8,912)(4,935)1,91020Selected Condensed Consolidated Balance Sheets Data As of December 31,2024GaotuTecheduInc.OthersubsidiariesWFOEsVIE andVIEsSubsidiariesEliminationConsolidatedTotalsUS$US$US$US$US$US$(in thousands)Cash and cash equivalents30,2386,49076,24568,019180,992Restricted cash715715Short-term investments70,780100,72281,295252,797Inventory4,9874,987Amounts due from subsidiaries and VIE,current portion881,91777,183489,18992,277(1,540,566)Prepaid expenses and other current assets24945,50653,706(305)59,160Total current assets983,18483,677671,662300,999(1,540,871)498,651Operating lease right-of-use assets5,94763,04668,993Property,equipment and software,net6,52185,30191,822Land use rights3,5293,529Long term investments23,8552,88399,677126,415Investments in subsidiaries and VIE17,638(17,638)Rental deposit1,6644,6156,279Amounts due from subsidiaries and VIE,non-current portion61,500(61,500)Other non-current assets482,7042,752Total non-current assets23,85579,13817,063258,872(79,138)299,790TOTAL ASSETS1,007,039162,815688,725559,871(1,620,009)798,441Accrued expenses and other current liabilities7928058,798111,227(305)170,592Amounts due to subsidiaries and VIE14,807882,331119,174524,255(1,540,567)Deferred revenue,current portion255,791255,791Operating lease liabilities,current portion4,54415,68220,226Income tax payable188291Total current liabilities15,599882,412182,524907,037(1,540,872)446,700Deferred revenue,non-current portion29,97529,975Operating lease liabilities,non-current portion1,00746,20447,211Deferred tax liabilities399,6349,673Deficit of investments in subsidiaries and VIE726,558487,517(1,214,075)Other long-term payables54,538(54,538)Total non-current liabilities726,558488,563140,351(1,268,613)86,859TOTAL LIABILITIES742,157882,412671,0871,047,388(2,809,485)533,559TOTAL SHAREHOLDERS EQUITY/(DEFICIT)264,882(719,597)17,638(487,517)1,189,476264,88221As of December 31,2023GaotuTecheduInc.OthersubsidiariesWFOEsVIE andVIEsSubsidiariesEliminationConsolidatedTotalsUS$US$US$US$US$US$(in thousands)Cash and cash equivalents13,8677,92435,02732,76889,586Restricted cash4,7754,775Short-term investments74,32450,584192,549317,457Inventory3,4643,464Amounts due from subsidiaries and VIE,current portion916,707112,775556,18073,021(1,658,683)Prepaid expenses and other current assets3857,26082,59289,895Total current assets1,004,936120,704649,051389,169(1,658,683)505,177Operating lease right-of-use assets4,45222,26126,713Property,equipment and software,net2,24472,90275,146Land use rights3,7423,742Long term investments29,4737,352108,196145,021Investments in subsidiaries and VIE158,916(158,916)Deferred tax assets1,5931,593Rental deposit9441,5552,499Amounts due from subsidiaries and VIE,non-current portion61,500(61,500)Other non-current assets812,4762,557Total non-current assets29,473220,41615,073212,725(220,416)257,271TOTAL ASSETS1,034,409341,120664,124601,894(1,879,099)762,448Accrued expenses and other current liabilities65344,53268,201113,386Amounts due to subsidiaries and VIE15,228916,708105,249621,498(1,658,683)Deferred revenue,current portion156,830156,830Operating lease liabilities,current portion2,2674,8457,112Income tax payable28593603Total current liabilities15,881916,710152,056851,967(1,658,683)277,931Deferred revenue,non-current portion17,48517,485Operating lease liabilities,non-current portion2,30617,08219,388Deferred tax liabilities1610,12010,136Deficit of investments in subsidiaries and VIE581,020350,830(931,850)Other long-term payables56,070(56,070)Total non-current liabilities581,020353,152100,757(987,920)47,009TOTAL LIABILITIES596,901916,710505,208952,724(2,646,603)324,940TOTAL SHAREHOLDERS EQUITY/(DEFICIT)437,508(575,590)158,916(350,830)767,504437,50822Selected Condensed Consolidated Cash Flows Data For the Year Ended December 31,2024GaotuTecheduInc.OtherSubsidiariesWFOEsVIE andVIEsSubsidiariesEliminationConsolidatedTotalsUS$US$US$US$US$US$(in thousands)Net cash(used in)/generated from operating activities(1,674)2,170(133,350)168,20135,347Investments in subsidiaries and VIELoans to subsidiaries and VIE(10,172)10,172Repayment from subsidiaries and VIE44,58932,918(77,507)Other investing investments12,660(35)(50,372)122,79985,052Net cash generated from/(used in)investing activities47,07732,883(50,372)122,799(67,335)85,052Capital contribution from parent companyLoans from parent company10,172(10,172)Repayment to parent company(44,589)(4,044)(28,874)77,507Other financing activities(28,126)(28,126)Net cash(used in)/generated from financing activities(28,126)(34,417)(4,044)(28,874)67,335(28,126)For the Year Ended December 31,2023GaotuTecheduInc.OtherSubsidiariesWFOEsVIE andVIEsSubsidiariesEliminationConsolidatedTotalsUS$US$US$US$US$US$(in thousands)Net cash generated from/(used in)operating activities2,0532,508(84,322)129,57849,817Investments in subsidiaries and VIELoans to subsidiaries and VIE(35,317)(1,403)36,720Repayment from subsidiaries and VIE56,733409(57,142)Other investing investments4,30326,35272,678(163,049)(59,716)Net cash generated from/(used in)investing activities25,71925,35872,678(163,049)(20,422)(59,716)Capital contribution from parent companyLoans from parent