J and Friends Holdings Limited

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

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

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

For the fiscal year ended December 31, 2025

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

☐	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: 001-38712

J and Friends Holdings Limited

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

Room 02/a, 7/F, A T Tower, 180 Electric Road

North Point, Hong Kong

(Address of principal executive offices)

Xin Yang, Chief Financial Officer

Telephone: +852 5649 4870

Email: ir@j-friends.com

Room 02/a, 7/F, A T Tower, 180 Electric Road

North Point, Hong Kong

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

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
American depositary shares (one American depositary share representing 35 Class A ordinary shares, par value US$0.000125 per share)	JF	The Nasdaq Stock Market LLC (The Nasdaq Global Market)
Class A ordinary shares, par value US$0.000125 per share*		The Nasdaq Stock Market LLC (The Nasdaq Global Market)

*	Not for trading, but only in connection with the listing of our American depositary shares on The Nasdaq Global Market, each American depositary share representing thirty-five Class A ordinary shares.

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

None

(Title of Class)

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

None

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(Title of Class)

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

As of December 31, 2025, there were 599,465,862 Class A ordinary shares and 42,439,520 Class B ordinary shares, par value US$0.000125 per share, issued and outstanding.

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

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 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 definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☒

Emerging growth company ☐

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

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

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

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

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

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


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

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

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

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

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

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TABLE OF CONTENTS


		Page
INTRODUCTION		1
FORWARD-LOOKING INFORMATION		3
PART I		4
Item 1.	Identity of Directors, Senior Management and Advisers	4
Item 2.	Offer Statistics and Expected Timetable	4
Item 3.	Key Information	4
Item 4.	Information on the Company	35
Item 4A.	Unresolved Staff Comments	63
Item 5.	Operating and Financial Review and Prospects	63
Item 6.	Directors, Senior Management and Employees	74
Item 7.	Major Shareholders and Related Party Transactions	81
Item 8.	Financial Information	82
Item 9.	The Offer and Listing	82
Item 10.	Additional Information	83
Item 11.	Quantitative and Qualitative Disclosures about Market Risk	99
Item 12.	Description of Securities Other Than Equity Securities	99
PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies	101
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	101
Item 15.	Controls and Procedures	101
Item 16A.	Audit Committee Financial Expert	102
Item 16B.	Code of Ethics	102
Item 16C.	Principal Accountant Fees and Services	103
Item 16D.	Exemptions from the Listing Standards for Audit Committees	103
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	103
Item 16F.	Change in Registrant’s Certifying Accountant	103
Item 16G.	Corporate Governance	103
Item 16H.	Mine Safety Disclosure	104
Item 16I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspection	104
Item 16J.	Insider Trading Policies	104
Item 16K.	Cybersecurity	104
ParT III		104
Item 17.	Financial Statements	104
Item 18.	Financial Statements	104
Item 19.	Exhibits	105
SIGNATURES		107

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INTRODUCTION

Unless otherwise indicated or the context otherwise requires, all information in this annual report reflects the following:

●

“ADSs” refers to our American depositary shares, each of which represents 35 Class A ordinary shares;

●

“A$,” “Australian dollars,” or “AUD” refers to the legal currency of Australia;

●

“China” refers to the People’s Republic of China, including Hong Kong, Macau and Taiwan; and “mainland China” or “PRC” refers to the People’s Republic of China, excluding Hong Kong, Macau and Taiwan;

●

“Class A ordinary shares” refers to our Class A ordinary shares, par value US$0.000125 per share;

●

“Class B ordinary shares” refers to our Class B ordinary shares, par value US$0.000125 per share;

●

“Jimu Group” refers to our predecessor and its subsidiaries and variable interest entities that operate its peer-to-peer lending business;

●

“MSME” refers to micro, small and medium-sized enterprise;

●

“our predecessor” refers to Jimu Holdings Limited;

●

“other subsidiaries” means subsidiaries of the Parent other than the WFOEs;

●

“Parent” refers to J and Friends Holdings Limited, formally known as Pintec Technology Holdings Limited, our ultimate Cayman Islands holding company and a Nasdaq-listed company;

●

“registered users” refers to individuals who have registered on our system with their name, government-issued identification number and mobile phone number;

●

“RMB” or “Renminbi” refers to the legal currency of mainland China;

●

“Romantic Park” refers to Romantic Park Holdings Limited;

●

“shares” or “ordinary shares” refers to our Class A ordinary shares and Class B ordinary shares;

●

“SME” refers to small and medium enterprise;

●

“U.S.” refers to the United States;

●

“U.S. GAAP” refers to generally accepted accounting principles in the United States;

●

“US$,” “U.S. dollars,” “$,” or “dollars” refers to the legal currency of the United States;

●

“variable interest entities” or “VIEs” refers to Anquying (Tianjin) Technology Co., Ltd., Pintec Jinke (Beijing) Technology Information Co., Ltd., or Beijing Jinke, Beijing Hongdian Fund Distributor Co., Ltd. and Beijing Xinshun Dingye Technology Co., Ltd., which are PRC companies in which the Parent did not have equity interests but whose financial results had been consolidated into the consolidated financial statements of the Parent in accordance with the U.S. GAAP based on a series of contractual arrangements up to and including October 2025;

●

“we,” “us,” “our company,” “our,” or “JF Cayman” refers to J and Friends Holdings Limited, formerly known as Pintec Technology Holdings Limited, its subsidiaries, and, in the context of describing our operations and consolidated financial information, its variable interest entities in mainland China;

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●

“wholly foreign-owned enterprises” or “WFOEs” refers to our wholly foreign-invested enterprises in mainland China, including Aixin Times (Chengdu) Enterprise Management Co., Ltd. and Aixin Times (Beijing) Enterprise Management Co., Ltd., in which we have not held any equity interests following our disposal of equity interests Romantic Park in November 2025; and

●

“ZIISMART” refers to ZIISMART Pty Ltd (Australian Company Number 662 551 564), which is a 51% owned subsidiary of ZIITECH.

●

“ZIITECH” refers to ZIITECH Pty Ltd (Australian Company Number 635 021 779), our subsidiary in which we hold 715,521 ordinary shares, representing 25.0% of the ordinary shares on issue (and approximately 23.77% of the total share capital, which includes both ordinary shares as well as Class C shares issued under ZIITECH’s employee incentive scheme which have limited voting rights) as of December 31, 2025. Since September 3, 2025, we have consolidated ZIITECH’s financial statements pursuant to a shareholders’ agreement dated September 3, 2025. See “Item 4. Information on the Company—C. Organizational Structure” for more details.

Effective October 1, 2025, we elected to change our reporting currency from Renminbi to U.S. dollars. The change in reporting currency is to better align the reporting currency with the underlying operations. Prior to October 1, 2025, we reported our consolidated balance sheets and consolidated statements of operations and comprehensive loss and shareholder’s equity and cash flows in Renminbi. The related financial statements and selected financial data prior to October 1, 2025 have been recast to reflect U.S. dollars as the reporting currency for comparison to the financial results for the year ended December 31, 2025.

The functional currency of our Company and subsidiaries incorporated in the British Virgin Islands and in Hong Kong is U.S. dollars; the functional currency of ZIITECH and ZIISMART is Australian dollars; the functional currency of the Singapore entity is Singapore dollars; and the functional currency of the PRC entities, including those disposed on December 31, 2025, is Renminbi. In the consolidated financial statements, the financial information of our entities located in the PRC, Singapore and Australia has been translated into U.S. dollars. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the reporting period.

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FORWARD-LOOKING INFORMATION

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

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

●

our goals and strategies;

●

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

●

expected changes in our revenues, costs or expenditures;

●

our expectations regarding demand for and market acceptance of our services and solutions;

●

our expectations regarding our relationships with funding sources and customers;

●

competition in our industries; and

●

developments in government policies, laws and regulations relating to our industries.

We would like to caution you not to place undue reliance on these forward-looking statements. You should read these statements in conjunction with the risks disclosed in “Item 3D. Key Information—Risk Factors.” Those risks are not exhaustive. We operate in a rapidly evolving environment. New risks emerge from time to time and it is impossible for our management to predict all risks, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statement. We do not undertake any obligation to update or revise the forward-looking statements except as required under applicable law.

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PART I

Item 1.Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2.Offer Statistics and Expected Timetable

Not applicable.

Item 3.Key Information

Implications of Being a Company with the Holding Company Structure

The Historical VIE Structures

J and Friends Holdings Limited, the Parent, is the ultimate Cayman Islands holding company with no material operations of its own. Historically, the Parent carried out its business in mainland China through the WFOEs and their respective contractual arrangements, commonly known as the VIE structures, with the VIEs based in mainland China and their respective shareholders. In November 2025, the Parent entered into a Share Transfer Agreement to dispose of its equity interests in Romantic Park, a Cayman Islands entity indirectly holding the entire equity interest in the WFOEs, pursuant to which the Parent has no longer been considered as the ultimate beneficiary of any VIE and does not hold any VIE following the divestment.

The former VIE structures were through a series of agreements, including those by and among Aixin Times (Chengdu) Enterprise Management Co., Ltd., Anquying (Tianjin) Technology Co., Ltd. and the shareholders of Anquying (Tianjin) Technology Co., Ltd., those by and among Aixin Times (Beijing) Enterprise Management Co., Ltd., Beijing Xinshun Dingye Technology Co., Ltd. and the shareholders of Beijing Xinshun Dingye Technology Co., Ltd., those by and among Aixin Times (Beijing) Enterprise Management Co., Ltd., Pintec Jinke (Beijing) Technology Information Co., Ltd. and the shareholders of Pintec Jinke (Beijing) Technology Information Co., Ltd., and those by and among Aixin Times (Beijing) Enterprise Management Co., Ltd., Beijing Hongdian Fund Distributor Co., Ltd. (“Beijing Hongdian”) and the shareholders of Beijing Hongdian. The series of agreements generally comprises executive business cooperation agreements (or exclusive technology consulting and service agreement), equity pledge agreements, exclusive option agreements, shareholders’ voting rights proxy agreements and spousal consent letters. Under the contractual arrangements, we (i) were considered as the primary beneficiary of the VIEs for accounting purposes and consolidate the financial results of the VIEs, (ii) received substantially all of the economic benefits of the VIEs, (iii) had the pledge right over the equity interests in the VIEs as the pledgee, and (iv) had an exclusive option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by PRC law, until we disposed of our equity interests in the WFOEs in November 2025. For details, see “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with Our Former Variable Interest Entities.”

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Financial Information Related to the VIE Structures

The following tables provide the condensed consolidating schedules depicting the financial position for the parent, the consolidated VIEs, the WFOEs and an aggregation of other entities, eliminating intercompany amounts and consolidated totals as of December 31, 2024. As of December 31, 2025, the financial position has no financial information of VIE structure upon divesture of VIEs in November 2025.


	As of December 31, 2024
				Other	VIE-	Elimination	Consolidated
	Parent	VIEs	WFOEs	Subsidiaries	Elimination	Adjustments	Total

	(US$ in thousands)
Condensed Consolidating Schedule of Financial Position
Cash and cash equivalents	5	—	—	—	—	—	5
Assets of discontinued operations	8,531	138,690	2,092	72,616	(126,165)	(81,600)	14,164
Including:
Cash and cash equivalents	—	2,263	1,374	50	—	—	3,687
Restricted cash-non current	—	685	—	—	—	—	685
Financing receivables, net	—	8,782	—	—	—	—	8,782
Accounts receivables, net	—	2,096	—	289	—	(1,914)	471
Amounts due from other subsidiaries	180,747	12,377	—	5,076	(12,377)	(185,823)	—
Amounts due from WFOEs	—	113,772	—	1,635	(113,772)	(1,635)	—
Amounts due from VIEs	—	—	711	110	—	(821)	—
Amounts due from Parent	—	16	—	63,690	(16)	(63,690)	—
Investment deficit in subsidiaries of the Company	(172,216)	—	—	(105,175)	—	277,391	—
Other assets of discontinued operations	—	(1,301)	7	106,941	—	(105,108)	539
Other assets	2	—	—	—	—	—	2
Total Assets	8,538	138,690	2,092	72,616	(126,165)	(81,600)	14,171
Liabilities of discontinued operations	64,030	283,958	3,653	73,262	(235,686)	(121,437)	67,780
Including:
Amounts due to other subsidiaries	64,013	65,318	302	2,732	(65,318)	(66,724)	323
Amounts due to WFOEs	—	170,368	—	—	(170,368)	—	—
Amounts due to VIEs	17	—	3,273	1,776	—	(5,066)	—
Amounts due to Parent	—	—	—	68,460	—	(68,460)	—
Amounts due to related parties	—	41,496	—	—	—	—	41,496
Other liabilities of discontinued operations	—	6,776	78	294	—	18,814	25,962
Other liabilities	522	—	—	—	—	—	522
Total Liabilities	64,552	283,958	3,653	73,262	(235,686)	(121,437)	68,302
Total JF Cayman’s (Deficit)/Equity	(56,014)	(147,176)	(1,561)	(646)	109,521	39,837	(56,039)
Non-controlling interests	—	1,908	—	—	—	—	1,908

Total (Deficit)/Equity	(56,014)	(145,268)	(1,561)	(646)	109,521	39,837	(54,131)

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The following tables provide the condensed consolidating schedules depicting the results of operations for the parent, the consolidated VIEs, the WFOEs and an aggregation of other entities, eliminating intercompany amounts and consolidated totals for the years indicated.


		For the Year Ended December 31, 2023
								Other		VIE-		Elimination		Consolidated
		Parent		VIEs		WFOEs		Subsidiaries		Elimination		Adjustments		Total

		(US$ in thousands)
Condensed Consolidating Schedule of Results of Operations
Cost of revenue from continuing operations		46		—		—		—		—		—		46
Operating expenses from continuing operations		450		—		—		(150)		—		—		300
Income/(loss) from continuing operations		496		—		—		(150)		—		—		346
Other loss		(6,052)		—		—		—		—		—		(6,052)
Loss from continuing operations before income taxes		(5,556)		—		—		(150)		—		—		(5,706)
Income tax expenses from continuing operations		—		—		—		—		—		—		—
Net loss from continuing operations		(5,556)		—		—		(150)		—		—		(5,706)
Revenues from discontinued operations		—		6,800		347		1,921		(1,157)		(466)		7,445
including revenues related to service fees paid by other subsidiaries		—		1,157		—		—		(1,157)		—		—
including revenues related to service fees paid by WFOEs		—		—		—		—		—		—		—
including revenues related to service fees paid by VIEs		—		—		200		266		—		(466)		—
Cost of revenues from discontinued operations		(46)		(5,419)		(3)		(1,355)		266		1,117		(5,440)
including cost of revenues related to service fees paid to other subsidiaries		—		(266)		—		—		266		—		—
including cost of revenues related to service fees paid to WFOEs		—		—		—		—		—		—		—
including cost of revenues related to service fees paid to VIEs		—		—		—		(1,117)		—		1,117		—
Operating expenses from discontinued operations		—		(4,308)		(1,707)		(2,593)		201		168		(8,239)
including service fees paid to other subsidiaries		—		—		—		—		—		—		—
including service fees paid to WFOEs		—		(200)		—		—		201		—		1
including service fees paid to VIEs		—		—		—		(169)		—		168		(1)
Loss from discontinued operations		(46)		(2,927)		(1,363)		(2,027)		(690)		819		(6,234)
Other income/(loss)		—		75		(482)		(2,098)		—		1,077		(1,428)
Share of income/(loss) from VIEs		—		—		(1,212)		—		—		1,212		—
Share of loss from subsidiaries		(11,468)		—		(1,342)		(7,545)		—		20,355		—
Income/(loss) from discontinued operations before income taxes		(11,514)		(2,852)		(4,399)		(11,670)		(690)		23,463		(7,662)
Income tax benefit from discontinued operations		—		1,640		—		—		—		323		1,963
Net income/(loss) from discontinued operations		(11,514)		(1,212)		(4,399)		(11,670)		(690)		23,786		(5,699)
Net income/(loss)		(17,070)		(1,212)		(4,399)		(11,820)		(690)		23,786		(11,405)
Less: net loss attributable to non-controlling interests		—		—		—		(352)		—		—		(352)
Net income/(loss) attributable to JF Cayman’s shareholders		(17,070)		(1,212)		(4,399)		(11,468)		(690)		23,786		(11,053)

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		For the Year Ended December 31, 2024
					Other	VIE-	Elimination	Consolidated
		Parent	VIEs	WFOEs	Subsidiaries	Elimination	Adjustments	Total

		(US$ in thousands)
Condensed Consolidating Schedule of Results of Operations
Operating expenses from continuing operations		(294)	—	—	—	—	—	(294)
Loss from continuing operations		(294)	—	—	—	—	—	(294)
Other loss		(24)	—	—	—	—	—	(24)
Loss from continuing operations before income taxes		(318)	—	—	—	—	—	(318)
Income tax expense from continuing operations		—	—	—	—	—	—	—
Net loss from continuing operations		(318)	—	—	—	—	—	(318)
Revenues from discontinued operations		—	4,346	4	593	(59)	—	4,884
including revenues related to service fees paid by other subsidiaries		—	59	—	—	(59)	—	—
including revenues related to service fees paid by WFOEs		—	—	—	—	—	—	—
including revenues related to service fees paid by VIEs		—	—	—	—	—	—	—
Cost of revenues from discontinued operations		—	(1,451)	—	(392)	—	59	(1,784)
including cost of revenues related to service fees paid to other subsidiaries		—	—	—	—	—	—	—
including cost of revenues related to service fees paid to WFOEs		—	—	—	—	—	—	—
including cost of revenues related to service fees paid to VIEs		—	—	—	(59)	—	59	—
Operating expenses from discontinued operations		—	(3,309)	(1,065)	(391)	—	—	(4,765)
including service fees paid to other subsidiaries		—	—	—	—	—	—	—
including service fees paid to WFOEs		—	—	—	—	—	—	—
including service fees paid to VIEs		—	—	—	—	—	—	—
Loss from discontinued operations		—	(414)	(1,061)	(190)	(59)	59	(1,665)
Other income/(loss)		—	25	(1)	—	—	—	24
Share of loss from VIEs		—	—	(484)	—	—	484	—
Share of loss from subsidiaries		(1,830)	—	(326)	(1,546)	—	3,702	—
Loss from discontinued operations before income taxes		(1,830)	(389)	(1,872)	(1,736)	(59)	4,245	(1,641)
Income tax expense from discontinued operations		—	(95)	—	—	—	—	(95)
Net loss from discontinued operations		(1,830)	(484)	(1,872)	(1,736)	(59)	4,245	(1,736)
Net loss		(2,148)	(484)	(1,872)	(1,736)	(59)	4,245	(2,054)
Less: net income attributable to non—controlling interests		—	—	—	94	—	—	94
Net loss attributable to JF Cayman’s shareholders		(2,148)	(484)	(1,872)	(1,830)	(59)	4,245	(2,148)

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		For the Year Ended December 31, 2025
								Other		VIE-		Elimination		Consolidated
		Parent		VIEs		WFOEs		Subsidiaries		Elimination		Adjustments		Total

		(US$ in thousands)
Condensed Consolidating Schedule of Results of Operations
Revenues from continuing operations		—		—		—		1,598		—		—		1,598
Cost of revenue from continuing operations		—		—		—		(455)		—		—		(455)
Operating expenses from continuing operations		(275)		—		(51)		(2,157)		—		—		(2,483)
Loss from continuing operations		(275)		—		(51)		(1,014)		—		—		(1,340)
Other (loss)/income		(317)		—		—		850		—		—		533
Share of loss from subsidiaries		(164)		—		—		—		—		164		—
Loss from continuing operations before income taxes		(756)		—		(51)		(164)		—		164		(807)
Income tax benefit from continuing operations		—		—		—		65		—		—		65
Net loss from continuing operations		(756)		—		(51)		(99)		—		164		(742)
Revenues from discontinued operations				3,360		—		221		—				3,581
including revenues related to service fees paid by other subsidiaries		—		—		—		—		—		—		—
including revenues related to service fees paid by WFOEs		—		—		—		—		—		—		—
including revenues related to service fees paid by VIEs		—		—		—		—		—		—		—
Cost of revenues from discontinued operations		—		(1,155)		—		(260)		—		—		(1,415)
including cost of revenues related to service fees paid to other subsidiaries		—		—		—		—		—		—		—
including cost of revenues related to service fees paid to WFOEs		—		—		—		—		—		—		—
including cost of revenues related to service fees paid to VIEs		—		—		—		—		—		—		—
Operating expenses from discontinued operations		—		(2,034)		(897)		(286)		—		—		(3,217)
including service fees paid to other subsidiaries		—		—		—		—		—		—		—
including service fees paid to WFOEs		—		—		—		—		—		—		—
including service fees paid to VIEs		—		—		—		—		—		—		—
Loss from discontinued operations		—		171		(897)		(325)		—		—		(1,051)
Other (loss)/income		—		(32)		6		—		—		—		(26)
Share of income from VIEs		—		—		417		—		—		(417)		—
Share of loss from subsidiaries		(569)		—		(687)		(362)		—		1,618		—
(Loss)/income from discontinued operations before income taxes		(569)		139		(1,161)		(687)		—		1,201		(1,077)
Income tax benefit from discontinued operations		—		278		—		—		—		—		278
Net (loss)/income from discontinued operations		(569)		417		(1,161)		(687)		—		1,201		(799)
Net (loss)/income		(1,325)		417		(1,212)		(786)		—		1,365		(1,541)
Less: net loss attributable to non—controlling interests		—		—		—		(217)		—		—		(217)
Net (loss)/income attributable to JF Cayman’s shareholders		(1,325)		417		(1,212)		(569)		—		1,365		(1,324)

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The following tables provide the condensed consolidating schedules depicting the cash flows for the parent, the consolidated VIEs, the WFOEs and an aggregation of other entities, eliminating intercompany amounts and consolidated totals for the years presented.


	For the Year Ended December 31, 2023
				Other	VIE-	Elimination	Consolidated
	Parent	VIEs	WFOEs	Subsidiaries	Elimination	Adjustments	Total

	(US$ in thousands)
Condensed Consolidating Schedule of Cash Flows
Net cash provided by (used in) operating activities	(366)	(663)	209	5,846	4,145	(7,956)	1,215
Net cash provided by (used in) investing activities	(3,718)	5,085	—	—	—	3,614	4,981
Net cash provided by (used in) financing activities	3,920	—	(41)	(40,227)	—	32	(36,316)
Effect of exchange rate changes on cash and cash equivalents	—	(60)	(202)	(521)	(4,145)	4,310	(618)
Net increase (decrease) in cash and cash equivalents, and restricted cash	(164)	4,362	(34)	(34,902)	—	—	(30,738)
Cash and cash equivalents, and restricted cash at the beginning of year	193	1,715	39	35,200	—	—	37,147
Cash and cash equivalents, and restricted cash at the end of year	29	6,077	5	298	—	—	6,409


	For the Year Ended December 31, 2024
				Other	VIE-	Elimination	Consolidated
	Parent	VIEs	WFOEs	Subsidiaries	Elimination	Adjustments	Total

	(US$ in thousands)
Condensed Consolidating Schedule of Cash Flows
Net cash (used in) provided by operating activities	(263)	(332)	1,389	(243)	—	(2,623)	(2,072)
Net cash used in investing activities	(15)	(2,673)	—	—	—	2,677	(11)
Net cash provided by financing activities	254	—	—	—	—	—	254
Effect of exchange rate changes on cash and cash equivalents	—	(124)	(20)	(5)	—	(54)	(203)
Net increase (decrease) in cash and cash equivalents, and restricted cash	(24)	(3,129)	1,369	(248)	—	—	(2,032)
Cash and cash equivalents, and restricted cash at the beginning of year	29	6,077	5	298	—	—	6,409
Cash and cash equivalents, and restricted cash at the end of year	5	2,948	1,374	50	—	—	4,377


		For the Year Ended December 31, 2025
								Other		VIE-		Elimination		Consolidated
		Parent		VIEs		WFOEs		Subsidiaries		Elimination		Adjustments		Total

		(US$ in thousands)
Condensed Consolidating Schedule of Cash Flows
Net cash (used in) provided by operating activities		(1,679)		1,903		(902)		824		—		—		146
Net cash provided by (used in) investing activities		152		(4,870)		(479)		(75)		4,871		(4,871)		(5,272)
Net cash provided by financing activities		1,550		—		—		—		—		—		1,550
Effect of exchange rate changes on cash and cash equivalents		—		19		26		99		—		—		144
Net increase (decrease) in cash and cash equivalents, and restricted cash		23		(2,948)		(1,355)		848		—		—		(3,432)
Cash and cash equivalents, and restricted cash at the beginning of year		5		2,948		1,374		50		—		—		4,377
Cash and cash equivalents, and restricted cash at the end of year		28		—		19		898		—		—		945

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Cash Flows through Our Organization

Historically, under the contractual arrangements, our ability to pay dividends to the shareholders and to service any debt we incurred, highly depended upon dividends paid by the WFOEs to us and service fees paid by the VIEs to the WFOEs, despite that we may obtain financing at the holding company level through other methods. For instance, if any of the WFOEs or the VIEs incur debt on their own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends to us and our shareholders, as well as the ability to settle amounts owed under the contractual arrangements. In 2023, 2024 and 2025, the total amount of cash paid by VIEs to WFOEs was US$0.5 million, US$3.1 million and US$0.4 million, respectively, including service fees that the VIEs paid to the WFOEs under the contractual arrangements of US$0.2 million, nil and nil.

After our acquisition of equity interests in ZIITECH in September 2025 and disposal of equity interests in Romantic Park in November 2025, our ability to pay dividends to the shareholders and to service any debt we may incur, highly depends upon dividends paid by our subsidiaries outside mainland China. Historically, we did not pay any dividends or make any distributions to shareholders, including any U.S. investors, nor do we have any present plan to pay any cash dividends in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividend Policy” for details.

For the years ended December 31, 2023, 2024 and 2025, the cash flows that have occurred between the Parent, the WFOEs, the VIEs and subsidiaries are summarized as the following:


	For the Year Ended December 31,
	2023	2024	2025⁽¹⁾
	US$	US$	US$

	(in thousands)
Cash received by parent company from equity owned subsidiaries	3,981	—	591
Cash paid by VIEs to equity owned subsidiaries	263	193	146
Cash received by VIEs from equity owned subsidiaries	2,848	179	84
Cash paid by WFOEs to equity owned subsidiaries	1,885	145	253
Cash received by WFOEs from equity owned subsidiaries	—	—	—
Cash paid by VIEs to WFOEs	459	3,082	356
Cash received by VIEs from WFOEs	316	499	162

Note:

(1)	The VIE structure in mainland China was terminated in November 2025, in connection with our disposal of equity interests in Romantic Park.

Our Historical Operations and Applicable Regulatory Permissions in the PRC

Historically, we, through the WFOEs and the VIEs, conducted our operations in mainland China, which are governed by PRC laws and regulations. In November 2025, in connection with our disposal of equity interests in Romantic Park, all of the WFOEs and VIEs were divested. As of the date of this annual report, we had PRC subsidiaries PrimeStart (Beijing) Enterprise Management Co., Ltd., a PRC subsidiary wholly owned by Next Hop Hong Kong Limited, and Beijing YJZY Tech Co., Ltd., a PRC subsidiary wholly owned by ZIITECH and no longer have any revenue-generating operations in China.

Following the divestment of our mainland China business in 2025 and since we no longer have any revenue-generating operations in China, we believe that we are no longer subject to PRC laws, regulations or regulatory oversight in relation to the divested business, and we believe that the risk of being penalized for violations of such PRC laws, regulations or regulatory oversight is relatively low in relation to the above two subsidiaries in mainland China without any revenue. However, PRC authorities may exercise broad discretion in interpreting and enforcing PRC laws, and the scope of such laws may be applied extraterritorially or in ways that differ from our expectations. Accordingly, PRC regulators may take a different view and could seek to assert jurisdiction over us or subject us to PRC regulatory requirements. Any such assertion could result in regulatory inquiries, compliance obligations, increased costs, or other adverse consequences. For regulatory risks associated with our historical operations in mainland China, see “—D. Risk Factors—Risks Relating to Our Historical Operations in China.” See “Item 4. Information on the Company—B. Business Overview— Regulations— PRC” for a summary of PRC laws and regulations applicable to our historical operations in mainland China.

