Table of Contents

​

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

​

FORM 20-F

​

(Mark One)

​

​

OR

​

​

OR

​

​

OR

​

​

Date of event requiring this shell company report

​

For the transition period from                    to      

​

Commission file number: 001-37790

​

​

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

​

​

​

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

​

​

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

​

​

Table of Contents

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

​

As of December 31, 2025, there were 359,059,557 ordinary shares outstanding, par value $0.0001 per share, being the sum of 255,452,577 Class A ordinary shares (excluding 8,289,315 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercising or vesting of awards granted under the issuer’s share incentive plan) and 103,606,980 Class B ordinary shares.

​

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes ☒ No

​

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐ Yes ☒ No

​

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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

​

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

​

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

​

​

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

​

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

​

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

☐ Yes ☒ No

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

​

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

​

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

​

​

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐ Item 17 ☐ Item 18

​

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

​

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

​

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

☐ Yes ☐ No

​

​

​

​

Table of Contents

TABLE OF CONTENTS

​

​

​

i

Table of Contents

INTRODUCTION

In this annual report, except where the context otherwise requires and for purposes of this annual report only:

​

1

Table of Contents

FORWARD-LOOKING INFORMATION

This 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. This annual report contains forward-looking statements that reflect our current expectations and views of future events. The forward-looking statements are contained principally in the sections entitled “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company—B. Business Overview” and “Item 5. Operating and Financial Review and Prospects.” These forward-looking statements are made under the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Known and unknown risks, uncertainties and other factors, including those listed under “Item 3. Key Information—D. Risk Factors,” may cause our actual results, performance or achievements to be materially different from those expressed or implied by the 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 “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:

​

2

Table of Contents

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our expectations. Other sections of this annual report 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. You should read thoroughly this annual report and the documents that we refer to with the understanding that our actual future results may be materially different from, or worse than, what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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. You should read this annual report and the documents that we refer to in this annual report and exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect.

​

​

3

Table of Contents

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

51Talk Online Education Group is not an operating company but a Cayman Islands holding company. We conduct our business through our subsidiaries across different jurisdictions, including our Singapore subsidiary, Hong Kong subsidiaries, as well as our subsidiaries in other jurisdictions. As a result, 51Talk Online Education Group’s ability to pay dividends depends upon dividends paid by our subsidiaries, which is subject to restrictions imposed by the applicable laws and regulations of the relevant jurisdictions.

We currently operate in several key markets across the globe, including Hong Kong, Southeast Asia, the Middle East, and others. As we have shifted our business focus to countries and regions outside mainland China, we conduct our operations, which solely pertains to research and development, administration and sales and marketing, through our mainland China subsidiaries.

The following diagram illustrates our current corporate structure, which includes our significant subsidiaries as of the date of this annual report:

​

Notes:

⁎ The holding company in which the investors hold their interests

† Our operating subsidiaries

4

Table of Contents

5

Table of Contents

​

​

Not Applicable.

​

​

Not Applicable.

​

​

Summary of Risk Factors

​

Risks Related to Our Business and Industry

6

Table of Contents

Risks Related to Our Global Operations

7

Table of Contents

Risks Related to Our ADSs

Risks Related to Our Business and Industry

Our limited operating history in the international market makes it difficult to evaluate our future prospects.

In response to the Alleviating Burden Opinion promulgated on July 24, 2021, and its implementation measures, we ceased providing K-12 online tutoring services in mainland China and divested the China Mainland Business at the end of June 2022.

​

8

Table of Contents

In the second half of 2021, we commenced our international business that provides one-on-one English lessons taught by foreign tutors to students in countries and regions outside of mainland China. Since then, we have managed to grow rapidly to acquire a substantial number of students outside of mainland China. However, given our short history of international operations, our performance to date may not be indicative of our future growth or financial results. We cannot assure you that we will be able to grow at a similar rate as we did since we commenced our international operations or as we did in the past when we were providing English lessons to students in mainland China, or avoid any decline in the future. Our growth may slow down or our revenues may decline for a number of possible reasons, some of which are beyond our control, including decreasing student spending, increasing competition, declining growth or contraction of our overall market or industry, the emergence of alternative business models, changes in rules, regulations, government policies or general economic conditions, and natural disasters or virus outbreaks. We will continue to expand our international business and may explore new service offerings to bring better experience to students and increase our student base and expand our geographic reach. Implementation of our expansion plan and execution of our new business initiatives are subject to uncertainty, and we may not be able to grow at the rate we expect for the reasons stated above. In addition, there may be particular complexities, regulatory or otherwise, associated with our expansion into new service categories or new markets. If our growth rate declines, investors’ perceptions of our business and business prospects may be adversely affected and the market price of the ADSs could decline. You should consider our prospects in light of the risks and uncertainties that companies with a limited operating history may encounter.

If we are not able to continue to attract students to purchase our course packages or to increase the spending of our students on our platform, our business and prospects will be materially and adversely affected.

Since the second half of 2021, we have developed and transitioned into new business models and service offerings of providing one-on-one English lessons taught by foreign tutors to students in countries and regions outside mainland China. Our ability to attract students to purchase our course packages and to increase their spending on our education platform remains critical to the future success and growth of our business. This in turn will depend on several factors, including our ability to effectively market our platform to a broader base of prospective students, continue to develop, adapt or enhance quality educational content and services to meet the evolving demands of our students and expand our geographic reach. We must also manage our growth while maintaining consistent and high teaching quality, and respond effectively to competitive pressures. If we are unable to continue to attract students to purchase our course packages or to increase the spending of our students on our platform, our net revenues and gross billings may decline, which may have a material adverse effect on our business, financial condition and results of operations.

Our business depends on the market recognition of our brand, and if we are unable to maintain and enhance brand recognition, our business, financial conditions and results of operations may be materially and adversely affected.

We believe that the market recognition of our brand has significantly contributed to the success of our business and that as we have transitioned into new business models and service offerings outside of mainland China in response to the regulatory changes in mainland China since the second half of 2021, maintaining and enhancing our brand recognition is critical to our future success. For example, promoting our brand recognition in international markets will be important for us to attract international students and grow our international business. Our ability to maintain and enhance brand recognition and reputation depends primarily on the perceived effectiveness and quality of our curriculum and tutors, as well as the success of our branding efforts. If we are unable to maintain and further enhance our brand recognition and reputation and promote awareness of our platform, we may not be able to charge a desired level of student fees or engage qualified tutors, and our results of operations may be materially and adversely affected. Furthermore, any negative publicity relating to our company, our courses, tutors and platform or our brand ambassador, regardless of its veracity could harm our brand image and in turn materially and adversely affect our business and results of operations.

If we are unable to conduct sales and marketing activities cost-effectively, our results of operations and financial condition may be materially and adversely affected.

We have incurred significant sales and marketing expenses. Our sales expenses include telemarketing sales and free trial lesson related expenses, and our marketing expenses include online and mobile marketing and branding expenses. In December 2015, we began outsourcing part of our marketing and sales functions to independent third- party suppliers who provide management and business outsourcing services. We had 1,382 sales and marketing staff for international business, including 381 full-time employees (including free trial tutors and teaching support) and 1,001 outsourced personnel as of December 31, 2025. We incurred US$23.6 million, US$33.4 million and US$62.3 million in sales and marketing expenses for international business in 2023, 2024, and 2025, respectively. We have ceased branding and marketing services in mainland China since the release of the Alleviating Burden Opinion, and we are conducting branding and marketing activities in our international markets.

9

Table of Contents

Our sales activities may not be well received by students and may not result in the levels of sales that we anticipate and our trial lessons may not be attractive to our prospective students. Furthermore, we may not be able to achieve the operational efficiency necessary to increase the revenues per sales and marketing staff. We also may not be able to retain or recruit experienced sales staff, or to efficiently train junior sales staff. We may also incur additional costs in our sales and marketing efforts to promote our new service offerings or target new international markets and cannot guarantee that such efforts will succeed. Further, marketing and branding approaches and tools in the online education market abroad are evolving, especially for mobile platforms. This further requires us to enhance our marketing and branding approaches and experiment with new methods to keep pace with industry developments and student preferences. Failure to refine our existing marketing and branding approaches or to introduce new marketing and branding approaches in a cost-effective manner may reduce our market share, cause our revenues to decline and negatively impact our profitability.

We have incurred, and in the future may continue to incur, net losses.

We incurred net loss of US$15.0 million, US$7.3 million and US$16.9 million in 2023, 2024 and 2025, respectively. We had accumulated deficit of US$370.4 million as of December 31, 2025. As of December 31, 2025, we had a total shareholders’ equity of negative US$31.3 million and our current liabilities exceeded the current assets by US$35.0 million.

We incurred net loss for 2023, 2024 and 2025. We cannot assure you that we will be able to generate net profits or positive cash flow from operating activities in the future, especially as we divested the China Mainland Business and transitioned into new international markets, the financial prospects of which are largely uncertain. Our ability to maintain profitability will depend in large part on our ability to maintain continuous operation in compliance with regulatory requirements, maintain or increase our operating margin, either by growing our revenues at a rate faster than our operating expenses increase, or by reducing our operating expenses. We also intend to continue to invest in our branding and marketing activities to attract students to our new services and enhance student experience. We may continue to incur net losses from operating activities and net current liabilities, which may materially and adversely affect our business, prospects, liquidity, financial condition and results of operations.

We face significant competition, and if we fail to compete effectively, we may lose our market share or fail to gain additional market share, which would adversely impact our business and financial conditions and operating results.

The global English education market is fragmented, rapidly evolving and highly competitive. We face competition in various areas of English education in which we offer or plan to offer services, from existing online and offline education companies in the global markets. In addition, the competitive landscape is evolving with the emergence of technology-driven language learning solutions, including those incorporating artificial intelligence (AI), which further intensify competition for students’ attention. In the future, we may also face competition from new entrants into the English education market.

Some of our competitors may be able to devote more resources than we can to the development and promotion of their education programs and respond more quickly than we can to changes in student demands, market trends or new technologies. We believe our strategy of integrating human-led instruction with AI-powered tools may distinguish us from certain competitors; however, if we fail to effectively integrate AI into our offerings, or if AI-only solutions prove more effective or more appealing to students than our human-AI hybrid model, we may be adversely affected in our competitive position. In addition, some of our competitors may be able to respond more quickly to changes in student preferences or engage in price-cutting strategies. We cannot assure you that we will be able to compete successfully against current or future competitors. If we are unable to maintain our competitive position or otherwise respond to competitive pressure effectively, we may lose market share or be forced to reduce our fees for course packages, either of which would adversely impact our results of operations and financial condition.

​

10

Table of Contents

If we are not able to continue to engage, train or retain qualified tutors, we may not be able to maintain consistent teaching quality on our platform, and our business, financial conditions and operating results may be materially and adversely affected.

Our tutors are critical to the learning experience of our students and our reputation. We seek to engage highly qualified tutors with strong English and teaching skills. We must provide competitive pay and other benefits, such as flexibility in lesson scheduling to attract and retain them. We must also provide ongoing training to our tutors to ensure that they stay abreast of changes in course materials, student demands and other changes and trends necessary to teach effectively. Furthermore, as we develop new service offerings and continue to develop new course contents and lesson formats, we may need to engage additional tutors with appropriate skill sets or backgrounds to deliver instructions effectively. We cannot guarantee that we will be able to effectively and timely engage and train such tutors, or at all. Further, given other potential more attractive opportunities for our quality tutors, over time some of them may choose to leave our platform. We may not always be able to engage, train and retain enough qualified tutors to keep pace with our growth or new business strategies while maintaining consistent education quality. We may also face significant competition in engaging qualified tutors from our competitors or from other opportunities that are perceived as more desirable. A shortage of qualified tutors, a decrease in the quality of our tutors’ performance, whether actual or perceived, or a significant increase in the cost to engage or retain qualified tutors would have a material adverse effect on our business and financial conditions and results of operations.

If we fail to successfully execute our growth strategies, our business and prospects may be materially and adversely affected.

We are in the process of developing new business models and service offerings internationally. See “Item 4. Information on the Company” for details. Our growth strategies also include further enhancing our brand image to grow or evolve our student base and increase student enrollments, increasing our market penetration, expanding our course offerings, enhancing our teaching methods, improving the learning experience of our students, and advancing our technology. We may not succeed in executing these growth strategies due to a number of factors, including the following:

If we fail to successfully execute our growth strategies, we may not be able to maintain our growth rate and our business and prospects may be materially and adversely affected as a result.

11

Table of Contents

If we fail to develop and introduce new courses that meet our existing and prospective students’ expectations, or adopt new technologies important to our business, our competitive position and ability to generate revenues may be materially and adversely affected.

In response to the regulatory changes in mainland China since the second half of 2021, we have switched from a business model that focuses on Chinese K-12 students to new business models and service offerings in international market. See “Item 4. Information on the Company” for details. We intend to continue developing new courses as we grow our new businesses. The timing of the introduction of new courses is subject to risks and uncertainties. Unexpected technical, operational, logistical or other problems could delay or prevent the introduction of one or more new courses. Moreover, we cannot provide assurance that any of these courses or programs will match the quality or popularity of those developed by our competitors, achieve widespread market acceptance or contribute the desired level of income.

The effectiveness of our program depends on the success of our personalized learning approach to English education, which in turn is determined by the efficiency of our data analytics know-how. We might not be able to continue to efficiently monitor and analyze data important for us to provide a personalized learning experience for our students, or to continue to drive our teaching training, curriculum development and other operational aspects of our platform.

Technology standards in internet and value-added telecommunications services and products in general, and in online education in particular, may change over time. If we fail to anticipate and adapt to technological changes, our market share and our business development could suffer, which in turn could have a material and adverse effect on our financial condition and results of operations. If we are unsuccessful in addressing any of the risks related to new courses, our reputation and business may be materially and adversely affected.

Our business generates and processes a large amount of data, and we are required to comply with applicable laws relating to privacy and cybersecurity. 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:

​

12

Table of Contents

As all of our servers and routers, including backup servers, are currently hosted by third-party service providers in Singapore, we are, with regards to privacy legislation, subject principally to the Singapore Personal Data Protection Act 2012 which provides a baseline standard for the protection of personal data in Singapore. See “Item 4. Information on the Company—B. Business Overview—Government Regulations—Singapore Regulations.” Similarly, there are personal data protection laws and regulations imposed on our group companies in each of the jurisdictions that we operate in. For example, we have obligations under Hong Kong’s Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong), or the PDPO, and Malaysia’s Personal Data Protection Act. In particular, the PDPO applies to data users that control the collection, holding, processing or use of personal data in Hong Kong. We are subject to the general requirements under the PDPO, including the requirements to inform the data subjects whether it is obligatory or voluntary to supply the data, the purpose of using their data and the classes of person to whom their data may be transferred as well as to take all practicable steps to protect the personal data held by data users against unauthorized or accidental access, loss or use. Non-compliance with the PDPO may lead to a variety of civil and criminal sanctions including fines and imprisonment. In addition, data subjects have a right to bring proceedings in court to seek compensation for damage caused by a contravention of the PDPO. We have taken various measures to guard against unauthorized access or use of data collected from users or accidental data leak. As of the date of this annual report, we have not received any warning, penalty, administrative punishment from relevant authorities in Hong Kong as a result of violations of applicable laws and governmental policies including the PDPO, nor have received requests from governmental authorities to improve our online platform to enhance protection over personal data.

In general, we expect that data security and data protection compliance will receive greater attention and focus from regulators in the countries and regions that we operate in, as well as attract continued or greater public scrutiny and attention going forward, as regulatory authorities around the world have adopted or are considering a number of legislative and regulatory proposals concerning data protection. These legislative and regulatory proposals, if adopted, and the uncertain interpretations and application thereof could, in addition to the possibility of fines, result in an order requiring that we change our data practices and policies, which could increase our compliance costs and subject us to heightened risks and challenges associated with data security and protection and thereby have an adverse effect on our business and results of operations.

If we are unable to manage these risks associated with data privacy and cybersecurity, we could become subject to penalties, including fines, suspension of business and revocation of required licenses, and our reputation and results of operations could be materially and adversely affected.

Furthermore, despite that we divested the China Mainland Business in June 2022 in response to regulatory changes in China, there is no assurance that students based in mainland China will not manage to access our service offerings under our international business through the internet, which may subject us to risks of non-compliance with laws, rules and regulations of data security and protection in mainland China and thereby have a negative impact on our business operations, financial condition and operating results. The PRC government has promulgated a series of cybersecurity and data privacy laws and regulations in China, including the PRC Cybersecurity Law and the Cybersecurity Review Measures. Pursuant to the Cybersecurity Review Measures, critical information infrastructure operators that procure internet products and services must be subject to the cybersecurity review if their activities affect or may affect national security. The Cybersecurity Review Measures further stipulates that network platform operators that hold personal information of over one million users shall apply with the Cybersecurity Review Office for a cybersecurity review before any initial public offering at a foreign stock exchange. All of our servers and routers, including backup servers, are currently hosted by third-party service providers in Singapore. As of the date of this annual report, we and our mainland China subsidiaries have not been asked to go through cybersecurity review by any PRC government authority. Based on the foregoing, as advised by our PRC legal counsel, Shihui Partners, our mainland China subsidiaries are not required by the CAC to go through cybersecurity review in connection with our company’s previous issuance of securities to foreign investors.

Our business broadcasts online content and we are required to comply with various broadcasting and online content regulations, including licensing requirements, under applicable laws. Non-compliance with such regulations and applicable licensing requirements may result in, among others, the revocation of our licenses and the takedown and/or blocking of our content in these jurisdictions.

Our business involves the broadcasting of online content in and from various jurisdictions, including Singapore, and would therefore be subject to applicable laws and regulations (including licensing requirements). For applicable laws and regulations in Singapore, see “Item 4. Information on the Company—B. Business Overview—Government Regulations—Singapore Regulations.”

​

13

Table of Contents

If we are unable to comply with the broadcasting and online content laws and regulations, we could become subject to penalties, including fines, revocation of our licenses, blocking and/or takedown of our online content.

Unexpected network interruptions, security breaches or computer virus attacks and system failures could have a material adverse effect on our business, financial condition and results of operations.

Our business depends on the performance and reliability of the internet infrastructure in the countries and regions where we operate our business. In many parts of the countries and regions where we operate our business, in particular, certain Asian countries, the internet infrastructure is relatively underdeveloped, and internet connections are generally slower and less stable than in more developed countries. We cannot assure you that the internet infrastructure in the countries and regions where we operate our business will remain sufficiently reliable for our needs or that such countries or regions will develop and make available more reliable internet access to our students and independently contracted tutors. Any failure to maintain the performance, reliability, security or availability of our network infrastructure may cause significant damage to our ability to attract and retain students and tutors. Major risks involving our network infrastructure include:

Any network interruption or inadequacy that causes interruptions in the availability of our online and mobile platforms or deterioration in the quality of access to our online and mobile platforms could reduce student satisfaction and result in a reduction in the activity level of our students and the number of students purchasing our course packages. If sustained or repeated, these performance issues could reduce the attractiveness of our platform. Furthermore, increases in the volume of traffic on our online and mobile platforms could strain the capacity of our existing computer systems and bandwidth, which could lead to slower response times or system failures. The internet infrastructure in the countries and regions where we operate our business may not support the demands associated with continued growth in internet usage. This would cause a disruption or suspension in our lesson delivery, which could hurt our brand and reputation. We may need to incur additional costs to upgrade our technology infrastructure and computer systems in order to accommodate increased demand if we anticipate that our systems cannot handle higher volumes of traffic in the future.

All of our servers and routers, including backup servers, are currently hosted by third-party service providers in Singapore. We do not maintain any backup servers outside of Singapore. We also rely on major telecommunication companies to provide us with data communications capacity primarily through local telecommunications lines and internet data centers to host our servers. We may not have access to alternative services and we have no control over the costs of services. If the prices that we pay for telecommunications and internet services in the countries and regions where we operate our business rise significantly, our gross profit and net income could be adversely affected. In addition, if internet access fees or other charges to internet users increase, our visitor traffic may decrease, which in turn may harm our revenues.

​

14

Table of Contents

We are subject to certain regional political, regulatory and economic risks that may have a material adverse effect on our results of operations.

We operate our business in multiple jurisdictions and are subject to risks associated with doing business internationally and in differing political and regulatory environments. For example, rising trade and political tensions, including those arising from the conflict in Ukraine and sanctions on Russia and the conflict in the Gaza Strip and the war among Iran and U.S. and Israel, among other geopolitical tensions, could reduce levels of trades, investments, technological exchanges and other economic activities among countries, which would have an adverse effect on global economic conditions, the stability of global financial markets, and international trade policies. It could also adversely affect the financial and economic conditions in the jurisdictions in which we operate, as well as our global expansion, our financial condition, and results of operations.

Governments or government agencies may take legislative, executive, administrative or other measures or implement policies to regulate foreign investments, including applying heightened scrutiny and imposing additional requirements, prohibitions and restrictions on investments made by companies that meet certain criteria. Companies may be evaluated based on (i) their place of incorporation or country of origin, (ii) the place of incorporation, country of origin, or nationality of their shareholders and/or beneficial owners, and (iii) where the companies have employees or service providers, store data or develop or provide their products and services. Any changes in foreign investment restrictions in the markets where we operate may affect our ability to operate and maintain our business in these markets. In the event of such restrictions, we may face additional legal and regulatory compliance costs and risks, lose investments we have made and/or exit such markets, our users may develop a negative perception of us, and our business, financial condition and results of operations could be negatively affected.

The government authorities of certain jurisdictions have significant oversight over the conduct of our business in those jurisdictions and may influence our local operations. These government authorities have published and may continue to publish new policies that significantly affect certain industries and we cannot rule out the possibility that they will in the future release regulations or policies that directly or indirectly affect our industry or require us to comply with more stringent regulatory requirements in order for us continue our local operations, which could result in a material adverse change in our operation in such jurisdictions and/or the value of our ADSs. Therefore, investors of our company faces potential uncertainty from actions taken by the governmental authorities in markets in which we operate. If we cannot timely and effectively manage such challenge, it may place significant strain on our management and resources to keep balance among the jurisdictions where we operate, which may adversely affect our business, financial condition and results of operations.

There have been heightened tensions in international economic relations in recent years and these tensions may continue to escalate in the future. These tensions have resulted in changes in international trade policies and, as they further escalate, may result in additional barriers to trade. For example, the tensions between the United States and China in recent years have led to additional, or higher tariffs imposed by the United States on products imported from China and restrictions on the sale of certain products into the United States. China has responded by imposing, and proposing to impose additional, or higher tariffs on products imported from the United States, among other measures. In addition, international political tensions have escalated and continue to be subject to uncertainties with respect to a wide range of issues. The U.S. government has also adopted measures aiming to prohibit or restrict U.S. investment in China-associated companies that operate in certain industries. Rising political tensions could reduce levels of trades, investments, technological exchanges, and other economic activities, which would materially and adversely affect the global economic conditions and the stability of global financial markets. These developments may also lead to increased compliance costs, operational disruptions, and potential constraints on our access to capital markets. The possibility of the U.S. government delisting China-associated companies from U.S. stock exchanges, as previously reported in the media, creates uncertainty regarding our ability to maintain our NYSE American LLC listing. Although we are a global company with limited operations in China, we cannot rule out the possibility of being affected by these U.S. policies, given the uncertainties associated with such policies and their implementation and the broad discretion of U.S. authorities.

Accordingly, our business, results of operations and financial condition may be materially and adversely affected by significant political, social and economic developments in those places or changes in laws and regulations of those places. Any changes in the political and economic conditions of those places could materially affect our business and results of operations. Any failure to comply with regulations in those places could subject us to legal and reputational risks.

​

15

Table of Contents

Higher labor costs, inflation and implementation of stricter labor laws in the countries and regions where we operate our business may adversely affect our business, financial conditions and results of operations.

We incur labor costs in the countries and regions where we operate our international business. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to our students by increasing prices for our courses or improving the utilization of our staff, our profitability and results of operations may be materially and adversely affected. Furthermore, the government in the countries and regions where we operate may promulgate new laws and regulations to enhance labor protection. As the interpretation and implementation of these new laws and regulations are still evolving, our employment practice may not at all times be deemed in compliance with the new laws and regulations. If we are subject to penalties or incur significant liabilities in connection with labor disputes or investigation, our business and profitability may be adversely affected.

In addition, our future success depends, to a significant extent, on our ability to engage, train and retain qualified personnel in the countries and regions where we operate our business, particularly experienced independently contracted tutors with expertise in English education. Our experienced mid-level managers in the countries and regions where we operate our business are instrumental in implementing our business strategies, executing our business plans and supporting our business operations and growth. We benefit from lower labor costs in the countries and regions where we operate our business, but countries and regions where we operate our business are subject to relatively high degrees of political and social instability. Disruptions resulting from this instability could decrease our efficiency and increase our costs. Any political or economic instability in the countries and regions where we operate our business could result in our having to replace or reduce these labor sources, which may increase our labor costs and have an adverse impact on our results of operations.

Our pool of independently contracted tutors is mainly from the Philippines. We engage our independently contracted foreign tutors as independent contractors whose rights differ from those of employees. There are uncertainties in determining whether a service provider is an independent contractor or an employee. The level and extent of control exercised by the hiring entity, among other factors, would determine the employment status. Our labor costs will increase if we engage our independently contracted tutors in the countries and regions where we operate our business as full-time employees or if courts or other authorities in the countries and regions where we operate our business determine that our independently contracted tutors are deemed employees instead of independent contractors.

We also rely on some third-party vendors in Hong Kong to handle the payment of the compensation of our foreign tutors. Any failure of this vendor to provide these services may negatively impact our relationships with tutors in the countries and regions where we operate our business, damage our reputation and cause us to lose tutors while making it difficult to find replacement tutors.

Some students may decide not to continue taking our courses for a number of reasons, including a perceived lack of improvement in their English proficiency or general dissatisfaction with our programs, which may adversely affect our business, financial condition, results of operations and reputation.

The success of our business depends in large part on our ability to retain our students by delivering a satisfactory learning experience and improving their English proficiency. If students feel that we are not providing them the experience they are seeking, they may choose not to renew their existing packages. For example, our education programs may fail to significantly improve a student’s English proficiency. All our tests are unit-based and level-based assessments, which can only measure students’ mastery of knowledge within the current learning phase. They cannot accurately measure the specific improvement in students’ overall English proficiency. To a large extent, the improvement of students’ English proficiency depends on each student’s level of interest, effort, and time invested. Student satisfaction and parent satisfaction with our programs may decline for a number of reasons, many of which may not reflect the effectiveness of our lessons and teaching methods. A student’s learning experience may also suffer if his or her relationship with our tutors does not meet expectations. If a significant number of students fail to significantly improve their English proficiency after taking our lessons or if their learning experiences with us are unsatisfactory, they may not purchase additional lessons from us or refer other students to us and our business, financial condition, results of operations and reputation would be adversely affected.