company35,3171,403(36,720)Repayment to parent company(56,733)(409)57,142Other financing activities(12,744)(12,744)Net cash(used in)/generated from financing activities(12,744)(21,416)(409)1,40320,422(12,744)For the Year Ended December 31,2022GaotuTecheduInc.OtherSubsidiariesWFOEsVIE andVIEsSubsidiariesEliminationConsolidatedTotalsUS$US$US$US$US$US$(in thousands)Net cash(used in)/generated from operating activities(396)(54,545)(18,061)80,9107,908Investments in subsidiaries and VIELoans to subsidiaries and VIE(43,962)(3,320)47,282Repayment from subsidiaries and VIE14,4998,498(22,997)Other investing investments25,283(28,168)(7,464)(12,615)(22,964)Net cash(used in)/generated from investing activities(4,180)(22,990)(7,464)(12,615)24,285(22,964)Capital contribution from parent companyLoans from parent company43,9623,320(47,282)Repayment to parent company(14,499)3,5164,9826,001Other financing activitiesNet cash generated from/(used in)financing activities29,4636,8364,982(41,281)23B.Capitalization and IndebtednessNot Applicable.C.Reasons for the Offer and Use of ProceedsNot Applicable.D.Risk Factors Summary of Risk Factors An investment in our ADSs or Class A ordinary shares involves significant risks.Below is a summary of material risks we face,organized under relevant headings.These risks are discussed more fully in“Item 3.Key InformationD.Risk Factors.”Risks Related to Our Business and Industry Significant risks exist in relation to the interpretation and implementation of,or proposed changes to,the laws,regulations and policies of mainland China regarding the private education industry.In particular,our compliance with the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education and the implementation measures issued thereunder by the government authorities of mainland China has materially and adversely affected and will materially and adversely affect our business,financial condition,results of operations and prospect.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustrySignificant risks exist in relation to the interpretation and implementation of,or proposed changes to,the laws,regulations and policies of mainland China regarding the private education industry.In particular,our compliance with the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education and the implementation measures issued thereunder by the PRC government authorities has materially and adversely affected and will materially and adversely affect our business,financial condition,results of operations and prospect.”The cessation of compulsory education academic subject tutoring services have materially and adversely affected and will materially and adversely affect our business,financial condition,results of operations and prospect.Failure to effectively and efficiently manage changes of our existing and new business may materially and adversely affect our ability to capitalize on new business opportunities.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryThe cessation of compulsory education academic subject tutoring services have materially and adversely affected and will materially and adversely affect our business,financial condition,results of operations and prospect.Failure to effectively and efficiently manage changes of our existing and new business may materially and adversely affect our ability to capitalize on new business opportunities.”If we fail to successfully execute our business strategies,we may not able to attract students to purchase our existing and new course packages outside of compulsory education academic subject tutoring services,and our business and prospects will be materially and adversely affected.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryIf we fail to successfully execute our business strategies,we may not able to attract students to purchase our existing and new course packages outside of compulsory education academic subject tutoring services,and our business and prospects will be materially and adversely affected.”We have incurred net losses in the past,and the cessation of compulsory education academic subject tutoring services have had and will continue to have a material adverse impact on our revenues.As a result,we may not remain profitable or increase profitability in the future.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryWe have incurred net losses in the past,and the cessation of compulsory education academic subject tutoring services have had and will continue to have a material adverse impact on our revenues.As a result,we may not remain profitable or increase profitability in the future.”24 We have a limited operating history with our current business model,which makes it difficult to predict our prospects and our business and financial performance.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryWe have a limited operating history with our current business model,which makes it difficult to predict our prospects and our business and financial performance.”We are facing new risks and challenges related to the operations of our offline learning centers,which may adversely affect our business and results of operations.If we are not able to continue to engage,train and retain high quality teaching staff,we may not be able to maintain consistent teaching quality,and our business,financial condition and results of operations may be materially and adversely affected.