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The Holding Foreign Companies Accountable Act

Pursuant to the Holding Foreign Companies Accountable Act (the “HFCAA”), if the Securities and Exchange Commission (the “SEC”) determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the Public Company Accounting Oversight Board (“PCAOB”) for two consecutive years, the SEC will prohibit our ordinary shares or ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.

The PCAOB is required under the HFCAA to make its determination on an annual basis with regards to its ability to inspect and investigate completely accounting firms based in mainland China and Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC by then, we may be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and the possibility of being a Commission-Identified Issuer and risk of delisting could continue to adversely affect the trading price of our securities. For details, see “D. Risk Factors—Risks Relating to Our Business—If the PCAOB is unable to inspect our auditors as required under the Holdings Foreign Companies Accountable Act, the SEC will prohibit the trading of our ADSs. A trading prohibition may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections of our auditors deprives our investors of the benefits of such inspections.”

A.	[Reserved]

B.	Capitalization and Indebtedness

Not applicable.

C.	Reasons for the Offer and Use of Proceeds

Not applicable.

D.	Risk Factors

Summary Risk Factors

Our business is subject to numerous risks and uncertainties, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects. These risks are discussed more fully below and include, but are not limited to, risks related to:

Risks Relating to Our Business

●

We underwent a series of corporate restructuring in 2025. We are at an early stage of business transformation, and may not be able to effectively implement our future business strategies and investment, in which case our business and results of operations may be materially and adversely affected

●

Investments in and acquisitions of assets, technologies and businesses may fail and may result in equity dilution or significant diversion of management attention.

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●

Our technology systems may fail to operate as intended, and any interruption, defect or cybersecurity incident could harm our business and adversely affect our results of operations.

●

If the PCAOB is unable to inspect our auditors as required under the Holdings Foreign Companies Accountable Act, the SEC will prohibit the trading of our ADSs. A trading prohibition may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections of our auditors deprives our investors of the benefits of such inspections.

●

If we fail to comply with laws and contractual obligations related to data privacy and protection, our business, results of operations and financial condition could be materially and adversely affected.

●

If any wealth management financial product or service previously provided by us or the business practices of us or any of our financial partners for our historical financial solution business are deemed to violate any PRC laws or regulations, our business, financial condition and results of operations could be materially and adversely affected.

Risks Relating to Our Operations Across Multiple Jurisdictions

●

There is uncertainty regarding the identification of whether we are a non-PRC company. The Chinese government exercises discretion in interpreting and enforcing PRC laws, and therefore may exert oversight and supervision over the manner in which we must conduct our business activities and may intervene or influence our operations at any time in accordance with the applicable laws and regulations, which could result in a material change in our operations and the value of our ADSs.

●

There is uncertainty whether our subsequent securities offerings are subject to additional compliance procedures, due to the promulgation of the new filing-based administrative rules for overseas offering and listing by domestic companies in China.

●

We cannot assure you that our prior involvement with PRC entities disposed of in 2025 will not continue to adversely affect us. Our previous affiliations with such entities may give rise to residual risks that could materially and adversely affect our business, results of operations, financial condition, and reputation.

●

Limitations on credit enhancement may adversely affect our access to funding.

●

Our historical financial solution business may be deemed to operate a financing guarantee business by the PRC regulatory authorities.

●

Our historical financial solution business subject us to regulatory uncertainties relating to consumer finance in mainland China, which could harm our business, financial condition and results of operations.

●

Regulatory uncertainties relating to campus online lending may materially and adversely affect our business and results of operations

Risks Relating to Our ADSs

●

The trading price of our ADSs has declined significantly since listing, and our ADSs could be delisted from Nasdaq or trading could be suspended, which could result in substantial losses to investors.

●

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

●

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

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Risks Relating to Our Business

In 2025, we underwent a series of corporate restructuring. As of the date of this annual report, we have terminated our historical businesses in China. We no longer have revenue-generating operations in China. We have also exited our historical financial solution business in mainland China. As such, our reported historical financial results may not be indicative of our future performance. We have repositioned to become a technology company. We are transforming into a merchant digitization and commerce-enablement business, offering cloud-based point-of-sale and business management software. However, our new business strategy is currently at an early stage, and we cannot assure you that our business development in the technology sector will succeed at all.

We may also seek other new business strategies, new business opportunities or new business acquisitions or partnerships, expand into new vertical sectors or geographic markets we believe are attractive from time to time. Investment in such new business strategies is inherently risky, and may involve significant risks and uncertainties, including limitation of management’s resources, greater-than-expected liabilities and expenses, economic, political, legal and regulatory challenges associated with operating in new businesses, regions or countries, and inadequate return on capital. In addition, we cannot assure you that our current and planned personnel, systems, procedures and controls will be adequate to support our future operations, and we cannot assure you that we will be able to manage our growth or implement our future business strategies effectively, and failure to do so may materially and adversely affect our business and results of operations.

Investments in and acquisitions of assets, technologies and businesses may fail and may result in equity dilution or significant diversion of management attention.

As part of our long-term growth strategy, we may pursue acquisitions and strategic investments, including through limited partnership contributions, asset injections, or other financing or investment arrangements. In September 2025, we acquired a 25.0% ordinary shareholding in ZIITECH in exchange for the issuance of 83,726,789 Class A ordinary shares to the transferors, representing approximately 13.0% of our total outstanding ordinary shares as of December 31, 2025.

Any similar future investments may require us to issue a substantial number of additional ordinary shares, which would dilute the equity interests of our existing shareholders. Moreover, any future sales of our shares by significant shareholders—whether individually or collectively—could adversely affect the market price of our shares.

In addition, any future investments or acquisitions that require us to issue a substantial number of additional ordinary shares would dilute the equity interests of our existing shareholders. Moreover, any future sales of our shares by significant shareholders—whether individually or collectively—could adversely affect the market price of our shares. In addition, any future cash investments, capital injections, or financial support provided to our investment targets could materially reduce our available cash resources and negatively impact our working capital. If we choose to raise additional capital through the issuance of equity or equity linked securities, our existing shareholders may experience further dilution. If we incur debt financing, we may become subject to restrictive covenants that limit our ability to undertake certain actions, including incurring additional indebtedness, making capital expenditures, paying dividends, or engaging in other corporate activities.

Our business model is unproven.

We are transforming into a merchant digitalization and commerce-enablement business with limited operating history in its current form, involving new solutions and capabilities, monetization approaches, customer segments and competitive dynamics, and our ability to forecast demand, merchant adoption, retention, usage levels and unit economics is limited; if our key assumptions regarding product-market fit, customer acquisition costs, renewal and churn rates, expansion within existing merchants, and the scalability and profitability of our model prove incorrect, we may fail to achieve expected growth or margins, may be required to adjust our strategy or commercial terms, and may incur higher costs, any of which could materially and adversely affect our business, financial condition and results of operations.

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We may face a number of operational risks in our merchant digitization commerce-enablement business.

We are transforming into a platform business serving food & beverage and retail merchants with solutions that enable digitized in-store and omni-channel commerce. Our ability to execute this strategy and generate sustainable growth depends on merchant adoption, retention and expansion, and our results may be adversely affected by competitive dynamics, pricing pressure, longer or less predictable sales cycles, and the pace at which merchants migrate from incumbent or legacy solutions. In addition, our revenue and growth may be sensitive to merchant churn, the number of active merchant locations, and, to the extent we generate usage- or transaction-based fees, fluctuations in merchant activity levels and consumer demand.

Our business also relies on establishing and maintaining key commercial relationships with third parties that support merchant commerce enablement. These counterparties may change their strategic priorities, modify commercial terms, impose additional requirements or costs, delay or suspend cooperation, or terminate relationships. In addition, our arrangements with third parties may involve revenue-sharing or other economics that could reduce our margins, and we may have limited ability to negotiate or enforce favorable terms. If we are unable to establish and maintain such commercial relationships on commercially reasonable terms, our business, financial condition and results of operations could be materially and adversely affected.

If we are unable to develop and offer solutions that meet merchant needs and expectations, our business, financial condition and results of operations could be materially and adversely affected.

Our ability to grow our merchant digitization and commerce-enablement business depends on our ability to develop and offer satisfactory solutions that deliver measurable value to merchants and remain competitive in a rapidly evolving market. Merchant requirements vary by industry, size and jurisdiction, and are influenced by changing consumer behavior, competitive dynamics and regulatory and industry standards. If our solution features, functionality, ease of use, pricing or overall value proposition do not meet merchant expectations, or if we fail to effectively introduce new products or enhancements in a timely manner, merchants may choose competing solutions, delay adoption, reduce usage, or terminate their relationships with us.

In addition, our competitive position may be adversely affected by innovations introduced by existing and new competitors, including offerings that are priced aggressively. If we are unable to differentiate our offerings, or respond effectively to market changes, we may experience slower growth, increased churn, reduced expansion within existing merchants, and heightened pricing pressure. Any of these factors could materially and adversely affect our business, financial condition and results of operations.

If we are unable to attract new merchants and retain existing merchants, our business, financial condition and results of operations could be materially and adversely affected.

Our growth depends on our ability to acquire new merchants and maintain and expand relationships with existing merchants. The decision to adopt or switch operating systems may involve lengthy and unpredictable sales cycles, internal approvals, and operational considerations, and prospective merchants may be reluctant to change existing systems due to perceived switching costs, business disruption, or contractual commitments with current providers. If we are unable to effectively identify and convert suitable merchants, or if our sales and marketing efforts are unsuccessful or become more expensive, our customer acquisition costs may increase and our revenue growth may slow.

We may also experience merchant churn or reduced usage, which could adversely affect our recurring revenue base and operating results. Merchants may cancel, downgrade, reduce the number of active locations, or shift spending away from our offerings due to competitive offerings, pricing pressure, dissatisfaction with product performance or support, adverse economic conditions, or changes in their own operations. Because a portion of our revenues may be recurring or usage-based, reduced renewals, lower expansion rates, or decreased merchant activity levels could have a disproportionate effect on our revenues, margins and cash flows, and could materially and adversely affect our business, financial condition and results of operations.

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Our technology systems may fail to operate as intended, and any interruption, defect or cybersecurity incident could harm our business and adversely affect our results of operations.

Merchants rely on our platform to support core commercial activities, and our business depends on the availability, performance and integrity of our systems. Any outage, degradation, latency, software defect, processing error, failed upgrade or other interruption, whether due to internal systems issues, human error, capacity constraints, third-party infrastructure failures or other causes, could disrupt merchant operations, result in lost sales for merchants, increase support and remediation costs, lead to service credits or contractual claims, and harm our reputation, which could in turn reduce merchant retention and new customer acquisition.

We are also exposed to cybersecurity risks, including unauthorized access, ransomware, malware, phishing, denial-of-service attacks and other security incidents that could compromise our systems or sensitive merchant and consumer information. Any actual or perceived security breach could require significant remediation efforts, result in legal claims and regulatory investigations, and cause merchants to reduce or discontinue use of our services. In addition, our reliance on third-party service providers and integrations may increase the frequency or severity of these risks and limit our ability to prevent, detect or mitigate them.

If we are unable to provide effective implementation and ongoing customer support, our ability to acquire and retain merchants could be harmed, which could adversely affect our business and results of operations.

Our growth depends in part on our ability to onboard merchants efficiently and provide timely, high-quality support, including training, troubleshooting and ongoing assistance. If we fail to meet merchant expectations regarding responsiveness, issue resolution or service quality, merchants may delay deployments, reduce usage, decline to expand to additional locations, or terminate their relationship with us. Any deterioration in service quality could also harm our reputation and increase churn, which would negatively affect our recurring revenue base and operating results.

As we expand our merchant base, introduce new functionality and serve larger or multi-site merchants, the complexity and volume of support requests may increase. If we are unable to scale our support organization, processes and tools in a cost-effective manner, or if we experience difficulties hiring, training and retaining qualified personnel, our operating costs may increase and our ability to maintain service levels may be impaired, which could materially and adversely affect our business, financial condition and results of operations.

We generate a significant proportion of our revenues through a limited number of customers.

We generate a significant proportion of our total revenues through a limited number of customers. We generated 0%, 0% and 43.8% of our total revenues from continuing operations through cooperation with our top five customers in 2023, 2024 and 2025, respectively. Our partnerships with these customers are not on an exclusive basis. In addition, our contracts with them typically have a duration of one year, with most of which providing for automatic renewal. If these customers change their policies, terminate their partnership or do not renew their cooperation agreements with us, our business and result of operations may be materially and adversely affected. If we are not able to expand into new verticals and increase penetration in existing verticals to increase the number of our customers, retain our existing customers or renew our existing contracts with major customers on terms favorable to us, our results of operations will be materially and adversely affected.

If we do not compete effectively, our results of operations could be harmed.

The markets for merchant digitization and commerce enablement are highly competitive, rapidly evolving and characterized by frequent new solution introductions, changing customer preferences and aggressive pricing. We compete with a wide range of participants, including well-capitalized global and regional providers, integrated payment companies offering bundled solutions, and smaller niche vendors. Many of our competitors have significantly greater financial, technical, marketing and distribution resources, broader brand recognition, longer operating histories, and established customer relationships, and may be able to respond more quickly to technological changes and market opportunities than we can. If we are unable to differentiate our offerings, deliver a compelling value proposition, maintain competitive pricing and commercial terms, and execute our product roadmap in a timely manner, we may lose existing merchants, fail to attract new merchants, and be unable to achieve expected growth or profitability, which could materially and adversely affect our business, financial condition and results of operations.

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We may not be able to achieve or increase profitability in the future.

We recorded net loss of US$11.4 million, US$2.1 million and US$1.5 million in 2023, 2024 and 2025 and net loss from continuing operations of US$5.7 million, US$0.3 million and US$0.7 million in 2023, 2024 and 2025. We cannot assure you that we will be able to achieve or increase profitability in the future. Our ability to achieve profitability will depend primarily on our ability to collaborate with business partners, our ability to manage risk, and our ability to manage product mix to continue to attract new users while maintaining or improving our overall gross margins. Our ability to achieve profitability will also depend on macro factors such as the conditions of the consumer finance market and SME financing market in China. There can be no assurance that we will achieve profitability at all and we may experience net losses in the future.

We may not be able to obtain additional capital when desired, on favorable terms or at all.

Our total current assets decreased from US$12.9 million as of December 31, 2024 to US$1.8 million as of December 31, 2025. Our operating results for future periods are subject to numerous uncertainties and it is uncertain if we will be able to reduce or eliminate our net losses for the foreseeable future. These conditions raise substantial doubt about our ability to continue as a going concern. To alleviate the pressure of capital liquidity, we have obtained approval of certain lines of credit from third parties. Moreover, we have taken measures to improve operating efficiency and control costs, including downsizing staff to cope with the decrease in business volume and revenue, standardizing our finance and operation policies, enhancing internal controls and creating a synergy of our resources. However, there can be no assurance that these plans and arrangements will be sufficient to fund our ongoing capital expenditures, working capital, and other requirements.

Due to the unpredictable nature of the capital markets and the industries in which we operate, there can be no assurance that we will be able to raise additional capital on terms favorable to us, or at all, if and when required, especially if we experience unfavorable operating results. If adequate capital is not available to us as required, our ability to fund our operations, expand our business, take advantage of unanticipated opportunities, develop or enhance our infrastructure or respond to competitive pressures could be significantly limited, which would adversely affect our business, financial condition and results of operations. If we do raise additional funds through the issuance of equity or convertible debt securities, the ownership interests of our shareholders could be significantly diluted. These newly issued securities may have rights, preferences or privileges senior to those of existing shareholders.

Any negative publicity with respect to us, our shareholders, directors or officers, our business partners or the industries in which we operate may materially and adversely affect our business and results of operations.

Negative publicity regarding us, our shareholders, directors or officers, our business partners or the industries in which we operate, whether or not such publicity is accurate, could damage our reputation and brand, reduce confidence among merchants, consumers, counterparties and other stakeholders, and adversely affect our ability to attract and retain customers and business partners. Such publicity may relate to, among other things, allegations of misconduct, regulatory or law enforcement inquiries, litigation, data privacy or cybersecurity incidents, product or service quality issues, conflicts of interest, financial performance, or other matters involving us or third parties with whom we do business. In addition, publicity concerning the broader industries in which we operate, including the merchant technology or e-commerce sectors, could lead to heightened scrutiny, changes in stakeholder perceptions or regulatory developments that negatively impact our business. The rapid dissemination of information through social media and other channels may amplify these effects, and responding to reputational issues may require significant management attention and expense. As a result, any such negative publicity could materially and adversely affect our business, financial condition and results of operations.

If we fail to promote and maintain our brands in a cost-efficient way, our business and results of operations may be harmed.

We believe that developing and maintaining awareness of our brands effectively is critical to attracting new partners and users to our platforms and retaining existing ones. This depends largely on the effectiveness of our customer acquisition strategy, our marketing efforts, our cooperation with our business partners and the success of the channels we use to promote our platforms. If any of our current user acquisition strategies or marketing channels become less effective, more costly or no longer feasible, we may not be able to attract new partners and users in a cost-effective manner or convert potential partners and users into using our financial services and solutions.

We have invested substantially to enhance our brands images and expect such investments to continue. These efforts may not result in increased revenues in the immediate future or any increases at all and, even if they do, any increases in revenues may not offset the expenses incurred. If we fail to successfully promote and maintain our brands in a cost-efficient way, our results of operations and financial condition would be adversely affected, and our ability to grow our business may be impaired.

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We and certain of our directors and officers have been subject to certain legal proceedings, which could have a material adverse impact on our business, financial condition, results of operation, cash flows and reputation.

On September 29, 2020, we and certain of our current and former directors and officers and the underwriters in our initial public offering were named as defendants in a securities class action filed in the U.S. District Court for the Southern District of New York. The plaintiffs allege that our registration statement on Form F-1 in connection with our initial public offering contained material misstatements and omissions in violation of the U.S. federal securities laws, including those relating to our revenue recognition, internal control over financial reporting and historical financial results. We filed a motion to dismiss on April 16, 2021. On April 25, 2022, the court granted our motion to dismiss the amended complaint in full. The plaintiffs did not appeal the verdict and the case was closed.

We cannot guarantee that we will not be a target for lawsuits in the future, including putative class action lawsuits brought by shareholders. There can be no assurance that we will be able to prevail in our defense or reverse any unfavorable judgment on appeal, and we may decide to settle the lawsuit on unfavorable terms. Any adverse outcome of the lawsuit in the future could result in payments of substantial monetary damages or fines, or changes to our business practices, and thus have a material adverse effect on our business, financial condition, results of operations, cash flows and reputation. In addition, there can be no assurance that our insurance carriers will cover all or part of the defense costs, or any liabilities that may arise from these matters. The litigation process may utilize a significant portion of our cash resources and divert management’s attention from the day-to-day operations of our company, all of which could harm our business. We also may be subject to claims for indemnification related to these matters, and we cannot predict the impact that indemnification claims may have on our business or financial results.

We have access to a large amount of data and personal information, including financial information and personally identifiable information. While we have security measures in place to protect such data, our solutions and underlying infrastructure may in the future be materially breached or compromised as a result of the following:

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third-party attempts to fraudulently induce employees or customers into disclosing sensitive information such as usernames, passwords or other information to gain access to our customers’ data, our data or our IT systems;

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efforts by individuals or groups of hackers and sophisticated organizations;

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cyberattacks on our internally built infrastructure;

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vulnerabilities resulting from enhancements and upgrades to our existing solutions;

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vulnerabilities in third-party infrastructure and systems and applications that our solutions operate in conjunction with or are dependent on;

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vulnerabilities existing within newly acquired or integrated technologies and infrastructure;

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attacks on, or vulnerabilities in, the many different underlying networks and services that power the internet that our solutions depend on, most of which are not under our control; and

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employee or contractor errors or intentional acts that compromise our security systems.

These risks may be mitigated, to the extent possible, by our ability to maintain and improve business and data governance policies, enhanced processes and internal security controls, including our ability to escalate and respond to known and potential risks. Although we have developed systems and processes designed to protect confidential data, we can provide no assurance that such measures will provide absolute security. For example, our ability to mitigate these risks may be affected by the following:

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vulnerabilities in third-party infrastructure and systems and applications that our solutions operate in conjunction with or are dependent on;

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vulnerabilities existing within newly acquired or integrated technologies and infrastructure;

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attacks on, or vulnerabilities in, the many different underlying networks and services that power the internet that our solutions depend on, most of which are not under our control; and

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employee or contractor errors or intentional acts that compromise our security systems.

If we fail to protect such data, our business, results of operations and financial condition could be materially and adversely affected.

Misconduct and errors by our employees could harm our business and reputation.

We are exposed to many types of operational risks, including the risk of misconduct and errors by our employees. Our business depends on our employees to interact with users and partners, process large numbers of transactions and support loan servicing, all of which involve the use and disclosure of personal information. We could be materially and adversely affected if transactions were redirected, misappropriated or otherwise improperly executed, if personal information were disclosed to unintended recipients or if an operational breakdown or failure were to occur in the processing of transactions, whether as a result of human error, purposeful sabotage or fraudulent manipulation of our operations or systems. In addition, the manner in which we store and use certain personal information and interact with partners and users through our platforms is governed by various PRC laws. It is not always possible to identify and deter misconduct or errors by employees, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses. If any of our employees take, convert or misuse funds, documents or data or fail to follow protocols when interacting with partners and users, we could be liable for damages and subject to regulatory actions and penalties. We could also be perceived to have facilitated or participated in the illegal misappropriation of funds, documents or data, or the failure to follow protocols, and therefore be subject to civil or criminal liability.

Our business depends on the continued efforts of our senior management. If one or more of our key executives were unable or unwilling to continue in their present positions, our business may be severely disrupted.

Our business operations depend on the continued services of our senior management, particularly the executive officers named in this annual report. While we have provided incentives to our management, we cannot assure you that we can continue to retain their services. If one or more of our key executives were unable or unwilling to continue in their present positions, we might not be able to replace them easily or at all, our future growth may be constrained, our business may be severely disrupted and our financial condition and results of operations may be materially and adversely affected. In addition, although we have entered into confidentiality and non-competition agreements with our management, there is no assurance that any member of our management team will not join our competitors or form a competing business. If any dispute arises between us and our current or former officers, we may have to incur substantial costs and expenses in order to enforce such agreements in mainland China or we may not be able to enforce them at all.

We may not be able to attract and retain the qualified and skilled employees needed to support our business.

We believe our future success depends on our continued ability to attract, develop, motivate and retain qualified and skilled employees. Competition for highly skilled technical and sales personnel is extremely intense. We may not be able to hire and retain these personnel at compensation levels consistent with our existing compensation and salary structure. Some of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment. In addition, we invest significant time and expenses in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to retain our employees, we could incur significant expenses in hiring and training new employees, and our ability to serve users and financial service providers could diminish, resulting in a material adverse effect to our business.

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We may not be able to prevent others from making unauthorized use of our intellectual property, which could harm our business and competitive position.

We regard our software registrations, trademarks, domain names, know-how, proprietary technologies and similar intellectual property as critical to our success, and we rely on a combination of intellectual property laws and contractual arrangements, including confidentiality and non-compete agreements with our employees and others to protect our proprietary rights. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” Despite these measures, any of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages. In addition, parts of our business rely on technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms, or at all.

It is often difficult to maintain and enforce intellectual property rights in mainland China. Statutory laws and regulations are subject to judicial interpretation and enforcement and may not be applied consistently due to the lack of clear guidance on statutory interpretation. Confidentiality and non-compete agreements may be breached by counterparties, and there may not be adequate remedies available to us for any such breach. Accordingly, we may not be able to effectively protect our intellectual property rights or to enforce our contractual rights in mainland China. Preventing any unauthorized use of our intellectual property is difficult and costly and the steps we take may be inadequate to prevent the misappropriation of our intellectual property. In the event that we resort to litigation to enforce our intellectual property rights, such litigation could result in substantial costs and a diversion of our managerial and financial resources. We can provide no assurance that we will prevail in such litigation. In addition, our trade secrets may be leaked or otherwise become available to our competitors, or our competitors may independently discover them. To the extent that our employees or consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related know-how and inventions. Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition and results of operations.

We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.

We cannot be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights, know-how or other intellectual property rights held by third parties. From time to time in the future, we may be subject to legal proceedings and claims relating to the intellectual property rights of others. In addition, there may be third-party trademarks, patents, copyrights, know-how or other intellectual property rights that are infringed by our products, services or other aspects of our business without our awareness. Holders of such intellectual property rights may seek to enforce such intellectual property rights against us in mainland China, the United States or other jurisdictions. If any third-party infringement claims are brought against us, we may be forced to divert management’s time and other resources from our business and operations to defend against these claims, regardless of their merits.

Additionally, the application and interpretation of mainland China’s intellectual property right laws and the procedures and standards for granting trademarks, patents, copyrights, know-how or other intellectual property rights in mainland China are still evolving and are uncertain, and we cannot assure you that PRC courts or regulatory authorities would agree with our analysis. If we were found to have violated the intellectual property rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives of our own. As a result, our business and results of operations may be materially and adversely affected.

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If we fail to maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.

We are a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002 requires that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F. In addition, once we cease to be an “non-accelerated filer” as such term is defined in the SEC rules, our independent registered public accounting firm may be required to attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, our reporting obligations as a public company may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. In the course of management’s preparation and our independent registered public accounting firm’s auditing our consolidated financial statements for the year ended December 31, 2025, we and our independent registered public accounting firm identified two material weaknesses in our internal control over financial reporting as of December 31, 2025, in accordance with the standards established by the Public Company Accounting Oversight Board of the United States, or the PCAOB. As defined in the standards established by the PCAOB, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses that have been identified relates to (i) our lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP technical accounting issues and to prepare and review financial statements and related disclosures in accordance with U.S. GAAP and reporting requirements set forth by the SEC; (ii) our lack of formal internal control framework over financial reporting, including lack of sufficient entity level control policies and procedures, and lack of appropriate segregation of functions and duties. These material weaknesses, if not timely remedied, may lead to significant misstatements in our consolidated financial statements in the future.

Following the identification of the material weaknesses, we have taken measures and plan to continue to take measures to remedy the material weaknesses. For example, we engaged a consulting firm with extensive U.S. GAAP experiences to strengthen our internal control over financial reporting. For details, see “Item 15. Controls and Procedures—Internal Control Over Financial Reporting.” However, the implementation of these measures may not fully address these deficiencies in our internal control over financial reporting, and we cannot conclude that they have been fully remedied. Our failure to correct these control deficiencies or our failure to discover and address any other control deficiencies could result in inaccuracies in our financial statements and impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. Moreover, ineffective internal control over financial reporting could significantly hinder our ability to prevent fraud.

If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

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

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On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. Our auditors, Marcum Asia CPAs LLP, are an independent registered public accounting firm that issued the audit report included elsewhere in the annual report. As auditors of publicly traded companies in the United States and a U.S.-based accounting firm registered with the PCAOB, they are subject to U.S. laws that require the PCAOB to conduct regular inspections to assess their compliance with applicable professional standards. Our auditor, headquartered in New York, New York, was not included in the list of PCAOB identified firms pursuant to the 2021 determination. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. As of the date of this annual report, we were not identified as a Commission-Identified Issuer and do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2025.

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

Fluctuations in exchange rates could have a material adverse effect on our results of operations.

Prior to our disposal of equity interests in Romantic Park in November 2025, substantially all of our revenue and costs were denominated in Renminbi. The Renminbi fluctuated against the U.S. dollar, at times significantly and unpredictably. During those periods, appreciation or depreciation of the Renminbi relative to the U.S. dollar affected the amounts we received when converting U.S. dollars into Renminbi for operations and the amounts available when converting Renminbi into U.S. dollars for dividends or other purposes. Hedging options in mainland China were limited, and we did not enter into hedging transactions. As a result, exchange rate volatility could adversely affect our historical results.

We now operate in multiple international markets, which exposes us to the effect of fluctuations in currency exchange rates as we report our financials in U.S. dollars. fluctuations in the exchange rates among the local currencies that we use could create economic instability that may increase our expenses and harm our business operations. The conversion of one currency into another currency is based on rates set by relevant authorities in each of the countries and regions where we operate and is affected by, among other things, changes in each country or region’s political and economic conditions and its foreign exchange policies. Any significant appreciation or depreciation of the currencies of the countries and regions where we operate may have a material and adverse effect on the value of, and any dividends payable on, our ADSs in U.S. dollars and your investment.