16

Table of Contents

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

We believe that our copyrights, trademarks and other intellectual property are essential to our success. We depend to a large extent on our ability to develop and maintain the intellectual property rights relating to our technology and course materials. We have devoted considerable time and energy to the development and improvement of our websites, mobile apps, our Air Class platform, trademarks, domain names, trade secrets, and our course materials.

We rely primarily on copyrights, trademarks, trade secrets and other contractual restrictions for the protection of the intellectual property used in our business. Nevertheless, these provide only limited protection and the actions we take to protect our intellectual property rights may not be adequate. Our trade secrets may become known or be independently discovered by our competitors. Third parties may in the future pirate our course materials and may infringe upon or misappropriate our other intellectual property. Infringement upon or the misappropriation of, our proprietary technologies or other intellectual property could have a material adverse effect on our business, financial condition or operating results. Policing the unauthorized use of proprietary technology can be difficult and expensive.

Also, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others. Such litigation may be costly and divert management’s attention away from our business. An adverse determination in any such litigation would impair our intellectual property rights and may harm our business, prospects and reputation. Enforcement of judgments in certain countries and regions where we operate is uncertain, and even if we are successful in litigation and purchase insurance in advance to cover costs arising from litigation, these may not provide us with an effective and adequate remedy. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

We may encounter disputes from time to time relating to our use of intellectual property of third parties.

We cannot be certain that third parties will not claim that our business infringes upon or otherwise violates patents, copyrights or other intellectual property rights that they hold. We cannot assure you that third parties will not claim that our courses and marketing materials, online courses, products, and platform or other intellectual property developed or used by us infringe upon valid copyrights or other intellectual property rights that they hold. We may be subject to claims by educational institutions and organizations, content providers and publishers, competitors and others on the grounds of intellectual property rights infringement, defamation, negligence or other legal theories based on the content of the materials that we or our tutors distribute or use in our business operation. These types of claims have been brought, sometimes successfully, against print publications and educational institutions in the past. We may encounter disputes from time to time over rights and obligations concerning intellectual property, and we may not prevail in those disputes.

Any claims against us, with or without merit, could be time consuming and costly to defend or litigate, divert our management’s attention and resources or result in the loss of goodwill associated with our brand. If a lawsuit against us is successful, we may be required to pay substantial damages and/or enter into royalty or license agreements that may not be based upon commercially reasonable terms, or we may be unable to enter into such agreements at all. We may also lose, or be limited in, the rights to offer some of our programs, parts of our platform and products or be required to make changes to our course materials or websites. As a result, the scope of our course materials could be reduced, which could adversely affect the effectiveness of our curriculum, limit our ability to attract new students, harm our reputation and have a material adverse effect on our results of operations and financial position.

Failure to protect confidential information of our tutors and students against security breaches could damage our reputation and brand and substantially harm our business and results of operations.

A significant challenge to the online education industry is the secure storage of confidential information and its secure transmission over public networks. Purchases of our course packages are made through our website, our mobile apps bank remittance, bank card, and third-party platforms. In addition, online payments for our course packages are settled through third-party online payment services. Maintaining complete security for the storage and transmission of confidential information on our technology platform, such as student names, phone numbers, and other personal information, is essential to maintaining student confidence.

17

Table of Contents

We have adopted security policies and measures to protect our proprietary data and student information. However, advances in technology, the expertise of hackers, new discoveries in the field of cryptography or other events or developments could result in a compromise or breach of the technology that we use to protect confidential information. We may not be able to prevent third parties, especially hackers or other individuals or entities engaging in similar activities, from illegally obtaining such confidential or private information we hold as a result of our students’ visits to our website and use of our mobile apps. Such individuals or entities obtaining our students’ confidential or private information may further engage in various other illegal activities using such information. Any negative publicity on our website’s or mobile apps’ safety or privacy protection mechanisms and policies, and any claims asserted against us or fines imposed upon us as a result of actual or perceived failures, could have a material and adverse effect on our public image, reputation, financial condition and results of operations.

Practices regarding the collection, use, storage, transmission and security of personal information by companies operating over the internet and mobile platforms have recently come under increased public scrutiny. Furthermore, there are a number of legislative proposals in the European Union and the United States, at both the federal and state level, as well as other jurisdictions that could impose new obligations in areas affecting our business. We generally comply with industry standards and are subject to the terms of our own privacy policies. Compliance with any additional laws or regulations concerning data protection, or the interpretation and application of existing data protection laws or regulations, which is often uncertain and in flux, could be expensive, and may place restrictions on the conduct of our business and the manner in which we interact with our students. Any failure to comply with applicable regulations could also result in regulatory enforcement actions against us.

Significant capital and other resources may be required to protect against information security breaches or to alleviate problems caused by such breaches or to comply with our privacy policies or privacy-related legal obligations. The resources required may increase over time as the methods used by hackers and others engaged in online criminal activities are increasingly sophisticated and constantly evolving. Any failure or perceived failure by us to prevent information security breaches or to comply with privacy policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other student data, could cause our students to lose trust in us and could expose us to legal claims. Any perception by the public that online transactions or the privacy of user information are becoming increasingly unsafe or vulnerable to attacks could inhibit the growth of online education services generally, which may negatively impact our business prospects.

We face risks related to outbreaks of health epidemics, natural disasters, and other extraordinary events, which could significantly disrupt our operations and adversely affect our business, financial condition or results of operations.

Our business could be adversely affected by the outbreak of Zika, Ebola, avian influenza, severe acute respiratory syndrome, or SARS, the influenza A (H1N1), H7N9, COVID-19 or other epidemics. Any of such occurrences could cause severe disruption to our daily operations, and may even require a temporary closure of our offices. Such closures may disrupt our business operations and adversely affect our results of operations. Our operation could also be disrupted if any of our students, tutors or business partners were affected by such health epidemics.

The COVID-19 pandemic and the measures to contain its spread had from time to time resulted in business disruptions in the countries and regions where we operate. For example, our operations in countries and regions where we operate were affected by outbreaks of COVID-19 and precautions taken in response there. Any future outbreak of adverse public health developments in countries and regions where we operate, may have a material and adverse effect on our business operations. These occurrences could cause cancellations or deferments of student enrollments and require the temporary closure of our offices. In the event that a health epidemic cannot be effectively and timely contained, our ability to consistently offer online lessons and related services in the future may be significantly disrupted, which in turn may harm the growth rate and retention of our students, as well as our financial performance generally.

We are also vulnerable to natural disasters and other calamities, including fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks, and any other severe weather conditions or similar event may give rise to loss of personnel, damages to property, server interruptions, breakdowns, technology platform failures or internet failures, where our operations could be materially and adversely affected.

18

Table of Contents

Our brand image, business and results of operations may be adversely impacted by students and independently contracted tutors’ misconduct and misuse of our platform.

Our platforms allow independently contracted tutors and students to engage in real-time communication. Because we do not have full control over how and what our independently contracted tutors and students will use our platform to communicate, our platforms may from time to time be misused by individuals or groups of individuals to engage in immoral, disrespectful, fraudulent or illegal activities. Though there have not been any such incidents on our platform that have been covered by media reports or internet forums, any such coverage could generate negative publicity about our brand and platform. We have implemented control procedures, such as training and sample auditing, to require our independently contracted tutors not to distribute any illegal or inappropriate content and conduct any illegal or fraudulent activities on our platforms, but such procedures may not prevent all such content or activities from being posted or carried out. Moreover, as we have limited control over the real-time and offline behavior of our students and independently contracted tutors, to the extent such behavior is associated with our platforms, our ability to protect our brand image and reputation may be limited. Our business and the public perception of our brand may be materially and adversely affected by misuse of our platform. In addition, if any of our students or independently contracted tutors suffers or alleges to have suffered physical, financial or emotional harm following contact initiated on our platform, we may face civil lawsuits or other liabilities initiated by the affected student or independently contracted teacher, or governmental or regulatory actions against us. In response to allegations of illegal or inappropriate activities conducted on our platform or any negative media coverage about us, the competent governmental authorities where we operate our international business may intervene and hold us liable for non-compliance with applicable laws and regulations concerning the dissemination of information on the internet and subject us to administrative penalties or other sanctions, such as requiring us to restrict or discontinue some of the features and services provided on our platform. As a result, our business may suffer and our brand image, student base, results of operations and financial condition may be materially and adversely affected.

Our employees may engage in misconduct or other improper activities or misuse our platform, which could harm our reputation.

We are exposed to the risk of employee fraud or other misconduct. Employee misconduct could include intentionally failing to comply with government regulations, engaging in unauthorized activities and misrepresentation to our potential students during marketing activities, which could harm our reputation. Employee misconduct could also involve improper use of our students’ and independently contracted tutors’ sensitive or classified information, which could result in regulatory sanctions against us and serious harm to our reputation. Employee misconduct could also involve making payments to government officials or third parties that would expose us to being in violation of laws. It is not always possible to deter employee misconduct, and the precautions we take to prevent and detect this activity may not be effective in controlling unknown or unmanaged risks or losses, which could harm our business, financial condition and results of operations.

Allegations, harassment or other detrimental conduct by third parties, as well as the public dissemination of negative, inaccurate or misleading information about us, could harm our reputation and adversely affect the price of our ADSs.

We may be subject to allegations by third parties or purported current or former employees, negative internet postings or other negative, inaccurate or misleading publicity related to our business and operations. We may also become the target of harassment or other detrimental conduct by third parties or disgruntled former or current employees. Such conduct may include complaints, anonymous or otherwise, to our board, advisors, regulatory agencies, media or other organizations. Depending on their nature and significance, we may need to conduct internal investigations to appropriately review any such allegations. We may also be subject to government or regulatory inquiries or, investigations or other proceedings as a result of such third-party conduct and may be required to spend significant time and incur substantial costs to address such conduct, and there is no assurance that we will be able to conclusively refute each of the allegations within a reasonable period of time, or at all. Allegations may be posted on the internet, including social media platforms, by anyone anonymously. Any negative, inaccurate or misleading publicity about us or our management can be quickly and widely disseminated. Social media platforms and devices immediately publish the content of their subscribers’ and participants’ posts, often without filters or checks on the accuracy of the content posted. Information posted on the internet or otherwise publicly released, including by us or our employees, may be inaccurate or misleading, and the information or the inaccurate or misleading nature of the information, may harm our reputation, business or prospects. The harm may be immediate without affording us an opportunity for redress or correction. Our reputation may be negatively affected as a result of the public dissemination of negative, inaccurate, or misleading information about our business and operations, which in turn may cause us to lose market share or students, and adversely affect the price of our ADSs.

19

Table of Contents

We may not be able to achieve the benefits we expect from recent and future acquisitions, and recent and future acquisitions may have an adverse effect on our ability to manage our business.

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

Failure to renew our current leases or locate desirable alternatives for our facilities could materially and adversely affect our business.

We lease properties for our offices in Middle East, the Philippines, Malaysia, Hong Kong, Thailand, mainland China and other countries and regions where we operate. We may not be able to successfully extend or renew such leases upon expiration of the current term on commercially reasonable terms or at all, and may therefore be forced to relocate our affected operations. This could disrupt our operations and result in significant relocation expenses, which could adversely affect our business, financial condition and results of operations. In addition, we compete with other businesses for premises at certain locations or of desirable sizes. As a result, even though we could extend or renew our leases, rental payments may significantly increase as a result of the high demand for the leased properties. In addition, we may not be able to locate desirable alternative sites for our facilities as our business continues to grow and failure in relocating our affected operations could adversely affect our business and operations.

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 bank transfers and payment through third-party online payment platforms such as Airwallex, Stripe, Tabby, Tamara, Payermax, Checkout and 2C2P. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower our profit margins. We may also be susceptible to fraud and other illegal activities in connection with the various payment methods we offer. We are also subject to various rules, regulations and requirements, regulatory or otherwise, governing electronic funds transfers which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and become unable to accept credit and debit card payments from our students, process electronic funds transfers or facilitate other types of online payments, and our business, financial condition and results of operations could be materially and adversely affected. With the expansion of our business to different countries and regions, we use more and more third-party platforms to collect payment. We could not guarantee that all of such platforms will timely and fully transfer the collected payments to us or will be in a good financial position to do so. If any of the third-party online payment platforms breaches the contracts and fails to transfer any payments to us, it may have a material adverse effect on our business and financial condition.

20

Table of Contents

If our senior management is unable to work together effectively or efficiently or if we lose their services, our business may be severely disrupted.

Our success heavily depends upon the continued services of our management. In particular, we rely on the expertise and experience of Mr. Jack Jiajia Huang, our founder, chairman and chief executive officer, and Ms. Ting Shu, our co-founder and director. Mr. Jack Jiajia Huang and Ms. Ting Shu are husband and wife. We also rely on the experience and services from other senior management, including Ms. Cindy Chun Tang, our chief financial officer. If they cannot work together effectively or efficiently, our business may be severely disrupted. If one or more of our senior management were unable or unwilling to continue in their present positions, we might not be able to replace them easily or at all, and our business, financial condition and results of operations may be materially and adversely affected. If any of our senior management joins a competitor or forms a competing business, we may lose students, tutors, and other key professionals and staff members. Our senior management has entered into employment agreements with us, including confidentiality and non-competition clauses. However, if any dispute arises between our officers and us, we may have to incur substantial costs and expenses in order to enforce such agreements in mainland China or we may be unable to enforce them at all.

Fluctuations in foreign currency exchange rates may materially and adversely affect our results of operations.

We operate in multiple international markets, which exposes us to the effect of fluctuations in currency exchange rates as we report our financials in U.S. dollars. We charge customers fees in local currencies in some countries and regions where we offer our course offerings, a significant portion of our assets and liabilities are denominated in US dollars and Renminbi, and a significant portion of our costs and expenses are incurred in the currencies of the countries and regions where we operate, including service fee payments to nearly all of our foreign tutors. For example, we engage independently contracted tutors and lease properties in the Philippines. We are exposed to the risk of cost increases due to inflation in the Philippines and other countries and regions and the depreciation of US dollars. Currency fluctuations in the currencies of the countries and regions where we operate could create economic instability that may increase our expenses and harm our business operations.

Currency fluctuations in the exchange rates among the various currencies that we use could create economic instability that may increase our expenses and harm our business operations. The conversion of one currency into another currency is based on rates set by responsible authorities in each of the countries and regions where we operate and is affected by, among other things, changes in each country or region’s political and economic conditions and its foreign exchange policies. Any significant appreciation or depreciation of the currencies of the countries and regions where we operate may have a material and adverse effect on the value of, and any dividends payable on, our ADSs in U.S. dollars and your investment. For example, to the extent that we need to convert U.S. dollars into local currencies for capital expenditures and working capital, appreciation of the local currencies against the U.S. dollar would have an adverse effect on the local currencies amount we would receive from the conversion. Conversely, if we decide to convert the local currencies where we operate our business into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs or for other business purposes, appreciation of the U.S. dollar against the local currencies would have a negative effect on the U.S. dollar amount available to us. We cannot assure you that the currencies of the countries and regions where we operate will not appreciate or depreciate significantly in value against U.S. dollar in the future. It is difficult to predict how market forces or government policy may impact the exchange rate among the currencies of the countries and regions where we operate and the U.S. dollar in the future.

Very limited hedging options are available in certain jurisdictions where we operate to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by exchange control regulations that restrict our ability to convert between currencies. As a result, fluctuations in exchange rates may increase our expenses and have a material adverse effect on our results of operations.

21

Table of Contents

Our results of operations have been and may continue to be subject to seasonal fluctuations.

Our industry generally experiences seasonality, reflecting a combination of traditional education industry patterns and new patterns associated with the online platform in particular. Seasonal fluctuations affected our business when we focused on lessons for Chinese K-12 students, and may continue to affect our business as we shift to new business models. Due to our limited operating history and the fact that we have shifted our focus from lessons for Chinese K- 12 students to new business models and service offerings targeting international students, the seasonal trends that we have experienced in the past may not be indicative of our future operating results. Our financial condition and results of operations for future periods may continue to fluctuate. As a result, the trading price of our ADSs may fluctuate from time to time due to seasonality.

We have granted options and restricted share units, and may continue to grant options, restricted share units and other types of awards under our share incentive plans, which may result in increased share-based compensation expenses.

We adopted share incentive plans in September 2013, or the 2013 Plan, and in December 2014, or the 2014 Plan. The 2014 Plan was amended in February 2016. Under the 2013 Plan and the 2014 Plan, we are authorized to grant options or share purchase rights to purchase up to an aggregate of 36,229,922 Class A ordinary shares. In September 2023, the 2013 Plan expired and additional grants may not be made thereunder. In December 2024, the 2014 Plan expired and additional grants may not be made thereunder.

In May 2016, we adopted the 2016 share incentive plan, or the 2016 Plan, which was amended and restated in April 2026. Upon the adoption of the Amended and Restated 2016 share incentive plan, or the Amended and Restated 2016 Plan, it replaced the previously adopted 2016 Plan in its entirety and the awards granted and outstanding thereunder remain effective and binding under the Amended and Restated 2016 Plan. Under the Amended and Restated 2016 Plan, the maximum aggregate number of shares which may be issued pursuant to all awards under the Amended and Restated 2016 Plan is initially 4,600,000 Class A ordinary shares in 2016, plus (i) an annual increase, on the first day of each fiscal year from 2017 through 2026, equal to 1.5% of the total outstanding share capital of the Company as of December 31 of the immediately preceding calendar year, and (ii) an annual increase, on the first day of each fiscal year beginning in 2027, equal to 1.2% of the total outstanding share capital of the Company as of December 31 of the immediately preceding calendar year, or, in each case, such lesser number of Class A ordinary shares as may be determined by our board of directors, during the term of the Amended and Restated 2016 Plan. As of January 1, 2026, the maximum aggregate number of Class A ordinary shares which may be issued pursuant to all awards granted under the Amended and Restated 2016 Plan was increased to 53,645,627. As of March 18, 2026, 13,009,194 restricted share units were outstanding under the Amended and Restated 2016 Plan.

As a result of grants under the 2013 Plan, the 2014 Plan and the Amended and Restated 2016 Plan and potential future grants under the Amended and Restated 2016 Plan, we have incurred and will continue to incur share-based compensation expenses. We have recognized share-based compensation expense in the amount of US$1.3 million in 2025. We believe the granting of share-based compensation is of significant importance to our ability to attract and retain key personnel and employees, and we will continue to grant share-based compensation to employees in the future. As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations.

We have limited insurance coverage for our operations in the countries and regions where we operate our business, which could expose us to significant costs and business disruption.

We do not maintain any liability insurance or property insurance policies covering students, equipment and facilities for injuries, death or losses due to fire, earthquake, flood or any other disaster, except for the liability insurance and property insurance policies for our certain offices. Consistent with customary industry practice, we do not maintain business interruption insurance, nor do we maintain key-man life insurance. We maintain certain personal accident insurance, commercial medical insurance, government-mandated medical insurance, and supplementary medical insurance to certain of our employees in the markets in which we operate. However, as the insurance industry in many countries and regions where we operate is still in an early stage of development and service providers typically offer limited business-related insurance products. We also have limited experience dealing with the insurance industry in international markets. We cannot assure you that our insurance coverage is sufficient to prevent us from any loss or that we will be able to successfully claim our losses under our current insurance policy on a timely basis, or at all. If we incur any loss that is not covered by our insurance policies, or the compensated amount is significantly less than our actual loss, our business, financial condition and results of operations could be materially and adversely affected.

22

Table of Contents

If we fail to implement and maintain an effective system of internal controls to remediate our material weaknesses over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of our ADSs may be materially and adversely affected.

As defined in the standards established by the PCAOB, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

We could not completely remediate the material weaknesses identified in 2024. Furthermore, a new material weakness was identified in 2025 related to our Information Technology General Controls (ITGC). For details, see “Item 15. Controls and Procedures.”

We are actively developing remediation plans designed to address the material weaknesses. However, we cannot assure you that we will be able to continually implement these measures to effectively remediate our material weaknesses, or that we will not identify additional material weaknesses or significant deficiencies in the future.

If we fail to remediate these material weaknesses or to discover and address any other control deficiencies, we could suffer material misstatements in our consolidated financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.

It may be difficult for international regulators to conduct investigation or collect evidence within the countries and regions where we operate.

Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in certain jurisdictions where we operate. For example, in mainland China, there may be obstacles to providing information needed for regulatory investigations or litigation initiated outside mainland China. Although the authorities in mainland China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no international securities regulator is allowed to directly conduct investigation or evidence collection activities within mainland China. While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an international securities regulator to directly conduct investigation or evidence collection activities within mainland China may further increase difficulties faced by you in protecting your interests.

​

23

Table of Contents

We are subject to risks associated with operating in the rapidly evolving Asia and EMEA, and we are therefore exposed to various risks inherent in operating and investing in the region.

We derive a significant portion of our revenue from our operations in countries and regions located in Asia and EMEA, and we intend to continue to develop and expand our business and penetration in these countries and regions. Our operations and investments in Asia are subject to various risks related to the economic, political and social conditions of the countries and regions that we operate in, including risks related to the following:

Volatile political situations in certain countries and regions could impact our business. For example, elections and other political transitions in the countries or regions in which we operate may create uncertainty, which could adversely affect market conditions and, in some cases, contribute to civil unrest. Any disruptions in our business activities or volatility or uncertainty in the economic, political or regulatory conditions in the markets we operate in could adversely affect our business, financial condition, results of operations and prospects. Any of the foregoing risks may adversely affect our business, financial condition, results of operations and prospects.

Rising geopolitical tension between the countries and regions where we operate our business may disrupt the economy and business environment of the countries and regions where we operate our business, which may negatively impact our business operations in these countries and regions.

Certain countries and regions where we operate our business have geopolitical tension with one another.

Although diplomatic relationships among these countries and regions have been relatively stable in recent years, we cannot be sure that the territorial disputes or other forms of political discord will not escalate or that new disputes will not arise in the future. Should such disputes continue or intensify, the affected countries and their economies may experience disruptions, which could, in turn, adversely impact our operations.

24

Table of Contents

Furthermore, as a significant portion of our workforce, including independently contracted personnel, may be concentrated in certain countries or regions, any deterioration in diplomatic relations could make it more challenging to attract or retain talent, or to conduct business activities in those locations. It could also discourage customers from those regions from engaging with our services or products. Prolonged or intense diplomatic tensions may therefore have a material adverse effect on our business operations, both in the affected countries and more broadly. Any current or future geopolitical disputes among the countries and regions where we operate may negatively impact our business activities, financial position and overall performance.

We could face uncertain tax liabilities in various countries and regions in which we operate, which could adversely impact our operating results.

We are subject to the tax laws and policies of each of the countries and regions in which we operate. Since legislation and other laws and regulations (particularly in relation to tax) in emerging markets, such as the markets where we operate, are often undeveloped and the interpretation, application and enforcement of tax laws and policies in emerging market countries is uncertain, there is a risk that we may be unable to determine our taxation obligations with certainty.

We obtain external tax advice from time to time on the application of tax laws to our operations. Due to the aforementioned challenges of interpretation and consistency of application and enforcement, obtaining such advice may be difficult and opinions on the law may differ. The determination of our provision for tax liabilities requires significant judgment and estimation and there are classifications, transactions and calculations where the ultimate tax payable is uncertain.

Our tax exposure and obligations exist in each of the countries and regions in which we presently operate and provide course offerings and may arise in other countries or regions in the future in the event that we commence operations in such new countries or regions, either organically or through acquisitions. These risks may increase when we acquire a business, particularly to the extent that there are limitations or restrictions on the scope or nature of the financial, tax and other due diligence investigations that we are able to undertake in connection with the acquisition, or where the vendors withhold material information. Given the nature of our business, we are also exposed to the general changes in digital taxation policy that are happening globally.

From time to time, we establish provisions to account for uncertainties as well as timing and accounting differences in respect of income tax and indirect taxes, including, but not limited to, in relation to businesses that are acquired by us. While we have established our tax and other provisions using assumptions and estimates that we believe to be reasonable, these provisions may prove insufficient given the risks and uncertainties inherent in the taxation systems in the countries and regions where we operate. Any adverse determinations by a revenue authority in relation to our tax obligations may have an adverse effect on our business, financial condition and results of operations, and may adversely impact our operations in the country or region and our reputation.

We are subject to education, content, accessibility, consumer protection and anti-discrimination laws and regulations in the jurisdictions in which we operate, and any non-compliance could materially and adversely affect our reputation, business, financial condition and results of operations.

We provide our course offerings through our apps and other channels in the jurisdictions in which we operate, and we are subject to a variety of laws, rules and regulations that govern, among other things, (i) the accessibility and content of educational materials, (ii) advertising, marketing and consumer protection, (iii) data privacy and cybersecurity, and (iv) licensing, permits, registrations and other operational requirements applicable to education-related services. These requirements may differ significantly across jurisdictions, may be interpreted and enforced inconsistently, and may change over time.

If we fail, or are alleged to have failed, to comply with applicable requirements, we may be subject to investigations, inspections, fines, penalties, warnings, increased compliance requirements, civil claims (including class actions where available), or other enforcement actions. Regulators may also require us to modify or remove content, suspend certain offerings, restrict our marketing practices, block access to certain services, or suspend or revoke licenses or permits, any of which could disrupt our operations and materially and adversely affect our business, financial condition and results of operations. In addition, any actual or alleged non-compliance could harm our brand and reputation and reduce student and parent trust, which could negatively affect our ability to attract and retain users and partners.

25

Table of Contents

For example, in Hong Kong, we provide our course offerings to students through our apps and are subject to the Education Ordinance, which sets out certain requirements applicable to schools and educational institutions, including requirements relating to curriculum, teacher qualifications and student assessment. The Education Bureau may suspend or revoke the licence of a school or educational institution that is found to be in violation of the Education Ordinance. In addition, educational content may be required to be accurate and complete, and inaccurate or incomplete content may subject us to regulatory scrutiny, fines or other legal action. We are also subject to Hong Kong anti-discrimination laws, which require education companies to ensure that educational content is accessible to all students, including those with disabilities; failure to provide accessible content may result in legal action, regulatory scrutiny or reputational damage.

Negative publicity or consumer backlash arising from actual or perceived violations in any jurisdiction could make it more difficult for us to attract new customers or retain existing ones, as trust and credibility are important factors for students and parents to consider when selecting educational services. As a result, we may be forced to scale back our operations and even suspend operations in one or more markets. Any of the foregoing could materially and adversely affect our reputation, business, financial condition and results of operations.