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryIf we are not able to continue to engage,train and retain high quality teaching staff,we may not be able to maintain consistent teaching quality,and our business,financial condition and results of operations may be materially and adversely affected.”Our business is subject to complex and evolving laws and regulations of mainland China regarding cybersecurity,information security,privacy and data protection.Many of these laws and regulations are subject to change and uncertain interpretation,and any failure or perceived failure to comply with these laws and regulations could result in claims,changes to our business practices,negative publicity,legal proceedings,increased cost of operations,or declines in user growth or engagement,or otherwise harm our business.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Business and IndustryOur business is subject to complex and evolving laws and regulations of mainland China regarding cybersecurity,information security,privacy and data protection.Many of these laws and regulations are subject to change and uncertain interpretation,and any failure or perceived failure to comply with these laws and regulations could result in claims,changes to our business practices,negative publicity,legal proceedings,increased cost of operations,or declines in user growth or engagement,or otherwise harm our business.”Our business depends on our“Gaotu”brand.The recognition of our brand may be adversely affected by any negative publicity concerning us and our business,shareholders,affiliates,directors,officers,teaching staff and other employees,as well as the industry in which we operate,regardless of its accuracy,that could harm our reputation and business.If we are not able to maintain and enhance our brand,our business and operating results may be harmed.Risks Related to Our Corporate StructureWe are a Cayman Islands holding company with no equity ownership in the VIE and we conduct our operations in China primarily through(i)our subsidiaries in China,(ii)the VIE with which we have contractual arrangements,and(iii)the subsidiaries of the VIE.Investors thus are not purchasing direct equity interests in our operating entities in China but instead are purchasing equity interests in a Cayman Islands holding company.Our holding company,our PRC subsidiaries,the VIE and its subsidiaries,and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of our contractual arrangements with our consolidated affiliated entities and,consequently,significantly affect the financial performance of the VIE and our company as a whole.For a detailed description of the risks associated with our corporate structure,please refer to the risks disclosed under“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate Structure.”If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with mainland Chinas regulations relating to the relevant industries,or if the determinations,changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIE that conduct our operations,our securities may decline in value or become worthless.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureIf the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with mainland Chinas regulations relating to the relevant industries,or if the determinations,changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIE that conduct our operations,our securities may decline in value or become worthless.”25We rely on contractual arrangements with the VIE and its shareholders for our business operations,which may not be as effective as direct ownership in providing operational control.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureWe rely on contractual arrangements with the VIE and its shareholders for our business operations,which may not be as effective as direct ownership in providing operational control.”Any failure by the VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureAny failure by the VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.”We may rely on dividends paid by our mainland China subsidiaries to fund cash and financing requirements,which are subject to restrictions and limitations by laws and regulations of mainland China.See“Item 3.Key InformationD.Risk FactorsRisks Related to Our Corporate StructureWe may rely on dividends paid by our mainland China subsidiaries to fund cash and financing requirements.Any limitation on the ability of our mainland China subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of our ADSs and our ordinary shares.”Risks Related to Doing Business in ChinaUncertainties with respect to the legal system of mainland China could adversely affect us.As the legal system of mainland China is evolving,laws,regulations and rules in mainland China may change quickly with little advance notice and enforcement of these laws,regulations and rules involves uncertainties.See“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaUncertainties with respect to the legal system of mainland China could adversely affect us.”Changes in Chinas economic,political or social conditions or government policies could have a material adverse effect on our business and operations.See“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaChanges in Chinas economic,political or social conditions or government policies could have a material adverse effect on our business and operations.”We conduct our business primarily in mainland China,and our operations in mainland China are governed by the laws and regulations of mainland China.The PRC government may intervene or influence our operations at any time.The PRC government may take regulatory actions to exert more oversight and control over offerings conducted overseas and/or foreign investment in mainland China-based issuers,which could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.See“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaThe PRC governments significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.”The filing with the CSRC may be required in connection with our future follow-on offerings and the occurrence of certain activities under the laws of mainland China,and we cannot predict whether we will be able to complete such filing.See“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaThe filing with the CSRC may be required in connection with our future follow-on offerings and the occurrence of certain activities under the laws of mainland China,and we cannot predict whether we will be able to complete such filing.”The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.See“Item 3.Key InformationD.Risk Factors Risks Related to Doing Business in ChinaThe PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.”26Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.The delisting of the ADSs,or the threat of their being delisted,may materially and adversely affect the value of your investment.See“Item 3.Key InformationD.Risk FactorsRisks Related to Doing Business in ChinaOur ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.The delisting of the ADSs,or the threat of their being delisted,may materially and adversely affect the value of your investment.”Risks Related to the ADSsThe trading price of our ADSs is likely to be volatile,which could result in substantial losses to investors.See“Item 3.Key InformationD.Risk FactorsRisks Related to the ADSsThe trading price of our ADSs is likely to be volatile,which could result in substantial losses to investors.”If we fail to meet NYSEs continued listing requirements,our ADSs could be subject to delisting,which may significantly reduce the liquidity of our ADSs and cause further declines to the market price of our ADSs.See“Item 3.Key InformationD.Risk FactorsRisks Related to the ADSsIf we fail to meet NYSEs minimum share price and other continued listing requirements,our ADSs could be subject to delisting,which may significantly reduce the liquidity of our ADSs and cause further declines to the market price of our ADSs.”If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business,the market price for our ADSs and trading volume could decline.See“Item 3.Key InformationD.Risk FactorsRisks Related to the ADSsIf securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business,the market price for our ADSs and trading volume could decline.”The sale or perceived availability for sale of substantial amounts of the ADSs could adversely affect their market price.See“Item 3.Key InformationD.Risk FactorsRisks Related to the ADSsThe sale or perceived availability for sale of substantial amounts of the ADSs could adversely affect their market price.”27Risks Related to Our Business and Industry Significant risks exist in relation to the interpretation and implementation of,or proposed changes to,the laws,regulations and policies of mainland China regarding the private education industry.In particular,our compliance with the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education and the implementation measures issued thereunder by the PRC government authorities has materially and adversely affected and will materially and adversely affect our business,financial condition,results of operations and prospect.The private education industry in mainland China,especially the after-school tutoring sector,has experienced intense scrutiny and has been subject to significant regulatory changes.In particular,the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education jointly promulgated by the General Office of the State Council and the General Office of the Central Committee of the Communist Party of China on July 24,2021,or the Alleviating Burden Opinion,set out a series of operating requirements on after-school tutoring institutions,including,among other things,(i)local government authorities shall no longer approve any new after-school tutoring institutions providing tutoring services on academic subjects for students in compulsory education,known as Academic AST Institutions,and all the existing Academic AST Institutions shall be registered as non-profit,and local government