We cannot assure you that the currencies of the countries and regions where we operate will not appreciate or depreciate significantly in value against U.S. dollar in the future. It is difficult to predict how market forces or government policy may impact the exchange rate among the currencies of the countries and regions where we operate and the U.S. dollar in the future. Limited hedging options are available in certain jurisdictions where we operate. 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.

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

We maintain insurance coverage that we believe is appropriate for our business. However, our insurance coverage may not be sufficient to cover all risks or losses we may incur. In addition, we cannot assure you that we will be able to successfully recover under our insurance policies on a timely basis, or at all. If we suffer uninsured or underinsured losses, or if our insurance recoveries are significantly less than our actual losses, our business, financial condition and results of operations could be materially and adversely affected.

We face significant risks associated with expanding our merchant digitization and commerce‑enablement business into new international markets.

We intend to expand our merchant digitization and commerce-enablement business beyond Australia into additional markets, including New Zealand, Singapore, Bangladesh and the United Kingdom, which will increase the complexity of our operations and require significant management attention and investment in localization, compliance and operational infrastructure; we may face differing and evolving legal and regulatory requirements, including data protection, payments and consumer protection, unfamiliar competitive dynamics and customer preferences, foreign exchange and macroeconomic volatility, political and economic instability, challenges in enforcing contracts and collecting receivables, difficulties in establishing and managing cross-border operations and third-party relationships, and increased risks relating to intellectual property protection, and if we are unable to manage these risks effectively or our expansion is slower or more costly than expected, our business, financial condition and results of operations could be materially and adversely affected.

We face risks related to natural disasters and health epidemics.

During the outbreak of COVID-19 pandemic from the end of 2019 to early 2023, our business operations was materially and adversely affected. As a result of the pandemic and a series of challenges we encountered, including changes in market conditions, market regulations, external partners and management members, our loan volume in 2022 decreased by 75% compared with 2021. Although businesses are back to normal since early 2023, our business and results of operations remain subject to risks associated with any new variants of COVID-19 or any other pandemics that harm the Chinese and global economy in general.

In addition to the impact of COVID-19, our business could be materially and adversely affected by natural disasters, other health epidemics or other public safety concerns. Natural disasters may give rise to server interruptions, breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to provide solutions. Our business could also be adversely affected if our employees are affected by health epidemics. In addition, our results of operations could be adversely affected to the extent that any health epidemic harms the economy in general.

Current reform of Australian payments regulations may result in additional compliance obligations for ZIITECH

The Australian payments and financial services regulatory landscape is undergoing significant reform, with an increased focus from regulators on activities in and around payments, stored value, digital wallets and related infrastructure. At present, ZIITECH does not require any Australian financial services or related payments licenses for its current business activities. However, the scope and thresholds of applicable licensing and conduct obligations remain subject to change as reforms are introduced and implemented. For details, please refer to “Item 4. Information on the Company – Regulations – Australia – Payment Reform.”

Risks Related to Our Operations Across Multiple Jurisdictions

We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.

We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which is charged with the protection of investors and the oversight of companies whose securities are publicly traded, and the various regulatory authorities in Australia, the Cayman Islands and the PRC, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

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Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.

According to the Trial Administrative Measures for the Overseas Issuance and Listing of Securities by Domestic Enterprises, or the Trial Measures, the Trial Measures, which became effective on March 31, 2023 issued on February 17, 2023 by the China Securities Regulatory Commission, or the CSRC, (i) an issuer that meets both of the following conditions shall be deemed to be conducting an indirect overseas issuance and listing by a domestic enterprise: (a) any of the indicators of the domestic enterprise of such issuer, including revenue, total profit, total assets, or net assets, in the most recent fiscal year accounts for more than 50% of the corresponding data in the issuer’s audited consolidated financial statements for the same period; and (b) the main links of its business activities are carried out in the territory of CHINA, or its principal places of business are located in the territory of CHINA, or the majority of its senior management responsible for its operation and management are Chinese citizens or have their primary place of residence in the territory of CHINA, (ii) if, after the overseas issuance and listing, such issuer’s principal business operations undergo a material change such that it no longer falls within the scope of the filing requirement under the Trail Measures, it shall, within three working days from the date of such material change, submit a special report and a legal opinion issued by a CHINA law firm to the CSRC, explaining the relevant circumstances.

In November 2025, in connection with our disposal of equity interests in Romantic Park, all of the WFOEs and VIEs were divested and we no longer have any revenue-generating operations in China after such divestment, which we believe results in a material change to our principal business operations. As of date of this annual report, we have submitted our filing report regarding the divestment transaction described above and have not yet received any comments from the CSRC.

Current reform of Australian payments regulations may result in additional compliance obligations for ZIITECH.

Following the divestment of our mainland China business in 2025, we believe that we are no longer subject to PRC laws, regulations or regulatory oversight in relation to the divested business. However, PRC authorities exercise discretion in interpreting and enforcing PRC laws, and the scope of such laws can be applied extraterritorially or in ways that differ from our expectations. Accordingly, PRC regulators may take a different view and could seek to assert jurisdiction over us or subject us to PRC regulatory requirements notwithstanding our lack of revenue-generating operations in mainland China. The Chinese government has exercised and continues to exercise oversight and supervision of the Chinese economy through applicable laws and regulations, including those relating to securities regulation, data protection, cybersecurity and mergers and acquisitions and other matters.

If PRC authorities determine that we remain subject to PRC laws, regulations or regulatory oversight, or if the Chinese government otherwise intervenes in or influences our business, we may become subject to additional compliance requirements, regulatory approvals, filings, investigations or enforcement actions, and we may be required to change our corporate structure, business practices or financing activities. Any such development could materially and adversely affect our business, financial condition and results of operations, and could cause the value of our ADSs to significantly decline or become worthless.

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In November 2025, we divested our equity interests in Romantic Park. As of the date of this annual report, we no longer hold any equity interest in the WFOEs and are no longer treated as the ultimate beneficiaries of the VIEs. Notwithstanding the foregoing, we cannot assure you that matters arising from our prior PRC affiliations have been fully resolved or that such matters will not continue to affect us negatively going forward.

In addition, residual risks arising from our previous PRC affiliations may persist notwithstanding the disposal, including but not limited to the following:

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Reputational harm. Any negative perception associated with our prior PRC operations — whether arising from regulatory scrutiny, pending or threatened litigation, contractual disputes, governmental investigations, or adverse media coverage — may harm our reputation and brand image. Such reputational harm could adversely affect our ability to attract and retain customers, impair our relationships with existing and prospective business partners, and limit our ability to pursue strategic partnerships and collaborations, thereby reducing our growth opportunities.

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Regulatory and legal exposure. Notwithstanding the disposal, we may remain subject to inquiries, investigations, or proceedings by PRC regulatory authorities or other governmental bodies in connection with our prior operations or affiliations in the PRC. Any such proceedings, even if ultimately resolved in our favor, could be costly, time-consuming, and disruptive to our management and operations.

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Perception of operational instability. Our disposal of PRC operations may be perceived by investors, customers, or counterparties as indicative of operational or financial instability. Such perception, whether or not well-founded, could adversely affect investor confidence in our company and impair our ability to raise capital on favorable terms or at all.

Limitations on credit enhancement may adversely affect our access to funding

We historically provided credit enhancement through our variable interest entities for loans that we facilitated with certain financial partners since the fourth quarter of 2017. However, the Notice on Regulating and Rectifying “Cash Loan” Business, (the “Circular 141”) and the Implementation Plans of Internet Micro Finance Companies both prohibit financial institutions from accepting credit enhancement services provided by institutions with no relevant qualifications. We cannot assure you that the arrangements between our subsidiaries and our financial partners would be deemed to be in compliance with those requirements. Due to the absence of clear interpretation and implementation rules and rapidly evolving applicable laws and regulations, we cannot assure you that we would not be adversely affected by our historical arrangements.

Our historical financial solution business may be deemed to operate a financing guarantee business by the PRC regulatory authorities.

The State Council of China promulgated the Regulations on the Administration of Financing Guarantee Companies, or the Financing Guarantee Rules, effective October 1, 2017. Pursuant to the Financing Guarantee Rules, “financing guarantee” refers to the activities in which guarantors provide guarantees to the guaranteed parties as to loans, bonds or other types of debt financing, and “financing guarantee companies” refer to companies legally established and operating financing guarantee businesses. According to the Financing Guarantee Rules, the establishment of financing guarantee companies shall be subject to the approval by the competent government department, and unless otherwise stipulated by the state, no entity may operate a financing guarantee business without such approval. If any entity violates these regulations and operates a financing guarantee business without approval, the entity may be subject to penalties including ban or suspension of business, fines of RMB500,000 (US$69,565) to RMB1,000,000 (US$139,130), and confiscation of any illegal gains, and if the violation constitutes a criminal offense, criminal liability shall be imposed in accordance with the law.

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In October 2019, the China Banking and Insurance Regulatory Commission, or the CBIRC, and eight other PRC regulatory agencies promulgated the Supplementary Provisions on the Supervision and Administration of Financing Guarantee Companies, or the Financing Guarantee Supplementary Provisions, which became effective in October 2019 and was amended in June 2021. The Financing Guarantee Supplementary Provisions further clarify that institutions providing services such as client recommendation and credit assessment to various institutional funding partners shall not render any financing guarantee service, whether in direct form or disguised form, without the approval of the competent authorities. An institution that operates financing guarantee business without a financing guarantee business license shall be cancelled by the supervision and administration department in accordance with the regulations and the outstanding transactions of the unlicensed financing guarantee business shall be properly settled. In case any institution intends to continue its financing guarantee business, financing guarantee companies may be established in accordance with the Financing Guarantee Rules.

We historically have provided credit enhancement through our subsidiaries or variable interest entities for loans that we facilitate with certain financial partners. We have fully ceased providing credit enhancement through our subsidiaries or variable interest entities for loans that we facilitated with any financial partners commencing from November 2022. Due to the lack of further interpretations, the exact definition and scope of “operating financing guarantee business” under the Financing Guarantee Rules and what behavior would be deemed as “render any financing guarantee service in disguised form” is unclear. It is uncertain whether we would be deemed to operate a financing guarantee business because of the credit enhancement services we provided. If such credit enhancement services are deemed to be in violation of the Financing Guarantee Rules or the Financing Guarantee Supplementary Provisions, we could be subject to penalties and be required to change our business model in cooperation with our financial partners. As a result, our business, financial condition, results of operations and prospects could be materially and adversely affected.

Our historical financial solution business may be subject to a variety of PRC laws and regulations governing the consumer finance industry, and has been subject to significant regulatory changes. For example, as China’s microfinance industry has grown rapidly since 2008, the applicable laws, regulations and policies governing the industry have evolved in recent years. In addition, some of our businesses were subject to licensing requirements. We may face injunctions, including orders to cease illegal activities, and may be subject to other penalties as determined by the relevant government authorities if we fail to satisfy the requirements. See “Item 4. Information on the Company—B. Business Overview—Regulations” for more information on the regulations that affect or may affect our business. As of the date of this annual report, we have not been subject to any material fines or other penalties under any PRC laws or regulations on our business operations.

In November 2025, we disposed of our equity interests in Romantic Park and therefore divested our operations in mainland China. Although we have exited our historical financial solution business, the risks associated with such business may continue to affect us and our reputation. If any of our clients suffer financial loss or other damages, our reputation, client relationship, business, financial conditions and prospects may be materially and adversely affected.

Regulatory uncertainties relating to campus online lending may materially and adversely affect our business and results of operations.

The laws, regulations, rules and governmental policies governing campus online lending are expected to continue to evolve. There exist uncertainties regarding the interpretation of campus online lending. For a detailed discussion of relevant laws, regulations, rules and notices, see “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations Relating to Campus Online Lending.”

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Our historical financial solution business was subject to the laws, regulations, rules and governmental policies governing campus online lending. To minimize our risk, with respect to our point-of-sale installment loans and personal installment loans, we have set the age threshold of our end users at 22. We have also implemented a number of measures for different loan facilitation scenarios, including the following: (i) our business partners will present to borrowers a commitment letter stating that the borrower is not a student and seek their confirmation before extending any point-of-sale installment loans; (ii) any loan request labeled with “student consumption” by our business partners in the point-of-sale installment loans will be rejected; (iii) any loan request generated by lenders identified as students by our financial partners or business partners through the mainland China Credentials Verification system will be rejected; (iv) all the lenders who are between the age of 20 and 22 will be required to confirm whether they are students or not, and any loan request generated by those who have selected the option of “students” will be rejected; and (v) all of our credit lending services will not serve lenders below 22 years of age, who will be labeled as students or individuals with low repayment capabilities. However, we cannot assure you that the foregoing measures are sufficient to enable us to fully comply with the laws, regulations, rules and governmental policies governing campus online lending. In the event that any Chinese governmental authority considers us to be conducting a campus online lending business, we will be subject to various liabilities and penalties such as rectification and cancellation of campus online lending products. Accordingly, our business, financial condition and prospects would be materially and adversely affected.

Financial products and financial service providers are strictly regulated in mainland China. While we are not regulated as a financial service provider, we may be affected by PRC financial regulations as a result of the wealth management financial products previously provided by us and our relationships with financial partners in our historical financial solution business. If any financial product previously provided by us is deemed to violate any PRC laws or regulations, we may be liable for distributing the product or assisting in offering the product on our platforms, even if we are not its direct provider. If any of financial partners in our historical financial solution business is deemed to violate any PRC laws or regulations, we may be jointly liable due to the services or solutions we provide. We may have to remove financial products from our platforms or terminate our relationships with financial partners. As a result of any of the foregoing, our business, financial condition and prospects will be materially and adversely affected.

Further, in December 2021, the PBOC, the MIIT, the Cyberspace Administration of China, the CBIRC, the CSRC, the SAFE and the China National Intellectual Property Administration jointly issued the Administrative Measures for Online Marketing of Financial Products (Draft), providing for a code of conduct for marketing cooperation between financial institutions and third-party internet platform operators. As of the date of this annual report, these draft regulations have not been adopted, and there exist uncertainties as to the interpretation of such regulations and their applicability to our business.

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Any failure by us, our financial partners or other funding sources to comply with applicable anti-money laundering laws and regulations under our historical financial solution business could damage our reputation.

We have adopted various policies and procedures, such as internal controls and “know-your-customer” procedures, for anti-money laundering purposes. The Internet Finance Guidelines purport, among other things, to require internet finance service providers to comply with certain anti-money laundering requirements, including the establishment of a customer identification program, the monitoring and reporting of suspicious transactions, the preservation of customer information and transaction records, and the provision of assistance to the public security department and judicial authority in investigations and proceedings in relation to anti-money laundering matters. The Administrative Measures for Internet Finance Service Providers Regarding Anti-Money Laundering and Counter Terrorism Financing (Trial Version), or the Administrative Measures Regarding AML and CTF, require internet finance service providers to comply with certain anti-money laundering and counter terrorism financing requirements, including establishing an internal control system for anti-money laundering and counter terrorism financing, establishing a customer identification program, monitoring terrorist organizations and terrorists, monitoring and reporting suspicious transactions and preserving customer information and transaction records. The Measures for the Supervision and Administration of Publicly-offered Securities Investment Fund Distributors, originally promulgated by the China Securities Regulatory Commission, or the CSRC, in August 2020, require independent fund sales institutions to comply with certain anti-money laundering requirements, including providing fund managers with necessary information for anti-money laundering, such as clients’ statutory basic identity information, as well as assistance in performing such relevant duties as anti-money laundering, counter-terrorism financing and due diligence on tax-related information in terms of non-resident financial accounts. There is no assurance that our anti-money laundering policies and procedures will protect us from being exploited for money laundering purposes or that we will be deemed to be in compliance with applicable anti-money laundering implementing rules, if and when adopted, given that our anti-money laundering obligations in the Internet Finance Guidelines, the Administrative Measures Regarding AML and CIF, the Measures for the Supervision and Administration of Publicly-offered Securities Investment Fund Distributors are not specified. Measures for the Implementation of Anti-Money Laundering in the Securities and Futures Sector (Amended in 2022) requires Securities and futures operators shall fulfill their anti-money laundering obligations establish sound anti-money laundering internal control systems, information reporting systems, client risk rating systems and work confidentiality systems, training and publicity systems. Any new requirement under money laundering laws could increase our costs, and may expose us to potential sanctions if we fail to comply. Furthermore, our financial partners are required to have their own appropriate anti-money laundering policies and procedures as stipulated in the applicable anti-money laundering laws and regulations, and our other funding sources may also be required to comply with the applicable anti-money laundering laws and regulations. If we or any of our financial partners or other funding sources fail to comply with applicable anti-money laundering laws and regulations under the historical financial solution business, our reputation could suffer and we could become subject to regulatory intervention, which could have a material adverse effect on our business, financial condition and results of operations.

Risks Relating to Our ADSs

Since the ADSs became listed on the Nasdaq Global Market on October 24, 2018, the trading price of the ADSs has ranged from US$0.253 to US$15.10. The trading price of our ADSs is likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, like the performance and fluctuation of the market prices of other companies with business operations located mainly in mainland China that have listed their securities in the United States. A number of Chinese companies have listed or are in the process of listing their securities on U.S. stock markets. The securities of some of these companies have experienced significant volatility, including price declines in connection with their initial public offerings. The trading performances of these Chinese companies’ securities after their initial public offerings may affect the attitudes of investors toward Chinese companies listed in the United States in general and consequently may impact the trading performance of our ADSs, regardless of our actual operating performance.

In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following:

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variations in our revenues, earnings and cash flow;

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

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announcements of new services and expansions by us or our competitors;

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changes in financial estimates by securities analysts;

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detrimental adverse publicity about us, our services and solutions, or the industries in which we operate;

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additions or departures of key personnel;

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release of transfer restrictions on our outstanding equity securities or sales of additional equity securities; and

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potential litigation or regulatory investigations.

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

In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

The listing of our ADSs on the Nasdaq Global Market is contingent on our compliance with the Nasdaq Global Market’s conditions for continued listing.

On December 9, 2021 and October 26, 2022, we received written notifications from the Nasdaq Stock Market LLC (“Nasdaq”) that we were not in compliance with the minimum bid price requirement of US$1.00 per share under the Nasdaq Listing Rules. Nasdaq confirmed that we regained compliance on June 2, 2022 and April 10, 2023, respectively. See “Item 4. Information on the Company—A. History and Development of the Company.”

We cannot assure you that we will not receive other deficiency notifications from Nasdaq in the future. A decline in the closing price of our ADSs could result in a breach of the requirements for listing on the Nasdaq Global Market. If we don’t maintain compliance, Nasdaq could commence suspension or delisting procedures in respect of our ADSs. The commencement of suspension or delisting procedures by an exchange remains at the discretion of such exchange and would be publicly announced by the exchange. If a suspension or delisting were to occur, there would be significantly less liquidity in the suspended or delisted securities. In addition, our ability to raise additional necessary capital through equity or debt financing would be greatly impaired. Furthermore, with respect to any suspended or delisted ADSs, we would expect decreases in institutional and other investor demand, analyst coverage, market making activity and information available concerning trading prices and volume, and fewer broker-dealers would be willing to execute trades with respect to such ADSs.

If securities or industry analysts do not publish research or reports about our business, or if they publish critical or negative research or reports or otherwise recommend that investors not purchase our ADSs, the trading volume and market price for our ADSs could decline and we may find it difficult to raise additional capital.

The trading market for our ADSs will be influenced by research or reports that industry or securities analysts publish about our business. If securities or industry analysts do not publish research or reports about our business, then we could lose visibility in the financial markets, institutional investors may not be willing to invest in our ADSs, and it would be more difficult for us to raise additional capital through the capital markets. If analysts publish critical or negative research or reports about our business or industry or otherwise recommend that investors not purchase our ADSs, the trading volume and market price for our ADSs would likely decline.

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

Sales of substantial amounts of our ADSs in the public market, or the perception that these sales could occur, could adversely affect the market price of our ADSs and could materially impair our ability to raise capital through equity offerings in the future. We have 599,465,862 Class A ordinary shares and 42,439,520 Class B ordinary shares outstanding as of March 31, 2026, including 238,629,685 Class A ordinary shares represented by ADSs. All of our ADSs are freely tradable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act. The lockup agreement that our directors and executive officers and all of our pre-IPO shareholders signed with the underwriters of our initial public offering expired on April 23, 2019, and these shareholders, and the remaining Class A ordinary shares are available for sale subject to volume and other restrictions under Rule 144 and Rule 701 under the Securities Act. To date, the trading volume of our ADSs on the Nasdaq Global Market has been low, so sales of even relatively small amounts of our ADSs in the public market could adversely affect the market price of our ADSs. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our ADSs.

We have a dual-class share structure. Our ordinary shares consist of Class A ordinary shares and Class B ordinary shares, and our ADSs represent Class A ordinary shares. In respect of matters requiring the votes of shareholders, holders of Class B ordinary shares are entitled to fifteen votes per share, subject to certain conditions, while holders of Class A ordinary shares are entitled to one vote per share. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale of Class B ordinary shares by a holder thereof to any person other than our three core founders, Mr. Wei Wei, Mr. Jun Dong and Ms. Xiaomei Peng, or to any entity which is not affiliated with any of the three core founders, such Class B ordinary shares are automatically and immediately converted into the same number of Class A ordinary shares. Each Class B ordinary share beneficially owned by any core founder is automatically converted into one Class A ordinary share if at any time the core founder ceases to be a director or employee of our company or ceases to have the capability to make business decisions on behalf of our company due to health reasons.

As of March 31, 2026, Mr. Jun Dong, beneficially owned all of our issued Class B ordinary shares. These Class B ordinary shares constitute approximately 6.6% of our total issued and outstanding share capital and 51.5% of the aggregate voting power of our total issued and outstanding share capital due to the disparate voting powers associated with our dual-class share structure. See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” As a result of the dual-class share structure and the concentration of ownership, holders of Class B ordinary shares will have considerable influence over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. Such holders may take actions that are not in the best interest of us or our other shareholders. This concentration of ownership may discourage, delay or prevent a change in control of our company, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of our ADSs. This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial.

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

We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business, including through potential merger and acquisition opportunities. 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 ADSs as a source for any 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 subsidiary, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our ADSs will likely depend entirely upon any future price appreciation of our ADSs. There is no guarantee that our ADSs will appreciate in value or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in our ADSs and you may even lose your entire investment in our ADSs.

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We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. Holders of our ADSs or ordinary shares.

A non-U.S. corporation, such as our company, will be classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, if either (i) 75% or more of its gross income for such taxable year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) during such taxable year produce or are held for the production of passive income. Passive income generally includes dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains. For this purpose, cash and assets readily convertible into cash are categorized as passive assets and the company’s unbooked intangibles associated with active business activity are taken into account as non-passive assets.

In addition, we will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock. Although the law in this regard is unclear, we treat our variable interest entities as being beneficially owned by us for U.S. federal income tax purposes because we control their management decisions, we are entitled to substantially all of the economic benefits associated with these entities, and, as a result, we consolidate their results of operations in our U.S. GAAP financial statements.

We believe our income from, and assets used in the historical business, which were divested in the latter part of the year, were treated as passive under the PFIC provisions. Based on annual income and the value and characterization of our assets throughout the year, as well as the value of our ADSs, it is likely that we were classified as a PFIC for our taxable year ended December 31, 2025. Accordingly, U.S. Holders (as defined in “Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations”) should consult their tax advisors regarding the advisability of making a mark-to-market election (as described in “Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Considerations”). Even if we are not currently a PFIC, changes in the nature of our income or assets, or fluctuations in the market price of our ADSs, may cause us to become a PFIC for future taxable years. In estimating the value of our goodwill and other unbooked intangibles, we have taken into account our market capitalization, which may fluctuate over time. Among other factors, if our market capitalization declines, we may continue to be classified as a PFIC for our taxable year ending December 31, 2026. Under circumstances where revenues from our historical installment sale business or other activities that produce passive income increase relative to our revenues from activities that produce non-passive income or where we determine not to deploy significant amounts of cash for working capital or other purposes, our risk of becoming classified as a PFIC may substantially increase. In addition, if it were determined that that we are not the beneficial owner of our variable interest entities for U.S. federal income tax purposes, we may be treated as a PFIC for our current taxable year and in future taxable years.

If we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares, such U.S. Holder may incur significantly increased U.S. federal income tax on gain recognized on the sale or other disposition of our ADSs or ordinary shares and on the receipt of distributions on our ADSs or ordinary shares to the extent such gain or distribution is treated as an “excess distribution” under the U.S. federal income tax rules. If we are so classified during a U.S. Holder’s holding period, our ADSs or ordinary shares will generally continue to be treated as shares in a PFIC for all succeeding taxable years during which such U.S. Holder holds our ADSs or ordinary shares, even if we cease to be a PFIC, unless certain elections are made. See the discussion under “Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Rules” concerning the U.S. federal income tax considerations of an investment in our ADSs or ordinary shares if we are or become classified as a PFIC, including the possibility of making certain elections.

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

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

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited.

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

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

Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. As a foreign private issuer, we are permitted under the Nasdaq Stock Market Rules to follow home country corporate governance practices. Specifically, we do not have a majority of independent directors serving on our board of directors and we also rely on home country practice exemption with respect to the requirement for an annual general meeting for shareholders. We may also continue to rely on this and other exemptions available to foreign private issuers in the future, and to the extent that we choose to do so, our shareholders may be afforded less protection than they otherwise would under the Nasdaq Stock Market Rules’ corporate governance listing standards applicable to U.S. domestic issuers. See “—Risks Relating to Our ADSs—As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices for corporate governance matters that differ significantly from the Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the corporate governance listing standards.”

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In addition, all of our directors and senior management are based outside U.S. The SEC, U.S. Department of Justice, or the DOJ, and other authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies and non-U.S. persons, including company directors and officers, in certain emerging markets, including China. Additionally, our public shareholders may have limited rights and few practical remedies in emerging markets where we operate, as shareholder claims that are common in the United States, including class action based on securities law and fraud claims, generally are difficult or impossible to pursue as a matter of law or practicality in many emerging markets, including China. For example, in China, there are significant legal and other obstacles for the SEC, the DOJ and other U.S. authorities to obtaining information needed for investigations or litigation. Although the competent authorities in mainland China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, the regulatory cooperation with the securities regulatory authorities in the United States has not been efficient in the absence of a mutual and practical cooperation mechanism. According to Article 177 of the PRC Securities Law which became effective in March 2020, no foreign securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. Accordingly, without the consent of the competent PRC securities regulators and relevant authorities, no organization or individual in China may provide the documents and materials for investigation or evidence collection activities by foreign securities regulators.

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

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

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

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

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

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

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

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the sections of the Exchange Act imposing liability for insiders who profit from trades made in a short period of time; and

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

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 a quarterly basis through 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. Insiders are required to file public reports of their stock ownership and trading activities. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely than that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.

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As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices for corporate governance matters that differ significantly from the Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the corporate governance listing standards.

As an exempted company incorporated in the Cayman Islands company with limited liability that is listed on the Nasdaq, we are subject to the Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. We have relied on and plan to continue to rely on home country practice with respect to our corporate governance. Specifically, we do not have a majority of independent directors serving on our board of directors and we also rely on home country practice exemption with respect to the requirement for an annual general meeting for shareholders. For details, please refer to “Item 6. Directors, Senior Management and Employees—C. Board Practices—Board of Directors.” As a result, our shareholders may be afforded less protection than they otherwise would enjoy under the Nasdaq rules applicable to U.S. domestic issuers.

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

As a holder of our ADSs, you will only be able to exercise the voting rights with respect to the underlying Class A ordinary shares in accordance with the provisions of the Deposit Agreement. Under the Deposit Agreement, you must vote by giving voting instructions to the Depositary. If we ask for your instructions, then upon receipt of your voting instructions, the Depositary will try to vote the underlying Class A ordinary shares in accordance with these instructions. You will not be able to directly exercise your right to vote with respect to the underlying shares unless you withdraw the shares. Under our amended and restated memorandum and articles of association, the minimum notice period required for convening a general meeting is 10 days. When a general meeting is convened, you may not receive sufficient advance notice to withdraw the shares underlying your ADSs to allow you to vote with respect to any specific matter. If we ask for your instructions, the Depositary will notify you of the upcoming vote and will arrange to deliver our voting materials to you. We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the Depositary to vote your shares. In addition, the Depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise your right to vote and you may have no legal remedy if the shares underlying your ADSs are not voted as you requested.

The Depositary for our ADSs will give us a discretionary proxy to vote our Class A ordinary shares underlying your ADSs if you do not vote at shareholders’ meetings, except in limited circumstances, which could adversely affect your interests.