Information we provide to users and customers regarding our course offerings is subject to consumer protection and related laws and regulations in the jurisdictions in which we operate, and any actual or alleged non-compliance could materially and adversely affect our business, financial condition and results of operations.

Information we provide (or are required to provide) to users and customers regarding our course offerings—such as course descriptions, pricing, promotions, subscription terms, refund policies, and other contractual and consumer-facing disclosures—is subject to consumer protection, e-commerce and other similar laws and regulations in the jurisdictions in which we operate. We also market and promote our course offerings and are subject to advertising, marketing and consumer information requirements in the jurisdictions in which we operate. These requirements generally prohibit false, misleading or deceptive statements and may impose specific disclosure obligations (for example, regarding pricing, discounts, limited-time offers, subscription renewals, cancellation rights, and refund policies). Government authorities may take different views on the scope, format and sufficiency of required disclosures and may determine that our user-facing information is incomplete, unclear or misleading (including based on evolving regulatory priorities or guidance). If we are required to modify our marketing materials, change our disclosure practices, offer refunds, pay fines or penalties, or defend against claims, our reputation, user growth and results of operations could be materially and adversely affected.

For example, in Hong Kong, we are subject to consumer protection and advertising-related requirements that generally require clear and accurate information to consumers (including in relation to course content, pricing and refund policies) and prohibit misleading advertisements. If Hong Kong regulators determine that our disclosures are not sufficiently transparent, or that any promotional statements are misleading, we could be subject to fines or other legal action, and we may be required to change our practices, any of which could materially and adversely affect our business and financial condition.

Limited internet connectivity, device availability, digital literacy and language proficiency in certain markets could reduce the accessibility and adoption of our course offerings and materially and adversely affect our business and financial condition.

We rely on users having access to compatible devices (such as smartphones, tablets or computers) and sufficient, reliable internet connectivity to access our course offerings. In a number of the jurisdictions in which we operate—particularly in developing countries—internet penetration, broadband coverage, network speed and reliability, and access to suitable devices may be limited, inconsistent or unaffordable for some users (including in rural or lower-income areas). These limitations could degrade the performance and perceived quality of our services (for example, through buffering, interrupted sessions, reduced functionality or an inability to access certain features), reduce user satisfaction, and constrain our ability to acquire, engage and retain users in those markets.

Limited connectivity and device access may also be associated with lower levels of digital literacy, and a meaningful portion of potential users in certain jurisdictions may be unfamiliar with, or reluctant to adopt, online learning. To address these constraints, we may need to incur additional costs to adapt and optimize our products for lower-bandwidth environments, enhance user support, and invest in marketing, outreach and education initiatives to increase awareness and adoption of our course offerings. These efforts may be expensive, may take significant time to implement, and may not be effective.

26

Table of Contents

In addition, language barriers may limit the adoption and engagement of our course offerings in certain jurisdictions. In markets where a substantial portion of the population is not proficient in English (or any other language in which our content is offered), we may need to devote additional resources to localization, translation, subtitles, dubbing and/or developing locally relevant content and instructors. These investments may not result in the expected increase in user growth, engagement or revenue.

If we are unable to effectively address limitations in connectivity, device availability, digital literacy or language proficiency in one or more markets, we may fail to grow our user base as expected, user engagement and retention may be lower than anticipated, and our investments may not generate the returns we expect. Any of the foregoing could limit our market penetration, increase our operating costs, and materially and adversely affect our business, financial condition and results of operations.

For example, in Malaysia, while internet penetration is increasing, there are still areas with limited access to devices (such as computers and smartphones) and limited internet access (including high-speed internet or supporting technology infrastructure), which may affect the quality and reliability of our course offerings. In addition, a significant portion of the population may be unfamiliar with technology or e-learning, and some potential users may not be proficient in English. As a result, we may need to invest in marketing, user education and localization efforts in Malaysia, and there can be no assurance that these efforts will be successful or generate the returns we expect.

We face intense competition in jurisdictions in which we operate, and there is no assurance that we will be able to secure or expand our market share in existing or new markets.

We operate in highly competitive markets across multiple jurisdictions, and we may enter additional markets or jurisdictions in the future. Many of these markets have a strong demand for exam preparation services, which has attracted numerous competitors, including both established players and new entrants, resulting in intense competition.

As a new entrant in certain jurisdictions or as we expand into new markets, we face significant challenges in differentiating our course offerings and providing unique value to users compared to competitors. Many of our competitors may have greater financial resources, more established brand recognition, larger user bases, or longer operating histories, which may give them a competitive advantage. Additionally, new entrants may adopt innovative strategies or offer lower pricing, further intensifying competition.

There can be no assurance that we will be able to effectively distinguish our products and services, attract and retain users, or secure and grow our market share in any jurisdiction in which we operate or may enter. If we fail to compete successfully, we may experience reduced demand for our services, loss of users, or an inability to achieve our growth objectives, which could materially and adversely affect our business operations, financial condition, and prospects.

Our operations in the Middle East could be affected by economic and geopolitical conditions in the Middle East, and subject us to additional compliance costs.

Our operations in the Middle East expose us to elevated political, operational and economic risks associated with a complex and volatile geopolitical environment. The region has experienced armed conflicts, political and social unrest and terrorist attacks, including the Hamas-Israel conflict, hostilities in countries such as Syria and Yemen, and attacks on commercial shipping in the Red Sea. These conditions have disrupted, and could further disrupt, local economies and infrastructure and could materially adversely affect our business, including by impairing our ability to operate in the region, increasing our operating costs and affecting business continuity.

Tensions between the United States and Iran have periodically escalated and could further deteriorate, including through additional sanctions, military action, cyber activity or disruptions affecting energy supplies and key shipping routes. Any such developments could materially adversely affect us, including by (i) restricting our ability to transact with certain customers, vendors or other counterparties, (ii) disrupting logistics and increasing transportation and insurance costs, and (iii) increasing risks to the safety of our personnel and the security of our facilities and assets, which could require us to scale back or suspend operations in affected locations.

27

Table of Contents

In addition, our operations in the Middle East may be subject us to additional compliance costs to comply with sanctions related regulations issued by the United States, which have established an SDN list of corporations and people with which engaging in business by a person subject to the jurisdiction of such government authority is prohibited without a license. There is no guarantee that any individual or entity in the Middle East or elsewhere with which we have done business will not be identified on the SDN list. If any customer, employee or vendor were to be listed on the SDN list, we could be required to suspend or terminate the business relationship with such person, incur costs, including legal and compliance costs, to evaluate and implement appropriate actions, and could be exposed to investigations, fines, penalties, reputational harm and other costs.

If we fail to obtain, maintain or renew licenses, permits or approvals applicable to our service offerings, our business, financial condition and results of operations could be adversely affected.

Under the applicable laws and regulations of countries and regions where we operate, we may be required to obtain certain licenses, permits and approvals from and make filings or complete registrations with, government authorities in order to provide our courses. In addition, given the evolvement in laws, rules, regulations and enforcement practice by government authorities, we may be required to obtain additional licenses, permits or approvals, or make filings or registrations for our service offerings in the future. However, we cannot assure you that we will be able to successfully obtain, maintain or review these licenses, permits and approvals or complete these filings or registrations on a timely basis, or at all. The failure or delay to obtain, maintain or renew such licenses, permits, approvals, filings or registrations required to conduct our business may subject us to various penalties, including confiscation of revenues, imposition of fines and/or restrictions on our business operations, or the discontinuation of our operations. Any such disruption in our business operations could materially and adversely affect our business, financial condition and results of operations.

We may be unable to enforce certain of our contractual provisions between us and our customers under relevant local laws or directives of countries and regions where we operate.

We face risks as to the validity of certain contractual provisions within contracts between us and our customers, which may prevent us from enforcing such contractual provisions with customers. For instance, we use standard form contracts with our customers in certain countries or regions, which may expose us to risks as to the enforceability of contractual provisions within our contracts under different local laws or directives, including, but not limited to, the choice of law, liquidate damages and refunds, and gift courses provisions. If any regulatory authorities or courts deem our contractual provisions unfair, unenforceable or invalid under applicable consumer protection laws, our business operations and financial condition may be materially and adversely affected.

Some students may decide to register for our online or mobile platform and attend our courses from mainland China, which may be deemed by government authorities in mainland China as circumventing the restrictions on after-school tutoring taught by foreign tutors to K-12 students in mainland China. If the government authorities in mainland China take actions against us, our business and operations could be materially and adversely affected.

The General Office of State Council and the General Office of Central Committee of the Communist Party of China jointly promulgated the Alleviating Burden Opinion on July 24, 2021, which sets out a series of operating requirements on after-school tutoring institutions. The Alleviating Burden Opinion and its subsequently adopted implementation measures prohibited our historically offered online tutoring services taught mainly by independently contracted foreign tutors to K-12 students in mainland China.

In response to the regulatory developments in the private education sector in mainland China since mid-2021, we have divested our China Mainland Business and are completely focused on international markets. After the divestiture of our China Mainland Business, we started to offer English courses to students in countries and regions outside of mainland China. If students from mainland China wish to access our course offerings, they may register for our online or mobile platform and attend our courses from mainland China. For example, students may by-pass our geolocation settings to register for and attend our courses. There are no comprehensive methods to prevent students in mainland China from purchasing and using our platform, and our ability to adopt technological safeguards are limited. If students from mainland China register for or use our platform for English courses, we and our operations may be deemed by the government authorities in mainland China to circumvent the restrictions on after-school tutoring to K-12 students in mainland China.

28

Table of Contents

We rely on third-party distributors in certain markets, and their failure to effectively market and distribute our products and services, or any deterioration in our relationships with them, could materially and adversely affect our business, financial condition, results of operations and prospects.

In certain jurisdictions, we rely on third-party distributors to market, sell and, in some cases, facilitate the delivery of our products and services because local laws, regulations, licensing requirements or other restrictions limit or prohibit our ability to do so directly. These arrangements are an important part of our strategy for accessing markets that we might not otherwise be able to serve directly or could only serve at greater cost and regulatory burden. As a result, our ability to generate revenue and expand in those markets depends in part on the performance, compliance and financial condition of these distributors.

We have limited control over the manner in which our distributors market and sell our products and services. Our distributors may fail to devote sufficient resources to promoting our offerings, may prioritize competing products or services, or may adopt pricing, marketing or other business practices that are inconsistent with our strategy or that harm our brand and reputation. In addition, if our distributors fail to comply with applicable laws and regulations, including those relating to online education, data privacy, consumer protection, foreign exchange and cross-border transactions, we could be subject to regulatory scrutiny, fines, sanctions, reputational harm or other liabilities.

Our distribution agreements may be terminated, may expire without renewal, or may be renewed only on less favorable terms. We may not be able to identify and engage replacement distributors in a timely manner, on acceptable terms, or at all. In addition, disputes may arise with our distributors regarding pricing, performance obligations, exclusivity, territory, intellectual property rights or termination rights, and such disputes could be costly and divert management’s attention and resources.

We are also exposed to risks relating to the financial condition and operational stability of our distributors. If a distributor experiences financial difficulties, fails to remit payments collected on our behalf, or otherwise becomes unable to perform its obligations, our business, cash flows and operating results in the affected market could be adversely affected. If we are unable to maintain effective distribution relationships in existing markets or establish new ones in additional markets, our business, financial condition, results of operations and prospects could be materially and adversely affected.

Our mainland China subsidiaries are subject to restrictions on paying dividends or making other payments to us, which may restrict our ability to satisfy our liquidity requirements.

We are a holding company incorporated in the Cayman Islands and conduct part of our operations, which pertains to research and development, administration and sales and marketing, through our mainland China subsidiaries. We derive revenues from our business conducted through our subsidiaries. However, there is no assurance that we would not need dividends and other distributions on equity from our mainland China subsidiaries to satisfy our liquidity requirements. Current mainland China regulations permit our mainland China subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our mainland China subsidiaries are required to set aside at least 10% of their respective accumulated after-tax profits each year, if any, to fund statutory reserve funds until the total amount set aside reaches 50% of their respective registered capital. Our mainland China subsidiaries may also allocate a portion of its after-tax profits based on mainland China accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cash dividends. Furthermore, if our mainland China subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of our subsidiaries to distribute dividends to us may restrict our ability to satisfy our liquidity requirements.

In addition, the PRC Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated.

​

29

Table of Contents

The M&A Rules and certain other regulations of mainland China establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in mainland China.

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an overseas special purpose vehicle formed for listing purposes through acquisitions of mainland China domestic companies and controlled by mainland China companies or individuals to obtain the approval of the CSRC, prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. In September 2006, the CSRC published a notice on its official website specifying documents and materials required to be submitted to it by a special purpose vehicle seeking CSRC approval of its overseas listings.

The M&A Rules discussed in the preceding paragraph and other PRC regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex. Mergers, acquisitions or contractual arrangements that allow one market player to take control of or to exert decisive impact on another market player must also be notified in advance to the State Administration of Market Regulation when the threshold under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings last amended by the State Council of the PRC in January 2024 is triggered. In addition, the Measures for the Security Review of Foreign Investment jointly issued by the National Development and Reform Commission and Ministry of Commerce of the PRC provides that foreign investors or relevant parties in the PRC must submit a security review application to the office of the working mechanism before making the following investments: (i) investing in fields related to national defense security, such as military industry and military industry support, as well as investing in areas surrounding military facilities and military industry facilities; and (ii) investing in important agricultural products, important energy and resources, major equipment manufacturing, important infrastructure, important transportation services, important cultural products and services, important information technology and internet products and services, important financial services, key technologies, and other important fields that involve national security, and acquiring control over the target enterprise.

In the future, we may expand our operations in mainland China through acquisition. Complying with the requirements of the above-mentioned regulations and other rules to complete such transactions could be time consuming, and any required approval processes, including obtaining approval from the Ministry of Commerce or its local counterparts may delay or inhibit our ability to complete such transactions. Our ability to expand our operations in mainland China through future acquisitions would as such be materially and adversely affected.

The enforcement of the Labor Contract Law and other labor-related regulations in mainland China may adversely affect our business and our results of operations in China.

Our research and development team, administrative team and part of our sales and marketing team are based in mainland China, which subjects us to labor laws and regulations in mainland China. The PRC Labor Contract Law was issued on June 29, 2007, and was later amended on December 28, 2012. It has reinforced the protection of employees who, under the PRC Labor Contract Law, have the right, among others, to have written labor contracts, to enter into labor contracts with no fixed terms under certain circumstances, to receive overtime wages and to terminate or alter terms in labor contracts. According to the PRC Social Insurance Law, which became effective on July 1, 2011 and was amended on December 29, 2018, and the Administrative Regulations on the Housing Funds, which became effective on April 3, 1999 and was last amended on March 24, 2019, companies operating in mainland China are required to participate in pension insurance, work-related injury insurance, medical insurance, unemployment insurance, maternity insurance and housing funds plans, and the employers must pay all or a portion of the social insurance premiums and housing funds for their employees.

As the laws and regulations in the PRC are designed to enhance labor protection, we expect our labor costs will continue to increase. In addition, as the interpretation and implementation of these laws and regulations are still evolving, our employment in China practice may not at all times be deemed in compliance with the new laws and regulations. If we are subject to severe penalties or incur significant liabilities in connection with labor disputes or investigations, our business and results of operations may be adversely affected in China.

30

Table of Contents

PRC regulations relating to foreign exchange registration of international investment by mainland China residents may subject our mainland China resident beneficial owners or our mainland China subsidiaries to liability or penalties, limit our ability to inject capital into these subsidiaries, limit mainland China subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.

A series of circulars promulgated by government authorities require mainland China residents to register with qualified banks in connection with their direct establishment or indirect control of an offshore entity, for the purpose of international investment and financing, with such mainland China residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, which is referred to in SAFE Circular 37 as a “special purpose vehicle.” In the event that a mainland China resident holding interests in a special purpose vehicle fails to complete the required SAFE registration, the mainland China subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its mainland China subsidiaries. Furthermore, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls.

We cannot assure you that all of our shareholders or beneficial owners who are mainland China residents will at all times comply with, or in the future make or obtain any applicable registrations or approvals required by foreign exchange regulations. Mr. Jack Jiajia Huang and Ms. Ting Shu, who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being mainland China residents have completed the initial foreign exchange registrations, amended their registrations to reflect our corporate restructuring in November 2014. In addition, we may not at all times be fully aware or informed of the identities of all our shareholders or beneficial owners that are required to make such registrations, and we may not be able to compel them to comply with all applicable foreign exchange regulations. The failure or inability of such individuals to comply with the registration procedures set forth in these regulations may subject us to fines or legal sanctions, restrictions on our cross-border investment activities, or obtain foreign-exchange-dominated loans from our company, or prevent us from making distributions or paying dividends. As a result, our business operations and our ability to make distributions to you could be materially and adversely affected.

The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our offshore offerings in the future under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.

On February 17, 2023, the CSRC promulgated the Overseas Offering and Listing Measures and published a series of guidance rules and Q&As in connection with the implementation of the Overseas Offering and Listing Measures. These regulations established a filing-based regime to regulate overseas offerings and listings by PRC domestic companies. According to regulations, an overseas offering of securities by a PRC domestic company, either in direct or indirect manner, has to be filed with the CSRC. For more details of the New Filing Rules, please refer to “Item 4. Information on the Company—B. Business Overview—Government Regulations—PRC Regulations—Regulations Relating to Overseas Listing and M&A Rules.”

Under the current PRC laws, rules and regulations, we are subject to the following test in determining whether we and our mainland China subsidiaries are subject to the filing procedures with the CSRC: (i) whether our mainland China subsidiaries account for more than 50% of our operating revenue, profits, total assets or net asset in our audited consolidated financial statements for the most recent completed fiscal year, and (ii) whether the majority of our senior management are Chinese citizens or domiciled in mainland China, or the key aspects of our business activities are conducted in mainland China, or our main places of operations are located in mainland China. Moreover, according to the applicable rules and regulations, the determination of the overseas offerings and listings by domestic companies will be conducted on a “substance over form” basis.

​

31

Table of Contents

If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, are required for our offshore offerings or capital raising activities, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected. In addition, there are uncertainties with regard to whether any report filed with the CSRC after the occurrence of certain material corporate events will be subject to any further action from the CSRC in the event that our future offshore offerings and capital raising activities are subject to the regulatory regimes of the CSRC or other PRC government authorities. Any failure to obtain or delay in obtaining such approval or completing such filing procedures for our offshore, offerings, capital raising activities or certain material corporate events, or a rescission of any such approval or filing if obtained by us, would subject us to sanctions by the CSRC or other PRC regulatory authorities for failure to seek CSRC approval or filing or other government authorization for our offshore offerings, capital raising activities or certain material corporate events. These regulatory authorities may impose fines and penalties on our operations in mainland China, limit our operating privileges in mainland China, delay or restrict the repatriation of the proceeds from our offshore offerings into mainland China or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our listed securities. The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offshore offerings or capital raising activities before settlement and delivery and further actions of the shares offered or take any actions regarding our material corporate events. Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement, delivery and further actions may not occur. In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring that we obtain their approvals or accomplish the required filing or other regulatory procedures for our prior offshore offerings or capital raising activities, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our listed securities.

Risks Related to Our ADSs

The trading prices of our ADSs have fluctuated and may be volatile, which could result in substantial losses to investors.

The market price and trading volume for our ADSs may be volatile and subject to wide fluctuations in response to factors including, but not limited to, the following:

32

Table of Contents

Any of these factors may result in large and sudden changes in the volume and price at which our ADSs will trade. In addition, the global financial crisis and the ensuing economic recessions in many countries have contributed and may continue to contribute to extreme volatility in the global stock markets. Moreover, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies like us. These broad market and industry fluctuations may adversely affect operating performance. Volatility or a lack of positive performance in our ADS price may also adversely affect our ability to retain key employees, some of whom have been granted restricted share units under our share incentive plan.

There can be no assurance that we will not be a passive foreign investment company for U.S. federal income tax purposes for any taxable year, which could subject U.S. Holders of our ADSs or ordinary shares to significant adverse U.S. federal income tax consequences.

A non-United States corporation, such as our company, will be classified as a passive foreign investment company, or a PFIC, for U.S. federal income tax purposes for any taxable year, if either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income, or the asset test.

Although we do not believe that we were a PFIC for the taxable year ended December 31, 2025, no assurances can be given that we will not be a PFIC for the current or any future taxable year because the determination of whether we will be or become a PFIC is a factual determination made annually that will depend, in part, upon the characterization and composition of our income, assets and liabilities. Additionally, fluctuations in the market price of our ADSs may cause us to be classified as a PFIC for the current or future taxable years because the value of our assets for purposes of the asset test, including the value of our goodwill and unbooked intangibles, may be determined by reference to the market price of our ADSs from time to time (which may be volatile). The market price of our ADSs may continue to fluctuate considerably and, consequently, we cannot assure you of our PFIC status for any taxable year. Furthermore, the composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets. Under circumstances where our revenue from activities that produce passive income significantly increase relative to our revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming classified as a PFIC may substantially increase.

If we were to be or become classified as a PFIC in any taxable year, a U.S. Holder (as defined in “Taxation—United States Federal Income Taxation”) may incur significantly increased U.S. federal income tax on gain recognized on the sale or other disposition of our ADSs or ordinary shares and on the receipt of distributions on the ADSs or ordinary shares to the extent such gain or distributions is treated as an “excess distribution” under the U.S. federal income tax rules. Further, if we are classified as a PFIC for any year during which a U.S. Holder holds our ADSs or ordinary shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or ordinary shares. You are urged to consult your tax advisor concerning the U.S. federal income tax consequences of holding and disposing of ADSs if we are or become classified as a PFIC. For more information, see “Item 10. Additional Information—E. Taxation—United States Federal Income Taxation—Passive Foreign Investment Company Considerations” and “Item 10. Additional Information—E. Taxation—United States Federal Income Taxation—Passive Foreign Investment Company Rules.”

33

Table of Contents

If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our ADSs, the market price for our ADSs and trading volume could decline.

The trading market for our ADSs will be in part influenced by research reports and ratings that industry or securities analysts or ratings agencies publish about us, our business and the online education market in mainland China in general. As of the date of this annual report, there is no analyst coverage of our company. We do not have any control over these analysts or agencies as to whether they will cover us, whether such coverage will continue. If the analysts or agencies previously covered us who do not resume to cover us, or no new analysts or agencies begin to cover us, we may lose visibility in the financial markets, which could cause the market price or trading volume for our ADSs to decline.

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

Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to ten votes per share, with Class A and Class B ordinary shares voting together as one class on all matters subject to a shareholders’ vote. As of March 18, 2026, our Class B ordinary shares represent 28.7% of our total outstanding ordinary shares on an as-converted basis and entitle their holders to 80.1% of our total voting power.

As a result of the dual class share structure and the concentration of ownership, holders of our Class B ordinary shares have substantial influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. They may take actions that are not in the best interest of us or our other shareholders. This concentration of ownership may discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of our ADSs. This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial. For more information regarding our principal shareholders and their affiliated entities, see “Item 7. Major Shareholders and Related Party Transactions.”

We cannot guarantee that any share repurchase program will be fully consummated or that any share repurchase program will enhance long-term shareholder value, and share repurchases could increase the volatility of the trading price of the ADSs and could diminish our cash reserves.

On December 8, 2025, our board of directors authorized a share repurchase program, under which we may repurchase up to US$10 million worth of our shares, including in the form of ADS, over the next 12 months, effective until December 7, 2026. Although our board of directors has authorized this program, we are not obligated to purchase any specific dollar amount or to acquire any specific number of shares. The timing and amount of repurchases, if any, will depend upon several factors, including market, business conditions, the trading price of the ADSs or our shares and the nature of other investment opportunities. Our board of directors also has the discretion to authorize additional share repurchase programs in the future.

Our share repurchase program could affect the price of the ADSs and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of the ADSs. For example, the existence of a share repurchase program could cause the price of the ADSs to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for the ADSs. Additionally, our share repurchase program could diminish our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategic opportunities. There can be no assurance that any share repurchases will enhance shareholder value because the market price of the ADSs or our shares may decline below the levels at which we determine to repurchase the ADSs or our shares. Although our share repurchase program is intended to enhance long-term shareholder value, there is no assurance that it will do so and short-term share price fluctuations could reduce the program’s effectiveness.

34

Table of Contents

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

Sales of substantial amounts of our ADSs in the public market, or the perception that these sales could occur, could adversely affect the market price of our ADSs and could materially impair our ability to raise capital through equity offerings in the future. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our ADSs. In addition, certain holders of our existing shareholders are entitled to certain registration rights, including demand registration rights, piggyback registration rights, and Form F-3 or Form S-3 registration rights. Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration. Sales of these registered shares in the public market, or the perception that such sales could occur, could cause the price of our ADSs to decline.

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

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

The Cayman Islands courts are also unlikely:

There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.

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

Judgments obtained against us by our shareholders may not be enforceable.

We are a Cayman Islands company and all of our assets are located outside of the United States. The majority of our current operations are conducted in Asia. In addition, a majority of our current directors and officers are nationals and residents of countries other than the United States. Specifically, Mr. Jack Jiajia Huang, Ms. Ting Shu and Mr. Xiaoguang Wu are located in Hong Kong and Cindy Chun Tang is located in mainland China. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the United States federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of mainland China may render you unable to enforce a judgment against our assets or the assets of our directors and officers.

35

Table of Contents

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

As a holder of our ADSs, you will only be able to exercise the voting rights with respect to the underlying Class A ordinary shares in accordance with the provisions of the deposit agreement. Under the deposit agreement, you must vote by giving voting instructions to the depositary. Upon receipt of your voting instructions, the depositary will vote the underlying Class A ordinary shares in accordance with these instructions. You will not be able to directly exercise your right to vote with respect to the underlying shares unless you withdraw the shares. Under our amended and restated memorandum and articles of association, the minimum notice period required for convening a general meeting is ten clear days. When a general meeting is convened, you may not receive sufficient advance notice to withdraw the shares underlying your ADSs to allow you to vote with respect to any specific matter. If we ask for your instructions, the depositary will notify you of the upcoming vote and will arrange to deliver our voting materials to you. We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise your right to vote and you may have no legal remedy if the shares underlying your ADSs are not voted as you requested.

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

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

We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we publish our results on a quarterly basis as press releases, distributed pursuant to the rules and regulations of the NYSE American. Press releases relating to financial results and material events are also furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC is less extensive and less timely than that required to be filed with the SEC by United States domestic issuers.