authorities shall no longer approve any new after-school tutoring institutions providing tutoring services on academic subjects for pre-school-age children and students in grade ten to twelve;(ii)online Academic AST Institutions that have filed with the local education administration authorities will be subject to review and re-approval procedures by competent government authorities,and any failure to obtain such approval will result in the cancellation of its previous filing and ICP license;(iii)Academic AST Institutions are prohibited from raising funds by listing on stock markets or conducting any capitalization activities and listed companies are prohibited from investing in Academic AST Institutions through capital markets fund raising activities,or acquiring assets of Academic AST Institutions by paying cash or issuing securities;and(iv)foreign capital is prohibited from controlling or participating in any Academic AST Institutions through mergers and acquisitions,entrusted operation,joining franchise or variable interest entities.The Alleviating Burden Opinion further provides that administration and supervision over academic subjects tutoring institutions for students on grade ten to twelve shall be implemented by reference to the applicable provisions of the Alleviating Burden Opinion.On February 8,2022,the Ministry of Education issued the Key Points of Workstreams of the year 2022 on its public website,indicating that the requirements for academic subjects tutoring for students on grade ten to twelve shall strictly refer to the requirements implemented to academic subjects tutoring for students in compulsory education.See“Item 4.Information on the CompanyB.Business OverviewGovernment RegulationsRegulation Related to Private EducationRegulation Related to After-School Tutoring”for more details.In recent years,PRC governmental authorities published a series of regulations,rules and policies to implement the Alleviating Burden Opinion.On August 18,2021,the Beijing Municipality Government and the Beijing Municipal Committee of the Communist Party of China jointly published the full text of the Beijing Municipalitys Measures to Further Reduce the Burden of Homework and After-School Tutoring on Students in Compulsory Education in Beijing.On August 2,2021,the Guangdong Education Bureau issued the Circular on Reducing the Burden of After-School Tutoring on Students in Compulsory Education.On September 7,2021,the Ministry of Education published on its official website that the Ministry of Education,together with two other government authorities,issued a circular requiring all Academic AST Institutions to complete registration as non-profit by the end of 2021,and all Academic AST Institutions shall,before completing such registration,suspend enrollment of students and charging fees.Moreover,the Ministry of Education and other governmental authorities further issued an announcement to regulate non-academic subjects after-school tutoring in March 2022 and the Opinions on Regulation of Non-Academic After-School Tutoring for Primary and Secondary School Students in November 2022.On February 8,2024,the Ministry of Education issued the Administrative Regulations on Off-campus Tutoring(Draft for Comments)and the public comment period of the draft administrative regulations ended on March 8,2024.As of the date of this annual report,these draft administrative regulations have not come into effect.See“Item 4.Information on the CompanyB.Business OverviewGovernment RegulationsRegulation Related to Private EducationRegulation Related to After-School Tutoring”for more details.We have closely monitored the evolving regulatory environment and made efforts to seek guidance from and cooperate with the government authorities to comply with these regulations,rules and policies.Among other things,we have ceased offering and will not offer compulsory education academic subject tutoring services since the end of 2021.28Our business,financial condition,results of operations and prospect have been and will be materially and adversely affected by the actions we have taken to date and consider taking to be in compliance with the Alleviating Burden Opinion and its implementation measures.We are committed to complying with all applicable laws and regulations of mainland China,including the Alleviating Burden Opinion and related regulations,rules and policies.In addition to the cessation of compulsory education academic subject tutoring services,we have taken other actions to restructure our business and operations,including closing of some of our operating centers and implementing staff optimization plans,to maintain our continued operations.We will continue to seek guidance from and cooperate with government authorities in mainland China in connection with our efforts to comply with the policy directives of the Alleviating Burden Opinion and related regulations,rules and policies.We will further adjust our business operations as required.However,due to the complexity and evolving regulatory environment,we cannot assure you that our operations would be in full compliance with applicable laws,regulations and