Maase Inc.提交截至2026年6月30日财年的20-F年报，披露业务重组、持续经营分部表现及拟议私募融资

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

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

OR

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

For fiscal year ended June 30, 2026

OR

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

OR

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

Date of event requiring this shell company report______________

For the transition period from __________ to ___________

Commission file number 001-38813

MAASE Inc.

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

N/A

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

Building 48, Zhixin Manufacturing Valley Industrial Park

No. 52 Yangzhou Road, Economic Development Zone, Laixi, Qingdao

Shandong Province, People’s Republic of China, 266000

Tel: +86-532-66030885

(Address of principal executive offices)

Min Zhou, Chief Executive Officer

Building 48, Zhixin Manufacturing Valley Industrial Park

No. 52 Yangzhou Road, Economic Development Zone, Laixi, Qingdao

Shandong Province, People’s Republic of China, 266000

Tel: +86-532-66030885

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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

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

N/A

(Title of Class)

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

None

(Title of Class)

Indicate the number of outstanding shares of each of the Issuer’s classes of capital or ordinary shares as of the close of the period covered by the annual report:

442,175,578 ordinary shares issued and outstanding, par value $0.09 per share, as of June 30, 2026, consisting of 435,508,910 Class A ordinary shares and 6,666,668 Class B ordinary shares

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

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

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

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

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

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. ☐

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. ☒

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

i

INTRODUCTION

Unless otherwise indicated and except where the context otherwise requires, references in this annual report on Form 20-F to:

ii

Our reporting currency is Renminbi. This annual report contains translations of Renminbi amounts into U.S. dollars at specific rates solely for the convenience of the reader. The conversion of Renminbi into U.S. dollars in this annual report is based on the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this annual report were made at a rate of RMB6.7851 to US$1.00, the exchange rate on June 30, 2026 set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, or at all. The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of Renminbi into foreign exchange and through restrictions on foreign trade.

FORWARD-LOOKING STATEMENTS

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. Known and unknown risks, uncertainties and other factors, including those listed under “Risk Factors,” 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 some of 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 relate to, among others:

iii

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable

ITEM 3. KEY INFORMATION

3.A. [Reserved]

3.B. Capitalization and Indebtedness

Not applicable.

3.C. Reason for the Offer and Use of Proceeds

Not applicable.

3.D. Risk Factors

An investment in our Class A Ordinary Shares involves significant risks. Investors in our Class A Ordinary Shares are not purchasing equity securities of our subsidiaries and VIE and VIE’s subsidiaries that have substantive business operations in China and elsewhere, but instead are purchasing equity securities of a Cayman Islands holding company. Maase Inc. is a Cayman Islands holding company that conducts all of its operations through its subsidiaries and VIE and VIE’s subsidiaries located in China and elsewhere. Such structure involves unique risks to investors in our Class A Ordinary Shares.

As a China-based company incorporated in the Cayman Islands, we face various legal and operational risks and uncertainties related to being based in and having a significant portion of our operations in China. The PRC regulatory authorities have significant oversight and discretion over the conduct of our business and may influence our operations as they deem appropriate to further economic, regulatory, political and societal goals. The PRC regulatory authorities have published new policies that affected certain industries with respect to matters such as cybersecurity, data privacy, antitrust and competition, foreign investments, and overseas listings, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business, financial condition and results of operations. Furthermore, the PRC regulatory authority has recently issued new laws and regulations to exert more oversight and control over overseas securities offerings and other capital markets activities and foreign investment in China-based companies like us. Any such action, once taken by the PRC regulatory authority, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless.

You should consider carefully all of the information in this annual report, including the risks and uncertainties described below, before making an investment in our Class A Ordinary Shares.

Risks Related to Our Business and Industry

We are subject to risks and uncertainties related to our business and industry, including but not limited to the following:

1

Risks Related to Our Corporate Structure

We are also subject to risks and uncertainties related to our corporate structure, including but not limited to the following:

Risks Related to Doing Business in China

We face risks and uncertainties related to doing business in China in general, including but not limited to the following:    

2

Risks Related to Our Class A Ordinary Shares

We are subject to risks and uncertainties related to our Class A Ordinary Shares, including but not limited to the following:

3

Risks Related to Our Business and Industry

We may not be able to compete successfully or implement our growth strategies, which could materially and adversely affect our business, financial condition and results of operations.

Our industries are highly competitive and subject to rapidly changing consumer preferences, technological developments and market conditions. Many of our current and potential competitors have longer operating histories, greater brand recognition, broader customer bases, more established distribution networks, and significantly greater financial, marketing and technical resources than we do.

Our future success depends, largely, on our ability to implement our growth strategies effectively, including, developing and commercializing smart technology and new energy solutions following our acquisition of Real Prospect Group and developing our computing power and algorithm solutions services following our acquisition of Huazhi Group and expanding our health and wellness product offerings following our acquisition of Carve Group.

With respect to our smart technology and new energy solutions business by Real Prospect Group, our growth strategy involves operating and expanding electric vehicle charging services as well as expanding sale of charging equipment, including mobile charging robots, fixed charging piles and modular residential energy storage systems. The sale of charging equipment requires us to manage different operational, manufacturing, inventory, pricing and working capital requirements than service-based operations. Our ability to execute this strategy depends on factors such as technological performance, market acceptance, infrastructure availability, third-party cooperation, and our ability to compete with other charging service providers and equipment manufacturers.

With respect to the computing power and algorithm solutions services provided by Huazhi Group, our growth strategy includes the planned implementation of the Stars Distributed Intelligent Computing Center Project, which contemplates the development of distributed intelligent computing infrastructure at multiple sites. On August 18, 2026, we entered into an investment cooperation memorandum with the People’s Government of Chongqing, in connection with a proposed 4,000P computing power project. Separately, discussions regarding another proposed site are also ongoing. The implementation of computing center projects would require us to manage substantial capital expenditures, financing arrangements, and ongoing operational and capacity utilization. Our ability to execute this strategy depends on factors such as the availability of financing on commercially reasonable terms, regulatory compliance, construction and technical integration progress, market demand for computing services, and our ability to compete with other computing infrastructure operators and service providers.

With respect to our health and wellness product business by Carve Group, our growth strategy involves developing and commercializing traditional health and wellness products, including bird’s nest based products, while also advancing herbal medicine and ginseng related resource operations. Our ability to expand these businesses depends on, among other things, our ability to identify and respond to consumer trends, develop and launch new products, ensure stable sourcing of raw materials, comply with applicable regulatory requirements, establish effective distribution arrangements, and compete with other health and wellness brands. As a multi-product and early stage business, our health and wellness product business faces increased complexity and uncertainty regarding consumer demand, pricing, product acceptance and cost control.

We may fail to implement these growth strategies successfully and timely. If we are unable to identify and capture new customers, expand sales and distribution channels, commercialize new products or services, or effectively compete in our target markets, we may not be able to grow our revenues or improve our operating results. Any failure to execute our growth strategies, or any investment in growth initiatives that ultimately proves unsuccessful, could materially and adversely affect our business, financial condition and results of operations.

4

Our revenues and operating results can fluctuate from period to period, which could cause the price of our Class A Ordinary Shares to fluctuate.

Our revenues and operating results have fluctuated in the past and may fluctuate significantly from period to period in the future due to a variety of factors, many of which are beyond our control. During the past fiscal year, we substantially transformed our business through the acquisitions of Carve Group, Real Prospect Group, Oriental Grove and Huazhi Group, the divestiture of our wealth management services business, and the deconsolidation of AIFU and its insurance agency services following the AIFU Reorganization. These transactions have materially changed our business mix, sources of revenue and cost structure and have reduced the comparability of our results across reporting periods.

Factors that may contribute to fluctuations in our revenues and operating results include:

5

Several of our current businesses are at an early stage of development, commercialization or transition and have limited operating histories under our ownership. Certain products and projects have not generated material revenue, and some may require substantial additional investment, development, testing, regulatory compliance efforts and market validation before achieving commercial scale, if ever. In addition, revenue from hardware sales, infrastructure projects and customized AI solutions may be concentrated in a limited number of transactions or customers and may not recur at comparable levels in subsequent periods.

As a result of these and other factors, our results for any prior interim or annual period, particularly periods preceding our acquisitions, dispositions and changes in consolidation, may not be comparable to our results for subsequent periods and should not be relied upon as an indication of our future revenues, operating results or financial condition. If our revenues or operating results fall below the expectations of investors or securities analysts, the trading price of our Class A Ordinary Shares could decline.

If we do not successfully develop, commercialize and distribute our products and services, or if our operations or logistics are disrupted, our business may suffer.

Our success depends in part on our ability to continually develop, commercialize and distribute products and services that meet evolving customer demands in smart technology, computer power and algorithm solutions and health and wellness markets. Consumer preferences in these markets change frequently, and our ability to respond to such changes through timely product development and service enhancement is critical to our growth. New product introductions involve risks, including the possibility that products may not achieve market acceptance, may not be launched on a timely basis, or may fail to meet quality, cost or regulatory requirements. If we are unable to commercialize new or existing products successfully, our revenues may not grow as expected, or may decline. In our smart technology and new energy business, we rely on the effective operation and deployment of charging services and charging equipment. Our operations depend on the availability of suitable sites, infrastructure connectivity, equipment performance, maintenance capabilities, and third-party service providers. Any failure of equipment, disruption in operations, delay in deployment, or inability to efficiently manage logistics, inventory or fulfillment could adversely affect customer satisfaction and revenue generation.

In addition, our operations may be vulnerable to disruptions caused by factors beyond our control, including supply chain interruptions, natural or man-made disasters, public health events, labor disputes, system failures or transportation and logistics issues. Such disruptions could delay product deliveries, interrupt service operations, increase costs, or damage our reputation. If we are unable to successfully develop and commercialize our products and services, efficiently operate and scale our logistics and fulfillment capabilities, or mitigate the impact of operational disruptions, our business, financial condition and results of operations could be materially and adversely affected.

6

Our newly acquired businesses have limited operating histories and are subject to significant uncertainties, which may make it difficult for us to evaluate their prospects and could materially and adversely affect our business.

Our recently acquired businesses operate in industries in which we have limited historical operating experience, and certain of these businesses have operated for only a relatively short period of time in their current form or business focus.

Because of the limited operating histories of these newly acquired businesses in their current forms, there is limited historical information available to evaluate their performance, growth trajectory, cost structure, customer adoption, pricing dynamics or long-term profitability. These businesses may require additional time and resources to establish stable operations, optimize products and services, and achieve sustainable revenue growth. Accordingly, our expectations regarding the future performance of these businesses may not be realized, and we may experience losses, volatility in results of operations or delays in achieving profitability. Any failure of these businesses to develop as anticipated could materially and adversely affect our business, financial condition and results of operations.

We may not be able to successfully integrate and manage our newly acquired businesses, which could divert management attention and adversely affect our operations.

We acquired Carve Group and Real Prospect Group in 2025 and Huazhi Group in 2026 as part of our strategic transition into new operating segments. As a result, these businesses have limited operating histories under our direction and, in certain respects, limited operating histories in their current form. Carve Group’s health and wellness product business remains at an early stage of commercialization. Real Prospect Group is undergoing a major business expansion from a pure service based model to one that includes the sale of charging equipment. Huazhi Group is also undergoing business transition responding to market conditions and management decisions.

Because these businesses are in early stages of development or transition, their historical results may not be indicative of future performance. We face uncertainty in forecasting revenues, costs, cash flows and profitability, and we may not be able to accurately assess the long-term prospects of these businesses. If these acquired businesses do not perform as expected, our consolidated results of operations and financial condition could be materially and adversely affected.

We intend to grow through acquisitions or joint ventures and we may not successfully integrate, operate or realize the anticipated benefits of such business combinations.

As part of our strategic initiatives, we intend to continue pursuing acquisitions or joint ventures. Our future acquisition strategy will be based on identifying and acquiring brands with products that complement our existing products and identifying and acquiring brands in new categories and new geographies for the purpose of expanding our platform of health and wellness products and the smart technology and new energy solutions sectors. Although we regularly evaluate multiple acquisition candidates, we cannot be certain that we will be able to successfully identify suitable acquisition candidates, negotiate acquisitions of identified candidates on favorable terms, or integrate acquisitions that we complete.

Acquisitions involve numerous risks and uncertainties, including intense competition from other potential acquirers, which could increase target prices and/or materially and adversely affect our ability to consummate deals on favorable terms, the potential unavailability of financial resources necessary to consummate acquisitions, the risk that we improperly value and price a target, the potential inability to identify all of the risks and liabilities inherent in a target company or assets notwithstanding our diligence efforts, the diversion of management’s attention from the day-to-day operations of our business and additional strain on our existing personnel, increased leverage resulting from the additional debt financing that may be required to complete an acquisition, dilution of our net current book value per share if we issue additional equity securities to finance an acquisition, difficulties in identifying suitable acquisition targets or in completing any transactions identified on sufficiently favorable terms and the need to obtain regulatory or other governmental approvals that may be necessary to complete acquisitions.

Any future acquisitions may pose risks associated with entry into new geographic markets, and our current markets, distribution channels, lines of business or product categories, where we may not have significant prior experience and where we may not be as successful or profitable as we are in businesses and geographic regions where we have greater familiarity and brand recognition. Potential acquisitions may entail significant transaction costs and require a significant amount of management time and distraction from our core business, even where we are unable to consummate or decide not to pursue a particular transaction.

7

In addition to the risks above, even when acquisitions are completed, integration of acquired entities can involve significant difficulties. These difficulties include failure to achieve financial or operating objectives with respect to an acquisition, systems, operational and managerial controls and procedures, the need to modify systems or to add management resources, difficulties in the integration and retention of consumers or personnel and the integration and effective deployment of operations or technologies, amortization of acquired assets (which would reduce future reported earnings), possible adverse short-term effects on cash flows or operating results, integrating personnel with diverse backgrounds and organizational cultures, coordinating sales and marketing functions and failure to obtain and retain key personnel of an acquired business. Failure to manage these acquisition growth risks could have an adverse effect on our business.

Our computing power and algorithm solutions service currently relies heavily on third-party computing resource suppliers and does not currently own computing infrastructure, which may limit our operational control and adversely affect our business.

Our computing power and algorithm solutions service currently operates under a light-asset model, aggregating computing capacity from third-party suppliers and computing centers to provide services to government and enterprise customers. We currently do not own or operate data centers or computing infrastructure. As a result, our ability to deliver computing services depends on the continued availability, pricing, performance, and reliability of external computing resource providers.

Although we have proposed the Stars Distributed Intelligent Computing Center Project as part of our growth strategy, this initiative remains in the planning stage and has not been implemented as of the date of this annual report. Accordingly, we do not currently generate revenue from self-owned computing infrastructure, and there can be no assurance that such project will be completed or will materially reduce our reliance on third-party suppliers.

We do not control the operation, maintenance, capacity allocation, or pricing policies of third-party computing resource suppliers. If such suppliers reduce available capacity, increase prices, experience operational failures, fail to meet performance standards, terminate cooperation arrangements, or prioritize other customers, we may be unable to secure sufficient computing resources on commercially reasonable terms or at all. Increased market demand for high-performance computing resources may further intensify competition for supply and increase procurement costs.

Because we do not currently own the underlying computing infrastructure, we may have limited ability to control long-term cost structures, ensure stable capacity, optimize operational efficiencies, or differentiate our services based on proprietary assets. If we experience disruptions in computing resource supply, significant cost increases, service quality issues, or competitive disadvantages resulting from our lack of self-owned infrastructure, our ability to fulfill customer obligations and maintain margins could be materially and adversely affected, which in turn could adversely affect our consolidated financial condition and results of operations.

We have not secured definitive financing for the proposed Stars Distributed Intelligent Computing Center Project under our computing power and algorithm solutions service, and the significant capital expenditures required for such project may increase our financial and operational risks.

Stars Distributed Intelligent Computing Center Project is part of the growth strategy of our computing power and algorithm solutions service, which contemplates the development of distributed intelligent computing infrastructure at multiple sites. On August 18, 2026, we entered into an investment cooperation memorandum with the People’s Government of Chongqing, in connection with a proposed 4,000P computing power project. Separately, discussions regarding another proposed site are ongoing. However, this initiative remains in the planning stage and has not been implemented as of the date of this filing. We are in discussions with certain counterparties in connection with the proposed development of the local computing center projects. These discussions include a proposed power supply arrangement with an energy enterprise under which electricity would be supplied at market-based pricing, as well as a proposed agreement with local government that is expected to provide certain incentives, including potential tax benefits, land-use support and other preferential policies. As of the date of this annual report, these arrangements have not been finalized and no binding agreements have been executed.

8

In addition, the financing structure for Shizhu project has not been finalized, and no binding equity or debt financing agreements have been executed. We currently expect that financing for the Shizhu project may be arranged at the project company level through a combination of equity investment and debt financing from external investors. If financing is obtained, such arrangements may require pledging of project assets, including computing equipment or related infrastructure, granting of security interests, provision of guarantees, or acceptance of restrictive covenants. These terms could increase our leverage, restrict our operational flexibility, require dedication of cash flows to debt service, or otherwise adversely affect our liquidity and financial condition. If financing is not obtained on acceptable terms, or at all, we may delay, scale back, or terminate the Shizhu project or the broader project.

In addition, the development of computing centers under the proposed Stars Distributed Intelligent Computing Center Project would require significant upfront capital expenditures and such expenditures would be incurred prior to the generation of revenue from these facilities. The project may also be subject to construction delays, cost overruns, equipment delivery delays, technical integration challenges, lower-than-expected utilization rates, or changes in market demand for computing services. If actual costs exceed our expectations, if revenue generation is delayed, or if utilization rates are lower than anticipated, our financial condition and results of operations could be materially and adversely affected.

The operation of the computing sites comprising the Stars Distributed Intelligent Computing Center Project will expose us to risks associated with data center and computing infrastructure operations, which could materially and adversely affect our computing power and algorithm solutions service.

The Stars Distributed Intelligent Computing Center Project will consist of multiple distributed computing sites. The operation of these computing sites will subject us to risks inherent in data center and computing infrastructure operations, including fire, power outages, telecommunications or network disruptions, liquid leakage from cooling or other systems, chip corrosion, equipment failure and other accidents or system malfunctions. Any such incident at one or more sites could result in damage to servers, chips and other critical equipment, loss of computing capacity, data loss, service interruptions and increased costs for repair or replacement.

The computing equipment and chips deployed in our facilities are sensitive to environmental conditions, including temperature, humidity and exposure to liquids or contaminants. Any failure of our cooling systems, electrical systems, network connectivity or environmental controls may impair the performance or lifespan of such equipment. In addition, prolonged power or network disruptions could interrupt our ability to provide computing power and algorithm solutions to customers, potentially resulting in contractual liabilities, customer claims, reputational harm and loss of business.

Although we intend to implement safety management measures, redundancy systems, monitoring mechanisms and insurance coverage, these measures may not be sufficient to prevent or fully mitigate the impact of such incidents. Any significant disruption or damage to the Stars Distributed Intelligent Computing Center Project could materially and adversely affect our computing power and algorithm solutions service, financial condition and results of operations.

Our revenues from smart technology and new energy operations may be subject to variability due to changes in business mix, customer demand and cost structure.

Following the acquisition of Real Prospect Group, our smart technology and new energy operations include electric vehicle charging services and sales of charging equipment, including mobile charging robots and fixed charging piles. These activities involve different revenue models, cost structures and margin profiles. Revenues from charging services may fluctuate based on utilization rates, site availability and customer demand, while revenues from equipment sales may be affected by product acceptance, pricing pressure, inventory management and sales cycles. Changes in the mix of service revenue and product sales could result in variability in our revenues, gross margins and operating results from period to period, making our financial performance more difficult to predict.

9

Our smart technology and new energy operations depend on our ability to obtain, maintain and enforce intellectual property rights, and any failure to do so could materially and adversely affect our business.

A key part of the value proposition of our smart technology and new energy operations relates to proprietary know-how and technology, including certain charging and charging related system designs and software. However, one of the acquired operating entities has a number of the identified patent applications that are not yet granted and remain unapproved, including patents relating to, among other things, a new energy vehicle charging container system and wireless charging robotics systems. There can be no assurance that these patent applications will be approved on acceptable terms, on a timely basis, or at all, or that any patents that are ultimately issued will provide meaningful protection against competitors or will not be challenged, invalidated or circumvented.

In addition, the acquired business relies on software and platform functionality supported by registered software copyrights, including software related to charging path optimization/navigation, charging duration management platforms, battery health evaluation systems, robot fault warning software, power conversion systems and user demand response software. If we fail to maintain the confidentiality of trade secrets, experience unauthorized disclosure or misappropriation, encounter claims of infringement or misappropriation by third parties, or are unable to secure or maintain rights in key software or technical components, we could be required to redesign products, discontinue certain offerings, incur substantial litigation or licensing costs, or suffer reputational harm. Any of these events could materially and adversely affect our business, financial condition and results of operations.

We may be subject to claims alleging that our smart technology and new energy solutions products or services infringe third-party intellectual property rights, which could be costly and disruptive.

Companies operating in technology intensive sectors frequently face claims alleging infringement of patents, copyrights, trade secrets or other proprietary rights. Even if such claims are without merit, they can be time consuming and expensive to defend and may divert management’s attention and resources. Given that our acquired operations include patent applications and software copyrights and involve technical systems and software implementation, we may be exposed to third-party claims relating to similar technologies, algorithms, control systems, software features or implementations. If we are found to infringe a third party’s intellectual property rights, we could be required to cease manufacturing or sales of certain products or services, pay damages or royalties, enter into costly licensing arrangements, if available at all, or redesign our technologies. Any of these outcomes could materially and adversely affect our business and operating results.

If we are unable to retain our core technical personnel, particularly in our computing power and algorithm solutions business segment, or attract qualified replacements, our business and results of operations could be materially and adversely affected.

The success of our computing power and algorithm solutions business segment, which is operated through Huazhi Group, depends in large part on the continued services of our core technical personnel. These individuals possess specialized expertise and significant institutional knowledge relating to our computing infrastructure, algorithm development, system architecture and product optimization. The loss of any of our core technical personnel could disrupt ongoing projects, delay product development and impair our ability to maintain or enhance our technological capabilities.

Competition for qualified technical personnel is intense in the markets in which we operate, and we may not be able to attract or retain such personnel on commercially reasonable terms, or at all. Although we have entered into employment agreements and confidentiality and non-compete arrangements with certain key employees, these agreements may not be effective in preventing departures or in adequately protecting our proprietary technology and trade secrets.

If we fail to retain our core technical personnel or to timely recruit and integrate suitable replacements, our computing power and algorithm solutions business segment, as well as our overall business, financial condition and results of operations, could be materially and adversely affected.

If we are unable to continue to build and enhance brand recognition for our health and wellness products, demand for our products may be limited and our results of operations may be adversely affected.

The success of our health and wellness product business depends in part on our ability to establish and enhance brand recognition for our products, including bird’s nest based and related wellness products. Consumer purchasing decisions in this category are often influenced by brand perception, trust, perceived quality and awareness of product benefits. As a result, maintaining and strengthening brand recognition is critical to generating and sustaining demand. Our ability to build brand recognition depends on the effectiveness of our marketing strategies, promotional activities, distribution channels and consumer engagement efforts. If we are unable to differentiate our products, effectively communicate their value proposition, or maintain consumer trust, our brand recognition may stagnate or decline. Any failure to enhance or protect our brands could limit demand for our products and materially and adversely affect our business, financial condition and results of operations.

10

Our sales may be concentrated in a limited number of distribution channels or customer groups, and the loss of, or reduced demand from, such channels or customers could materially adversely affect our business.

Based on the current stage of the operations of Carve Group in our health and wellness product business, sales are conducted through a limited number of channels and customer groups, and we have not yet established a broad, diversified distribution base. As a result, our revenues may be disproportionately dependent on the performance of a relatively small number of channels, distributors or consumer segments. If any of these channels or customer groups reduce purchases, terminate relationships, experience financial difficulty or shift demand to competing products, our revenues could decline materially. In addition, our ability to expand sales may depend on our success in developing additional channels, distributors or retail placements, which may require additional investment and may not be achieved on acceptable terms, or at all.

Our growth may be limited if we are unable to expand distribution, increase product placement or secure additional shelf space or inventory allocation.

Future growth in our health and wellness product business depends in part on our ability to expand distribution, increase product placement and secure additional shelf space or inventory allocation across existing and new sales channels. Expanding distribution may require additional marketing expenditures, promotional incentives, pricing concessions or changes in product packaging and logistics. There can be no assurance that we will be successful in expanding distribution or that any such expansion will result in increased sales. If we are unable to obtain additional shelf space, inventory commitments or favorable placement, our ability to grow revenues may be constrained, even if consumer demand for our products increases.

We must expend resources to maintain consumer awareness of our brands, build brand loyalty and generate interest in our products. Our marketing strategies and channels will evolve and our programs may or may not be successful.

We rely on a range of marketing strategies and channels to promote our products, which may include online marketing, offline promotions, influencer or community based marketing and other initiatives. Consumer preferences and marketing effectiveness may change over time, requiring us to adapt our strategies. In order to remain competitive and expand and keep shelf placement for our products, we may need to increase our marketing and advertising spending to maintain and increase consumer awareness, protect and grow our existing market share or promote new products, which could affect our operating results. Substantial advertising and promotional expenditures may be required to maintain or improve our brand’s market position or to introduce new products to the market, and participants in our industry are increasingly engaging with non-traditional media, including consumer outreach through social media and web-based channels, which may not prove successful. An increase in our marketing and advertising efforts may not maintain our current reputation, or lead to increased brand awareness. There can be no assurance that our marketing programs will be effective or that changes in marketing strategy will result in increased brand recognition or sales. Ineffective marketing expenditures could reduce returns on investment and adversely affect our business and operating results.

Shortages, delays or interruptions in the supply, delivery or distribution of our products could adversely affect our business.

Our operations depend on the reliable sourcing, production, packaging and delivery of products. Disruptions in transportation, logistics, warehousing, distribution networks or third-party service providers could delay product availability, increase costs or result in lost sales. Such disruptions may arise from factors beyond our control, including transportation constraints, labor shortages, natural disasters, public health events, regulatory actions or operational failures by third-party logistics or distribution partners. Any sustained interruption in supply or delivery could materially and adversely affect our business and results of operations.

The cost of raw materials, ingredients, packaging and logistics may be volatile and could increase significantly, which could adversely affect our margins.

The production and distribution of our products require raw materials, ingredients, packaging materials and logistics services, the costs of which may fluctuate due to market conditions, supply-demand dynamics, regulatory changes, transportation costs or other factors. If the cost of raw materials, ingredients, packaging or logistics increases and we are unable to pass such increases on to customers through higher prices or other measures, our margins could decline. Significant cost volatility could also complicate pricing decisions and adversely affect our operating results.

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If we are unable to maintain or increase prices for our products, our margins and profitability may decrease.

We rely in part on price increases to offset cost increases and improve the profitability of our business. Our ability to maintain prices or effectively implement price increases may be affected by a number of factors, including competition, effectiveness of our marketing programs, the continuing strength of our brand, market demand and general economic conditions, including inflationary pressures. During challenging economic times, consumers may be less willing or able to pay a price premium for our branded products and may shift purchases to lower-priced or other value offerings, making it more difficult for us to maintain prices and/or effectively implement price increases. In addition, our retail partners and distributors may pressure us to rescind price increases that we have announced or already implemented, whether through a change in list price or increased promotional activity. If we are unable to maintain or increase prices for our products or must increase promotional activity, our margins may be adversely affected. Furthermore, price increases generally result in volume losses, as consumers purchase fewer units. If such losses are greater than expected or if we lose distribution due to a price increase, our business, financial condition and results of operations may be materially and adversely affected.

The success of our health and wellness products depends on consumer acceptance, product quality and regulatory compliance, and failure in any of these areas could materially and adversely affect our business.

A significant portion of our current operations following the acquisition of Carve Group relates to the development, production and sale of traditional health and wellness products, including bird’s nest based products. The market for health and wellness products is sensitive to consumer preferences, perceptions of product efficacy and safety, pricing, branding and regulatory scrutiny. Our products must meet applicable quality standards and regulatory requirements relating to food safety, labeling, advertising and health related claims. Any failure to maintain consistent product quality, any real or perceived safety issue, or any determination by regulatory authorities that our products or marketing practices do not comply with applicable requirements could result in product recalls, enforcement actions, reputational harm, increased compliance costs or restrictions on our ability to sell such products. Any of these events could materially and adversely affect our revenues, results of operations and financial condition.

Our health and wellness product business is dependent on reliable sourcing, processing and supply of raw materials, and disruptions in our supply chain could adversely affect our operations.

Our health and wellness products rely on the sourcing and processing of specific raw materials, including bird’s nest and other natural or herbal inputs. The availability, quality and cost of these raw materials may be affected by factors beyond our control, including environmental conditions, regulatory requirements, supplier capacity, transportation disruptions and changes in market demand. In addition, certain stages of processing and production may depend on third-party manufacturers or service providers. Any disruption in our supply chain, failure by suppliers or processors to meet quality or delivery requirements, or inability to secure alternative sources on acceptable terms could delay production, increase costs or limit our ability to meet customer demand. Such disruptions could materially and adversely affect our business and operating results.

Our herbal resource and ginseng related operations may not generate economic returns and may expose us to asset impairment or ongoing costs without corresponding revenue.

Certain operations acquired as part of Carve Group involve herbal resource and ginseng related assets, which are currently at an early stage of commercialization and subject to long development cycles. As of June 30, 2026, our inventories, consisting primarily of wild ginseng and high-grade tea recorded at their acquisition-date fair value and held as long-term reserves, amounted to RMB2.4 billion, or approximately 49% of our total assets, and goodwill and intangible assets arising from our acquisitions amounted to RMB2.1 billion, or approximately 43% of our total assets. Any impairment of these assets would materially reduce our net assets and results of operations. The economic viability of these operations depends on factors such as cultivation success, yields, processing capabilities, market demand, pricing and regulatory treatment. There can be no assurance that these assets will be successfully commercialized or generate returns sufficient to justify the costs incurred. If these operations fail to achieve commercial viability, we may be required to incur ongoing maintenance or development costs without corresponding revenue or recognize impairment charges, which could materially and adversely affect our financial condition and results of operations.

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Our health and wellness products are susceptible to heightened scrutiny regarding advertising, labeling and health related claims, and any perceived or actual inaccuracies could materially harm our brand and results of operations.

Our health and wellness product business includes the sale of bird’s nest products and bird’s nest peptide products and related marketing and consumer education. One product portfolio may include numerous differentiated product lines and peptide products that are marketed with consumer oriented benefit statements, including, for example, anti-aging, youth, health protection positioning. Health and wellness products that are marketed with benefit related messaging are often subject to heightened scrutiny by regulators, platforms and consumers regarding the substantiation and accuracy of advertising, labeling and related claims. If our advertising, promotional materials, product packaging, labeling or influencer messaging is alleged to be misleading, unsubstantiated, exaggerated or otherwise non-compliant, we may face regulatory inquiries or enforcement, platform takedowns, consumer disputes, product returns, reputational damage, and increased compliance costs. Any of these events could materially and adversely affect our revenues, financial condition and results of operations.

Litigation or legal proceedings could expose us to significant liabilities and have a negative effect on our reputation.

From time to time, we may be party to various claims and litigation proceedings. We evaluate these claims and litigation proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, potential losses. We may establish reserves, as appropriate based on the information available to management at the time. These assessments and estimates involve a significant amount of management judgment and may differ materially from actual outcomes.

We are engaged in a material arbitration initiated by GEM Global Yield LLC SCS and GEM Yield Bahamas Limited (collectively, “Claimants”) before the International Centre for Dispute Resolution (“ICDR”). The Claimants seek damages relating to a Share Purchase Agreement, Registration Rights Agreement and Warrant, all dated April 16, 2024 (the “GEM Agreements”) between us and Claimants, which contemplated a potential equity investment of up to US$1 billion. Subsequently, our Board of Directors considered that the GEM Agreements shall be void due to fraud and resolved to terminate all proposed transactions and cooperation contemplated thereunder. On July 29, 2025, we received notice of a Demand for Arbitration filed by Claimants with the ICDR concerning the GEM Agreements. Pursuant to procedural orders issued by the Sole Arbitrator, the Sole Arbitrator directed the Company to provide partial security for claims in the sum of US$13.5 million either by way of an irrevocable bank guarantee or a cash deposit into escrow arrangement, by November 2026. This security order is procedural and does not constitute a finding of liability against the Company. The parties are currently engaged in the document production and discovery phase of the arbitration, with the evidential hearing scheduled to take place in March 2027. The Company’s management continues to consult with external legal counsel regarding this arbitration and the security order. The arbitration is ongoing, and the final outcome and its associated financial impact on the Company cannot be determined with certainty at this time. See “Item 8. Financial Information – 8.A. Consolidated Statements and Other Financial Information - Legal Proceedings” for more information.

There is an additional risk that potential litigation may lead to adverse publicity, consumer confusion, distrust and additional legal challenges for us. Should we become subject to related or additional unforeseen lawsuits, including claims related to our products, labeling or advertising, which may vary in accordance with state and federal rules and regulations, consumers may avoid purchasing our products or seek alternative products, even if the basis for the claims against us is unfounded.

Any consumer loss of confidence in the truthfulness of our labeling or ingredient claims would be difficult and costly to overcome and may significantly reduce our brand value. For example, publications and other third-party commentary may vary in opinion with respect to our health and wellness products. For instance, customers may have different views on ingredient and nutritional functions of our bird’s nest products. Uncertainty among consumers as to the health and wellness content or the ingredients used in our products, regardless of the cause, may have an adverse effect on our brands, business, results of operations and financial condition.

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Our results of operations and the value of our Class A Ordinary Shares may be affected by geopolitical events, trade tensions and other developments beyond our control, which may in turn adversely affect the economic and market conditions in China and globally.

There have been concerns over unrest, terrorist threats and the potential for war in the Middle East, Europe and elsewhere, as well as over the increasing of conflicts involving Ukraine, Syria, Kosovo, Serbia, Sudan, Kashmir and North Korea. For example, the military conflict between Russia and Ukraine has resulted in an escalated regional instability, amplified the existing geopolitical tension among Russia and other countries in the region and in the west, as well as adversely affected commodity and other financial markets or economic conditions. The Russia-Ukraine conflict has increased uncertainties to the already heightened tensions in international economic relations. The United States, European Union, the United Kingdom, Switzerland and other countries have imposed, and may further impose, financial and economic sanctions and export controls targeting certain Russian entities and/or individuals, which could adversely affect the global economy and financial markets, even though we do not have any direct exposure to Russia or the adjoining geographic regions. The duration of such military conflict and the related sanctions, as well as their impact on the global financial markets, cannot be predicted.