Furthermore, as a Cayman Islands company listed on the NYSE American, we are permitted to elect to rely, and have relied, on the home country exemptions afforded to foreign private issuers under NYSE American Company Guide, including:

36

Table of Contents

As a result, you may not be afforded the same protections or information, which would be made available to you, were you investing in a United States domestic issuer.

You may not receive dividends or other distributions on our Class A ordinary shares and you may not receive any value for them, if it is illegal or impractical to make them available to you.

The depositary of our ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on Class A ordinary shares or other deposited securities underlying our ADSs, after deducting its fees and expenses. You will receive these distributions in proportion to the number of Class A ordinary shares your ADSs represent. However, the depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act but that are not properly registered or distributed under an applicable exemption from registration. The depositary may also determine that it is not feasible to distribute certain property through the mail. Additionally, the value of certain distributions may be less than the cost of mailing them. In these cases, the depositary may determine not to distribute such property. We have no obligation to register under U.S. securities laws any ADSs, ordinary shares, rights or other securities received through such distributions. We also have no obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to holders of ADSs. This means that you may not receive distributions we make on our ordinary shares or any value for them if it is illegal or impractical for us to make them available to you. These restrictions may cause a material decline in the value of our ADSs.

You may not be able to participate in rights offerings and may experience dilution of your holdings.

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

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

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

​

37

Table of Contents

ITEM 4.INFORMATION ON THE COMPANY

51Talk Online Education Group began to provide English education services in July 2011, initially in mainland China. In order to facilitate international capital raising of our company, we incorporated China Online Education Group, or 51Talk, to become our offshore holding company under the laws of the Cayman Islands in November 2012.

In October 2014, 51Talk English International Limited, or COE HK Co, was incorporated with limited liability in Hong Kong. In the Philippines, we incorporated two limited liability companies: China Online Innovations Inc., or Philippines Co II, and On Demand English Innovations Inc., or Philippines Co III, which were incorporated in October 2014 and January 2016, respectively. Furthermore, we began to enter into employment agreements with office-based tutors and other full-time employees in the Philippines through Philippines Co II and with the free trial tutors and support staff through Philippines Co III.

On June 10, 2016, our ADSs began trading on the NYSE under the ticker symbol “COE.” We sold a total of 2,760,000 ADSs (reflecting the full exercise of the over-allotment option by the underwriters to purchase an additional 360,000 ADSs), representing 41,400,000 Class A ordinary shares, at an initial offering price of US$19.00 per ADS. Concurrently with our initial public offering, we also issued 11,842,105 and 3,947,368 Class A ordinary shares at a price of US$19.00 per share to DCM (through two affiliated entities) and Sequoia (through SCC Growth I Holdco A, Ltd.), respectively, through private placements.

In July 2018, Helloworld Online Education Group, or Helloworld Online Cayman, was incorporated under the Laws of the Cayman Islands as a wholly owned subsidiary of our company. In August 2018, Helloworld Online Education Group (HK) Limited, or Helloworld Online HK, was incorporated in Hong Kong as a wholly owned subsidiary of Helloworld Online Cayman. Beijing Helloworld Online Technology Co., Ltd., or Helloworld Online, was set up in September 2018 as a wholly owned subsidiary of Helloworld Online HK in mainland China.

On June 17, 2020, we completed a registered follow-on public offering, where we issued and sold 327,140 ADSs (including 27,140 ADSs sold from the exercise of over-allotment option) and certain selling shareholders sold 795,542 ADSs (including 95,542 ADSs sold from the exercise of over-allotment option), at a public offering price of US$19.00 per ADS. We received aggregate gross proceeds from the follow-on public offering of approximately US$6.2 million.

In December 2021, Helloworld Online Education Pte. Ltd. was incorporated as a wholly owned subsidiary of our company to operate the international business in Singapore.

In June 2022, we entered into a definitive share purchase agreement, dated June 24, 2022, with Dasheng Holding (HK) Limited, or Dasheng, an entity controlled by Mr. Jack Jiajia Huang, our chairman and chief executive officer, pursuant to which Mr. Jack Jiajia Huang, through Dasheng, acquired our China Mainland Business, i.e., all of our online English tutoring businesses in mainland China, including all associated liabilities and assets, for US$1. This transaction was completed on June 30, 2022. Thereafter, China Online Education (HK) Limited, or COE HK CO I, and its subsidiaries, and the VIEs, which our Cayman Islands holding company was considered the primary beneficiary of for accounting purposes and consolidated as required by Accounting Standards Codification topic 810, Consolidation, such as Dasheng Zhixing and its subsidiaries and branches, 51Talk English Philippines Corporation, or Philippines Co I and Shenzhen Dasheng Zhiyun Technology Co., Ltd., or Dasheng Zhiyun, were all divested from us. See “Item 4. Information on the Company—C. Organizational Structure” for further details.

To support our global expansion, we have established wholly-owned subsidiaries and operations in local markets, including Malaysia (2022), Saudi Arabia (2023), Jordan (2023), the United Arab Emirates (2024) and Vietnam (2025). We also operate in Thailand (2022, as a non-wholly-owned subsidiary).

In September 2022, to keep pace with our international business strategy, we changed the name of our offshore holding company from China Online Education Group to 51Talk Online Education Group, which was approved by way of special resolution at our annual general meeting.

In November 2022, we terminated the contractual arrangements with Beijing Dasheng Helloworld Technology Co., Ltd., or Dasheng HelloWorld, and since then we no longer have any consolidated VIE in mainland China.

38

Table of Contents

In December 2022, we changed the ratio of our American depositary shares, or ADSs, to Class A ordinary shares from one ADS representing fifteen Class A ordinary shares to one ADS representing sixty Class A ordinary shares. The intention of the ADS ratio change was to prepare our company for a contemplated transfer of the listing of our ADSs from the New York Stock Exchange to a listing venue that more fits our company’s size and stage.

In May 2023, we transferred the listing of our ADSs from the New York Stock Exchange to NYSE American LLC, or the NYSE American.

Historically, we provided online tutoring services taught mainly by independently contracted foreign tutors to K-12 students in mainland China, which have been prohibited by the Alleviating Burden Opinion promulgated on July 24, 2021, and its implementation measures. Upon the consummation of the divestiture of the China Mainland Business at the end of June 2022, we ceased providing online tutoring services in China and concentrate on expanding international business. After the divestiture, our business is no longer directly affected by the Alleviating Burden Opinion and its implementation measures, and we currently focus on providing English education to foreign students outside of mainland China.

SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on www.sec.gov. You can also find information on our corporate website http://ir.51talk.com/. The information contained on our website is not a part of this annual report.

We are a tutor-centric online education platform, with core expertise in language education. Our mission is to make quality education accessible and affordable. Recognizing the strong demand for improving language proficiency and the lack of effective and affordable solutions, our founders started with English education as the first step of our journey, and further transitioned to English and Chinese education in an increasingly globalized environment. Jack, our founder and CEO, has a vision for an effective but affordable language education product.

English education and Chinese education as a second language traditionally focus on test preparation instead of improving English or Chinese proficiency, such as English and Chinese communication skills. To address this unmet need, we have developed proprietary online and mobile education platforms that enable students to take live interactive English and Chinese lessons, on demand, fostering the development of all aspects of English and Chinese proficiency.

We connect our students with a large pool of highly qualified English and Chinese tutors that we have assembled using a shared economy approach. Once our tutors have gone through our rigorous selection and training process, we assign them to classes with different schedules, considering their own scheduling availability, at appropriate locations of their choice. This shared economy approach has allowed us to quickly build a large pool of tutors in a cost-effective manner.

Prior to the second half of 2021, we focused primarily on offering one-on-one lessons to K-12 students in mainland China, connecting them with our pool of foreign tutors. In response to the regulatory developments in the private education sector in mainland China since mid-2021, we have now fully divested from the China Mainland Business and are completely focused on international markets by continuing to leverage our expertise in English education and our pool of English tutors. Our key business offering under our international business is one-on-one English lessons taught by English tutors to students in countries and regions outside of mainland China.

We started our international business in the second half of 2021 and currently provide English course offerings in Hong Kong, Thailand, the Middle East and certain other countries and regions. In these markets, we mainly conduct one-on-one online live English courses, targeting children aged five to twelve. In Hong Kong, we offer our packages with a wide range of prices from US$680 to US$2,200. In Thailand, we offer our packages with a wide range of prices from US$365 to US$2,640, catering to the varied spending power of users. In the Middle East, we offer our package with a wide range of prices from US$528 to US$2,960, catering to the varied spending power of users.

We expect that in 2026, we will further deepen the penetration of our one-on-one online English lesson business in the countries and regions where we are currently operating as well as explore new markets. We will further upgrade and refine our English course offerings to better meet the demands of local users in terms of localized course content, payment channels and customer services. We strive to provide more English learners with the opportunity to communicate with the world through our platform.

39

Table of Contents

We employ student and teacher feedback and data analytics to deliver a personalized learning experience. Our platform analyzes tutors’ teaching aptitudes, feedback and rating from students as well as background, and recommends suitable tutors to students according to their respective characteristics and learning objectives. The large pool of tutors not only allows us to accommodate and address students’ individual English proficiency level and learning behaviors and needs, but also ensures that we are able to afford students’ scheduling flexibility.

We develop and tailor our proprietary curriculum specifically to our interactive lesson format and our goal of building an interactive and immersive English learning environment. We have designed a holistic learning solution that enhances effective learning through the integration of live lessons, practice and mentoring. Our live lessons allow for frequent interactions between students and tutors, which is a key factor in improving English communication skills. Prior to taking lessons, students preview course materials using exercises and illustrations, supported by a pronunciation recognition and rating system. Assessment includes post-lesson quizzes and level advancement exams, both of which help students better assess their learning outcome and identify areas for improvement. Our Classic English Junior and Classic English lesson offerings in countries and regions outside of mainland China focus on improving students’ English proficiency, especially English communication skills.

Our proprietary online and mobile education platforms, particularly our Air Class platform, are critical to students’ learning experience. The Air Class platform integrates a number of features that allows us to closely simulate, and in some ways surpass, a traditional classroom experience. Our 51Talk mobile app, which serves as an integral part of our students’ overall learning experience, allows students to book and manage lessons, access pre-lesson preparation and review materials, and take lessons at locations of their choice. Approximately 99.7% of our active students utilized our mobile app in 2025.

Our net revenues from international business increased from US$27.1 million in 2023 to US$50.7 million in 2024, and further to US$95.6 million in 2025. Our gross billings from international business increased from US$39.9 million in 2023 to US$69.6 million in 2024, and further to US$127.6 million in 2025. Such increase in our gross billings in 2025 is mainly due to the increase in the number of paying students. We define gross billings for a specific period as the total amount of cash received and receivable from third party payment of platforms for the sale of course packages and services in such period, net of the total amount of refunds in such period. We incurred net loss from international business of US$15.0 million, US$7.3 million and US$16.9 million in 2023, 2024 and 2025, respectively.

The following table sets forth our key operating data of international business for the years indicated:

Notes:

40

Table of Contents

Learning Process

Our holistic learning process consists of four aspects: live lessons, effective practice, assessment and mentoring. Our one-on-one program comprises AI-empowered knowledge preview and AI-empowered post-lesson practices and assessment.

In order to recommend the proper course level that a new student should take, we first assess the student’s English proficiency, using an 11-level scale for K-12 students and a 16-level scale for post-secondary students. New students will answer a few questions online to assess their levels of proficiency in English.

Once a student is enrolled, he or she first picks the courses based on our recommendation. For one-on-one class, each student can select the timing for each lesson according to individual schedule. Once a lesson is scheduled, the student has access to AI-empowered knowledge preview lessons and self-study course materials. After each lesson, the student is encouraged to assess their learning outcome by taking the post-lesson quizzes.

Live lessons

One-on-one lessons with foreign tutors

We believe one-on-one live lessons foster the interactions between students and tutors as well as afford students tutors’ individual attention, which are key to an effective English learning experience. Each student has access to a large pool of qualified foreign tutors. Students have the flexibility to select tutors based on a wide range of attributes, including their rating and feedback from other students, as well as teaching aptitudes and characteristics. We also cross reference students’ English proficiency, learning progression, age group, profession, gender and platform engagement against certain traits of our teacher base to provide each student an individualized shortlist of most suitable tutors.

Lessons are typically 25 minutes long. Tutors and students interact using real-time audio and visual streaming technology. Our proprietary Air Class platform allows students to see the teacher and view the interactive white boards and course materials, on their desktop, laptop or mobile device. This makes the instructional process more efficient and the learning experience more interactive.

Our tutors provide instructions using our standardized curriculum. Within the framework of our standardized course materials, our one-on-one lesson format allows our tutors to adjust the pace of each lesson according to student performance and reaction, thus accommodating students across all learning curves.

In order to give students a consistent and seamless learning experience from different tutors, after each lesson tutors record in memos the strengths of the students, summaries of knowledge points and areas that need improvement and other information that would be helpful to tutors of future lessons. These memos allow subsequent tutors to be briefed on the student’s learning background and to continue to provide the student an adaptive and effective learning experience. Furthermore, these memos are also made available to students as a study tool.

A substantial majority of our foreign tutors are Filipino tutors.

Effective Practice

Students are required to preview course materials through the AI-empowered knowledge preview. Pre-lesson learning is particularly important, as such process allows students to engage in more productive interactions with tutors or other students during live lessons.

Our AI-empowered knowledge preview aims to develop students’ English speaking, listening, reading and writing skills. It contains preview sessions of subsequent All-round Proficiency lessons, intriguing students’ curiosity to the following main lessons. Our AI-empowered knowledge preview also features audio functions that allow students to hear the correct pronunciation of key vocabulary words and model sentences. Students can record their pronunciation of individual words to be graded by our system. To build a more instinctive understanding of the English language for our students, our pre-lesson studying system relies on graphic illustrations to explain the meaning of vocabulary and phrases.

41

Table of Contents

Tutors

Our teaching staff is critical to the quality of our programs and to promoting our brand and reputation. We have assembled a large pool of tutors in the Philippines. Our tutors deliver lessons based on their individual availability, at appropriate locations of their choice, and are paid according to the number of lessons they teach. Tutors who deliver paid lessons are generally engaged by us as independent contractors. As of December 31, 2025, we had approximately 9.8 thousand foreign tutors qualified to deliver lessons on our platform.

Teacher engagement

The individual skill sets and backgrounds of prospective tutors, combined with our rigorous selection and training program, have enabled us to build a team of passionate and patient tutors who are highly qualified to assist students in meeting their learning objectives.

We attract applicants through various online social media platforms and career websites and regularly participate in job fairs. We also reach out to prospective tutors through major job posting portals. Our tutors are attracted to our platform as it allows them to utilize their English skills to receive competitive service fees and gives them the opportunity to interact with students.

To ensure the quality of our tutors, we seek tutors capable of, and preferably experienced in, delivering effective instruction. Given the interactive nature of our live lessons, we seek to engage tutors who have a strong command of the English language and good communication skills.

Tutor training and development

Through the ongoing enhancement and refinement of our teaching methods and teacher training, our tutors are able to develop the skills necessary to more effectively communicate key learning points from our proprietary curriculum to our students. We believe that empowering our tutors with these skills is essential to maintaining our leading position as online and mobile education platforms and improving student experience and ensuring that our students receive quality education.

Our newly engaged tutors are generally required to undergo standard training programs that focus on our curriculum and teaching skills in a live lesson setting, as well as the specific learning behavior and objectives to a typical English-learning student. Our trainers also provide customized training based on a new teacher’s educational background and previous professional experience. New tutors also learn how to use our proprietary Air Class platform and how it can improve their teaching effectiveness. After completing our new teacher training program, the candidates will be assessed by our team of experienced evaluators before they are allowed to offer lessons on our platform.

To ensure our tutors continue to improve, we offer standardized training modules based on their progress and experience level on our platform. Our tutors are ranked according to a multi-star scale and most of them begin their careers as one-star tutors. In order to advance through our system, tutors must maintain high student ratings and complete the training modules. Our training program is updated and customized based on changes to our curriculum and feedback from our quality assurance team and students. We also operate a quality assurance team to monitor teacher performance, review recordings of lessons based on random samplings and handle student complaints.

We plan to maintain this level of commitment to our tutors as we expand our platform and develop our tutors’ capabilities through partnerships with training and certification bodies in the future.

Tutor evaluation and promotion

We collect student feedback on our tutors on a regular basis. Each teacher’s rating and student reviews are publicly available to students. Tutors with higher ratings and more favorable reviews tend to earn higher incomes as their teaching lessons are signed up by students more quickly.

​

42

Table of Contents

We offer our tutors career advancement prospects with competitive service fees. The service fees of our tutors are based on student reviews, number of lessons taught and the completion of on-going training. With each promotion within the multi-tiered system, tutors receive a pay raise for each lesson taught. We also offer our tutors discretionary merit-based incentive bonuses, as well as opportunities for tutors who aspire to further their career in teacher training or course development based on their performance and capability.

Course Offerings

In addition to building general proficiency in listening, speaking, reading and writing skills, our proprietary course materials have a special emphasis on developing English communication and reading skills. Each of our courses for one-on-one lessons is broken down into a 25-minute session, and for small group lessons is broken down into two 25-minute sessions, both highly interactive and with clear learning objectives. The materials for our courses are designed for teaching settings that are conducted in live audio-visual lesson format.

We currently offer two flagship courses, namely Classic English Junior and Classic English. We complement our flagship offerings with AI-empowered knowledge preview and AI-empowered reading lessons.

Classic English Junior and Classic English

Classic English Junior is taught by foreign tutors and taken by K-12 students in countries and regions outside of mainland China. After the Alleviating Burden Opinion was released in July 2021, we stopped selling Classic English Junior course to K-12 students in mainland China. Classic English is taught by foreign tutors and taken by post- secondary students outside of mainland China. Our proprietary Classic English curriculum and course materials were developed under the guidance of the Common European Framework of Reference for Languages, also known as the CEFR, and are grouped into six general stages of English proficiency, splitting across a total of 16 levels. In addition to being guided by the CEFR, our proprietary Classic English Junior curriculum and course materials are developed under the further guidelines of the Content and Language Integrated Learning teaching method, and are split across 11 levels (from LS, L0 to L9) in aggregate.

Other Courses

In response to strong demand from local users, we also launched the “All-round Mandarin Chinese Course” for children aged four to 12 in Hong Kong, which caters to the local demand for learning Mandarin language skills.

Course Content Development

Team

We have dedicated course content development teams based in mainland China and some other countries and regions where we operate employing a total of 24 professionals as of December 31, 2025. Our content development team members focus exclusively on developing, updating and improving our curriculum and course materials. We leverage the familiarity of our professionals in mainland China with the learning patterns of Chinese students to produce customized and high-quality course material for our students outside mainland China, meanwhile, our course development teams based in other regions tailor and optimize the courses in response to the specific needs of local students, ensuring that our teaching materials cater to the characteristics of different markets.

Process

Our Classic English Junior and Classic English course materials and content for substantially all of our popular specialty courses are developed in-house.

​

43

Table of Contents

We regularly and systematically update our existing curriculum to make them more effective and appealing to our students, and to adopt the latest English teaching methods. We also regularly engage in new course development in order to capture the demands created by evolving needs for English education. The feedback and market information we gather provide us with a wealth of resources for updating our existing course materials and developing new courses. For major updates to our flagship courses, we first pilot-test the new versions for several months to assess student and teacher satisfaction. We then broadly release such new versions on our platform after we have incorporated the feedback.

We regularly release updates to our course materials. We will continue to launch new courses in the future to meet the varied interests and English learning needs of our young students and to realize greater cross-selling opportunities.

Online Education Platform

Proprietary Air Class platform

We developed our proprietary Air Class platform, which includes innovative features that closely simulate, and in some ways surpass, a traditional classroom learning experience, such as the interactive white board that allows tutors to highlight in real-time specific text phrases or important points to students. Our Air Class platform integrates high quality video and audio streaming features to create an interactive learning experience for our students. Each aspect of our holistic learning solution is available through our Air Class platform. The Air Class platform is available online and through our mobile app.

Mobile app

Our mobile platform is an integral part of our students’ overall learning experience. Through our mobile app, we enhance the learning experiences of our students with better flexibility and higher frequency of engagement. It allows students to book and manage lessons, access pre-lesson preparation and review materials and take lessons over their mobile devices. It also supports live lessons with features specifically designed for mobile devices. We continually upgrade and optimize our mobile app to improve our student experience. Approximately 99.7% of our active students accessed our mobile platform at least once in 2025. We offer our mobile app on both iOS and Android.

Students

In 2023, 2024 and 2025, we had 51.9 thousand, 97.5 thousand and 176.7 thousand active students with general lesson consumption from international business, respectively. An “active student with general lesson consumption” for a specified period refers to a student who booked at least one paid lesson, excluding those students who only attended paid live broadcasting lessons or trial lessons. A lesson is considered “booked” when it is taken or when the student to such lesson is confirmed absent.

Student Services

We employ a service-oriented approach and devote significant resources to developing course-related support and services for our students.

Our technology support personnel are available during lesson hours to monitor and provide real-time support services to students encountering technical difficulties.

In addition to the student services described above, our general student service representatives counsel potential and existing students on our courses, assist in course-package purchases, handle student complaints and provide other support services. They are available online and by phone between 10:00 a.m. and 9:00 p.m., seven days a week on a rotation basis. Our dedicated general student service team had 17 individuals (including 9 full-time employees and 8 outsourced personnel). We engage student service personnel from candidates with good communication skills and student service ethics and provide on-the-job training for our new staffs. We conduct ongoing evaluations of our student service staff and provide periodic training to improve their skills.

​

44

Table of Contents

Furthermore, we have expanded our learner service capabilities. Our learning partners, serving as coaching guides, engage with learners and their parents through phone calls and local social media platforms preferred by users. They facilitate course bookings, pre-class preparations and post-class reviews, academic performance diagnostics, periodic learning summaries, resolution of learning-related disputes and inquiries, as well as user education. Our learning partner team had 271 individuals (including 48 full-time employees and 223 outsourced personnel) as of December 31, 2025. These efforts aim to increase class attendance and improve learners’ English proficiency. Additionally, we provide professional and tailored services to ensure that both parents and learners are satisfied with our products and services.

Sales and Marketing

Since the release of the Alleviating Burden Opinion, we have ceased our branding and marketing activities in mainland China and now we only promote our new business offering in countries and regions outside of mainland China. As a result, we have revamped our marketing model for the international markets. We marketed our platform through a combination of online and offline channels. For the online channel, we use advertising via content platforms. For the offline channel, we use promotions as well as hosting joint activities with brands from other segments.

Our tele-marketing teams follow up on sales leads by providing additional information and support and trying to convince prospective students to enroll in our free trial lessons. Our course consultants then follow up with prospective students who have taken our free trial lessons and promote course packages most suited to each student’s background, proficiency and learning objectives. In addition, we engage in various branding activities to promote brand awareness among prospective students.

Branding

We are focused on promoting our 51Talk brand and to increase the overall effectiveness of our sales and marketing efforts. Our 51Talk brand represents our K-12 one-on-one program.

Channels

Online channels

We place online and mobile advertisements mainly on search engines and conduct marketing on leading social media platforms and web portals in countries and regions outside of mainland China. We also place banner advertisements on popular internet education platforms and apps, as well as mobile news apps. As part of our efforts to increase K-12 enrollment in countries and regions outside of mainland China, we also place advertisements on online parenting community portals and regional information flow in order to reach a broader audience of parents of prospective students there.

Referrals

We have historically generated a significant percentage of our sales leads through word-of-mouth referrals by our students and parents. New enrollments through word-of-mouth referrals have benefited from the rapid growth in our student base, as well as our reputation, brand and the proven learning results of our students. We integrated social network functionalities into our mobile app and utilize social network platforms such as WeChat, Meta, Line, snapchat, WhatsApp, etc. to encourage post-secondary students to share their learning experience with their friends. We also promote our brand through referrals by our students and parents.

Offline channels

In certain countries and regions that we operate in, we place outdoor display advertisements in public including residential areas and transportation, as well as TV commercials.

Sales Process

The sales leads generated by our various marketing channels are initially handled by our tele-marketing teams. The primary function of our tele-marketing personnel is to encourage prospective students who have registered their information on our online and mobile platforms to sign-up for free trial lessons and to assist with the sign-up process.

45

Table of Contents

We offer free trial lessons to prospective students. In addition to giving prospective students a preview of our interactive learning experience, we also use free trial lessons to assess the English proficiency of prospective students. A majority of our free trial lessons are delivered by our free trial tutors, who are our full-time employees. We have a highly selective process for free trial tutors. Free trial tutors must also participate in regular training programs. A significant portion of the training programs for free trial tutors concerns salesmanship and client communication.

Once prospective students have completed their trial lessons, our dedicated course consultants will offer feedback on the results of their English proficiency assessment, as well as introduce our holistic learning solution to prospective students. Based on this assessment and the data we had gathered from student questionnaires, our course consultants recommend an appropriate starting level and provide advice as to the most appropriate course package and study plan for each prospective student. As of December 31, 2025, we had a total of 743 dedicated course consultants (including 183 full-time employees and 560 outsourced personnel).

After a student has purchased a course package, the student is assigned to an account manager, who provides personalized and ongoing support services. Our account managers track the English proficiency progress as well as the lesson booking and participation status of each student. Our account managers also assist students with future lesson bookings and course selection to increase their activity level on our platform and regularly communicate with our students to solicit their feedback on our education program, such as teaching quality and learning experience. As of December 31, 2025, we had a total of 430 account managers (including 70 full-time employees and 360 outsourced personnel). Our account manager team plays a critical role in increasing the course package upgrades and renewals among our students.

Students who took free or paid short-duration trial lessons, but who did not book any paid lesson, are not counted as “active students with general lesson consumption.”

Fees

We offer the following payment plans for our students:

Prepaid credit Packages. We offer a variety of prepaid credit packages to international students. We have prepaid credit packages with minimum monthly consumption of eight to fifteen credits in different countries and regions to help international students build study habits. To offer our students more options and especially during promotional campaigns, we also offer different types of prepaid credit packages with various number of credits.

We accept fee payments through bank transfer and major third-party online payment channels, including Airwallex, Stripe, Tabby, Tamara, Payermax, Checkout and 2C2P.

Competition

The international online language education services market is generally fragmented, rapidly evolving and highly competitive. We face competition in general language proficiency education, as well as in K-12 and other specialized areas of language education, from existing online and offline companies. We face competition from other companies that provide online language education as well as from those that provide traditional offline language education abroad. We also face competition from other online and mobile platforms or internet companies that plan to expand their business into language education. In addition, the competitive landscape is evolving with the emergence of technology-driven language learning solutions, including those incorporating artificial intelligence (AI), which add new dimensions to the market and compete for students’ attention.