policies,including the Alleviating Burden Opinion and its implementation measures,and the related regulations,rules and policies,in a timely manner,or at all.We may become subject to fines or other penalties or be required to terminate certain operations,in which case our business,financial condition and results of operations could be materially and adversely affected further.In addition,we may incur material impairment and severance charges resulting from termination of leases,dismissal of employees and other actions we take in light of the latest regulatory developments,which may have material adverse impact on our financial condition,results of operations and prospect.The cessation of compulsory education academic subject tutoring services have materially and adversely affected and will materially and adversely affect our business,financial condition,results of operations and prospect.Failure to effectively and efficiently manage changes of our existing and new business may materially and adversely affect our ability to capitalize on new business opportunities.In light of recent regulatory developments in mainland China,in addition to the cessation of our compulsory education academic subject tutoring services,we have made and will continue to make changes to our existing business and execute new business strategy we decide to pursue.Learning services are still our most important business and main source of income.This part of business mainly includes traditional learning services,non-academic tutoring services,and college student and adult education services.In addition,educational content and digitalized learning products are complementary to learning services,primarily consisting of content products and auxiliary learning tools.We have diligently designed and developed educational products tailored to students individual learning needs.By sparking students interest in learning,we aim to strengthen their fundamental critical thinking skills and learning abilities.Furthermore,we assist them in cultivating healthy study habits and self-motivation.By diversifying our educational products and learning service formats,we have created a comprehensive product matrix that caters to users diverse and personalized learning requirements.We have also been rolling out face-to-face learning services and personalized learning experiences through our learning centers across the country and offering comprehensive educational programs and services to students across China.These new business directions have resulted,and will continue to result,in substantial demands on our management,faculty and operational,technological and other resources.Our expanded course offerings and education services also place significant demands on us to maintain the consistency of our teaching quality and our culture to ensure that our brand does not suffer as a result of any decreases,whether actual or perceived,in our teaching quality.To manage and support changes in our business and our future growth strategy,we must continue to improve our existing operational,administrative and technological systems and our financial and management controls,and recruit,train and retain additional qualified teachers,management personnel and other administrative and sales and marketing personnel,particularly as we enter into new areas.We also need to continue to develop,adapt or enhance number and quality of our course offerings in these new areas.We cannot assure you that we will be able to effectively and efficiently manage our operations,recruit and retain qualified teachers and management personnel and integrate new businesses into our operations.Any failure to effectively and efficiently manage changes of our business may materially and adversely affect our ability to capitalize on new business opportunities,which in turn may have a material adverse impact on our financial condition and results of operations.29If we fail to successfully execute our business strategies,we may not able to attract students to purchase our existing and new course packages outside of compulsory education academic subject tutoring services,and our business and prospects will be materially and adversely affected.Following the cessation of compulsory education academic subject tutoring services,we have shifted our business strategies to expand our course and service offerings into new areas,grow our network of offline learning centers,and update and expand the content of our existing course,services and products in a cost-effective and timely manner.Our ability to attract students to purchase our course packages for either online or offline courses outside of compulsory education academic subject tutoring services is critical to maintaining our continued operations.This in turn will depend on several factors,including our ability to continue to develop,adapt or enhance number and quality of our course offerings in these new areas to respond to regulatory developments
2025-04-24
218页
5星级
InvestorRoomUxin Reports Unaudited First Quarter of Fiscal Year2025 Financial ResultsBEIJING,Sept.23.
2025-04-24
8页
5星级
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