There have also been concerns on the relationship between China and other countries, including the U.S. and the surrounding Asian countries, which may potentially have economic effects. In particular, there is significant uncertainty about the future relationship between the United States and China with respect to trade policies, treaties, government regulations and tariffs. Although cross-border business may not be an area of our focus, if we plan to expand our business internationally in the future, any unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our products and services, impact our competitive position, or prevent us from being able to conduct business in certain countries. If any new tariffs, legislation, or regulations are implemented, or if existing trade agreements are renegotiated, such changes could adversely affect our business, financial condition, and results of operations. The U.S. government used to impose higher tariffs on certain products imported from China to penalize China for what it characterized as unfair trade practices. It remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade, tax policy related to international commerce, or other trade matters. Furthermore, there is considerable uncertainty over the long-term effects of the monetary and fiscal policies adopted by central banks and financial authorities in some of the world’s leading economies, including the United States and China.  

For international projects, we evaluate local regulations, data compliance requirements, energy availability, trade policies and project financing conditions, and conducts necessary commercial, technical and legal reviews before entering into definitive agreements. We will continue to monitor geopolitical developments, trade policies, foreign exchange rates, financing conditions and the availability of critical equipment, and may adjust project timelines and capital deployment accordingly. However, these evaluations, reviews and monitoring measures may not accurately identify, assess or mitigate all relevant risks, and any adjustments we make may be insufficient, ineffective or untimely. Accordingly, our strategies may not achieve their intended objectives, and we may continue to be adversely affected by geopolitical, regulatory, trade, financing and other risks beyond our control.

Our geographic focus makes us particularly vulnerable to economic and other events and trends in the PRC.

We operate in the PRC and, therefore, are particularly susceptible to adverse regulations, economic climate, consumer trends, market fluctuations, including commodity price fluctuations or supply shortages of key ingredients, and other adverse events in the PRC. The concentration of our businesses geographically could present challenges and may increase the likelihood that an adverse event in the PRC would disproportionately materially and adversely affect product sales, financial condition and operating results.

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Changes in the legal and regulatory environment could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation.

Elements of our business, including the production, storage, distribution, sale, display, advertising, marketing, labeling, health and safety practices, transportation and use of many of our products, are subject to various laws and regulations administered by authorities and governmental agencies in the PRC, where our products or components thereof, such as packaging, may be made, manufactured or sold. These laws, regulations and interpretations thereof may change, sometimes dramatically, as a result of a variety of factors, including political, economic or social events. Such factors may include changes in:

Loss of our key executive officers or other personnel, or an inability to attract and retain such management and other personnel, could negatively affect our business.

Our future success depends to a significant degree on the skills, experience and efforts of our key executive officers. The loss of the services of any of these executives could materially and adversely affect our business and prospects, as we may not be able to find suitable individuals to replace them on a timely basis, if at all. Additionally, we also depend on our ability to attract and retain qualified personnel to operate and expand our business. If we fail to attract talented new employees, our business and results of operations could be negatively affected.

Our operations may require significant working capital, and any inability to effectively manage cash flows could materially and adversely affect our business.

The operation and expansion of our businesses require working capital to support ongoing activities, including sourcing and production of health and wellness products, inventory management, marketing and distribution, equipment procurement, deployment, installation and ongoing service operations. In our health and wellness product business, working capital is required to fund raw material sourcing, product processing, inventory build-up, marketing initiatives and distribution activities, often in advance of cash receipts from customers or distributors. In our smart technology and new energy operations, working capital is required to support equipment acquisition and deployment, infrastructure related costs and operating expenses prior to the realization of service revenue or product sales. If customer payment cycles lengthen, demand fluctuates, costs increase, or cash inflows do not align with operating requirements, we may experience liquidity pressure. Any inability to effectively manage working capital, maintain adequate liquidity or obtain additional financing on acceptable terms could constrain our operations, delay growth initiatives or adversely affect our financial condition and results of operations.

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We may need additional capital in the future, and it may not be available on acceptable terms or at all.

We have historically relied upon cash generated by our operations and equity financing to fund our operations and strategy. We may need to access the debt and equity capital markets to a greater extent, however, these sources of financing may not be available on acceptable terms, or at all. Our ability to obtain additional financing will be subject to a number of factors, including market conditions, our operating performance, investor sentiment and our ability to incur additional debt in compliance with agreements governing our outstanding debt. These factors may make the timing, amount, terms or conditions of additional financing unattractive to us. If we are unable to generate sufficient funds from operations or raise additional capital, our growth could be impeded.

We may be at risk of securities class action litigation.

Recently, U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by some investors, financial commentators and regulatory agencies. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in some cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stocks of many U.S.-listed Chinese companies have sharply decreased in value and, in some cases, have become virtually worthless. Some of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting or subject to internal and external investigations into the allegations. We had been targeted by short selling reports in the past and became subject to class action lawsuits which were subsequently dismissed or settled. Shortselling firms or others may in the future publish additional short seller reports with respect to our business, officers, directors and shareholders, and we may become subject to other unfavorable allegations, which might cause further fluctuations in the trading price of our Class A Ordinary Shares. Such volatility in our share price could subject us to increased risk of securities class action lawsuits or derivative actions.

Any future class action lawsuit against us, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations. Even if such allegations are ultimately proven to be groundless, the allegations or the process of dealing with them could severely impact our business operations and stockholder’s equity, and any investment in our Class A Ordinary Shares could be greatly reduced or even rendered worthless.

We may be unsuccessful in identifying suitable acquisition candidates, completing acquisitions, integrating acquired companies or the acquired companies may not perform to our expectations, which could adversely affect our growth.

Our growth strategy includes selective acquisition. We expect a substantial portion of our future growth to come from acquisitions of high-quality assets that are either complementary to our existing business or can accelerate our intelligence development and further broaden our service offerings. There is no assurance that we can successfully identify suitable acquisition candidates. Even if we identify suitable candidates, we may not be able to complete an acquisition on terms that are commercially acceptable to us. In addition, we compete with other entities to acquire high-quality entities. Many of our competitors may have substantially greater financial resources than we do and may be able to outbid us for these acquisition targets. If we are unable to complete acquisitions, our growth strategy may be impeded and our earnings or revenue growth may be negatively affected.

Even if we succeed in acquiring other high-quality assets, our ability to integrate an acquired entity and its operations is subject to a number of factors. These factors include difficulties in the integration of acquired operations and retention of personnel, especially the sales agents who are not employees of the acquired company, entry into unfamiliar markets, unanticipated problems or legal liabilities, and tax and accounting issues. The need to address these factors may divert management’s attention from other aspects of our business and materially and adversely affect our business prospects. In addition, costs associated with integrating newly acquired companies could negatively affect our operating margins.

Furthermore, the acquired companies may not perform to our expectations for various reasons, including legislative or regulatory changes that affect the insurance products in which a company specializes, the loss of key clients after the acquisition closes, general economic factors that impact a company in a direct way and the cultural incompatibility of an acquired company’s management team with us. If an acquired company cannot be operated at the same profitability level as our existing operations, the acquisition would have a negative impact on our operating margin. Our inability to successfully integrate an acquired entity or its failure to perform to our expectations may materially and adversely affect our business, prospects, results of operations and financial condition.

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We may not be able to prevent unauthorized use of our intellectual property, which could reduce demand for the products that we distribute and the services we provide, adversely affect our revenues and harm our competitive position.

We rely primarily on a combination of copyright, trade secret, trademark and anti-unfair competition laws and contractual rights to establish and protect our intellectual property rights. We cannot assure you that the steps we have taken or will take in the future to protect our intellectual property or piracy will prove to be sufficient. In addition, other parties may independently discover trade secrets and proprietary information, and in such cases, we could not assert any trade secret rights against such parties. Implementation of intellectual property-related laws in China has historically been lacking, primarily due to ambiguity in the PRC laws and enforcement difficulties. Accordingly, intellectual property rights and confidentiality protection in China may not be as effective as in the United States or other countries. Current or potential competitors may use our intellectual property without our authorization in the development of products and services that are substantially equivalent or superior to ours, which could reduce demand for our products and services, adversely affect our revenues and harm our competitive position. Even if we were to discover evidence of infringement or misappropriation, our recourse against such competitors may be limited or could require us to pursue litigation, which could involve substantial costs and diversion of management’s attention from the operation of our business. 

We may face intellectual property infringement claims that could be time consuming and costly to defend and may result in the loss of significant rights by us.

Although we have not been subject to any litigation, pending or threatened, alleging infringement of third-parties’ intellectual property rights. We cannot assure you that such infringement claims will not be asserted against us in the future. Intellectual property litigation is expensive and time-consuming and could divert resources and management attention from the operation of our business. If there is a successful claim of infringement, we may be required to alter our services, cease certain activities, pay substantial royalties and damages to, and obtain one or more licenses from, third-parties. We may not be able to obtain those licenses on commercially acceptable terms, or at all. Any of those consequences could cause us to lose revenues, impair our client relationships and harm our reputation.

Risks Related to Our Corporate Structure

We rely on Huazhi Contractual Agreements with Huazhi Future and its shareholders for purposes of consolidating Huazhi Future and its subsidiaries as VIEs under U.S. GAAP, which may not be as effective as direct equity ownership and could materially and adversely affect our business.

We do not directly own equity interests in Huazhi Group. Instead, we exercise control over Huazhi Group through the Huazhi Contractual Agreements entered into among us, Huazhi Future, and its shareholders. For accounting purposes and in accordance with U.S. GAAP, we have determined that Huazhi Future is a VIE and that we are its primary beneficiary because we satisfy the conditions for consolidation under ASC Topic 810-10. Accordingly, we consolidate the financial results of Huazhi Group in our consolidated financial statements.

We rely on the Huazhi Contractual Agreements because Huazhi Group holds licenses for value-added telecommunications services (Category II), which are subject to foreign investment restrictions under PRC law. A change in ownership that results in Huazhi Group becoming a foreign-invested enterprise would require cancellation of these licenses. Accordingly, in order to preserve these licenses, we have adopted the VIE structure instead of directly holding equity interests in Huazhi Group.

The Huazhi Contractual Agreements may not be as effective as direct equity ownership in providing us with the ability to satisfy the conditions required for consolidation under U.S. GAAP. If Huazhi Future or its shareholders fail to perform their respective obligations under the Huazhi Contractual Agreements, we may have to rely on legal remedies under PRC law, including seeking specific performance or injunctive relief. Such remedies may be time-consuming, costly, and subject to uncertainty. There can be no assurance that such remedies would be effective or sufficient to prevent disruptions to Huazhi Group’s operations.

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In addition, the Huazhi Contractual Agreements have not been tested in a court of law in the PRC, and there is uncertainty as to whether PRC regulatory authorities would determine that such arrangements comply with existing or future laws and regulations. If the Huazhi Contractual Agreements were determined to be invalid or unenforceable, or if we otherwise fail to satisfy the conditions to be considered the primary beneficiary of Huazhi Group under U.S. GAAP, we may not be able to consolidate Huazhi Group in our consolidated financial statements. Any such event could materially and adversely affect our business, financial condition, and results of operations, and could cause the value of our securities to decline significantly or become worthless.

The Huazhi Contractual Agreements and any other arrangements and transactions among related parties that we currently have or will have in future, may be subject to scrutiny by the PRC tax authorities, which may determine that we owe additional taxes, which could substantially reduce our consolidated net income and the value of your investment.

Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities. We are not able to determine whether the Huazhi Contractual Agreements or any other arrangements and transactions among related parties that we currently have or will have in future will be regarded by the PRC tax authorities as arm’s length transactions. We could face material and adverse tax consequences if the PRC tax authorities determine that our current contractual arrangements or any other arrangements and transactions among related parties are not entered into on an arm’s-length basis, and therefore constitute favorable transfer pricing. As a result, the PRC tax authorities could require us to adjust our taxable income upward for PRC tax purposes, which could increase Huazhi Future’s tax expenses, subject us to late payment fees and other penalties for under-payment of taxes, and result in the loss of any preferential tax treatment we may have. As a result, our consolidated net income may be adversely affected.

The shareholders of Huazhi Future may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.

The shareholders of Huazhi Future may have conflicts of interest with us. We do not have existing arrangements to address potential conflicts of interest between these shareholders and our group other than the Huazhi Contractual Agreements and cannot assure you that when conflicts arise, these shareholders will act in the best interest of our group or that conflicts will be resolved in our favor. If we cannot resolve any conflicts of interest or disputes between us and these shareholders, we may have to rely on legal proceedings, which may materially disrupt our business. There is also substantial uncertainty as to the outcome of any such legal proceeding. If any of the foregoing were to occur, our business, financial condition and results of operations may be materially and adversely affected.

We may lose the ability to use and enjoy assets held by Huazhi Future and its subsidiaries that are material to the operation of certain portion of our business if Huazhi Future or any of its subsidiaries goes bankrupt or become subject to a dissolution or liquidation proceeding.

As part of the Huazhi Contractual Agreements, Huazhi Future and its subsidiaries hold certain assets that are material to the operation of our business. If Huazhi Future or any of its subsidiaries goes bankrupt and all or part of its assets become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and results of operations. Under the Huazhi Contractual Agreements, Huazhi Future may not, in any manner, sell, transfer, mortgage or dispose of its assets or legal or beneficial interests in the business without our prior consent. If Huazhi Future or any of its subsidiaries undergoes a voluntary or involuntary liquidation proceeding, independent third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations.

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Our principal shareholder has substantial influence over our group and their interests may not be aligned with the interests of our other shareholders.

As of the date of this annual report, our principal shareholder Moonlit Group Ltd. beneficially owned approximately 50.41% of our aggregate voting power and as a result, could exert substantial influence over matters requiring approval by our shareholders, including electing directors and approving mergers or other business combination transactions, and it may not act in the best interests of other noncontrolling shareholders. This concentration of ownership may have an adverse impact on a change in control of our group, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our group and might reduce the price of our Class A Ordinary Shares. These actions may be taken even if they are opposed by certain of our other shareholders. In such events, our business, financial condition and results of operations may be materially and adversely affected.

We are a foreign private issuer within the meaning of the rules under the Exchange Act and are therefore exempt from certain provisions applicable to U.S. domestic issuers.

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 intend to publish our results on an annual basis as press releases, distributed pursuant to the rules and regulations of the Nasdaq Global Market. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, our shareholders may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer. 

As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters in lieu of the corporate governance listing standards applicable to U.S. domestic issuers, which home country practices may afford comparatively less protection to shareholders.

As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq Global Market corporate governance requirements; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq Global Market corporate governance requirements. For example, as a foreign private issuer, we are not required to: (i) hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year-end; (ii) have a majority of the board be independent; (iii) have a compensation committee or a nominating/corporate governance committee consisting entirely of independent directors; or (iv) have regularly scheduled executive sessions with only independent directors each year.

We intend to follow home country practice in lieu of the requirements under the Nasdaq Global Market rules with respect to certain corporate governance standards. Accordingly, our shareholders will not be provided with the benefits of certain corporate governance requirements of the Nasdaq Global Market rules.

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If we fail to implement and maintain an effective system of internal control, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of the Class A Ordinary Shares may be materially and adversely affected.

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of the Nasdaq Global Market. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Commencing with our fiscal year ended June 30, 2020, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting in our Form 20-F filing, as required by Section 404 of the Sarbanes-Oxley Act. In addition, an independent registered public accounting firm must attest to and report on the effectiveness of our internal controls over financial reporting for each fiscal year. 

As required by Section 404 of the Sarbanes-Oxley Act and related rules as promulgated by the SEC, our management assessed the effectiveness of the internal control over financial reporting as of June 30, 2026 using criteria established in “Internal Control—Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission and concluded that our internal control over financial reporting was effective as of June 30, 2026. If we fail to achieve and maintain an effective internal control environment for our financial reporting, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with the Sarbanes-Oxley Act of 2002, which could result in inaccuracies in our consolidated financial statements and could also impair our ability to comply with applicable financial reporting requirements and make related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our Class A Ordinary Shares, may be materially and adversely affected. Moreover, if we are not able to conclude that we have effective internal control over financial reporting, investors may lose confidence in the reliability of our financial statements, which would negatively impact the trading price of our Class A Ordinary Shares. Our reporting obligations as a public company, including our efforts to comply with Section 404 of the Sarbanes-Oxley Act, will continue to place a significant strain on our management, operational and financial resources and systems for the foreseeable future.

In 2024, we identified an uncorrected error related to recording funds we held temporarily for the investors as our asset which we did not have control over. In addition, we identified two other uncorrected classification errors of (i) commission expense that was reported previously under selling expense but should have been under cost of sales, and (ii) excess input value-added tax credit that was reported previously as a current liability but should have been reported as a current asset. These uncorrected misstatements were not prevented or detected as a result of operating effectiveness deficiencies of certain internal controls during prior periods. We assessed the materiality of each of these errors individually and in the aggregate with others to prior periods’ financial statements and concluded that the errors were immaterial to our previously issued financial statements. Consequently, a restatement of previously filed financial statements is not required. During the fiscal years ended June 30, 2024 and 2025, our management has designed and implemented corrective actions to remediate the control deficiencies primarily through enhancing the detailed description of the review steps as well as the inputs needed in the relevant controls. As of June 30, 2026, our management concluded that our internal controls over financial reporting were effective. However, if we fail to maintain effective internal controls over financial reporting in the future, our management may conclude that our internal controls over financial reporting are not effective and we may not be able to produce timely and accurate financial statements. If that were to happen, the market price of the Class A Ordinary Shares could decline and we could be subject to sanctions or investigations by the Nasdaq Global Market, SEC or other regulatory authorities.

Moreover, our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, regardless of how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected. 

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If we were deemed to be an investment company under the Investment Company Act of 1940, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business and the price of our Ordinary Shares.

An entity will generally be deemed an “investment company” for purposes of the Investment Company Act of 1940, as amended (the “1940 Act”) if: (a) it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities, or (b) absent an applicable exemption, it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We believe that we are engaged, through our subsidiaries and the Huazhi VIEs, in the businesses of computing power and algorithm solutions, smart technology and new energy solutions and health and wellness products, and not in the business of investing reinvesting or trading in securities. We do not propose to engage primarily in the business of investing, reinvesting or trading in securities. Accordingly, we believe that we are not an investment company under Section 3(b)(1) of the Investment Company Act because, among other things, we are primarily engaged in a non-investment company business. If one or more of our operating entities ceased to be deemed as a wholly-owned subsidiary of ours, our interests in those subsidiaries could be deemed an “investment security” for purposes of the 1940 Act. 

The 1940 Act and the rules thereunder contain detailed parameters for the organization and operation of investment companies. The 1940 Act and the rules thereunder limit or prohibit transactions with affiliates, impose limitations on the issuance of debt and equity securities, generally prohibit the issuance of options and impose certain governance requirements, among other things. We intend to conduct our operations so that Maase will not be deemed an investment company. However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact business with affiliates, could make it impractical for us to continue our business as currently conducted and would have a material adverse effect on our business, financial condition, results of operations and the price of our Ordinary Shares. In addition, we may be required to limit the amount of investments that we make as a principal or otherwise conduct our business in a manner that does not subject us to the registration and other requirements of the 1940 Act.

Risks Related to Doing Business in China

The approval of and filing with the China Security Regulation Commission (“CSRC”) CSRC or other PRC government authorities may be required in connection with our future offshore offerings, capital raising activities and acquisitions or other trading arrangements of domestic enterprises conducted by China-based issuers. We must file with the CSRC within three business days after the issuance, and also may be required to go through cybersecurity review under the new laws and regulations of mainland China if authorities identifying us as a critical information infrastructure operator or requiring us to go through review by the Cyberspace Administration of China (“CAC”), which remains unclear. And, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing or other regulatory procedures. 

On August 8, 2006, the Ministry of Commerce of the People’s Republic of China (“MOFCOM”), the CSRC, the State-owned Assets Supervision and Administration Commission of the State Council, the State Administrative of Taxation (“SAT”), the State Administration for Industry and Commerce (dissolved), and the State Administration of Foreign Exchange (“ SAFE”), jointly promulgated regulations entitled the Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), which took effect as of September 8, 2006, and as amended on June 22, 2009. Historically, the M&A Rules require 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. However, this approval requirement has been superseded by the new filing regime.

The Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, new rules for the filing-based administration of overseas securities offerings and listings by Chinese domestic companies released on February 17, 2023, or the Trial Measures, establish a new filing-based regime to regulate overseas offerings and listings by domestic companies. According to the Trial Measures, (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, issuance of convertible bonds, offshore relisting after go-private transactions and other equivalent offering activities. In addition, after a domestic company has offered and listed securities in an overseas market, it is required to file a report to the CSRC after the occurrence and public disclosure of certain material corporate events, including but not limited to, change of control and voluntary or mandatory delisting. According to the Trial Measures, the Company shall be deemed to be a domestic enterprise indirectly listed overseas. 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 future offshore offerings or capital raising activities or are involved in other circumstances that require filing with the CSRC. 

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On February 24, 2023, the CSRC, together with other relevant government authorities, issued the Provisions on Strengthening Confidentiality and Archives Administration in Respect of Overseas Offering and Listing of Securities by Domestic Companies, or the Archives Rules, which became effective on March 31, 2023. According to the Archives Rules, domestic companies, whether offering and listing securities overseas directly or indirectly, must strictly abide the applicable laws and regulations when providing or publicly disclosing, either directly or through their overseas listed entities, documents and materials to securities services providers such as securities companies and accounting firms or overseas regulators in the process of their overseas offering and listing. If such documents or materials contain any state secrets or government authorities work secrets, domestic companies must obtain the approval from competent governmental authorities according to the applicable laws, and file with the secrecy administrative department at the same level with the approving governmental authority. Furthermore, the Archives Rules also provide that securities companies and securities service providers shall also fulfill the applicable legal procedures when providing overseas regulatory institutions and other relevant institutions and individuals with documents or materials containing any state secrets or government authorities work secrets or other documents or materials that, if divulged, will jeopardize national security or public interest. For more details of the Trial Measures, please refer to “Item 4. Information on the Company—4.B. Business Overview—Regulations—Regulations Relating to Overseas Listing.” 

In addition, we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us. 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. 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.

Adverse changes in the political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China, which could adversely affect our business.

Substantially all of our assets are located in China and substantially all of our revenues are derived from our operations there. Accordingly, our business, financial condition, results of operations and prospects are significantly affected by economic, political and legal developments in China. China’s economy differs from the economies of most developed countries in many respects, including amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. While China’s economy has experienced significant growth in the past 40 years, the growth has been uneven across different periods, regions and among various economic sectors of China, and the rate of growth has been slowing since 2012. We cannot assure you that China’s economy will continue to grow. Further, the Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources, some of which may benefit the overall China’s economy but have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. Also, in the past the Chinese government implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures may cause decreased economic activity in China, which may adversely affect our business and operating results. Accordingly, any adverse changes in economic conditions in China, in the policies of the Chinese government or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our business and operating results, lead to reduction in demand for our services and adversely affect our competitive position.

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Uncertainties with respect to the PRC legal system could adversely affect us.

We conduct our business primarily through our PRC subsidiaries in which we hold equity interests. Our operations in China are governed by PRC laws and regulations. Our PRC subsidiaries are subject to laws and regulations applicable to foreign investment in China and, in particular, laws applicable to foreign-owned enterprises. The PRC legal system is a civil law system based on written statutes. Unlike common law system, prior court decisions may be cited for reference but have limited precedential value. In addition, any new or changes in PRC laws and regulations related to foreign investment in China could affect the business environment and our ability to operate our businesses in China.

From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since PRC judicial and administrative authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to predict the outcome of a judicial or administrative proceeding than in more developed legal systems. In addition, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, that may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until some time after the violation. Any administrative and court proceedings in China may be protracted and result in substantial costs and diversion of resources and management attention. However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These uncertainties may also impede our ability to enforce the contracts we have entered into, and as a result, could materially and adversely affect our business and results of operations.  

Fluctuations in exchange rates may have a material adverse effect on your investment.

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

Significant revaluation of the Renminbi may have a material and adverse effect on our revenues, earnings and financial position as well as your investment. For example, an appreciation of the Renminbi against the U.S. dollar would make any new RMB-denominated investments or expenditures more costly to us, to the extent that we need to convert U.S. dollars into Renminbi for such purposes. An appreciation of the Renminbi against the U.S. dollar would also result in foreign currency translation losses for financial reporting purposes when we translate our U.S. dollar-denominated financial assets into Renminbi, our reporting currency. Conversely, if we decide to convert Renminbi into U.S. dollars for the purpose of making payments for dividends on our Ordinary Shares or Class A Ordinary Shares, for payment of interest expenses, for strategic acquisitions or investments or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on us. In addition, appreciation or depreciation in the value of the Renminbi relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. Fluctuations in the exchange rate will also affect the relative value of earnings from and the value of any U.S. dollar-denominated investments we make in the future.

Very limited hedging options are available in China 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 PRC exchange control regulations that restrict our ability to convert Renminbi into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on your investment

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Governmental control of conversion of Renminbi into foreign currencies may limit our ability to utilize our revenues effectively and affect our operations and the value of your investment.

PRC government imposes controls on the convertibility of the RMB into foreign currencies and the remittance of currency out of China. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from the SAFE, provided that the transaction has a genuine and lawful transaction basis and that a financial institution has reasonably verified the authenticity of the transaction documents and their consistency with the foreign exchange receipts and payments in compliance with certain procedural requirements. Furthermore, the RMB may also be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies upon review by a bank in accordance with the relevant regulations. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. Under our current corporate structure, the primary source of our income at the holding company level is dividend payments from our PRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign-currency-denominated obligations. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency needs, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our Class A Ordinary Shares. The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in Renminbi, and most of our cash is in RMB. Under our corporate structure, Maase, a Cayman Islands holding company, primarily relies on dividend payments from our directly-held PRC subsidiaries (which are treated as foreign-invested enterprises under PRC law), namely, Shenzhen Hillstar Management Consulting Co., Ltd., Shenzhen Guibao Intelligent Management Co., Ltd. and Shenzhen Huazhixing, and formerly Puyi Consulting prior to its disposal, and on payments under the Huazhi Contractual Agreements, to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the SAFE, provided that the transaction has a genuine and lawful transaction basis and that a financial institution has reasonably verified the authenticity of the transaction documents and their consistency with the foreign exchange receipts and payments.. As such, our directly-held PRC subsidiaries are able to pay dividends in foreign currencies to us without prior approval from the SAFE, and Renminbi may be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies upon review by a bank in accordance with the relevant regulations. However, the PRC government may at its discretion restrict access in the future to foreign currencies for current account transactions. There is no assurance that the PRC government will not intervene or impose restrictions on the ability of us, our subsidiaries to transfer cash. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies from the PRC subsidiaries to the offshore subsidiaries, across borders, and to our shareholders, including holders of our Class A Ordinary Shares. These foreign exchange restrictions and limitations could prevent the cash maintained from leaving the PRC, and limit our ability to utilize our revenue effectively and affect our operations and the value of your investment. 

PRC regulations relating to the establishment of offshore special purpose companies by PRC residents and filing requirements for overseas securities offering by offshore special purpose companies established by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us.

On July 4, 2014, the SAFE promulgated the Circular on Relevant Issues Relating to Foreign Exchange Administration for Overseas Investments and Financing and Round-trip Investments by Domestic Residents through Special Purpose Vehicles, or the SAFE Circular 37, which came into effect as of July 4, 2014. According to the SAFE Circular 37, prior registration with the local SAFE branch is required for PRC residents, including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange administration purpose, in connection with their direct or indirect contribution of domestic assets or interests to offshore companies, known as SPVs. The SAFE Circular 37 further requires amendment to the SAFE registrations in the event of any changes with respect to the basic information of the offshore special purpose vehicle, such as change of a PRC individual shareholder, name and operation term, or any significant changes with respect to the offshore special purpose vehicle, such as increase or decrease of capital contribution, share transfer or exchange, or mergers or divisions. The SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. In February 2015, the SAFE promulgated the Circular on Further Simplifying and Improving Foreign Exchange Administration Policies on Direct Investment, or the SAFE Circular 13, effective June 1, 2015. Under the SAFE Circular 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under the SAFE Circular 37, will be filed with qualified banks instead of the SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of the SAFE.

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In addition to the SAFE Circular 37 and the SAFE Circular 13, our ability to conduct foreign exchange activities in China may be subject to the interpretation and enforcement of the Implementation Rules of the Administrative Measures for Individual Foreign Exchange promulgated by the SAFE in January 2007 (as amended and supplemented, the “Individual Foreign Exchange Rules”). Under the Individual Foreign Exchange Rules, any PRC individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas must make the appropriate registrations in accordance with the SAFE provisions, the failure of which may subject such PRC individual to warnings, fines or other liabilities.

We have requested our beneficial owners who to our best knowledge are PRC residents to make the necessary applications, filings and amendments as required under SAFE Circular 37 and other related rules. We attempt to comply, and attempt to ensure that our beneficial owners who are subject to these rules comply with the relevant requirements. However, we may not be informed of the identities of all the PRC residents holding direct or indirect interest in our group, and we have no control over any of our beneficial owners. Thus, we cannot provide any assurance that our current or future PRC resident beneficial owners will comply with our request to make or obtain any applicable registrations or continuously comply with all registration procedures set forth in these SAFE regulations. Such failure or inability of our PRC residents beneficial owners to comply with these SAFE regulations may subject us or our PRC residents beneficial owners to fines and legal sanctions, restrict our cross-border investment activities, or limit our PRC subsidiaries’ ability to distribute dividends to, or obtain foreign-exchange-dominated loans from, our group, or prevent us from being able to make distributions or pay dividends, as a result of which our business operations and our ability to distribute profits to you could be materially and adversely affected. 

We may rely principally on dividends and other distributions from our PRC subsidiaries and payments under the Huazhi Contractual Agreements to fund our cash and financing requirements. Any limitation on such payments could materially and adversely affect our ability to fund and conduct our business.

We are a holding company, and we may rely principally on dividends and other distributions on equity paid by our PRC subsidiaries and payments made pursuant to the Huazhi Contractual Agreements for our cash and financing requirements, including funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. We do not directly own any equity interests in Huazhi Group and therefore are not entitled to receive dividends from Huazhi Group based on equity ownership. Instead, the economic benefits of Huazhi Group are transferred to us through payments under the Huazhi Contractual Agreements. If our PRC subsidiaries or Huazhi Group incur debt on their own behalf, the instruments governing such debt may restrict their ability to pay dividends, make other distributions or make payments under the Huazhi Contractual Agreements.

In September 2025, we disposed of the Puyi former VIEs through which we historically conducted our wealth management business, and the related contractual arrangements were terminated. However, the PRC tax authorities may determine that those historical contractual arrangements were not entered into on an arm’s-length basis and may adjust the relevant entities’ taxable income, which could result in additional taxes, interest or penalties. In addition, the PRC tax authorities may scrutinize the Huazhi Contractual Agreements and require adjustments to Huazhi Group’s taxable income, disallow deductions or impose additional taxes, interest or penalties if they determine that such arrangements were not entered into on an arm’s-length basis. Any such action could reduce the amounts available for payment to us.

Current PRC regulations permit our PRC 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, each of our PRC subsidiaries is required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund certain statutory surplus reserve, until the aggregate amount of such fund reaches 50% of its registered capital. These statutory surplus may not be distributed to shareholders as cash dividends.

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In addition, the ability of Huazhi Group to make payments under the Huazhi Contractual Agreements may be subject to applicable PRC laws and regulations, the availability of distributable funds, tax obligations, contractual restrictions and regulatory scrutiny of the Huazhi Contractual Agreements. The Huazhi Contractual Agreements may also be determined to be invalid or unenforceable, in which case we may not receive the economic benefits of Huazhi Group.

Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. 

PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of conversion of foreign currencies into Renminbi may delay or prevent us from using any offshore cash we may have to make loans to our PRC subsidiaries or to make additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

We are an offshore holding company conducting our operations in China through our PRC subsidiaries. We may make loans to our PRC subsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries, which are treated as foreign invested enterprise under PRC law, are subject to PRC regulations and foreign exchange loan registrations. For example, loans by us to our PRC subsidiaries to finance its activities cannot exceed the limits prescribed by PRC foreign exchange regulations and must be registered with the local counterpart of the SAFE or, where applicable, processed by a bank in accordance with the prevailing foreign exchange regulations. We may also decide to finance our PRC subsidiaries by means of capital contributions, which must be approved by MOFCOM or its local counterpart. We can use our capital funds to make domestic equity investments when the following conditions are met: (i) we shall not violate the current special management measures for the access of foreign investment (the Negative List); and (ii) domestic investment projects are true and compliant with the PRC laws and regulations. To be compliant, our capital funds shall not be used for the following purposes: (i) directly or indirectly used for payment beyond the business scope of the enterprises or prohibited by relevant laws and regulations; (ii) directly or indirectly used for investment in securities or investments other than banks’ principal-secured products unless otherwise permitted by relevant laws and regulations; (iii) the granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business license; and (iv) payment for the purchase of real estate that is not for self-use (except for the foreign-invested real estate enterprises). In addition, any transfer of funds by Maase to our PRC subsidiaries, either as a shareholder loan or as an increase in the registered capital, is subject to a series of procedural requirements with SAFE or its local counterpart.

In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans by us to our PRC subsidiaries or with respect to future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use any offshore cash we may have, including the proceeds we receive from any future offshore offering of equity or debts securities, and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

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Any failure to comply with PRC regulations regarding the registration and other requirements for share incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.

Under the SAFE regulations, PRC residents who participate in a share incentive plan in an overseas publicly listed company are required to register with the SAFE or its local branches and complete certain other procedures. We and our PRC resident employees who participate in our share incentive plans are subject to these regulations. If we or any of these PRC resident employees fail to comply with these regulations, we or such employees may be subject to fines and other legal or administrative sanctions. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law.

According to Guidelines No.1 on Application of Regulatory Rules Concerning Overseas Offering and Listing of Securities, the requirement under the the Trial Measures for an issuer to file with the CSRC its subsequent offering in the same securities exchange post listing does not apply to issuance of shares for: (i) stock incentive plan, (ii) conversion of reserve funds into capital increase, (iii) share dividend, or (iv) share split. Therefore, a listed enterprise issuing securities for the purpose of share incentive plan in the same overseas securities exchange is not overseas offering and listing, hence is not required to meet the filing requirement. However, we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements, nor can we assure you that we will be able to complete the necessary procedures as required; if not, such failure may materially and adversely affect the equity interest in us. 