We believe that the principal competitive factors in our markets include the following:

46

Table of Contents

We believe that we are well-positioned to effectively compete in the markets in which we operate on the basis of our innovative approach to online language education, immersive and interactive learning environment, scalable and efficient business model, extensive and high-quality teacher network, high course quality, strong course development capabilities and experienced management team. We also believe our strategy of integrating human-led instruction with AI-powered tools enhances the scalability of our offerings while maintaining the high-quality interaction that drives student outcomes, distinguishing us from platforms that rely solely on automated or purely traditional approaches. However, some of our current or future competitors may have longer operating histories, greater brand recognition, or greater financial, technical or marketing resources than we do. For a discussion of risks related to competition, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We face significant competition, and if we fail to compete effectively, we may lose our market share or fail to gain additional market share, which would adversely impact our business and financial conditions and operating results.”

Seasonality

Seasonal fluctuations have affected, and may affect our business in the future. Seasonal fluctuations affected our business when we focused on lessons for K-12 students in mainland China, and may continue to affect our business as we shifted to new countries and regions. Due to our limited operating history and the fact that we just shifted our focus from lessons for Chinese K-12 students to new business models and service offerings, the seasonal trends that we have experienced in the past may not be indicative of our future operating results. Our financial condition and results of operations for future periods may continue to fluctuate. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Our results of operations have been and may continue to be subject to seasonal fluctuations.”

Insurance

We do not maintain any liability insurance or property insurance policies covering students, equipment and facilities for injuries, death or losses due to fire, earthquake, flood or any other disaster, except for the liability insurance and property insurance policies for certain office in mainland China. We do not maintain business interruption insurance, nor do we maintain key-man life insurance. We maintain personal accident insurance and supplementary medical insurance for all employees after six months of employment and management in mainland China, in addition to government-mandated medical insurance. For employees in Malaysia, Thailand, Jordan and Saudi Arabia, we provide government-mandated medical and supplementary medical insurance. Uninsured injury or death to our staff, or damage to any of our equipment or buildings could have a material adverse effect on our results of operations. “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We have limited insurance coverage for our operations in the countries and regions where we operate our business, which could expose us to significant costs and business disruption.”

Government Regulations

Philippine Regulations

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

47

Table of Contents

Regulations on Data Privacy

The Republic Act No. 10173, or the Data Privacy Act of 2012, its implementing rules and regulations, and the issuances of the National Privacy Commission (the “NPC”) govern the processing of all types of personal information. The Data Privacy Act of 2012 applies to any natural or juridical person involved in the personal information processing such as the personal information controllers and processors who, although not found or established in the Philippines, use equipment that are located in the Philippines, or those who maintain an office, branch or agency in the Philippines, subject to certain exceptions. The Data Privacy Act of 2012 expressly requires that before a personal information controller or processor can collate, process, and then use or share personal data, the personal information controller or processor must have a lawful criterion or basis for processing, such as consent (which is defined as any freely given, specific, informed indication of will, whereby the data subject agrees to the collection and processing of his or her personal data). Such entity must also register with the NPC and appoint a data protection officer.

The Data Privacy Act of 2012 and its implementing rules require personal information controllers and processors to have a data protection officer or compliance officer who shall be accountable for ensuring compliance with applicable laws and regulations for the protection of data privacy and security. Personal information controllers and processors must also (i) conduct a privacy impact assessment as part of the organizational security measures pursuant to NPC Advisory No. 2017-03, and (ii) register its personal data processing system if (a) it employs more than 250 persons, (b) it employs less than 250 persons but the processing undertaken is likely to pose a risk to the rights and freedoms of the data subject or is not occasional, or involves the processing of sensitive personal information of at least 1,000 individuals, pursuant to NPC Circular No. 17-01.

Personal information controllers and processors are also required to constitute a data breach response team and proper documentation under NPC Circular No. 2016-03.

Regulations on Cybersecurity

BSP Circular No. 808, Series of 2013 provides for the guidelines on technology risk management applicable to all BSP-supervised institutions and requires BSP supervised institutions to establish a robust technology risk management system covering the following components: (1) technology governance, (2) risk identification and assessment, (3) technology control implementation, and (4) risk measurement and monitoring.

Regulations on Competition Law

The Philippine Competition Act is the primary competition policy of the Philippines. It came into effect on August 8, 2015, and was enacted to provide free and fair competition in trade, industry and all commercial economic activities. The Philippine Competition Act prohibits practices that restrict market competition through anti-competitive agreements or conduct and abuse of a dominant position, and requires parties to notify and obtain clearance for certain mergers and acquisitions. The Philippine Competition Act prescribes administrative fines of up to PHP275 million and criminal penalties of imprisonment up to seven years for violations of its provisions.

The Philippine Competition Commission (PCC) is able to review transactions motu proprio. Particularly, the PCC has the power to review, motu proprio, mergers and acquisitions which it believes, based on reasonable grounds, are likely to substantially prevent, restrict or lessen competition in the market.

Starting March 1, 2024, mergers and acquisitions that reach a size of party of PHP7.8 BILLION and a size of transaction of PHP3.3 BILLION will have to be notified to the PCC for mandatory merger review.

48

Table of Contents

Regulations on Employment

Independent Contractor

Contracting and subcontracting of work is allowed but is heavily regulated by the Philippine Labor Code and Department of Labor and Employment Department Order No. 174, series of 2017. There is legitimate contracting where the contractor (i) conducts an independent business; (ii) with adequate capital to do the job and pay its people; and (iii) exercises direct control over the performance of the workers. “Control” refers to the right reserved to the person for whom the services of the contractual workers are performed, to determine not only the end to be achieved, but also the manner and means to be used in reaching that end. On the other hand, the law prohibits labor-only contracting, which is where the person supplying workers to an employer does not have substantial capital or investment, and the workers recruited and placed by such contractor/subcontractor are performing activities which are directly related to the principal business of such employer, or when the contractor or subcontractor does not exercise the right to control over the performance of the work of the workers. In such cases, the contractor, subcontractor, or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.

Regulations on Tax

On January 1, 1998, Republic Act No. 8424, otherwise known as the “National Internal Revenue Code,” or NIRC, took effect. Since NIRC came into effect, numerous laws have been passed to amend the various provisions within the NIRC.

On March 26, 2021, the Corporate Recovery and Tax Incentives for Enterprises (CREATE law) was signed into law as Republic Act No. 11534 and took effect on April 11, 2021. Under this law, the corporate income tax rates for domestic and resident foreign corporations were reduced from 30% to 25%. However, for corporations with net taxable income of not more than five million Pesos and total assets not exceeding one hundred million Pesos, the tax rate shall be 20%.

However, there are instances wherein corporations are not subject to the twenty-five (25%) corporate income tax rate for a certain amount of time. One example is entities registered with the Philippine Economic Zone Authority, or PEZA.

Under the CREATE law, such entities are entitled to fiscal incentives including income tax holiday or 100% exemption from corporate income tax for a period of four (4) to seven (7) years. After such time, the PEZA registered corporation shall enjoy a special corporate income tax rate of 5% on gross income earned in lieu of all national and local taxes, or enhanced deduction for five (5) to ten (10) years. PEZA entities will also enjoy tax and duty free importation of raw materials, capital equipment, machineries, spare parts or accessories. The number of years an entity is entitled to the incentives is determined by the location of the entity and the type of business or activity it is engaged in.

On November 8, 2024, the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act was signed into law (Republic Act No. 12066) and took effect on November 28, 2024. It further improved on the earlier CREATE Act by enhancing the tax regime and incentive framework to hopefully engaged more local and foreign investments. The CREATE MORE Act aims to generate jobs and spur economic growth. It, among others, extends the maximum period for tax incentives to 27 years, up from the 17 years provided under CREATE in order to provide businesses sufficient time to recover their investments and realize profits.

Philippine Economic Zone Authority

The Philippine Economic Zone Authority, or the PEZA, is an attached agency to the Department of Trade and Industry. It is tasked to promote investments, extend assistance, register, grant incentives to, and facilitate the business operations of investors in export-oriented manufacturing and service facilities located inside selected areas throughout the Philippines which are proclaimed by the President of the Philippines as PEZA Special Economic Zones. The PEZA oversees and administers incentives to developers/operators and locators in PEZA Special Economic Zones.

On December 19, 2014, Philippines Co II was registered with the PEZA as an Ecozone IT Enterprise. As an IT Enterprise within the PEZA jurisdiction, seventy percent (70%) of the total revenues derived by Philippines Co II must come from clients outside the Philippine jurisdiction. Since 2022, the PEZA registration of Philippine Co II has expired.

49

Table of Contents

According to the CREATE law, those granted an income tax holiday prior to the effectivity of the law and are entitled to 5% tax on gross income earned shall be allowed to continue to avail of the five percent (5%) tax on gross income earned incentive for ten (10) years while those availing of the five percent (5%) tax on gross income earned prior the effectivity of the law shall be allowed to continue availing the said incentive for ten (10) years. The CREATE MORE Act has extended this period of tax incentives.

Singapore Regulations

Regulations on Data Protection

Personal Data Protection Act 2012

The Personal Data Protection Act 2012 requires organizations to, among others, (a) notify individuals of the purposes for the collection, use and disclosure of their personal data (being data, whether true or not, about an individual who can be identified from that data or other accessible information) (b) obtain the individual’s consents against such notified purposes prior to the collection, use or disclosure of their personal data, and (c) provide individuals with the right to access and correct their own personal data. Organizations have mandatory obligations to assess data breaches they suffer, and to notify the Personal Data Protection Commission, which administers and enforces the Personal Data Protection Act 2012, and where applicable, the relevant individuals where the data breach is (or is likely to be) of a significant scale or resulting in (or is likely to result in) significant harm to individuals. Other obligations that organizations must comply with relate to accountability, protection, retention, and requirements around the international transfers of personal data.

In addition, Do-Not-Call requirements require organizations to, among others, check “Do-Not-Call” registries prior to sending specified marketing messages addressed to Singapore telephone numbers, through voice calls, fax or text messages, unless clear and unambiguous consent to the sending of the message to their number was obtained from the individual.

The Personal Data Protection Commission may impose sanctions in connection with the improper collection, use and disclosure of personal data and certain failures to comply with the Personal Data Protection Act 2012, including the DNC requirements. Organizations who contravene provisions of the Personal Data Protection Act 2012 may be liable for a financial penalty of up to SGD1 million or 10% of the organization’s annual turnover in Singapore (where the organization’s annual turnover in Singapore exceeds SGD10 million) (whichever is higher) and/or imprisonment.

The Personal Data Protection Commission has also issued guidelines on March 28, 2024 in relation to personal data of children (individuals who are or are below 18 years old). These guidelines clarify how the provisions of the Personal Data Protection Act 2012 apply to the processing of children’s personal data in the online environment. The guidelines apply to any organisation whose online products or services are “likely to be accessed by children”, and may therefore include our products and services. The guidelines address, among others, (a) use of language that is readily understandable by children, (b) obtaining valid consent from children, (c) collection, use and disclosure of children’s personal data for reasonable purposes, (d) protection of children’s personal data, (e) notification of data breaches involving children’s personal data, and (f) conducting data protection impact assessments before releasing products or services that are likely to be accessed by children.

Regulations on Online Content and Broadcasting

The Broadcasting Act 1994 of Singapore prohibits the provision of certain broadcasting services, including internet content, in or from Singapore without a license issued by the Infocomm Media Development Authority. The Infocomm Media Development Authority is the regulator of the information, communications and media sectors in Singapore. Under the Broadcasting Act 1994, no person may provide any ‘licensable broadcasting services’ (including computer on-line services) “in or from Singapore” without a broadcasting license granted by the Infocomm Media Development Authority. The Broadcasting Act 1994 sets out an automatic class licensing scheme for computer online services provided by internet content providers. An internet content provider includes a corporation which provides any program for business purposes on the internet. If the content provided via the computer online services includes content relating to political or religious content in Singapore, the provider of such content would have to register itself with the Infocomm Media Development Authority.

50

Table of Contents

Internet content providers are in general mandated to be automatically class licensed without any need to make specific applications to the Infocomm Media Development Authority, and are required to comply with the conditions of the class license and the Internet Code of Practice. As an internet content provider, we are obliged to use our best efforts to ensure that prohibited material (which refers to material that is objectionable on the grounds of public interest, public morality, public security, national harmony, offends good taste or decency, or is otherwise prohibited by applicable Singapore laws) is not broadcast via the internet to users in Singapore, and we are also required to deny access to any prohibited material if directed to do so by the Infocomm Media Development Authority. Companies that contravene the class license conditions or the Internet Code of Practice may face administrative sanctions such as suspension or cancellation of license, or fines.

Under the Online Safety (Miscellaneous Amendments) Act, which came into effect on February 1, 2023, the Online Communication Services, or the OCS, accessible by Singapore users are subject to regulation under part 10A of the Broadcasting Act 1994. The OCS to which the Online Safety (Miscellaneous Amendments) Act applies to are set out in the fourth schedule to the Broadcasting Act 1994, which at present includes only social media services. Under the Online Safety (Miscellaneous Amendments) Act, the Infocomm Media Development Authority can, among other things, issue directions to disable access by Singapore users to egregious content found on OCSs. Egregious content includes content advocating or instructing on suicide or self-harm, physical or sexual violence and terrorism; content depicting child sexual exploitation; content posing public health risks in Singapore; and content likely to cause racial and religious disharmony in Singapore. The directions include (a) directions to an OCS provider to disable access by Singapore users to the egregious content on the service, (b) directions to an OCS provider to stop the delivery or communication of content to Singapore users, and (c) direction to an internet access service provider to block access by Singapore users to the non-compliant OCS if the OCS provider fails to comply with the directions of the Infocomm Media Development Authority. Under the Broadcasting Act 1994, OCS providers to whom a direction has been issued have a duty to take all reasonably practicable steps to comply with the direction, and non-compliance with a direction by the Infocomm Media Development Authority constitutes a criminal offense, punishable with a fine. The Infocomm Media Development Authority may also designate OCSs with significant reach or impact as Regulated Online Communication Services, or ROCS, and ROCS are required to further comply with the Code of Practice for Online Safety issued by the Infocomm Media Development Authority. To date, the Infocomm Media Development Authority has designated six OCSs as ROCS, and 51Talk has not been designated as a ROCS.

Under the Online Criminal Harms Act 2023, parts of which came into force as of February 1, 2024, designated officers from various government agencies may issue directions in respect of online activity for criminal offenses under their agencies’ purview, if the designated officer reasonably suspects that an offense (specified in the first schedule of the Online Criminal Harms Act 2023) has been committed and that any online activity is in furtherance of the offense, or suspects or has reason to believe that any online activity is preparatory to, or in furtherance of the commission of a scam or malicious cyber activity offense. These directions include (a) directions to a person who has control of the relevant materials or location to remove, stop providing or disable access to the material, (b) directions to the provider of an online service to disable access to any relevant material (or copies thereof) or the location in the online service, and (c) directions to the provider of an online service to restrict interaction between any accounts on the online service. Under the Online Criminal Harms Act 2023, non-compliance with a direction may result in orders being issued, including for (a) the blocking of access to the location by an internet access service, (b) the removal of the app by an app distribution service, and (c) suspension or provision of the online service. Government agencies may also designate online services which are subject to codes of practice and implementation directives in respect of specified offenses. To date, the Code of Practice for E-commerce Services and Code of Practice for Online Communication Services have been issued pursuant to Online Criminal Harms Act 2023. Both codes of practice came into effect on June 26, 2024, and apply to four designated e-commerce services and five designated online communication services respectively. 51Talk has not been designated as one of such e-commerce services or online communication services as of February 10, 2026.

In addition, to the extent that our platforms or services enable our users to transmit online content to each other or access third party online content, we would be an internet intermediary under the Protection from Online Falsehoods and Manipulation Act 2019 of Singapore. This act empowers any Singapore government minister to direct the responsible office to issue certain directions to internet intermediaries whose internet intermediary service had been used to communicate a false statement of fact in Singapore, if the minister is of the opinion that it would be in the public interest to do so. Such directions would include: (a) targeted correction directions, which require the internet intermediary to communicate a correction notice on its service to all end-users in Singapore who accessed the offending false statement of fact after a specified time; and (b) disabling directions, which require the internet intermediary to disable access by end-users in Singapore to the offending false statement of fact being communicated on or through its service. Companies may be fined if they fail to comply with directions issued under the Protection from Online Falsehoods and Manipulation Act 2019 of Singapore without reasonable excuse.

51

Table of Contents

Under the Foreign Interference (Countermeasures) Act, the Singapore government is empowered to implement countermeasures to prevent, detect and disrupt foreign interference in domestic politics conducted through (i) hostile information campaigns and (ii) local proxies (politically significant persons). For example, this act empowers the Minister for Home Affairs to issue the directions to various entities such as social media services, relevant electronic services, internet access services, as well as persons who own or run websites, blogs or social media pages, to help the authorities investigate and counter hostile communications activity that is of foreign origin. Examples of directions that can be issued include directions for a communicator to take down their content, for an internet intermediary such as a social media service to take down their content, or suspend or disable the account, such that the content is not viewable by end-users in Singapore. Non-compliance with directions is an offense. Companies should be prepared to comply with such directions under Foreign Interference (Countermeasures) Act from a technical/operational perspective in relation to content carried on their online platforms.

Hong Kong Regulations

Regulations on Education

The Education Ordinance (Chapter 279 of the Laws of Hong Kong) sets out the requirements for schools and educational institutions in Hong Kong, including the curriculum, teacher qualifications, and student assessment. Companies that offer online courses or other educational services are required that their offerings meet the standards set out in the Education Ordinance. Companies may also need to obtain licenses or approvals from the Education Bureau or other authorities before offering their services. Companies that violate the regulations may be subject to fines and other penalties. For example, the Education Bureau may impose fines on companies that are found to be operating without the necessary licenses or approvals, or that are in violation of the curriculum or assessment requirements set out in the Education Ordinance.

Regulations on Data Privacy and Cybersecurity

The Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong), or the PDPO, regulates the collection, storage, use, and disclosure of personal data in Hong Kong. The PDPO came into effect in December 1996 and was later significantly amended in 2012 and 2021. The PDPO imposes a statutory duty on data users to comply with the requirements of the six data protection principles contained in Schedule 1 to the PDPO. The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a data protection principle unless the act or practice, as the case may be, is required or permitted under the PDPO. Non-compliance with a data protection principle may lead to a complaint to the Privacy Commissioner for Personal Data. The Privacy Commissioner may serve an enforcement notice to direct the data user to remedy the contravention and/ or instigate prosecution actions. Non-compliance with the PDPO may lead to a variety of civil and criminal sanctions including fines and imprisonment.

The PDPO also gives data subjects certain rights. In particular, companies that collect personal data from data subjects directly must inform the data subjects whether it is obligatory or voluntary to supply the data, the purpose of using their data and the classes of person to whom their data may be transferred, and must use that data only for the purposes for which it was collected unless with the data subject’s express and voluntary consent. Companies must also take appropriate measures to protect the security of that data, including implementing data protection policies and procedures, and ensuring that data is stored securely. The PDPO also contains, among other things, restrictions on use of personal data in direct marketing activities, provisions relating to compliance with data access requests and restrictions on unauthorized disclosure of personal data obtained without the data user’s consent.

Regulations on Copyright

The Copyright Ordinance (Chapter 528 of the Laws of Hong Kong), which came into effect in June 1997, protects intellectual property rights in Hong Kong, including copyright and related rights. The Copyright (Amendment) Ordinance 2022, which was introduced with a view to modernize the Hong Kong copyright regime under the Copyright Ordinance, came into effect on May 1, 2023. Five key areas of changes are introduced under the new regulatory framework, including, among others, a technology-neutral communication right for copyright owners to communicate their works to the public via any mode of electronic transmission and criminal sanctions against infringers making unauthorized communication of copyright works to the public.

52

Table of Contents

Regulations on Anti-discrimination

Hong Kong has various anti-discrimination laws, including the Sex Discrimination Ordinance (Chapter 480 of the Laws of Hong Kong), the Disability Discrimination Ordinance (Chapter 487 of the Laws of Hong Kong), the Family Status Discrimination Ordinance (Chapter 527 of the Laws of Hong Kong) and the Race Discrimination Ordinance (Chapter 602 of the Laws of Hong Kong), to prohibit discrimination against a person on the grounds of sex, marital status, pregnancy, disability, family status, and race. These ordinances are applicable in different areas, including employment, education, provision of goods, services, or facilities, and disposal or management of premises. Companies may be subject to anti-discrimination laws, if their course offerings discriminate against any particular group of individuals. For example, companies should ensure that online courses and materials are accessible to individuals with disabilities, and that their marketing materials do not contain discriminatory language or images.

Regulations on Consumer Protection

The main piece of legislation in Hong Kong is the Trade Descriptions Ordinance (Chapter 362 of the Laws of Hong Kong) (TDO) which prohibits false and misleading trade descriptions of goods, including in advertising. An amendment to the law came into force in July 2013 and extended the application of the TDO. It created new offenses relating to advertising, including (i) false trade descriptions relating to services, (ii) misleading omissions, and (iii) certain aggressive or unfair commercial practices.

Malaysia Regulations

Regulations on Education

The Education Act 1996 sets out the regulations surrounding education in Malaysia, including requirements for licensing and accreditation of educational institutions. Under the Malaysian education legal framework, including the Education Act 1996 and related regulations, tutors offering courses or other educational services are generally required to be registered as teachers, which in turn requires meeting specific qualification standards (such as relevant degrees and certifications) prescribed by the relevant authorities for their respective subjects and types of educational institutions. The Ministry of Education oversees the education system in Malaysia and has the power to regulate and enforce educational standards. Companies that offer courses or other educational services in Malaysia without the necessary licenses and approvals from the Ministry of Education may face legal action, including fines, injunctions to cease operations, or closure of the premises by the authorities. Depending on the nature of the violation, such as operating without registration or offering unaccredited courses, penalties may include fines of up to RM100,000, imprisonment for a term not exceeding two years, or both.

The Malaysian Qualifications Agency (MQA) is responsible for accreditation and quality assurance of higher education institutions and programmes in Malaysia. Education technology companies that offer higher education qualifications (such as diplomas or degrees) must ensure their programmes comply with MQA’s accreditation requirements, including meeting the agency’s standards for quality and rigor under the Malaysian Qualifications Framework (MQF). For non-higher education courses (such as tutoring, enrichment classes, or vocational skills training), different regulatory requirements may apply under the Ministry of Education or other relevant authorities.

Regulations on Personal Data Protection

The Personal Data Protection Act 2010 regulates the processing of personal data in the course of commercial transactions in Malaysia, and is enforced by the Personal Data Protection Commissioner. Broadly, the Personal Data Protection Act 2010 sets out key data protection principles which must be adhered to by data users (i.e., a person who either alone or jointly or in common with other persons processes any personal data or has control over or authorizes the processing of any personal data, but does not include a processor) in Malaysia, which include (i) the requirement to obtain consent prior to processing an individual’s personal data; (ii) the requirement to provide written notice to individuals in both English and the Malay language stating, among other things, the purposes for which the personal data will be processed, the classes of third parties to whom personal data will be disclosed, and the individual’s right of access; (iii) obligation to ensure that the personal data collected will be processed in a safe and secure manner; (iv) obligation to ensure that personal data processed will not be kept longer than is necessary, and (v) taking reasonable steps to ensure that personal data is accurate. The Personal Data Protection Standard 2015 further prescribes the minimum requirement for data security in processing personal data. Infringement of the Personal Data Protection Act 2010 may result in fines and imprisonment.

53

Table of Contents

Regulations on Communications and Multimedia

The Communications and Multimedia Act regulates the use of the internet and digital content in Malaysia, including ensuring that their advertising is truthful and not misleading. Under the Communications and Multimedia Act, companies that operate online without the necessary licenses and approvals may face fines of up to RM500,000, imprisonment for a term not exceeding five years, or both. The Malaysian Communications and Multimedia Commission may also take legal action to require the company to cease operations or to block access to its website or content. In addition, companies that violate advertising regulations under the Communications and Multimedia Act may face penalties, including fines, imprisonment, or both, depending on the severity of the offence. The Malaysian Communications and Multimedia Commission may also take legal action to require the company to remove the misleading or deceptive advertisement.

Thailand Regulations

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

Civil and Commercial Code of Thailand (“CCC”)

Laws governing formation and incorporation of types of Thai business entity can be found in the Civil and Commercial Code of Thailand (“CCC”). A private limited company is formed through a process which leads to the registration of a Memorandum of Association and Articles of Association (By-laws), as its constitutive documents. A company is formed with the registered capital and divided into shares to be subscribed by the promoters or shareholders. The liability of the shareholders being limited to the amount unpaid on the shares respectively held by them.

Foreign Business Act

Thai law imposes restrictions on foreigners engaging in certain business activities. The principal law with respect to foreign participation in various business activities is the Foreign Business Act, or the FBA. The FBA defines the definition of “foreigner” as (i) a non-Thai natural person, (ii) a legal entity not incorporated in Thailand, (iii) a juristic entity incorporated in Thailand with at least 50% (fifty percent) of share capital is owned by foreign individuals or entities, and (iv) a limited partnership or a registered ordinary partnership that having the managing partner or manager is a non-Thai natural person. Based on the aforesaid definition, a private limited company which is owned by majority Thai nationals and/or entities with at least more than half of the share capital shall be considered as a Thai private limited company and is not subject to the FBA. Foreigners therefore are generally allowed to participate and own less than 50% of share capital unless specific laws prescribe different ownership limits for restricted businesses.

The FBA regulates the restrictions on certain different types of business activities, which foreigners are prohibited, or restricted from participating unless prior approval is granted and obtaining a Foreign Business License, or an FBL. Such activities are divided into three lists, with each list subject to different levels of restrictions.

Beside the restricted activities as in the lists of the FBA, there are non-restricted businesses which are not subject to the FBA and foreigners are permissible to operate such activities in Thailand without the FBL requirement, such as, manufacturing business, export activity, holding company, non-commercial undertaking. However, foreigners shall still be subject to other specific laws, such as factory act and property law.

Social Security Act

The Social Security Act of B.E. 2533 (1990) (the “Social Security Act”) in Thailand, and its amendments, established the Social Security Fund (the “Fund”) with the objective of providing coverage for fund members under certain conditions. The stipulations of the Social Security Act apply to every company having one or more employees. Persons insured under the provisions of the Fund include all employees from the age of 15 years up through those not over 60 years.

A company having one or more employees must register with the Social Security Office (“SSO”) for the Fund within 30 days after hiring the first employee. If the company increases the number of employees, it must submit a new employee registration form for each new employee.