Under the Deposit Agreement for the ADSs, if you do not vote, the Depositary will give us a discretionary proxy to vote the Class A ordinary shares underlying your ADSs on any matter at a shareholder meeting provided that we give the Depositary a written confirmation sufficiently in advance of the meeting that:

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we wish a proxy to be given to a person of our choice;

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we reasonably do not know of any substantial opposition to the matter; and

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the matter is not materially adverse to the interests of shareholders.

The effect of this discretionary proxy is that if you do not vote at shareholders’ meetings, you cannot prevent the Class A ordinary shares underlying your ADSs from being voted, except under the circumstances described above. This may make it more difficult for shareholders to influence the management of our company. Holders of our ordinary shares other than the Depositary are not subject to this discretionary proxy.

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

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

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

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

ADSs holders may not be entitled to a jury trial with respect to claims arising under the Deposit Agreement, which could result in less favorable outcomes to the plaintiffs in any such action.

The Deposit Agreement governing the ADSs representing our Class A ordinary shares provides that, to the fullest extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the Depositary arising out of or relating to our shares, the ADSs or the Deposit Agreement, including any claim under the U.S. federal securities laws.

If we or the Depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of New York, which govern the Deposit Agreement, by a federal or state court in the City of New York, which has non-exclusive jurisdiction over matters arising under the Deposit Agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the Deposit Agreement and the ADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before entering into the depositors arising under the Deposit Agreement or the ADSs, including claims under federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and the Depositary. If a lawsuit is brought against either or both of us and the Depositary under the Deposit Agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes agreement.

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

Nevertheless, if this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the Deposit Agreement with a jury trial. No condition, stipulation or provision of the Deposit Agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the Depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder.

The correction of previously issued unaudited condensed financial statements may affect investor confidence and raise reputational issues and may subject us to additional risks and uncertainties, including increased professional costs and the increased possibility of legal proceedings and regulatory inquiries.

In connection with our year-end financial statement close and preparation of our annual report on Form 20-F for the year ended December 31, 2023, an error was identified in the interim financial statements for the six months ended June 30, 2023 (the “Interim Report”). On April 30, 2024, we issued the correction to the Interim Report in a press release and filed a Form 6-K/A to include such corrected Interim Report. As a result of this error and the resulting correction of our condensed financial statements for the impacted periods, we have become subject to a number of risks and uncertainties, including the increased possibility of litigation and regulatory inquiries. Any of the foregoing may affect investor confidence in the accuracy of our financial disclosures and may raise reputational risks for our business, both of which could harm our business and financial results.

Item 4.Information on the Company

A.	History and Development of the Company

Our holding company in the Cayman Islands, J and Friends Holdings Limited, formerly known as Pintec Technology Holdings Limited, was incorporated in March 2017, since when we had been operating financing solutions business in the PRC, until our disposal of equity interests in Romantic Park In November 2025.

On October 24, 2018, our ADSs commenced trading on the Nasdaq Global Market under the symbol “PT.”

On December 9, 2021, we received notification from Nasdaq Listing Qualifications that we are not in compliance with the minimum bid price requirement set forth in Listing Rules for continued listing on the Nasdaq Stock Exchange as the closing price of our ADSs have been less than US$1.00 over a consecutive 30-trading-day period (the “Minimum Bid Price Requirement”). On May 13, 2022, we amended the ratio of our ADS representing its Class A ordinary shares from one (1) ADS representing seven (7) Class A ordinary shares to one (1) ADS representing thirty-five (35) Class A ordinary shares. The effect of the ratio change on the ADS trading price on the Nasdaq Global Market took place on May 16, 2022. On June 2, 2022, Nasdaq Listing Qualifications notified us that we have regained compliance with the Minimum Bid Price Requirement after changing the ratio of our ADSs.

On October 26, 2022, we received notified notification from Nasdaq Listing Qualifications we are not in compliance with the Minimum Bid Price Requirement. On April 10, 2023, Nasdaq confirmed we regained compliance with the Minimum Bid Price Requirement.

In September 2025, we acquired a 25.0% ordinary shareholding in ZIITECH in exchange for the issuance of 83,726,789 Class A ordinary shares to the transferors. In connection with the acquisition, we entered into a shareholders’ agreement with ZIITECH and its other shareholders, pursuant to which we are entitled to appoint two-thirds of the directors to the board of ZIITECH and have a substantive veto right over matters requiring shareholder resolutions. As these rights give us the ability to direct the most significant financial and operating activities of ZIITECH, we obtained control of ZIITECH for U.S. GAAP purposes upon the effectiveness of the shareholders’ agreement and began consolidating ZIITECH’s financial statements from September 3, 2025.

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In November 2025, we entered into a Share Transfer Agreement to dispose of our equity interests in Romantic Park, a Cayman Islands entity indirectly holding the entire equity interest in the former WFOEs. This disposal also resulted in the divestment of all of our former WFOEs and VIEs, which previously conducted our operations in mainland China. Accordingly, as of the date of this annual report, we no longer maintain any revenue-generating operations in mainland China.

On January 8, 2026, we passed a special resolution at an extraordinary general meeting of shareholders to change our name to “J and Friends Holdings Limited.” Effective upon January 16, 2026, our ADSs began trading under the new name “J and Friends Holdings Limited” and new ticker symbol “JF.”

Our principal executive offices are located at Room 02/a, 7/F, A T Tower, 180 Electric Road North Point, Hong Kong. Our telephone number at this address is +852 5649 4870. Our registered office in the Cayman Islands is located at the offices of International Corporation Services Ltd., P.O. Box 472, Harbour Place, North Wing, 2nd Floor, 103 South Church Street, George Town, Grand Cayman KY1-1106, Cayman Islands. Our agent for service of process in the United States is Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711. All information filed with the SEC can be obtained over the internet at the SEC’s website at www.sec.gov or inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549.

B.	Business Overview

Overview

We are a Nasdaq-listed group providing merchant digitalization and commerce-enablement solutions to small and medium enterprises (“SME”). Our solutions feature critical functionality that SMEs need to engage with consumers, manage their operations, accept payments, and grow their business. Such solutions empower single- and multi-location retailers, restaurants and other SMEs to compete successfully in an omni-channel market environment by engaging with consumers across online, mobile, and physical channels. Substantially all of our current operations are conducted in Australia. We plan to expand globally through a combination of organic growth, selective international scaling and strategic initiatives, including white-label cooperation in certain markets and acquisition-driven growth.

Our Merchant Digitalization and Commerce-Enablement Solutions

We currently offer three types of solutions that catering to SMEs’ evolving commerce needs: food and beverage (“F&B”) solution, retail solution, and payment solution. We deliver these solutions through modular components that can be seamlessly integrated with third-party systems and service providers through APIs and other integration tools. Our customers and counterparties may adopt our solutions on a standalone basis or as bundled offerings, enabling them to leverage our capabilities while focusing on their core businesses.

F&B Solution

Our F&B solution enables restaurants, cafés and other hospitality merchants to digitize core front-of-house and back-of-house workflows, including order intake, menu management, kitchen coordination and store-level reporting, while supporting omni-channel operations across dine-in, takeaway and online ordering. These merchants typically require reliable, real-time workflow management during peak service periods and benefit from tools that standardize operations across single-store and multi-store settings.

Our F&B solution is integrated with common in-store hardware, such as printers, kiosks and payment terminals. It generally includes a merchant portal for centralized management and reporting, point of sale (“POS”) functionality for in-store operations, and modules that support omni-channel ordering such as QR ordering, self-ordering and online ordering, as well as optional functionality such as reservations and membership system features. For merchant groups, our system supports standardized menu and pricing management, location-level configuration and head-office level controls.

The F&B solution generates revenue primarily through a combination of one-off sales of the in-store hardware and recurring SaaS subscription fees. As of December 31, 2025, we served approximately 1,378 F&B merchant locations, out of which 728 locations process transactions with our payment solutions.

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Retail Solution

We offer an integrated retail solution designed to support merchants across retail and, in certain cases, wholesale workflows. Our retail solution enables merchants to manage checkout and store operations while digitizing inventory and purchasing workflows to improve operational efficiency, reduce shrinkage, and support expansion. Target customers include supermarkets, convenience stores, specialty retail stores and other merchants that require high-throughput checkout, inventory accuracy and frequent price and product updates.

Our retail solution typically includes POS functionality integrated with in-store hardware, and may include mobile workflows for inventory counts, shelf management and label printing, as well as optional integrations with electronic shelf labels. In addition, our retail operating suite may include purchasing–sales–inventory functionality that supports supplier management, purchase ordering, stock movements and operational reporting, and may connect to online ordering capabilities when requested by customers.

The retail solution generates revenue primarily through one-off sales of the in-store hardware and recurring SaaS subscription fees. As of December 31, 2025, we served approximately 387 retail merchant locations, out of which 87 locations process transactions with our payment solutions.

Payment Solution

We offer payment enablement capabilities that allow merchants to accept and manage electronic payments in connection with their in-store and omni-channel commerce activities. Our payment solution is designed to help merchants streamline checkout, improve settlement visibility and offer customers a full suite of convenient payment methods, including credit and debit cards, digital wallets, bank transfers, prepaid cards, and other local and alternative payment methods popular across key markets, including through integrations with third-party payment processors and acquiring partners. These merchants seek a seamless payment experience that is integrated into their operating workflows.

Our payment solution is compatible with multiple payment service providers and hardware terminals, as well as operational tools that support payment reconciliation and reporting alongside merchant transaction data. We earn volume-based commissions through the transactions facilitated by our payment solution. For the year ended December 31, 2025, a total of 1,687 locations used our payment solution.

Our POS Network

Our POS network consists of merchant locations that adopt our solutions to support daily operations and transaction workflows. We serve a diverse base of SME merchants across food & beverage, retail and wholesale, and we seek to expand our footprint by increasing the number of merchant locations and by deepening usage across existing merchants. Our POS network is operated under a cloud-based subscription model, which supports continuous product updates, ongoing feature enhancements and modular adoption of additional capabilities over time. We believe this model enables us to respond more efficiently to merchant needs, improve product deployment across our installed base and build recurring customer relationships.

Our Divested Business

Prior to our disposal of PRC operations in November 2025, we offered certain financial solutions through our former WFOEs and VIEs, including wealth management, insurance, business installment loan, and international installment loan solutions. We provided value added tools to our business partners and financial partners, including mobile product templates, digital marketing and real time monitoring tools. These tools enabled them to quickly deploy our solutions, monitor and evaluate performance and scale their business.

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Wealth Management Solutions. Our wealth management solutions included fund product distribution and robo-advisory services. Through our Hongdian brand (operated via our former VIE holding an investment fund sales brokerage license), we enabled partners to distribute CSRC-regulated mutual fund products to their customers — either under the Hongdian brand or as a white label solution — earning commission fees from third-party asset management companies. Under our Polaris brand, we offered robo-advisory solutions to both financial and business partners utilizing assets from Hongdian and our partners, with all services further customizable to the specific requirements of business partners or retail investors, for which we charged investment management and portfolio rebalancing fees.

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Insurance Solutions. We launched our Myfin solution in July 2016. Myfin enabled our partners to offer and distribute insurance products to our users. We operate Myfin through our former VIE Beijing Myfin, a subsidiary of which possesses an insurance brokerage license.

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Business Installment Loan Solutions. We offered business installment loan solutions to both online and traditional enterprise owners — including sole proprietors and SMEs — either through our own platform or those of partner platforms that leveraged their customer data to aid credit assessment, while also serving MSME customers sourced offline through on-site financial assessments and online credit evaluations, with approved loans funded by our subsidiaries and consolidated affiliated entities and designated for the operational purposes of those MSMEs.

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International Installment Loan Solutions. Based on our big data and AI-driven risk control modeling capabilities, we could automatically perform credit worthiness assessment, bank flow analysis and process real-time payment, providing our customers with more efficient and lower cost digital credit services and further the advancement of financial inclusion.

Sales and Marketing

Our sales and marketing strategy is centered on building deep, long-term partnerships with renowned brands across the food and beverage sector, combined with a targeted, market-driven business development approach tailored to the unique needs of international markets. We deploy a multi-channel go-to-market model that integrates direct sales, franchise partner engagement, and strategic account management to scale our reach and drive adoption of our proprietary cloud-native SaaS platform.

Our business development initiatives are closely aligned with this go-to-market model. In direct sales, we focus on strategic accounts, including iconic and high-growth brands, and work with them to develop customized technology solutions that address their operational needs and support their expansion plans. Our franchise partner engagement efforts are centered on collaboration with local franchise associations, industry participants and trade bodies to strengthen our presence in regional food and beverage ecosystems and facilitate broader adoption of our solutions across franchise networks. In parallel, our strategic account management function leverages platform analytics and ongoing customer support to demonstrate measurable value, including improvements in operational efficiency, customer experience and revenue per store, with a view to strengthening customer retention, increasing solution adoption and generating cross-market referrals.

We have established strategic collaborations with a diversified portfolio of internationally recognized brands. These collaborations reflect targeted, long-term commercial relationships developed through our direct sales and strategic account management efforts, rather than one-off or opportunistic transactions. Covering multiple geographies and food and beverage sub-sectors, including premium tea beverages, casual snacking and baked goods, these relationships demonstrate the scalability, reliability and industry relevance of our SaaS solutions. Through our cooperation with these brands and franchise partners, we also gain insights into global consumer trends and franchise operating requirements, which we incorporate into our product roadmap to continuously refine our technology offerings and better serve customers across markets.

In 2025, ZIITECH was recognized by the Australian Trade and Investment Commission (“Austrade”) under the Export Market Development Grant (“EMDG”) program. This recognition represents a meaningful milestone in ZIITECH’s international growth strategy and underscores its commitment to advancing Australian technology innovation on the global stage. Through participation in the EMDG program, ZIITECH will receive financial support to help offset eligible expenses related to its overseas expansion efforts, including market entry activities, international business development, marketing initiatives, and customer acquisition in key markets outside Australia. These funds will enable ZIITECH to further expand its technology export initiatives into key markets including New Zealand, Singapore, Bangladesh, and the United Kingdom.

Looking ahead, we intend to leverage our technological capabilities, intellectual property and experience in serving brand customers to further expand our international presence. We plan to deepen penetration in our existing target markets, selectively enter additional high-potential markets and strengthen our relationships with existing and new food and beverage brands. We will also continue to enhance our SaaS platform and customer service capabilities and utilize available market development support programs to support our market position and revenue growth.

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Technology

Our business depends on our technological capabilities to deliver effective and innovative solutions to merchants, enhance user experience and improve merchants’ operational efficiency. Our technology is distinguished by its scalability, configurability and reliability, supported by continued R&D investment and a focus on solving practical operational challenges faced by merchants.

We have developed and operated a proprietary, cloud-native software that integrates intelligent business modules, data analytics and scalable cloud infrastructure. Our offerings are designed to address the operational needs of merchants across a range of industries. Built on a modular architecture, our software can be configured to meet the needs of different business sizes and operating models, ranging from small and medium-sized enterprises to large multinational franchise operators. Our technology enables merchants to streamline daily operations, automate repetitive processes, enhance service delivery and improve productivity through end-to-end digitalized workflows.

We maintain a secure and stable system architecture, supported by continuous technical monitoring and rapid response mechanisms, to meet the growing needs of our merchant base and help ensure consistent service quality. Our software also incorporates data encryption and other security and compliance features intended to protect merchant and customer data and support compliance with applicable data privacy and industry requirements.

We place significant emphasis on research and development and continue to invest substantial resources in our R&D activities to upgrade platform functionality, enhance user experience and support technological innovation. Our R&D efforts are primarily focused on improving platform performance and reliability, developing new intelligent features such as predictive analytics and automated reporting, and integrating emerging technologies to enhance our product offerings. We also own a number of software copyrights relating to our core intellectual property, including key algorithms, platform modules and customized features, which support the distinctiveness and sustainability of our SaaS offerings.

We believe our technological capabilities and intellectual property provide us with important competitive advantages, enable us to respond to evolving market trends and merchant demands, and support our ability to provide tailored and efficient solutions to our customers. Our ongoing commitment to R&D also allows us to continuously iterate and enhance our platform so that it remains relevant and effective in addressing the changing operational needs of merchants.

Data Privacy and Security

Under our historical financial solution business, we have access to a large amount of data and personal information of our end users and certain operating and other data of our financial and business partners. Currently, we have access to operating data of merchants. We take the privacy of personal data and confidential information seriously and have designed stringent data protection and retention policies to ensure compliance with applicable laws and regulations. We do not share end users’ data with third parties without their prior consent. In addition, we utilize a system of firewalls to prevent unauthorized access to our internal systems. We also maintain a real-time backup system in a leased facility where we host most of our hardware, and a remote backup system at a separate facility. Our IT department monitors the performance of our websites, technology systems and network infrastructure to enable us to respond promptly to potential problems. We also continuously review, improve and iterate our data privacy policies and security foundation.

As of the date of this annual report, we have not received any claim from any third party against us on the ground of infringement of such party’s right to data protection as provided by applicable laws and regulations in China, Australia and other jurisdictions, and we have not experienced any material data loss or breach incidents.

Competition

The merchant operation software market is competitive, fragmented and rapidly evolving. We provide technological solutions that enable merchants to digitize core workflows and run in-store and online operations more efficiently. We compete with a broad range of participants, including global and regional POS and merchant software providers, payments and fintech companies that offer bundled merchant solutions, and smaller niche vendors that are focused on particular verticals or functionalities. In addition, certain large merchants and merchant groups may develop or customize in-house systems, or rely on internally managed integrations, that compete with some of the services we provide.

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Competition may increase as market participants expand product offerings, introduce new functionality and pricing models, and pursue acquisitions to broaden their installed bases. Some competitors have longer operating histories, greater brand recognition, larger customer bases, broader product suites and significantly greater financial and technical resources, which may enable them to invest more in product development, sales and marketing, and customer support, and to offer more aggressive commercial terms. Our ability to compete effectively depends on multiple factors, including the breadth and quality of our solutions, ease of implementation and integration, system performance and reliability, merchant experience, pricing and overall value proposition, and our ability to execute our product roadmap and expand our merchant base.

Furthermore, as our business continues to grow rapidly, we face significant competition for highly skilled personnel, including management, engineers, product managers and risk management personnel. The success of our growth strategy depends in part on our ability to retain existing personnel and add additional highly skilled employees.

Intellectual Property

We seek to protect our proprietary technology, including our technology infrastructure, through a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure by confidentiality and non-compete agreements. We have eight registered domain names that are currently used in our business and operations, including j-friends.com and ziitech.com.au. As of the date of this annual report, we had three trademarks and eighteen copyrights.

We intend to protect our technology and proprietary rights vigorously, but there can be no assurance that our efforts will be successful in every circumstance. Even successful efforts to defend our rights, including resorting to litigation, may incur significant costs. In addition, third parties may initiate litigation against us alleging infringement of their intellectual property or seeking to declare non-infringement of our intellectual property. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We may not be able to prevent others from making unauthorized use of our intellectual property, which could harm our business and competitive position” and “—We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.”

Regulations

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

Australia

In this section, a reference to “ZIITECH” includes reference to its Australian subsidiaries from time to time, including ZIISMART, except in relation to specific reference to the Company’s rights under the shareholders’ agreement between the direct shareholders of ZIITECH, including the Company as 25% ordinary shareholder, in the sub-section “Corporate Governance.”

Regulations Relating to Australian Corporations

The Corporations Act 2001 (Cth) (“Corporations Act”), together with the Corporations Regulations 2001 (Cth), is the principal legislative framework governing the formation, regulation and management of companies in Australia. The Australian Securities and Investments Commission (“ASIC”) administers and enforces the Corporations Act, including company registration and reporting, market conduct, financial services licensing and enforcement action for relevant breaches.

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Corporate governance

ZIITECH is incorporated in Australia as a proprietary (private) company limited by shares. As a proprietary company, it must maintain a register of members, minutes of boards and shareholder meetings/resolutions as well as financial records sufficient to explain transactions and the company’s financial position and performance. ZIITECH’s internal management is governed by its constitution, which operates as a contract between the company and each shareholder, and between each shareholder. ZIITECH shareholders are also subject to the ZIITECH Shareholders’ Agreement, pursuant to which the shareholders have agreed to further allocate their rights and obligations regarding governance, and agree certain reserved matters and consent thresholds required to obtain valid approval of ZIITECH’s directors or shareholders as applicable. The ZIITECH Shareholders’ Agreement prevails over ZIITECH’s constitution to the extent of any inconsistency. The Company’s special rights in the ZIITECH Shareholders’ Agreement continue unless and until it holds less than 50% of the ZIITECH shares held by it on the amended ZIITECH Shareholders’ Agreement (i.e. 3 September 2025).

ZIITECH board approval matters: Subject to the matters expressly reserved to shareholders under the ZIITECH Shareholders’ Agreement or the Corporations Act (discussed below), the board of ZIITECH determines all other company matters, including approval of the annual budget and business plan, material changes to the business, expenditure outside the approved budget, employee incentive plans, decisions regarding composition of the management team, investments, asset disposals or encumbrances, and the commencement or settlement of litigation or arbitration.

The maximum number of directors of ZIITECH is three directors. The Company has the right to appoint and replace two of the three directors of ZIITECH. The number of directors and the composition of the board cannot be changed without the Company’s approval (in addition to any necessary shareholders’ approval).

The quorum to hold a ZIITECH directors’ meeting is two directors, and must include at least one of the Company’s nominee directors to be in attendance.

Subject to any contrary provision in the ZIITECH Shareholders’ Agreement or the Corporations Act, all decisions of the board of directors of ZIITECH must be approved by ordinary resolution, which is defined as approval by more than 50% in number of the directors present and entitled to vote at the board meeting and including approval by the directors appointed by the Company. Ordinary resolutions must not be passed without the approval of at least 1 director appointed by the Company. In limited scenarios only, an approval by a directors’ special resolution is required (by more than 50% in number of the directors present and entitled to vote at the board meeting). Written directors’ resolutions may only be passed if signed by all directors.

These governance arrangements mean the Company’s nominated directors hold the voting rights necessary to exercise functional control over board decision-making.

ZIITECH shareholder approval matters: Under the Corporations Act, certain corporate actions require approval by special resolution of shareholders (at least 75% of votes cast by shareholders who are entitled to vote on the resolution). Furthermore, the ZIITECH Shareholders’ Agreement specifies a limited number of matters where an approval by ZIITECH shareholders is required, as either an ordinary resolutions (approval by shareholders at least 50% of votes cast by shareholders who are entitled to vote on the resolution) or a special resolution (approval by shareholders at least 50% of votes cast by shareholders who are entitled to vote on the resolution).

The quorum to hold a ZIITECH shareholders’ meeting is shareholders holding at least 50% of the issued shares, and the Company must be in attendance.

Under the ZIITECH Shareholders’ Agreement, no shareholder ordinary resolution or special resolution may be approved without the approval of the Company at a duly convened shareholders’ meeting at which quorum is present, and a written shareholders’ resolution may only be passed if signed by all shareholders (including the Company). These governance arrangements mean the Company, as a 25% ordinary shareholder of ZIITECH, cannot unilaterally approve shareholder decisions. However, the Company has rights in the ZIITECH Shareholders’ Agreement which operate as a negative veto power over approval of ZIITECH shareholder resolutions. In the event there is a deadlock among ZIITECH’s shareholders about approval of a particular decision following a 30-day period of negotiation, the dispute must be referred to and finally settled by arbitration at the Hong Kong International Arbitration Centre, with any award being final and binding.

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Directors duties

Officers (including directors) of ZIITECH owe duties under the Corporations Act and Australian common law. Key duties include:

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to act with the care and diligence of a reasonable person;

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to act in good faith and for a proper purpose;

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to disclose any material personal interest in matters that relate to the affairs of the company and, where required, abstain from deliberation and voting;

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to not improperly use their position to gain an advantage for themselves or someone else, or to cause detriment to the company;

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to not improperly use information obtained as an officer to gain an advantage or cause detriment;

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to prevent the company from trading while insolvent; and

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to ensure compliance with financial reporting, record-keeping and disclosure obligations.

Breach of these duties can give rise to civil penalty proceedings (including pecuniary penalties, disqualification and compensation orders) and, for serious misconduct, criminal liability. ASIC has broad investigative powers and may accept enforceable undertakings, commence civil enforcement or refer matters to relevant Australian government agencies for prosecution.

Regulations Relating to Licenses

To carry on a financial services business in Australia, a company must hold an Australian financial services license (“AFSL”) or a foreign AFSL, be appointed as an authorized representative of an AFSL holder; or be exempt from the requirement to hold an AFSL (under Chapter 7 of the Corporations Act). Similarly, if a company engages in credit activities, they will generally need an Australian credit license or authorization from a holder of an Australian credit license before they can engage in credit activities.

ZIITECH not currently hold an AFSL or Australian credit license in Australia as the Merchant Digitalization and Commerce-Enablement Solutions currently offered in Australia through ZIITECH do not constitute a financial service or a credit service for which an AFSL or Australian credit license is required.

The Reserve Bank of Australia (“RBA”), Australian Payments Network (“AusPayNet”) and New Payments Platform Australia Limited (“NPPA”) oversee and administer the different payments systems in Australia. Under the Payment Systems (Regulation) Act 1998 (Cth) (“PSRA”), the RBA has the power to designate certain payment systems and make access regimes and standards applicable to administrators and participants in those systems.

Payment Reform

The Australian Government is currently modernizing the regulatory framework for payments in Australia meaning that the future framework may capture many participants in the payments industry who are not currently subject to regulation. As part of these reforms, the Australian federal parliament passed the Treasury Laws Amendment (Payments System Modernisation) Act 2025 (the “Modernisation Act”). The proposed reforms would give designation powers to the Federal Treasurer and provide the RBA with new ministerial powers to designate payment systems in the national interest. These reforms expand the coverage of the PSRA and significantly broaden the scope of payment systems that could be designated. The RBA and the Treasurer may impose an access regime on participants or make standards that must be complied with by participants in a payment system and this may in the future cover any of our activities.

On 12 March 2026, the Australian Government released further draft legislation for consultation, being the Treasury Laws Amendment Bill 2026: Payment Systems Modernisation – amendment of the Corporations Act 2001 and other Acts. The legislation will introduce new payment products into the Corporations Act for which an AFSL will be required, one of which is payment technology and enablement services for example payment gateways and pass through digital wallets. The consultation closes in April 2026. Once completed and implemented, this may result in additional compliance obligations or associated costs.

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Regulations Relating to Anti-Money Laundering and Counter-Terrorism Financing

ZIITECH is subject to laws and regulations in Australia relating to corrupt and illegal payments and money laundering obligations, as well as laws prohibiting doing business with certain individuals, groups and countries. There has been increased supervisory, regulatory and enforcement focus on compliance with anti-money laundering, counter-terrorism financing, antibribery and corruption and sanctions laws. The Australian federal parliament passed significant amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (“AML/CTF Act”) in November 2024, the majority of which will come into effect from March 31, 2026. The amendments will impact all existing and new regulated entities, particularly those involved in transfers of value.

Regulations Relating to Information Security and Privacy Protection

ZIITECH is subject to the Privacy Act 1988 (Cth) (“Privacy Act”) and the Australian Privacy Principles (“APPs”). The Privacy Act regulates the collection, storage, use and disclosure of personal information by organisations carrying on business in Australia and requires that personal information only be used or disclosed for the primary purpose for which it was collected, unless an exception applies.

Under the Privacy Act, ZIITECH is required to take reasonable steps, including the implementation of appropriate organisational and technical measures, to protect personal information that it collects from misuse, interference and loss, and from unauthorised access, modification or disclosure. What constitutes “reasonable” steps depends on factors such as the nature of the organisation and the volume and sensitivity of the personal information it holds.

The Privacy Act also establishes a mandatory data breach notification regime for “eligible data breaches”, being incidents that are likely to result in a real risk of serious harm to affected individuals. If ZIITECH experiences a data breach that meets this threshold, it will be required to notify the Office of the Australian Information Commissioner and affected individuals. Any failure to comply with applicable privacy obligations, or any significant data breach, could result in regulatory investigation, civil penalties and reputational harm.

Regulations Relating to Intellectual Property

The principal forms of intellectual property protection available in Australia include trade marks, designs, patents and copyright under statute, together with common law protections for confidential information and passing off. ZIITECH relies on a combination of registered trade marks and domain name registrations in Australia, and the copyright subsisting in ZIITECH’s software is protected under the Copyright Act 1968 (Cth) without registration.