The dividends we receive from our PRC subsidiaries may be subject to PRC tax under the PRC Enterprise Income Tax Law, which would likely have a material adverse effect on our financial condition and results of operations.

Pursuant to the Enterprise Income Tax Law (the “EIT Law”) and its Implementing Rules, as amended and effective on December 29, 2018 and January 20, 2025, respectively, an enterprise established outside the PRC with “de facto management bodies” within the PRC is considered a “resident enterprise” and shall pay income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law define de facto management as “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. In 2009, the State Administration of Taxation, or the SAT, issued the SAT Circular 82, which further interprets the application of the EIT Law and its implementing rules to a PRC-controlled offshore enterprise. Pursuant to the SAT Circular 82, an enterprise incorporated in an offshore jurisdiction and controlled by a PRC enterprise or a PRC enterprise group will be classified as a PRC resident enterprise for tax purposes and will be subject to PRC enterprise income tax on its global income, only if (i) its senior management in charge of daily operations reside or perform their duties mainly in the PRC; (ii) its financial or personnel decisions are made or approved by bodies or persons in the PRC; (iii) its substantial assets and properties, accounting books, corporate stamps, board and shareholder minutes are kept in the PRC; and (iv) at least 50% of its directors with voting rights or senior management habitually reside in the PRC. Such PRC resident enterprise would have to pay a withholding tax at a rate of 10% when paying dividends to its non-PRC shareholders.

We believe that we are not a PRC resident enterprise for PRC tax purposes because we do not have a PRC enterprise or a PRC enterprise group as our primary controlling shareholder. In addition, we are not aware of any offshore company with a corporate structure similar to ours that has been deemed a PRC resident enterprise by the PRC tax authorities. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body,” we will continue to monitor our tax status. 

If the PRC tax authorities determine that we are a PRC resident enterprise for tax purposes, we could be subject to PRC tax at a rate of 25% on our worldwide income, which could materially reduce our net income, and we may be subject to a 10% withholding tax from dividends we pay to our non-PRC shareholders, including the holders of our Class A Ordinary Shares. In addition, if such income is treated as sourced from within the PRC, non-resident shareholders including the holders of our Class A Ordinary Shares may be subject to PRC tax on gains realized on the sale or other disposition of Class A Ordinary Shares or Ordinary Shares, at a rate of 10% for non-PRC enterprises or a rate of 20% for non-PRC individuals, unless a reduced rate is available under an applicable tax treaty. It is unclear whether non- PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in the Class A Ordinary Shares or Ordinary Shares.

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We might be subject to penalties if our PRC subsidiaries fail to make adequate contributions to social security and housing provident fund pursuant to the relevant PRC laws and regulations.

Pursuant to the Social Insurance Law of the PRC promulgated in 2010 as amended in 2018 and the Regulations on Administration of Housing Provident Funds promulgated in 1999 as amended in 2026, an enterprise is mandatorily and unconditionally required, within a prescribed time limit, to register with the relevant social security authority and housing provident fund management center, and to open the relevant accounts and make timely contributions for their employees; failure to do so may subject the enterprise to an order for rectification, and certain fines if the enterprise fails to rectify in time. Should the relevant authorities determine that they have underpaid, such PRC entities may be required to pay outstanding contributions and penalties to the extent they did not make full contributions to the social security and housing provident funds.

On July 31, 2025, the Supreme People’s Court promulgated the Interpretation of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (II), effective on September 1, 2025, laying down express adjudicating principles for certain labor dispute issues. In particular: if an employer and an employee agree that social insurance premiums do not need to be paid, or if an employee promises the employer as much, the People’s court shall find such an agreement or promise invalid. As of the effective date, if an employer fails to pay social insurance premiums for an employee for whatever reason, it shall be found in breach of law.

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

Pursuant to the Circular on Strengthening Administration of Enterprise Income Tax on Proceeds from Transfer of Non-Resident Enterprise Equity Interest, or the SAT Circular 698, promulgated by the SAT in 2009 with retroactive effect from January 1, 2008, where a non-resident enterprise transfers the equity interests of a PRC resident enterprise indirectly by disposition of the equity interests of an overseas holding company, or an Indirect Transfer, and such overseas holding company is located in a tax jurisdiction that: (i) has an effective tax rate less than 12.5% or (ii) does not tax foreign income of its residents, the non-resident enterprise, being the transferor, shall report to the competent tax authority of the PRC resident enterprise this Indirect Transfer. 

In February 2015, the SAT promulgated an Announcement on Certain Enterprise Income Tax Matters Regarding Indirect Transfer of Properties between Non-resident Enterprises, or the SAT Circular 7, which supersedes the rules with respect to the Indirect Transfer under the SAT Circular 698, but does not touch upon the other provisions of the SAT Circular 698, which remain in force. The SAT Circular 7 extends its tax jurisdiction to not only Indirect Transfers set forth under the SAT Circular 698 but also transactions involving transfer of other taxable assets through offshore transfer of a foreign intermediate holding company. In addition, the SAT Circular 7 provides clearer criteria than the SAT Circular 698 for assessment of reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. The SAT Circular 7 also brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets. Where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an Indirect Transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the relevant tax authority. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

In October 2017, the SAT promulgated an Announcement on Issues Relating to Withholding at Source of Income Tax Payable by Non-resident Enterprises, or the SAT Circular 37, effective December 2017, which, among others, repealed the Circular 698 and amended certain provisions in the SAT Circular 7. According to the SAT Circular 37, where the non-resident enterprise fails to declare the tax payable pursuant to Article 39 of the Enterprise Income Tax, the tax authority may order it to pay the tax due within required time limits, and the non-resident enterprise shall declare and pay the tax payable within such time limits specified by the tax authority. However, if the non-resident enterprise voluntarily declares and pays the tax payable before the tax authority orders it to do so within required time limits, it shall be deemed that such enterprise has paid the tax on time.

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

The approval, filing and/or other requirements of the CSRC or other PRC governmental authorities are not required as we have already completed our IPO overseas before promulgation of the recent PRC regulatory rules, regulations or policies in connection with overseas offering and listing; however, if there is going to be any new offering, listing or re-financing activities, we are required to comply with the filing requirements once the application for registration of new offering, listing or re-financing activities is submitted overseas and we cannot predict whether or how soon we will be able to comply with such filing requirements.

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council promulgated the Opinions on Strictly Cracking Down Illegal Securities Activities in accordance with the Law (the “Opinions on Securities Activities”), which announced the plans to take effective measures to enhance the administration over illegal securities activities and the supervision on the offering and listing of securities by PRC domestic companies in an overseas market, including to promote the construction of relevant regulatory systems.

On December 24, 2021, the CSRC promulgated the Administrative Provisions of the State Council on Overseas Offering and Listing of Securities by Domestic Enterprises (Draft for Comments), and the Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Enterprises of Overseas Securities Issuance and Listing (Draft for Comments), which, if become effective, (i) require a PRC domestic company seeking securities offering and listing of securities in an overseas market, directly or indirectly, to file the required documents with the CSRC within three working days after such application for overseas offering and/or listing of securities is submitted, and (ii) stipulate certain circumstances under which overseas offering and/or listing of securities is prohibited as well as the measures to be taken by the CSRC against a PRC domestic company in any of such circumstances prior to the overseas offering and/or listing of securities, such as postponement or termination of the proposed overseas offering and listing of securities, and canceling the corresponding filing on the conditions that the proposed overseas offering and/or listing of securities or cancellation of the corresponding filing in the event that the application documents for the proposed overseas offering and/or listing of securities have already been filed. 

The above regulations have been integrated into the latest the Trial Measures promulgated by CSRC on February 17, 2023, which took effect on March 31, 2023; thereafter, the CSRC promulgated five Guidelines for Application of Regulatory Rules concerning overseas offering and listing of securities, with immediate effect (hereinafter collectively referred to as the “Administrative Measures and Supporting Guidelines on Overseas Offering and Listing of Securities”). The aforementioned Administrative Measures and Supporting Guidelines on Overseas Offering and Listing of Securities require a PRC domestic company seeking initial public offering and/or listing of securities on an overseas market, directly or indirectly, to file the required documents with the CSRC within three working days after such application for overseas offering and/or listing is submitted overseas. The Administrative Measures and Supporting Guidelines on Overseas Offering and Listing of Securities provide for five circumstances under which overseas offering and listing of securities are prohibited; any PRC domestic company falling under any of such circumstances prior to its overseas offering and/or listing of securities shall suspend or terminate its overseas offering and/or listing of securities and report to the CSRC and other competent authorities under the State Council in a timely manner, otherwise it may be subject to penalty imposed by the CSRC. As per the relevant CSRC Answers to Reporter Questions on the official website of the CSRC, we have completed the overseas initial public offering of securities prior to the date on which the Administrative Measures and Supporting Guidelines on Overseas Offering and Listing of Securities took effect, hence fall within the ambit of existing enterprises. Existing enterprises are not required to make immediate filing thus far; however, they shall comply with the filing requirements with the CSRC in the event of subsequent re-financing or other activities requiring filing. Therefore, the above filing requirement could significantly limit or completely hinder our future offering of securities to investors. 

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On December 28, 2021, the Measures for Cyber Security Review (2021) was released, which stipulates, among others, that the procurement of network products and services by critical information infrastructure operators and the data processing activities conducted by network platform operators which affect or may affect national security shall be subject to cybersecurity review. On August 20, 2021, the Personal Information Protection Law (the “PIPL”) was promulgated, effective on November 1, 2021. The PIPL provides for the rights and obligations of personal information processors, with particular emphasis on requirements for cross-border information transfer. See “Item 3. Key Information—3.D. Risk Factors—Risks Related to Our Business and Industry—Any failure to protect our clients’ privacy and confidential information could lead to legal liability, adversely affect our reputation and have a material adverse effect on our business, financial condition or results of operations.”

As per the Trial Measures, our future offering of securities overseas and the listing of our Class A Ordinary Shares resulting therefrom shall be filed with the CSRC. Furthermore, the PRC governmental authorities may have wide discretion on the interpretation and enforcement of the above regulations, and we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on any of our future proposed offering of securities overseas or the listing of our Class A Ordinary Shares. It is uncertain whether we can or how long it will take us to comply with such requirements. Any failure to comply with such requirements may subject us to regulatory actions or other sanctions from the CSRC or other PRC governmental authorities, which may have a material adverse effect on our business, financial conditions or results of operations.

There are difficulties in bringing actions and enforcing foreign judgments in China against us, our management or our assets.

We are incorporated in the Cayman Islands, but most of our and our subsidiaries’ operations are conducted in the PRC and most of our and our subsidiaries’ assets are located in the PRC. In addition, all of our directors and officers are nationals and/or residents of the PRC, and all or a substantial portion of their assets are located in the PRC. 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 we have violated your rights or have a claim against us, either under United States federal or state securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may not allow you to enforce a judgment against our assets or the assets of our directors and officers.

It may also be difficult for our shareholders to effect service of process upon us or those persons inside Mainland China. As advised by our PRC legal counsel, China currently does not have treaties providing for the reciprocal recognition and enforcement of court judgments with the Cayman Islands, United States and many other countries and regions. Therefore, with respect to matters that are not subject to a binding arbitration provision, it may be difficult or impossible to recognize and enforce judgments of any of those non-PRC jurisdictions in a China court. 

According to the Administrative Measures for Personal Information Protection Compliance Audits, we may be obliged to carry out compliance audit (or have compliance audit carried out) on personal information protection every year.

According to the Administrative Measures for Personal Information Protection Compliance Audits (hereinafter referred to as the “Administrative Measures”), (i) a personal information processor that processes the personal information of more than 10 million individuals shall carry out a personal information protection compliance audit at least once every two years; (ii) a personal information processor that processes the personal information of 1 million individuals or more shall appoint a personal information protection officer to be responsible for the processor’s personal information protection compliance audits. Since inception, we have had over 20.3 million individual customers who have purchased insurance products and wealth management products through us. There is uncertainty on the timeline for the implementation of the Administrative Measures and the interpretation of the Administrative Measures lacks clarity. Once the Administrative Measures takes effect, we may be obliged to carry out a compliance audit (or have a compliance audit carried out) on personal information protection every two year, otherwise we may be investigated for criminal liability in accordance with the law.

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Risks Related to our Class A Ordinary Shares

We may be unable to comply with the applicable continued listing requirements of Nasdaq.

Our Class A Ordinary Shares are currently listed on Nasdaq. In order to maintain this listing, we must satisfy minimum financial and other continued listing requirements and standards, including a minimum closing bid price requirement of $1.00 per share. On November 21, 2024, we were notified by the Listing Qualifications Department of Nasdaq that the closing bid price per share for our ADSs previously representing our Class A Ordinary Shares was below US$1.00 for a period of 35 consecutive business days and that the Company was not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”). The Company had been provided with a compliance period of 180 calendar days to regain compliance with the Minimum Bid Price Requirement. In order to regain compliance with the minimum bid price requirement, we changed our ADS ratio from 2 ADS representing 3 Class A Ordinary Shares to 1 ADS representing 90 Class A Ordinary Shares, effective April 14, 2025. On April 29, 2025, Nasdaq provided confirmation to the Company that for the last 10 consecutive business days, from April 14, 2025 to April 28, 2025, the closing bid price of the Company’s ADSs has been at $1.00 per share or greater. Accordingly, the Company has regained compliance with Nasdaq Listing Rule 5450(a)(1) and the matter is now closed. 

There can be no assurance that we will be able to maintain compliance with the applicable listing standards in the future. For example, if we were to fail to meet the minimum bid price requirement for 30 consecutive business days, we could become subject to delisting. Although Nasdaq may provide us with a compliance period in which to regain compliance with the minimum bid price requirement, we cannot assure you that we would be able to regain compliance within the period provided by Nasdaq. In order to regain compliance with such requirement, the closing bid price of our Class A ordinary share would need to meet or exceed $1.00 per share for at least 10 consecutive business days during the compliance period. If we were not able to regain compliance within the allotted compliance period for this requirement or any other applicable listing standard, including any extensions that may be granted by Nasdaq, our Class A Ordinary Shares would be subject to delisting. In the event that our Class A Ordinary Shares are delisted from Nasdaq and are not eligible for quotation or listing of securities on another market or exchange, trading of our Class A Ordinary Shares could be conducted only in the over-the-counter market established for unlisted securities such as OTC Markets. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for our Class A Ordinary Shares, which could cause the price of our Class A Ordinary Shares to decline further.

The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our Class A Ordinary Shares.

We conduct our business in China primarily through our PRC subsidiaries in which we hold equity interest and Huazhi VIE and its subsidiaries, whose operational activities we direct through the Huazhi Contractual Agreements. Our operations in China are governed by PRC laws and regulations. The PRC government has significant oversight over the conduct of our business, and it regulates and may intervene our operations, which could result in a material adverse change in our operations and/or the value of our Class A Ordinary Shares.

Also, the PRC government has recently exerted more oversight over offerings that are conducted overseas and/or foreign investment in China-based issuers. The Administrative Measures and Supporting Guidelines on Overseas Offering and Listing of Securities promulgated by the CSRC have provided expressly that a PRC domestic company applying for subsequent offering and listing of securities on the same overseas market or applying for offering and listing of securities on another overseas market after its IPO shall comply with the filing requirements with the CSRC within three working days after such application is submitted overseas.

According to the Answers to Reporter Questions, we have completed our overseas IPO of Class A Ordinary Shares prior to the taking effect of the Administrative Measures and Supporting Guidelines on Overseas Offering and Listing of Securities, hence we fall within the ambit of existing enterprises as referenced in the Answers to Reporter Questions and are not required to make immediate filing thus far; however, we shall comply with the filing requirements with the CSRC as required in the event of subsequent re-financing or other activities requiring filing.

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Meanwhile, it is stated in the Answers to Reporter Questions that the CSRC will accept filing of those enterprises with VIE structure meeting the compliance requirements for overseas listing, to support companies’ growth by utilizing two markets and two resources. However, the practice of determining whether a company with VIE structure has met the compliance requirements is yet to be clarified by the CSRC. Therefore, our future offering of securities to investors may be significantly limited or completely hindered. In addition, implementation of industry-wide regulations directly targeting our operations could cause our securities to significantly decline in value or become worthless. Therefore, our investors face potential uncertainty from actions taken by the PRC government affecting our business. 

If the PCAOB is unable to adequately inspect our auditors as required under the Holding Foreign Companies Accountable Act, the SEC will prohibit the trading of our Class A Ordinary Shares. A trading prohibition may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct adequate inspections of our auditors deprives our investors of the benefits of such inspections, which could cause investors and potential investors in the Class A Ordinary Shares to lose confidence in the audit procedures and reported financial information and the quality of our financial statements.

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

On December 16, 2021, the PCAOB issued the PCAOB Determinations that they were unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong SAR. The report sets forth lists identifying the registered public accounting firms headquartered in mainland China and Hong Kong SAR, respectively, that the PCAOB was unable to inspect or investigate completely, and our former auditor was on such lists.  

On December 15, 2022, the PCAOB announced that it has secured complete access to inspect and investigate completely PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong SAR. The PCAOB also vacated its previous determinations issued in December 2021.Our current auditor, Enrome LLP, is headquartered in Singapore and subject to inspection by the PCAOB. Our current auditor was not among the PCAOB-registered public accounting firms headquartered in mainland China or Hong Kong that were subject to PCAOB’s determinations. As a result, we do not believe we are at risk of having our securities subject to a trading prohibition under the HFCA Act unless a new determination is made by the PCAOB.

However, each year, the PCAOB determines whether it can inspect and investigate completely audit firms in mainland China and Hong Kong SAR, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong SAR and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. In accordance with the HFCA Act, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future. If our Class A Ordinary Shares are prohibited from trading in the United States, there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our shares will develop outside of the United States. The prospect and implications of possible regulation on this subject, in addition to the prevailing requirements of the HFCA Act, are uncertain. Such uncertainty could cause the market price of our Class A Ordinary Shares to be materially and adversely affected, and our securities could be delisted or prohibited from being traded “over-the-counter” earlier than would be required by the HFCA Act as it currently provides. If our securities are unable to be listed on another securities exchange by then, such a delisting would substantially impair your ability to sell or purchase our Class A Ordinary Shares when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our Class A Ordinary Shares . Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.

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The market price for our Class A Ordinary Shares will continue to be volatile.

The trading prices of our Class A Ordinary Shares or previously ADSs have been, and are likely to continue to be, volatile and could fluctuate widely due to factors beyond our control. In addition, securities markets may from time-to-time experience significant price and volume fluctuations that may or may not relate to our operating performance, which may have a material and adverse effect on the market price of our Class A Ordinary Shares. In particular, volatility in the PRC stock markets in the last few years has resulted in some volatility in the trading prices of most PRC-based companies in the United States. The market price for our Class A Ordinary Shares is likely to be highly volatile and subject to wide fluctuations in response to factors including the following:

In addition, the securities market has from time-to-time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also have a material adverse effect on the market price of our Ordinary Shares.

Under our dual-class share structure with different voting rights, holders of Class B Ordinary Shares have complete control of the outcome of matters put to a vote of shareholders, which may limit ability of holders of our Class A Ordinary Shares to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A Ordinary Shares may view as beneficial.

We have adopted a dual-class share structure such that our Ordinary Shares consist of Class A Ordinary Shares and Class B Ordinary Shares. In respect of matters requiring the votes of shareholders, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to 100 votes. Each Class B ordinary share is convertible into one Class A ordinary share, at the option of the holder, with the consent of our board of directors given by a majority of votes at a board meeting or by written resolutions of all directors. In no event shall Class A Ordinary Shares be convertible into Class B Ordinary Shares under any circumstances. Class B Ordinary Shares shall be automatically and immediately converted into an equal number of Class A Ordinary Shares under the following circumstances: (i) if the holder is an employee, upon the termination of their employment with the Company; (ii) if the holder is a Director, upon their resignation or removal from the Board of Directors; and (iii) if the holder is a wholly-owned company (“Owned Company”) of a Director, senior management, or an existing shareholder, upon the individual ceasing to wholly own the Owned Company. Each Class B ordinary share confers upon the holder: (a) no right to any share in any dividend or distribution paid by the Company and (b) no right to any share in the distribution of the surplus assets of the Company upon liquidation or otherwise, and no Class B ordinary share may be sold, transferred, assigned, pledged, or otherwise disposed of, or used as collateral for loans or any obligations.

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As of the date of this annual report, Moonlit Group Ltd. beneficially owned 2,223 Class A Ordinary Shares and 5,555,556 Class B Ordinary Shares, in aggregate representing approximately 1.26% of our total issued and outstanding share capital and 50.41% of our aggregate voting power, while Equality Group Ltd. beneficially owned 1,112 Class A Ordinary Shares and 1,111,112 Class B Ordinary Shares, in aggregate representing 0.25% of our total issued and outstanding share capital and 10.08% of our aggregate voting power. As a result of this dual-class share structure, the holders of our Class B Ordinary Shares have significant control over the outcome of matters put to a vote of shareholders and have significant influence over our business, including decisions regarding mergers, consolidations, liquidations and the sale of our assets, election of directors and other significant corporate actions. The holders of Class B Ordinary Shares control the outcome of a shareholder vote (i) with respect to matters requiring an ordinary resolution which requires the affirmative vote of a simple majority of shareholder votes; and (ii) with respect to matters requiring a special resolution which requires the affirmative vote of no less than two-thirds of shareholder votes. The holders of Class B Ordinary Shares may take actions that are not in the best interest of us or our other shareholders. It may discourage, delay or prevent a change in control of our company, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of the Class A Ordinary Shares. This concentrated control will limit the ability of the holders of our Class A Ordinary Shares 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 may view as beneficial.

We do not expect to pay dividends in the foreseeable future and you may have to rely on price appreciation of our Class A Ordinary Shares for any return on your investment.

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

Our board of directors has complete discretion as to whether to distribute dividends. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our Class A Ordinary Shares will likely depend entirely upon any future price appreciation of our Class A Ordinary Shares. There is no guarantee that our Class A Ordinary Shares will appreciate in value or even maintain the price at which you purchased the Class A Ordinary Shares. You may not realize a return on your investment in our Class A Ordinary Shares and you may even lose your entire investment in our Class A Ordinary Shares. 

Substantial future sales or perceived potential sales of our Class A Ordinary Shares in the public market could cause the price of our Class A Ordinary Shares to decline.

Additional sales of our Class A Ordinary Shares or Ordinary Shares in the public market, or the perception that these sales could occur, could cause the market price of our Class A Ordinary Shares to decline. As of the date of this annual report, we have 442,175,578 Ordinary Shares outstanding, including 435,508,910 Class A Ordinary Shares and 6,666,668 Class B Ordinary Shares.14,470,899 Class A Ordinary Shares are freely transferable without restriction or additional registration under the Securities Act. In addition, our registration statement on Form F-3 (File No. 333-298147), which was declared effective on August 21, 2026, registers the resale by certain selling shareholders of up to 75,419,246 Class A Ordinary Shares issued as consideration in the Carve Group and Real Prospect Group acquisitions or subsequently transferred by the sellers, and also registers the offer and sale by us from time to time of up to US$500,000,000 of Class A Ordinary Shares, debt securities, warrants, rights and units. The remaining Class A Ordinary Shares outstanding and Class A Ordinary Shares convertible from Class B Ordinary Shares will be available for sale, subject to volume and other restrictions as applicable under Rules 144 and 701 under the Securities Act and to the contractual lock-up arrangements described in “Item 4. Information on Our Group—4.A. History and Development of Our Group,” which permit transfers with the prior written consent of our board of directors.

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Certain holders of our Ordinary Shares have the right to cause us to register under the Securities Act the sale of their shares, and we have registered the resale of 75,419,246 Class A Ordinary Shares on Form F-3 as described above. Registration of these or additional shares under the Securities Act results in Class A Ordinary Shares representing 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 could cause the price of our Class A Ordinary Shares to decline. 

You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited because we are incorporated under Cayman Islands law, we conduct substantially all of our operations in China and all of our directors and officers reside outside the United States.

We are incorporated in the Cayman Islands, and conduct substantially all of our operations in China through our PRC subsidiaries. All of our directors and officers reside outside the United States and a substantial portion of their assets are located outside of 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 Cayman Islands or in China in the event that you believe that your rights have been infringed under the securities laws or otherwise. Even if you are successful in bringing an action of this kind against us, the laws of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of our directors and officer depending on where these individuals and/or assets are located. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will generally recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.

Our corporate affairs are governed by our memorandum and articles of association, as amended and restated from time to time, and by the Companies Act (as amended) and common law of the Cayman Islands. The rights of shareholders to take legal action against us and our directors, actions by minority shareholders and the fiduciary responsibilities of our directors 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 compared to the United States) as well as from English common law, which provides persuasive, but not binding, authority on a court in the Cayman Islands (except for those decisions handed down from the Judicial Committee of the Privy council to the extent that these have been appealed from the Cayman Islands courts). The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are broadly similar to those in other common law jurisdictions, but there may be differences in the statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws than the United States. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in U.S. federal courts.

As a result, our public shareholders may have more difficulty in protecting their interests through actions against us, our management, our directors or our major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

Our memorandum and articles of association contain anti-takeover provisions that could adversely affect the rights of holders of our Class A Ordinary Shares by limiting their opportunities to sell them at a premium.

Our memorandum and articles of association contain certain provisions that could limit the ability of others to acquire control of our company, including a provision that grants to our board of directors the authority to establish and issue from time to time one or more series of preferred shares without action by our shareholders and to determine, with respect to any series of preferred shares, the terms and rights of that series. The provisions could have the effect of depriving our shareholders of the opportunity to sell their shares at a premium over the prevailing market price by discouraging third-parties from seeking to obtain control of our company in a tender offer or similar transactions.

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We may be classified as a passive foreign investment company under U.S. tax law, which could result in adverse U.S. federal income tax consequences to U.S. holders of our Class A Ordinary Shares.

Depending upon the value of our assets (based, in part, on the market value of our Class A Ordinary Shares) and the nature of our assets and income over time, we could be classified as a passive foreign investment company, or PFIC, for United States federal income tax purposes. Based on the price of our Class A Ordinary Shares, the value of our assets, and the composition of our income and assets, we do not expect to be classified as a PFIC for the current taxable year. While we do not anticipate becoming a PFIC for the current taxable year, fluctuations in the market price of our Class A Ordinary Shares may cause us to become a PFIC for the current or any subsequent taxable year.

We will be classified as a PFIC for any taxable year if either (i) at least 75% of our gross income for the taxable year is passive income or (ii) at least 50% of the value of our assets (determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income. Because of the uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year on the basis of the composition of our income and the value of our active versus passive assets, there can be no assurance that we will not be a PFIC for our current taxable year or any future taxable year. The overall level of our passive assets will be affected by our liquid assets and cash. Under circumstances where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming classified as a PFIC would substantially increase.

If we were to be or become classified as a PFIC, a U.S. holder (as defined in “Taxation — U.S. Federal Income Tax Considerations — General”) may be subject to reporting requirements and may incur significantly increased United States income tax on gain recognized on the sale or other disposition of the Class A Ordinary Shares or Ordinary Shares and on the receipt of distributions on the Class A Ordinary Shares or Ordinary Shares to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules. Further, if we were a PFIC for any year during which a U.S. holder held our Class A Ordinary Shares or Ordinary Shares, we would continue to be treated as a PFIC for all succeeding years during which such U.S. holder held our Class A Ordinary Shares or Ordinary Shares. You are urged to consult your tax advisor concerning the United States federal income tax consequences of acquiring, holding, and disposing of Class A Ordinary Shares or Ordinary Shares if we are or become classified as a PFIC. See “Item 10. Additional Information — 10.E. Taxation — U.S. Federal Income Tax Considerations — Passive Foreign Investment Company Considerations.” 

ITEM 4. INFORMATION ON OUR GROUP

4.A. History and Development of Our Group

On July 3, 2025, we entered into a definitive share purchase agreement (the “Agreement”) for a private placement and warrant offering with certain investors. Pursuant to the Agreement, the investors have agreed to subscribe for, and the Company has agreed to issue and sell to the investors, (i) an aggregate of 10,000,000 Class A Ordinary Shares, par value US$0.09 per share, of the Company, at a purchase price of $2.08 per Class A ordinary share (the “Per Share Purchase Price”) (“Share Issuance”) and (ii) warrants to purchase up to 20,000,000 additional Class A Ordinary Shares of the Company. The Share Issuance was completed on July 18, 2025, generating approximately US$20.8 million in gross proceeds. The subscription price was received in full in June 2026. The exercise price of the warrants is structured in two tranches: 50% of the warrants are exercisable at 200% of the Per Share Purchase Price, with the remaining 50% exercisable at 250%. The warrants have become exercisable on October 18, 2025 and will expire on October 18, 2030.

At the end of August 2025, we completed the acquisition of 100% of the equity interests in Carve and its wholly-owned subsidiaries Zhongshen and Glyken from its existing shareholders, Golden Brighter Limited (“GBL”), WJ Management Company Limited (“WJM”), and Union Chief Limited (“UCL”) (collectively, the “Sellers”). As consideration, we issued to the Sellers an aggregate of 195,894,609 Class A Ordinary Shares with a par value of US$0.09 per share (the “Consideration Shares”), at an issue price of US$1.50 per share. The Consideration Shares held by GBL and WJM are subject to a five-year lock-up period, except for transfers made with the prior written consent of our board of directors or to a wholly-owned subsidiary of the holder. Carve indirectly holds 100% equity interests of Zhongshen, a premium wild ginseng resource holder, and Glyken, a pioneering bird’s nest biotech company specializing in the extraction of small molecular bird’s nest peptides using a physical heating separation method. Following the acquisition, MAAS indirectly holds full ownership of Zhongshen and Glyken.

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On September 26, 2025, we entered into a share sales and purchases agreement (the “Agreement”) with Echoes Group Ltd (“Echoes Group”), for the sales of 100% of the equity interests in Puyi Group as well as all equity interests in subsidiaries directly or contractually controlled by Puyi Group (collectively, “Target Companies”), for a total cash consideration of RMB70.0 million. The transaction has been completed by September 30, 2025, with the consideration received in October 2026. The Target Companies include: (i) Puyi Holdings (Hong Kong) Limited (“Puyi HK”), a wholly owned subsidiary of Puyi Group; (ii) Puyi Enterprises Management Consultant Co., Limited (“Puyi Enterprises”), a wholly owned subsidiary of Puyi HK.; (iii) Chengdu Yihuitong Information Technology Co., Ltd. (“Yihuitong”), a wholly owned subsidiary of Puyi Enterprises; (iv) Puyi Bohui, a company controlled by Puyi Enterprises through contractual agreements; (v) Fanlian Investment, a wholly owned subsidiary of Puyi Bohui; (vi) Guangdong Puyi Consulting Management Co., Ltd., a wholly owned subsidiary of Puyi Bohui; (vii) Chongqing Fengyi Enterprises Management Consultant Co., Limited, a wholly owned subsidiary of Puyi Bohui; and (viii) Fanhua Puyi Fund Sales Co., Ltd., the operating entity of our wealth management business and a wholly-owned subsidiary of Puyi Bohui. Upon completion of the transaction, we have ceased the fund product distribution business and other wealth management or asset management business.

At the end of October 2025, we completed the acquisition of 100% of the equity interests in Real Prospect from its existing shareholders, Ace Long Limited (“ALL”) and Arts Wing Limited (“AWL”) (collectively, the “Sellers”). As consideration, we issued to the Sellers an aggregate of 98,002,174 Class A Ordinary Shares with a par value of US$0.09 per share (the “Consideration Shares”), at an issue price of US$1.50 per share. AWL undertook that the Real Prospect Group, taken as a whole, would achieve not less than 80% of agreed performance targets in each of the financial years 2026 to 2028, and is required to return to us 5.0 million Consideration Shares for any such year in which the achievement is below 80% but not below 70% and 10.0 million Consideration Shares for any such year in which the achievement is below 70%, unless the shortfall results from matters outside AWL’s control. The Consideration Shares of AWL are subject to a three-year lock-up period, except for transfers made with the prior written consent of our board of directors or to a wholly-owned subsidiary of AWL. Real Prospect indirectly held 100% of the equity interests of Qingdao Maisi Intelligent Technology Co., Ltd. and 49% of the equity interests of Qingdao Huiju Laixi Intelligent Technology Co., Ltd. (“Laixi”), which we sold in July 2026 as described below. The Target Group Companies specialize in smart-technology solutions, including mobile EV-charging robots, modular residential energy-storage systems, and fully automated unmanned car-wash equipment. This acquisition supports the Company’s strategic expansion into new-energy technologies and intelligent services.

In December 2025, AIFU completed its issuance of 250,000 Class B ordinary shares (adjusted for AIFU’s 20-for-1 share consolidation effected on June 16, 2026) to a third party. Following this issuance, our aggregate beneficial ownership of the total outstanding shares of AIFU was diluted to approximately 7.85%, and our aggregate voting power was diluted to approximately 16.75%. As a result, we no longer had a controlling financial interest in AIFU and its subsidiaries. Accordingly, the Group deconsolidated AIFU and its subsidiaries as of December 31, 2025, and the Group no longer conducts any material operations in the insurance agency business. On January 9, 2026, AIFU issued 5,128,942 Class A ordinary shares (as adjusted for AIFU’s share consolidation on June 16, 2026) in connection with an acquisition. On March 17, 2026, we converted all of the 63,750 Class B ordinary shares (as adjusted for AIFU’s share consolidation on June 16, 2026) that we held in AIFU to Class A ordinary shares on a one-for-one basis and subsequently disposed of 207 Class A ordinary shares of AIFU (as adjusted for AIFU’s share consolidation on June 16, 2026) in open market transactions in June 2026. As of June 30, 2026, we held 83,932 Class A ordinary shares of AIFU, representing 1.33% of its outstanding shares and 0.26% of its voting power. As of the date of this annual report, our beneficial ownership of the total outstanding shares of AIFU has been further diluted to approximately 0.13%, representing approximately 0.01% of its aggregate voting power as the result of a series of share issuances completed by AIFU to third parties since January 2026. We account for our remaining interest in AIFU as an equity security measured at fair value.

On January 14, 2026, we completed the acquisition of 100% of the equity interests in Oriental Grove pursuant to a transaction agreement dated December 19, 2025 with Oriental Grove and its shareholders, for a total consideration of approximately US$62.4 million, consisting of an aggregate of 34,911,410 Class A Ordinary Shares issued at a price of US$1.50 per share and a cash payment of US$10,000,000 payable within 365 days after the closing. Subject to certain customary exceptions, each seller is subject to a lock-up period of sixty (60) months following the closing. Oriental Grove is engaged in the business of premium tea products and maintains inventory consisting primarily of high-grade tea. The acquisition was accounted for as an asset acquisition because the assets acquired consisted primarily of inventories of high-grade tea and did not include substantive operating activities, customer or supplier relationships, or operating personnel. Upon completion of the acquisition, Oriental Grove became a wholly owned subsidiary of our holding company. We acquired the tea inventories primarily to hold as strategic reserves.