54

Table of Contents

Workmen Compensation Fund

The Workmen’s Compensation Fund was established under the Workmen’s Compensation Act, B.E. 2537 (1994) (“WCA”) to ensure that adequate compensation is paid when workers are injured, become ill, or die as a result of their work, or as a result of illnesses arising out of the nature or conditions of the work, or as the Department of the Interior may prescribe. This objective will be achieved by requiring employers to register with and contribute to the Workers’ Compensation Fund and by having the Department of Labour Protection and Social Welfare pay the above compensation that employers are required to pay under the Occupational Safety and Health Act instead of employees. The contribution rate should be 0.2% - 1%.

Labour Protection Act

The Thailand Labour Protection Act (“LPA”) is a comprehensive law that sets out the rights and obligations of employers and employees in the workplace. It aims to protect the welfare of workers and ensure fair treatment.

Under section 108 of the LPA, a company shall procure the work rules in Thai language upon the date the employer employed more than ten (10) employees and shall disclose such work rules at the working place of the employee. As from 4 April 2017, the work rules are not required to submit to the Labour Department in accordance with the Order of the Head of the National Council for Peace and Order No. 21/2017 dated 4 April 2017 Governing Amendment of Laws for Ease of Doing Business.

Foreigners’ Working Management Emergency Decree

Foreigners’ Working Management Emergency Decree Pursuant to Section 8 of the Foreigners’ Working Management Emergency Decree B.E. 2560 (2017), a foreigner shall not carry out any work prescribed in the Notification issued under section 7 paragraph one or carry out any work without a work permit.

The Revenue Code

The principal law with respect to tax implication in Thailand is the Revenue Code of Thailand, or the RC, under governed by the Revenue Department.

Corporate Income Tax (“CIT”)

According to the RC, in general, a company is subject to the CIT rate of 20 % on net profit. In addition, with respect to Small Medium Enterprises which a company that having its paid-up registered capital at the end of the accounting period of not exceeding THB5 million and having annual revenue income from business operation not exceeding THB30 million per annum shall be entitled to reduction of CIT in which it will be exempted from CIT for the net profit not over THB 300,000, and it will be subject to 15% CIT on net profit range between THB300,001 – 3,000,000, and 20% CIT on net profit exceeding THB 3,000,000.

The tax year for a company is defined by a 12 (twelve) months accounting period for that entity. The date of the first accounting period commences on the date of incorporation of the juristic entity. In each accounting period, a company is required to file tax returns and pay corporate income tax twice a year.

Value Added Tax (“VAT”)

VAT is an indirect consumption tax levied on the supply of goods and provision of services by a VAT operator and on the import of goods or services. Any person (individual or juristic entity) who conducts business in Thailand and its annual turnover exceeds THB1.8 million is required to register to be a VAT operator. A VAT operator is required to comply with VAT requirements per the Revenue Code. Only a registered VAT operator is entitled to claim for prepaid VAT credit or VAT refund.

There are also other applicable taxes, for example, the excise tax, withholding tax, special business tax, land and building tax and stamp duty, etc. A company is required to file tax returns to the Revenue Department on a regular basis, including monthly, annual and semi-annual reports.

​

55

Table of Contents

Saudi Arabia Regulations

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

Personal Data Protection Law

The Personal Data Protection Law was promulgated on September 16, 2021. In September 2023, the President of Saudi Data & AI Authority (SDAIA) issued the Implementing Regulation of the Personal Data Protection Law and the Regulation on Personal Data Transfer Outside the Kingdom to supplement the implementation details and specific provisions of the Personal Data Protection Law.

The Personal Data Protection Law regulates how personal data is processed digitally. It requires the entities engaged in data processing to provide a clear notice of their privacy policies, specifying the purposes for which personal data is being processed. The Personal Data Protection Law ensures individuals the right to access their personal data and to be informed of the purpose of its collection and processing. They have the right to obtain a copy of their data, request corrections, updates, or deletions after the purpose of its collection has been fulfilled. Data owners may also request the restriction of the processing of their personal data for specific cases and for a limited period. The collection of personal data is restricted to the minimum necessary to achieve the specified purposes. Data cannot be used for marketing without the owner’s consent. Consent for data processing cannot be a condition for receiving services unless the service or benefit is directly related to the processing of the personal data for which consent has been granted. The law also outlines the process for disclosing personal data under specific regulations.

Under the Personal Data Protection Law, anyone who discloses or publishes sensitive data in violation of the law, with the intent to harm the data owner or for personal gain, is subject to a maximum prison sentence of two years and a fine of up to SAR3,000,000, or one of these two penalties. The public prosecution is responsible for investigating and prosecuting violations of the Personal Data Protection Law before the competent court. In the event of repeat offenses, the court has the authority to double the fine, even if it exceeds the maximum limit, provided it does not exceed twice that limit.

Furthermore, any natural or legal person who violates any provisions of the law or its regulations, other than the disclosure or publication of sensitive data as described in the previous paragraph, shall be subject to a warning or a fine not exceeding SAR5,000,000. In case of repeated violations, the fine may be doubled, even if this exceeds the maximum limit, as long as it does not exceed twice that limit. The law also grants the court the authority to order the confiscation of any proceeds obtained through the commission of violations. In addition, the law grants individuals who have suffered harm due to the commission of any violations the right to seek compensation before the court for material or moral damages, in proportion to the extent of the harm caused.

E-commerce Law

The E-Commerce Law in the Kingdom of Saudi Arabia, issued on July 10, 2019, applies to merchants, consumers, and practitioners and covers the sale and display of products, the offering and advertising of services, the exchange of related data, the relationship between E-Commerce practitioner and online shopper and product return and order cancellation, among others. The E-Commerce Council is responsible for monitoring and evaluating e-commerce activities in the Kingdom.

The E-Commerce Law imposes several obligations on service providers, including protecting the personal data of online shoppers, addressing issues related to delayed deliveries, adhering to the regulations of licensed professions that require a license for practice, and disclosing the service provider’s business location as listed in the commercial registry. It also includes the removal or blocking of non-compliant advertisements, coordinating electronic commercial advertisements, disclosing contact information, and providing the essential characteristics of goods.

The E-Commerce Law in the Kingdom imposes a range of penalties for those who violate its provisions, including a warning, a fine not exceeding SAR1 million, temporary or permanent suspension of e-commerce activities, and partial or complete blocking of the online store.

56

Table of Contents

A committee, or more than one, is formed by a decision from the Minister of Commerce to review violations and decides on penalties based on the violation’s severity, its recurrence, the scale of the service provider’s business, and the harm caused to others. Any person against whom a decision has been issued under the law may appeal that decision before the Administrative Court. Additionally, the decision may require publication of its contents at the violator’s expense in one or more local newspapers or through any other appropriate means, depending on the type, severity, and impact of the violation. The publication must occur after the legally prescribed period has passed or once the ruling has become final. The competent court is responsible for resolving disputes, including claims for compensation arising from the application of the provisions of the law.

Electronic Transactions Law

The issuance of Saudi Arabian Electronic Transactions Law constitutes significant development in the legal structure of the electronic transactions system as well as in controlling, regulating and providing a legal framework for electronic transactions and signatures in general, thus providing effect and validity for these transactions. The electronic signature will be equal to a hand-written signature, having the same legal effects, provided that it is carried out in compliance with the conditions provided for in Electronic Transactions Law. Electronic transactions will also have full effect and enforceability and will be deemed as new means for transactions processing.

According to Article 23 of Electronic Transactions Law, many actions are considered a violation of the law, such as exercising the activity of the certification service provider without obtaining a license from the commission. The violation the provisions of Electronic Transactions Law will cause a fine of not more than SAR5 million and/or imprisonment for a period not exceeding five years, as well as the confiscation of the devices, systems and programs used in committing the violation.

Copyright Law

The Copyright Law in the Kingdom of Saudi Arabia is a set of rules and regulations governing the rights of any person who has created literary, scientific, or artistic work within the Kingdom. It was issued by Royal Decree in 2003, comprising twenty-eight articles. These rights remain protected for a period of fifty years after the death of the author. The provisions of the law apply to works of both Saudi and non-Saudi authors that are published, produced, performed, or displayed for the first time in the Kingdom.

The Copyright Law grants the author a set of rights over their literary, artistic, or scientific creations, whether these are moral or financial rights, and they have a specific protection period according to the law. These rights include protection from unauthorized printing or publication, alteration, or translation of the work into other languages, as well as all forms of material exploitation of the work, such as licensing or leasing it to third parties. The author also has the right to attribute the work to themselves, object to any infringement on their work, and decide on the publication, modification, or withdrawal of the work from circulation.

Any person who commits one of the violations mentioned in the law is considered to be infringing on the author’s rights. Establishments are held responsible for any violations committed by their employees on any intellectual property if it is proven that the establishment was aware of or neglected the issue. This includes retaining counterfeit or copied computer programs, audio, or visual tapes, conducting maintenance on an electronic device containing counterfeit or decoded software, or similar acts.

It is also considered an infringement of copyright and a violation of the law and its regulations to reproduce protected works, sell them, import, export, transport, publish, or rent them without permission.

Anyone who violates a provision of this law is subject to one or more of the following penalties: a warning, a fine not exceeding SAR250,000, closure of the violating establishment or the one that contributed to the infringement on the author’s rights for a period not exceeding two months, confiscation of all copies of the work, as well as the materials intended or used to commit the infringement, and imprisonment for a period not exceeding six months. In the event of repeated infringement on the same or another work, the maximum limit of the penalty, fine, and closure may be doubled.

Investment law

On August 11, 2024, the Saudi Cabinet approved the new Investment Law, which has taken effect in February 2025, replacing the Foreign Investment Law that came into effect in 2000.

57

Table of Contents

The Ministry of Investment of Saudi Arabia (MISA) is the competent authority for foreign investors to invest in Saudi Arabia. Foreign investors who carry out investment activities and establish legal entities in Saudi Arabia must register with MISA in advance and obtain an “investment license” issued by MISA. The Ministry of Investment publicizes Saudi Arabia’s recommended investment industries and specific requirements for applying for licenses in various industries through the Service Manual, which is an important operational guide for the investment procedure. The current effective version is the 12th Edition 05-2025.

According to Article 4.1 of the Investment Law, an Investor shall have the rights of being treated equally to other investors and being treated fairly and justly, among others.

Income Tax Law

The Income Tax Law gathers rules and regulatory procedures for income tax within the Kingdom of Saudi Arabia. It was issued on March 6, 2004, and specifies taxable persons. It was last amended on June 23, 2020.

The tax authority in Saudi Arabia is the Zakat, Tax and Customs Authority (“ZATCA”). The two major direct taxes in Saudi Arabia are corporate income tax and “Zakat”, but personal income tax and stamp duty are not levied. Corporate income tax and Zakat are essentially distinguished based on the nationality of the company’s shareholders. For example, if a Saudi company is directly or indirectly held by foreign investors or citizens of non-GCC member states (collectively referred to as “non-Saudi citizens”), non-Saudi citizens shall pay corporate income tax at a rate of 20%.

Withholding Tax Guideline

This Guideline - published by ZATCA - serves to provide insights and guidance on the application of the withholding tax (WHT) provisions included in the Law and its Regulation.

Withholding Tax (WHT) is an income tax assessed on Nonresidents who generates income from a source in the Kingdom. However, it differs from ordinary taxation that the Resident person or the permanent establishment in KSA making a payment to Nonresidents is required to withhold a part of that payment corresponding to tax and remit it to ZATCA. The WHT base is determined according to the total payments made not the profit.

Value Added Tax Law

Pursuant to the Unified Value Added Tax Agreement for the GCC countries (the Agreement), approved by Saudi Arabia Cabinet Decision No. 257/1438 that has been signed between all Member States of the GCC, the KSA has introduced a general tax on consumption - known as VAT.

On July 26, 2017, the Saudi government promulgated the Value Added Tax Law (Royal Decree No. M/113); on September 5 of the same year, it promulgated the Regulations for the Implementation of the Value Added Tax Law.

Saudi Arabia officially began to levy VAT on January 1, 2018. Residents or non-residents who sell or import goods or services in Saudi Arabia are VAT taxpayers, and the VAT rate is subject to the 5% standard rate and zero rate under the framework agreement. On June 7, 2020, Saudi Arabia issued Royal Decree No. A/638, announcing that the standard value-added tax rate will be increased from 5% to 15% from July 1, 2020.

Tax Evasion and Penalties

According to Article 39 of Value Added Tax Law, many activities, such as submitting incorrect, forged or false documents, declarations, record or information with the intent to evade the payment of the due tax, may be considered as tax evasion. According to Article 40 of Value Added Tax Law, the tax evasion shall be punishable by a fine of no less than the amount of the due tax and no more than three times the value of the goods or services concerned with the evasion.

58

Table of Contents

Labour Law

The Saudi Labour Law and the Implementing Regulations of the Labour Law were promulgated in 2005 and 2007 respectively (the latest amendment was on August 6, 2024 and took effect in February 2025).

The Labour Law stipulates a series of provisions regulating the labour relationship between employees and employers, including the labour relationship between foreign workers and employers in Saudi Arabia. For example, the labour contract of non-Saudi nationals must be in writing and a fixed-term contract. The contract must be terminated when the foreigner’s work visa expires, and a foreigner can only provide services to one employer. If the contract does not specify the term, it is deemed to be one year from the date the employee starts working. If the labour relationship continues after the expiration of this term, the contract is deemed to be automatically renewed for the same term as the original term. Employment of local residents can sign a fixed-term or indefinite-term labour contract.

In order to increase the employment rate in the country, the Saudi government has implemented the “Nitaqat” policy, requiring all Saudi companies to employ a certain proportion of Saudi employees according to their industry and size. The proportion of Saudi employees employed by a company is called the “Saudization Percentage”. Companies are labeled Red, Low Green, Medium Green, High Green and Platinum according to their Saudization Percentage, and compliance is directly linked to the company’s application for work visas. According to the Saudi labour Law, except for special circumstances where there are not enough qualified Saudi employees, the Saudization Percentage of a company should not be less than 75%. Since the current target of 75% is difficult to achieve, the specific requirements for the Saudization Percentage are regulated by the Ministry of Human Resources. There are different calculation standards for companies in different industries, positions and sizes. Companies need to pay attention to relevant policies to ensure that the Saudization Percentage requirements are met.

PRC Regulations

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

Regulations Relating to Intellectual Property Rights

Copyright and Software Registration

The NPC Standing Committee adopted the Copyright Law in 1990 and amended it in 2001, 2010 and 2020, respectively. According to the amended Copyright Law effective as of June 1, 2021, the definition of works has been revised that the expression of “cinematographic works and works created by methods similar to cinematographic production” has been amended to “audio-visual works,” which means that the scope of copyright protection has been further expanded. The amended Copyright Law has improved the provisions on the protection of internet copyright, especially by substantially increasing the upper limit of legal damages for infringement and clarifying the principle of punitive damages. To address the problem of copyright infringement related to the content posted or transmitted over the internet, the National Copyright Administration and the Ministry of Industry and Information Technology jointly promulgated the Measures for Administrative Protection of Copyright Related to Internet on April 29, 2005, which became effective on May 30, 2005.

In order to further implement the Computer Software Protection Regulations promulgated by the State Council on December 20, 2001, and amended on January 8, 2011, and January 30, 2013, the State Copyright Bureau issued the Computer Software Copyright Registration Procedures on February 20, 2002, which apply to software copyright registration, license contract registration and transfer contract registration. In compliance with, and in order to take advantage of the above rules, as of December 31, 2025, we registered nine software copyrights in mainland China.

​

59

Table of Contents

Patents

The NPC Standing Committee adopted the Patent Law of the People’s Republic of China in 1984 and amended it in 1992, 2000, 2008 and 2020, respectively. The State Council first promulgated the Implementation Regulations for the Patent Law of the People’s Republic of China on December 21, 1992, with the latest amendments made on December 11, 2023 and in effect on January 20, 2024. A patentable invention, utility model or design must meet three conditions: novelty, inventiveness and practical applicability. The Patent Office under the National Intellectual Property Administration is responsible for receiving, examining and approving patent applications. A patent is valid for a twenty-year term for an invention, a ten-year term for a utility model and a fifteen-year term for design, starting from the application date. Except under certain specific circumstances provided by law, any third party user must obtain consent or a proper license from the patent owner to use the patent, or else the use will constitute an infringement of the rights of the patent holder. As of December 31, 2025, we held six patents in mainland China.

Domain Name

In September 2002, the China Internet Network Information Center issued the Implementing Rules for Domain Name Registration setting forth detailed rules for registration of domain names, which was amended on May 29, 2012. On November 5, 2004, the Ministry of Industry and Information Technology promulgated the Measures for Administration of Domain Names for the Chinese Internet. The measures regulate the registration of domain names, such as the first-tier domain name “.cn.” On August 24, 2017, the Ministry of Industry and Information Technology promulgated Administrative Measures for Internet Domain Names, repealing the Measures for Administration of Domain Names for the Chinese Internet since November 1, 2017. The efforts to undertake internet domain name services as well as the operation, maintenance, supervision and administration thereof and other relevant activities within the territory of mainland China shall thereafter be made in compliance with Administrative Measures for Internet Domain Names. On June 18, 2019, the China Internet Network Information Center issued the Measures on Resolution of Disputes over National Top-level Domain Names. Pursuant to these measures, the domain name disputes shall be accepted and solved by a domain name dispute resolution body as recognized by the center.

Regulations Relating to Foreign Investment

On March 15, 2019, the National People’s Congress adopted the Foreign Investment Law of the PRC, which became effective on January 1, 2020. The Regulations on Implementing the Foreign Investment Law of the PRC adopted by the State Council on December 12, 2019, which came into effect on January 1, 2020, provides implementing measures and detailed rules to ensure the effective implementation of the Foreign Investment Law of the PRC. Pursuant to the Foreign Investment Law of the PRC, “foreign investors” means natural person, enterprise, or other organization of a foreign country, “foreign-invested enterprises” means any enterprise established under PRC law that is wholly or partially invested by foreign investors and “foreign investment” means any foreign investor’s direct or indirect investment in Mainland China, including: (i) establishing foreign-invested enterprises in Mainland China either individually or jointly with other investors; (ii) obtaining stock shares, stock equity, property shares, other similar interests in Chinese domestic enterprises; (iii) investing in new projects in Mainland China either individually or jointly with other investors; and (iv) making investment through other means provided by laws, administrative regulations, or State Council provisions.

On December 30, 2019, the Ministry of Commerce and the State Administration of Market Regulation issued the Measures for the Reporting of Foreign Investment Information, which came into effect on January 1, 2020, and replaced the Interim Administrative Measures. Since January 1, 2020, for foreign investors carrying out investment activities directly or indirectly in China, the foreign investors or foreign-invested enterprises shall submit investment information to the commerce authorities pursuant to the abovementioned measures. Pursuant to the Measures for the Security Review of Foreign Investment, which was promulgated by the National Development and Reform Commission and the Ministry of Commerce on December 19, 2020, and became effective on January 18, 2021, the office of the working mechanism for the security review of foreign investments is set up under the National Development and Reform Commission, which is led by the National Development and Reform Commission and the Ministry of Commerce to undertake the routine work of the security review of foreign investments.

60

Table of Contents

The Foreign Investment Law of the PRC is considered to grant national treatment to foreign-invested enterprises, except that foreign-invested enterprises are subject to certain restrictions or prohibitions if they propose to operate in certain industries prescribed on the Special Administrative Measures for Access of Foreign Investment (Negative List) (2024 version). The Foreign Investment Law of PRC establishes the administration systems for foreign investment, which mainly consists of pre-establishment national treatment plus the negative list, foreign investment information report system and security review system. The said systems, together with other administration measures stipulated under the Foreign Investment Law, constitute the frame of foreign investment administration. The pre-establishment national treatment refers to granting foreign investors and their investments, in the stage of investment access, the treatment no less favorable than that granted to domestic investors and their investments; the negative list refers to special administrative measures for access of foreign investments in certain fields and the national treatment will be given to the foreign investments that do not fall within any of the categories set out in the negative list.

On September 6, 2024, the Ministry of Commerce and the National Development and Reform Commission jointly promulgated the Special Administrative Measures for Access of Foreign Investment (Negative List) (2024 version), which became effective on November 1, 2024. Under these measures, pre-school education, senior high school education in grades 10 to 12, and higher education are in a restricted industry, meaning foreign educational organizations with relevant qualifications and experience and Chinese educational organizations are only allowed to operate pre-school education, senior high schools and higher education in cooperative ways by the form of a cooperative joint venture in the PRC. Foreign investment is banned from compulsory education, which means grades 1 to 9. Foreign investment is allowed in after-school tutoring services and training services which do not grant certificates or diplomas and non-academic vocational training institutions.

On December 19, 2020, the National Development and Reform Commission and Ministry of Commerce of the PRC jointly issued the Measures for the Security Review of Foreign Investment which became effective on January 18, 2021. The Security Review of Foreign Investment provides that foreign investors or relevant parties in the PRC must submit a security review application to the office of the working mechanism before making the following investments: (i) investing in fields related to national defense security, such as military industry and military industry support, as well as investing in areas surrounding military facilities and military industry facilities; and (ii) investing in important agricultural products, important energy and resources, major equipment manufacturing, important infrastructure, important transportation services, important cultural products and services, important information technology and internet products and services, important financial services, key technologies, and other important fields that involve national security, and acquiring control over the target enterprise.

Regulations on Foreign Exchange

Foreign Currency Exchange

Pursuant to the Foreign Currency Administration Rules, as amended, and various regulations issued by the State Administration of Foreign Exchange, or the SAFE, on August 5, 2008, and other relevant PRC government authorities, RMB is freely convertible to the extent of current account items, such as trade related receipts and payments, interest and dividends. Capital account items, such as direct equity investments, loans and repatriation of investment, unless expressly exempted by laws and regulations, still require prior approval from SAFE or its provincial branch for conversion of RMB into a foreign currency, such as U.S. dollars, and remittance of the foreign currency outside of mainland China. Payments for transactions that take place within mainland China must be made in RMB. Foreign currency revenues received by mainland China companies may be repatriated into mainland China or retained outside of mainland China in accordance with requirements and terms specified by SAFE.

61

Table of Contents

Regulations Relating to Foreign Exchange Registration of Overseas Investment by Mainland China Residents

The Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, issued by SAFE taking effect on July 4, 2014, regulates foreign exchange matters in relation to the use of special purpose vehicles, or SPVs, by mainland China residents or entities to seek offshore investment and financing and conduct round trip investment in mainland China. Under SAFE Circular 37, a SPV refers to an offshore entity established or controlled, directly or indirectly, by mainland China residents or entities for the purpose of seeking offshore financing or making offshore investment, using legitimate domestic or offshore assets or interests, while “round trip investment” refers to the direct investment in mainland China by mainland China residents or entities through SPVs, namely, establishing foreign-invested enterprises to obtain the ownership, control rights and management rights. SAFE Circular 37 requires that, before making contribution into an SPV, mainland China residents or entities are required to complete foreign exchange registration with the SAFE or its local branch. SAFE Circular 37 further provides that option or share-based incentive tool holders of a non-listed SPV can exercise the options or share incentive tools to become a shareholder of such non-listed SPV, subject to registration with SAFE or its local branch.

Mainland China residents or entities who have contributed legitimate domestic or offshore interests or assets to SPVs but have yet to obtain SAFE registration before the implementation of the SAFE Circular 37 shall register their ownership interests or control in such SPVs with SAFE or its local branch. An amendment to the registration is required if there is a material change in the SPV registered, such as any change of basic information (including change of such mainland China residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions. Failure to comply with the registration procedures set forth in SAFE Circular 37, or making misrepresentation on or failure to disclose controllers of foreign-invested enterprise that is established through round-trip investment, may result in restrictions on the foreign exchange activities of the relevant foreign-invested enterprises, including payment of dividends and other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may also subject relevant mainland China residents or entities to penalties under PRC foreign exchange administration regulations. On February 13, 2015, SAFE further promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, or SAFE Circular 13, which took effect on June 1, 2015. This SAFE Circular 13 has amended SAFE Circular 37 by requiring mainland China residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. Jack Jiajia Huang and Ting Shu, who directly or indirectly hold shares in our Cayman Islands holding company and who are mainland China residents have completed the initial foreign exchange registrations and amended their registrations to reflect our corporate restructuring in November 2014.

Regulations on Stock Incentive Plans

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

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

62

Table of Contents

Regulations Relating to Employment, Social Insurance and Housing Fund

The PRC Labor Law effective as of January 1, 1995 (as latest amended on December 29, 2018), and the PRC Labor Contract Law effective as of January 1, 2008 (as amended on December 28, 2012), set forth a series of provisions governing the labor relationship between employees and employers. The requirements include, among others, (i) a written labor contract shall be executed by an employer and an employee when the employment relationship is established, and an employer is under an obligation to sign an unlimited-term labor contract with any employee who has worked for the employer for ten consecutive years; (ii) if an employee requests or agrees to renew a fixed-term labor contract that has already been entered into twice consecutively, the resulting contract must have an unlimited term, with certain exceptions. The employer must also pay severance to an employee in nearly all instances where a labor contract, including a contract with an unlimited term, is terminated or expires; and (iii) All employers must compensate their employees equal to at least the local minimum wage standards. In addition, the government has continued to introduce various new labor-related regulations after the Labor Contract Law. Among other things, new annual leave requirements mandate that annual leave to be available for nearly all employees and further require that the employer compensate an employee for any annual leave days the employee is unable to take in the amount of three times his daily salary, subject to certain exceptions. Moreover, all mainland China enterprises are generally required to implement a standard working time system of eight hours a day and forty hours a week, and if the implementation of such standard working time system is not appropriate due to the nature of the job or the characteristics of business operation, the enterprise may implement a flexible working time system or comprehensive working time system after obtaining approvals from the authorities.

In addition, employers in mainland China are obliged to pay contributions to the social insurance plan and the housing fund plan for their employees, and such contribution amount payable shall be calculated based on the employee actual salary in accordance with the applicable regulations. In accordance with the PRC Social Insurance Law which became effective on July 1, 2011 and was amended on December 29, 2018, a social insurance system consisting of a basic old-age insurance, basic medical insurance, work injury insurance, unemployment insurance, and maternity insurance has been established. In accordance with the Regulations on the Administration of Housing Funds, which was promulgated by the State Council in 1999 and amended in March 2002 and March 2019, employers must register at the designated administrative centers and open bank accounts for depositing employees’ housing funds.