There is a risk that ZIITECH’s intellectual property may be infringed, misappropriated or otherwise exploited by third parties, including through unauthorised access, copying or reverse engineering of its software. Conversely, ZIITECH may also face claims that its technology, software or branding infringes the intellectual property rights of third parties. Any such disputes could result in litigation, damages or the need to modify or replace elements of ZIITECH’s technology or branding.

Like many software businesses, ZIITECH may incorporate third-party or open-source software components into its platform. The use of such software may be subject to licence conditions that could impose obligations on ZIITECH in relation to the distribution or use of its software. In addition, where ZIITECH relies on third-party contractors or service providers for software development, it must ensure that intellectual property created by such persons is properly assigned to ZIITECH, as failure to do so could affect its ability to own that intellectual property.

Regulations Relating to Competition and Consumer Law Matters

Australia’s regulation of competition and consumer law matters is centred on the Competition and Consumer Act 2010 (Cth) (“CCA”) including the Australian Consumer Law (“ACL”).

Competition Law Regulation

The CCA prohibits certain anticompetitive practices, including:

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the entry into agreements, arrangements or understandings that contain cartel provisions or other provisions having the purpose or effect of substantially lessening competition;

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the misuse by a firm of its substantial market power that has the purpose or effect of substantially lessening competition;

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imposing conditions on customers or suppliers having the purpose or effect of substantially lessening competition;

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imposing or attempting to impose minimum resale prices on resellers; and

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acquisitions of shares or assets of another person or corporation having the effect of substantially lessening competition in a market in Australia.

On 1 January 2026, a new mandatory and suspensory merger control regime commenced in Australia. The acquisition of a controlling interest in the shares of a corporation or of the assets of another person or corporation that trigger prescribed monetary thresholds must be notified to the Australian Competition and Consumer Commission (“ACCC”) and either ‘cleared’ or ‘waived’ by it prior to completion. For the purposes of the new regime, control means the capacity to determine the outcome of the other entity’s financial or operating policies. The concept is therefore based on practical influence rather than specific rights that can be enforced, marking a slight variation from the EU Merger Regulation approach. With relatively low monetary notification thresholds, the new regime has broad application. Completion of a notifiable acquisition without clearance will be void.

Cartel Conduct

Under the CCA, cartel conduct, including price fixing, market sharing, output restrictions and bid rigging, is prohibited and attracts both civil and criminal liability. Attempted inducement to engage in cartel conduct is also unlawful and has led to record penalties. The ACCC continues to prioritise detection and prosecution supported by immunity and cooperation policies. The consequences of engaging in cartel conduct include substantial maximum penalties being the greater of:

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AUD 50 million;

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3 x the benefit obtained; or

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30% of annual turnover for corporations and up to 10 years imprisonment for individuals.

Consumer Law Regulation

The ACL proscribes various forms of conduct, including:

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the making of false, misleading or deceptive representations;

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engaging in particular forms of conduct including referral selling or pyramid schemes;

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including unfair contract terms in standard form consumer or small business agreements;

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engaging in unconscionable conduct.

Penalties for contraventions of the ACL have been significantly increased and now mirror those outlined above.

A new general prohibition on unfair trading practices is also proposed to be introduced into the ACL. The prohibition would expand the ambit of the ACL to capture conduct which unreasonably manipulates consumers or distorts the environment in which they make decisions, and that is likely to cause detriment to the consumer.

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Regulations Relating to Unfair Contract Terms Regime

ZIITECH is subject to unfair contract terms (“UCT”) regime implemented in each of the CCA and the Australian Securities and Investments Commission Act 2001 (Cth) (“ASIC Act”). The UCT regime found in the ACL¹ applies to:

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a consumer contract, which is defined as a contract for the sale of goods or services to a small business; and

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a small business contract, which is defined as a contract for the supply of goods or services to a small business.

This is largely mirrored in the UCT regime found in the ASIC Act, however the UCT regime under the ASIC Act applies to consumer contracts or small business contracts where the contract is a financial product or a contract for the supply or possible supply of services that are financial services (as defined in the ASIC Act).

The Treasury Laws Amendment (More Competition, Better Prices) Act 2022 introduced amendments to the UCT regime, including new contraventions, increased penalties and an expansion of the entities falling within the scope of a small business (entities that have less than 100 employees or an annual turnover of less than AU$10 million). It also extended what could constitute a standard form contract.

Penalties will apply to any party that proposes, uses, applies, or relies on an unfair contract term. From 9 November 2023, civil penalties will apply to each unfair term in a contract, and will be treated as separate contravention of the ASIC Act and the ACL.

Regulations Relating to Tax

Corporate taxation

Australian resident companies are subject to Australian corporate tax which is calculated on a stand-alone basis on worldwide assessable income (i.e. Australian sourced income as well as foreign sourced income), subject to deductions, credits and other specific taxation provisions. The corporate tax rate is generally 30%, but which may be subject to a reduced tax rate of 25% for certain entities with low turnover.

The Australian Government recently passed legislation enacting the OECD’s Pillar Two Global Anti-Base Erosion Rules (“GloBE Rules”) which applies from 2024 onwards. The GloBE Rules place a 15% floor on the tax that large multinationals will pay in any particular jurisdiction and may apply to multinational groups with a consolidated annual revenue of at least €750 million (approx. USD$818 million) in 2 of the preceding 4 fiscal years. The income inclusion rule and qualified domestic minimum top-up tax rule apply for tax years beginning on or after 1 January 2024 while the undertaxed profits rule will apply for tax years beginning on or after 1 January 2025.

Withholding taxes

Withholding taxes may be imposed on certain dividends, interest and royalty payments made by an Australian entity to a non-resident entity.

The rates imposed under Australian domestic law are:

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30% for unfranked dividends;

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30% for royalties; and

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10% for interest payments.

¹Part 2-3 of chapter 2 of Schedule 2 to the CCA.

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Generally, there is a reduced rate of withholding tax that may apply where Australia has a double tax treaty with another jurisdiction. There is no double tax treaty between Australia and the Cayman Islands (noting that the Company directly holds its shares in ZIITECH).

Dividends

Dividends payable by an Australian company may be “franked”. Broadly, a franking credit represents corporate tax paid by the Australian subsidiary on the profits out of which the dividend is paid. Withholding tax is deducted from unfranked dividends (i.e. dividends from income not yet taxed) paid to a non-resident at the standard rate of 30% (unless reduced under an applicable double tax treaty). Dividends are not subject to dividend withholding tax to the extent that they are franked.

Royalties

Under new guidance from the Australian Taxation Office (“ATO”) on software and royalties, a broad range of payments for access to software under software distribution arrangements could be characterised as royalties which are subject to withholding tax. This approach could be applied to arrangements that businesses would not otherwise consider give rise to royalties (including payments made in relation to digital software distribution, cloud computing arrangements, including software-as-a-service, and packaged software). The characterisation of a particular arrangement will depend upon the particular facts and circumstances of the arrangement.

Debt funding

In broad terms, the new Australian thin capitalisation rules will limit debt deductions payable in respect of related party debt to 30% of ‘Tax EBITDA’ (which is an approximation of accounting profit). Australia has also recently introduced new debt deduction limitation rules which disallow debt deductions incurred in respect of related-party debt that is used to either acquire assets from a related party or fund distributions such as dividends and returns of capital.

Transfer pricing

Australia has a comprehensive transfer pricing regime aligned with the OECD Transfer Pricing Guidelines which is aimed at preventing taxpayers engaged in cross-border transactions from increasing deductions or decreasing income to reduce their Australian income tax liability. The arm’s length principle applies to cross-border dealings between related parties, and transfer pricing adjustments operate on a self-assessment basis. Offshore related party dealings with an Australian business (e.g. management fees, service charges, licensing of fintech intellectual property, or intercompany financing) are subject to the transfer pricing rules and may be subject to scrutiny by the ATO.

Anti-avoidance and integrity measures

Australia has a number of integrity measures which are directed at large multinational groups with annual global income of AUD 1 billion or more, including the Multinational Anti-Avoidance Law and the Diverted Profits Tax, as well as general anti-avoidance provisions which apply irrespective of an entity’s annual income. These measures target arrangements that artificially avoid a taxable presence in Australia or divert profits offshore through contrived related-party dealings. Hybrid mismatch rules may also apply to neutralise any hybrid financing or entity mismatches which result from differences in tax treatment of arrangements as between Australia, the PRC and the Cayman Islands.

Regulations Relating to Employment

The terms of employment of workers in Australia are primarily regulated by legislation and, for certain classes of workers, by industrial awards or workplace agreements. The common law of employment also has an important role. The Fair Work Act 2009 (Cth) (“Fair Work Act”) is the key piece of legislation governing workplace relations in Australia, establishing a national workplace relations framework applicable to most private sector employers, including ZIITECH. The Fair Work Act includes rules relating to unfair dismissal, protections from ‘adverse action’, industrial instruments (industrial awards and enterprise agreements), and prescribes minimum entitlements for all national system employees, including relating to wages, annual leave, personal and carer’s leave, parental leave and related entitlements, family and domestic leave, maximum weekly hours, public holidays, notice of termination, redundancy pay, a right to disconnect, and a right to request flexible working arrangements. Most of these minimum entitlements form part of the National Employment Standards (“NES”) - a set of 12 minimum entitlements which apply regardless of an employee’s industry, role or seniority.

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Modern awards, made by the Fair Work Commission, supplement the NES and operate as a further ‘safety net’ for employees by providing industry or occupation-specific minimum terms and conditions for covered employees, including minimum rates of pay, overtime, penalty rates, allowances and leave loading. Employers may also negotiate enterprise agreements with their workforce, which may override an applicable modern award (but may not derogate from the NES), through a process of bargaining with employees and any representatives, including unions, governed by the Fair Work Act.

In recent years there has been increased regulator focus by the Fair Work Ombudsman on compliance and enforcement of obligations under industrial instruments. If an employer contravenes the NES or a term of an applicable industrial instrument, orders to pay compensation and/or pecuniary penalties (fines) can be imposed by a court - these penalties can be severe (up to AUD 4,950,000 or 3 times the underpayment amount per contravention for some ‘serious contraventions’). Certain individuals involved in contraventions, such as directors, senior managers and HR/payroll staff, may also be ordered to personally pay penalties or face criminal liability for intentional underpayments.

Australian employers are also required to make superannuation guarantee contributions on behalf of eligible employees at a rate prescribed by the Superannuation Guarantee (Administration) Act 1992 (Cth), currently 12% of the employee’s salary or wages (capped to a maximum contribution in respect of high-earning employees). Each Australian State and Territory maintains its own long service leave legislation, which sets out rules for the accrual and payment of long service leave entitlements. State and Territory laws also regulate employers’ obligations to provide workers’ compensation payments to employees suffering from work-related injuries or diseases. Depending on the applicable jurisdiction, employers are either required to contribute a levy to the State or to keep and maintain insurance cover for the full amount of the employer’s statutory liability.

Work health and safety (“WHS”) is primarily regulated through a system of nationally harmonised State and Territory-based laws. The laws are based on the national model Work Health and Safety Act 2011 (Cth) in all jurisdictions except Victoria, which relies on its own distinct legislation being the Occupational Health and Safety Act 2004 (Vic), operating on substantially similar principles. These laws impose a primary duty of care for persons conducting a business or undertaking (“PCBUs”) to ensure, so far as is reasonably practicable, the health and safety (both physical and psychological) of workers (including employees, contractors and volunteers) at the workplace. Each State and Territory has its own WHS regulator who is responsible for providing guidance to duty holders about WHS matters, monitoring compliance with WHS laws, investigating non-compliance and taking enforcement action where there has been a breach. Non-compliance with WHS laws can expose PCBUs, including their officers and workers, to criminal and civil penalties, ranging from on-the-spot fines up to criminal prosecution, where the maximum penalties for serious breaches or industrial manslaughter can be up to AUD 20 million or 25 years’ imprisonment for individuals (or both) depending on the jurisdiction.

Regulations Relating to Foreign Investment

Foreign investment in Australia is regulated by the Foreign Acquisitions and Takeovers Act 1975 (Cth) (“FATA”), the Foreign Acquisitions and Takeovers Regulation and the Australian Government’s Foreign Investment Policy (collectively, the “FIRB regime”). The Australian Government minister responsible for making decisions under the FIRB regime is the Australian Federal Treasurer (“Treasurer”). The Treasurer is advised and assisted by the Foreign Investment Review Board (“FIRB”) which is an administrative body. Applications to the Australian Treasurer under the FATA are made through the FIRB and processed by the Australian Federal Department of Treasury.

As a foreign person, we (including ZIITECH) are subject to the FIRB regime. Some foreign persons are “foreign government investors” for the purposes of the FIRB regime and subject to more stringent approval thresholds. To the Company’s knowledge, based on our current shareholding structure, we are not a foreign government investor for the purposes of the FIRB regime.

The FIRB regime (including the definitions of “foreign person” and “foreign government investor”) is a complex area of Australian law. The overview below is a high level summary only. The Company received professional advice about the FIRB regime in respect of its acquisition of shares in ZIITECH. Any persons seeking to acquire a substantial interest in the Company’s securities in future should consider obtaining independent legal advice about their individual obligations under the FIRB regime (if applicable to the particular transaction).

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Mandatory FIRB approval

Where a proposed acquisition falls within the scope of the FIRB regime, a foreign person needs to consider whether they must provide prior notification of the acquisition and seek a no objection notification from the Australian Treasurer through FIRB (“FIRB approval”).

Certain proposed acquisitions of interests in Australian entities, businesses and land (including certain offshore acquisitions with connection to such assets, such as an investment in the Company’s shares while it holds underlying interests in Australian entities including ZIITECH) require prior FIRB approval. Whether a proposed acquisition requires FIRB approval depends on the percentage interest (including certain control or voting rights) to be acquired and whether the relevant monetary threshold is met (which may be as low as AUD 0). Different thresholds apply depending on who the acquirer is and the type of target. Foreign government investors are subject to lower thresholds.

Certain passive increases in securities holdings (where holdings increase due to actions of third parties, for example, buybacks or redemption) must also be notified to the Australian Treasurer within 30 days. Notification is required where the increase results in a foreign person holding an interest that exceeds a relevant ownership threshold where the relevant monetary thresholds are also met.

Foreign persons must also notify FIRB of any proposals to start a national security business in Australia.

The test against which FIRB applications are assessed is whether the proposal is contrary to Australia’s national interest or in limited cases, national security. There is no definition of ‘national interest’ or ‘national security’ and applications are assessed on a case-by-case basis. The Australian Treasurer may attach conditions to a FIRB approval where compliance with the conditions is necessary in order to prevent the proposal from being contrary to Australia’s national interest or national security.

Criminal offences and civil penalties can apply for failing to give notification of acquisitions to the Australian Treasurer where required, undertaking certain acquisitions without FIRB approval, or contravening a condition to a FIRB approval.

If an acquisition falls within an exemption under the FATA, then FIRB approval will not be required. There are a number of exemptions under the FATA.

Voluntary notifications to FIRB

Some proposed acquisitions are not compulsorily notifiable but may activate the Australian Treasurer’s powers to make adverse orders. If the Australian Treasurer considers a proposal to be contrary to Australia’s national interest, the Australian Treasurer can make orders including prohibition or divestment.

The Australian Treasurer can ‘call in’ for review reviewable national security actions which are not otherwise notified if the Treasurer considers that the action may pose national security concerns. The review can occur when the action is still proposed or up to 10 years after the action has been taken.

National security actions

Any acquisition of an interest in national security land or certain acquisitions of interests in a national security business is considered a ‘notifiable national security action’ and will be subject to an AUD 0 threshold.

National security land is defined as Australian defense premises or land where an Australian national intelligence community agency holds an interest that is publicly known, or ascertainable through reasonable inquiries.

A national security business in Australia includes one of the following kinds:

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it is a responsible entity for, or a direct interest holder in, a critical infrastructure asset under the Security of Critical Infrastructure Act 2018 (Cth) (“SOCI Act”);

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it develops, manufactures or supplies critical goods, technology or services for a military or intelligence use;

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it stores or has access to classified information; or

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it collects, stores or maintains security sensitive personal information for the Australian Defence Force, the Australian Department of Defence or an Australian intelligence agency.

Recent changes to the SOCI Act have considerably expanded the types of critical infrastructure assets and sectors. The sectors now covered by the SOCI Act are communications, data storage or processing, financial services and markets, water and sewerage, energy, healthcare and medical, higher education and research, food and grocery, transport, space technology and the defense industry.

There is a separate and additional obligation to register certain acquisitions with the Register of Foreign Ownership of Australian Assets (“Register”). Unlike the pre-transaction notification requirements, the Register’s registration requirements apply within 30 days after the relevant transaction or event. Registration may be required even if pre-transaction notification is not required and no FIRB approval is obtained.

Certain changes in, and disposal of, the assets will also need to be registered. A new foreign person that holds certain assets also have to consider their registration obligation, as well as those that cease to be a foreign person.

PRC

Regulations Relating to Microfinance Industry

As of the date of this annual report, there is no nationwide administrative regulatory authority for the microfinance industry at national level. Pursuant to the Guiding Opinions of the China Banking Regulatory Commission and the People’s Bank of China on the Pilot Operation of Microfinance Companies (the “Guiding Opinions”), which was promulgated by the CBRC and the PBOC and took effect on May 4, 2008, the provincial governments may launch the pilot operation of microfinance companies within county territory in their respective province (region, municipality) only after they could determine a competent department (financial affairs office or similar department) to be responsible for the supervision and administration on microfinance companies and are willing to assume the responsibility for managing the microfinance companies’ risks.

The Guiding Opinions has provided guidance on pilot operation of microfinance companies and has specified the incorporation, capital source, capital use and regulatory policies of the microfinance companies. Pursuant to the Guiding Opinions:

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Any applicant must apply to the supervising authority of the provincial government and, upon approval, comply with registration formalities to obtain all necessary business licenses, approvals and certificates for the establishment of a microfinance company;

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If a microfinance company is a limited liability company, its registered capital must be at least RMB5.0 million, and if it is a company limited by shares, its registered capital must be at least RMB10.0 million;

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No single natural person, enterprises or other social organization, together with their respective affiliates, may hold in excess of 10% of the total registered capital of the microfinance company;

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The funds of a microfinance company mainly consist of the capital contributed and funds donated by shareholders as well as funds raised from up to a maximum of two banking financial institutions. A microfinance company must accept public supervision and shall not engage in any form of illegal fund-raising. According to relevant laws and regulations, the funds obtained by a microfinance company from banking financial institutions may not exceed 50% of its net capital;

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A microfinance company must conduct its operations according to market-oriented principles. The loan interest rate charged by a microfinance company cannot exceed the maximum loan interest rate specified by judicial departments and cannot be lower than 0.9 of the benchmark interest rate announced by the PBOC. The specific floating rate shall be determined by the microfinance company based on market-oriented principles;

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The outstanding amount of loan made to the same borrower by a microfinance company cannot exceed 5% of the net capital of such microfinance company;

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None of the founders, being natural persons, enterprises and other social organizations, of any microfinance company and no natural person as a director, supervisor, or member of senior management of any microfinance company must have any criminal or bad credit record;

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The microfinance company shall, according to relevant provisions, set up prudent and normative asset classification and provision systems, accurately classify the assets, make full provision for allowances for doubtful accounts, and guarantee that its adequacy ratio of provision for asset losses always remain above 100% in order to fully cover all risks;

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The microfinance company shall establish a sound corporate governance structure and credit management system, and strengthen internal control; and

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The PBOC will trace and monitor the interest rates and capital flows of microfinance companies, and will include them in the credit system. The microfinance company shall regularly provide the credit system with information about the borrower, loan amount, guarantee and repayment, and other business information.

According to the Opinions on Further Supporting the Sound Development of Small and Micro Enterprises issued by the State Council on April 19, 2012, the restriction on the percentage of equity interest held by a single shareholder in a microfinance company can be lifted where it is appropriate.

On December 31, 2024, NFRA promulgated Interim Measures for the Supervision and Administration of Microcredit Companies, which stipulates the following requirements with respect to the microcredit companies, including but not limited to: (i) internet microcredit companies shall ensure that core business segments such as loan application acceptance, risk review, approval, disbursement and recovery are completed through online operations. Microcredit companies are not allowed to conduct business across provinces, autonomous regions and centrally administered municipalities. The conditions for the operating regions of internet microcredit companies shall be separately stipulated; (ii) the loan balance for consumption purposes per household by an internet microcredit company shall not exceed RMB 200,000, and the total loan balance for production and operation purposes per household shall not exceed RMB 10 million; (iii) microcredit companies shall pay the loan principal to the borrowers in full amount as stipulated in the loan contracts, and shall not deduct interest, handling fees, management fees, security deposits or the like in advance; (iv) the balance of funds raised by microcredit companies through non - standardized forms such as bank loans and shareholder loans shall not exceed one-fold of their net assets at the end of the previous year. The balance of funds raised by microcredit companies through standardized forms such as bond issuance and asset securitization products shall not exceed four-fold of their net assets at the end of the previous year. The risk prevention and control system established by Internet-based microcredit companies shall include data-driven risk control models, anti-fraud systems, risk identification mechanisms, risk monitoring means, risk disposal measures, customer identity identification and registration systems, etc. Internet microcredit companies shall mainly rely on endogenous data information within Internet platforms and other data information obtained through legal channels to assess and prevent customers’ credit risks; (v) microcredit companies shall strengthen the list - based management of cooperative institutions, establish a unified access mechanism covering various cooperative institutions, and clarify the corresponding standards and procedures. Microcredit companies that carry out marketing and customer acquisition, publish loan products or disburse loans through internet platforms such as websites, mobile applications (APPs), and small programs (including their own and those of cooperative institutions) shall file the information of such Internet platforms and the detailed information of the products with the local financial management institutions; (vi) for microcredit companies with serious illegal and irregular behaviors, the provincial local financial management institutions may revoke their microcredit business qualifications in accordance with relevant laws, regulations and regulatory provisions, and require them to complete the change registration or cancellation registration of their names and business scopes with the market supervision and management departments within the prescribed time limit; (vii) microcredit companies shall gradually meet the requirements stipulated in the Interim Measures for the Supervision and Administration of Microcredit Companies within the transition period specified by the provincial local financial management institutions. The transition period shall in principle not exceed two years.

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The Interim Measures for the Administration of Network Microfinance Companies Business (Draft), or the Draft Network Microfinance Measures, was released by the CBIRC and PBOC in November 2020 to solicit public comments. The Draft Network Microfinance Measures makes it clear that a network microfinance business shall be carried out mainly in the provincial administrative areas to which the entity is registered and shall not be cross-provincial without prior approval. The registered capital of a company operating a network microfinance business shall not be less than RMB1 billion and shall be a one-time paid-in monetary capital. The Draft Network Microfinance Measures would expressly prohibit loans from being used to invest in bonds, stocks, financial derivatives, or asset management products to purchase houses or to repay mortgage loans. The Draft Network Microfinance Measures would establish a three-year transition period, and those operating cross-provincial network microfinance businesses without approval will be phased-out.

According to the Administrative Measures for Personal Loans promulgated on February 2, 2024 by National Financial Regulatory Administration, or the NFRA, which took effective on July 1, 2024, lenders shall not entrust a third party to complete the core matters of risk control in a loan investigation involving borrowers’ true intention, income level, debt status, source of proprietary funds and access of an external assessment agency, etc. For a loan of not more than RMB 200,000, if a lender may, through off-site indirect investigation, effectively verify the authenticity of relevant information and thus assess the risk of the borrower, it may simplify or eliminate on-site investigation (excluding loans for personal housing purposes). The lender shall require the borrower to sign the loan contract and other relevant documents in person. For a loan of no more than RMB 200,000, the relevant contracts and documents may be concluded through e-banking channels (excluding loans for personal housing purposes). Where a contract is signed in person, the lender shall make audio and video recordings of the signing process and properly keep the relevant videos.

In December 2025, the People’s Bank of China and the NFRA jointly issued the Guidelines on Comprehensive Financing Cost Management for Microcredit Companies, or Circular 247, and the Q&A on the implementation of Circular 247 (the “Q&A”). To promote the reduction of comprehensive financing costs for loans by the microcredit companies, Circular 247 stipulates that (i) local financial regulatory authorities shall guide microcredit companies to disclose the comprehensive financing costs to borrowers prior to the execution of loan agreements. Comprehensive financing costs refer to interest and fees borne by the borrower directly related to the loan business, including but not limited to loan interest, guarantee fees, and insurance premiums. Such costs shall be disclosed in annualized form, specifying the fee items, charging standards, and the entities who collect such costs. No other forms of interest or fees shall be charged to borrowers; (ii) local financial regulatory authorities shall guide microcredit companies to strictly comply with applicable laws and regulations regarding the comprehensive financing costs of newly issued loans. Where such costs exceed 24%, local financial regulatory authorities shall take regulatory measures in accordance with the Interim Measures for the Supervision and Administration of Microcredit Companies, urge the microcredit companies to make immediate rectification, and concurrently, share information regarding such violation with the relevant local branch of the People’s Bank of China in a timely manner, to be integrated into the dynamic management for access to the credit reference system; (iii) where comprehensive financing costs of newly issued loans exceed four times the one-year Loan Prime Rate (LPR), local financial regulatory authorities shall take regulatory measures under the Interim Measures for the Supervision and Administration of Microcredit Companies to guide microcredit companies in gradually reducing the comprehensive financing cost of newly issued loans. For microcredit companies with larger scales and sound operations, regulatory authorities may appropriately intensify guidance, leading large companies to play a demonstrative role and drive the development of smaller ones. In principle, all microcredit companies shall reduce such costs to within four times the one-year LPR by the end of 2027; (iv) from 2026, local financial regulatory authorities shall, by year-end, assess progress and effectiveness in reducing comprehensive financing costs of newly issued loans (including cost levels, regulatory measures, and supportive policies), and evaluate feasibility of achieving the target of capping such costs at four times the one-year LPR. The Q&A further clarifies: (i) in principle, by the end of 2026, the proportion of newly issued loans with comprehensive financing costs exceeding four times the one-year LPR shall drop significantly; by the end of 2027, all such costs of newly issued loans shall be capped at four times the one-year LPR and (ii) certain non-bank financial institutions engaged in consumer credit business may be managed by reference to Circular 247.

In January 2026, Jiangxi Local Financial Regulatory Administration promulgated Implementation Rules for the Supervision and Administration of Microfinance Companies in Jiangxi Province, to impose the management duties upon the relevant regulatory authorities and to specify more detailed requirements on the microfinance companies, in accordance with which, among other requirements, (i) the microfinance companies are prohibited from engaging in deposit taking activities from the public and illegal fund-raising and (ii) the modification of certain company registration issues shall be subject to the approval by the relevant regulatory authorities.

We historically engaged in microfinance businesses through a former subsidiary in Ganzhou, Jiangxi Province, namely Ganzhou Aixin Micro Finance, which has obtained a microfinance license from the relevant local government authority. This microfinance license was updated in September 18,2025 and remains valid until September 17,2026.

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Regulations Relating to Insurance Brokerage

The primary regulation governing insurance intermediary services is the PRC Insurance Law, originally enacted in 1995 and revised in 2015. According to the PRC Insurance Law, the China Insurance Regulatory Commission (which was integrated into the CBIRC with other governmental departments in April 2018) is the regulatory authority responsible for the supervision and administration of the PRC insurance companies and the intermediaries in the insurance sector, including insurance agencies and brokers.

The principal regulations governing insurance brokerage are the Provisions on the Supervision and Administration of Insurance Brokers, promulgated by the China Insurance Regulatory Commission in February 2018. According to these regulations, an insurance broker refers to an entity that receives commissions for providing intermediary services to policyholders and insurance companies to facilitate their entering into insurance contracts. An insurance broker established in mainland China must meet the qualification requirements specified by the CBIRC and obtain a license from the CBIRC or its local branches to operate insurance brokerage business.