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At the end of March 2026, we completed the acquisition of 100% of the equity interests in Times Good Limited pursuant to a transaction agreement dated January 23, 2026 with Times Good Limited and its shareholders, YCY Management Company Limited, Victory Kong Limited and QYH Management Company Limited. Times Good Limited, through its wholly-owned PRC subsidiary, Shenzhen Huazhixing, and the Huazhi Contractual Agreements, controls Huazhi Group. As consideration, we issued to the sellers an aggregate of 87,400,144 Class A Ordinary Shares at a price of US$1.50 per share and agreed to pay US$26.0 million in cash within 365 days after the closing, representing total consideration of approximately RMB1.1 billion. Subject to certain customary exceptions, each seller is subject to a lock-up period of sixty (60) months following the closing. The acquisition expands our presence in the sectors of computing power and algorithm solutions.

At the end of July 2026, we completed the sale of 49% of the issued and outstanding equity interests of Laixi to Galaxicore Holdings Limited, an independent third party, for a total consideration of US$17 million pursuant to an equity interest sale and purchase agreement dated July 17, 2026. As of the date of this report, approximately 30% of consideration was collected. The remaining balance is expected to be settled by December 31, 2026. The divestiture represents an important step in our ongoing efforts to optimize our business portfolio and sharpen our strategic focus on the AI sector.

We refer to the above acquisitions, disposal and deconsolidation collectively, as the “Transactions”.

On September 23, 2026, we entered into a securities purchase agreement with an investor for a private placement of 3,878,856 Class A Ordinary Shares at a price of US$12.89 per share, for gross proceeds of approximately US$50 million, the shares being subject to a 36-month lock-up following the closing. The private placement is expected to close by the end of 2026. We intend to use the proceeds to expand the Stars Distributed Intelligent Computing Center Project, to advance the research, development and commercialization of our LingYanMiaoYu large language models and for working capital and general corporate purposes.

Corporate Information

Our principal executive offices are located at Building 48, Zhixin Manufacturing Valley Industrial Park, No. 52 Yangzhou Road, Economic Development Zone, Laixi, Qingdao, Shandong Province, People’s Republic of China, 266000. Our telephone number is +86-532-66030885. Our registered office in the Cayman Islands is Walkers Corporate Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9008, Cayman Islands.

The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. We maintain our website at https://ir.maaseai.com.

Cash Flows Through Our Organization

We are not an operating company but a Cayman Islands holding company. During the fiscal year ended June 30, 2026, our operations were primarily conducted by our subsidiaries and by the AIFU former VIEs, Puyi former VIEs and the Huazhi VIEs (collectively, the “consolidated VIEs”) based in China through contractual arrangements.

We currently do not have a cash management policy that dictates how funds must be transferred among Maase Inc., our subsidiaries, Huazhi VIE and its subsidiaries, and our investors. Cash may be transferred through our organization in the following manner: (i) Maase Inc. may provide funds to its directly or indirectly owned subsidiaries through capital contributions or shareholder loans, as applicable; (ii) our offshore subsidiaries may provide funds to our PRC subsidiaries through capital contributions or shareholder loans, subject to applicable PRC registration, filing, foreign-exchange and other regulatory requirements; (iii) our PRC subsidiaries may provide funds to Huazhi VIE and its subsidiaries through loans, service arrangements or other transactions permitted under the Huazhi Contractual Agreements and applicable PRC laws and regulations; (iv) Huazhi VIE and its subsidiaries may make payments to our PRC subsidiaries pursuant to the Huazhi Contractual Agreements; and (v) our subsidiaries may make dividends or other distributions to their respective parent companies and, ultimately, to Maase Inc., subject to applicable laws, regulations and contractual restrictions.

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Because Maase Inc. does not directly own equity interests in Huazhi VIE or its subsidiaries, Huazhi VIE and its subsidiaries cannot pay dividends to Maase Inc. based on equity ownership. Instead, the economic benefits of Huazhi VIE and its subsidiaries may be transferred to our PRC subsidiaries through payments under the Huazhi Contractual Agreements. Such payments may be subject to PRC tax, foreign-exchange and other regulatory requirements and may also be limited if the Huazhi Contractual Agreements are determined to be invalid or unenforceable.

Cash proceeds raised through any future offshore financing may be transferred by Maase Inc. through its offshore subsidiaries to its PRC subsidiaries by way of capital contributions or shareholder loans, as applicable. Our PRC subsidiaries may then use such funds for their operations or transfer funds to Huazhi VIE and its subsidiaries under the Huazhi Contractual Agreements or other arrangements permitted under PRC law. Such transfers may be subject to governmental approvals, registrations, filings, foreign-exchange controls, statutory limits and restrictions on the use of funds.

Our ability to pay dividends to our shareholders and service any debt we may incur will depend, in part, on dividends and other distributions received from our subsidiaries and payments made under the Huazhi Contractual Agreements. Under applicable PRC regulations, our PRC subsidiaries may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, each PRC subsidiary is generally required to allocate at least 10% of its after-tax profits each year, after making up prior years’ accumulated losses, to a statutory reserve until the reserve reaches 50% of its registered capital. These statutory reserves are not distributable as cash dividends. Cross-border dividend payments and other distributions may also be subject to applicable tax, foreign-exchange and procedural requirements.

If our subsidiaries, Huazhi VIE or its subsidiaries incur debt, the applicable debt instruments may restrict their ability to pay dividends, make distributions or transfer funds within our organization. In addition, to the extent cash is held in the PRC or by a PRC entity, such cash may not be available to fund operations or for other uses outside the PRC due to restrictions imposed by PRC laws and regulations on cross-border fund transfers and foreign-exchange conversion. Any restriction on the ability of our subsidiaries to pay dividends or make other distributions to us, or on the ability of Huazhi VIE and its subsidiaries to make payments under the Huazhi Contractual Agreements, could materially limit our ability to fund our operations, pursue investments or acquisitions, service indebtedness or pay dividends to our shareholders.

Conversely, transfers of funds from Maase Inc. or its offshore subsidiaries to our PRC subsidiaries as shareholder loans or capital contributions are subject to applicable PRC approvals, registrations, filings and foreign-exchange requirements. Funds transferred to our PRC subsidiaries may also be subject to restrictions on their amount and use. Transfers from our PRC subsidiaries to Huazhi VIE and its subsidiaries may be subject to additional legal, regulatory, tax and contractual requirements. We cannot assure you that we will complete the applicable procedures or obtain any necessary approvals on a timely basis or at all.

For additional information, see “Item 3. Key Information—3.D. Risk Factors—Risks Relating to Doing Business in China—We may rely principally on dividends and other distributions from our PRC subsidiaries and payments under the Huazhi Contractual Agreements to fund our cash and financing requirements. Any limitation on such payments could materially and adversely affect our ability to fund and conduct our business” and “—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of conversion of foreign currencies into Renminbi may delay or prevent us from using any offshore cash we may have to make loans to our PRC subsidiaries or to make additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.

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During the fiscal years ended June 30, 2024, 2025 and 2026, our subsidiaries and, for the periods during which they were consolidated, the AIFU former VIEs, the Puyi former VIEs and the Huazhi VIEs conducted business transactions that primarily included insurance agency services, wealth management services and computing power and algorithm solutions services. The cash flows that have occurred among our subsidiaries and the consolidated VIEs are summarized as the following:

Financial Information Related to the Consolidated VIEs

The following tables present the summary consolidated balance sheets data as of June 30, 2025 and 2026 and the summary of the consolidated statement of operations and cash flows for the fiscal years ended June 30, 2024, 2025 and 2026 for the parent, the consolidated VIEs, the WFOEs and an aggregation of other subsidiaries, eliminating intercompany amounts and consolidated totals (in thousands of RMB). Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP. Our and the consolidated VIEs’ historical results are not necessarily indicative of results expected for future periods. You should read this information together with our consolidated financial statements and the related notes and “Item 5. Operating and Financial Review and Prospects” included elsewhere in this annual report. 

In these tables, “parent” refers to Maase Inc., the Nasdaq listed company which is a Cayman exempted company. “VIEs” in fiscal year ended June 30, 2024 refer to Puyi Bohui, Xinbao Investment, RONS Technologies and their respective subsidiaries while “VIEs” in fiscal year ended June 30, 2025 refer to Puyi Bohui and its subsidiaries only. “VIEs” in fiscal year ended June 30, 2026 refer to Puyi Bohui and its subsidiaries before the disposal of the Puyi Group in September 2025, together with Huazhi and its subsidiaries subsequent to the acquisition of Huazhi in March 2026. “WFOEs” refer to Puyi Consulting, Fanhua Group Company, Fanlian Investment and Huazhixing. For a complete list of our subsidiaries as of the date of this annual report, see Exhibit 8.1 to this annual report.

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4.B. Business Overview

Overview

We are an integrated provider and operator of an artificial intelligence (“AI”)-centric full-scene digital systems. Our businesses focus on areas of flexible energy deployment and intelligent commercial network operation, and provide closed-loop solutions from computing infrastructure, smart hardware and full-scene services, aiming to achieve wide implementation of AI technologies across industries. Powered by our dual engines of intelligent technology and ecosystem integration, through strategic industry consolidation and continuous improvement in operations, our mission is to build up an open and collaborative industrial ecosystem and provide our customers with efficient, reliable and sustainable intelligent products and solutions. We will continuously explore and consolidate high-quality technological and commercial resources globally and explore industrial application scenarios of AI technologies.

As part of our strategic realignment and pivoting to core areas of flexible energy deployment and intelligent commercial network operation, we consummated strategic acquisition of Real Prospect Group in October 2025, expanding into smart technology and new energy related solutions, including electric vehicle charging services and charging equipment, and strategic acquisition of Times Good Limited in March 2026, which in turn, through Huazhi Contractual Agreements, controls Huazhi Group, a provider of computing power and algorithm solutions in China.

In addition to the strategic acquisitions of Real Prospect Group and Huazhi Group, we also expanded into other businesses through acquisitions. We consummated acquisition of Carve Group in August 2025 establishing our health and wellness product business focused on premium ingredients, including bird’s nest-based products. In addition, as part of the acquisition, we acquired a strategic reserve of wild ginseng resources. We consummated acquisition of Oriental Grove in January 2026, expanding into industry of premium tea products. We use strategic acquisitions and ecosystem partnerships to gain access to technologies, markets and industry resources, while continuously optimizing our business portfolio.

Historically, we provided financial services through (i) AIFU Inc., a technology driven independent financial service platform listed on the Nasdaq; and (ii) Fanhua Puyi Fund Distribution Co., Ltd., an independent wealth management service provider. Concurrently with our strategic acquisitions, we have proactively exited non-core historical operations to sharpen our strategic focus and optimize resource allocation. Specifically, we disposed of our wealth management services segment in September 2025, and through AIFU, we divested the claims adjusting services segment in January 2025. On December 22, 2025, AIFU completed the issuance of its 250,000 class B ordinary shares (as adjusted for AIFU’s 20-for-1 share consolidation effected on June 16, 2026) to a third party. Following this issuance of shares, our aggregate beneficial ownership of the total outstanding shares of AIFU was diluted from approximately 10.35% to approximately 7.85%, and our aggregate voting power was diluted from approximately 48.55% to approximately 16.75% (such change in AIFU, the “AIFU Reorganization”). As a result of the AIFU Reorganization, we no longer exercise control over AIFU, and AIFU and its insurance agency services are no longer consolidated in our consolidated financial statements since then. The exit from historical financial service business is part of our strategic realignment.

Our Primary Long-Term Growth Drivers

Our long-term growth drivers primarily include increasing demand for AI computing power, growing enterprise demand for customized AI solutions, the integration of artificial intelligence with energy infrastructure, and the continued commercialization of intelligent hardware and scenario-based services.

Through its “intelligent technology + ecosystem integration” approach, the Company is connecting computing infrastructure, large language models, intelligent hardware and industry applications to support the scaled deployment of AI technologies across real-world industries.

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Specifically, our key growth drivers include:

Our Long-Term Strategy

Our long-term strategy is to become an AI-centric full-scene digital systems provider and operator, with an integrated business portfolio spanning computing infrastructure, models and algorithms, intelligent hardware and scenario-based services.

We plan to expand the application of AI technologies in China and international markets through proprietary research and development, project commercialization, strategic partnerships and selective integration of industry resources.

Our Competitive Advantages

We differentiate ourselves by integrating computing infrastructure, large language models, intelligent hardware and industry applications within a single business system.

Rather than providing only standalone products or algorithms, we seek to deliver integrated solutions covering infrastructure, model deployment and data governance, as well as system integration, operations and maintenance, and application deployment.

In addition, we are continuing to build its capabilities in modular distributed computing architecture, enterprise large-model applications, intelligent energy products and industry ecosystem integration.

Social Responsibilities and Employee Development

According to our 2026 Environmental, Social and Governance Report published on our website on June 2, 2026, we focus on access to energy services, emergency energy support, equipment and data security, employee skills training and career development.

We have disclosed plans to develop talent in mobile energy operations, intelligent scheduling and related technical fields through technical training, job certification and cooperation with vocational institutions, while maintaining a safe, healthy and compliant working environment.

Our Products and Services

We are a diversified holding company with two primary business segments: (1) smart technology and new energy solutions: our new business through Real Prospect Group acquisition which provides innovative, technology driven solutions in relation to electric vehicle charging, modular residential energy storage systems; and (2) computing power and algorithm solutions: our new business through Huazhi Group acquisition. In addition, we offer health and wellness products, through Carve Group, which focuses on premium ingredients and health and wellness food products, and through Oriental Grove, which maintains inventory consisting primarily of high-grade tea

Historically, during the fiscal years ended June 30, 2023, 2024 and 2025, our operations were primarily focused on financial asset allocation services to meet the investment and wealth inheritance objectives of our clients. We primarily provided insurance agency services and wealth management services. The insurance agency services that were provided through AIFU is no longer consolidated in our consolidated financial statements as a result of the AIFU Reorganization in December 2025. In addition, we provided wealth management services to our clients with a wide range of product offerings including publicly raised fund products and privately raised securities investment fund products. We discontinued our wealth management services in September 2025.

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Smart Technology and New Energy Solutions

We conduct our smart technology and new energy solutions business through operating entities acquired as part of the Real Prospect Group transaction. This business focuses on technology-enabled solutions related to electric vehicle charging, mobile energy replenishment, energy storage, and intelligent energy management equipment operated through Qingdao Maisi. Our offerings are organized into product and service categories of mobile energy storage charging solutions, fixed energy infrastructure solutions and other products and emerging technologies, each with distinct technical characteristics, deployment models and revenue mechanisms. The description and breakdown of our product and service categories are based on their operating scenarios and each solution will generate revenues in the forms of sale of products (mainly sale of mobile charging robots and charging piles) and services (mainly charging services through mobile charging robots and charging services through charging piles). Disaggregation of revenues is reflected in our financial statements prepared in accordance with applicable accounting policies of revenue recognition and financial reporting presentation.

Mobile Energy Storage Charging Solutions

A core component of this business includes electric vehicle charging and mobile recharging solutions. These offerings are designed to provide flexible charging services and equipment for electric vehicles across a range of usage scenarios, including roadside assistance, public parking facilities, transportation hubs and temporary or high demand locations. Our operations in this segment include both charging services and charging equipment, which are closely integrated but may be deployed under different commercial arrangements.

Mobile energy storage charging robots constitute primary offering in such business line. These products integrate mobile energy storage systems with electric vehicle charging equipment and are designed to provide instant charging services for new energy vehicles without the need for investment in fixed charging infrastructure. These products are primarily configured in different energy capacity specifications, such as approximately 100 kWh and 150 kWh units. Each unit is composed of multiple energy storage battery modules and is centrally controlled through our self-developed battery management systems (BMS) and energy management systems (EMS). The equipment can be flexibly deployed across a range of application scenarios, including fuel stations, highway service areas, public parking facilities and temporary emergency locations. Mobile energy storage charging robots are sold as standalone hardware products or deployed as operating assets under leasing or service-based models. While the physical form of the equipment remains consistent, the applicable commercial arrangements differ depending on the business model adopted.

Around mobile energy storage charging robots, we have developed a series of service-oriented offerings in which the equipment serves as the operational platform rather than being sold as an independent hardware product. These services include, without limitation:

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Fixed Energy Infrastructure Solutions

(i) Fixed Charging Pile Products

Fixed charging pile products represent another category of products that Real Prospect Group has placed into actual operation. These products consist of fixed electric vehicle charging facilities typically deployed in government parks, public institutions, hospitals, schools and highway service areas. Fixed charging pile projects are generally invested in, constructed and operated directly by us. A single charging site usually includes transformers, cabling systems and multiple charging pile units, which together form an integrated fixed-asset project for operation. In terms of product attributes, fixed charging pile products differ from mobile energy storage equipment in that their commercial logic is more closely aligned with long-term infrastructure operation rather than flexible deployment.

In July 2025, our project with Shandong Hi-Speed Company Limited (600350.SH) commenced commercial operations, and the relevant charging sites and supporting services became available to the public. Since then, the project has generated revenue primarily from charging service fees and equipment usage fees. Under the arrangement, we are responsible for investing in and deploying the equipment, providing ongoing operations and maintenance, and delivering related branding services, while Shandong Hi-Speed Company Limited provides access to its sites and associated traffic resources.

(ii) Fixed Energy Storage System Products

Fixed energy storage system products represent product categories that we are actively advancing. These products are primarily intended for commercial and industrial energy storage applications and are designed to support energy management, peak shaving and backup power use cases. Certain fixed energy storage products remain in early stages of commercialization and may require further development, testing and market validation prior to large-scale deployment.

Other Products and Emerging Technologies

In addition to its core mobile and fixed energy infrastructure solutions, we operate and are developing a number of other energy-related products and technologies that are currently at testing, early commercialization or development stages. These products are not yet core revenue drivers but represent potential future extensions of our smart technology and new energy business.

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Computing Power and Algorithm Solutions

We conduct our computing power and algorithm solutions business through Huazhi Group. This business focuses on computing resource services, hardware trading, AI vertical industry large model training, and AI industry application solutions.

Computing Power Services

A significant portion of this business is to provide computing power. We integrate computing capacity sourced from servers and related infrastructure into scalable computing resource pools that can be allocated to enterprise customers. These services are designed to support high-performance computing workloads, data processing, and algorithm training scenarios. Services include computing capacity configuration, deployment support, performance optimization, and ongoing operational coordination.

We primarily serve business customers that require stable and scalable computing environments rather than one-time hardware purchases. Revenue is typically generated through service arrangements structured around computing capacity usage, deployment support, or system integration components.

As part of our long-term infrastructure development strategy, we are planning the Stars Distributed Intelligent Computing Center Project. The project aims to build an intelligent computing infrastructure network covering selected key regions, deliver rapidly deployable standardized computing units, and enhance regional computing supply capacity and utilization efficiency. The project is designed to support scalable deployment of computing resources through modular configurations that can be adapted to varying regional demand conditions. The first site for the Stars Distributed Intelligent Computing Center Project is planned to be located in Xinjiang or Chongqing Province, and on August 18, 2026 we entered into an investment cooperation memorandum with the People’s Government of Chongqing Province, in connection with a proposed 4,000P computing power project. As of the date of this annual report, the project remains in the planning and development stage, no definitive agreement has been entered into with any partner, and the timing, scale, and commercial outcomes remain subject to uncertainties.

Hardware Trading

We also engage in the procurement and trading of servers, graphics processing units (GPUs), and related high-performance computing components. In this capacity, we act as a supplier to enterprise customers seeking to build or expand computing infrastructure. Products include standardized server configurations and customized hardware solutions tailored to customer technical requirements.

Hardware trading activities are generally transaction-based and involve bulk purchases from upstream suppliers followed by resale to enterprise customers. These activities complement our computing resource aggregation services by supporting infrastructure build-out.

AI Industry Application Solutions

We provide AI industry application solutions tailored to customer-specific operational needs. These solutions may include system integration, deployment support, algorithm configuration, and other application-layer services designed for particular business use cases.

A core enabling technology supporting this segment is LingYanMiaoYu, our internally developed large language model platform, which serves as the underlying technical foundation for certain of our AI application solutions. LingYanMiaoYu is developed within our internal technology framework and utilizes a Transformer-based architecture. It is designed to support model fine-tuning, domain adaptation, and deployment across selected industry scenarios.

In November 2025, LingYanMiaoYu completed the generative artificial intelligence service filing with the Cyberspace Administration of China (CAC) in accordance with applicable PRC regulatory requirements. In addition, certain related algorithms underlying our application models have completed required algorithm filings with CAC.

Leveraging LingYanMiaoYu, we have developed multiple industry- and application-oriented model solutions targeting specific vertical scenarios. These include model solutions applied in AI-assisted video generation, cultural and tourism-related applications, and AI-enabled apparel design, among others. Such models are developed based on the foundation architecture of LingYanMiaoYu and adapted for defined industry use cases.

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Relying on its low-cost and high-efficiency training and inference capabilities, LingYanMiaoYu can be flexibly deployed in government, education, technology, finance, and lifestyle service sectors, subject to applicable regulatory requirements and customer-specific implementation arrangements.

These model solutions are customized and priced independently based on customer requirements, project scope, and technical complexity. These solutions are typically delivered through project-based arrangements and involve close coordination with customer technical teams.

We have begun commercializing LingYanMiaoYu and our related technology capabilities through customer service arrangements. These arrangements include providing enterprise customers with API-based access to LingYanMiaoYu and other models, together with integration, account administration, usage management and technical support services, enabling customers to incorporate our models into their own business systems. We have also entered into customer arrangements for related computing services.

In addition, the trial version of consumer-facing portal for LingYanMiaoYu was launched on December 1, 2025 under the application name “LingYanMiaoYu”. On July 14, 2026, LingYanMiaoYu was officially launched. LingYanMiaoYu is powered by MAAS’s proprietary AI infrastructure and advanced Mixture-of-Experts (“MoE”) architecture. With a total parameter scale of 9 billion, the model dynamically activates selected expert networks on demand during inference, reducing computational costs while improving concurrency and response efficiency. The portal is currently available to consumers free of charge and has not generated direct revenue. At this stage, it is intended primarily to expand consumer access to LingYanMiaoYu and direct user traffic to other services available through our service platform, including electricity-related services, mobile account top-ups, utility bill payments and electric vehicle charging services. Accordingly, commercialization of the consumer portal remains at an early stage.

Health and Wellness Products

We conduct our health and wellness product business through operating entities acquired as part of the Carve Group acquisition and Oriental Grove acquisition. This business focuses on the development, production and commercialization of wellness products derived from natural ingredients, as well as the longer-term development of certain natural health resources. Our activities in this segment primarily relate to bird’s nest peptide raw materials and compounded finished products, with different product lines at varying stages of commercialization and market validation. For the Oriental Grove acquisition, we maintain inventory consisting primarily of high-grade tea and there is no short-term plan to commercialize such inventory.

Bird’s nest peptide raw materials and compounded finished products

A significant portion of our health and wellness product business relates to bird’s nest peptide raw materials and compounded finished products. These products are positioned as premium wellness offerings and are developed for consumption as nutritional and functional supplements. Our products involve additional processing beyond traditional cleaning and soaking steps. Our bird’s nest peptide products are produced through a proprietary extraction process that differs from the enzymatic hydrolysis approach commonly used by others for protein extraction, and the extracted material is further processed into powder-form products. These powder-form products may be provided as functional bird’s nest peptide ingredients for downstream applications or compounded into finished products with standardized nutritional specifications.

In our product portfolio, we focus primarily on bird’s nest ingredients and products that are designed to be more convenient for end users to easily carry and use compared to traditional forms of bird’s nest in the market, such as raw “bird’s nest cakes,” ready-to-eat bottled bird’s nest, and certain freeze-dried forms. The products are easier to digest, absorb, and utilize by the body due to their small molecular structure. In addition, we offer multiple product lines and stock keeping units designed to address different consumer preferences and usage scenarios. Certain customers use our existing bird’s nest product categories as inputs for application development, and we may support a number of customers with customized specifications or application-oriented customization, while most products remain based on our standard specifications.

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Wild Ginseng Resources, High-Grade Tea and Other Natural Ingredient Products

In addition to bird’s nest products, our health and wellness product business includes activities related to wild ginseng resources, high-grade tea and other natural ingredient products. These activities are focused on the cultivation, conservation and long-term development of natural ingredient resources, rather than the near-term commercialization of finished consumer products. As of the date of this annual report, wild ginseng related activities remain at an early, pre-commercial stage. A relatively small amount of revenue was generated from sales of wild ginseng resources in fiscal year 2026, and we have no short-term plans to further commercialize such inventory. Wild ginseng activities are characterized by extended cultivation and growth cycles, as well as heightened regulatory oversight and quality control requirements. Any future development or commercialization of wild ginseng based products would be subject to successful completion of cultivation cycles, compliance with applicable regulatory requirements and market conditions, and there can be no assurance as to the timing or feasibility of such commercialization. We maintain inventory of high-grade tea, from which a relatively small amount of revenue was generated in fiscal year 2026. We have no short-term plans to further commercialize this inventory.

Our health and wellness product business also includes other natural ingredient related development activities that involve resource cultivation and long-term asset development, rather than immediate market deployment. These activities generally follow operational processes similar to those used in our broader natural ingredient business, including ingredient sourcing, formulation research, processing, packaging evaluation and distribution planning, but remain primarily focused on resource preparation and capability building at this stage.

Insurance Agency Services and Wealth Management Services

Insurance agency business of AIFU was our largest business segment, accounting for 93.1% of our net revenues for the fiscal year ended June 30, 2025. Revenue from this segment was derived from two broad categories of insurance agency services: (i) life insurance business, and (ii) non-life insurance business, both primarily focused on meeting the insurance needs of individuals.

For life insurance and non-life insurance agency services offered to individual clients, our sales agents used the application or WeChat public account of “LA App” to process the transactions online. We received commission fees from insurance companies for the distribution of insurance products based on a certain percentage of the premiums paid by the individual policy holders. We also received volume-based performance bonus on a semi-annual or annual basis when we achieve the agreed target of aggregated sales volume of insurance policies facilitated by us.

As a result of the AIFU Reorganization, we no longer exercise control over AIFU. AIFU and its insurance agency services are no longer consolidated in our consolidated financial statements after December 2025.

For wealth management services, we provided our clients with a wide range of product offerings including publicly raised fund products and privately raised securities investment fund products. Our wealth management service business accounted for 6.9% of our net revenues for the fiscal year ended June 30, 2025. Since December 2020, we have provided online services for our privately raised fund products through the app “Puyi Fund” in the same manner as for publicly raised fund products. The app “Puyi Fund” provided up-to-date product-related information online through which clients can execute transactions and monitor their investments portfolio. We received distribution commissions for almost all of wealth management products distributed by us. In addition, we received performance-based fee income for certain privately raised funds we distributed. We discontinued our wealth management services in September 2025.

For description of our insurance agency services and wealth management services, see “Item 4.B. Business Overview – Our Services – Insurance Agency Services” and “Item 4.B. Business Overview – Our Services – Wealth Management Services” in our annual report on Form 20-F for the fiscal year ended June 30, 2025.

Sales and Marketing

Our sales and marketing activities are designed to support the commercialization and long-term development of our operating businesses. We employ differentiated sales and marketing approaches across our business lines, reflecting differences in customer profiles, purchasing behavior, product characteristics and commercialization stage. Our sales and marketing efforts emphasize disciplined expansion, targeted customer engagement and controlled deployment rather than rapid, large-scale growth.

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Smart Technology and New Energy Solutions

Our smart technology and new energy solutions sales and marketing activities are conducted through Qingdao Maisi. These activities are conducted through a combination of direct engagement, project cooperation arrangements and limited agency or distributor relationships, depending on product category, deployment model and customer type. Sales activities are primarily oriented toward business and institutional customers rather than mass-market retail consumers.

Sales Channels and Customer Types

Sales activities are primarily directed toward enterprise, institutional and site-based customers, including energy companies, infrastructure operators, transportation-related operators, local government–affiliated entities, and commercial site owners. The sales of our equipment and certain products and services are also marketed through regional agents or sales partners on a non-exclusive basis in specific geographic areas. We also engage directly with large enterprises and institutional customers, including state-owned enterprises, infrastructure operators and energy-related entities, through project based direct sales. Customers on this channel typically evaluate products and solutions in connection with specific deployment scenarios, such as highway service areas, transportation hubs, public facilities or other large-scale sites. Transactions under this channel are generally negotiated on a project-by-project basis and may involve equipment sales, deployment arrangements or service cooperation structures. While this channel does not necessarily generate recurring or high-frequency revenue, it plays an important role in validating product capabilities, supporting market entry into regulated or infrastructure-oriented environments and enhancing industry recognition.

Our customer acquisition channels also combine online content promotion and offline conversion. This model utilizes digital content distribution and live demonstration formats on major social media and short-video platforms to introduce products and application scenarios, generate customer interest and collect potential customer leads. These leads are subsequently followed up through direct communication, including telephone outreach, technical explanation and invitation to in-person meetings or project discussions. This channel is designed to support nationwide customer outreach and to improve the efficiency of identifying and converting potential commercial customers through standardized digital processes rather than transaction-based retail sales.

In addition to direct engagement, we have established regional agent and distribution arrangements in certain geographic areas. Under this model, regional partners are responsible for localized market development, customer outreach and project coordination within designated territories, while we provide products, technical support and operational coordination. These arrangements are designed to support geographic expansion and local execution without relying on a nationwide standardized dealership system. Our regional distribution activities currently focus on selected provinces and municipalities where local partners have been established to support project implementation and customer servicing.

Sales arrangements are generally project based or transaction specific rather than long-term framework purchase agreements. Customer relationships typically do not involve long-term minimum purchase commitments, and revenue is generated through a combination of equipment sales, service fees or revenue sharing arrangements depending on the applicable business model. In certain cases, we utilize agency or cooperative sales structures, including commission based or revenue sharing mechanisms, particularly in connection with regional distribution or joint operational projects.

Marketing Activities and Market Outreach

Sales and marketing activities are supported by internal coordination mechanisms designed to enhance operational efficiency and scalability. We work with established partners to develop standardized marketing materials and reference cases, which are used to enhance customer credibility and support business development efforts. Marketing content and case studies generated from these projects are deployed across multiple sales channels to promote consistent market messaging. We maintain centralized marketing materials and standardized operational guidelines to support regional agents and direct sales teams. These materials are designed to ensure consistency in product positioning, pricing frameworks and service offerings, while improving conversion efficiency at the local level. Feedback from regional markets and channel partners is incorporated into ongoing sales and marketing adjustments, and insights derived from customer interactions are used to refine product positioning, service structures and deployment strategies, supporting the continuous optimization of our sales and marketing execution.

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Computing Power and Algorithm Solutions

Sales Channel Characteristics and Market Focus

Our computing power and algorithm solutions are primarily sold through a combination of direct sales and channel partner arrangements.

Direct sales are conducted by our internal sales team, which engages enterprise and institutional customers through project-based negotiations, technical discussions, and solution proposals.

Channel sales represent an important source of business development. We cooperate with five core channel agents whose sales teams collectively include more than 200 personnel. These channel partners provide regional coverage in Beijing, Shanxi, Xinjiang, Yunnan, Shaanxi, Chongqing, and other regions.

Our primary customer groups consist of government entities and enterprise customers. We have served more than 130 enterprise and institutional customers. Customers are generally engaged in digital transformation initiatives, intelligent upgrading of traditional industries, cultural tourism and media applications, and intelligent manufacturing. We also provide services to state-owned enterprises, centrally administered enterprises, and industrial park operators. Specifically, the computing power services segment primarily serves approximately 30 customers; the hardware trading segment primarily serves approximately 56 customers; and the AI industry application solutions segment primarily serves approximately 97 customers. Certain customers may purchase our services and products across our computing power and algorithm solutions, and accordingly there is overlap among the customer bases of above three categories.

Since the end of fiscal year 2026, Huazhi Group has entered into a number of customer contracts for its computing power and algorithm solutions, including an enterprise AI application development agreement with Zhongchuang Liankong Holdings (Zhejiang) Co., Ltd. with a contract value exceeding RMB10 million, announced in July 2026, a twelve-month computing services agreement with Guangzhou Chuangyan Information Technology Co., Ltd. with a contract value of RMB14.76 million and a twelve-month computing services agreement with Beijing VirtAI Technology Co., Ltd. with a contract value of RMB76.8 million, each entered into by Huarong Future (Sichuan) Technology Co., Ltd., a wholly-owned subsidiary of Huazhi Future, and three two-year token-based model access agreements with an aggregate contract value of RMB23.52 million, each announced in September 2026. There can be no assurance that the contract values will be realized in full.

Marketing Activities

Due to the nature of this business, our sales activities are primarily conducted through our direct sales team and channel partners. Channel partners represent an important source of business development. We provide channel partners with comprehensive product training and sales training to support customer engagement and solution delivery.

Health and Wellness Products

Our health and wellness products are primarily sold to business consumers and individual customers through a combination of direct sales channels and distributor-supported arrangements. Sales activities vary by product category and are structured to support ongoing consumer usage rather than one-time transactions. Sales activities are primarily organized around two core product categories: (i) bird’s nest peptide raw materials, and (ii) finished or formulated products that use bird’s nest peptide as a core ingredient. These two product categories are distributed through different channels and target different customer groups.

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Sales Channel Characteristics and Market Focus

Bird’s nest peptide products are sold primarily to business customers. These customers primarily include manufacturers of dietary supplements, functional foods, flavor-enhanced foods, and, to a lesser extent, cosmetic product manufacturers. The bird’s nest peptide is supplied as a standardized raw material that business customers incorporate into their own downstream products, rather than being sold directly to individual consumers. Sales to business customers are conducted through a combination of direct sales and agency arrangements. We sell directly to a number of end customers, while also working with agents who distribute bird’s nest peptide raw materials to additional business customers. Customer relationships are generally transaction based and driven by recurring purchase orders rather than long-term exclusive supply agreements. These business sales are not concentrated on a single customer. Instead, sales are distributed across approximately six to ten major customers, with purchase volumes being relatively balanced among them. While certain customers may request limited customization to meet specific application needs, most sales are based on our existing standardized product specifications, allowing the same bird’s nest peptide raw materials to be supplied to multiple customers.