Regulations Relating to Overseas Listing and M&A Rules

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, were jointly adopted by six PRC regulatory authorities, including China Securities Regulatory Commission, or CSRC, on August 8, 2006, and became effective as of September 8, 2006, and were later amended on June 22, 2009. This M&A Rules purports to require, among other things, offshore SPVs, formed for listing purposes through acquisition of mainland China domestic companies and controlled by mainland China companies or individuals, to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange. We believe that CSRC approval is not required in the context of our initial public offering as we are not a special purpose vehicle formed for listing purpose through acquisition of domestic companies that are controlled by our mainland China individual shareholders.

The new rules for the filing-based administration of overseas securities offerings and listings by Chinese domestic companies released on February 17, 2023, or New Filing Rules, establish a new filing-based regime to regulate overseas offerings and listings by domestic companies. The New Filing Rules consist of six sets of rules, including the Trial Measure for Administration of the Overseas Securities Offerings and Listings by Domestic Enterprises. According to the New Filing Rules, (i) an overseas offering and listing by a domestic company, whether directly or indirectly, shall be filed with the CSRC; and (ii) the issuer or its affiliated domestic company, as the case may be, shall file with the CSRC for its initial public offering, follow-on offering and other equivalent offing activities. The New Filing Rules also set forth certain regulatory red lines for overseas offerings and listings by domestic enterprises. However, from March 31, 2023, enterprises that have been listed overseas shall constitute existing enterprises and are not required to conduct the overseas listing filing procedure immediately, but shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC.

​

63

Table of Contents

On February 24, 2023, the CSRC, together with the Ministry of Finance, the National Administration of State Secrets Protection and the National Archives Administration of China, issued the Provisions on Strengthening Confidentiality and Archives Administration of International Securities Offering and Listing by Domestic Companies, or the Archives Rules, which came into effect on March 31, 2023. The Archives Rules reiterate that working papers produced in the PRC by securities companies and securities service providers for direct and indirect international offering and listing by domestic companies, should be retained in mainland China, and, without prior approval by competent authorities of mainland China, such working papers shall not be brought, mailed or otherwise transferred to recipients outside of mainland China. Furthermore, the Archives Rules establish a cross-border regulatory cooperation mechanism as prescribed in the PRC Securities Law and strengthen cross-border regulatory cooperation as prescribed in the New Filing Rules, which shifts the overall direction of cross-border supervision of international offering and listing from a “dominated by domestic regulators or depend on the conclusions of inspections by domestic regulators” approach to a “cross-border regulatory cooperation” mechanism.

The Archives Rules provide that, among other things, (i) in relation to the international offering and listing activities of domestic enterprises, the domestic enterprises are required to strictly comply with the requirements on confidentiality and archives management, establish a sound confidentiality and archives system, and take necessary measures to implement their confidentiality and archives management responsibilities; (ii) during the course of an international offering and listing, if a domestic enterprise needs to publicly disclose or provide to securities companies, accounting firms or other securities service providers and international regulators, any materials that contain relevant state secrets, work secrets of government agencies or that have a sensitive impact (i.e., be detrimental to national security or the public interest if divulged), the domestic enterprise should complete the approval/filing and other regulatory procedures; and (iii) working papers produced in mainland China by securities companies and securities service institutions, which provide domestic enterprises with securities services during their international issuance and listing, should be stored in mainland China, and the transmission of all such working papers to recipients outside of mainland China is required to be approved by competent authorities of mainland China.

Regulations Relating to Anti-Monopoly

The Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress of the PRC and the Provisions on the Review of Concentrations of Undertakings promulgated by the State Administration for Market Regulation require that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the State Administration for Market Regulation before they can be completed. Where the participation in concentration of undertakings by way of foreign-funded merger and acquisition of domestic enterprises or any other method which involves national security, the examination of concentration of undertakings shall be carried out pursuant to the provisions of the Anti-Monopoly Law and examination of national security shall be carried out pursuant to the relevant laws and regulations. Failure to comply with above regulations may result in an order to stop concentration, dispose the shares/assets or transfer the operation within a stipulated period, or adopt other necessary measures to reinstate the pre-concentration status, or fines.

​

64

Table of Contents

The following diagram illustrates our current corporate structure, which includes our significant subsidiaries as of the date of this annual report:

​

Notes:

⁎The holding company in which the investors hold their interests

†Our operating subsidiaries

65

Table of Contents

66

Table of Contents

Contractual Arrangement with Our Subsidiaries in the Philippines and Its Shareholders

Under the Philippine Corporation Code, the business, assets and affairs of a corporation are handled and managed by a board of directors, which is composed of the number of individuals mandated under the corporation’s articles of incorporation. Philippine law further requires that each director own at least one share of stock in his or her name in the books of the corporation. In order to comply with the foregoing, there are five individual shareholders in each of Philippines Co II and Philippines Co III, holding an aggregate of 0.000005% and 0.001% of the equity interest of Philippines Co II and Philippines Co III, respectively. We have entered into (i) contracts with Philippines Co II, and some of the shareholders of Philippines Co II, i.e., Huiru Yuan, Jennifer Que and Samuel Celestino, which we refer to as the signing shareholders of Philippines Co II; and (ii) contracts with Philippines Co III and one shareholder of Philippines Co III, Frank Lin, which we refer to as the signing shareholder of Philippines Co III.

51Talk, Philippines Co II and the signing shareholders of Philippines Co II entered into exclusive option agreements on August 31, 2015. Under the exclusive option agreements by and among Philippines Co II, each of the signing shareholders of Philippines Co II and 51Talk, in consideration of the payment of US$1.0 by 51Talk, each of the signing shareholders irrevocably granted 51Talk a binding and exclusive right to purchase or designate one or more persons to purchase, equity interests in Philippines Co II then held by each shareholder at once or at multiple times at any time in part or in whole at 51Talk’s sole and absolute discretion to the extent permitted by Philippine laws and at the price of US$1.0. Without 51Talk’s prior written consent, Philippines Co II’s signing shareholders shall not sell, transfer, mortgage, or otherwise dispose in any manner any material assets of Philippines Co II or legal or beneficial interest in the material business or revenues of Philippines Co II in an amount exceeding US$100,000, or allow the encumbrance thereon of any security interests; or cause Philippines Co II to execute any contract with a price exceeding US$100,000, except the contracts in the ordinary course of business. Unless otherwise required by Philippine laws, Philippines Co II shall not be dissolved or liquidated without prior written consent by 51Talk. The signing shareholders of Philippines Co II waive their rights of first refusal in regard to the transfer of equity interest by any other shareholder of Philippines Co II to 51Talk (if any), give consents to the execution by each other shareholder of Philippines Co II with 51Talk and Philippines Co II the exclusive option agreements, the equity interest pledge agreements and the powers of attorney, and accept not to take any actions in conflict with such documents executed by other shareholders. The signing shareholders of Philippines Co II agree to promptly donate any profits, interests, dividends, or proceeds of liquidation to 51Talk or any other person designated by 51Talk to the extent permitted under the applicable Philippine laws. These agreements shall remain in effect until all equity interests in Philippines Co II held by the signing shareholders have been transferred or assigned to 51Talk and/or any other person designed by 51Talk in accordance with this agreement. The signing shareholders of Philippines Co II and Philippines Co II do not have any right to terminate the exclusive option agreements in any event unless otherwise required by the applicable laws.

51Talk, Philippines Co III and the signing shareholder of Philippines Co III entered into exclusive option agreements on February 1, 2016. Such exclusive option agreements contain terms substantially similar to the exclusive option agreements described above.

In the opinion of our Philippines counsel, Sapalo Velez Bundang & Bulilan, the contractual arrangements in respect of Philippines Co II and Philippines Co III are valid, binding and enforceable under current laws of the Philippines.

We maintain offices in Pasig City, Philippines, Riyadh, Saudi Arabia, Hong Kong, Kuala Lumpur, Malaysia and other places outside mainland China with an aggregate of 9,642 square meters. These facilities accommodate part of our sales and marketing and general and administrative activities. We also maintain offices in mainland China with an aggregate of 3,434 square meters accommodating part of our product development and general and administrative activities.

We lease all of the facilities that we currently occupy from independent third parties.

We believe that the facilities that we currently lease are adequate to meet our needs for the foreseeable future, and we believe that we will be able to obtain adequate facilities, principally through leasing of additional properties, to accommodate our future expansion plans.

​

67

Table of Contents

ITEM 4.A.UNRESOLVED STAFF COMMENTS

Not Applicable.

​

ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included in this annual report on Form 20-F. This report contains forward-looking statements. See “Forward-Looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report on Form 20-F.

Overview

We are a global online education platform with core expertise in English education. Our mission is to make quality education accessible and affordable. Recognizing the strong demand for improving English proficiency and the lack of effective and affordable solutions, our founders started with English education as the first step of our journey.

Prior to the second half of 2021, we focused primarily on offering one-on-one lessons to K-12 students and post-secondary students in mainland China, connecting them with our pool of foreign tutors. In response to the regulatory developments in the private education sector in mainland China since mid-2021, we have stopped selling lessons taught by foreign tutors to K-12 students in mainland China and have developed and transitioned into new service offerings that continue to leverage our expertise in English education and our pool of English tutors. Our new business offerings focus on one-on-one English lessons taught by foreign tutors to students in countries and regions outside of mainland China. Our historical operational and financial data is not indicative of future operational and financial performances, particularly due to the transition described above.

Our reporting currency is United States dollars. The functional currency of our company and our subsidiaries incorporated in the Cayman Islands, Hong Kong and Singapore is United States dollars, the functional currency of the Philippines entities is Peso, the functional currency of the Thailand entity is Thai Baht, the functional currency of Saudi is Saudi Riyal, the functional currency of the Malaysia entity is Ringgit, the functional currency of United Arab Emirates entities is Dirham and the functional currency of the mainland China entities in our company is RMB, the functional currency of the Jordan entity is Jordanian Dinar and the functional currency of the Vietnam entity is Vietnamese Dong. In the consolidated financial statements, the entities located in mainland China, the Philippines, Malaysia, Thailand, Saudi, United Arab Emirates, Jordan and Vietnam have been translated into USD. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average of exchange rates during their respective reporting period.

Our net revenues increased from US$27.1 million in 2023 to US$50.7 million in 2024, and further to US$95.6 million in 2025. Our gross billings increased from US$39.9 million in 2023 to US$69.6million in 2024 and further to US$127.6 million in 2025. We define gross billings for a specific period as the total amount of cash received and receivable from third party payment platforms for the sale of course packages and services in such period, net of the total amount of refunds in such period. Our net losses in 2023, 2024 and 2025 were US$15.0 million, US$7.3 million and US$16.9 million, respectively.

Selected Income Statement Items

Net Revenues

In 2023, 2024 and 2025, we generated net revenues of US$27.1 million, US$50.7 million and US$95.6 million, respectively. We generally collect fees in advance, which we initially record as advances from students. We mainly offer prepaid credit packages with minimum monthly consumption for our students to purchase. For prepaid credit packages, fees for lessons that have expired are automatically recognized as revenues. We had advances from students from international business of US$27.2 million, US$45.1 million, and US$76.6 million, as of December 31, 2023, 2024, and 2025, respectively. Our net revenues are presented net of value - added tax.

68

Table of Contents

Cost of Revenues

Our cost of revenues primarily consists of service fees to our tutors who delivered paid lessons, payment processing fees charged by third party payment channels, cost of server and bandwidth and compensation to personnel providing support for our services. We recorded cost of revenues of US$6.3 million, US$11.2 million and US$24.9 million in 2023, 2024 and 2025, respectively.

Operating Expenses

Our operating expenses consist of sales and marketing expenses and general and administrative expenses, and to a lesser extent, product development expenses. The following table sets forth, for the years indicated, our operating expenses, in absolute amounts and as percentages of total net revenues:

​

​

Our sales and marketing expenses primarily consist of our sales and marketing personnel related expenses and marketing and branding expenses.

Our general and administrative expenses primarily consist of our management and administrative personnel related expenses. Our general and administrative expenses also include professional service fees as well as share -based compensation expenses.

Our product development expenses primarily consist of personnel related expenses for employees involved in course content development, as well as for those involved in the research and development of technology for our online and mobile platforms.

Taxation

Cayman Islands

We are incorporated in the Cayman Islands. Under the current law of the Cayman Islands, we are not subject to income or capital gains tax. In addition, dividend payments are not subject to withholding tax in the Cayman Islands.

Singapore

Our wholly owned subsidiary in Singapore, HelloWorld Online Education Pte. Ltd., is subject to 17% Singapore corporate income tax on its taxable income generated from operations in Singapore for the year 2025. In 2025, HelloWorld Online Education Pte. Ltd. was in a loss position, hence no taxable profit was reported during such period.

Malaysia

Our subsidiary in Malaysia, 51TALK TRAINING SDN. BHD was incorporated in April 2022. Under the prevailing Malaysian tax law (Income Tax Act 1967 and Budget 2024 provisions), the taxable income generated by the company should be subjected to 15% for the first MYR0.15 million taxable income, 17% for taxable income between MYR0.15 million to MYR0.6 million, and 24% thereafter, while it qualifies as a resident small or medium-sized enterprise (SME). Non-SME resident companies are subject to a uniform 24% corporate income tax rate. The subsidiary was a SME for the year ended December 31, 2023 and became a non-SME for the years ended December 31, 2024 and 2025.

69

Table of Contents

Thailand

Our subsidiary in Thailand, Helloworld Education Online (Thailand) Co., Ltd., was incorporated in 2022. The income is subject to Thailand tax laws. The income tax rate is 20% on taxable profits.

Saudi Arabia

Our subsidiary in Saudi Arabia, Darb Al - Najah Training Company, was incorporated in 2023. The income is subject to Saudi Arabia tax laws. The income tax rate is 20% on taxable profits.

United Arab Emirates

Our subsidiaries in United Arab Emirates, HAWO EDUCATION INVESTMENT-FZCO and Hawo Online Training L.L.C-FZ were incorporated in 2024. The income is subject to United Arab Emirates tax laws. The income tax rate is 9% on taxable profits.

Hong Kong

Commencing from the year of assessment 2018/2019, the first HK$2 million of profits earned by our subsidiaries incorporated in Hong Kong (being our former wholly owned subsidiary COE HK Co I and our wholly owned subsidiary COE HK Co II and Helloworld Online HK) have been taxed at half the current tax rate of 16.5% (i.e., 8.25%) while the remaining profits continue to be taxed at the existing 16.5% tax rate. For the years ended December 31, 2023, 2024 and 2025, there was no taxable profit for COE HK Co II. For the years ended December 31, 2023, 2024 and 2025, there was no taxable profit for Helloworld Online HK. In addition, payments of dividends by our subsidiaries incorporated in Hong Kong to us are not subject to withholding tax in Hong Kong.

Philippines

Philippines Co II was incorporated in the Philippines and subjected to corporate income tax in the Philippines at a rate of 25%.

Philippines Co III is subject to a corporate income tax of 20% of the taxable net income on all income derived during each taxable year from sources within and outside of the Philippines. In addition to the corporate income tax, these two subsidiaries are also subject to 12% of Value Added Tax on all income generated within the Philippines. Prior to the Ease of Paying Taxes Act (Republic Act No. 11976), which took effect on January 22, 2024, the VAT on services was based on gross receipts.

Payments of dividends by Philippines Co II and Philippines Co III are subject to withholding tax in the Philippines at the rate of 25%. As of December 31, 2023, 2024 and 2025, we did not record any withholding tax on the retained earnings of the two subsidiaries in the Philippines on the basis of our current intent to permanently reinvest the undistributed earnings.

Vietnam

Our subsidiary, Helloworld Online Education Vietnam Company Limited, is established in Vietnam in July, 2025 and is subject to Vietnam tax laws. The income tax rate is 20% on taxable profits.

Jordan

Our subsidiary, HelloWorld Online Education Jordan LLC, is established in Jordan and is subject to Jordan tax laws. The income tax rate is 20% on taxable profits.

​

70

Table of Contents

PRC

Our subsidiary in mainland China are companies incorporated under PRC law and, as such, are subject to mainland China enterprise income tax on their taxable income in accordance with the PRC income tax laws. Pursuant to the PRC Enterprise Income Tax Law, which became effective on January 1, 2008, and was amended on February 24, 2017, and December 29, 2018, a uniform 25% enterprise income tax rate is generally applicable to both foreign-invested enterprises and domestic enterprises, except where a special preferential rate applies. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards.

Our subsidiaries in mainland China are subject to value-added tax at a rate of 6% on services, and 9% or 13% on the goods or products we provide, less any deductible value-added tax we have already paid or borne. Our subsidiaries in mainland China are also subject to surcharges on value-added tax payments in accordance with PRC law.

Results of Operations

The following table sets forth a summary of our consolidated results of operations for the years indicated, both in absolute amounts and as percentages of our net revenues. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

​

The Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

Net Revenues

Our net revenues from our international business operations increased by 88.6% from US$50.7 million in 2024 to US$95.6 million in 2025. The increase was primarily attributable to the increase in the number of paid lessons booked driven by the increase in the number of active students of our international business. The number of active students with general lesson consumption increased by 81.2% from 97.5 thousand in 2024 to 176.7 thousand in 2025. The number of active students is the main driver for our revenue. We track the number of active students as a key indicator for our business growth and manage our course offerings and sales strategies accordingly.

71

Table of Contents

Cost of Revenues

Our cost of revenues from our international business operations increased by 123.4% from US$11.2 million in 2024 to US$24.9 million in 2025. The increase was primarily due to the increase in total service fees paid to tutors, which was mainly resulting from an increased number of paid lessons. The total amount of service fees paid to tutors for delivering paid lessons increased by 101.2% from US$8.9 million in 2024 to US$18.0 million in 2025.

Gross Profit

As a result of the foregoing, our gross profit from our international business operations was US$39.5 million in 2024 and US$70.7 million in 2025. Our gross margin decreased from 78.0% in 2024 to 73.9% in 2025. The decrease was mainly attributable to the increased payment processing fee due to the larger gross billings.

Operating Expenses

Our operating expenses from our international business operations increased by 78.8% from US$47.6 million in 2024 to US$85.1 million in 2025. The increase was mainly due to the increases in sales and marketing expenses.

Sales and Marketing Expenses

Our sales and marketing expenses from our international business operations increased by 86.6% from US$33.4 million in 2024 to US$62.3 million in 2025. The increase in headcount and personnel-related expenses, and the increase in marketing and branding expenses resulting from intensified marketing and branding activities.

General and Administrative Expenses

Our general and administrative expenses from our international business operations increased by 63.0% from US$10.6 million in 2024 to US$17.3 million in 2025. This increase was primarily due to the increase in headcount and personnel-related expenses.

Product Development Expenses

Our product development expenses from our international business operations increased by 53.3% from US$3.6 million in 2024 to US$5.5 million in 2025. The increase was primarily due to the increase in headcount and personnel-related expenses.

Other income / (expenses), net

We recorded other income, net from our international business operations of US$0.8 million in 2024 and other expense, net of US$1.5 million in 2025. The other income, net in 2024 mainly include the reversal of the provision for interests and penalties of the taxes that were recognized in 2023. The other expense, net in 2025 mainly include foreign exchange losses.

Income Tax Expenses

We recorded income tax expenses from our international business operations of US$0.3 million in 2024 and US$1.2 million in 2025, respectively.

Net loss

As a result of the foregoing, we incurred net loss from our international business operations of US$7.3 million and US$16.9 million in 2024 and 2025, respectively.

72

Table of Contents

The Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

Net Revenues

Our net revenues from our international business operations increased by 87% from US$27.1 million in 2023 to US$50.7 million in 2024. The increase was primarily attributable to the increase in the number of paid lessons booked driven by the increase in the number of active students of our international business. The number of active students with general lesson consumption increased by 87.9% from 51.9 thousand in 2023 to 97.5 thousand in 2024. The number of active students is the main driver for our revenue. We track the number of active students as a key indicator for our business growth and manage our course offerings and sales strategies accordingly.

Cost of Revenues

Our cost of revenues from our international business operations increased by 76.6% from US$6.3 million in 2023 to US$11.2 million in 2024. The increase was primarily due to the increase in total service fees paid to tutors, which was mainly resulting from the delivery of an increased number of paid lessons. The total amount of service fees paid to tutors for delivering paid lessons increased by 70.5% from US$5.2 million in 2023 to US$8.9 million in 2024.

Gross Profit

As a result of the foregoing, our gross profit from our international business operations was US$20.8 million in 2023 and US$39.5 million in 2024. Our gross margin increased from 76.7% in 2023 to 78.0% in 2024. The increase was mainly attributable to an increase in the price for prepaid credit packages.

Operating Expenses

Our operating expenses from our international business operations increased by 38.1% from US$34.5 million in 2023 to US$47.6 million in 2024. The increase was mainly due to the increases in sales and marketing expenses, general and administrative expenses and product development expenses.

Sales and Marketing Expenses

Our sales and marketing expenses from our international business operations increased by 41.3% from US$23.6 million in 2023 to US$33.4 million in 2024. The increase was primarily due to the increase in headcount and personnel - related expenses and the increase in advertising and promotion fees for our international business.

General and Administrative Expenses

Our general and administrative expenses from our international business operations increased by 37.4% from US$7.7 million in 2023 to US$10.6 million in 2024. This increase was primarily due to the increase in headcount and personnel - related expenses

Product Development Expenses

Our product development expenses from our international business operations increased by 15.6% from US$3.1 million in 2023 to US$3.6 million in 2024. The increase was primarily due to an increase in the number of technology and course development - related personnel in the international business.

Other income / (expenses), net

We recorded other expenses, net from our international business operations of US$1.4 million in 2023 and other income, net of US$0.8 million in 2024. The fluctuation was primarily due to, in 2024, the reversal of the provision for interests and penalties of the taxes that were recognized in 2023.

73

Table of Contents

Income Tax Expenses

We recorded income tax expenses from our international business operations of US$0.1 million in 2023 and US$0.3 million in 2024, respectively.

Net loss

As a result of the foregoing, we incurred net loss from our international business operations of US$15.0 million and US$7.3 million in 2023 and 2024, respectively.

Impact of Foreign Currency Fluctuation

See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Fluctuations in foreign currency exchange rates may materially and adversely affect our results of operations” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk—Foreign Exchange Risk.”

Impact of Governmental Policies

See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Global Operations” and “Item 4. Information on the Company—B. Business Overview—Government Regulations.”

Cash Flows and Working Capital

51Talk Online Education Group is a holding company with no operations of its own. 51Talk Online Education Group may, through capital contributions or loans, provide funding to its wholly owned subsidiaries in Hong Kong or subject to the satisfaction of applicable government registration and approval requirements, to its wholly owned mainland China subsidiaries. In addition, subsidiaries of 51Talk Online Education Group pay service fees to certain mainland China subsidiary of 51Talk Online Education Group pursuant to operating management service agreements, marketing service agreements and research and development service agreements. To effectively manage cash flow within our organization, we have put in place relevant cash management policies. For a more detailed description of cash flows within our organization and our cash management policies, see “Item 3. Key Information—Cash Flows through Our Organization.”

Our ability to distribute earnings to U.S. investors is limited. We are a Cayman Islands holding company, and we may rely on dividends and other distributions on equity paid by our subsidiaries for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. When any of our subsidiaries incurs debt on its own behalf, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us. Our subsidiaries’ ability to distribute dividends is based upon their distributable earnings. In addition, our subsidiaries may be subject to restrictions imposed by local laws and regulations.

In addition, under laws and regulations of mainland China, our mainland China subsidiaries are subject to restrictions on foreign exchange and cross-border cash transfers, including to our holding company 51Talk Online Education Group and to U.S. investors. To the extent cash or other assets in the business is in mainland China or a mainland China entity, the funds or other assets may not be available to fund operations or for other use outside of mainland China due to the imposition of restrictions and limitations by the PRC government on the ability of 51Talk Online Education Group or its subsidiaries to transfer cash or other assets. As of the date of this annual report, there is no equivalent or similar restriction or limitation in Hong Kong on cash or other assets transfers in, or out of, our Hong Kong entities, except for the transfer of funds involving money laundering and criminal activities. However, if restrictions or limitations were to become applicable to cash or other asset transfers in and out of Hong Kong entities in the future, the funds or other assets in our Hong Kong entities may not be available to fund operations or for other use outside of Hong Kong. There is no assurance that the ability of us or our subsidiaries to transfer cash will not subject to further limitations or restrictions imposed by the PRC government. Our subsidiaries did not make cash dividends or other distributions to 51Talk Online Education Group, the holding company, or its offshore subsidiaries, in the years ended December 31, 2023, 2024 and 2025. Going forward, our subsidiaries intend to retain most, if not all, of their available funds and any future earnings.

74

Table of Contents

Our principal sources of liquidity have been proceeds from our equity offerings and cash generated from operating activities. As of December 31, 2025, we had US$39.0 million in cash, cash equivalents, and time deposits. Cash and cash equivalent consists of cash held in demand deposit accounts managed by financial institutions, which have original maturities of less than three months and unrestricted as to withdrawal and use.

As of December 31, 2025, we and our subsidiaries held cash, cash equivalents and time deposits in the amount of US$13.6 million, SAR57.5 million, SGD0.4 million, MYR2.5 million, HKD21.2 million, RMB19.3 million and THB60.7 million in bank accounts in mainland China, Saudi Arabia, Singapore, Malaysia, Hong Kong and Thailand, and our consolidated entities in mainland China held cash, cash equivalents in the amount of US$2.4 million in mainland China, which included cash reserved to settle payables to our mainland China subsidiaries.

We believe our cash and cash equivalents on hand will be sufficient to meet our current and anticipated needs for general corporate purposes for at least the next 12 months. We may, however, need additional cash resources in the future if we experience changes in business conditions or other developments. We may also need additional cash resources in the future if we find and wish to pursue opportunities for investment, acquisition, capital expenditure or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand, we may seek to issue equity or equity linked securities or obtain debt financing. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

Our consolidated financial statements for 2025 had been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations. We incurred net losses of US$15.0 million, US$7.3 million and US$16.9 million from international business operations for the fiscal years ended December 31, 2023, 2024 and 2025, respectively. Accumulated deficits were US$370.4 million as of December 31, 2025. The net current liabilities were US$9.3 million, US$16.8 million and US$35.0 million as of December 31, 2023, 2024 and 2025, respectively. The operating cash inflows were US$0.6 million, US$5.8 million and US$11.8 million for the years ended December 31, 2023, 2024 and 2025, respectively. We assess our liquidity by our ability to generate cash from operating activities to fund our operations, attract investors and borrow funds on favorable economic terms.

Operating Activities

Net cash provided by operating activities from our international business operations in 2024 and 2025 was US$5.8 million and US$11.8 million, respectively. The year over year increase from 2024 to 2025 was primarily due to the increase in advances from students.