On March 12, 2002, the Circular of China Insurance Regulatory Commission on Distributing the Contents Related to Insurance Industry in the Legal Documents of China’s Accession to WTO, or the Circular 14, became effective and provided that foreign shareholders of a Chinese insurance broker shall (i) be foreign insurance brokers with more than 30 years of experience in establishing commercial institutions in WTO member countries; (ii) have established a representative office in mainland China for two successive years; and (iii) have total assets of more than US$200 million at the end of the year preceding the investment application in a Chinese brokerage business. On October 30, 2019, the Opinions of the State Council on Furthering Effective Use of Foreign Capital was promulgated, which became effective the same day. The State Council presented several opinions to further the effective use of foreign capital, including canceling the years of business operation and the total assets requirements for foreign insurance brokerage institutions to operate insurance brokerage business. According to the Service Guide for the Establishment and Examination and Approval of Insurance Brokers, published by the CBIRC in September 2021, foreign shareholders of a Chinese Insurance Broker shall be (i) foreign insurance brokers with more than 30 years of experience in establishing commercial institutions in WTO member countries; and (ii) have total assets of more than US$200 million at the end of the year preceding the investment application in a Chinese brokerage business.

However, on December 3, 2021, the Notice of the CBIRC General Office on Clarifying Relevant Measures for the Opening up of the Insurance Intermediary Market was released and provided that overseas insurance brokerage companies with actual business experience and complying with the relevant provisions of the CBIRC are allowed to invest in and establish insurance brokerage companies in mainland China to engage in insurance brokerage business. The relevant requirements that an investor that intends to establish a foreign-funded insurance brokerage company in mainland China shall have more than 30 years of business experience in any WTO member country, have established a representative office in mainland China for two consecutive years and have total assets of not less than US $200 million in the year prior to the application as prescribed in the Circular 14 shall no longer be implemented.

On December 26, 2022, the CBIRC issued the Administrative Measures for the Protection of Consumers’ Rights and Interests by Banking and Insurance Institutions, or the Administrative Measures, which became effective on March 1, 2023. The Administrative Measures require banking and insurance institutions to establish and improve systems and mechanisms for the protection of consumer’s rights and interests, including mechanisms for review, disclosure, consumer appropriateness management, traceability of sales practices, protection of consumers’ information, list-based management of the partners, complaint handling, diversified resolution of conflicts and disputes, internal training, internal assessment and internal audit. The Administrative Measures also specify the following consumers’ rights that the banking and insurance institutions shall protect: (i) right to know; (ii) right to choices on their own; (iii) right to a fair transaction; (iv) right to property safety; (v) right to lawful claim; (vi) right to education; (vii) right to respect; and (viii) right to information security. Further, the China Banking and Insurance Regulatory Commission and its local offices may take regulatory measures against the institutions if any issue regarding consumer protection was found and may impose administrative penalties in case of violation of the Administrative Measures.

On September 20, 2023, the NFRA issued the Administrative Measures Governing Insurance Sales Practices, which became effective on March 1, 2024. These Measures categorizes insurance sales activities of insurance companies and insurance intermediaries, including insurance brokers, into three phases namely pre-sales, in-sales, and post-sales activities, setting forth varied regulatory requirements on insurance sales activities in each phase:

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Pre-sales: insurance brokers shall not engage in insurance sales activities beyond the approved business scope and regional scope. Insurance brokers shall assume the primary management responsibility for the insurance sales promotion information released by its sales personnel;

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In-sales: insurance brokers shall not enter into insurance contracts with their clients using methods such as compulsory tie-in sale or default check on web pages;

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Post-sales: insurance brokers shall establish archives management rules, properly maintain business archives, account books, business ledgers, personnel archives, client materials and audio-visual materials, electronic data, and other archive materials generated during traceability management.

The subsidiary of one of our former variable interest entities, Beijing Myfin, has obtained a license for insurance brokerage from the Beijing Bureau of the CBIRC and is thus qualified to conduct an insurance brokerage business within the territory of the PRC. Such license will remain valid until June 2028.

Regulations Relating to Fund Sales Business

The Law on Securities Investment Funds, originally promulgated in 2003 and amended in 2015, sets forth the principal requirements applicable to fund service institutions, including fund sales institutions. This law subjects institutions that engage in fund sales and other fund services related to publicly raised securities investment funds to registration or record-filing requirements with the securities regulatory authority. The Measures for the Supervision and Administration of Publicly Offered Securities Investment Fund Distributors, originally promulgated by the CSRC in August 2020, govern the qualification of publicly raised securities investment fund sales, payments and settlement for publicly raised securities investment fund sales, publicly raised securities investment fund sales charges and other aspects of publicly raised securities investment fund sales business.

Independent fund sales institutions must apply for registration with the local branch of the CSRC at their place of industrial and commercial registration and obtain a license for a publicly raised securities investment fund sales business. In order to obtain such a license, an independent fund sales institution must meet certain requirements, including, but not limited to: (i) having good financial position and regulated operation; (ii) having business premises, security protection and other facilities commensurate with fund distribution business, and its information management platform for handling fund distribution business complies with the requirements of the CSRC; (iii) having sound and efficient business management and risk management systems, its systems for anti-money laundering, counter-terrorism financing and due diligence on tax-related information in terms of non-resident financial accounts, etc., comply with the requirements of laws and regulations, and its systems for fund distribution settlement capital management, investor eligibility management, internal control, etc., comply with the requirements of the CSRC; (iv) having at least 20 employees obtained the fund practice qualification; (v) it has been subjected to neither a criminal penalty nor major administrative punishment during the last three years, it has been subjected to no major administrative regulatory measures due to any analogous business during the last one year, it does not fall within the rectification period due to any major act in violation of laws and regulations, or is under investigation by the competent regulator due to being suspected of committing any major act in violation of laws and regulations, and it involves no matter concerning a major alteration that has affected or may affect the normal company operation, or major litigation, arbitration, etc.; (vi) its shareholders make capital contributions with their self-owned capital, rather than non-self-owned capital such as debt capital or entrusted capital, and its overseas shareholders make capital contributions in freely convertible currencies; (vii) having net assets of no less than RMB50 million; and (viii) the senior executives have obtained the fund practice qualification, are familiar with the fund distribution business and comply with the post-holding conditions for senior executives in the fund industry as required by the CSRC.

The Measures for the Administration of the Raising of Privately Raised Investment Funds, promulgated in April 2016 by the Asset Management Association of China, govern the raising of privately raised investment funds. A member institution of the Asset Management Association of China which has registered with the CSRC and obtained a license for a publicly raised securities investment fund sales business can be entrusted by managers of privately raised investment funds to raise privately raised investment funds. “Raising” refers to the promotion, sale, purchase and redemption of privately raised investment fund units and other related activities.

On March 28, 2018, the Office of the Leading Group for the Special Rectification for Internet Financial Risks issued the Notice on Strengthening the Rectification and Conducting Review and Acceptance of Asset Management Business Conducted through the Internet, also known as Circular 29. Circular 29 emphasized that an asset management business conducted through the internet is subject to the oversight of financial regulatory authorities and the relevant licensing requirements. Any public issuance or sales of asset management products through the internet would be deemed to be a financing business and the relevant asset management licenses or permits would be required to conduct such a business. Internet asset management platforms are not allowed to publicly raise funds through “directed commission plans”, “directed financing plans”, “wealth management plans”, “asset management plans”, “credit asset transfers” or similar products, or to act as an agent for any types of trading exchanges to sell asset management products.

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In addition, the securities regulatory bureau of Beijing has issued the Circular of Regulating Fund Investment Recommendation Activities, or the Recommendation Circular, in 2021, which requires that a fund sales agency shall not provide any investment recommendations for fund portfolio strategies without the fund investment advisory licenses. The Recommendation Circular further prohibits institutions from developing new business of making recommendations for fund portfolio strategies in violation of the requirements of the Pilot Notice. Specifically, they shall not display or launch new fund portfolio strategies, provide existing fund portfolio strategies to new clients, or allow existing clients to make additional fund portfolio strategy investments. Moreover, the Recommendation Circular sets different rectification timelines for institutions with and without fund investment advisory licenses.

On February 17, 2023, the CSRC and the PBOC jointly issued Interim Provisions on the Regulation of Important Money Market Funds, effective on May 16, 2023, which requires fund sales agencies shall establish a risk reserve mechanism for important money market funds, under which the ratio of risk reserve set aside from the total sales revenue of important money market funds shall not be less than 20%, and it may be discontinued when the balance of the risk reserve reaches 0.25% of the sales volume of the important money market fund at the end of the previous quarter.

On February 24, 2023, Asset Management Association of China issued the Measures for Registration and Filing of Private Investment Funds, effective on May 1, 2023, which emphasizes that a fund sales agency should fulfill obligations in ensuring investor suitability, clearly disclose risks in investments and should not mislead consumers.

On December 8, 2023, the CSRC released the Measures on Supervision and Administration of Privately Raised Investment Funds (Draft for Comment), which requires the private fund sales agencies shall fully and comprehensively explain the relevant terms of the fund contract to investors and shall not collect investment funds from investors before the signing of the fund contract. Where a private fund sales agency raises funds from a natural person, it shall record or videotape the whole process, establish, and improve the mechanism of follow-up confirmation and cooling-off period, and improve the supporting trace-keeping arrangement if raising through the Internet or other off-site methods. Private fund sales agencies shall also prepare and properly keep records and other relevant information on private fund investment decisions, transactions, due diligence of investors, and suitability management of the investors. The retention period shall not be less than 20 years from the date of the liquidation of relevant private funds.

On December 31, 2025, the CSRC released Provisions on the Administration of Sales Expenses of Publicly Offered Securities Investment Funds, which (i) reduce the subscription (application) fees and distribution service fees for publicly offered funds, (ii) simplify the arrangement of redemption fees and clarify that all redemption fees shall be included in the fund assets, (iii) clarify that for fund units held by investors for more than one year (excluding money market funds and other funds recognized by the CSRC), the distribution service fees shall no longer be charged, (iv) set up differentiated caps on the payment ratios of client maintenance fees and encourage the vigorous development of equity funds, (v) request fund managers, fund distribution institutions and their staff shall strictly comply with relevant clean-practice provisions and shall not, through themselves or their affiliates, pay or collect fund sales expenses in a disguised form through various methods such as conference fees, training fees, travel expenses, advertising fees, or technical service fees, and (vi) strengthen the regulation of fund sales expenses, clarify that interest generated from fund sales settlement funds belongs to investors, and clarify that fund investment advisory services shall not be subject to double charging.

Our former variable interest entity, Beijing Hongdian, a member of the Asset Management Association of China, has obtained a license for a publicly raised securities investment fund sales business from the CSRC and is qualified to conduct both publicly raised and privately raised securities investment fund sales businesses.

Regulations Relating to Loan Interest

The Civil Code of PRC, which was promulgated by the National People’s Congress in May 2020 and became effective in January 2021, requires that the interest rates charged under a loan agreement must not violate applicable provisions of the PRC laws and regulations. In addition, under the Civil Code of PRC, the interest shall not be deducted from the proceeds of the loan in advance; and if the interest is deducted from the proceeds in advance, the loan shall be repaid and the interest shall be calculated based on the actual loan amount.

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In accordance with the Provisions on Several Issues Concerning Laws Applicable to Trials of Private Lending Cases issued by the Supreme People’s Court in August 2015 and effective in September 2015, or the 2015 Private Lending Judicial Interpretations, agreements between a lender and a borrower on loans with annual interest rates below 24% are valid and enforceable. With respect to loans with annual interest rates between 24% and 36%, if the interest on the loans has already been paid to the lender, and so long as such payment has not damaged the interest of the state, the community or any third parties, the courts will likely turn down the borrower’s request to demand the return of the interest payment. If the annual interest rate of a private loan is higher than 36%, the obligations to pay interest payment in excess of the maximum interest rate allowed will be invalidated.

In December 2020, the Supreme People’s Court issued the Decision on Amending the Provisions of the Supreme People’s Court on Several Issues the Application of Law in the Trial of Private Lending Cases (second revisions in the year of 2020), or the Private Lending Judicial Interpretation Amendment, which amended several provisions of the 2015 Private Lending Judicial Interpretation including the upper limit of judicial protection for private lending interest rates. The Private Lending Judicial Interpretation Amendment provides that where the lender requests the borrower to pay interest in accordance with the interest rate agreed upon in the agreement, the people’s court shall support such request, except where the interest rate agreed by both parties exceeds four times of the LPR at the time of the establishment of the agreement, or the Quadruple LPR Limit. The one-year Loan Prime Rate refers to the one-year loan market quoted interest rate issued by the National Bank Interbank Funding Center which was authorized by the People’s Bank of China, on the 20th of each month since August 20, 2019. According to the Private Lending Judicial Interpretation Amendment, the upper limit of interest rates of 24% and 36% provided in the 2015 Private Lending Judicial Interpretation, are replaced by the Quadruple LPR Limit. Moreover, if the lender and the borrower agree on both the overdue interest rate and the liquidated damages or other fees, the lender may choose to claim any or all of them, but the portion in total exceeding the Quadruple LPR Limit shall not be supported by the people’s court.

In addition, the Supreme People’s Court issued the Official Reply to Issues on the Application of the Interpretations of the Supreme People’s Court of New Private Lending, or the Official Reply on the Application of Interpretations of New Private Lending, in December 2020, which became effective in January 2021. The Official Reply on the Application of Interpretations of New Private Lending confirms that any disputes arising from the relevant financial business conducted by the microcredit companies, financing guarantee companies, regional equity market, pawn enterprises, financial leasing companies, business factoring companies and local assets management companies that are supervised by the local financial supervision governmental authorities, shall not apply to the Interpretations of the Supreme People’s Court of New Private Lending.

In March 2021, the PBOC releases Announcement No.3 to ensure orderly competition in the loan market and protect the legitimate rights and interests of financial consumers. Announcement No.3 requires all loan products to list their annualized interest rates expressly. Specifically, (i) all lending institutions are required to display the annualized rate of each loan product prominently on the website, mobile app, poster, and any other channels where the product is marketed, and specify the annualized rate in the loan contract. Daily and monthly interest rates may also be displayed if necessary, but not more prominently than the annualized interest rates; (ii) lending institutions include but are not limited to depository financial institutions, automobile finance companies, consumer finance companies, micro-lending companies, and internet platforms that advertise or display loan services; (iii) the annualized rate of a loan should be calculated as the annualized ratio of total costs (to the borrower) to the outstanding principal amount. The costs include interest and other fees and charges directly related to the loan. The amount of principal should be specified in the loan contract or other loan certificates. If the loan is repaid in installments, the outstanding principal amount should be the balance after each repayment; and (iv) the calculation of the annualized interest rate may be based on compound interest or simple interest. The calculation based on compound interest is equivalent to that of the internal rate of return, and the simple-interest approach should be specified as such.

Regulations Relating to Cooperation with Institutional Funding Partners

The PRC laws and regulations governing our cooperation with institutional funding partners are developing and evolving.

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In December 2017, the National Internet Finance Rectification Office and the National Online Lending Rectification Office jointly issued the Circular 141, outlining the general features and the principal requirements on “cash loan” businesses conducted by internet micro finance companies, banking financial institutions and online lending information intermediaries. “Cash loans” are generally described as a loan that is unrelated to the circumstances of its use, with no designated use for the loan proceeds, no qualification requirement for the borrower and no collateral for the loan. The definition of a cash loan under Circular 141 is vague and subject to further regulatory interpretation. The principal requirements with respect to “cash loan” businesses are (i) no organizations or individuals may conduct a lending business without obtaining approvals for the lending business; (ii) the annualized all-in borrowing costs to borrowers charged in the form of interest and various fees are subject to the limit on interest rate for private lending as set forth in the Provisions on Several Issues Concerning Laws Applicable to Trials of Private Lending Cases issued by the Supreme People’s Court in 2015; (iii) all relevant institutions shall follow the “know-your-customer” principle to assess and determine the borrower’s eligibility, credit limit, and cooling-off period with prudence, and a loan to a borrower without any source of income is prohibited; (iv) all relevant institutions shall improve their internal risk control and use a data-driven risk management model with prudence; and (v) relevant institutions and their third-party collection service providers may only use lawful means of collection, and shall not use illegal or inappropriate means of collection such as threats, intimidation or harassment. With respect to internet micro finance companies, Circular 141 requires the regulatory authorities to suspend the approval of the establishment of internet micro finance companies and the approval of any micro finance business across provincial lines. Circular 141 also specifies that internet micro finance companies may not provide campus loans, and should suspend the funding of internet micro loans unrelated to the circumstances of their use, gradually reduce the volume of the existing business relating to such loans and take rectification measures within a given period. Further requirements on internet micro finance companies will be detailed in a rectification implementation plan that is to be issued by the national financial regulator. Circular 141 also sets forth several requirements on the banking financial institutions participating in “cash loan” businesses, including that: (i) extension of loans jointly with any third-party institution that have not obtained approvals for the lending business, or funding to such institutions for the purpose of extending loans in any form, is prohibited; (ii) with respect to a loan business conducted in cooperation with a third-party institution, outsourcing of the core business (including the credit assessment and risk control) is prohibited, and any credit enhancement service whether or not in disguised form (including the commitment to bear the risk of default) provided by any third-party institutions with no guarantee qualification shall be prohibited, and (iii) such banking financial institutions must require and ensure that the third-party institutions shall not collect any interests or fees from the borrowers. In addition, Circular 141 emphasizes several requirements applicable to online lending information intermediaries. For example, it is prohibited to facilitate any loans to students or other persons without repayment source or repayment capacity, or loans with no designated use of proceeds. Also it is not permitted to charge upfront fees to the borrowers. Any violation of Circular 141 may result in a variety of penalties, including sanctions, rectification and revocation of license, an order to cease business operation, and criminal liabilities.

On December 8, 2017, the Online Lending Rectification Office promulgated the Rectification Implementation Plans of Network Microcredit Companies, detailing the requirements on network microcredit companies. Pursuant to the Rectification Implementation Plans of Network Microcredit Companies, “network micro-loans” are defined as micro-loans provided through the internet by network microcredit companies controlled by internet enterprises. The features of network micro-loans include online borrower acquisition, credit assessment based on the online information collected from the business operation and internet consumption, as well as online loan application, approval and funding.

The Interim Measures for the Administration of Network Microcredit Companies Business (Draft), or the Draft Network Microcredit Measures, was released by the CBIRC and the PBOC in November 2020 to solicit public comments. The Draft Network Microcredit Measures makes it clear that internet-based microcredit business shall be carried out mainly within the provincial administrative areas in which the entity is registered and shall not be cross-provincial without prior approval. The registered capital of a company operating internet-based microcredit business shall be no less than RMB1 billion and shall be a one-time paid-in monetary capital. The Draft Network Microcredit Measures would expressly prohibit loans from being used to invest in bonds, stocks, financial derivatives, or asset management products to purchase houses or to repay mortgage loans. The Draft Network Microcredit Measures would establish a three-year transition period, during which entities operating cross-provincial network microcredit businesses without approval will be phased-out.

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Regulations Relating to Campus Online Lending

In April 2016, the General Office of the Ministry of Education and the General Office of the China Banking Regulatory Commission jointly issued the Notice on Education and Guidance Work and Strengthening the Risks Prevention of Campus Delinquency Online Lending, or the Education and Guidance Work Notice. The Education and Guidance Work Notice provides that (i) the local financial regulatory authority shall closely monitor the online lending intermediaries’ actions, such as false and misleading advertising and promotion, or other actions that may mislead lenders or borrowers, and strengthen the supervision and the risk warnings of online lending intermediaries’ advertising and promotional activities focusing on college students, as well as those online lending intermediaries who neglect to conduct borrower qualification examinations; and (ii) the corresponding response measures and plan for non-compliant campus online lending shall be established and improved; and any non-compliant online lending intermediary that has advertised and promoted its services within the campus and thus may infringe upon the legal rights of the students, cause safety hazards or lack advance permission, shall promptly be reported to the relevant regulatory authorities and be dealt with pursuant to the applicable laws.

In October 2016, six PRC regulatory agencies, including the China Banking Regulatory Commission, the Office of the Central Leading Group for Cyberspace Affairs and the Ministry of Education, jointly issued the Notice on Further Strengthening the Rectification of Campus Online Lending, or Rectification of Campus Online Lending Notice. The Rectification of Campus Online Lending Notice strengthens and details the remediation measures for online lending businesses focusing on students, or campus online lending, and provides the following:

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Online lending services may not be provided to college students under the age of 18.

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For college students over 18 years old, the person engaging in campus online lending must verify the secondary repayment source of such borrower, which could be the borrower’s parents, guardian, or other custodian, obtain written undertaking documents consenting to the loan and the repayment guarantee from the secondary repayment source of such borrower, and verify the identity of the secondary repayment source of such borrower through the phone or other methods.

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False and fraudulent advertising and promotion through the use of discriminatory and misleading language or other methods, and the distribution of false or incomplete information to mislead college students borrowers, are prohibited.

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Publicizing or promoting lending services at physical locations (excluding electronic means such as the internet) either by persons engaging in campus online lending themselves or by a third party is prohibited.

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Usurious loans in disguised forms such as charging various fees such as procedure fees, overdue fines, service fees and recovery fees, and forcing repayment by illegal collection, are prohibited.

In addition, the Rectification of Campus Online Lending Notice requires that the person engaging in campus online lending shall establish three mechanisms as follows:

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borrower qualification examinations and classification systems to ensure that the borrowers have the repayment capacity for the loan pursuant to the relevant agreement;

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risk monitoring systems to further strengthen information disclosure and to provide risk warnings to borrowers, and ensure that the lending procedures and the key elements of the loan are open and transparent; and

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customer information protection mechanism by implementing the Order for the Protection of Telecommunication and Internet User Personal Information and other relevant criteria and by conducting information system gradation registration and testing, to strengthen customer information protection and ensure the legality and information security during the collection, settlement and use of lenders’ and borrowers’ information.

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Pursuant to the Rectification of Campus Online Lending Notice, the local financial regulatory authorities and the branches of the China Banking Regulatory Commission shall jointly conduct a thorough examination and centralized rectification of persons engaging in campus online lending. When a violation is determined to be minor, rectification shall be made within a prescribed time limit, but when the conduction of the rectification is refused or the violation is determined to be material, such person’s business of campus online lending could be suspended, shut down or banned according to the applicable laws. Any person that is suspected to be involved in any malicious fraud or other serious extraordinary activities shall be severely punished. In any case involving criminal activities, the relevant person shall be dealt with by relevant judicial authorities.

In April 2017, the China Banking Regulatory Commission issued the Guidelines on Prevention and Control of the Risks in Banking Industry, to further emphasize the relevant requirements on campus online lending businesses provided in the Rectification of Campus Online Lending Notice, which include prohibitions on:

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marketing to individuals unable to repay loans;

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providing online lending service to college students under the age of eighteen;

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conducting false and fraudulent advertising and promotion; and

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providing usurious loans in disguised forms.

In May 2017, the China Banking Regulatory Commission, the Ministry of Education and the Ministry of Human Resources and Social Security issued the Notice on Further Strengthening the Regulation and Management Work of Campus Online Lending Business, or the Circular 26. This circular provides that:

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Commercial banks and policy banks may research and develop financial products and provide loans that provide general assistance to college students and support them in areas such as learning and training, consumption and entrepreneurship, and provide customized and quality financial services to college students with reasonable credit limits and interest rates.

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Any entity established without approval of the relevant banking regulatory authority shall not provide any credit services to college students so as to eliminate fraud, usurious loans or violent loan collections.

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All campus online lending businesses conducted by online lending information intermediaries shall be suspended and the outstanding balance of online campus lending loans shall be gradually reduced to zero.

In February 2021, the CBIRC, the PBOC, the Ministry of Education, the Office of the Central Cyberspace Affairs Commission and the Ministry of Public Security jointly issued the Notice on Further Strengthening the Regulation and Management Work of Internet Consumer Loan for College Students, or the Notice on Internet Consumer Loan for College Students. The Notice on Internet Consumer Loan for College Students provides that the microcredit companies are prohibited from providing internet consumer loans to college students. In addition, it sets forth several requirements on the banking financial institutions participating in internet consumer loans for college students, including without limitation: (i) the banking financial institutions and its cooperative institutions shall not conduct online precision marketing aimed at college students, and shall complete necessary filings and reports with relevant authorities before offline promotion on campus; (ii) the banking financial institutions shall strictly check credit qualifications and identities of college students and their use of loans, conduct comprehensive credit assessment, and receive the written confirmation from the second repayment sources (such as parents, guardians, or other administrator of the college students) that they agree such internet consumer loans to be provided to such college student and they will guarantee the repayment of such internet consumer loans; and (iii) all credit information of internet consumer loans for college students shall be submitted to the financial credit information database in a timely, complete and accurate manner, and college students who do not agree to submit such credit information shall not be extended the loan.

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Regulations Relating to Commercial Factoring

The Notice on the Pilot Launch of Commercial Factoring, issued by the Ministry of Commerce in 2012, approves the pilot launch of commercial factoring in the Shanghai Pudong New Area and the Tianjin Binhai New Area. The Ministry of Commerce also issued another notice to expand the list of pilot areas to include the Chongqing Liangjiang New Area, Sunan Modern Construction Demonstration Zone and Suzhou Industrial Park. In 2015, the Ministry of Commerce issued the Opinions on Supporting the Innovative Development of Pilot Free Trade Zones, which approved the pilot commercial factoring businesses in all the free trade zones. Under these notices issued by the Ministry of Commerce and local implementing rules, commercial factoring companies may be established in these areas upon the approval of the local counterpart of the Ministry of Commerce or other competent authorities.

On May 8, 2018, the Ministry of Commerce issued the Notice of Matters concerning the Adjustments to the Duties of Administration of Financial Leasing Companies, Commercial Factoring Companies and Pawnshops, according to which the Ministry of Commerce has transferred the duties of developing business operation and supervision rules for commercial factoring companies to the CBIRC effective April 20, 2018. In October 2019, the CBIRC issued the Notice on Strengthening the Supervision and Administration over Commercial Factoring Enterprises. This notice clarifies the commercial factoring business as to the following services provided by a commercial factoring enterprise to the supplier that transfers its account receivable based on the real transaction to the commercial factoring enterprise: (i) factoring financing; (ii) maintenance of the sales breakdown (ledger); (iii) collection of account receivables; and(iv) non-commercial bad debt guarantee. Commercial factoring enterprises may concurrently engage in client credit investigation and evaluation and the consulting services relating to commercial factoring. A commercial factoring enterprise may not engage in the following activities or businesses: (i) taking or taking in a disguised manner the deposits from the public; (ii) obtaining funds through online lending information intermediaries, local trading places in various types, asset management institutions, private investment fund or any other institutions; (iii) borrowing or borrowing in a disguised manner funds from other commercial factoring enterprises; (iv) offering loans or offering loans as entrusted; (v) specially engaging in or carrying out as entrusted a collection business or debt repayment demand business irrelevant to commercial factoring; and (vi) carrying out a factoring financing business based on an illegal underlying transaction contract, consignment contract, account receivable with unclear ownership or the right to demand payment arising out instrument or other negotiable securities.

Minheng, a subsidiary of one of our former variable interest entities, is qualified to conduct our commercial historically engaged factoring business.

Regulations Relating to Financing Guarantee

The State Council promulgated the Regulations on the Administration of Financing Guarantee Companies, or the Financing Guarantee Rules, effective as of October 1, 2017. Pursuant to the Financing Guarantee Rules, “financing guarantee” refers to the activities in which guarantors provide guarantees to the guaranteed parties as to loans, bonds or other types of debt financing, and “financing guarantee companies” refer to companies legally established and operating financing guarantee businesses. According to the Financing Guarantee Rules, the establishment of financing guarantee companies shall be subject to the approval by the competent government department, and unless otherwise stipulated by the state, no entity may operate a financing guarantee business without such approval. If any entity violates these regulations and operates a financing guarantee business without approval, the entity may be subject to penalties including ban or suspension of business, fines of RMB500,000 (US$70,595) to RMB1,000,000 (US$141,189), and confiscation of any illegal gains, and if the violation constitutes a criminal offense, criminal liability shall be imposed in accordance with the law.

On October 9, 2019, the CBIRC and eight other PRC regulatory agencies promulgated the Supplementary Provisions on the Supervision and Administration of Financing Guarantee Companies, or the Financing Guarantee Supplementary Provisions, which became effective the same day and was amended in June 2021. The Financing Guarantee Supplementary Provisions provide that institutions providing services such as client recommendation and credit assessment to various institutional funding partners shall not render any financing guarantee service, whether in direct form or disguised form, without the approval of the competent authorities.