Finished products that incorporate bird’s nest peptide as a core ingredient are sold under our own brands and are primarily distributed to individual consumers. These products are sold through a mix of online and offline channels. We previously operated stores on other major e-commerce platforms but later consolidated our online retail efforts to focus on JD.com due to considerations relating to platform costs and marketing efficiency. Beginning in August 7, 2026, we began livestreaming through our brand-operated storefront on WeChat Channels as part of our efforts to expand our online sales presence. Offline distribution includes cooperation with pharmacy chains and selected healthcare-related outlets, as well as smaller distribution channels such as private health clinics. In addition, a portion of consumer sales is generated through direct referrals and relationship-based channels, including customers introduced through industry exhibitions, seminars, and product presentations. These customers often make repeat purchases for personal or family use based on familiarity with the products and the brand. Sales of finished products are generally conducted on a non-exclusive basis and do not rely on long-term sales contracts. Distribution arrangements are flexible and adjusted based on channel performance and market feedback.

For bird’s nest peptide raw materials, sales activities emphasize technical communication and application support, including participation in industry conferences, professional forums, and technical seminars related to nutrition, functional foods, and ingredient applications. These activities are primarily aimed at increasing awareness and adoption among our business customers. Beginning in fiscal year 2026, we expect to continue our research and development efforts to broaden the potential applications of our bird’s nest peptide ingredients. These efforts include developing formulations tailored to the nutritional and functional needs of specific demographic groups, with an initial focus on older adults and mothers and infants. The relevant formulations are currently undergoing preliminary research and small-batch testing. Their further development and commercialization will depend on, among other factors, testing results, regulatory requirements, production feasibility and market acceptance.

For finished products, sales efforts focus on brand visibility and consumer education, particularly through online platforms and social media channels, as well as targeted offline collaborations with pharmacies and health related outlets. In the second half of calendar year 2026, we reduced the retail prices of certain bird’s nest peptide-based products to broaden their market appeal and reach a wider range of consumers. These price adjustments were supported by lower raw material procurement costs and improved extraction and processing efficiencies. Overall, our sales and distribution model reflects a dual track approach, with business raw material sales providing a significant portion of current revenue and consumer-oriented finished products supporting brand development and market presence.

Marketing Activities

Marketing activities for our health and wellness products emphasize brand credibility, product quality and ingredient sourcing. We focus on educating consumers regarding product characteristics and intended usage without making unsubstantiated claims. Brand recognition is developed gradually through consistent messaging, product experience and customer referrals. Marketing methods may include a combination of offline promotional activities, digital outreach and targeted campaigns.

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In addition to routine sales activities through selected channels, certain product categories are introduced to customers and channel partners through product presentations, technical briefings and educational sessions, including seminars, product briefings and industry-related forums, which are primarily conducted to explain product attributes, processing methods and application scenarios. These activities are typically targeted at distributors, channel partners and specific customer groups and are intended to support product understanding and application, rather than mass-market promotion.

As part of our marketing strategy after the reporting period, we plan to broaden the positioning and distribution of our bird’s nest peptide products. Beginning in the second half of calendar year 2026, we intend to supplement our traditional offline channels with broader online distribution and expand our marketing beyond the products’ functional attributes to include gifting occasions, with the aim of reaching a wider range of consumers and use cases.

Technology Research and Product Innovation

A portion of our business strategy is focused on developing and commercializing differentiated products and solutions across our businesses of smart technology and new energy solutions, computing power and algorithm solutions and health and wellness products. We believe that product innovation is an important component of building sustainable operating platforms in these areas, particularly as certain of our acquired businesses are at early stages of commercialization or market expansion.

Smart Technology and New Energy Solutions

In our smart technology and new energy solutions business, product innovation is focused on the development and deployment of technology enabled solutions designed to address specific operational and usage scenarios. Our technology development is primarily focused on the core control and energy management capabilities that support our mobile energy storage charging robots and related electric vehicle charging equipment. In particular, we design and develop key software and control systems internally, including our BMS and EMS, which are used to monitor battery cell status and safety parameters and to manage charging, discharging and overall energy usage at the system level. Our self-developed systems support operational monitoring functions, including visibility into charging and discharging activity and battery status through software interfaces. For example, in connection with our mobile energy storage charging robots, our systems are designed to manage the operating status of multi cell battery packs, including temperature and state of charge across individual cells, and to manage overall energy dispatch and usage for the equipment.

We also develop embedded control software used in our control boards and related components. The core embedded programs are written by our in-house team and are burned to chips used in our control hardware. While we procure certain mature third party components and modules (such as certain power or high voltage related modules) where the technology is already standardized, our development efforts are focused on the integration layer and the control logic that enables our equipment to operate as an integrated system. In addition, our product development efforts include continued refinement of specifications and performance based on field deployment feedback and testing, including technical validation and environmental adaptability testing for certain products that are in testing or early rollout stages.

We also maintain an intellectual property strategy aligned with our technology roadmap, including V-to-V charging hardware and the related platform based system. These product lines remain under development, and commercialization will depend on completion of development and testing, integration of hardware and software systems, and customer adoption. Innovation efforts are driven by functional performance, deployment feasibility, system reliability and adaptability to customer use cases rather than consumer branding considerations. Product development and refinement may involve iterative testing, pilot deployments and technical adjustments prior to broader commercialization. The pace and success of innovation in this segment depend on technological feasibility, customer adoption, regulatory developments, infrastructure compatibility and the availability of supporting operational and service capabilities.

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Computing Power and Algorithm Solutions

Huazhi Group conducts its technology development activities through its Product and Technology Center, which is responsible for system design, solution optimization and application-level innovation supporting our computing power and algorithm solutions services. As of the date of this annual report, the center consists of 18 core research and development personnel organized across product development, AI algorithm development, technical support and operations functions.

As of the date of this annual report, Huazhi Group holds 33 registered trademarks, 44 registered software copyrights and 4 registered patents in the PRC. These intellectual property rights primarily relate to software systems, operational management tools and application-level solutions supporting our computing power aggregation and algorithm related service offerings. We rely on this portfolio of intellectual property to support the stability and functionality of our service platform and to enhance operational efficiency.

Health and Wellness Products

In our health and wellness product business, technology research and product innovation activities are primarily focused on the processing, formulation and application development of natural ingredients, with particular emphasis on bird’s nest-based products and related functional formulations. Product development activities are mainly conducted through Glyken, primarily supporting the conversion of raw bird’s nest materials into standardized intermediate and finished products suitable for consumer use and downstream functional applications. Our research and development work centers on three main areas: (i) patented physical heating separation extraction technologies applied to bird’s nest raw materials, (ii) formulation optimization for functional and peptide based products, and (iii) application testing and validation for different product formats and usage scenarios. These activities are intended to improve product consistency, functional performance and scalability while maintaining compliance with applicable food safety and regulatory requirements.

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Our approach to product innovation emphasizes disciplined development and measured commercialization rather than rapid expansion. We seek to identify products and solutions with defined use cases and potential demand, refine product specifications based on operational feedback and gradually expand market presence as products mature. We do not pursue innovation solely for exploratory purposes and instead focus on products and solutions that can be integrated into our broader operating platforms over time. Our innovation efforts may require ongoing investment in product development, testing, sourcing, technology refinement and operational support. These efforts may not result in commercially successful products, and delays or challenges in product development or market acceptance could adversely affect our business, financial condition and results of operations.

Customers

Our customer base varies by business segment and reflects the distinct commercialization models of our businesses of smart technology and new energy solutions, computing power and algorithm solutions and health and wellness products.

Smart Technology and New Energy Solutions

Our smart technology and new energy solutions business serves a diversified customer base that includes public sector entities, state owned and private infrastructure operators, transportation related service providers, and commercial counterparties involved in electric vehicle charging and energy services. Customers are generally engaged through project based arrangements, service agreements or equipment related contracts, depending on the product category and deployment model.

For mobile energy storage charging solutions, customers primarily include highway service area operators, transportation infrastructure managers and regional service providers that require flexible charging capabilities without permanent charging infrastructure. In these arrangements, mobile energy storage charging equipment is deployed to support emergency charging, peak demand coverage or temporary service needs. Typical contracts include emergency charging equipment leasing and service agreements for highway service areas and roadside assistance scenarios, under which charging services are provided on a usage basis or through defined service fee structures. For service oriented offerings built around mobile energy storage charging robots, customers include site operators and energy related partners that participate in cooperative operating models. Under these arrangements, equipment is deployed at agreed locations and charging services are provided to end users, with revenues generated from charging activities shared between the parties based on contractual allocation mechanisms. These customers typically provide site access and basic operational support, while charging equipment operation and technical management are handled through the deployed systems.

For fixed energy infrastructure solutions, customers are primarily public institutions and site owners such as local government entities, public parking facility operators, hospitals, schools and transportation corridor operators. In these projects, fixed charging facilities are invested in, constructed and operated as integrated infrastructure assets. Contracts typically cover site cooperation, construction, operation and revenue arrangements, and charging sites may include multiple charging units along with supporting electrical infrastructure such as transformers and cabling systems. For fixed energy storage system products, customers are generally commercial and industrial users seeking energy management, peak shaving or backup power solutions. These products are typically deployed under project based arrangements and may remain in early commercialization or pilot stages depending on the application scenario and customer requirements.

In addition, certain customers engage with us through equipment sales agreements for specific products, including intelligent charging equipment and integrated energy storage solutions. These transactions may involve direct sales, customized deployment configurations or project specific technical requirements, depending on the customer and use case.

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Customer arrangements vary by product category and deployment model. Service and cooperation arrangements are typically short- to medium-term or project-specific, while infrastructure-related projects may involve longer operational horizons tied to specific sites. We do not generally enter into long-term customer purchase contracts covering standardized volumes or guaranteed usage levels, and sales cycles may vary depending on project complexity, site conditions, regulatory considerations and customer decision processes. We do not rely on a single customer or a single category of customers for a substantial portion of revenues. Customer relationships are generally established on a project by project or contract by contract basis, and contract duration, pricing mechanisms and revenue models vary depending on the nature of the product, service scope and deployment environment.

Computing Power and Algorithm Solutions

Our customers are primarily government and enterprise entities. Our customer base is mainly in sectors undergoing digital transformation and intelligent upgrading, including traditional industry digitalization, cultural tourism and media applications, and intelligent manufacturing. These sectors represent our core strategic development areas.

We also provide services to state-owned enterprises, centrally administered enterprises, and industrial park operators. It typically involves relatively larger contract values and will have demonstration effects within their respective industries or regions. Successful project implementation with these customers may provide reference cases that support subsequent business development and enhance market credibility.

As of the date of this annual report, we have served more than 130 enterprise and institutional customers. Specifically, the computing power services segment primarily serves approximately 30 customers; the hardware trading segment primarily serves approximately 56 customers; and the AI industry application solutions segment primarily serves approximately 97 customers. Certain customers may purchase our services and products across our computing power and algorithm solutions, and accordingly there is overlap among the customer bases of above three categories.

Health and Wellness Products

Customers for our health and wellness products are primarily located in China and consist of a combination of individual consumers and business customers, depending on product category and stage of commercialization. Our customer base varies across product lines and reflects the differing usage scenarios, purchasing behavior and application requirements associated with traditional bird’s nest based products, bird’s-nest peptide products and other functional formulations.

For bird’s-nest peptide products and other functional formulations, customers include both individual consumers and business customers, depending on product format and intended application. Certain peptide based products are sold as finished consumer products, while others are supplied as functional inputs or ingredients used by downstream customers for further application development. In these cases, customers may evaluate products based on functional attributes, formulation characteristics, stability requirements and suitability for specific usage scenarios. A limited number of customers may request application-oriented specifications, while most products are supplied based on standard product specifications. Demand in this category is influenced by product authenticity, ingredient quality, processing standards and consumer familiarity with bird’s-nest products. Customer relationships in this segment are generally transactional in nature and fulfilled through established retail and e-commerce channels.

With respect to wild ginseng related activities, operations are currently in a development and cultivation stage. As such, there are no active customers for wild ginseng products at this time, and only a relatively small amount of revenue has been generated from sales of wild ginseng products. As a result of the Oriental Grove acquisition, we maintain inventory of high-grade tea and only a relatively small amount of revenue has been generated from sales of tea products.

Customer demand in this segment is influenced by factors such as product quality, brand perception, perceived health benefits, pricing and repeat purchasing behavior. Sales to end consumers are typically conducted through consumer oriented distribution channels, which may include direct-to-consumer platforms, third-party e-commerce platforms and selected offline channels. We currently do not rely on a single customer or a small number of customers for a majority of sales in this segment, although overall sales volumes may be affected by the performance of specific distribution channels or platforms. Certain products in this segment are at early stages of market introduction and as a result, customer purchasing patterns may be uneven and subject to change as products mature and market acceptance develops.

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Suppliers and Sourcing

Our sourcing and supplier relationships also differ by business segment.

We seek to mitigate the impact of supply-chain disruptions and macroeconomic volatility through supplier and partner diversification, modular technology architecture, phased project implementation, contractual risk controls and ongoing cash-flow management.

Smart Technology and New Energy Solutions

We adopt a system integration focused sourcing strategy, under which core components and materials are procured from established third-party suppliers, while we also concentrate on system architecture design, software development, integration, testing and commercialization.

Key Components and Supply Sources

Our principal suppliers provide the following categories of components:

Our sourcing strategy emphasizes supplier diversification, particularly for key components such as battery cells, which are procured from multiple qualified suppliers to mitigate the risk of supply chain disruptions and to enhance procurement flexibility. By avoiding reliance on a single supplier for critical inputs, we seek to maintain continuity of production and delivery even in the event of temporary market fluctuations or supplier-specific constraints. In addition, we primarily utilize standardized and commercially available components for non-core parts, which are widely used in electric vehicle charging and energy storage applications. This approach allows us to substitute suppliers when necessary, without significant redesign or operational disruption, supporting both supply chain resilience and cost control.

Supplier selection is based on a combination of factors, including technical capability, product quality, production capacity, delivery reliability and compliance with applicable industry standards. We conduct ongoing evaluations of supplier performance to ensure that components meet their technical specifications and quality requirements, particularly for components that directly affect system safety, performance and service life. Our sourcing model is designed to support scalable production and competitive procurement pricing as business volume increases. Based on current market conditions and supplier availability, we do not consider itself to be materially dependent on any single supplier. We believe that alternative suppliers are available for substantially all major components, and that any temporary supply disruption could be addressed without a material adverse effect on its business, financial condition or results of operations.

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Computing Power and Algorithm Solutions

Computing Power Services

Our computing power services depend primarily on sourcing of computing capacity from third-party providers.

We procure computing capacity from external suppliers and integrate such capacity into scalable computing resource pools for allocation to enterprise customers. These arrangements enable us to provide computing power leasing and resource coordination services without manufacturing or hosting hardware infrastructure.

The sourcing of computing capacity is subject to market conditions, including supply availability, pricing fluctuations, data center resource constraints and delivery timelines. Market demand for high-performance computing resources may affect procurement costs and service margins. While we seek to manage supplier relationships and capacity planning, computing resource availability and cost variability may impact project timing and profitability.

Hardware Trading

Our hardware trading business depends on the procurement of servers, GPUs and related high-performance computing components from third-party suppliers for resale to enterprise customers. We purchase servers and related hardware equipment in bulk from upstream suppliers and resell such products to customers seeking to build or expand computing infrastructure. We do not manufacture semiconductor components or server hardware.

Pricing and availability of servers and GPU-based systems are influenced by market supply and demand dynamics, component availability, global semiconductor market conditions and supplier production capacity. Fluctuations in procurement costs or supply constraints may affect margins and delivery schedules.

While we work with multiple suppliers to support procurement flexibility, our hardware trading activities remain subject to ordinary commercial supply risks, including pricing volatility and delivery lead times.

Health and Wellness Products

Our health and wellness product business relies on the sourcing, processing and commercialization of premium natural ingredients used in functional nutrition and wellness products. These sourcing activities are conducted through operating entities acquired as part of the Carve Group acquisition.

Key Raw Materials and Ingredient Sources

Our primary raw materials include bird’s nest related inputs and other natural or functional ingredients used in the development of health and wellness products. Certain products incorporate ingredients derived from traditional natural sources that require specialized procurement, processing and quality control. In particular:

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The sourcing of natural raw materials, particularly bird’s nest, is subject to factors including seasonal availability, geographic origin, regulatory oversight, quality standards and market pricing. Supply conditions may fluctuate due to changes in upstream production, export requirements or environmental factors. In addition, products that depend on specialized processing or early-stage technologies may face longer lead times or scalability challenges. While we seek to mitigate these risks through supplier diversification, quality controls and production planning, there can be no assurance that supply disruptions or cost increases will not adversely affect product availability, margins or commercialization timelines.

Packaging and Ancillary Materials

Packaging materials, including containers, labels and related components, are sourced from third-party suppliers. Packaging design and specifications are tailored to product positioning, regulatory requirements and consumer preferences. The availability and cost of packaging materials may be affected by market conditions and supplier capacity. We work with external packaging suppliers to customize packaging designs for different product categories and stock keeping units. Packaging suppliers are selected based on production capability, quality standards and delivery timelines. Packaging materials are procured separately from raw ingredient sourcing and are integrated into the production process following product formulation and preparation. The availability and cost of packaging materials may be affected by supplier capacity, material pricing and market conditions. While we maintain working relationships with multiple suppliers, packaging procurement remains subject to ordinary commercial supply risks.

Competition

Competition in our operating businesses is significant and is driven by factors including product quality, pricing, brand recognition, distribution reach, product differentiation, technology performance, service capability and compliance with evolving regulatory requirements. Our competitors range from established operators with larger scale, longer operating history and greater financial resources to smaller and emerging operators that compete on price or niche positioning.

Smart Technology and New Energy Solutions

The markets in which we operate through Qingdao Maisi are competitive and evolving, with participants ranging from established infrastructure operators and equipment manufacturers to emerging technology-driven solution providers. Competition varies by product category and deployment model and is influenced by factors including technological capability, system reliability, deployment flexibility, pricing, operational experience, regulatory compliance and the ability to deliver integrated solutions.

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In the mobile energy storage charging segment, we compete primarily with traditional fixed charging infrastructure operators, portable charging equipment providers and, to a more limited extent, manufacturers of battery trailers or emergency power vehicles. Compared to fixed charging stations, our mobile energy storage charging solutions are designed to address scenarios where permanent infrastructure is unavailable, impractical or uneconomical, including temporary, emergency or high-demand locations. Barriers to entry in this segment include system integration capability, battery management and energy management performance, field deployment experience and operational reliability under real-world conditions.

In the fixed charging pile and fixed energy storage system segment, we face competition from conventional charging station developers, energy storage system integrators and local infrastructure operators. These competitors often focus on long-term, site-specific infrastructure projects that require substantial upfront investment and longer deployment cycles. Our offerings in this segment compete based on project execution capability, integration with site requirements and operational efficiency rather than purely on equipment pricing.

In addition, we face competition from regional solution providers that operate through agency, cooperative or revenue sharing arrangements. In certain regions, competitors may benefit from established local relationships or government-supported initiatives. We seek to compete by combining equipment capability with flexible commercial structures, including service based and cooperative operating models, which are intended to lower customer entry barriers and improve deployment efficiency.

We believe that our competitive position is supported by our ability to offer differentiated deployment models across multiple application scenarios, our accumulated operational experience from completed projects and our ongoing development of platform-based and system-level solutions. However, increased competition, technological advancements by competitors or changes in regulatory or market conditions could adversely affect demand, pricing or market share.

Computing Power and Algorithm Solutions

In the computing power services market, competition is primarily influenced by the ability to access stable upstream computing resources, optimize resource allocation efficiency, maintain system reliability and provide responsive customer service. In recent periods, high-performance computing resources have been in relatively limited supply in China and globally, and demand has generally exceeded supply.

In the hardware trading business, competition primarily relates to the ability to obtain supply from upstream vendors and manufacturers and to satisfy customer procurement needs in a timely manner. Market demand for certain computing-related hardware products has at times exceed available supply. We compete with other distributors and resellers based on supplier relationships, product availability, pricing, delivery capability and after-sales service. Our competitive position depends significantly on our procurement capabilities.

In the AI industry application solutions market, the competitive landscape in China is relatively fragmented, and service offerings among providers are often similar. In this segment, competition is more price-sensitive and driven primarily by solution customization capabilities, client relationship management, industry experience and project execution efficiency. This service may experience service supply exceeds market demand, resulting in more intense competition.

Health and Wellness Products

The health and wellness products market in China is competitive and includes a broad range of participants offering bird’s nest products, functional nutrition products, herbal ingredient products and other wellness offerings. We compete with (i) companies offering premium or specialty bird’s nest products, including traditional prepared products and further processed functional formulations, (ii) manufacturers and brand owners that market functional nutrition products through online and offline channels, and (iii) smaller regional or niche operators that compete primarily on price.

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Our products primarily compete based on processing approach, formulation design and functional positioning, rather than solely on scale or pricing. Unlike traditional bird’s nest products that emphasize minimal processing and customary consumption formats, we focus on controlled processing techniques, including patented physical heating separation extraction technologies, to convert bird’s nest raw materials into functional components suitable for diversified product formulations. This approach allows us to develop products with more consistent specifications, targeted functional attributes and broader application formats compared to conventional bird’s nest offerings. Competition in this segment is also influenced by consumer perceptions of ingredient authenticity, sourcing reliability and product safety. We emphasize sourcing traceable bird’s nest raw materials, including materials sourced from Southeast Asia, and maintaining standardized cleaning, grading and processing procedures. These factors are intended to address consumer concerns regarding authenticity, quality consistency and regulatory compliance, which are key competitive considerations in the bird’s nest market. Functional and peptide-based bird’s nest products represent an earlier stage and more specialized segment of the market. In this area, competition is shaped by technical capabilities, formulation know how and the ability to translate processing methods into commercially viable consumer products. We differentiate our products by controlling formulation parameters internally and by developing application oriented products designed for specific consumption scenarios, while recognizing that market acceptance, regulatory interpretation and consumer education remain important competitive variables. Overall, we compete in a fragmented and evolving market where differentiation is driven less by scale and more by processing methodology, formulation capability, sourcing discipline and the ability to align product characteristics with consumer expectations and regulatory standards. There can be no assurance that these differentiating factors will be sufficient to achieve or maintain competitive advantage as market conditions continue to evolve.

Intellectual Property

Our brand, trade names, trademarks, trade secrets, proprietary database and research reports and other intellectual property rights distinguish the products we distribute and our services from those of our competitors and contribute to our competitive advantage in the smart technology and new energy solutions industry, the health and wellness product industry and computing power and algorithm solutions industry. We rely on a combination of patents, copy right, trademark and trade secret as well as confidentiality agreements and non-compete covenants with our employees, sales agents, contractors and our third-party product providers. As of the date of this annual report, we hold 20 registered patents (including one for bird’s nest extraction method), 80 registered copyrights, 125 registered trademarks, and 5 registered domain names.

In our smart technology and new energy solutions business, intellectual property focuses on protecting proprietary technologies developed in connection with our mobile energy storage charging equipment, system integration architecture and related control and management technologies. We integrate external engineering resources where appropriate while maintaining ownership of all critical technological outcomes. Our core technologies cover areas including mobile energy storage systems, BMS, EMS, charging control logic, system integration architecture, and related software and platform technologies. We define key technical specifications, functional requirements and system frameworks for our products and solutions, ensuring that core technological decisions remain fully under our control. Engineering implementation, prototyping and testing for certain modules may be conducted in cooperation with specialized third-party partners under our technical direction.

In our computing power and algorithm solutions business, intellectual property rights primarily relate to software systems, operational management tools and application-level solutions supporting our computing power aggregation and algorithm related service offerings. We rely on this portfolio of intellectual property to support the stability and functionality of our service platform and to enhance operational efficiency.

While we believe that our intellectual property portfolio and technical capabilities provide a meaningful competitive advantage, we cannot assure that our intellectual property rights will not be challenged, circumvented or invalidated, or that competitors will not develop alternative technologies that achieve similar functionality. We also rely, in part, on intellectual property rights licensed from third parties, and any termination or limitation of such rights could adversely affect our operations.

In our health and wellness product business, brand identity and product differentiation are important. We seek to protect our brands through trademarks and related rights. We also develop and use proprietary know-how related to product processing, formulation and quality management. Certain product differentiation may also arise from packaging design, customer facing materials and product naming conventions, which are subject to risks of imitation by competitors. The market for wellness products, including bird’s nest products, is characterized by frequent entry of new products and brands, and product imitation and counterfeiting can occur.

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Government Regulations

PRC Regulations Relating to Foreign Debt

We are an offshore holding company conducting operations in China through our PRC subsidiaries and the VIE and its subsidiaries, which are consolidated into our financial statements. As an offshore holding company, we may make additional capital contributions to our PRC subsidiaries subject to information filing (or approval where the relevant industry falls within the foreign investment negative list) with the competent local department of commerce, and the SAFE regulations concerning foreign exchange as discussed in “PRC Regulations Relating to Foreign Exchange,” subject to the applicable statutory ratio between registered capital and total investment. We may also make loans to the WFOEs and the VIEs, which are subject to foreign debt registration with SAFE or its authorized banks and the limitation on amount of foreign debt quota.

By means of such loans, our PRC subsidiaries and the VIE are subject to the relevant PRC laws and regulations relating to foreign debts. On January 8, 2003, the NDRC (then the State Development Planning Commission), SAFE and Ministry of Finance jointly promulgated the Circular on the Interim Administrative Measures for Foreign Debts, hereinafter referred to as the “Foreign Debts Administrative Measures,” which took effect on March 1, 2003, and was amended by NDRC Order No. 26 on May 30, 2015 and further amended by NDRC Order No. 51 on July 26, 2022. Pursuant to the Foreign Debts Administrative Measures, the total amount of foreign loans received by a foreign-invested company shall not exceed the surplus between the total investment in projects as approved by the MOFCOM or its local counterpart and the amount of registered capital of such foreign-invested company and the available quota is further calculated by reference to the percentage of the foreign investor’s paid-in capital contribution. In addition, on January 12, 2017, the People’s Bank of China (the “PBOC”) promulgated the Circular on Matters Concerning Macro-Prudential Administration of Cross-Border Financing in General, hereinafter referred to as the “PBOC Circular 9”, which sets out the statutory upper limit on the foreign debts for PRC non-financial entities, including both foreign-invested companies and domestic-invested companies. Pursuant to the PBOC Circular 9, the upper limit of the risk-weighted cross-border financing balance for both foreign-invested companies and domestic-invested companies is calculated as the net assets of such companies multiplied by a cross-border financing leverage ratio of 2 and a macro-prudential adjustment parameter (initially set at 1 and subject to adjustment by the PBOC and SAFE from time to time). As to net assets, the companies shall take the net assets value stated in their latest audited financial statement. Domestic-invested enterprises (including the VIEs) are subject only to the macro-prudential regime, while foreign-invested enterprises may elect between this regime and the foregoing “total investment minus registered capital” regime..

On January 5, 2023, the NDRC promulgated Administrative Measures for Examination and Registration of Medium and Long-term Foreign Debts of Enterprises, hereinafter referred to as the “Medium and Long-term Foreign Debts Measures”, which took effect on February 10, 2023. The Medium and Long-term Foreign Debts Measures was enacted principally to facilitate the orderly development of overseas financing by domestic enterprises, to promote the utilization efficiency of the Medium and Long-term Foreign Debts’ proceeds, and to forestall foreign debt risks effectively. The “Medium and Long-term Foreign Debts of the Enterprises” (hereinafter referred to as the “Foreign Debts”) is defined in the Medium and Long-term Foreign Debts Measures as debt instruments with terms over one year, borrowed from overseas by PRC domestic enterprises or the overseas enterprises/branches controlled by them, denominated in local or foreign currency, and with their principals to be repaid and interests to be paid as agreed. When borrowing Foreign Debts, the enterprises shall (i) complete the examination and obtain the requisite examination and registration certificate before borrowing (i.e., before the settlement of an offshore bond issuance or the first drawdown of a commercial loan) (ii) report and disclose relevant information, (iii) optimize use of foreign debts proceeds, (iv) manage risks properly, and (v) be cooperative in supervisions and inspections. The Measures also stresses that the proceeds raised as Foreign Debts shall not be used in a way threatening or impairing China’s national interests or economic, information or data security, or in a way that increases the implicit debts of local governments, nor shall such proceeds be applied in making up speculation or hyping, or on-lending to third parties, other than by banking financial institutions or where such on-lending is specified in the application materials and approved. The Medium and Long-term Foreign Debts Measures also apply to indirect overseas borrowing by PRC enterprises, i.e., where an enterprise whose principal business activities are in China issues bonds or borrows commercial loans overseas through an offshore registered entity, based on the equity, assets, revenues or similar interests of the PRC enterprise.

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The PBOC Circular 9 does not supersede the Foreign Debts Administrative Measures. It provides a one-year transitional period from its promulgation date to foreign-invested companies, such as our WFOEs, which are permitted to choose their method of calculating the foreign debt upper limit based on either the Foreign Debts Administrative Measures or the PBOC Circular 9. The transitional period ended on January 11, 2018. Upon its expiry, pursuant to the PBOC Circular 9, the PBOC and the SAFE were to issue further notices on the applicable calculation method for foreign-invested companies. As of the date of this document, no such further notice has been issued, and under the SAFE’s policy Q&As and the 2025 Operational Guidelines for Deepening the Facilitation of Foreign Exchange Administration for Cross-border Investment and Financing, foreign-invested enterprises continue to elect either regime by written application at the time of their first foreign debt contract registration; once confirmed, the elected regime may not be changed at will, except that an enterprise initially electing the “total investment minus registered capital” regime may switch to the macro-prudential regime on a one-way basis, and no further change is permitted thereafter..

In March 2020, the PBOC and the SAFE raised the macro-prudential adjustment parameter for enterprises and financial institutions from 1 to 1.25. On January 7, 2021, the PBOC and the SAFE issued the Circular on Adjusting Macro-Prudential Adjustment Parameter for Enterprises’ Cross-Border Financing, hereinafter referred to as the “Circular 5”, which adjusts the macro-prudential adjustment parameter in the formula for the upper limit of an enterprise’s outstanding risk-weighted cross-border financing balance. The Circular 5 lowers the parameter for enterprises from 1.25 to 1, while the parameter for financial institutions had separately been lowered from 1.25 to 1 in December 2020. On October 25, 2022, the PBOC and the SAFE jointly issued a notice providing that the macro-prudential adjustment parameter for enterprises’ and financial institutions’ cross-border financing was adjusted from 1 back to 1.25. On July 20, 2023, the PBOC and the SAFE jointly declared that the macro-prudential adjustment parameter for enterprises’ and financial institutions’ cross-border financing was adjusted from 1.25 to 1.5. To further improve the comprehensive cross-border financing macro-prudential management, continue to increase the cross-border funding sources for enterprises and financial institutions, and guide them to optimize their asset-liability structure, the PBOC and the SAFE have decided to increase the macro-prudential adjustment parameter for enterprises’ and financial institutions’ cross-border financing from 1.5 to 1.75, which took effect on January 13, 2025. Accordingly, the current upper limit of the risk-weighted cross-border financing balance for enterprises is 3.5 times their net assets, calculated as net assets multiplied by a cross-border financing leverage ratio of 2 and the macro-prudential adjustment parameter of 1.75. 

PRC Regulations Relating to Dividend Distribution

The principal regulations governing the distribution of dividends by foreign holding companies include the Company Law (effective on July 1, 2024), the Foreign Investment Law (effective on January 1, 2020), and the Implementation Regulations for the Foreign Investment Law (effective on January 1, 2020). Under these regulations, wholly foreign-owned investment enterprises in China may pay dividends only out of their retained profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, wholly foreign-owned investment enterprises in China are required to allocate at least 10% of their respective retained profits each year, if any, to fund certain reserve funds unless these reserves have reached 50% of the registered capital of the enterprises. These reserves are not distributable as cash dividends, and a wholly foreign-owned enterprise is not permitted to distribute any profits until losses from prior fiscal years have been offset.

PRC Regulations Relating to Offshore Special Purpose Companies Held by PRC Residents

The SAFE promulgated the Circular on Relevant Issues Relating to Foreign Exchange Administration for Overseas Investments and Financing and Round-trip Investments by Domestic Residents through Special Purpose Vehicles, hereinafter referred to as the “SAFE Circular 37” in July 2014 that requires PRC residents or entities to register with the 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. In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic information (including change of such PRC citizens or residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions.

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The SAFE Circular 37 was issued to replace the SAFE Circular 75 (the Circular on Relevant Issues Concerning Foreign Exchange Administration in Respect of Financing and Round-trip Investments by Domestic Residents through Overseas Special Purpose Vehicles. The SAFE further enacted the Circular on Further Simplifying and Improving the Foreign Exchange Administration Policies on Direct Investment, hereinafter referred to as the “SAFE Circular 13” effective on June 1, 2015, which allows PRC residents or entities to register with qualified banks in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. However, remedial registration applications made by PRC residents that previously failed to comply with the SAFE Circular 37 continue to fall under the jurisdiction of the relevant local branch of the SAFE. In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from distributing profits 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 PRC subsidiaries. Moreover, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls. Such Circular has been repealed by the Circular of State Administration of Foreign Exchange on Repealing and Invalidating Five Regulatory Documents and Certain Provisions of Seven Regulatory Documents, which was promulgated and took effect on December 30, 2019, in part, namely: sections 1.5, 1.6, 1.10, 1.11, 1.12, 1.13, 1.14, 1.16, 1.17, 1.18 and 1.19 of the Annex (the Guideline to Foreign Exchange Operation in Relation to Direct Investment) to said Circular.

On July 26, 2024, the PBOC and the SAFE jointly promulgated the Regulation on Foreign Institutional Investors’ Domestic Securities and Futures Investment Capital Administration, amending the Regulation on Foreign Institutional Investors’ Domestic Securities and Futures Investment Capital Administration which was promulgated on May 7, 2020 to the effect that (i) abolishing the administrative licensing requirement for QFII/RQFII to attend to capital registration with the SAFE, (ii) no longer distinguishing the RMB special deposit account for securities and derivatives transactions, (iii) no longer requiring conversion of the principal and investment return in the RMB account corresponding to the foreign currency account before remitting out, i.e. the RMB amount can be remitted out directly, and (iv) QFII/RQFII being able to handle foreign exchange spot settlement and sale and foreign exchange derivative product transactions by means of, among others, through other domestic financial institutions qualified to carry out foreign exchange settlement and sale business.