Net cash provided by operating activities from our international business operations in 2023 and 2024 was US$0.6 million and US$5.8 million, respectively. The year over year increase from 2023 to 2024 was primarily due to the increase in advances from students.

Investing Activities

Net cash used in investing activities from international business operations amounted to US$1.0 million in 2025, which was primarily attributable to purchase of PPE and netted off by withdrawal of deposits.

Net cash provided by investing activities from international business operations amounted to US$0.5 million in 2024, which was primarily attributable to withdrawal of time deposits.

Net cash provided by investing activities from our international business operations amounted to US$2.4 million in 2023, which was primarily attributable to withdrawal of time deposits.

Financing Activities

Net cash provided by financing activities from international business operations in 2025 amounted to US$0.2 million, which was mainly due to proceeds from exercise of stock options.

75

Table of Contents

Net cash provided by financing activities from international business operations in 2024 amounted to US$0.2 million, which was mainly due to capital injection from noncontrolling interests.

Net cash used in financing activities from international business operations in 2023 amounted to nil.

Capital Expenditures

Our capital expenditures are incurred primarily in connection with leasehold improvements and investments in office furniture, computers and servers. Our capital expenditures from our international business were US$0.3 million, US$0.3 million and US$2.3 million in the years ended December 31, 2023, 2024 and 2025, respectively. We intend to continue to utilize real estate leasing in order to allocate our capital resources cost - efficiently. We may make acquisitions of businesses and properties that complement our operations when suitable opportunities arise.

Material Cash Requirements

Other than the ordinary cash requirements for our operations, our material cash requirements as of December 31, 2025, and any subsequent interim period primarily include our operating lease obligations and purchase commitments.

The following table sets forth our contractual obligations as of December 31, 2025:

Notes:

We intend to fund our existing and future material cash requirements primarily with anticipated cash flows from operations, our existing cash balance and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support our business.

Technology

Network infrastructure

Building a reliable, scalable and secure technology infrastructure is crucial to our ability to support our lessons and the various services that we provide to our students on our online platforms. We manage our lesson delivery system mainly using our proprietary technology, and to a lesser extent, commercially available technology. We have built a robust technology infrastructure to optimize the performance of our Air Class platform.

The telecommunication infrastructure in the Philippines, Malaysia and certain other countries and regions where we conduct our business is less developed. We have designed our infrastructure based on our insights into the local environment to ensure an optimal streaming experience for our tutors and our students. We work with leading network providers in the Philippines and have employed an exclusive network infrastructure to support our online performance by increasing stability and reliability since April 2017. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Unexpected network interruptions, security breaches or computer virus attacks and system failures could have a material adverse effect on our business, financial condition and results of operations.”

76

Table of Contents

All of our servers and routers, including backup servers, are currently hosted by third-party service providers in Singapore. We back up our databases daily. Our IT department regularly monitors the performance of our websites, mobile apps and technology infrastructure to enable us to respond quickly to potential problems. We have not experienced any major problems in our network infrastructure.

Proprietary CRM and ERP systems

We developed our proprietary ERP system to manage and integrate our key administrative and operational functions, especially those related to our tutors. Each step of our tutors’ interaction with our platform, from initial engagement, to interviews, orientation, teacher training, evaluation and promotion, is systematically managed and processed by our ERP system. We have also developed our proprietary CRM software to organize and manage every aspect of our students’ engagement with our platform. Our CRM software manages student information from leads generation through every step of our sales efforts, as well as tracks student feedback and performance on our platform throughout their entire learning experience.

Data analytics

Our online and mobile education platforms monitor and collect data with respect to teacher performance and learning outcomes from each lesson, forming a feedback loop that serves as a critical foundation for us to provide ongoing teacher training, update our courses, increase the effectiveness of our sales and marketing efforts and improve student experience on our platform.

We gather and analyze student data at essentially each stage of their interaction with our platform, beginning from the extensive student questionnaires that they fill out prior and after free trial lessons containing their background information and learning objectives, to their selections of courses and tutors, performance during pre-lesson studying process, evaluation of tutors after each lesson, as well as the lesson memos prepared by the tutors after each lesson. We similarly gather a wide range of data on our tutors based on feedback from our quality assurance team and students, as well as the personal background information. We analyze this information through our internally developed adaption engine and prediction model, which enables us to offer personalized learning experience for our students and personalized teacher training process for our students. We are also able to forecast the frequency of lesson bookings, preferences of course topics and learning progress through the data analytic to make our operations more efficient. Furthermore, our course content development and sales and marketing efforts also heavily draw upon our data analytics capability.

Intellectual Property

We own copyrights to the course contents we developed in-house.

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

As of December 31, 2025, we held eighteen registered domain names relating to our business, nine registered software copyrights and five trademark designs, which were registered and recognized in several jurisdictions as per applicable laws in several jurisdictions.

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2025 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

77

Table of Contents

We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. We believe the following accounting estimate involve the most significant judgments used in the preparation of our financial statements.

Determination of Standalone Selling Price of Performance Obligations

We provide two kinds of lessons as distinct performance obligations in one contract: one-on-one private course service and public course service. We did not sell them separately on stand-alone basis, therefore judgment is required to determine standalone selling price for each distinct performance obligation. We determine the stand-alone selling prices using an expected cost plus margin methodology for private courses and the adjusted market assessment methodology for public courses.

Recent Accounting Pronouncements

A list of recently issued accounting pronouncements that are relevant to us is included in Note 2 (x) “recently issued accounting pronouncements” to our consolidated financial statements included elsewhere in this annual report.

​

ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

The following table sets forth information regarding our executive officers and directors as of the date of this annual report.

​

Mr. Jack Jiajia Huang is our founder and has served as the chairman of our board of directors and chief executive officer since our inception. Prior to founding our company, he served as an operations manager at Mitsubishi Corporation (China) Co., Ltd. from 2007 to 2010. Mr. Huang received his bachelor’s degree in Japanese language from Tsinghua University in 2007. In 2015, Mr. Huang was named a leading entrepreneur under 30 by Cyzone, an entrepreneur service platform in China.

Ms. Ting Shu is our co-founder and has served as our director since our inception. From 2010 to 2012, Ms. Shu worked in the enterprise risk services department of Deloitte in China. Prior to that, Ms. Shu co-founded Talk China with Mr. Jack Jiajia Huang in 2007. Ms. Shu received her master’s degree in language science from the University of Tokyo in 2010 and her bachelor’s degree in Japanese language from Tsinghua University in 2007. Mr. Jack Jiajia Huang and Ms. Ting Shu are husband and wife.

78

Table of Contents

Ms. Cindy Chun Tang has served as our chief financial officer since October 2022, and served in roles of the finance director, senior finance director and vice president of finance since she joined our company in 2014. Prior to joining 51Talk, Ms. Tang served as a senior financial analyst in Google’s Beijing office from 2007 to 2014. Previously, Ms. Tang served as a senior financial analyst with Novo Nordisk, a CSE-listed world leading pharmaceutical manufacturer, a finance manager with Beijing City International School, and a senior auditor with PricewaterhouseCoopers Zhong Tian LLP. Ms. Tang received a master’s degree in western accounting from the Central University of Finance and Economics and a bachelor’s degree in accounting from Northeastern University in Shenyang China. Ms. Tang is a Certified Public Accountant licensed in China and Certified Management Accountant designated by the Institute of Certified Management Accountants of the Institute of Management Accountants, United States of America.

Mr. Frank Lin has served as our director since June 2013. Mr. Lin is a general partner of DCM, a technology venture capital firm. Prior to joining DCM in 2006, Mr. Lin was the chief operating officer of SINA Corporation, a Nasdaq - listed company. He co - founded SINA’s predecessor, SinaNet, in 1995 and later guided SINA through its listing on Nasdaq. Mr. Lin had also held various marketing, engineering and managerial positions at Octel Communication Inc. and NYNEX. Mr. Lin currently serves on the board of directors of various DCM portfolio companies, including Tuniu Corporation and QuantaSing Group Limited, which are Nasdaq - listed companies, and Vipshop Holdings Limited, an NYSE - listed company. Mr. Lin received an MBA degree from Stanford University and a bachelor’s degree in engineering from Dartmouth College.

Mr. Jimmy Lai has served as our independent director since June 2024. Mr. Lai also serves as an independent director of several NYSE - listed companies, including Zepp Corporation (NYSE: ZEPP), FinVolution Group (NYSE: FINV) and Youdao, Inc (NYSE: DAO). Mr. Lai served as our chief financial officer from June 2015 to December 2018. Prior to joining us in 2015, Mr. Lai served as the chief financial officer for several companies, including Chukong Technologies Corp., a leading mobile entertainment platform company in China, from 2013 to 2015, Gamewave Corporation, a leading webgame company in China, from 2011 to 2013, Daqo New Energy Corp., an NYSE - listed company and a leading polysilicon manufacturer based in China, from 2009 to 2011, Linktone Ltd., a Nasdaq - listed company and a leading provider of wireless interactive entertainment services to consumers in China, from 2008 to 2009 and Palm Commerce Holdings, a leading information technology solution provider for the China lottery industry, from 2006 to 2008. Prior to that, Mr. Lai served as an associate vice president of investor relations at Semiconductor Manufacturing International Corporation, a company listed on the NYSE and the Main Board of the Hong Kong Stock Exchange, from 2002 to 2006, and as a controller and director of financial planning at AMX Corporation from 1997 to 2001. Mr. Lai received his MBA from the University of Texas at Dallas and his bachelor’s degree in statistics from the National Cheng Kung University in Taiwan. Mr. Lai is a certified public accountant licensed in the State of Texas.

Mr. Xiaoguang Wu has served as our independent director since June 2016. Mr. Wu is the founding partner of Welight Capital (Hong Kong) Limited. Mr. Wu joined Tencent Inc., a company listed on the Hong Kong Stock Exchange, in 1999 as a member of the early founding team. He worked as a project manager for the research and development team for instant messaging products, a general manager for the internet business division and later became the senior executive vice president of the internet service division and the chief executive officer of Tencent E - Commerce Holdings Limited, a subsidiary of Tencent Inc. Mr. Wu has served as a senior management advisor for Tencent Inc. since June 2015. Mr. Wu has extensive experience in product research and development, product planning, product operation and marketing internet businesses. Mr. Wu currently serves on the board of directors of LexinFintech Holdings Ltd., a Nasdaq - listed company, and Haidilao International Holding Ltd., a Hong Kong Stock Exchange listed company and a Nasdaq - listed company. Mr. Wu received his EMBA from China Europe International Business School (CEIBS) in 2008 and his bachelor of science degree in weather dynamics from Nanjing University in 1996.

For the fiscal year ended December 31, 2025, we paid an aggregate of approximately US$519.4 thousand in cash to our executive officers and our non - executive directors. For share incentive grants to our directors and executive officers, see “—Share Incentive Plan.”

Our subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, housing fund, unemployment and other statutory benefits. Other than the above-mentioned statutory contributions mandated by applicable laws, rules and regulations in the countries and regions where we operate, we have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.

79

Table of Contents

Employment Agreements and Indemnification Agreements

We have entered into employment agreements with each of our executive officers. We may terminate an executive officer’s employment for cause at any time without advance notice or remuneration, if (i) the executive officer is convicted or pleads guilty to a felony or to an act of fraud, misappropriation or embezzlement, (ii) the executive officer has been negligent or acted dishonestly to our detriment, (iii) the executive officer has engaged in actions amounting to misconduct or failed to perform his/her duties thereunder and such failure continues after the executive officer is afforded a reasonable opportunity to cure such failure, (iv) the executive officer has died, or (v) the executive officer has a disability which shall mean a physical or mental impairment which, as reasonably determined by our board of directors, renders the executive officer unable to perform the essential functions of his/her employment with us, even with reasonable accommodation that does not impose an undue hardship on our company, for more than 180 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period would apply. We may also terminate an executive officer’s employment by giving a three-month prior written notice. An executive officer may terminate his or her employment at any time by giving a three-month prior written notice.

Each executive officer has agreed to hold, at all times during and after the termination or expiry of his or her employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable law, any of our confidential information, or the confidential or proprietary information disclosed to the executive officer by or obtained by the executive officer from us either directly or indirectly in writing, orally or otherwise, if specifically indicated to be confidential or reasonably expected to be confidential.

In addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or her employment and for two years following the last date of employment. Specifically, each executive officer has agreed not to (i) approach our suppliers, clients, customers or contacts of us or other persons or entities introduced to the executive officer in the executive officer’s capacity as our representative for the purposes of doing business with such persons or entities which will harm the business relationship between the company and such persons and/or entities; (ii) unless expressly consented to by us, assume employment with or provide services to any of our competitors, engage, whether as principal, partner, licensor or otherwise, any of our competitors; or (iii) unless expressly consented to by us, seek directly or indirectly, by the offer of alternative employment or other inducement whatsoever, to solicit the services of any of our employees who is employed by us.

We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.

Share Incentive Plan

2013 Plan and 2014 Plan

We adopted an employee equity incentive plan in 2013, or the 2013 Plan, and another in 2014, or the 2014 Plan. The 2014 Plan was amended in February 2016. The 2013 Plan and the 2014 Plan are hereinafter collectively referred as the Pre-IPO Plans. The purpose of the Pre-IPO Plans is to attract and retain the best available personnel to provide additional incentives to employees, directors and consultants and to promote the success of the company’s business.

We are authorized to grant options or share purchase rights to purchase up to an aggregate of 36,229,922 Class A ordinary shares under the Pre - IPO Plans. The 2013 Plan expired in September 2023 and no additional grants may be made thereunder. The 2014 Plan expired in December 2024 and no additional grants may be made thereunder. As of March 18, 2026, options to purchase an aggregate number of 5,946,640 Class A ordinary shares have been granted and are outstanding, and nil restricted share units have been granted and are outstanding.

The terms of the Pre-IPO Plans are substantially similar. The following paragraphs summarize the terms of the Pre-IPO Plans.

Types of Awards. The Pre-IPO Plans permit the awards of options, share appreciation rights, dividend equivalent rights, restricted shares, restricted share units and other rights or benefits under the Pre-IPO Plans.

80

Table of Contents

Plan Administration. Our board of directors administers the Pre-IPO Plans. The board of directors may authorize the chief executive officer to grant any awards and may limit such authority as the board determines from time to time.

Eligibility. We may grant awards to our employees, directors and consultants. An employee, director or consultant who has been granted an award may, if otherwise eligible, be granted additional awards.

Designation of Award. Each award under the Pre-IPO Plans is designated in the award agreement, which is the written agreement evidencing the grant of an award executed by the company and the grantee, including any amendments thereto.

Conditions of Award. The board of directors or any entity appointed by the board to administrate the Pre-IPO Plans determines the provisions, terms, and conditions of each award including, but not limited to, the award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, shares, or other consideration) upon settlement of the award and payment contingencies.

Terms of Award. The term of each award is stated in the relevant award agreement. The specified term of any award will not include any period for which the grantee has elected to defer the receipt of the shares or cash issuable pursuant to the award.

Transfer Restrictions. The awards are transferable (i) by will and by the laws of descent and distribution and (ii) during the lifetime of the grantee, to the extent and in the manner authorized by the administrator. The grantee may designate one or more beneficiaries of the grantee’s award in the event of the grantee’s death on a beneficiary designation form provided by the administrator.

Time of Granting Awards. The date of grant of an award is the date on which the administrator makes the determination to grant such award, or such other date as is determined by the administrator.

Acceleration of Award Upon Corporate Transaction or Change in Control. Except as provided otherwise in a separate board resolution or an individual award agreement and except for the complete liquidation or dissolution of the company, in the event of a corporate transaction, for the portion of each award under the Pre-IPO Plans that is neither assumed nor replaced, such portion of the award shall automatically become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at fair market value) for all of the shares at the time represented by such portion of the award, immediately prior to the specified effective date of such corporate transaction, provided that the grantee’s continuous service has not terminated prior to such date. The portion of the award under the Pre-IPO Plans that is not assumed will terminate under the Pre-IPO Plans to the extent not exercised prior to the consummation of such corporate transaction. Except as provided otherwise in a separate board resolution or an individual award agreement, in the event of a change in control (other than a change in control which also is a corporate transaction), each award which is at the time outstanding under the Pre-IPO Plans automatically will become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at fair market value), immediately prior to the specified effective date of such change in control, for all of the shares at the time represented by such award, provided that the grantee’s continuous service has not terminated prior to such date.

Exercise of Award. Any award granted under the Pre-IPO Plans is exercisable at such times and under such conditions as determined by the administrator under the terms of the Pre-IPO Plans and specified in the award agreement. An award is deemed to be exercised when written notice of such exercise has been given to the company in accordance with the terms of the award by the person entitled to exercise the award and full payment for the shares with respect to which the award is exercised, including, to the extent selected, use of the broker-dealer sale and remittance procedure to pay the purchase price as provided in the Pre-IPO Plans.

Term of the Pre-IPO Plans. The Pre-IPO Plans will continue in effect for a term of ten years unless sooner terminated by the approval of the board of the company with its unanimous resolutions.

Amendment, Suspension or Termination of the Pre-IPO Plans. The board of directors may at any time amend, suspend or terminate the Pre-IPO Plans, provided, however, that no such amendment shall be made without the approval of the company’s shareholders to the extent such approval is required by applicable laws, or if such amendment would change any of the provisions related to (i) the amendment to the terms of any outstanding award granted under the Pre-IPO Plans or (ii) board’s right to amend, suspend or terminate the Pre-IPO Plans. No award may be granted during any suspension of the Pre-IPO Plans or after termination of the Pre-IPO Plans. No suspension or termination of the Pre-IPO Plans (including termination of the Pre-IPO Plans after it has served its term) shall adversely affect any rights under awards already granted to a grantee.

81

Table of Contents

There were no outstanding options granted to our directors and executive officers under the 2013 Plan and 2014 Plan as of March 18, 2026. As of March 18, 2026, other current and former employees as a group held options to purchase 5,946,640 Class A ordinary shares under the 2014 Plan, with exercise prices ranging from US$0.0167 to US$0.904 per Class A ordinary share.

Amended and Restated 2016 Plan

We adopted the original 2016 share incentive plan, or the 2016 Plan, in May 2016, which was amended and restated in April 2026. Upon the adoption of the Amended and Restated 2016 share incentive plan, or the Amended and Restated 2016 Plan, it replaced the previously adopted 2016 Plan in its entirety and the awards granted and outstanding thereunder remain effective and binding under the amended and restated 2016 Plan. Under the Amended and Restated 2016 Plan, the maximum aggregate number of shares which may be issued pursuant to all awards under the Amended and Restated 2016 Plan is initially 4,600,000 Class A ordinary shares in 2016, plus (i) an annual increase, on the first day of each fiscal year from 2017 through 2026, equal to 1.5% of the total outstanding share capital of the Company as of December 31 of the immediately preceding calendar year, and (ii) an annual increase, on the first day of each fiscal year beginning in 2027, equal to 1.2% of the total outstanding share capital of the Company as of December 31 of the immediately preceding calendar year, or, in each case, such lesser number of Class A ordinary shares as may be determined by our board of directors. On January 1, 2026, the maximum aggregate number of shares which may be issued pursuant to all awards under the Amended and Restated 2016 Plan was increased to 53,645,627 Class A ordinary shares. As of March 18, 2026, options to purchase an aggregate number of 37,500 Class A ordinary shares have been granted and are outstanding and 13,009,194 restricted share units have been granted and are outstanding. The following paragraphs summarize the terms of the Amended and Restated 2016 Plan.

Types of Awards. The Amended and Restated 2016 Plan permits the awards of options, restricted shares and restricted share units.

Plan Administration. Our board or a committee of one or more members of our board duly authorized for the purpose of the Amended and Restated 2016 Plan can act as the plan administrator.

Award Agreement. Options, restricted shares or restricted share units granted under the Amended and Restated 2016 Plan are evidenced by an award agreement that sets forth the terms, conditions and limitations for each grant.

Eligibility. We may grant awards to our employees, directors, consultants, or other individuals as determined, authorized and approved by the plan administrator.

Acceleration of Awards upon Corporate Transactions. Except otherwise provided in the Award Agreement or other written agreement entered into by and between the company and a participant of the Amended and Restated 2016 Plan, if a corporate transaction occurs, the plan administrator may, in its sole discretion, provide for (i) any and all awards outstanding to terminate at a specific time in the future and give each participant the right to exercise the vested portion of such awards during a specific period of time as the plan administrator shall determine, or (ii) the purchase of any award for an amount of cash equal to the amount that could have been attained upon the exercise of such award, or (iii) the replacement of such award with other rights or property selected by the plan administrator in its sole discretion or the assumption of or substitution of such award by the successor or surviving corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of Class A ordinary shares and prices, or (iv) payment of award in cash based on the value of Class A ordinary shares on the date of the corporate transaction plus reasonable interest.

Exercise of Options. The exercise price in respect of any option will be determined by the plan administrator and set forth in the award agreement which may be a fixed or variable price related to the fair market value of the shares. The exercise price per share subject to an option may be amended or adjusted in the absolute discretion of the plan administrator, the determination of which shall be final, binding and conclusive.

Vesting Schedule. In general, the plan administrator determines the vesting schedule, which is set forth in the award agreement.

Transfer Restrictions. Awards may not be transferred in any manner by the recipient other than by will or the laws of descent and distribution, or pursuant to the other exceptions provided under the Amended and Restated 2016 Plan, except as otherwise provided by the plan administrator.

82

Table of Contents

Termination. Unless terminated earlier, the Amended and Restated 2016 Plan will terminate automatically in 2030.

The following table summarizes, as of March 18, 2026, the outstanding restricted share units granted to our directors and executive officers under the Amended and Restated 2016 Plan.

​

​

As of March 18, 2026, other current employees as a group held options to purchase 37,500 Class A ordinary shares under the Amended and Restated 2016 Plan, with exercise prices US$0.2610 per Class A ordinary share. As of March 18, 2026, other current employees as a group held 11,217,040 restricted share units under the Amended and Restated 2016 Plan.

Board of Directors

Our board of directors consists of five directors. A director is not required to hold any shares in our company to qualify to serve as a director. A director may vote with respect to any contract, proposed contract, or arrangement in which he or she is materially interested. A director may exercise all the powers of the company to borrow money, mortgage its business, property and uncalled capital, and issue debentures or other securities whenever money is borrowed or as security for any obligation of the company or of any third party.

Committees of the Board of Directors

We have an audit committee, a compensation committee and a nominating and corporate governance committee under the board of directors. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below.

Audit Committee. Our audit committee consists of Jimmy Lai and Xiaoguang Wu and is chaired by Jimmy Lai. We have determined that each of Jimmy Lai and Xiaoguang Wu satisfies the “independence” requirements of Section 803 of the NYSE American Company Guide and meet the independence standards under Rule 10A - 3 under the Securities Exchange Act of 1934, as amended. We have determined that Jimmy Lai and Xiaoguang Wu qualify as “audit committee financial experts”. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things:

83

Table of Contents

Compensation Committee. Our compensation committee consists of Frank Lin, Jimmy Lai and Xiaoguang Wu, and is chaired by Frank Lin. We have determined that each of Jimmy Lai and Xiaoguang Wu satisfies the “independence” requirements of Section 803 of the NYSE American Company Guide. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which their compensation is deliberated upon. The compensation committee is responsible for, among other things:

Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Jack Jiajia Huang, Jimmy Lai and Xiaoguang Wu, and is chaired by Jack Jiajia Huang. We have determined that each of Jimmy Lai and Xiaoguang Wu satisfies the “independence” requirements of Section 803 of the NYSE American Company Guide. The nominating and corporate governance committee assists the board in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible for, among other things:

84

Table of Contents

Duties of Directors

Under Cayman Islands law, our directors have a duty of loyalty to act honestly in good faith with a view to our best interests, and not to use their position for personal gains. Our directors also have a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association. A shareholder may have the right to seek damages in our name if a duty owed by our directors is breached.

Terms of Directors and Officers

Our officers are elected by and serve at the discretion of the board. Each director is not subject to a term of office and holds office until such time as his successor takes office or until the earlier of his death, resignation or removal from office by ordinary resolution or the unanimous written resolution of all shareholders. A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) dies or is found by our company to be of unsound mind.

We have general administrative, content development and sales and marketing personnel in Hong Kong, Malaysia, mainland China, Thailand and other countries and regions where we operate. In particular, our Philippines offices host our independently contracted teacher engaging and training team, free trial tutors, and part of our general and administrative personnel.

We had a total of 310, 539 and 729 full - time employees as of December 31, 2023, 2024 and 2025, respectively. As of December 31, 2025, we had approximately 42 employees in research and development, 345 employees in sales and marketing, 258 employees in management and administration, 36 employees in free trial tutors and teaching support and 48 employees in learning partner. In addition to our full - time employees, some of our subsidiaries, such as Beijing Helloworld Online Technology Co., Ltd., HelloWorld Online Education Group (HK) Limited and HelloWorld Online Education Pte. Ltd., entered into services outsource agreements with independent third - party suppliers in 2023, 2024 and 2025, through which they have outsourced part of their marketing and sales functions. As of December 31, 2025, we had 1,359 outsourced personnel mainly performing sales and marketing functions for us.

We enter into employment contracts with our full-time employees. For our full-time employees in countries and regions outside mainland China, the employment contracts we have with them contain confidentiality and non-compete provisions. For our full-time employees in mainland China, we also enter into stand-alone confidentiality and non-compete agreements with them. In addition to salaries and benefits, we provide performance-based bonuses for our full-time employees and commission-based compensation for our sales and marketing force.

Independently contracted foreign tutors and Chinese tutors delivering paid lessons on our platform are generally not our full - time employees. We enter into service contracts with such independently contracted tutors, and pay service fees to them based on the number of lessons they teach and their teaching performance. We had approximately 9.8 thousand independently contracted foreign tutors available to deliver lessons for our international business on our platform as of December 31, 2025.

As required by regulations in mainland China, we participate in various employee social security plans that are organized by municipal and provincial governments for our full-time employees in mainland China, including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing insurance. We are required under PRC law to make contributions from time to time to employee benefit plans for our mainland China-based full-time employees at specified percentages of the salaries, bonuses and certain allowances of such employees, up to a maximum amount specified by the local governments in mainland China.

Our employees are not covered by any collective bargaining agreement. We believe that we maintain a good working relationship with our employees, and we have not experienced any significant labor disputes.

85

Table of Contents

Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 18, 2026:

The calculations in the table below are based on 360,438,897 ordinary shares outstanding as of March 18, 2026, comprising of 256,831,917 Class A ordinary shares (excluding 6,909,975 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercising or vesting of awards granted under the issuer’s share incentive plan) and 103,606,980 Class B ordinary shares.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant, or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

​