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In July 2020, the CBIRC issued the Guidelines for Offsite Supervision of Financing Guarantee Companies, or the Offsite Supervision Guidelines, which took effect in September 2020. The Offsite Supervision Guidelines stipulate the guidelines for the competent regulatory authorities to continuously analyze and evaluate the risk of financing guarantee companies and the financing guarantee industry, by way of collecting report data and other internal and external data of the financing guarantee companies and carrying out corresponding measures. Pursuant to the Offsite Supervision Guidelines, financing guarantee companies shall establish and implement an offsite supervision information report system and submit related data and non-data information in accordance with the requirements of the competent regulatory authorities. The Offsite Supervision Guidelines note that the corporate governance, internal control, risk management capabilities, guarantee business, associated guarantee risks, asset quality, liquidity indicators and investment conditions of financing guarantee companies shall be the key areas for the offsite supervision.

In December 2024, the NFRA promulgated Measures for Compliance Management in Financial Institutions, effective on March 1, 2025, which stipulates that, (i) “financial institutions” refers to policy banks, commercial banks, financial asset management companies, enterprise group finance companies, financial leasing companies, auto finance companies, consumer finance companies, money brokerage companies, trust companies, wealth management companies, financial asset investment companies, insurance companies (including reinsurance companies), insurance asset management companies, insurance groups (holding) companies, mutual insurance organizations, and other institutions subject to the regulation by the NFRA and its local offices, (ii) financial institutions shall formulate compliance management rules, improve their organizational framework for compliance management pursuant to the requirements of “tiered management and hierarchical accountability”, clarify compliance management duties, deepen the building of a compliance culture and establish a sound compliance management system; (iii) financial institutions shall establish the position of chief compliance operator at their headquarters and appoint compliance officers at principle-level branches or first-tier branches, such chief compliance operator and compliance officers shall obtain qualification approval from the NFRA or its local offices, and shall not manage the front-office business, finance, fund operation, internal audit, or other departments that may have a conflict of interest in their compliance management duties, except as otherwise provided in the Measures for Compliance Management in Financial Institutions, (iv) the headquarters, provincial-level branches or first-tier branches and financial subsidiaries at various levels subject to the consolidated financial reporting management of each financial institution, shall each set up an independent compliance management department in principle, other branches of the financial institutions shall establish compliance management departments based on the scale of business, organizational structure and compliance management needs, and (v) financial institutions failing to meet the provisions herein shall complete rectification within the one-year transitional period from March 1, 2025.

C.	Organizational Structure

The following diagram illustrates our corporate structure, including our principal subsidiaries as of the date of this annual report.

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Shareholders’ Agreement with ZIITECH and its Other Shareholders

Under U.S. GAAP, an entity is required to consolidate another entity when it has a controlling financial interest in that entity. A controlling financial interest may be established not only through majority voting equity ownership, but also through contractual or other arrangements that confer upon an entity the power to direct the activities of another entity that most significantly impact its economic performance. As the board of directors of ZIITECH has the authority to make decisions with respect to the most significant financial and operating activities of ZIITECH, and we are entitled to appoint two-thirds of its directors pursuant to the ZIITECH Shareholders’ Agreement pursuant and a substantive veto right over matters requiring shareholder resolutions, we have concluded that we possess the power to direct ZIITECH’s relevant activities through our board representation rights.

Accordingly, we determined that we obtained a controlling financial interest in ZIITECH for purposes of U.S. GAAP, notwithstanding our 25.0% ordinary shareholding, by virtue of the rights conferred upon us under the ZIITECH Shareholders’ Agreement. As a result, we began consolidating ZIITECH’s financial statements into our consolidated financial statements with effect from September 3, 2025, with the remaining interests held by the other shareholders of ZIITECH recognized as noncontrolling interests in our consolidated financial statements. For details, see “Item 4. Information on the Company—B. Business Overview—Regulations—Australia—Regulations Relating to Australian Corporations—Corporate governance.”

Historical Contractual Arrangements with Our Former VIEs

PRC laws and regulations impose restrictions on foreign ownership and investment in internet-based businesses such as distribution of online information, insurance brokerage, fund distribution and other value-added telecommunications services. We are a Cayman Islands company and our former PRC subsidiaries are considered foreign-invested enterprises. To comply with PRC laws and regulations, we entered into a series of contractual arrangements, through our former PRC subsidiaries, with our former VIEs and the shareholders of our former VIEs to obtain effective control over our former VIEs and their subsidiaries. In November 2025, in connection with our disposal of equity interests in Romantic Park, all of the WFOEs and VIEs were divested, and following the divestment, we are no longer considered the ultimate beneficiary of any VIE and does not hold any VIE.

Historically, the contractual arrangements with the VIEs allowed us to:

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exercise effective control over our variable interest entities and their subsidiaries;

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receive substantially all of the economic benefits from our variable interest entities and their subsidiaries; and

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have an exclusive option to purchase all or part of the equity interests in our variable interest entities and when and to the extent permitted by PRC law.

As a result of these contractual arrangements, we had become the primary beneficiary of our VIEs under U.S. GAAP until our disposal of equity interests in Romantic Park. We have consolidated the financial results of our variable interest entities and their subsidiaries in our consolidated financial statements in accordance with U.S. GAAP up to and including October 2025.

The following is a summary of the historical contractual arrangements between our former PRC subsidiaries, our former VIEs and their shareholders.

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Agreements that Allowed Us to Receive Economic Benefits from Our Variable Interest Entities

Exclusive Business Cooperation Agreements. Our PRC subsidiaries entered into exclusive business cooperation agreements with each of our VIEs . Pursuant to these agreements, our PRC subsidiaries or their designated parties had the exclusive right to provide our VIEs with comprehensive business support, technical support and consulting services. Without our PRC subsidiaries’ prior written consent, our variable interest entities shall not accept any consulting and/or services covered by these agreements from any third party. Our VIEs agreed to pay service fees based on services provided and their commercial value on a quarterly basis or other service fees for specific services as required and as otherwise agreed by both parties. Our PRC subsidiaries owned the intellectual property rights arising out of the services performed under these agreements. Unless our PRC subsidiaries terminate these agreements or pursuant to other provisions of these agreements, these agreements will remain effective for ten years. These agreements can be terminated by our PRC subsidiaries with 30 days’ advance written notice, our VIEs have no right to unilaterally terminate these agreements, subject to certain exceptions.

Agreements that Provided Us with Effective Control over Our Variable Interest Entities

Power of Attorney. Through a series of powers of attorney, each shareholder of our VIEs irrevocably authorized our PRC subsidiaries or any person(s) designated by our PRC subsidiaries to act as its attorney-in-fact to exercise all of such shareholder’s voting and other rights associated with the shareholder’s equity interest in our VIEs, including but not limited to the right to attend shareholder meetings on behalf of such shareholder, the right to appoint legal representatives, directors, supervisors and chief executive officers and other senior management, and the right to sell, transfer, pledge and dispose of all or a portion of the shares held by such shareholder. The power of attorney is irrevocable and remains in force continuously upon execution.

Equity Pledge Agreement. Our PRC subsidiaries had entered into an equity pledge agreement with each shareholder of our VIEs . Pursuant to these equity pledge agreements, each shareholder of our variable interest entities had pledged all of his or her equity interest in our VIEs to our PRC subsidiaries to guarantee the performance by such shareholder and our VIEs of their respective obligations under the exclusive business cooperation agreements, the power of attorney, the exclusive option agreements, and any amendment, supplement or restatement to such agreements. If our VIEs or any of their shareholders breach any obligations under these agreements, our PRC subsidiaries, as pledgee, will be entitled to dispose of the pledged equity and have priority to be compensated by the proceeds from the disposal of the pledged equity. Each of the shareholders of our VIEs agreed that before his or her obligations under the contractual arrangements are discharged, he or she will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests which may result in the change of the pledged equity that may have adverse effects on the pledgee’s rights under these agreements without the prior written consent of our PRC subsidiaries. These equity pledge agreements will remain effective until our VIEs and their shareholders discharge all their obligations under the contractual arrangements, except that the equity pledge under (i) the equity pledge agreement entered into by and among Aixin Beijing, Beijing Hongdian and Beijing Hongdian’s shareholders, and (ii) the equity pledge agreement entered among Aixin Beijing, Xinshun Dingye and Xinshun Dingye’s shareholders, would not be deemed validly created until it is registered with the competent government authorities.

Agreements that Provided Us with the Option to Purchase the Equity Interest in Our VIEs

Exclusive Option Agreements. Our PRC subsidiaries had entered into exclusive option agreements with our variable interest entities and their respective shareholders. Pursuant to these exclusive option agreements, the shareholders of our VIEs had irrevocably granted our PRC subsidiaries or any third party designated by our PRC subsidiaries an exclusive option to purchase all or part of their respective equity interests in our VIEs. In addition, our VIEs have irrevocably granted our PRC subsidiaries or any third party designated by our PRC subsidiaries an exclusive option to purchase all or part of their respective assets in our VIEs. The purchase price of equity interests in our VIEs will be the lower of RMB1.00 per share or the lowest price permitted by law. The purchase price of assets in our VIEs will be the lower of the book value of the asset or the lowest price permitted by law. Without our PRC subsidiaries’ prior written consent, our VIEs shall not, among other things, amend their articles of association, increase or decrease the registered capital, sell, dispose of or set any encumbrance on their assets, business or revenue, enter into any material contract outside the ordinary course of business, merge with any other persons, make any investments or distribute dividends. The shareholders of our VIEs also undertook that they would not transfer, gift or otherwise dispose of their respective equity interests in our variable interest entities to any third party or create or allow any encumbrance on their equity interests within the term of these agreements. These agreements will remain effective for ten years and will be extended at the sole discretion of our PRC subsidiaries.

In the opinion of Shihui Partners, our PRC counsel, our historically VIE structure, did not result in any violation of the applicable PRC laws or regulations in the past in effect.

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D. Property, Plant and Equipment

Our corporate headquarters are located in Hong Kong, where we lease office premises with a gross floor area of approximately 50 square feet. from unrelated third parties under an operating lease arrangement expiring on March 31, 2027. As of December 31, 2025, ZIITECH also leased office premises in Melbourne, Australia, with a gross floor area of approximately 247 sq.m. We also leased offices and branch premises in Sydney, Australia and Singapore. We believe that our existing facilities are generally adequate to meet our current needs, but we expect to seek additional space as needed to accommodate future growth.

Item 4A.Unresolved Staff Comments

Not applicable.

Item 5.Operating and Financial Review and Prospects

A.Operating results

Overview

In September 2025, we acquired a 25.0% ordinary shareholding in ZIITECH in exchange for the issuance of 83,726,789 Class A ordinary shares to the transferors. In connection with the acquisition, we entered into a shareholders’ agreement with ZIITECH and its other shareholders on September 3, 2025, pursuant to which we are entitled to the contractual right to appoint two-thirds of Ziitech’s board of directors and a substantive veto right over all matters requiring shareholder resolution, including the determination of the number of seats on the board of directors; accordingly, we determined that we obtained a controlling financial interest in ZIITECH for purposes of U.S. GAAP. As a result, we began consolidating ZIITECH’s financial statements into our consolidated financial statements with effect from September 3, 2025, with the remaining interests held by the other shareholders of ZIITECH recognized as noncontrolling interests in our consolidated financial statements.

In November we disposed of our equity interests in Romantic Park. This disposal also resulted in the divestment of all of our former WFOEs and VIEs, which previously conducted our operations in mainland China. The disposal represents a strategic shift and has a significant impact on our results of operations. Accordingly, assets, liabilities, revenues and expenses and cash flows related to the disposal group have been reclassified in the accompanying consolidated financial statements as discontinued operations for all periods presented.

Effective October 1, 2025, we elected to change our reporting currency from RMB to US$. The functional currency of our company and subsidiaries incorporated in the Cayman Islands, British Virgin Islands and Hong Kong is United States dollars (“US$”). The functional currency of the Australia entities is Australian dollars (“AUD”). The functional currency of the Singapore entity is Singapore dollars (“SGD”). The functional currency of the mainland China entity is RMB. In the consolidated financial statements, the financial information of our company and subsidiaries has been translated into US$. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gain and losses are translated using the average of exchange rate during their respective reporting period.

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Non-GAAP Financial Measures

We use adjusted operating expenses and adjusted net loss, which are non-GAAP financial measures, in evaluating our operating results and for financial and operational decision-making purposes. We believe that these non-GAAP financial measures help identify underlying trends in our business that could otherwise be distorted by the effect of the expenses that we include in total operating expenses, loss from operations and net loss. We believe that these non-GAAP financial measures also provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. They should not be considered in isolation or construed as alternatives to total operating expenses, net loss or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review these historical non-GAAP financial measures in light of the most directly comparable GAAP measures, as shown below. The non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

Adjusted operating expenses represent total operating expenses before share-based compensation expense. Adjusted net loss represents net loss before share-based compensation expenses.

The table below sets forth a reconciliation of these non-GAAP financial measures for the periods indicated.


		For the Years Ended December 31,
		2023		2024		2025
		US$		US$		US$

		(in thousands, except percentages)
Total operating income/(expenses) from continuing operations		300		(294)		(2,483)
Add: share-based compensation expenses		(972)		—		14
Adjusted operating expenses from continuing operations		(672)		(294)		(2,469)
Net loss		(11,405)		(2,054)		(1,541)
Add: share-based compensation expenses		(972)		—		14
Adjusted net loss		(12,377)		(2,054)		(1,527)

Key Factors Affecting Our Results of Operations

Macroeconomic condition in Australia

We derived most of our revenues from merchant digitalization and commerce-enablement solution to SMEs in Australia. Our ability to maintain and grow our business is highly dependent on macroeconomic conditions in Australia and their impact on SMEs. Adverse changes in economic growth, consumer spending, inflation, interest rates, unemployment, and overall business confidence may weaken the financial condition and spending power of SME customers, reduce demand for our merchant digitalization and commerce-enablement solutions, hinder our customer retention and new client acquisition efforts, and materially adversely affect our results of operations, liquidity, and financial condition.

Ability to acquire and retain customers

Our sustained growth depends on our effectiveness in attracting new merchants and increasing the lifetime value of both single‑location and multi‑location customers.

Our success in acquiring new merchants is affected by product competitiveness, sales and marketing efficiency, brand awareness; customer retention is driven by platform reliability, product updates and customer support, especially for multi-location merchants that require consistent, scalable service. Expanding customer lifetime value relies on our ability to cross-sell, upsell and deepen platform integration across online, mobile and physical channels.

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Ability to maintain stability and manage the cost structure of our payment processing ecosystem

Our solutions rely on collaboration with third party payment partnership. Our operating results are affected by our ability to maintain stable cooperation, favorable pricing terms and reliable service access with these partners. Termination, renegotiation on unfavorable terms or operational disruptions of key partnerships may impair our service delivery, increase operating costs and limit our ability to serve SME customers.

Ability to innovate and optimize omni-channel product functionality

Our core competitiveness lies in providing integrated omni-channel solutions that help retailers, restaurants and other SMEs engage consumers across online, mobile and physical channels. Our ability to continuously upgrade product features, optimize operational management tools and enhance payment acceptance capabilities to meet evolving SME needs is critical. Failure to keep pace with technological trends and market demands may weaken our competitive edge, reduce merchant stickiness and restrict business growth.

Key Components of Results of Operations

Revenues

Our revenues are derived from payment platform partnership, SaaS subscription services provided to F&B merchants and retail merchants and other services or products. The following table sets forth the breakdown of our total revenues, both in absolute amount and as a percentage of our total revenues, for the years indicated.


		For the Years Ended December 31,
		2023				2024				2025
		US$		%		US$		%		US$		%

		(in thousands, except percentages)
Revenues:
Payment solutions		—		—		—		—		740		46.3
SaaS subscription services
F&B solution		—		—		—		—		275		17.2
Retail solution		—		—		—		—		92		5.8
Other revenue		—		—		—		—		491		30.7
Total revenues		—		—		—		—		1,598		100.0

The revenues from payment solutions represent the revenues generated from payment platform partnership. We establish strategic referral partnership with prominent payment platform of merchant payment facilities, providing referral services associated with each individual transaction generated by the merchants that we have successfully referred to the payment platform in exchange for incentive fees in Australia. We recognize revenue at point in time when the referred merchants have been approved by the payment platforms and when the variable consideration is not constrained after periodic reconciliation of incentive amount agreed with the payment platforms.

We provide SaaS subscription services to merchant for F&B solutions and retail solutions, enabling the merchants to improve order efficiency and better payment experience. The monthly SaaS subscription service fee is fixed and pre-determined in the contracts. However, if the merchant’s monthly transaction volume meets certain threshold as pre-determined in the contract, that month’s SaaS subscription fee is waived by us. Therefore, the transaction price of SaaS subscription service is variable and constrained by the monthly transaction volume. We act as a principal and recognize revenue on a gross basis. We recognize revenue from SaaS subscription service overtime on a monthly basis when it is probable that a significant reversal will not occur. While we currently generate revenue via incentive arrangements with payment platform partners, such revenue model is only applicable in Australia. In connection with our planned international expansion, we expect to generate a greater portion of our revenues from SaaS services.

We generate other revenues mainly from hardware sales and installment services and software development services. For hardware sales and installment services, we sell POS-related hardware and POS-related installment services to customers. We act as a principal and recognize revenue on a gross basis at the point when customer acceptance is completed. For software development services, we offer end-to-end white label software that enables customers to launch their own branded POS platform. We act as a principal and recognize revenue on a gross basis at point in time upon customers’ acceptance.

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Cost of Revenues

Cost of revenues mainly consist of POS-related hardware cost, fees paid to cloud server providers, fees paid to payment platform providers, staff costs and other costs during the year ended December 31, 2025. We recorded reversal of share-based compensation of US$46 thousand during the year ended December 31, 2023. The following table sets forth our cost of revenues, both in absolute amount and as a percentage of total revenues, for the years indicated.


		For the Years Ended December 31,
		2023				2024				2025
		US$		%		US$		%		US$		%

		(in thousands, except percentages)
Cost of revenues:
POS-related hardware cost		—		—		—		—		(328)		(20.5)
Fees paid to cloud server providers		—		—		—		—		(68)		(4.3)
Fees paid to payment platform providers		—		—		—		—		(24)		(1.5)
Staff costs		—		—		—		—		(17)		(1.1)
Other costs		46		—		—		—		(18)		(1.1)
Total cost of revenues		46		—		—		—		(455)		(28.5)

Gross Profit

During 2023 and 2024, no revenue was generated from continuing operations. During 2025, the gross profit was generated from payment platform partnership, SaaS subscription services provided to F&B merchants and retail merchants and other services or products. During 2023, we recorded reversal of share-based compensation of US$46 thousand. The following table sets forth our gross profit, both in absolute amount and as a percentage of our total revenues, for the years indicated.


	For the Years Ended December 31,
	2023		2024		2025
	US$	%	US$	%	US$	%

	(in thousands, except percentages)
Revenues	—	—	—	—	1,598	100.0
Cost of revenues	46	—	—	—	(455)	(28.5)
Gross profit	46	—	—	—	1,143	71.5

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Operating Expenses

The following table sets forth our operating expenses, both in absolute amount and as a percentage of total revenues, for the years indicated.


	For the Years Ended December 31,
	2023		2024		2025
	US$	%	US$	%	US$	%

	(in thousands, except percentages)
Sales and marketing expenses	229	—	(1)	—	(542)	(33.9)
General and administrative expenses	(264)	—	(293)	—	(1,442)	(90.2)
Research and development expenses	335	—	—	—	(499)	(31.2)
Total operating expenses	300	—	(294)	—	(2,483)	(155.3)

Sales and marketing expenses

Sales and marketing expenses primarily consist of staff expenses, commission expenses and business entertainment expenses. The increase in sales and marketing expenses was mainly due to acquisition of ZIITECH.

General and administrative expenses

General and administrative expenses primarily consist of professional expenses, depreciation and amortization expenses, staff expenses, office expenses, rental expenses and credit losses. The increase in general and administrative expenses was mainly due to acquisition of ZIITECH.

Research and development expenses

Research and development expenses primarily consist of IT consulting expenses and staff expenses. The increase in research and development expenses was mainly due to acquisition of ZIITECH.

Results of Operations

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

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		For the Years Ended December 31,
		2023				2024				2025
		US$		%		US$		%		US$		%

		(in thousands, except percentages)
Summary Consolidated Statements of Comprehensive Loss Data:
Revenues		—		—		—		—		1,598		100.0
Cost of revenues		46		—		—		—		(455)		(28.5)
Gross profit		46		—		—		—		1,143		71.5

Operating expenses:
Sales and marketing expenses		229		—		(1)		—		(542)		(33.9)
General and administrative expenses		(264)		—		(293)		—		(1,442)		(90.2)
Research and development expenses		335		—		—		—		(499)		(31.2)
Total operating expenses		300		—		(294)		—		(2,483)		(155.3)

Operating loss		346		—		(294)		—		(1,340)		(83.8)

Loss from disposal of subsidiaries		(5,421)		—		—		—		—		—
Interest expenses, net		(631)		—		(14)		—		(52)		(3.3)
Other (expenses)/income, net		—		—		(10)		—		585		36.6
Loss before income tax expense		(5,706)		—		(318)		—		(807)		(50.5)
Income tax benefit		—		—		—		—		65		4.1
Net loss from continuing operation		(5,706)		—		(318)		—		(742)		(46.4)
Net loss from discontinued operation		(5,699)		—		(1,736)		—		(799)		(50.0)
Net loss		(11,405)		—		(2,054)		—		(1,541)		(96.4)

Other comprehensive income/(loss)		3,051		—		1,557		—		(1,349)		(84.4)

Total comprehensive loss		(8,354)		—		(497)		—		(2,890)		(180.8)

Year Ended December 31, 2025 Compared with Year Ended December 31, 2024

Revenues

Our total revenue increased from nil in the year ended December 31, 2024 to US$1.6 million in the year ended December 31, 2025. The increase was mainly attributable to our strategic shift toward merchant digitalization and commerce-enablement solutions, which generate revenue mainly from our payment solutions, F&B solutions and retail solutions.

Cost of revenues

Cost of revenues increased from nil in the year ended December 31, 2024 to US$0.5 million in the year ended December 31, 2025. The increase was mainly attributable to our strategic business shift, which resulted in costs associated with our merchant digitalization and commerce-enablement solutions, including mainly expenditures on POS-related hardware, cloud service fees, fees paid to payment platform providers, and staff costs.

Gross profit

Our gross profit increased from nil in the year ended December 31, 2024 to US$1.1 million in the year ended December 31, 2025. The increase was mainly attributable to increasing gross profit from our merchant digitalization and commerce-enablement solutions.

Operating expenses

Total operating expenses increased by 744.6% from US$0.3 million in the year ended December 31, 2024 to US$2.5 million in the year ended December 31, 2025.

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Sales and marketing expenses. Sales and marketing expenses increased from US$1 thousand in the year ended December 31, 2024 to US$0.5 million in the year ended December 31, 2025. This increase was primarily attributable to the increase of US$0.4 million in staff expenses and US$0.1 million in commission expenses.

General and administrative expenses. General and administrative expenses increased by 392.2% from US$0.3 million in the year ended December 31, 2024 to US$1.4 million in the year ended December 31, 2025. The increase was primarily attributable to (i) the increase of US$0.6 million in professional expenses; (ii) the increase of US$0.2 million in depreciation and amortization expenses; (iii) the increase of US$0.2 million in staff expenses; and (iv) the increase of US$0.1 million in travel and office expenses.

Research and development expenses. Research and development expenses increased from nil in the year ended December 31, 2024 to US$0.5 million in the year ended December 31, 2025. This increase was primarily attributable to the increase in IT consulting expenses and staff expenses.

Other expenses, net

Interest expenses, net. We recorded interest expenses, net of US$0.01 million and US$0.1 million in 2024 and 2025, respectively.

Other expenses/(income), net. We recorded other expenses of US$10 thousand and other income of US$0.6 million in 2024 and 2025, respectively. The other income mainly consisted of income generated from our non-recurring consulting services of US$0.6 million.

Net Loss from continuing operations

We recorded net loss from continuing operations of US$0.3 million and US$0.7 million in the years ended December 31, 2024 and 2025, as a result of the above.

Net Loss from discontinued operations

We recorded net loss from discontinued operations of US$1.7 million and US$0.8 million in the years ended December 31, 2024 and 2025.

Net Loss

We recorded net loss of US$2.1 million and US$1.5 million in the years ended December 31, 2024 and 2025, as a result of the above.

Year Ended December 31, 2024 Compared with Year Ended December 31, 2023

Operating expenses

Total operating expenses increased by 198.0% from a reversal of expenses of US$0.3 million in the year ended December 31, 2023 to operating expenses of US$0.3 million in the year ended December 31, 2024.

Sales and marketing expenses. Sales and marketing expenses increased from a reversal of expenses of US$0.2 million in the year ended December 31, 2023 to nil in the year ended December 31, 2024. This increase was primarily attributable to a reversal of stock-based compensation expenses of US$0.3 million recognized in the year ended December 31, 2023, with no such reversal occurring in the year ended December 31, 2024; offset by the decrease of US$0.1 million in professional expenses.

General and administrative expenses. General and administrative expenses increased by 11.0% from US$264 thousand in the year ended December 31, 2023 to US$293 thousand in the year ended December 31, 2024. The increase was primarily attributable to a reversal of stock-based compensation expense of US$0.2 million recognized in the year ended December 31, 2023, with no such reversal occurring in the year ended December 31, 2024; offset by the decrease of US$0.1 million in professional expenses.

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Research and development expenses. Research and development expenses changed from a reversal of expenses of US$0.3 million in the year ended December 31, 2023 to nil in the year ended December 31, 2024. This change was primarily attributable to a reversal of stock-based compensation expenses of US$0.3 million recognized in the year ended December 31, 2023, with no such reversal occurring in the year ended December 31, 2024.

Other expenses, net

Loss from disposal of subsidiaries. We recorded loss from disposal of a subsidiary of US$5.4 million in 2023, with no such loss occurring in 2024.

Interest expenses, net. We recorded interest expenses, net of US$0.6 million and US$14 thousand in 2023 and 2024, respectively.

Net Loss from continuing operations

We recorded net loss from continuing operations of US$5.7 million and US$0.3 million in the year ended December 31, 2023 and 2024, as a result of the above.

Net loss from discontinued operations

We recorded net loss from discontinued operations of US$5.7 million in the year ended December 31, 2023 and net loss from discontinued operations of US$1.7 million in the year ended December 31, 2024.

Net Loss

We recorded net loss of US$11.4 million and US$2.1 million in the year ended December 31, 2023 and 2024, as a result of the above.

Taxation

Cayman Islands

We are not subject to income or capital gains tax under the current laws of the Cayman Islands. There are no other taxes likely to be material to us levied by the government of the Cayman Islands.

British Virgin Islands

Our subsidiary incorporated in the British Virgin Islands is not subject to income or capital gains tax under the current laws of the British Virgin Islands. The British Virgin Islands do not impose a withholding tax on dividends.

Australia

Under the current laws of Australia, our Australian subsidiary is subject to a federal tax rate of 30% on their taxable income. For certain smaller companies with an aggregated turnover of less than AUD50 million, a reduced rate of 25% applies.

Singapore

Under the current law of Singapore, entities located in Singapore are subject to 17% statutory income tax rate with respect to the profit generated from Singapore, with 75% exemption on the first SGD10,000 of taxable income and further 50% exemption on the next SGD190,000 of taxable income.

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Hong Kong

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. In March 2018, the Hong Kong government introduced a two-tiered profit tax rate regime by enacting the Inland Revenue (Amendment) (No.3) Ordinance 2018, the Ordinance. Under the two-tiered profits tax rate regime, the first HK$2 million of assessable profits of qualifying corporations is taxed at 8.25% and the remaining assessable profits at 16.5%. The Ordinance is effective from the year of assessment 2018-2019. Our Hong Kong subsidiary did not have assessable profits that were derived from Hong Kong during the years ended December 31, 2023, 2024 and 2025. Payments of dividends by our Hong Kong subsidiary to us are therefore not subject to withholding tax in Hong Kong.

PRC

Our PRC subsidiaries and our former variable interest entities, which are considered PRC resident enterprises under PRC tax law, are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of 25%. In addition, our variable interest entities and PRC subsidiaries are subject to value added taxes, or VAT, on the services they provide at the rate of 6% or 3%, depending on whether the entity is a general taxpayer or small-scale taxpayer, plus related surcharges, less any deductible VAT they have already paid or borne.

Dividends paid by our wholly foreign-owned subsidiaries in China to our intermediary holding companies in Hong Kong will be subject to a withholding tax rate of 10%, unless they qualify for a special exemption.