PRC Regulations Relating to Overseas Listing and Financing of Domestic Enterprises

On April 2, 2022, the CSRC promulgated the Provisions on Strengthening Confidentiality and Archives Administration in respect of Overseas Securities Issuance and Listing by Domestic Enterprises (Draft for Comments), which was later amended by the Provisions on Strengthening Confidentiality and Archives Administration in Respect of Overseas Offering and Listing of Securities by Domestic Enterprises promulgated by the CRSC, the Ministry of Finance, the National Administration for Protection of State Secrets and the National Archives Administration jointly on February 24, 2023, which took effect on March 31, 2023. The Provisions aims to (i) safeguard national economic security, (ii) protect social public interest, (iii) regulate confidentiality and archive administration concerning direct or indirect overseas offering and listing of securities by domestic enterprises, and (iv) facilitate enterprises’ overseas offering and listing activities in compliance with laws and regulations. The aforementioned provisions mainly comprises: (i) extending the application to enterprises listed overseas indirectly, as is consistent with the Provisional Administrative Measures for Overseas Offering and Listing of Securities by Domestic Enterprises, with the “PRC domestic enterprises” being defined to include domestic joint-stock companies offering or listing securities overseas directly and indirectly; (ii) adding procedural requirements and specifying confidentiality responsibilities of enterprises, i.e. when domestic enterprises providing or disclosing (or having provided or disclosed by the overseas listing entity) documents and materials to securities company, accounting firms, other securities service providers and overseas regulators, confidentiality laws and regulations shall be abided by; when domestic enterprises providing documents and materials to relevant securities companies and securities service providers, written explanation on details of sensitive information shall be provided and the securities companies and securities service providers shall keep such written explanation in proper custody for inspection; (iii) specifying accounting archive administration requirements, i.e. when domestic enterprises providing accounting archives or copies thereof to relevant securities companies, securities service providers, overseas regulators and other entities and individuals, the procedures under the relevant provisions of the State shall be followed; and (iv) specifying that, when overseas securities regulators and other competent authorities intend to investigate or collect evidence from the domestic enterprises and their domestic securities companies and securities service providers with respect to such domestic enterprises’ offering and listing of securities overseas and related activities, such investigation or evidence collection shall proceed under cross-border regulatory cooperation mechanisms; the CRSC and other competent authorities are to provide necessary assistance under bilateral or multilateral cooperation mechanisms as well as system guarantee for safe and efficient cross-border regulatory cooperation.

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On December 24, 2021, the CSRC promulgated the Administrative Provisions of the State Council on Overseas Offering and Listing of Securities by Domestic Enterprises (Draft for Comments) and the Administrative Measures for Filing by Domestic Enterprises of Overseas Securities Issuance and Listing (Draft for Comments), both of which have been integrated into the Trial Measures promulgated on February 17, 2023, which took effect on March 31, 2023. Thereafter, the CSRC promulgated five Guidelines for Application of Regulatory Rules on Overseas Offering and Listing with immediate effect, hereinafter collectively referred to as the “Administrative Measures and Supporting Guidelines on Overseas Offering and Listing”. The Administrative Measures and Supporting Guidelines on Overseas Offering and Listing are mainly to (i) regulate domestic enterprises’ activities of overseas securities offering and listing, and (ii) facilitate domestic enterprises’ healthy development by utilizing overseas capital markets in compliance with laws and regulations. The Administrative Measures and Supporting Guidelines on Overseas Offering and Listing mainly comprise: (i) implementing unified filing requirements for direct and indirect securities offering and listing by domestic enterprises; specifying overseas securities offering and listing by domestic enterprises governed by these Administrative Measures; setting up a negative list administration mechanism; setting no extra thresholds and conditions for overseas listing other than those express negative conditions such as prohibition by law, possibility to endanger national security, the enterprise or its controlling shareholder (actual controller) being involved in crime material breach of law or material irregularity, shareholding of controlling shareholder (or the shareholder controlled by controlling shareholder or actual controller) under material title dispute, and so forth; (ii) specifying filing requirements, including the subject, timing and procedure of filing; (iii) reinforcing regulatory concertation by establishing overseas offering and listing of securities regulatory concertation mechanism, improving cross-border securities regulatory cooperation arrangements, and establishing filing information notification and other mechanisms; (iv) specifying legal liabilities for failure to comply with the filing requirements, false filing materials and other illegal or irregular acts and raising the costs of illegal or irregular acts; and (v) increasing systemic flexibility, i.e. relaxing circumstance specific restrictions (such as those under the circumstances of stock option incentive and shares issued to purchase assets) on persons receiving shares issued in the event of direct offering and listing overseas, relaxing currency restrictions to allow fund raising and dividend distribution in RMB; further facilitating “full circulation” by allowing holders of domestic non-listed shares in domestic enterprises directly listed overseas to, upon registration, convert such shares into overseas floating shares.

In tandem with promulgation of the aforesaid new rules, heads of competent authorities addressed issues of extensive concern. As per the relevant CSRC Answers to Reporter Questions on the official website of the CSRC, hereinafter referred as to the “Answers to Reporter Questions”, enterprises having completed the overseas listing prior to the date on which the Administrative Measures and Supporting Guidelines on Overseas Offering and Listing took effect are existing enterprises. The existing enterprises are not required to make immediate filing thus far; however, they shall comply with the filing requirements with the CSRC as required in the event of subsequent re-financing or other matters requiring filing. Furthermore, the Answers to Reporter Questions expressed that the CSRC will, upon consulting with other competent authorities, accept the filing to those enterprises with VIE structure and meeting regulatory requirements. 

PRC Regulations Relating to Share Incentive Plan

On February 15, 2012, the SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Administration in Respect of Domestic Residents Participating in Share Incentive Plans of Offshore Listed Companies, hereinafter referred to as the “Offshore Share Incentive Plan Rules”, replacing the previous rules issued by the SAFE in March 2007. Under the Offshore Share Incentive Plan Rules and other relevant rules and regulations, PRC residents who participate in a share incentive plan in an overseas listed company are required to register with the SAFE or its local branches and complete certain other procedures. Participants of a share incentive plan who are PRC residents must retain a qualified PRC agent, which could be a PRC subsidiaries of the overseas listed company or another qualified institution selected by the PRC subsidiaries, to conduct the SAFE registration and other procedures with respect to the share incentive plan on behalf of its participants. The participants must also retain an overseas entrusted institution to handle matters in connection with their exercise of stock options, the purchase and sale of corresponding stocks or interests and fund transfers. In addition, the PRC agent is required to amend the SAFE registration with respect to the share incentive plan if there is any material change to the share incentive plan, the PRC agent or the overseas entrusted institution or other material changes. The PRC agents must, on behalf of the PRC residents who have the right to exercise the employee share options, apply to the SAFE or its local branches for an annual quota for the payment of foreign currencies in connection with the PRC residents’ exercise of the employee share options. The foreign exchange proceeds received by PRC residents from the sale of shares under the share incentive plans granted and dividends distributed by overseas listed companies must be remitted into the bank accounts in the PRC opened by the PRC agents before distribution to such PRC residents. In addition, the SAFE Circular 37 provides that PRC residents who participate in a share incentive plan of an overseas unlisted special purpose company must register with the SAFE or its local branches before exercising such rights.

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PRC Regulations Relating to Tax

Enterprise Income Tax

Under the People’s Republic of China Enterprise Income Tax Law, hereinafter referred to as the “Enterprise Income Tax Law”, which was promulgated on March 16, 2007, took effect on January 1, 2008, and was last amended on December 29, 2018 and the Implementation Regulations of the Enterprises Income Tax Law, which was promulgated by the State Council on December 6, 2007, took effect on January 1, 2008, and was last amended on December 6, 2024 (hereinafter collectively referred to as the “EIT Laws”), enterprises are categorized into resident enterprises and non-resident enterprises. Enterprises established inside the PRC and those established outside but with “de facto management bodies” within the PRC are considered as “resident enterprises” for EIT laws purposes and are generally subject to a uniform 25% enterprise income tax rate on its worldwide income. In 2009, the State Administrative of Taxation (the “SAT”) promulgated the Circular on Issues concerning the Determination of Chinese-Controlled Enterprises Registered Overseas as Resident Enterprises on the Basis of De Facto Management Bodies, hereinafter referred to as the “SAT Circular 82”, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise incorporated offshore is located in China, but Article 7, paragraph 1 has been repealed by the Decision on Promulgation of the Catalogues of Repealed Departmental Rules and Regulatory Documents of Tax Authorities, hereinafter referred to as the “Order No. 42 of the State Administration of Taxation”), dated December 29, 2017. Further to the SAT Circular 82, in 2011, the SAT promulgated the Administrative Measures for Enterprise Income Tax on Chinese-Controlled Enterprises Registered Overseas (Provisional), hereinafter referred to as the “SAT Bulletin 45”), to provide more guidance on the implementation of the SAT Circular 82. SAT Bulletin 45 was amended by Announcement on Amending Administrative Measures for Assessment and Collection of Enterprise Income Tax on Non-Resident Enterprises and Other Documents (promulgated on April 17, 2015 and became effective on June 1, 2015), Announcement of the State Taxation Administration on Matters Concerning the Issuance of the Certificate of Chinese Tax Resident Status (promulgated on June 28, 2016 and became effective on October 1, 2016) and Announcement of the State Taxation Administration on Amending Certain Tax Regulatory Documents (promulgated and became effective on June 15, 2018). 

According to the SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or enterprise group will be considered a PRC resident enterprise by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following conditions are met: (a) the senior management and core management departments in charge of its daily operation functions have their presence mainly in the PRC; (b) its financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (c) its major assets, accounting books, company seals, and minutes and files of its board of directors and shareholders’ meetings are located or kept in the PRC; and (d) more than half of the enterprise’s directors or senior management with voting rights habitually reside in the PRC. Although the SAT Circular 82 and the SAT Bulletin 45 only apply to offshore-incorporated enterprises controlled by PRC enterprises or PRC enterprise groups but not to those controlled by PRC individuals or foreigners, the determination criteria set forth therein may reflect the SAT’s general position on how the term “de facto management body” will be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, individuals or foreigners. A PRC resident enterprise would have to pay a withholding tax at a rate of 10% when paying dividends to its non-PRC shareholders.  

Pursuant to the Circular on Strengthening Administration of Enterprise Income Tax on Proceeds from Transfer of Non-Resident Enterprise Equity Interest, hereinafter referred to as the “SAT Circular 698”), promulgated by the SAT in 2009 with retroactive effect from January 1, 2008, where a non-resident enterprise investor transfers its equity interests in a PRC resident enterprise indirectly through disposition of the equity interests of an overseas holding company (an “Indirect Transfer”) and such overseas holding company is located in a tax jurisdiction that: (i) has an effective tax rate less than 12.5% or (ii) does not tax foreign income of its residents, the non-resident enterprise transferor shall report to the competent tax authority of the PRC resident enterprise such Indirect Transfer.

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In February 2015, the SAT promulgated an Announcement on Certain Enterprise Income Tax Matters Regarding Indirect Transfer of Properties between Non-resident Enterprises, hereinafter referred to as “the SAT Circular 7”, which supersedes the rules with respect to the Indirect Transfer under the SAT Circular 698, but does not touch upon other provisions of the SAT Circular 698, which remain in force. The SAT Circular 7 extends its tax jurisdiction to not only Indirect Transfers set forth under the SAT Circular 698 but also transactions involving transfer of other taxable assets through offshore transfer of a foreign intermediate holding company. In addition, the SAT Circular 7 provides clearer criteria than the SAT Circular 698 for assessment of reasonable commercial purposes and has introduced safe harbors for internal group restructurings and sale and purchase of equity interest through an open stock market. The SAT Circular 7 also brings challenges to both foreign transferors and transferees (or other person obligated to pay tax for the transfer) of taxable assets. Where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests in an overseas holding company, i.e., an Indirect Transfer, the non-resident enterprise as either transferor or transferee or the PRC entity that directly owns the taxable assets shall report such Indirect Transfer to the relevant tax authority. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferor/transferee or other person obligated to pay tax for the transfer is obligated to withhold the applicable taxes at a rate of 10% for the proceeds from transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee shall be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

In October 2017, the SAT promulgated an Announcement on Issues Relating to Withholding at Source of Income Tax Payable by Non-resident Enterprises, hereinafter referred to as the “SAT Circular 37”, which took effect on December 2017 and was amended by the Announcement on Amending Certain Taxation Regulatory Documents on June 15, 2018. The SAT Circular 37 repealed the SAT Circular 698 and amended certain provisions. According to the SAT Circular 37, where the non-resident enterprise fails to declare the tax payable pursuant to Article 39 of the Enterprise Income Tax, the tax authority may order it to pay the tax due within required time limits, and the non-resident enterprise shall declare and pay the tax payable within such time limits specified by the tax authority. However, if the non-resident enterprise voluntarily declares and pays the tax payable before the tax authority orders it to do so within required time limits, such enterprise shall be deemed as having paid the tax in time.

On December 6, 2024, the State Council promulgated the State Council Decision on Amending and Repealing Certain Administrative Regulations (State Council Decree No. 797), whereby the Implementation Regulations on the Enterprise Income Tax Law of the People’s Republic of China were amended for the second time, effective as of January 20, 2025. Such amendment has: (i) changed the term “science and technology” under Article 93(2) of the original Implementation Regulations to “industry and information technology, science and technology”, and (ii) expressly provided that the Catalogue of High- and New-Technology Areas Specially Supported by the State and the administrative measures for the recognition of high- and new-technology enterprises shall be formulated by the competent authorities of industry and information technology, science and technology, finance and taxation of the State Council, in consultation with the relevant departments of the State Council, and submitted to the State Council for approval before being promulgated.

Value-Added Tax

In November 2011, the Ministry of Finance and the SAT promulgated the Pilot Plan on Switching from Business Tax to Value-Added Tax, hereinafter referred to as the “Pilot Plan”. In March 2016, the Ministry of Finance and the SAT further promulgated the Circular on Fully Promoting the Pilot Plan on Switching from Business Tax to Value-Added Tax, which took effect on May 1, 2016. On November 19, 2017, the State Council revised the People’s Republic of China Interim Regulation on Value-Added Tax, hereinafter referred to as the “2017 Revision”). On March 20, 2019, the Ministry of Finance, the SAT and the General Administration of Customs promulgated the Announcement on Relevant Policies for Deepening the Value-Added Tax Reform, hereinafter referred to as the “Deepening Reform Announcement”, which took effect on April 1, 2019.  

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Pursuant to the Pilot Plan and relevant circulars, VAT is generally imposed nationwide on the modern service industries. VAT at a rate of 6% applies to revenue derived from the provision of some modern services. Unlike business tax, a taxpayer is allowed to offset the qualified input VAT paid on taxable purchases against the output VAT chargeable on the modern services provided.

Pursuant to the Deepening Reform Announcement, the tax rate of 16% applicable to the VAT taxable sale or import of goods by a general VAT taxpayer (the “taxpayer”) shall be adjusted to 13%; and the tax rate of 10% applicable to the VAT taxable sale or import of goods by a taxpayer shall be adjusted to 9%, for the purpose of advancing substantial cuts in VAT.

On December 25, 2024, the Standing Committee of the National People’s Congress promulgated the Value-added Tax Law of the People’s Republic of China by Order of the President of the People’s Republic of China No.41. The Law took effect on January 1, 2026 and the Interim Value-added Tax Regulation of the People’s Republic of China was repealed in the meantime. Entities and individuals (including individual businesses) engaged in the sale of goods, services, intangible assets, or real estate (hereinafter “taxable transactions”) within the territory of the People’s Republic of China (hereinafter “within China”), or in the importation of goods, shall be considered VAT taxpayers and shall pay VAT in accordance with the Law. The Law has (i) categorized taxable transactions, deemed taxable transactions and non-taxable transactions, (ii) prescribed different VAT rates (not exceeding 13%) for various transactions, (iii) expressly provided for tax payable, tax preferences, collection and administration, among other things, and (iv) provided for taxpayers’ obligation to issue and use VAT invoices in accordance with the law. VAT invoices include paper invoices and electronic invoices. Electronic invoices carry the same legal force as paper invoices. The State actively promotes the use of electronic invoices. Taxpayers, withholding agents, as well as tax authorities and their staff members who are found in violation of this Law shall be held legally liable in accordance with the Law of the People’s Republic of China on the Administration of Tax Collection, and relevant laws and administrative regulations.

Stamp Duty

On August 6, 1988, the People’s Republic of China Interim Regulations on Stamp Duty, hereinafter referred to as the “Stamp Duty Regulations”), was promulgated by the State Council of China and amended on January 8, 2011. The Stamp Duty Regulations stipulate that entities and individuals should pay stamp duty when writing or receiving contracts and transferring documents. The Stamp Duty Regulations also stipulate that entities and individuals should pay stamp tax on business account books and rights, licenses and other taxable documents in China.

The People’s Republic of China Stamp Duty Law, hereinafter referred to as the “Stamp Duty Law”), was promulgated by the SCNPC on June 10, 2021 and took effect on July 1, 2022. The Stamp Duty Law applies to the taxes collected for various certificates that are registered in transactions in China. According to this law, entities and individuals that issue taxable vouchers or conduct securities transactions within China are taxpayers of stamp duty. Taxpayers shall calculate the amount of tax payable in accordance with the nature of the taxable documents, and the tax rates vary from 0.005% to 0.1%.

Tax Incentives

On April 14, 2008, the PRC Ministry of Science and Technology, the Ministry of Finance and the SAT enacted the Administrative Measures for Accreditation of High and New Technology Enterprises, hereinafter referred to as the “Measures for High-Tech Enterprises”, which was amended on January 29, 2016 and retroactively effective from January 1, 2016. Under the EIT Law and the Measures for High-Tech Enterprises, certain qualified high-tech companies may benefit from a preferential tax rate of 15% if they own core intellectual properties and their business fall into certain industries that are strongly supported by the PRC government and recognized by certain departments of the State Council. On July 11, 2018, the Circular on Extension of the Loss-Covering Carryover Period for High and New Technology Enterprises and Small and Medium-Sized Technological Enterprises was enacted with retroactive effect from January 1, 2018.

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Pursuant to the Circular on Enterprise Income Tax Policies for Further Encouraging the Development of Software and Integrated Circuit Industries promulgated by the Ministry of Finance and the SAT on April 20, 2012, with retroactive effect from January 1, 2011, and the Circular on Relevant Issues Concerning Preferential CIT Policies for Enterprises in Software and Integrated Circuit Industries promulgated by the Ministry of Finance, SAT, NDRC, and MIIT on May 4, 2016 with retroactive effect from January 1, 2015, qualified software companies within the territory of the PRC shall enjoy tax benefits for a term of five years starting the first year that begins generating profits prior to December 31, 2017. In particular, such qualified companies shall be exempted from the EIT for the first two years, and from the third to the fifth year until the expiry of the tax holiday, shall enjoy a reduced rate of half of the statutory EIT rate of 25%.

PRC Regulations Relating to Mergers and Acquisitions

On August 8, 2006, six PRC regulatory agencies, including the CSRC, promulgated the Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, hereinafter referred to as the “M&A Rules”, which took effect on September 8, 2006 and were amended on June 22, 2009. The M&A Rules, among others, requires offshore special purpose vehicles formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC domestic enterprises or individuals to obtain approval of the CSRC prior to having their securities listed on an overseas stock exchange. On September 21, 2006, the CSRC published a Circular specifying the documents and materials required when applying for the CSRC approval. 

The M&A Rules and other recently adopted 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. For example, the M&A Rules require that MOFCOM shall be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise holding a famous trademark or PRC time-honored brand.

Moreover, the Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress on August 30, 2007, effective as of August 1, 2008 and amended as of August 1, 2022 (hereinafter referred to as the “2022 Amendment”), requires that transactions which are deemed concentrations and involving parties with specified turnover thresholds must be cleared by the State Administration for Market Regulation (“SAMR”) before they can be completed. The 2022 Amendment has accentuated sanctions on violations of Anti-Monopoly Law. In addition, on February 3, 2011, the General Office of the State Council promulgated the Circular on Establishing Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, hereinafter referred to as the “Circular 6”, which officially established a security review system for mergers and acquisitions of domestic enterprises by foreign investors. Further, on August 25, 2011, MOFCOM promulgated the Regulations on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors, hereinafter referred to as the “MOFCOM Security Review Regulations”, which took effect on September 1, 2011, to implement Circular 6. Under Circular 6, a security review is required for mergers and acquisitions by foreign investors with “national defense and security” concerns and mergers and acquisitions by which foreign investors may acquire the “de facto control” over domestic enterprises with “national security” concerns. Under the MOFCOM Security Review Regulations, MOFCOM will focus on the substance and actual impact of the transaction when deciding whether a specific merger or acquisition is subject to security review. If MOFCOM decides that a specific merger or acquisition is subject to security review, it will submit it to the Inter-Ministerial Panel, an authority established under the Circular 6 led by NDRC and MOFCOM under the leadership of the State Council, to carry out the security review. The regulations prohibit foreign investors from bypassing the security review by structuring transactions through trusts, indirect investments, leases, loans, control through contractual arrangements or offshore transactions. There is no explicit provision or official interpretation stating that a merger or acquisition of a company engaging in marketplace lending business requires security review. 

The Measures for the Security Review of Foreign Investment, hereinafter referred to as the “Review Measures”), was issued by the National Development and Reform Commission and the MOFCOM on December 19, 2020 and took effect on January 18, 2021. The Review Measures consists of 23 articles, stipulating the applicable types of foreign investment, authority, scope, procedures, supervision and implementation of decisions, and handling violations of security review. The Review aims to further regulate and improve accuracy and transparency of review work, minimize impact on foreign investment activities, and protect the motivation and legitimate rights and interests of foreign investors.

Our PRC legal counsel, Beijing Dacheng Law Offices, LLP (Fuzhou), has advised us that, based on their understanding of the current PRC laws and regulations, we currently control Huazhi Future by virtue of the Huazhi Contractual Agreements between Shenzhen Huazhixing, Huazhi Future and its shareholders, and not through either equity interest acquisition or asset acquisition under the New M&A Rule.

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PRC Regulations Relating to Labor and Social Security

Pursuant to the PRC Labor Law, the PRC Labor Contract Law and the Implementation Regulations of the Employment Contracts Law, labor relationships between employers and employees must be established in written form. Wages may not be less than the local minimum wage. Employers must establish a system for labor safety and sanitation, strictly abide by state standards and provide relevant education to its employees. Employees shall work in safe and sanitary conditions. 

On December 28, 2012, the PRC Labor Contract Law was amended with effect from July 1, 2013 to impose more stringent requirements on labor dispatch. Under such law, dispatched workers are entitled to salary equal to that of full-time employees for equal work, but the number of dispatched workers that an employer hires may not exceed a certain percentage of its total number of employees as determined by the Ministry of Human Resources and Social Security. Additionally, dispatched workers are only permitted to engage in temporary, auxiliary or substitute work. According to the Interim Regulations on Labor Dispatch promulgated by the Ministry of Human Resources and Social Security on January 24, 2014 and effective from March 1, 2014, the number of dispatched workers hired by an employer shall not exceed 10% of the total number of its employees (including both directly hired employees and dispatched workers). The Interim Regulations on Labor Dispatch requires employers not in compliance with the PRC Labor Contract Law in this regard to reduce the number of its dispatched workers to below 10% of the total number of its employees prior to March 1, 2016. In addition, an employer is not permitted to hire any new dispatched worker until the number of its dispatched workers has been reduced to below 10% of the total number of its employees. On December 29, 2018, the PRC Labor Law was amended with effect on the same day. Under such amendment to the PRC Labor Law, (i) the requirement that entities engaged in literary and artistic, sports or special craft activities go through an approval procedure before recruiting minors under the age of 16 has been removed; (ii) institutions assessing workers’ professional skills are no longer required to be approved but to be registered only; and (iii) the market supervision departments have got the right to revoke the business license of employers who illegally recruit minors.

Under PRC laws, rules and regulations, including the Social Insurance Law, the Interim Regulations on Collection and Payment of Social Insurance Fund and the Regulations on the Administration of Housing Provident Funds, employers are required to contribute, on behalf of their employees, to a number of social security funds, including funds for basic pension insurance, unemployment insurance, basic medical insurance, occupational injury insurance, maternity leave insurance and housing accumulation funds. These payments are made to local administrative authorities and any employer who fails to contribute may be fined and ordered to pay the deficit amount.

On July 31, 2025, the Supreme People’s Court promulgated the Interpretation of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (II), effective on September 1, 2025, laying down express adjudicating principles for certain labor dispute issues. In particular: if an employer and an employee agree that social insurance premiums do not need to be paid, or if an employee promises the employer as much, the people’s court shall find such an agreement or promise invalid. As of the effective date, if an employer fails to pay social insurance premiums for an employee for whatever reason, it shall be found in breach of law.

PRC Regulations Relating to Cyber Security

On June 1, 2017, the People’s Republic of China Cyber Security Law (hereinafter referred to as the “Cybersecurity Law”) promulgated by the SCNPC, took effect. The Cyber Security Law was amended on October 28, 2025, with the amendment effective as of January 1, 2026. It serves as a foundation law in the field of cybersecurity, operation in parallel with the Data Security Law and the Personal Information Protection Law. Pursuant to the Cyber Security Law, any individual or organization using the network must comply with the PRC constitution and the applicable laws, follow the public order, respect social moralities, and must not endanger cyber security or engage in activities by making use of the network that endanger the national security, honor and interests, or infringe on the fame, privacy, intellectual property and other legitimate rights and interests of others. The Cyber Security Law sets forth various security protection obligations for network operators, which are defined as “owners and administrators of networks and network service providers,” including, among other obligations, complying with a series of requirements of tiered cyber protection systems, verifying users’ real identities, localizing the personal information and important data gathered and produced by key information infrastructure operators during operations within the PRC, and providing assistance and support to government authorities where necessary for protecting national security and investigating crimes. 

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The National Standards under the Information Security Technology-Personal Information Security Specification, hereinafter referred to as the “Standards”), was promulgated on March 6, 2020 and took effect on October 1, 2020. The Standards sets forth requirements for collection, storage, use, exchange and disclosure of data.

On April 13, 2020, the CAC and eleven other government authorities (including but not limited to the Ministry of Industry and Information Technology, the MOFCOM, the Ministry of Public Security, the National Development and Reform Commission, and the State Administration for Market Regulation) promulgated the Measures for Cyber Security Review (2020). The Measures for Cyber Security Review provides and elaborates the applicable scope, procedure and factors of cyber security review. 

As the PRC government continues to focus on the supervision of cyber security, data security and protection of personal information, we could be subject to evolving laws and regulations in these regards that could affect how we collect, store, process and use data. On December 28, 2021, the CAC promulgated the Measures for Cyber Security Review (2021), hereinafter referred to as the “Measures”, which took effect on February 15, 2022 and replaced the Measures for Cyber Security Review (2020). The Measures, among others, stipulates that if an operator possesses personal information of over one million users and intends to be listed in a foreign country, it must be subject to the cyber security review by the CAC. The cyber security review, among others, will evaluate the potential risks of critical information infrastructure, core data, important data, or a large amount of personal information being influenced, controlled or maliciously used by foreign governments after the overseas listing of an operator. In addition, the Measures for Security Assessment of Cross-Border Data Transfer was promulgated by the CAC on July 7, 2022 and took effect on September 1, 2022, which specifies the government security review procedure for the transfer of a wide range of data out of the territory of China. The measures for the first time clarify (i) data processors that transfer important data out of the territory of China, (ii) critical information infrastructure operators (CIIOs) and data processors that process personal information of more than 1 million individuals providing personal information to overseas recipients, (iii) data processors that accumulatively transfers personal information of more than 100,000 users out of the territory of China or sensitive personal information of more than 10,000 users since January 1 of the previous year, or (iv) other circumstances stipulated by the national cyberspace administration that require the filing of a security assessment for cross-border data transfer, are required to file for CAC’s security review of cross-border data transfer with the provincial cyberspace administration. Where a data processor is required to apply for the CAC security assessment for its cross-border data transfer, it must first conduct an internal data export risk self-assessment. On August 31, 2022, the Guidance on Security Assessment Declarations of Cross-Border Data Transfer (Version 1) was promulgated by CAC, with immediate effectiveness on the same date, which regulates for the first time the security assessment declarations of cross-border data transfer. On September 24, 2024, the State Council promulgated the Administrative Regulations on Network Data Security which became effective on January 1, 2025. The aforementioned Regulations apply to network data processing activities and the related security supervision and administration carried out within the territory of the People’s Republic of China and also apply to activities outside the territory of the People’s Republic of China that process the personal information of natural persons within the territory of the People’s Republic of China, where such activities fall under the circumstances specified in Article 3, Paragraph 2 of the Personal Information Protection Law of the People’s Republic of China. Violations may result in fines of up to RMB10 million (under the Regulations and the Data Security Law) and up to RMB50 million or 5% of the preceding year’s turnover (under the Personal Information Protection Law), as well as suspension of business or revocation of business licenses, in each case pursuant to Article 58 of the Regulations.

The CSRC promulgated the Administrative Measures for Cybersecurity and Information Security in the Securities and Futures Industry on February 27, 2023, which took effect on May 1, 2023. The aforementioned Measures impose cybersecurity administration requirements for various kinds of entities in the securities and futures industry: requiring certain entities to establish comprehensive network and information protection systems and clarifying requirements on data and information system backups and regularized pressure tests. Provisions are also made on information protection mechanism and other matters.

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On March 22, 2024, the CAC promulgated the Provisions on Facilitating and Regularizing Cross-border Data Transfer, effective on the same date. The Provisions expressly set forth the conditions for exemption from declaration for cross-border data transfer security assessment, conclusion of personal information cross-border transfer standard contract, and undergoing personal information protection certification; the conditions for outbound data transfer to be declared for cross-border data transfer security assessment through local provincial cyberspace administration authority and by the Cyberspace Administration of China are set out as follows: (i) a critical information infrastructure operator is to transfer outbound personal information or important data; or (ii) a data processor other than a critical information infrastructure operator is to transfer outbound important data or (x) over 1,000,000 personal information (not including sensitive personal information), or (y) over 10,000 sensitive information in accumulation since January 1 of the current year. Where Articles 3, 4, 5 or 6 provide otherwise, such Articles shall prevail. The cross-border data transfer security assessment certification shall remain effective for three years commencing from its issuance date; within six months prior to its expiration, renewal application can be filed by law for another three-year effective period. In the event of any conflict between such the Measures for Security Assessment of Cross-Border Data Transfer promulgated on July 7, 2022 (by the Cyberspace Administration of China order 11) or the Measures for the Standard Contract for Cross-border Transfer of Personal Information promulgated on February 22, 2023 (by the Cyberspace Administration of China order 13), such Provisions shall prevail. 

On June 30, 2025, the National Technical Committee 260 on Cybersecurity of Standardization Administration of China formally issued the national standard GB/T 22080-2025 Cybersecurity technology—Information security management systems—Requirements (identically adopting ISO/IEC 27001:2022, effective January 1, 2026), which was first circulated for public comment on January 4, 2024. This standard encompasses ten chapters and one annex: the first three chapters define its general factors of scope, normative reference documents, and terms and definitions; the chapters from 4 onward set out its main technical contents of organizational environment, leadership, planning, support, operation, performance evaluation and improvement; and Annex A sets out the information security control measures required by the information security management system under Standard GB/T22081. Implementation of this standard aims at (i) enabling organizations to maintain confidentiality, integrity and availability of organizational information through the application of a risk management process, assisting the organizations in efficiently managing information security risks, and improving the organizations’ information security management competency; and (ii) guiding the certification bodies in their ISMS certification work and advancing certifications mutual recognition between domestic and foreign certification bodies.

On December 31, 2023, the Ministry of Finance promulgated the Guidance on Reinforcing Data Assets Management, aiming at regularizing and reinforcing data assets management and better facilitating digital economy development. The Guidance sets out main tasks of data assets management administration: to manage data assets by laws and regulations, to clarify rights and obligations in relation to data assets, to perfect the standards in relation to data assets, to reinforce management of data assets application, and so forth. It also articulates that, where the right-holder of public data assets is to make available to the public such data assets, security management and availability system mechanisms shall be established. It is encouraged to explore various data assets development and exploitation modes in data enrichment industries of finance, traffic, medical care, energy, industrial, telecommunication, and so forth.

On February 28, 2025, the State Administration for Market Regulation and the National Standardization Administration Committee promulgated the Cyber Security Technology AI Generated/Synthesized Content Labelling Methods (National Standard of the People’s Republic of China GB45438—2025).

On March 7, 2025, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Public Security and the National Radio and Television Administration promulgated the AI Generated/Synthesized Content Labelling Measures, effective on September 1, 2025. The Measures expressly provides that: (i) AI generated/Synthesized contents mean texts, images, audios, videos, virtual scenes and other information generated or synthesized with AI technology; (ii) ICP shall add label when generating or synthesizing such contents to ensure that users can identify them as AI generated contents; (iii) labels can be explicit or implicit: explicit labels are presented in the forms of texts, sounds, graphics and so forth and convenient for the users to perceive, while implicit labels are embedded into file data by technological means and not easy to be perceived by users; (iv) addition of explicit and implicit labels to so generated/synthesized contents are required; and (v) violation of the Measures shall be dealt with by cyberspace administration, telecommunication, public security, radio and television administration and other competent authorities in accordance with the relevant laws, regulations and departmental rules.

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In line with such mandatory national standard and the Measures, the National Cyber Security Standard Technology Committee promulgated the Cyber Security Standard Practice Guideline – AI Generated/Synthesized Contents Labelling Service Provider Coding Rules on March 14, 2025 and six cyber security standard practice guidelines on August 28, 2025, namely: the AI Generated/Synthesized Contents Labelling Methods – File Metadata Implicit Labelling For Videos, the AI Generated/Synthesized Contents Labelling Methods – File Metadata Implicit Labelling For Texts, the AI Generated/Synthesized Contents Labelling Methods – File Metadata Implicit Labelling For Images, the AI Generated/Synthesized Contents Labelling Methods – File Metadata Implicit Labelling For Audios, the AI Generated/Synthesized Contents Labelling Methods – File Metadata Implicit Labelling Safety Protection Technical Guideline and the AI Generated/Synthesized Contents Labelling Methods – Testing – Party One: Framework. The aforesaid Coding Rules and six documents have provided references to generating/synthesizing service providers and contents dissemination service providers in their AI generated/synthesized contents file metadata implicit labelling activities and generated/synthesized contents testing activities.

PRC Regulations Relating to Internet Privacy

In recent years, PRC government authorities have enacted laws and regulations on Internet use to protect personal information from any unauthorized disclosure. The Administrative Measures on Internet Information Services prohibits ICP service operators from insulting or slandering a third-party or infringing upon the lawful rights and interests of a third-party. Under the Several Provisions on Regulating the Market Order of Internet Information Services promulgated by the MIIT in 2011, an ICP service operator may not collect any user’s personal information or provide any such information to third-parties without the consent of the user. An ICP service operator must expressly inform the users of the method, content and purpose of the collection and processing of such user’s personal information and may only collect such information necessary for the provision of its services. An ICP service operator is also required to properly keep the user personal information, and in the case of any leak or likely leak of the users’ personal information, the ICP service operator must take immediate remedial measures and, in severe circumstances, to make an immediate report to the telecommunication regulatory authority. In addition, pursuant to the Decision on Strengthening Network Information Protection promulgated by the SCNPC in December 2012 and the Regulations on Protecting Personal Information of Telecommunications and Internet Users promulgated by the MIIT in July 2013, any collection and use of users’ personal information must be subject to the consent of the user, abide by the principles of legality, rationality and necessity and be within the specified purposes, methods and scopes. An ICP service operator must also keep such information strictly confidential and is further prohibited from divulging, tampering or destroying of any such information, or selling or providing such information to other parties. Any violation of the above decision or order may subject the ICP service operator to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of filings, closedown of websites or even criminal liabilities. Furthermore, in June 2016, the State Internet Information Office issued the Administrative Regulations on Mobile Internet Application Information Services, which took effect on August 1, 2016, to further strengthen regulation of the mobile application information services. Pursuant to these provisions, owners or operators of mobile Internet applications providing information services are required to be responsible for information security management, to establish and improve the protective mechanism for user information, to observe the principles of legality, rightfulness and necessity, and to expressly state the purpose, method and scope of, and obtain users’ consent to, the collection and use of users’ personal information. In addition, the new Cyber Security Law also requires network operators to keep users’ personal information that they have collected in strict confidentiality and to establish and improve their user information protective mechanisms. On November 28, 2019, the Secretary Bureau of the CAC, the General Office of the MIIT, the General Office of the Ministry of Public Security and the General Office of the SAMR promulgated the Method for Identifying Illegal Collection and Use of Personal Information Through App, which provides guidance for regulatory authorities to identify the illegal collection and use of personal information through mobile apps, for app operators to conduct self-examination and self-correction, and for other participants to voluntarily monitor compliance.  

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Personal Information Protection Law was promulgated on August 20, 2021 with immediate effect, whereby: (i) natural persons’ personal information is protected by the law; (ii) neither entities nor individuals may infringe upon natural persons’ rights and interests in personal information; and (iii) the law applies to activities of processing natural persons’ information within the territory of the People’s Republic of China, including those for the purpose of providing products or services to domestic natural persons. Personal information means various information recorded by electronic or other means concerning identified or identifiable natural person(s), not including anonymized information. Processing of personal information includes, inter alia, collection, storage, use, processing, transmission, provision, disclosure and deletion of personal information. Personal information processors shall process by law the personal information collected by them and shall not perpetrate infringement on rights and interests in personal information. Where a personal information processor is required by business demand or otherwise to provide personal information to overseas, any one of the following conditions shall first be met: (i) having passed the security review organized by the National Cyberspace Administration under Article 40 of this Law; (ii) having had a personal information protection certification carried out by a profession institution as per the provisions of the National Cyberspace Administration; (iii) having executed a standard contract formulated by the National Cyberspace Administration with the overseas receiver to articulate rights and obligations of the parties; or (iv) other condition(s) prescribed by laws, administrative regulations or the National Cyberspace Administration. In the event that any international treaty(ies)/agreement(s) signed/acceded by the People’s Republic of China contains provision(s) on condition(s) for providing personal information to receiver(s) overseas, such provision(s) may apply. Personal information processors shall take necessary measures to ensure that handling by the overseas receiver(s) of personal information reaches the personal information protection standards under this Law. Where the quantity of personal information processed by a personal information processor has reached the threshold prescribed by the National Cyberspace Administration, the personal information collected or generated from the territory of the People’s Republic of China shall be stored within such territory. Where provision of the same to a receiver overseas is a requisite nonetheless, it shall pass the security review organized by the National Cyberspace Administration; where there is in place an exemption from such security review prescribed by laws, administrative regulations or the National Cyberspace Administration, such exemption applies. A person shall have the right to know and the right to decide over his/her personal information and shall have the right to limit/decline processing of such personal information by others; personal information processor(s) is(are) obligated to secure such rights. Personal information processors shall perform their duty of protecting personal information and shall carry out audit regularly over their compliance with laws and administrative regulations in processing personal information. Offending personal information processors may be subject to penalties of warning, confiscation of illegal gains, suspension of the app processing personal information or order for cessation of service, suspension of relevant business or cessation of business for rectification, revocation of relevant business permit or revocation of business license, a fine not exceeding RMB50,000,000 or 5% of its revenue for the previous year, and so forth; the personnel directly in-charge or other personnel with direct responsibility of the personal information processor may be subject to a fine ranging from RMB10,000 to RMB1,000,000 and a prohibition for a prescribed period to act as director, supervisor, senior executive or officer in charge of personal information protection of a personal information processing enterprise. 

The People’s Republic of China Data Security Law, hereinafter referred to as the “Data Security Law”, was promulgated by the SCNPC on June 10, 2021 and took effect on September 1, 2021. The SCNPC also promulgated the People’s Republic of China Personal Information Protection Law, hereinafter referred to as the “PIPL”, which took effect on November 1, 2021, imposing restrictions on entities and individuals, including those operating abroad, that collect and process personal information and sensitive information from data subjects in China. Personal information, if collected and generated in the territory of China by critical infrastructure information operators and personal information processors or the number of users having reached the threshold prescribed by the Cyberspace Administration of China, shall be stored within the territory of China. If critical infrastructure information operators and personal information processors need to transfer personal information outside of China, they are required to undergo a security assessment organized by the National Cyberspace Administration of China.

The CAC promulgated Measures for the Standard Contract for Cross-border Transfer of Personal Information on March 22, 2023, which took effect on June 1, 2023. In order to guide and support personal information processors to file the standard contract properly and orderly, the CAC promulgated the Guidelines on Filing of the Standard Contract for Cross-border Transfer of Personal Information (First Edition) on May 30, 2023, with immediate effect. The aforementioned regulations expressly provide for the routes and risk prevention matters when personal information processors transferring personal information abroad. For activities of transferring personal information abroad commencing before such regulations took effect that do not comply with the aforementioned regulations, rectification shall be completed within six months after such regulations took effect.

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As the state’s supervision of data security and protection of personal information continues to deepen, the legislation and law enforcement activities of information protection in the financial field are gradually being strengthened. We will pay close attention to the latest regulatory developments on consumer financial information.

On August 8, 2023, the CAC promulgated the Face Recognition Technology Application Security Management Rules (Interim) (Draft for Comment), expressly providing for face recognition technology application security requirements: (i) the principle of “No Use Unless Necessary”, and (ii) use of face recognition technology shall be subject to knowing and voluntary consents of the individuals. It also expressly provides for protection of rights and interests in personal information and other personal and proprietary rights, maintenance of social order and public security, and so forth.

On September 12, 2023, the AMAC promulgated the first recommendatory group standards the Fund Management Company Mobile Internet Application Technical Specifications (hereinafter referred to as the “Specifications”), effective on the same date. Such Specifications governs provision to users of financial business-related mobile internet applications and their back-end services by publicly raised fund management companies and provides for technical requirements in terms of software security, users’ personal information security, compatibility, performance, interaction and so forth for publicly raised fund management companies’ mobile internet applications and the management requirements in the process of software research, development, operation and maintenance.  

On February 12, 2025, the Cyberspace Administration of China promulgated the Administrative Measures for Personal Information Protection Compliance Audits, effective on May 1, 2025. The Measures expressly provides that (i) a personal information processor that processes the personal information of more than 10 million individuals shall carry out a personal information protection compliance audit at least once every two years; (ii) a personal information processor that processes the personal information of 1 million individuals or more shall appoint a personal information protection officer to be responsible for the processor’s personal information protection compliance audits; (iii) personal information processors that provide important internet platform services, have a large user base, and operate a complex type of business shall establish an independent body that is primarily composed of external members, to supervise personal information protection compliance audits; (iv) professional organizations shall have the capability to conduct personal information protection compliance audits and shall comply with laws and regulations; (v) the same professional organization and its affiliated entities, as well as the same compliance audit officer, shall not conduct more than three consecutive personal information protection compliance audits for the same auditee; and (vi) any violation of these Measures by a personal information processor or a professional organization shall be dealt with in accordance with the Personal Information Protection Law of the People’s Republic of China, the Regulations on Network Data Security Management, and other laws and regulations, and any such violation that constitutes a criminal offense shall be investigated for criminal liability in accordance with the law.

PRC Regulations Relating to Foreign-Related Civil Relationships

On December 28, 2023, the Supreme People’s Court promulgated the Interpretation of Several Issues concerning Application of International Treaties and International Practice in Trial of Foreign-related Civil and Commercial cases, effective on January 1, 2024. The interpretation has nine articles in total, articulating that (i) where the trial of a civil or commercial case involves application of two or more international treaties, the People’s Court shall determine which one to apply on the basis of their applicability clauses; (ii) where the parties to a contract invoke an international treaty that has not yet taken effect on the People’s Republic of China, the People’s Court may ascertain their rights and obligations as per the provisions of such international treaty, provided however that no mandatory provisions of the laws and administrative regulations of the People’s Republic of China is breached and that no sovereignty, security or social public interest of the People’s Republic of China is undermined; and (iii) where the parties to a foreign-related civil or commercial contract expressly select application of international practice or the parties assert rights and obligations by international practice, the People’s Court shall support it.

The People’s Republic of China Civil Procedural Law (amended in 2023 and effective as of January 1, 2024) provides for an extensive jurisdiction for the People’s Court: not only jurisdiction over non-status relation foreign-related civil litigations on the basis of place of contract conclusion, place of contract performance, place where the target matter locates, place where the seizable property locates, place of tortious act, and representative office in China, but also jurisdiction over foreign related civil litigations of other proper connection with the People’s Republic of China. Furthermore, where no jurisdiction objection has been raised and a reply or counterclaim has been instituted, the People’s Court is deemed to have jurisdiction.

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On August 30, 2023, the Judicial Committee of the Supreme People’s Court promulgated the Interpretation of Several Issues concerning Application of the People’s Republic of China Foreign-related Civil Relationships Law Application Law (2nd), effective on January 1, 2024. The Explanation provides that (i) where the parties select application of a foreign law, they shall provide the same; or (ii) where the parties do not select application of a foreign law, the People’s Court shall ascertain such foreign law. The People’s Court may ascertain foreign laws by the means as follows: (i) provision by the parties; (ii) provision by the foreign central or competent authority through judicial assistance channel; (iii) provision by our embassy or consulate stationed in such foreign state at the request of the Supreme People’s Court; (iv) provision by a participant of a law ascertaining cooperation mechanism established or participated by the Supreme People’s Court; (v) provision by an expert of the International Commercial Expert Committee of the Supreme People’s Court; (vi) provision by a law ascertaining service institution or a legal expert home or abroad; and (vii) other proper means.

4.C. Organizational Structure

We are a holding company incorporated in the Cayman Islands and not an operating company. As of the date of this annual report, as a holding company with no material operations of our own, we conduct our business through our PRC subsidiaries and, in the case of our computing power and algorithm solutions business, through Huazhi Future and its subsidiaries, which we consolidate under the Huazhi Contractual Agreements. The registered shareholders of Huazhi Future were Chongqing Qianhong Fulong Technology Co., Ltd., Chongqing Gongzhang Gongyao Business Management Partnership Enterprise (Limited Partnership), Chongqing Yunzhimi Enterprise Management Partnership Enterprise (Limited Partnership) and Lucro Investments VCC, which held 64.68%, 18.62%, 14.70% and 2.00% of its equity interests, respectively, when the Huazhi Contractual Agreements were entered into. On March 31, 2026, Chongqing Qianhong Fulong Technology Co., Ltd., Chongqing Gongzhang Gongyao Business Management Partnership Enterprise (Limited Partnership) and Chongqing Yunzhimi Enterprise Management Partnership Enterprise (Limited Partnership) converted claims against Huazhi Future of RMB168.4 million in aggregate into share capital and capital reserve of Huazhi Future. In June 2026, Lucro Investments VCC and Chongqing Qianhong Fulong Technology Co., Ltd. entered into an equity transfer agreement, pursuant to which Lucro Investments VCC agreed to transfer its entire 2.00% equity interest in Huazhi Future to Chongqing Qianhong Fulong Technology Co., Ltd. The equity transfer was completed in September 2026, following which Lucro Investments VCC ceased to be a shareholder of Huazhi Future. In connection with the transfer, a new equity interest pledge over the transferred equity interest was completed in October 2026.

The following diagram illustrates our corporate structure as of the date of this annual report, including our significant subsidiaries directly or indirectly owned by us through equity ownership:

The Huazhi Contractual Agreements were entered into on February 10, 2026 by and among Huazhi Future, Shenzhen Huazhixing, a wholly-owned PRC subsidiary of Times Good Limited, and shareholders of Huazhi Future before we acquired Times Good Limited in March 2026. Each of the Exclusive Business Cooperation Agreement, the Call Option Agreement and the Equity Pledge Agreement is governed by PRC law and provides for arbitration before the Shenzhen Court of International Arbitration, and the Call Option Agreement has an initial term of ten years and renews automatically for successive one-year terms unless Shenzhen Huazhixing gives notice of non-renewal. The Huazhi Contractual Agreements, pursuant to which we consolidate the financial results of Huazhi Future in our consolidated financial statements in accordance with U.S. GAAP, consist of the following agreements:

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4.D. Property and Equipment.

Our principal executive offices are located at Building 48, Zhixin Manufacturing Valley Industrial Park, No. 52 Yangzhou Road, Economic Development Zone, Laixi, Qingdao, Shandong Province, People’s Republic of China, 266000. This office had a gross floor area of approximately 560 square meters as of June 30, 2026. Office space leased by Maase’s subsidiaries was approximately 4,300 square meters as of June 30, 2026.

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information — 3.D. Risk Factors” or in other parts in this annual report on Form 20-F. The discussion and analysis about the fiscal year ended June 30, 2025, including year-to-year comparison between the fiscal years ended June 30, 2024 and 2025, are not included in this annual report. For details of such information, see “Item 5. Operating and Financial Review and Prospects” in our annual report on Form 20-F for the fiscal years ended June 30, 2025. 

5.A. Operating Results

Portfolio Transformation Overview

Maase is a diversified holding company. During fiscal year 2025 and fiscal year 2026, the Group underwent a comprehensive portfolio transformation involving multiple disposals and acquisitions.

Disposals: The Group divested its claims-adjusting business in January 2025, its wealth management business, which was carried out through Puyi Group Limited and its subsidiaries (collectively, the “Puyi Group”) in September 2025, and deconsolidated its insurance agency business, which was carried out through AIFU Inc. and its subsidiaries (collectively, the “AIFU Group”) in December 2025. The results of operations for these disposed businesses are presented as discontinued operations in the consolidated statements of operations and comprehensive loss for all periods presented, and the related assets and liabilities are reflected as assets or liabilities of discontinued operations on the consolidated balance sheets.

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Acquisitions: The Group acquired Carve Group Ltd and its subsidiaries (collectively, the “Carve Group”) in August 2025, Real Prospect Limited and its subsidiaries (collectively, the “Real Prospect Group”) in October 2025, Oriental Grove Ltd (the “Oriental Grove”) in January 2026, and Times Good Limited and its directly or contractually controlled subsidiaries (collectively, the “Times Good”) in March 2026. The acquisitions were consummated after the end of the comparative period of fiscal year ended June 30, 2026 and are included in the Group’s continuing operations for the fiscal year ended on June 30, 2026 (the “Acquisitions”).

Major Factors Affecting Our Results of Operations

We believe that the major factors affecting our results of operations include the following:

Our business is affected by various factors within the broader economic and regulatory landscape, both in China and in other jurisdictions where we operate. These include but are not limited to:

While our business is influenced by general factors affecting our industry, our operating results are more directly affected by the following company-specific factors:

Our business mix has undergone significant changes over the past fiscal year. Following the acquisitions of Carve Group, Real Prospect Group, and Times Good and disposals of Puyi Group and AIFU Group during fiscal year 2026, computing power and algorithm solutions has become our largest source of revenue. The results of the operations related to Puyi Group and AIFU Group are presented as discontinued operations and all prior periods have been restated. As a result, our revenue, net profit, profit margins, and other aspects of our future results of operations will be primarily affected by the business acquired during fiscal year 2026.

Our three continuing business segments have different revenue characteristics and gross margin profiles. Computing power and algorithm solutions currently generates the largest proportion of our revenue but has the lowest gross margin among the three segments, followed by smart technology and new energy solutions, while health and wellness products and services has the highest gross margin. However, the health and wellness products and services segment currently contributes only a small amount to our total revenue. Accordingly, its relatively high gross margin has a limited impact on our consolidated gross profit and gross margin. Changes in the relative revenue contributions of our other two segments, particularly computing power and algorithm solutions, are therefore expected to be more significant drivers of our future consolidated financial performance

Times Good – offering computing power and algorithm solutions

This segment accounted for 83.8% of our total net revenues in fiscal year 2026. We expect revenue from this segment to continue to increase in both absolute terms and as a percentage of our total revenue, driven by an increase in the number of customer orders, higher usage per order, and expansion of our customer base. This growth is expected to further increase the segment’s contribution to our overall revenue. However, the segment’s current gross margin is relatively low, primarily because we are still in the customer acquisition phase and are investing in expanding our customer base. As a result, continued growth in this segment may place downward pressure on our overall gross margin in the near term, depending on the pace of growth and the profitability of the additional revenue generated.

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We believe that the segment’s gross margin has the potential to improve as the business matures. Based on our understanding of prevailing industry economics, we expect its gross margin, under a more normalized operating model, to approach that of our smart technology and new energy solutions segment. We intend to improve profitability through tighter cost control and an increase in the proportion of customized solutions, which we expect to offer opportunities for better pricing and value capture. The extent and timing of any margin improvement will depend on our ability to optimize delivery costs, improve operating efficiency, and expand higher-value customized solutions. Accordingly, the segment’s contribution to our operating results will depend not only on revenue growth, but also on our ability to translate that growth into improved gross profit and margins.

Real Prospect Group – offering smart technology and new energy solutions

We conduct our smart technology and new energy solutions business through operating entities acquired as part of the Real Prospect Group transaction. This segment provides a different revenue and margin profile from computing power and algorithm solutions. Its financial performance is expected to be driven by initial deployments to commercial partners, expansion of distribution channels, and growth in customer orders for products and solutions related to electric vehicle charging, mobile energy replenishment, energy storage, and intelligent energy management. We also operate charging services under pay-per-use, subscription-based, and transaction-based arrangements. Although charging services may generate incremental recurring revenue, management views them primarily as a complementary business that can support customer acquisition and encourage additional sales of mobile charging robots and charging piles. Accordingly, the segment’s impact on our operating results will depend on the scale and profitability of product sales, the development of charging service revenue, and our ability to manage product, deployment, and service delivery costs. Given its current gross margin is higher than that of computing power and algorithm solutions but lower than that of health and wellness products and services, the segment’s growth may also help moderate the effect of an increasing revenue contribution from the lower-margin computing power and algorithm solutions segment.

Carve Group and Oriental Grove – offering health and wellness products and services

This segment generates a relatively small amount of our total revenues from wellness products derived from natural ingredients, including bird’s nest products, wild-grown ginseng roots, premium tea, and other natural ingredient products. Although the segment currently has the highest gross margin among our three business segments, its limited revenue contribution means that it has a correspondingly limited impact on our consolidated gross profit and gross margin, and we do not expect it to be a significant driver of our future revenue growth or operating results. Accordingly, our future consolidated financial performance is expected to be driven primarily by the performance of our computing power and algorithm solutions and smart technology and new energy solutions segments.

Overall, we expect computing power and algorithm solutions to account for an increasing proportion of our revenue. While this trend is expected to support revenue growth, it may also place downward pressure on our consolidated gross margin in the near term, given the segment’s currently lower gross margin. Our future profitability will therefore depend on the balance between revenue growth in our two principal operating segments, their respective gross margin profiles, and our ability to improve the profitability of computing power and algorithm solutions through cost control, operating efficiency, and a greater emphasis on customized solutions.

We derive significant revenue from a relatively small number of company partners. For example, Company A and Company B collectively accounted for 27.3% of our total net revenues for the fiscal year ended June 30, 2026. As a result, any significant changes to our business relationship with such important customers could have a material impact on our revenue and profit.

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Basis of Presentation for Continuing Operations

Current Period (fiscal year ended on June 30, 2026):

The Group’s continuing operations primarily reflect the financial results of Carve Group, Real Prospect Group, and Times Good. Our total revenues and net loss from continuing operations are primarily attributable to these acquired groups during fiscal year 2026. Since neither group was owned by the Group during the comparative period of the fiscal year ended on June 30, 2025, no prior-period contributions are included. As a result, the year-over-year comparisons for continuing operations are significantly impacted by the absence of comparable prior-period activity.

Comparative Period (fiscal year ended on June 30, 2025, adjusted for discontinued operations):

As a result of the classification of disposed businesses as discontinued operations, the comparative period of the fiscal year ended on June 30, 2025 was adjusted to report nil revenue from continuing operations. The continuing operations in the comparative period consist solely of the remaining entities that were not subsequently disposed of. These entities did not generate any revenue during the comparative period and only incurred certain corporate-level operating expenses. All revenue-generating businesses were classified as discontinued operations.

Key Components of Results of Operations

Revenue

The following table identifies the disaggregation of our revenue from continuing operations and reportable segments for the twelve months ended June 30 of 2026 and 2025, respectively:

Net revenues from continuing operations for the fiscal year 2026 amounted to RMB183.4 million (US$27 million), representing a 100% increase from nil in the fiscal year 2025, due to above mentioned acquisitions and disposals.

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Computing power and algorithm solutions: Net revenue generated from computing power and algorithm solutions accounted for 83.8% of our total net revenues in fiscal year 2026, which increased by 100% from nil for the fiscal year 2025 to RMB153.7 million (US$22.7 million) for the fiscal year 2026 due to the acquisition of Times Good. Among which, this revenue stream mainly comprises: (i) Sales of AI compute servers of RMB69.2 million (US$10.2 million); (ii) AI industry application solutions of RMB44.1 million (US$6.5 million); (iii) AI computing power service of RMB26.8 million (US$4.0 million); and (iv) other related services.

Smart technology and new energy solutions: Net revenue generated from smart technology and new energy solutions accounted for 6.6% of our total net revenues in fiscal year 2026, which increased by 100% from nil for the fiscal year 2025 to RMB12.1 million (US$1.8 million) for the fiscal year 2026 due to the acquisition of Real Prospect Group. Net revenue from Real Prospect Group consists of mobile charging robots and charging piles and convenience charging services.

Net revenues from sale of mobile charging robots and charging piles amounted to RMB11.3 million (US$1.7 million) in fiscal year 2026, representing 93.1% of Real Prospect Group’s total net revenues. The increase in revenue from the sale of mobile charging robots and charging piles was primarily attributable to the acquisition of Real Prospect Group during fiscal year 2026.

Net revenues from charging services amounted to RMB0.8 million (US$0.1 million) in the fiscal year 2026, representing 6.9% of Real Prospect Group’s total net revenues.

Health and wellness products and services: Net revenue generated from health and wellness products-including wild-grown ginseng roots, premium tea, and bird’s nest peptide raw materials and compounded finished products-and related services accounted for 9.6% of our total net revenues in fiscal year 2026. This revenue increased by 100% from nil in fiscal year 2025 to RMB17.5 million (US$2.6 million) in fiscal year 2026, primarily attributable to the acquisition of Carve Group and Oriental Grove. Revenue of health and wellness products and services was primarily generated from the sales of bird’s nest peptide raw materials and compounded finished products.

Cost of revenues

Cost of Revenues from continuing operations for the fiscal year 2026 was RMB158.2 million (US$23.3 million), representing a 100% increase from nil for the fiscal year 2025, due to above mentioned acquisitions and disposals.

Cost of computing power and algorithm solutions increased from nil for the fiscal year 2025 to RMB137.5 million (US$20.3 million) for the fiscal year 2026 due to the acquisition of Times Good. This cost accounts for 86.9% of our total cost of revenues for the fiscal year 2026 and primarily consists of costs for procuring external computing services and server costs, and labor costs of in-house employees.

Cost of smart technology and new energy solutions increased from nil for the fiscal year 2025 to RMB 9.2 million (US$1.4 million) for the fiscal year 2026 due to the acquisition of Real Prospect Group. This cost accounts for 5.8% of our total cost of revenues for the fiscal year 2026, and primarily consists of costs for hardware components procurement, direct labor, assembly and manufacturing costs, and electricity.

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Cost of health and wellness products and services increased from nil for the fiscal year 2025 to RMB11.4 million (US$1.7 million) for the fiscal year 2026, primarily attributable to the acquisition of Carve Group. This cost accounts for 7.3% of our total cost of revenues for the fiscal year 2026 and primarily related to our bird’s nest product, consisting of direct materials, direct labor, and an appropriate allocation of manufacturing overhead, and other direct costs such as packaging and logistics. In addition, this cost category also comprised the cost of sales of ginseng and premium tea, including cost incurred for field patrolling staff and amortization of woodland land-use rights.

Operating expenses 

Operating expenses increased to approximately RMB48.8 million (US$7.2 million) in fiscal year 2026 from approximately RMB7.3 million in fiscal year 2025, primarily attributable to the acquisitions described. This increase reflects the expanded operational scale following the acquisitions of Carve Group, Real Prospect Group, and Times Good, as well as professional and administrative costs incurred in connection with the acquisitions and disposals.

Selling expenses increased to RMB3.5 million (US$0.5 million) in fiscal year 2026 from nil in fiscal year 2025, primarily attributable to the acquisitions described above. Selling and marketing expenses in fiscal year 2026 primarily include employee costs of sales personnel, advertising and promotional costs of core business, and brand development fees.

General and administrative expenses related to ongoing business increased to RMB40.8 million (US$6.0 million) in fiscal year 2026 from RMB7.3 million in fiscal year 2025, primarily attributable to the acquisitions described above. Administrative expenses primarily comprise employees’ costs of executive and personnel in back offices, amortization of intangible assets recognized at fair-value step-up in connection with the acquisitions of Carve Group, Real Prospect Group, and Times Good, audit fees, and other miscellaneous expenses.

Research and development (R&D) expenses increased to RMB4.6 million (US$0.7 million) in fiscal year 2026 from nil in fiscal year 2025, due to the above-mentioned acquisitions and disposals. Research and development expenses in fiscal year 2026 primarily relate to the development activities of Times Good, including employee costs of R&D personnel and other third-party R&D expenses.

Share-based compensation expenses

Under our 2018 Share Incentive Plan and 2024 Share Incentive Plan, the maximum aggregate number of ordinary shares available for issuance will be 16,806,720 ordinary shares (equivalent to approximately 186,742 Class A ordinary shares after giving effect to the 1-for-90 reverse share split effected on June 20, 2025 (the “Share Consolidation”) (“2018 Share Incentive Plan”) and 111,165,518 ordinary shares (equivalent to approximately 1,235,173 Class A ordinary shares after the Share Consolidation), respectively. On February 20, 2024, our board of directors approved the grant of share options to certain directors, executive officers, employees and top agents of the Company and AIFU to purchase 6,011,608 ADSs, previously representing 9,017,413 ordinary shares of the Company (equivalent to approximately 100,194 Class A ordinary shares after the Share Consolidation) (“2024 Option 1”), as a supplement of salary and benefit packages pursuant to the 2018 Share Incentive Plan. See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentives”. Pursuant to 2024 Option 1, the exercise price of these options is US$0.001 per ADS, equivalent to approximately US$0.0007 per ordinary share (equivalent to US$0.063 per post-split Class A ordinary share). The options were scheduled to vest over a one-year period starting from March 1, 2025, subject to the achievement of certain key performance indicators by the option holders and their continued service with the Company. As the required performance indicators related to 2024 Option 1 were not met during the year, the 2024 Share Option 1 were fully forfeited.

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On November 19, 2024, our board of directors approved the grant of 3,000,000 restricted share units (“RSUs”) to our former chairwoman Ms. Hong Suong Nguyen. Each RSU represented a right to receive one ADS with every two ADS representing three Class A ordinary shares. Giving effect to the subsequent ADR facility termination and 1-for-90 Share Consolidation, the grant was adjusted to 50,000 RSUs, with each RSU now representing the right to receive one post-consolidation Class A ordinary share. The RSUs were originally scheduled to vest over three years from the grant date, subject to Ms. Nguyen’s continued service. In fiscal year ended June 30, 2026, 16,667 Class A ordinary shares vested to Ms. Nguyen on November 18, 2025. Vesting of the remaining RSUs (33,333 Class A ordinary shares in aggregate) was accelerated upon her resignation, in recognition of her contributions to the Company during her tenure.

In February 2025, our board of directors granted a total of 666,704 RSUs to certain management and employees in connection with the termination of their employment relationships. These RSUs, with each representing the right to receive one post-consolidation Class A ordinary share, were granted and vested immediately.

Accordingly, we recognized share-based compensation expenses of RMB1.4 million for the fiscal year ended June 30, 2025. The share-based compensation expenses were RMB5.2 million (US$0.8 million) for the fiscal year ended June 30, 2026. We expect share-based compensation expenses to be a significant component of our operating expenses in the near future.

Loss from operations

Net loss from operations amounted to RMB23.7 million (US$3.5 million) in fiscal year 2026 from RMB7.3 million in fiscal year 2025. Operating loss margin was 12.9% in fiscal year 2026, primarily attributable to the acquisitions and disposals described above. The gradual transformation of our business portfolio during fiscal year 2026 increased certain fixed costs and operating expenses, including executives’ personnel costs and third-party consulting fees related to the afore-mentioned acquisitions, thereby expanding the operating loss.

Net loss from fair value change

Net loss from fair value change was RMB7.2 million (US$1.1 million) in fiscal year 2026, as compared to nil in fiscal year 2025. This was primarily attributable to a decline in the fair value of the Group’s equity interest in AIFU Inc and BGM Group Ltd.

Gain on disposal of subsidiaries

During fiscal year 2026, we recorded a gain on disposal of subsidiaries of RMB20.1 million (US$3.0 million), compared with nil in fiscal year 2025, arising from the disposal by Huazhi Future of two non-core subsidiaries to independent third parties for total cash consideration of RMB3.0 million. The divestiture of non-core businesses during the year was intended to optimize the allocation of key operating resources and enhance our focus on core operations.

Share of loss of affiliates

Share of loss of affiliates was RMB10.4 million (US$1.5 million) in the fiscal year 2026, as compared to nil in the fiscal year 2025. These amounts relate to the proportionate share of the net results of Qingdao Huiju Laixi Intelligent Technology Co., Ltd. and Yanbense Food Technology (Shenzhen) Co., Ltd., which are accounted for using the equity method.

Income Tax Benefits

We recognized an income tax benefit of RMB0.4 million (US$0.1 million) in fiscal year 2026, as compared to nil in fiscal year 2025.

Net loss from continuing operations

As a result of the foregoing factors, we recognized a net loss from continuing operations of RMB21.2 million (US$3.1 million) in fiscal year 2026, compared to a net loss from continuing operations of RMB21.9 million in fiscal year 2025.

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Net loss from discontinued operations

The net loss from discontinued operations was RMB1.8 billion (US$271.0 million) for the fiscal year 2026, as compared to a net loss from discontinued operations of RMB437.0 million for the fiscal year 2025.

Net Loss Attributable to Owner of the Company

As a result of the foregoing factors, our net loss attributable to our owner was RMB187.2 million (US$27.6 million) for the fiscal year 2026 as compared to a net loss attributable to our owner of RMB196.0 million for the fiscal year 2025.

Basic Net Loss per share

Basic net loss per share was RMB0.642 (US$0.095) for the fiscal year 2026, compared to basic net loss per share of RMB26.033 for the fiscal year 2025.

Taxation

Cayman Islands

Maase is incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, our group incorporated in the Cayman Islands is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman Islands. There are no other taxes likely to be material to us or holders of our ordinary shares levied by the government of the Cayman Islands, except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

British Virgin Islands

Under the current laws of the British Virgin Islands, our subsidiaries incorporated in the British Virgin Islands are not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholding tax in those jurisdictions. The exemption provided to a British Virgin Islands business company pursuant to section 242(3) of the BVI Business Companies Act from the payment of stamp duty does not apply to an instrument relating to the transfer to or by the relevant company of an interest in land situate in the British Virgin Islands or transactions in respect of the shares, debt obligations or other securities of a land-owning company. For this purpose, a company is a “land owning company” if it, or any of its subsidiaries, has an interest in any land in the British Virgin Islands.

Hong Kong

On March 21, 2018, the Hong Kong Legislative Council passed The Inland Revenue (Amendment) (No. 7) Bill 2017 (the “Bill”) which introduces the two-tiered profits tax rates regime. The Bill was signed into law on March 28, 2018 and was gazette on the following day. Under the two-tiered profits tax rates regime, the first 2 million Hong Kong Dollar (“HKD”) of profits of the qualifying group entity will be taxed at 8.25%, and profits above HKD2 million will be taxed at 16.5%. Following the completion of transactions in fiscal year 2026, each of our subsidiaries operating in the Hong Kong SAR incurred a net taxable loss arising from Hong Kong sources. Accordingly, no provision for Hong Kong profits tax was made for such entities in fiscal year 2026. Prior to the disposal of the Puyi Group and consolidation of AIFU in fiscal year 2026, Puyi HK, a holding company, generated a net taxable loss arising from Hong Kong sources for the fiscal year ended June 30, 2025, and therefore no provision for Hong Kong profits tax was recorded. Separately, current income tax provisions for AIFU’s subsidiaries operating in the Hong Kong SAR were calculated using the applicable statutory tax rate of 8.25% for the fiscal year ended June 30, 2025. Dividend payments are not subject to withholding tax in the Hong Kong SAR.

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PRC

According to the PRC Enterprise Income Tax Law (“EIT law”), was passed on March 16, 2007, became effective on January 1, 2008, and was subsequently amended on February 24, 2017 and December 29, 2018, as further clarified by subsequent tax regulations implementing the EIT law, foreign invested enterprises and domestic enterprises are subject to enterprise income tax, or EIT, at a uniform rate of 25%.

The Group’s PRC subsidiaries and the VIEs incorporated in PRC are subject to the PRC EIT law. Pursuant to the Article 28 of the Enterprise Income Tax Law of the People’s Republic of China, Enterprise income tax on high and new technology enterprises (“HNTE”) key supported by the State shall be levied at a reduced tax rate of 15%. Accordingly, the subsidiary of Maase’s, Guangxi Free Trade Zone Yanwo Bio-technology Co., Ltd., Puyi Dake Information Technology Co., Ltd., and Huazhi Future (Chongqing) Technology Co. Ltd. are regarded as a High and New Technology Enterprise (“HNTE”), and thus enjoys preferential tax treatments.

Pursuant to the Circular on Inclusive Tax Relief Policies for Small Low-Profit Enterprises (“SLPEs”), or Circular [2019] No. 13, jointly issued by the Ministry of Finance and the State Taxation Administration in January 2019, an SLPE is entitled to a preferential tax rate of 20% with a 75% reduction on its annual taxable income for the portion not exceeding RMB1 million and a 50% reduction for the portion between RMB1 million to RMB3 million. Further to the Circular [2019] No. 13, Announcement on Preferential Tax Policies for SLPEs and Individually-owned Businesses was jointly issued by the Ministry of Finance and the State Taxation Administration in April 2021, which provides SLPEs an 87.5% reduction on annual taxable income for the portion not exceeding RMB1 million. Pursuant to the Circular on Inclusive Tax Relief Policies for Small Low-Profit Enterprises (“SLPEs”), or Circular [2022] No. 13, jointly issued by the Ministry of Finance and the State Taxation Administration in March 2022, an SLPE is entitled to a preferential tax rate of 20% with a 75% reduction on its annual taxable income for the portion between RMB1 million to RMB3 million. Pursuant to the Circular on Inclusive Tax Relief Policies for Small Low-Profit Enterprises (“SLPEs”), or Circular [2023] No. 6, jointly issued by the Ministry of Finance and the State Taxation Administration in March 2023, an SLPE is entitled to a preferential tax rate of 20% with a 75% reduction on its annual taxable income for the portion not exceeding RMB1 million from January 2023 to December 2024. Pursuant to the Circular on Inclusive Tax Relief Policies for Small Low-Profit Enterprises (“SLPEs”), or Circular [2023] No. 12, jointly issued by the Ministry of Finance and the State Taxation Administration in August 2023, an SLPE is entitled to a preferential tax rate of 20% with a 75% reduction on its annual taxable income and the preferential tax treatment is extended to December 31, 2027.  

VAT

In March 2016, during the fourth session of the 12^th National People’s Congress, it was announced that the VAT reform will be fully rolled out and extended to all industries including construction, real estate, financial services and lifestyle services. Subsequently, the State Administration of Taxation and Ministry of Finance jointly issued a Notice on Preparing for the Full Implementation of the VAT Reform (Cai Shui [2016] No. 36). Accordingly, revenues from our services are subject to value-added tax instead of business tax starting from May 1, 2016.

PRC Urban Maintenance and Construction Tax and Education Surcharge

Any entity, foreign-invested or purely domestic, or individual that is subject to consumption tax, and VAT is also required to pay PRC urban maintenance and construction tax. The rates of urban maintenance and construction tax are 7%, 5% or 1% of the amount of consumption tax, and VAT actually paid depending on where the taxpayer is located. All entities and individuals who pay consumption tax, VAT is also required to pay education surcharge at a rate of 3%, and local education surcharges at a rate of 2%, of the amount of VAT, business tax and consumption tax actually paid. As a qualified small and low-profit enterprise, the Company is entitled to a 50% reduction on urban maintenance and construction tax, educational surcharge and local educational surcharge under the “Six Taxes and Two Surcharges” preferential policy. This preferential treatment is effective from January 1, 2023 to December 31, 2027. 

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Discussion of Key Balance Sheet Items

The following table sets forth selected information from our Consolidated Balance Sheets as of June 30, 2025 and 2026. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report.

Inventories

Inventories mainly represent the wild-grown ginseng roots, premium tea products, and bird’s nest-based nutritional products and functional food ingredients held by the Carve Group and Oriental Grove. As compared with the balance as of June 30, 2025, inventories as of June 30, 2026, increased by RMB2.4 billion (US$355.1 million) primarily attributable to the acquisition of the Carve Group and Oriental Grove.

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Cash and Cash Equivalents

As of June 30, 2026, we had cash and cash equivalents of RMB37.1 million (US$5.5 million), as compared to cash and cash equivalents of RMB0.2 million as of June 30, 2025.

Short-term investments

Short-term investments mainly represent the equity interests and bank wealth management products issued by banks. As compared with the balance as of June 30, 2025, short-term investments as of June 30, 2026 increased by RMB32.6 million (US$4.8 million). Following the loss of control of AIFU Group, the equity interests in AIFU Inc. with a carrying amount of RMB25.3 million were classified as financial assets measured at fair value through profit or loss, thereby increasing balance of short-term investments.

Accounts receivable

Accounts receivable primarily relate to operations of Times Good and Real Prospect Group. As compared with the balance as of June 30, 2025, accounts receivable as of June 30, 2026 increased by RMB30.1 million (US$4.4 million), primarily attributable to the acquisitions completed during fiscal year 2026.

Other receivables

Other receivables as of June 30, 2026 primarily derive from operations of Times Good. As compared with the balance as of June 30, 2025, other receivables as of June 30, 2026 increased by RMB90.5 million (US$13.3 million), primarily attributable to: (i) the increase of RMB61.2 million in consideration receivable from disposal of an investment, arising from the disposals of Puyi Group and Chongqing Xinzhichu Education Consulting Co., Ltd.; (ii) the decrease of RMB4.3 million, due to the collection of consideration receivables for issuance of Class B Ordinary Shares from shareholders during fiscal year 2026; and (iii) the increase of RMB33.6 million, primarily attributable to the acquisition of Times Good and Carve group. The acquired other receivables primarily consist of receivables from sales recognized on a net basis, receivables from corporations and individuals, and other miscellaneous receivables.

Other current assets of continued operations

Other current assets of continued operations as of June 30, 2026 primarily consist of restricted cash and other current assets, both of which mainly arose from operations of Times Good. Restricted cash represents pledged cash deposits related to letters of credits issued to settle Times Good’s business transactions. Other current assets primarily consist of prepayments for operating costs, other miscellaneous expenses for Times Good’s operations, and excess input value-added tax credits. The balance as of June 30, 2026 increased by RMB33.3 million (US$4.9 million) compared to the balance as of June 30, 2025, primarily due to the acquisition of Times Good during fiscal year 2026.

Goodwill

As compared to the balance as of June 30, 2025, goodwill as of June 30, 2026 increased by RMB2.0 billion (US$297.4 million), due to the acquisitions of Carve Group, Real Prospect Group, and Times Good during fiscal year 2026.

Intangible assets

As compared to the balance as of June 30, 2025, intangible assets as of June 30, 2026 increased by RMB115.3 million (US$17.0 million), due to the business combinations during fiscal year 2026. As of June 30, 2026, intangible assets primarily consist of trademark right, software copyright, patent right, and other miscellaneous intangible assets relating to the operations of Times Good, Real Prospect Group, and Carve Group.

Investments in affiliates

As compared to the balance as of June 30, 2025, investment in affiliates as of June 30, 2026 increased by RMB103.9 million (US$15.3 million), due to the acquisitions of Carve Group and Real Prospect Group. This balance represents the Group’s 49% equity interest in Qingdao Huiju Laixi Intelligent Technology Co., Ltd., which are accounted for using the equity method. We sold the 49% equity interest in Laixi in July 2026 as described in “Item 4. Information on Our Group—4.A. History and Development of Our Group.”

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Property, plant, and equipment, net

As compared to the balance as of June 30, 2025, property, plant, and equipment as of June 30, 2026 increased by RMB17.1 million (US$2.5 million), due to the business combinations during fiscal year 2026. Property, plant, and equipment primarily consist of the building held by Carve Group, charging piles and robots held by the Real Prospect Group, and other miscellaneous long-term assets used in daily operations of the Company.

Right of use assets

Right of use assets increased to RMB2.8 million (US$0.4 million) as of June 30, 2026, from nil as of June 30, 2025, due to the acquisition of Carve Group, Real Prospect Group, and Times Good. This balance represents the leases for office space, manufacturing plants, and staff dormitories.

Other payables and accrued expenses

Other payables and accrued expenses increased by RMB140.7 million (US$20.7 million) as of June 30, 2026, as compared to RMB5.0 million as of June 30, 2025. This increase was primarily attributable to: (i) the increase of RMB110.4 million of outstanding consideration for Times Good and Oriental Grove acquisitions; (ii) the increase of RMB18.6 million of amounts due to third-parties arising from Times Good, Carve Group, and Real Prospect Group; and (iii) the increase of RMB11.7 million of advances on behalf of customers for sales recognized on a net basis.

Short-term loan

Short-term loan increased to RMB28.5 million (US$4.2 million) as of June 30, 2026, from nil as of June 30, 2025, due to the acquisition of Times Good. As of June 30, 2026, short-term loan consists of: (i) bank borrowings of RMB26.6 million with interest rates ranging from 2.7%-3.51% per annum; and (ii) borrowings of RMB1.9 million due to financial institution. These short-term loans, which are due within one year, are made to supplement the working capital of Times Good.

Contract liabilities

Contract liabilities increased to RMB28.2 million (US$4.2 million) as of June 30, 2026, from nil as of June 30, 2025, due to the acquisition of Carve Group, Real Prospect Group, and Times Good. Most of such balances are expected to be realized in the following year.

Accounts payable

Accounts payable increased to RMB24.2 million (US$3.6 million) as of June 30, 2026, from nil as of June 30, 2025, primarily due to the acquisition of Times Good. As of June 30, 2026, accounts payable mainly refer to the outstanding balances due to third parties for the external procurement of computing services and server costs.

Amount due to related parties

Amount due to related parties increased to RMB13.7 million (US$2.0 million) as of June 30, 2026, from nil as of June 30, 2025, primarily due to an interest-free loan of RMB13.6 million from AIFU and its subsidiaries, a related party, during fiscal year 2026. This loan was made to supplement the Group’s working capital, which is expected to be settled in the following year.

Other current liabilities of continued operations

Other current liabilities of continued operations consist of current portion of long-term loan, accrued payroll, current operating lease liabilities, and income tax payable. This balance increased to RMB9.8 million (US$1.4 million) as of June 30, 2026, from nil as of June 30, 2025, primarily due to the acquisition of Carve Group, Real Prospect Group, and Times Good during fiscal year 2026.

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Deferred tax liabilities

Deferred tax liabilities increased to RMB7.2 million (US$1.1 million) as of June 30, 2026, from nil as of June 30, 2025, due to the acquisitions of Carve Group, Real Prospect Group, and Times Good. This balance resulted from the fair value step-up of the business combinations that occurred during fiscal year 2026.

Other non-current liabilities of continued operations

Other non-current liabilities of continued operations consist of long-term loan, and non-current lease liabilities, which increased to RMB3.5 million (US$0.5 million) as of June 30, 2026, from nil as of June 30, 2025. This increase is mainly attributable to the acquisition of Real Prospect Group, Times Good, and Carve Group.

5.B. Liquidity and Capital Resources

We believe that our current cash and cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs, including our cash needs for working capital and capital expenditures, for at least the next 12 months. We may, however, require additional cash due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If our existing cash is insufficient to meet our requirements, we may seek to sell additional equity securities, debt securities or borrow from lending institutions. Financing may be unavailable in the amounts we need or on terms acceptable to us, if at all. The sale of additional equity securities, including convertible debt securities, would dilute our earnings per share. The incurrence of debt would divert cash for working capital and capital expenditures to service debt obligations and could result in operating and financial covenants that restrict our operations and our ability to pay dividends to our shareholders. If we are unable to obtain additional equity or debt financing as required, our business operations and prospects may suffer.

As a Cayman exempted and offshore holding company, we are permitted under PRC laws and regulations to provide funding to our wholly foreign-owned subsidiary in China only through loans or capital contributions, subject to the approval of government authorities and limits on the amount of capital contributions and loans. In addition, our wholly foreign-owned subsidiary in China may provide Renminbi funding to our consolidated VIE only through entrusted loans. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of conversion of foreign currencies into Renminbi may delay or prevent us from using any offshore cash we may have to make loans to our PRC subsidiaries or to make additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.”

As of June 30, 2026, we had RMB37.1 million (US$5.5million) in cash and cash equivalents, and RMB36.9 million (US$5.4 million) in short-term investments. Our cash and cash equivalents consist of cash on hand and bank deposits and our short-term investments consisting of short-term, highly liquid investments that are readily convertible to known amounts of cash and have an insignificant risk of changes in value related to changes in interest rates. Our principal uses of cash have been to fund working capital requirements and infrastructure of intelligent computing center.

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For fiscal year 2026, our net cash flow used in operating activities was RMB103.4 million (US$15.2 million), as compared to net cash generated from operating activities of RMB71.5 million for fiscal year 2025. The decrease of RMB174.9 million in cash flow from operating activities was primarily due to changes in assets and liabilities and the expanded operating loss for fiscal year 2026 as above-mentioned factors.

For fiscal year 2026, our net cash flow used in investing activities was RMB108.4 million (US$16.0 million), as compared to net cash used in investing activities of RMB327.1 million for fiscal year 2025. The decrease of RMB218.7 million in net cash flow used in investing activities was primarily due to: (i) decreasing cash outflow in cash paid for loan receivables to a third party; (ii) the decreasing cash outflow in the disposal of subsidiaries; and (iii) the increasing cash outflow in business combinations and asset acquisition during fiscal year 2026.

For fiscal year 2026, our net cash flow generated from financing activities was RMB123.7 million (US$18.2 million), as compared to net cash used in financing activities of RMB14.2 million for fiscal year 2025. The increase of RMB137.9 million in financing activities was the result of: (i) increase of RMB147.0 million generated from the issuance of ordinary shares in fiscal year 2026; (ii) decrease of RMB5.6 million of net cash used in repayment of bank borrowings and other borrowings; and (iii) decrease of RMB3.6 million of net cash inflow generated from disposal of shares of subsidiaries.

The Company anticipates raising additional funds to finance its ongoing operations through issuance of additional Class A Ordinary Shares as well as obtaining additional external debt as needed. On September 23, 2026, the Company entered into a securities purchase agreement with certain investor for a private placement offering of 3,878,856 Class A ordinary shares of the Company, par value US$0.09 per share (the “Placement Shares”), at a purchase price of US$12.89 per Placement Share, for gross proceeds of approximately US$50 million. The private placement is expected to close on or before December 31, 2026, and the Placement Shares are subject to a 36-month lock-up following the closing. In addition, our registration statement on Form F-3 (File No. 333-298147), declared effective on August 21, 2026, permits us to offer and sell from time to time up to US$500,000,000 of Class A Ordinary Shares, debt securities, warrants, rights and units. Our known cash requirements over the next twelve months include the outstanding cash consideration of RMB110.4 million for the Times Good and Oriental Grove acquisition, of which approximately 70% was paid in October 2026, and the repayment of the bank borrowings described above.

Capital Expenditures

We made capital expenditures of RMB6.2 million and RMB3.3 million (US$0.5 million) for the fiscal years ended June 30, 2025 and 2026, respectively. These expenditures were primarily related to leasehold improvement, purchase of office equipment and maintenance of our technological infrastructure.

Dividend and Cash Transfers

Maase is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries in which we hold equity interest and Huazhi VIE and its subsidiaries. As a result, our ability to pay dividends depends upon dividends paid by our subsidiaries and and Huazhi VIE and its subsidiaries. If any of the entities incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly owned subsidiaries and Huazhi VIE and its subsidiaries in China are permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, each of our wholly owned subsidiaries in China and Huazhi VIE and its subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve funds reach 50% of its registered capital. In addition, our wholly foreign-owned subsidiary in China may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at its discretion. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by the SAFE. We currently plan to reinvest all earnings from our wholly-owned subsidiary in China to its business development and do not plan to request dividend distributions from it.

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Off-Balance Sheet Arrangements

As of June 30, 2026, we did not enter any off-balance sheet arrangements such as any financial guarantees or other commitments to guarantee the payment obligations of any third-parties, which in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operation. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as equity, or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

5.C. Research and Development, Intellectual Property

Research and Development

We have focused, and will continue to focus, on investing in our research and development function. Our research and development expenses were approximately nil, nil and RMB4.6 million (US$0.7 million) for the years ended June 30, 2024, 2025 and 2026, respectively.

We believe that our commitment to research and development is an important contributing factor to our success. As of June 30, 2026, we had a team of 22 research and development personnel. We provide our research and development personnel with various continuing training programs and opportunities. To grow and deepen our business, we will continue to compete for research and development talent and invest in research and development in order to provide better services to our customers. We rely on a combination of patents, copyrights and trademarks to protect our intellectual property rights. For details of our intellectual property portfolio, please see “Item 4.B. Business Overview — Technology Research and Product Innovation.”

Intellectual Property

See “Item 4. Information on our group — 4.B. Business Overview — Intellectual Property”.

5.D. Trend Information

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the fiscal year ended June 30, 2026 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that are reasonably likely to cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

5.E. Critical Accounting Estimates

We prepare financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect the reported amounts of our assets and liabilities and the disclosure of our contingent assets and liabilities at the end of each fiscal period, as well as the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and assumptions that we believe to be reasonable. This forms our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

The selection of critical accounting policies, the judgments and other uncertainties affecting the application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. The following descriptions of critical accounting estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this annual report. For further information, see Note 2 to our consolidated financial statements in this annual report.

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Goodwill Impairment Test

Goodwill represents the excess of costs over fair value of net assets of businesses acquired in a business combination. Goodwill is not amortized, but is tested for impairment at the reporting unit level at least on an annual basis at the balance sheet date or more frequently if certain indicators arise. The impairment test is performed as of year-end or if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount by comparing the fair value of a reporting unit with its carrying value.

The impairment review is highly judgmental and involves the use of significant estimates and assumptions. These estimates and assumptions have a significant impact on the amount of any impairment charge recorded. Estimates of fair value are primarily determined by using discounted cash flows. Discounted cash flows method is dependent upon assumptions of future sales trends, market conditions and cash flows of each reporting unit over several years. Actual cash flows in the future may differ significantly from those previously forecasted. Other significant assumptions include growth rates, operating margins and the discount rates applicable to future cash flows. Based on this quantitative impairment test, the fair value of the three reporting units exceeded their respective carrying amounts. Accordingly, the Company did not recognize any goodwill impairment loss for the year ended June 30, 2026.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A. Directors and Senior Management.

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

Jingkai Li Mr. Li has served as our director and chairman of the board since November 28, 2025. He was a shareholder of Qingdao Maisi Intelligent Technology Co., Ltd. prior to its reorganization under Real Prospect Group in September 2025. Mr. Li has over a decade of experience in the environmental protection and resource-recycling industries. Since 2010, he has served as chairman and chief executive officer of Guangxi Qinyuan Environmental Protection Co., Ltd., where he oversaw operations in industrial solid waste treatment, renewable resource utilization, and environmental engineering services. Mr. Li has also served as executive president of the Beiliu Slag Resource Comprehensive Utilization Industry Association since 2022. In addition, he has participated in industrial investment activities involving new energy, smart technology, and other high-tech projects. Mr. Li holds an executive master’s degree in business administration from Macau University of Science and Technology.

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Min Zhou Ms. Zhou has served as our chief executive officer and Vice Chairperson of the Board since January, 2025. Prior to this, she was our Independent Director from September 2024 to January 2025. From April 2024 to December 2024, Ms. Min Zhou has been an executive director of Tian Ruixiang Holdings Ltd (Nasdaq “TIRX”). Before that, Ms. Zhou worked as an investment manager at Huobi Capital from September 2021 to September 2022, where she’s developing investment plans and agreements for participating in the negotiation and trading of investment projects. She has rich experience in supervising the operation and development of investment projects. From September 2016 to June 2021, Ms. Zhou was the business development manager of Delta Insurance Brokerage Co., Ltd. Ms. Zhou has extensive experience in ensuring compliance with securities laws and regulations, protecting shareholders’ interests, as well as participating in the formulation of company strategy and supervising management implementation to promote the company’s long-term development and enhance shareholder value. Ms. Zhou graduated from Hunan University with a bachelor’s degree in mechanical automation.

Guotao Liu Mr. Liu has served as our co-chief executive officer since August 12, 2025. Since January 2024 he has served as Chairman of Qingdao Youdian New Energy Technology Co., Ltd., which we acquired in October 2025 as part of the Real Prospect Group acquisition. He was a shareholder and senior officer of Qingdao Maisi Intelligent Technology Co., Ltd. prior to its reorganization under Real Prospect Group in September 2025. He concurrently serves as Chairman of Shandong Meinengda Automotive Service Co., Ltd. since January 2014 and Qingdao Huiju Lai Xi Intelligent Technology Co., Ltd. since January 2021. Previously, he served as Chairman of Shandong Bohai Rim Advertising Media Co., Ltd. from August 2006 to October 2017. With over 15 years of corporate management experience, he specializes in automotive services, smart technology, and new energy sectors. He received his Master’s degree in Transportation Management in 1996 and Bachelor’s degree in Automotive Design in 1994 from Military Transportation College.

Jiaxing Shi Ms. Shi has served as our chief financial officer since December 31, 2025. Ms. Shi has over a decade of experience in finance investment and operation. Ms. Shi served as the investment operations manager at YD Network Technology Co Ltd. from March 2024 to November 2025, overseeing its investment strategy and financial due diligence to optimize long-term returns. Prior to that, she served as senior audit professional at UHY LLP and Marcum LLP from 2022 to 2024. Prior to that, she held a senior manager position in financial reporting and investor relations at Aurora Mobile Ltd. (Nasdaq: JG) since 2018. She received her MBA degree in financial management from Goldey-Beacom College in 2018 and her master degree in accounting from St. John’s University in 2015. She received her bachelor’s degree from Inner Mongolia University of Finance and Economics in 2013.

Zhifeng Li Dr. Li has served as our chief technology officer since August 2026. Dr. Li possesses extensive expertise in artificial intelligence, frontier scientific research, industrial technology applications and technology ecosystem development, and has significant experience in technology leadership and innovation. Dr. Li currently serves as the chairman of the board of directors of Huazhi Future (Chongqing) Technology Co., Ltd., our consolidated variable interest entity, since April 2021. He serves as Deputy Director of the Computing Power and Storage Research Center of the Investment Association of China and Co-Chairman of the Chongqing-Hong Kong Science and Technology Innovation Enterprise Development Alliance. He received a Ph.D. in Physics from the University of Vienna, and a master’s degree in Theoretical Physics and a bachelor’s degree in Applied Physics from Chongqing University.

Baoxue Xu Mr. Xu has served as our co-chief technology officer since October 13, 2026. Mr. Xu brings more than two decades of experience in embedded systems, vehicle electronics, industrial Internet of Things, battery management, energy storage, and intelligent control. He has held General Manager positions at Qingdao Guibao Electronic Technology Co., Ltd. since January 2016 and at Qingdao Maisi Intelligent Technology Co., Ltd. since January 2026, where he has led the development of vehicle connectivity systems, smart battery management systems and energy management systems platforms, distributed energy storage systems, industrial power solutions, and intelligent mobile charging equipment. Mr. Xu received a master’s degree of Engineering in Power System and Automation from Shandong University of Technology (now Shandong University) and a bachelor’s degree of Science in Computer Science and Technology from Qingdao Institute of Architectural Engineering (now Shandong University of Science and Technology).

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Yingying Li Ms. Li has served as our independent director since September 2024. She has served as the OEM Cotton Product Director for Qinshu (Shanghai) Trading Co., Ltd since 2022. From July 2021 to October 2022, Ms. Li served as the General Manager of the Product Planning Department at Shanghai Metersbonwe Fashion Co., Ltd., where she had extensive experience in leading the planning team to collect, sort, analyze fashion trends, and develop product strategies based on brand positioning and annual business goals. She also had experience in preparing planning proposals, themes, and quarterly development timetables. From October 2017 to June 2021, Ms. Li served as the Manager of the Product Planning Department at E-Land Group. She had extensive experience in leading the planning, design, and production teams in conducting product sketch review, sample review at selection meetings, and pricing work to ensure product completion. Ms. Li graduated from Donghua University with a Master’s degree in Textile Engineering.

Kwan Pui Chui Mr. Chui has served as our independent director since January, 2025. Since February 12, 2026, Mr. Chui has served as Chief Compliance and Operations Officer of AIOS Tech Inc. (NASDAQ: AIOS). From 2024 to 2025, Mr. Chui practiced as a lawyer at Fujian Shuangding Law Office, advising corporate clients on legal matters. Prior to that, from 2019 to 2024, he worked as a Registered Foreign Lawyer and Legal Assistant in the Corporate Finance Practice Group at Deacons, where he handled corporate finance matters and IPO projects. Mr. Chui received his Bachelor of Laws degree from Xiamen University in 2018 and his Master of Laws degree from City University of Hong Kong in 2019.

Pei Yu Ms. Pei has served as our independent director since April 2025. Ms. Pei Yu is currently serving as Finance Manager at Shenzhen Clarion Capital Venture Capital Co., Ltd. since July 2024. During her tenure, she has demonstrated exceptional proficiency in financial operations and strategic governance. In this role, she spearheads fiscal planning, investment analysis, and capital structure optimization. Prior to her current position, Ms. Yu served as a Senior Audit Professional at PricewaterhouseCoopers LLP from 2021 to 2024, where she led cross-functional teams in delivering critical services including financial statement audits for multinational corporations and IPO readiness assessments and capital markets advisory. She received a Master of Accounting from The Australian National University in 2019 and a Bachelor of financial Management in the West of Anhui University in 2017.

6.B. Compensation

Our board of directors has not adopted or established a formal policy or procedure for determining the amount of compensation paid to our executive officers. Our board of directors determines the compensation to be paid to our executive officers based on our financial and operating performance and prospects, and contributions made by the officers to our success. Each of our named executive officers are measured by a series of performance criteria by the board of directors on a yearly basis. Such criteria are set forth based on certain objective parameters such as job characteristics, required professionalism, management skills, interpersonal skills, related experience, personal performance and overall corporate performance. The board of directors will make an independent evaluation of appropriate compensation to key employees, with input from management. The board of directors has oversight of executive compensation plans, policies and programs.

For the fiscal year ended June 30, 2026, we paid an aggregate of approximately RMB1.8 million (US$0.3 million) in cash to our executive officers and an aggregate of approximately RMB600,000 (US$88,000) in cash to our independent directors. We have not set aside or accrued any amounts to provide pension, retirement or other similar benefits to our executive officers and directors. Our PRC subsidiaries and the Huazhi VIE and its subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance, maternity insurance, on-the-job injury insurance, and housing fund plans through a PRC government-mandated defined contribution plan. 

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Share Incentives

2018 Share Incentive Plan

Under the 2018 Share Incentive Plan, or the 2018 Plan, the maximum aggregate number of Ordinary Shares available for issuance will be 16,806,720 Ordinary Shares (equivalent to approximately 186,742 Class A Ordinary Shares after the Share Consolidation) (“2018 Share Incentive Plan”). The 2018 Share Incentive Plan will expire upon the tenth anniversary of the effective date.

On February 20, 2024, our board of directors approved the grant of share options to certain directors, executive officers, employees and top agents of the Company and AIFU to purchase 6,011,608 ADSs, previously representing 9,017,413 Ordinary Shares of the Company (equivalent to 100,194 Class A Ordinary Shares after the share consolidation), as a supplement of salary and benefit packages pursuant to the 2018 Share Incentive Plan (the “2024 Option 1”). Pursuant to the share incentive program, the exercise price of these options is US$0.001 per ADS, equating to approximately US$0.0007 per ordinary share, or US$0.063 per post-split Class A ordinary share. The options are scheduled to vest over a one-year period starting from March 1, 2025, subject to the achievement of certain key performance indicators by the option holders and their continued service with the Company. As the required performance indicators related to 2024 Option 1 were not met during the year, the 2024 Option 1 were fully forfeited.

2024 Share Incentive Plan

On February 20, 2024, our board of directors adopted a share incentive plan under which we have reserved 111,165,518 Ordinary Shares (equivalent to approximately 1,235,173 Class A Ordinary Shares after the Share Consolidation) for issuance, which was approximately 30% of our outstanding Ordinary Shares as of December 31, 2023 (“2024 Share Incentive Plan”). The 2024 Share Incentive Plan will expire upon the tenth anniversary of the effective date.

On November 19, 2024, our board of directors approved the grant of 3,000,000 restricted share units (“RSUs”) to our then chairwoman Ms. Hong Suong Nguyen, who resigned on November 28, 2025. Each RSU represented a right to receive one ADS with every two ADS representing three Class A Ordinary Shares. Giving effect to our subsequent ADR facility termination and 1-for-90 Share Consolidation effected on June 20, 2025, the grant was adjusted to 50,000 RSUs, with each RSU now representing the right to receive one post-consolidation Class A ordinary share. The RSUs were originally scheduled to vest over three years from the grant date, subject to Ms. Nguyen’s continued service. In the fiscal year ended June 30, 2026, 16,667 Class A ordinary shares vested to Ms. Nguyen on November 18, 2025. Vesting of the remaining RSUs (33,333 Class A ordinary shares in aggregate) was accelerated upon her resignation, in recognition of her contributions to the Company during her tenure. As of June 30, 2026, all 50,000 of these adjusted RSUs were fully vested.

During the first half of 2025, our board of directors granted a total of 40,002,240 RSUs to certain management and employees as severance compensation, with each RSU representing the right to receive one ADS. These RSUs were vested immediately upon grant. Following the termination of our ADR facility and Share Consolidation, these vested RSUs were adjusted to 666,704 RSUs, with each RSU representing the right to receive one post-consolidation Class A ordinary share.

On August 4, 2026, in connection with his appointment as our chief technology officer, our board of directors granted 12,500 RSUs under the 2024 Share Incentive Plan to Dr. Zhifeng Li, each representing the right to receive one Class A ordinary share, vesting in five equal annual installments of 2,500 RSUs, subject to his continued service. Dr. Li does not receive any cash salary for his services.

On October 13, 2026, in connection with his appointment as our co-chief technology officer, our board of directors granted 12,500 RSUs under the 2024 Share Incentive Plan to Mr. Baoxue Xu, each representing the right to receive one Class A ordinary share, vesting in five equal annual installments of 2,500 RSUs, subject to his continued service. Mr. Xu does not receive any cash salary for his services.

The following paragraphs describe the principal terms of the 2018 Share Incentive Plan and 2024 Share Incentive Plan:

Type of Awards. The plans permit the awards of options, restricted shares, restricted share units and other share awards that relate to our Ordinary Shares.

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Plan Administration. Our board of directors or a committee of one or more members of the board of directors will administer the plans, provided that grants to directors and executive officers of our company will be made by the full board. The committee or the board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each grant. We refer to our board of directors or a designated committee plan administrator.

Award Agreement. Awards granted under the plans are evidenced by an award agreement that sets forth the terms, conditions and limitations for each award, which may include the term of the award, vesting schedule, the provisions applicable in the event that the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.

Eligibility. We may grant awards to our employees, consultants and directors, as determined and approved by the plan administrators.

Exercise of Options. Subject to applicable laws, the plan administrator determines the exercise price for each award, which is stated in the relevant award agreement. Options that are vested and exercisable will terminate if they are not exercised prior to the time as the plan administrator determines at the time of grant. However, the maximum exercisable term is ten years from the date of grant.

Transfer Restrictions. Awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the plans or the relevant award agreement or otherwise determined by the plan administrator, such as transfers by will or the laws of descent and distribution.

Termination and Amendment of the Plans. Our board of directors has the authority to terminate, amend, suspend or modify the plans in accordance with our articles of association and subject to applicable laws. However, without the prior written consent of the participant, no such action may adversely affect in any material way any award previously granted pursuant to the plans.  

6.C. Board Practices

Board Committees

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

Audit Committee. Our audit committee consists of three independent directors, Ms. Pei Yu, Mr. Kwan Pui Chui and Ms. Yingying Li, and is chaired by Ms. Pei Yu. We have determined that these three independent directors satisfy the independence requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market and the independence standards under Rule 10A-3 under the Securities Exchange Act of 1934, as amended. We have determined that Ms. Pei Yu qualifies as an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our group. The audit committee is responsible for, among other things:

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Compensation Committee. Our compensation committee consists of Ms. Yingying Li, Ms. Pei Yu and Mr. Kwan Pui Chui, and is chaired by Ms. Yingying Li. We have determined that these three independent directors satisfy the independence requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market and the independence standards under Rule 10A-3 under the Securities Exchange Act of 1934, as amended. Our compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers, including all forms of compensation to be provided to our directors and executive officers. Our chief executive officers may not be present at any committee meeting during which their compensation is deliberated. The compensation committee is responsible for, among other things:

Corporate Governance and Nominating Committee. Our corporate governance and nominating committee consists of Mr. Kwan Pui Chui, Ms. Yingying Li and Ms. Pei Yu, and is chaired by Mr. Kwan Pui Chui. We have determined that these three independent directors satisfy the independence requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market and the independence standards under Rule 10A-3 under the Securities Exchange Act of 1934, as amended. The corporate governance and nominating committee assists our board of directors in identifying individuals qualified to become our directors and in determining the composition of the board and its committees. The corporate governance and nominating committee is responsible for, among other things:

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Duties of Directors

Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty to act honestly, and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also owe to our company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to our company, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time, and the rights vested thereunder in the holders of the shares. Our directors owe their fiduciary duties to our company and not to our company’s individual shareholders, and it is our company which has the right to seek damages if a duty owed by our directors is breached. In limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached.

Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.

The functions and powers of our board of directors include, among others:

Terms of Directors and Officers

Our officers are elected by and serve at the discretion of the board of directors. Our directors are not subject to a term of office and hold office until such time as they are removed from office by ordinary resolution of the shareholders. The office of a director will be vacated automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his office by notice in writing to our company; (iv) is prohibited by any applicable law from being a director; or (iii) without special leave of absence from the Board, is absent from meetings of the Board for three consecutive meetings and the Board resolves that his office be vacated.

6.D. Employees

The following table sets forth the breakdown of our employees by function as of June 30, 2026.

In accordance with PRC regulations, we participate in various employee social security plans that are organized by municipal and provincial governments, including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing insurance. We are required under PRC law to contribute to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by local governments from time to time. We believe that we maintain good working relationships with our employees, and we have not experienced any major labor disputes.

6.E. Share Ownership

See Item 7 below.

100

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A. Major Shareholders

The following tables set forth certain information with respect to the beneficial ownership of our Ordinary Shares as of the date of this annual report:

As of the date of this annual report, we have 442,175,578 Ordinary Shares issued and outstanding, comprising of 435,508,910 Class A Ordinary Shares and 6,666,668 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 of the date of this annual report, 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.