Inflation

Inflationary factors such as increases in costs may adversely affect our results of operations. We do not believe that inflation has had a material effect on our business, financial condition or results of operations to date. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher cost through price increases. Although we have not been materially affected by inflation in the past, we can provide no assurance that we will not be affected by higher rates of inflation in the countries and regions where we operate in the future.

B. Liquidity and Capital Resources

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


		For the Years Ended December 31,
		2023		2024		2025
		US$		US$		US$

		(in thousands)
Summary Consolidated Cash Flows Data:
Net cash used in operating activities from continuing operations		(862)		(265)		(908)
Net cash provided by/(used in) operating activities from discontinued operations		2,077		(1,807)		1,054
Net cash provided by/(used in) by operating activities		1,215		(2,072)		146
Net cash used in investing activities from continuing operations		—		—		147
Net cash provided by/(used in) investing activities from discontinued operations		4,981		(11)		(5,419)
Net cash provided by/(used in) investing activities		4,981		(11)		(5,272)
Net cash (used in)/provided by financing activities from continuing operations		(36,316)		254		1,550
Net cash provided by financing activities from discontinued operations		—		—		—
Net cash (used in)/provided by financing activities from continuing operations		(36,316)		254		1,550
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(618)		(203)		144
Net decrease in cash, cash equivalents and restricted cash		(30,738)		(2,032)		(3,432)
Cash, cash equivalents and restricted cash at beginning of the period		37,147		6,409		4,377
Cash, cash equivalents and restricted cash at end of the year		6,409		4,377		945

We experienced net loss of US$11.4 million, US$2.1 million and US$1.5 million for the years ended December 31, 2023, 2024 and 2025. In 2025, we had net cash provided by operating activities of US$0.1 million. Our operating results for future periods are subject to numerous uncertainties and it is uncertain if we will be able to reduce or eliminate our net losses for the foreseeable future. These conditions raise substantial doubt about our ability to continue as a going concern.

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As of December 31, 2025, we had US$0.9 million in cash and cash equivalents. Our cash and cash equivalents consist of cash on hand and time deposits, held in deposit accounts with banks that are highly liquid and have original maturities of three months or less and are unrestricted as to withdrawal or use.

As of December 31, 2025, we had total current liabilities of US$1.4 million, primarily consisting of accrued expenses and other liabilities of US$1.2 million.

To safeguard our liquidity position, we entered into a loan agreement with an independent third party in December 2022, with a principal amount of US$40.0 million bearing an annual simple interest rate of 7% (the “Original Loan Agreement”). Under the Original Loan Agreement, accrued interest is payable on a quarterly basis and all outstanding principal and accrued interest were due on September 30, 2025. We are entitled to disburse the loan in a lump sum or through instalment payments at our discretion. In April 2025, we entered into an amendment to the Original Loan Agreement with such third party, extending the maturity date to September 30, 2027.

We may require additional financing to continue our operations. However, there can be no assurance that these plans and arrangements will be sufficient to fund our ongoing capital expenditures, working capital, and other requirements. Therefore, we may also decide to enhance our liquidity position or increase our cash reserve through additional capital and finance funding. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We may not be able to obtain additional capital when desired, on favorable terms or at all.”

Operating Activities

Net cash provided by operating activities for the year ended December 31, 2025 was US$0.1 million, consisting of net cash flow used in operations activities from continuing operations of US$1.0 million and net cash provided by operations from discontinued operations of US$1.1 million. Net cash used in operating activities from continuing operations for the year ended December 31, 2025 was US$1.0 million, as compared to a net loss from continuing operations of US$0.7 million adjusted by depreciation and amortization of US$0.2 million. The difference between our net loss and our net cash used in operating activities was primarily attributable to an increase of US$0.3 million in prepayments and other current assets .

Net cash used in operating activities for the year ended December 31, 2024 was US$2.1 million, consisting of net cash flow used in operations activities from continuing operations of US$0.3 million and net cash used in operations from discontinued operations of US$1.8 million. Net cash used in operating activities from continuing operations for the year ended December 31, 2024 was US$0.3 million, as compared to a net loss from continuing operations of US$0.3 million.

Net cash provided by operating activities for the year ended December 31, 2023 was US$1.2 million, consisting of net cash flow used in operations activities from continuing operations of US$0.9 million and net cash provided by operations from discontinued operations of US$2.1 million. Net cash used in operating activities from continuing operations for the year ended December 31, 2023 was US$0.9 million, as compared to a net loss from continuing operations of US$5.7 million adjusted by loss from disposal of subsidiaries of US$5.4 million and share-based compensation reversal of US$1.0 million. The difference between our net loss and our net cash used in operating activities was primarily attributable to a decrease of US$0.3 million in prepayments and other current assets and an increase of US$0.1 million in accrued expenses and other liabilities.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2025 was US$5.3 million, consisting of net cash provided by investing activities from continuing operations of US$0.1 million and net cash used in investing activities from discontinued operations of US$5.4 million. Net cash provided by investing activities from continuing operations for the year ended December 31, 2025 mainly consisted of US$0.2 million net cash inflow from acquisition of ZIITECH.

Net cash used in investing activities for the year ended December 31, 2024 was US$0.01 million, consisting of net cash used in investing activities from discontinued operations of US$11 thousand. Net cash provided by investing activities from continuing operations for the year ended December 31, 2024 was nil.

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Net cash provided by investing activities for the year ended December 31, 2023 was US$5.0 million, consisting of net cash provided by investing activities from discontinued operations of US$5.0 million . Net cash provided by investing activities from continuing operations for the year ended December 31, 2023 was nil.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2025 was US$1.6 million, all of which was from continuing operations, mainly consisting of US$1.6 million in proceeds from borrowings.

Net cash provided by financing activities for the year ended December 31, 2024 was US$0.3 million, all of which was from continuing operations, mainly consisting of US$0.3 million in loan received from third parties.

Net cash used in financing activities for the year ended December 31, 2023 was US$36.3 million, all of which was from continuing operations, mainly consisting of US$33.9 million in repayment of short-term and long-term borrowings and US$6.4 million in repayment of convertible loans; offset by US$4.0 million in proceeds from issuance of ordinary shares.

Capital Expenditures

We did not have any significant capital expenditures for the years ended December 31, 2023, 2024 and 2025, as we do not heavily rely on property and equipment to operate.

Contractual Obligations

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


		Payment Due by December 31, 2025
				Less than		More than
		Total		1 year		1 year

		(Amounts expressed in US$ in thousands)
Operating lease obligations		112		88		24
Long-term borrowing		1,800		—		1,800
Total		1,912		88		1,824

Other than as shown above, we did not have any other significant capital and other commitments, long-term obligations or guarantees as of December 31, 2025.

C. Research and Development, Patents and Licenses, etc.

See “Item 4. Information on the Company—B. Business Overview—Technology” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.”

D. Trend Information

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

E. Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and accompanying footnotes. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the assets or liabilities in the future.

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We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. The management determines there are no critical accounting estimates.

When reading our financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. See “Note 2 — Summary of Significant Accounting Policies” to our financial statements for the disclosure of these accounting policies.

Item 6.Directors, Senior Management and Employees

A.Directors and Executive Officers

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


Directors and Executive Officers	Age	Position/Title
Zexiong Huang	39	Director, Chief Executive Officer
Xin Yang	43	Director, Chief Financial Officer
Jun Dong	48	Chairman of the Board of Directors
Hao Liu	40	Director
Sen Lin	49	Independent Director
Eun Jung Shin	43	Independent Director
Dawei Chen	51	Independent Director

Mr. Zexiong Huang has served as a director of the Board and the chief executive officer and acting chief financial officer of our company since January 2023. Mr. Huang has over ten years of experience in the financial industry as well as the financial services industry, specializing in SME financial services, financing and guarantee, consumer finance, real estate mortgage financing, microfinance, and other financial products. He has held various senior management positions in mainland China and Hong Kong and has gained comprehensive industry experience in the areas of consulting, business development, financial operations, and management. Mr. Huang was an executive director and the chief executive officer of JIMU GROUP LIMITED (8187.HK) from June 2020 to May 2022. He has been a consultant of our former digital SME business unit since 2021 and the executive vice president of the group since 2022. Mr. Huang holds a bachelor’s degree in economics from Yunnan University of Finance and Economics.

Mr. Xin Yang has served as our chief financial officer since December 2023 and as a director of the Board since October 2025. Mr. Yang has 20 years of experience in accounting and financial management. Prior to joining us, Mr. Yang served as chief financial officer at Shenzhen Longchengfa Technology Co., Ltd. from October 2021 to December 2023.Mr. Yang received his bachelor’s degree from Central University of Finance and Economics in 2004.

Mr. Jun Dong has served as a director of the Board since our inception and the chairman of the Board since September 2019. Mr. Dong served as our acting chief executive officer from September 2019 to August 2020. He has also served as the chairman of the board of Jimu Holdings Limited since its inception and as the chairman of the board of directors of Ever Smart International Holdings Limited since 2017. Mr. Dong has over 15 years of experience in the finance industry. Between 2005 and 2008, Mr. Dong served as investment manager with Bank Hapoalim in New York. Mr. Dong received his MBA degree from University of Connecticut in 2003 and his bachelor’s degree in tourism management from Yunnan University in 1999. He received his EMBA degree from China Europe International Business School in 2013. He holds Chief Financial Analyst Charter and Certified Management Accountants and Certified Financial Manage certifications.

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Mr. Hao Liu has served as a director of the Board since October 2025. Mr. Hao has been serving as an independent director of 3 E NETWORK TECHNOLOGY GROUP LIMITED (NASDAQ: MASK) since December 2024. Prior to that, Mr. Liu held roles of co-founder and chief executive officer at Jeethen Capital from January 2020 to December 2024, overseeing the firm’s strategic direction and daily operations. From March to August 2021, Mr. Liu served as CEO and director at Mercurity Fintech Holding Inc. (NASDAQ: MFH), where he led the company’s successful business transformation and service optimization. From October 2017 to February 2019, Mr. Liu served as chief technology officer at Huasheng Securities, where he enhanced the firm’s fintech infrastructure and digital services through his technical leadership. Mr. Liu also leverages his deep technical expertise and financial industry insight as an angel investor supporting multiple innovative fintech startups. Mr. Liu received a bachelor’s degree in software engineering from Nanjing University of Science and Technology in 2008.

Mr. Sen Lin has served as an independent director of the Board and chairman of the audit committee of the Board since January 2023. Mr. Lin has over 20 years of accounting and auditing experience. He currently serves as the chief capital officer of AsiaLinq Investments and the chief financial officer of ChinaUp Hong Kong Limited. Since December 2021, Mr. Lin has served as an independent director of Metalpha Technology Holding Limited (Nasdaq: MATH), a company engaged in the development of a rewards-based crowdfunding platform. Since June 2021, Mr. Lin has served as an independent director of Shenzhen Jiang &Associates Creative Design Co., Ltd. (300668.SZ). From 2001 to 2006, Mr. Lin served as a manager of PricewaterhouseCoopers, and he became a certified public accountant in China in 2010. Mr. Lin received his bachelor’s degree in international business administration from Central University of Finance and Economics in 1998 and an EMBA degree from China Europe International Business School in 2011.

Ms. Eun Jung Shin has served as an independent director of the Board and a member of the audit committee of the Board since January 2023. Ms. Shin has over 20 years of management, operations and marketing experience. From November 2013 to March 2022, she served as a director at Jenax Inc, during which time she created a new business unit and managed the R&D, production, HR, marketing and sales departments, presented as a guest speaker at various conferences in many cities in Europe, USA, and Japan, and led external collaborations with global companies. From 2009 to 2011, she worked as a senior account manager at Fleishman-Hillard Korea, where she developed the communications platform as part of the core team of the G20 Business Summit Committee communications partners. She received her bachelor’s degree in International Relations and Political Science in 2005 from Tufts University and an MBA degree in 2009 from Yonsei University.

Mr. Dawei Chen has served as an independent director of the Board since August 2023. Mr. Chen served as the Chief Financial Officer of Skillful Craftsman Education Technology Limited (Nasdaq: EDTK) from August 2021 to February 2026 and served as its Chief Strategy Officer from January 2021 to August 2021. Mr. Chen was the vice president of Wuhan Incar Technology Co. Ltd. from January 2018 to February 2020. Mr. Chen had served in several senior positions with leading multinational corporations and consulting firms, where he gained extensive experience in strategic planning and management consultancy. Over the past ten years, Mr. Chen focused on equity investment, with more than 20 successful IPOs and M&A transactions mainly in education, high-end manufacturing, IT infrastructure, Blockchain technology, and e-commerce. Additionally, Mr. Chen served as a senior consultant for several Chinese companies listed abroad and took key roles in financing advisory and investor relations. Mr. Chen holds a bachelor’s degree from Beijing University of Posts and Telecommunications (BUPT), a Master of Engineering degree from Beijing Jiaotong University (BJTU) and an MBA degree from Concordia University in Canada.

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Board Diversity

The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.


Board Diversity Matrix
Country of Principal Executive Offices		People’s Republic of China
Foreign Private Issuer		Yes
Disclosure Prohibited under Home Country Law		No
Total Number of Directors		7
	Female		Male	Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	1		6	0	0
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction	0
LGBTQ+	0
Did Not Disclose Demographic Background	0

B.Compensation

For the year ended December 31, 2025, we paid an aggregate of approximately US$0.1 million in cash and benefits to our executive officers. We paid our non-executive directors an aggregate of US$65,616 during the same period. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors. Our PRC subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.

Share Incentives

2018 Share Incentive Plan

In July 2018, our shareholders and board of directors adopted another share incentive plan, which we refer to as our Second Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. Our board of directors approved an amendment to the Second Plan in April 2025. Under our Second Plan, as amended, the maximum aggregate number of shares which may be issued pursuant to all awards under our Second Plan is initially 47,017,541, plus an annual increase on January 1 of each year commencing on January 1, 2026 and ending on the end of the term of our Second Plan, by an amount equal to 2% of the total number of shares issued and outstanding on December 31 of the preceding year. As of March 31, 2026, the maximum aggregate number of shares which may be issued pursuant to awards granted under the Second Plan was 59,855,649 (excluding the number of shares assumed from the First Plan). As of the same date, options to purchase 4,824,190 ordinary shares were outstanding.

The following paragraphs describe the principal terms of our Second Plan.

Types of Awards. Our Second Plan permits the awards of options, restricted shares, restricted share units or any other type of awards approved by the plan administrator.

Plan Administration. Our board of directors or a committee of one or more members of the board of directors will administer our Second Plan. The committee or the full 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 award.

Exercise Price. The plan administrator determines the exercise price for each award, which is stated in the award agreement.

Award Agreement. Awards granted under our Second Plan will be evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, 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.

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Eligibility. We may grant awards to our employees, directors and consultants of our company or any of our affiliates, which include our parent company, subsidiaries and any entities in which our parent company or a subsidiary of our company holds a substantial ownership interest.

Term of the Awards. The vested portion of options will expire if not exercised prior to the time as the plan administrator determines at the time of its grant. However, the maximum exercisable term is ten years from the date of a grant.

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

Transfer Restrictions. Awards may not be transferred in any manner by the recipient other than in accordance with the exceptions provided in our Second Plan, such as transfers by will or the laws of descent and distribution.

Termination. Unless terminated earlier, our Second Plan has a term of ten years. Our board of directors has the authority to amend or terminate the plan. However, no such action may adversely affect in any material way any awards previously granted unless agreed by the recipient.

The following table summarizes, as of March 31, 2026, the options issued under our share incentive plans to our directors, executive officers and other grantees.


	Ordinary
	Shares
	Underlying	Exercise
	Options	Price		Date of
Name	Awarded	($/Share)	Date of Grant	Expiration
Jun Dong	1,560,000	0.000125	July 1, 2018	July 1, 2028
Other grantees	54,358,674	0.000125	July 1, 2015 through July 1, 2018	July 1, 2025 through July 1, 2028

C.Board Practices

Board of Directors

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

Committees of the Board of Directors

We have established an audit committee and a compensation committee under the Board. We 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 Mr. Sen Lin, Ms. Eun Jung Shin and Mr. Dawei Chen, and is chaired by Mr. Lin. Mr. Lin, Ms. Shin and Mr. Chen each satisfies the “independence” requirements of Rule 5605(c)(2) of the Listing Rules of the Nasdaq Stock Market and meets the independence standards under Rule 10A-3 under the Exchange Act. We have determined that Mr. Lin qualifies as an “audit committee financial expert.” The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things:

●

selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm;

●

reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response;

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●reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;

●

discussing the annual audited financial statements with management and the independent registered public accounting firm;

●

reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies;

●

annually reviewing and reassessing the adequacy of our audit committee charter;

●

meeting separately and periodically with management and the independent registered public accounting firm; and

●

reporting regularly to the board.

Compensation Committee. Our compensation committee consists of Mr. Sen Lin, Ms. Eun Jung Shin and Mr. Dawei Chen, and is chaired by Ms. Shin. Mr. Lin, Ms. Shin and Mr. Chen each satisfies the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated upon. The compensation committee is responsible for, among other things:

●

reviewing the total compensation package for our executive officers and making recommendations to the board with respect to it;

●

reviewing the compensation of our non-employee directors and making recommendations to the board with respect to it; and

●

periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, and employee pension and welfare benefit plans.

Duties of Directors

Under Cayman Islands law, our directors have fiduciary duties, including duties of loyalty and a duty to act honestly in good faith with a view to our best interests. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association. We have 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.

Terms of Directors and Officers

Our officers are elected by and serve at the discretion of the Board. 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 or by the board. A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) is found by our company to be or becomes of unsound mind.

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Employment Agreements and Indemnification Agreements

We have entered into employment agreements with our senior executive officers. Pursuant to these agreements, we may terminate a senior executive officer’s employment without cause upon 60 days’ prior written notice or for cause at any time without remuneration for certain acts of the officer, such as being convicted of any criminal conduct, any act of gross or willful misconduct or any serious, willful, grossly negligent or material breach of any employment agreement provision, or engaging in any conduct which may make the continued employment of such officer detrimental to our company. Under the employment agreements, each senior executive officer grants us a nonexclusive, royalty-free license on any of his or her prior inventions that are related to our business. Each senior executive officer also grants us his or her entire rights to any intellectual property that he or she created, conceived, developed or reduced to practice during his or her term of employment that is related to our business, results from work performed for us, or uses any property of ours. The employment agreements also contain confidentiality, non-disclosure, non-competition, non-solicitation and non-interference provisions.

We also have entered into indemnification agreements with our directors and senior executive officers. Under these agreements, we will agree to indemnify them against certain liabilities and expenses that they incur in connection with claims made by reason of their being a director or officer of our company.

D. Employees

As of December 31, 2025, we had 30 employees, which included 23 in Austria, two in Singapore, 5 in China. The following table sets forth the numbers of our employees categorized by function as of December 31, 2025.


	As of December 31, 2025
		% of Total
	Number	Employees
Functions:
Research and development	5	16.7	%
Business & Marketing Development	12	40.0	%
General and administrative	13	43.3	%
Total number of employees	30	100.0	%

As required by laws and regulations in the jurisdictions where we operate, we participate in various employee social security plans. In China, these include, among other things, housing provident fund, pension, medical insurance and unemployment insurance. We are required under PRC law to make contributions to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by the local government from time to time. In Australia, we are also required to make superannuation guarantee contributions on behalf of eligible employees at the prescribed rate, currently 12% of the employee’s salary or wages, subject to the applicable cap for high-earning employees.

We typically enter into standard employment and confidentiality agreements with our senior management and core personnel. These contracts include a standard non-compete covenant that prohibits the employee from competing with us, directly or indirectly, during his or her employment and for 12 months after the termination of the employment, provided that we pay compensation equal to half a month’s salary.

We maintain a good working relationship with our employees, and we have not experienced any material labor disputes. None of our employees are represented by labor unions.

E.Share Ownership

The following table sets forth information with respect to the beneficial ownership of our shares as of March 31, 2026 by:

●

each of our current directors and executive officers; and

●

each person known to us to own beneficially 5% or more of our shares.

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The calculations in the table below are based on 641,905,382 ordinary shares outstanding as of March 31, 2026, comprising of (i) 599,465,862 Class A ordinary shares, and (ii) 42,439,520 Class B ordinary shares.

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


		Class A		Class B		Total		% of		Aggregate
		Ordinary		Ordinary		Ordinary		Beneficial		Voting
		Shares		Shares		Shares		Ownership		Power†
Directors and Executive Officers:*
Zexiong Huang		—		—		—		—		—
Xin Yang		—		—		—		—		—
Jun Dong⁽¹⁾		10,060,000		42,439,520		52,499,520		8.2		52.3
Sen Lin⁽²⁾		—		—		—		—		—
Eun Jung Shin⁽³⁾		—		—		—		—		—
Dawei Chen⁽⁴⁾		—		—		—		—		—
Hao Liu		—		—		—		—		—
All directors and executive officers as a group		10,060,000		42,439,520		52,499,520		8.2		52.3
Principal Shareholders:
Genius Hub Limited⁽¹⁾		—		32,490,725		32,490,725		5.1		39.4
Flamel Enterprises Ltd.⁽¹⁾		8,500,000		9,948,795		18,448,795		2.9		12.8
Tadpole Investing Carnival Limited⁽⁵⁾		105,000,000		—		105,000,000		16.4		8.5
Linkto Tech Limited⁽⁶⁾		98,000,000		—		98,000,000		15.3		7.9
Beansprouts Ltd.⁽⁷⁾		43,220,529		—		43,220,529		6.7		3.5

Notes:

For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class. Each holder of Class B ordinary shares is entitled to fifteen votes per share, subject to certain conditions, and each holder of our Class A ordinary shares is entitled to one vote per share on all matters submitted to them for a vote. Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Our Class B ordinary shares are convertible at any time by the holder thereof into Class A ordinary shares on a one-for-one basis.

*	Except for Ms. Eun Jung Shin, Mr. Sen Lin and Mr. Dawei Chen, the business address for our directors and executive officers is Room 02/a, 7/F, A T Tower, 180 Electric Road North Point, Hong Kong.

(1)

Represents (i) 1,560,000 Class A ordinary shares that Mr. Dong has the right to acquire upon exercise of option, (ii) 32,490,725 Class B ordinary shares directly held by Genius Hub Limited, and (iii) 8,500,000 Class A ordinary shares and 18,448,795 Class B ordinary shares directly held by Flamel Enterprises Ltd. Genius Hub Limited is wholly owned and controlled by Coastal Hero Limited, a company incorporated under the laws of the British Virgin Islands. Coastal Hero Limited is controlled by Genesis Trust, a trust established under the laws of the Cayman Islands and managed by TMF (Cayman) Ltd. as the trustee. Mr. Dong is the settlor of Genesis Trust, and Mr. Dong and his family members are the trust’s beneficiaries. Under the terms of this trust, Mr. Dong has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by Genius Hub Limited in our company, and the options we granted to Mr. Dong to purchase 1,560,000 ordinary shares of our company. Mr. Jun Dong is the sole shareholder and the sole director of Flamel Enterprises Ltd. The registered office address of Flamel Enterprises Ltd. is Tortola Pier Park, Building 1, Second Floor, Wickhams Cay I, Road Town, Tortola, British Virgin Islands.

(2)	The business address of Mr. Sen Lin is 9F, Block 3, Helen’s Garden Phase 3, Gongye 7 Road, Nanshan District, Shenzhen, Guangdong, China.

(3)	The business address of Ms. Eun Jung Shin is 101-2201, 91 Marine City, Ro Haeundae-gu, Busan, South Korea.

(4)	The business address of Mr. Dawei Chen is 1705, 9#, Phase5, Vanko Diwuyuan, Shenzhen, China.

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(5)

Beneficial ownership calculation is based solely on a review of a Schedule 13G filed with the SEC on March 16, 2023. Represents 105,000,000 Class A ordinary shares directly held by Tadpole Investing Carnival Limited, a company incorporated under the laws of British Virgin Islands. Tadpole Investing Carnival Limited is beneficially owned and controlled by Yechen Gan.

(6)

Beneficial ownership calculation is based solely on a review of a Schedule 13G filed with the SEC on March 16, 2023. Represents 98,000,000 Class A ordinary shares directly held by Linkto Tech Limited, a company incorporated under the laws of Hong Kong. Linkto Tech Limited is beneficially owned and controlled by YuanLan Gao.

(7)

Beneficial ownership calculation is based solely on a review of a Schedule 13G filed with the SEC on February 11, 2022. Represents (i) 1,084,986 Class A ordinary shares held by Mandra iBase Limited, a company incorporated under the laws of British Virgin Islands, 14,280,147 Class A ordinary shares in the form of 2,270,850 ADSs held by Mandra iBase Limited, and approximately 26,417,753 Class A ordinary shares which may be purchased by Mandra iBase Limited through the exercise of a warrant pursuant to a warrant agreement entered into between Mandra iBase Limited and us, (ii) 1 Class A ordinary share directly held by Woo Foong Hong Limited, and (iii) 2,818,907 Class A ordinary shares in the form of 402,701 ADSs held by Mandra Mirabilite Limited. Mandra iBase Limited is wholly owned and controlled by Beansprouts Ltd., and Woo Foong Hong Limited is 51% held by Beansprouts Ltd. Beansprouts Ltd. is owned by Bing How Mui and Song Yi Zhang, and each of them holds 50% of the issued and outstanding share capital of Beansprouts Ltd. The registered address of Mandra iBase Limited is 3rd Floor, J&C Building, P.O. Box 933, Road Town, Tortola, British Virgin Islands, VG1110.

Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to fifteen votes per share. We issued Class A ordinary shares represented by the ADSs in our initial public offering.

To our knowledge, as of March 31, 2026, a total of 238,629,685 Class A ordinary shares, representing approximately 38% of our total outstanding ordinary shares, were held by one record shareholder in the United States, which is The Bank of New York Mellon, the Depositary of our ADS program. The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.

Until the date when one or more of when Mr. Wei Wei, Mr. Jun Dong and Ms. Xiaomei Peng on an aggregate basis cease to beneficially own no less than 10,356,499 ordinary shares (including both Class A ordinary shares and Class B ordinary shares), representing 20% of the total issued and outstanding Class B ordinary shares immediately prior to our initial public offering, as adjusted for share splits, share dividends, recapitalization and the like, each Class B ordinary share will entitle its holder to fifteen (15) votes. Immediately following the foregoing date, each Class B ordinary share will entitle its holder to only one vote, rather than fifteen. Other than the foregoing, we are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

Item 7.Major Shareholders and Related Party Transactions

A.Major Shareholders

Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”

B.Related Party Transactions

Historical Contractual Arrangements with Our Former Variable Interest Entities and Their Shareholders

See “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with Our Former Variable Interest Entities.”

Historical Relationship with Jimu Group

We and Jimu Group had a certain degree of overlap in shareholders and board members. Jimu Group was also our largest single funding partner from 2016 to 2018. In January 2025, we reassessed our relationship with Jimu Group and concluded that Jimu Group was no longer our related party as of January 1, 2025, as the shared board representation had ceased.

Employment Agreements and Indemnification Agreements

See “Item 6—Directors, Senior Management and Employees—B. Compensation”

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Share Incentive Plans

See “Item 6. Directors, Senior Management and Employees—B. Compensation”

C. Interests of Experts and Counsel

Not applicable.

Item 8.Financial Information

A.Consolidated Statements and Other Financial Information

We have appended consolidated financial statements filed as part of this annual report.

Legal Proceedings

Other than disclosed in this annual report, we are currently not a party to any material legal or administrative proceedings. We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention. For risks and uncertainties relating to pending cases against us, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We and certain of our directors and officers have been subject to certain legal proceedings, which could have a material adverse impact on our business, financial condition, results of operation, cash flows and reputation.”

Dividend Policy

We have not previously declared or paid cash dividends and we have no plan to declare or pay any dividends in the near future on our shares. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

We are a holding company incorporated in the Cayman Islands. Historically, we relied principally on dividends from our PRC subsidiaries for our cash requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. Following our acquisition of ZIITECH in September 2025 and disposal of equity interests in Romantic Park in November 2025, we primarily rely on dividends from subsidiaries outside mainland China for our future cash requirements.

Our board of directors has discretion as to whether to distribute dividends, subject to applicable laws. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. If we pay any dividends on our ordinary shares, ADS holders will receive payment to the same extent as holders of our ordinary shares, subject to the terms of the Deposit Agreement, including the fees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.

B.Significant Changes

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

Item 9.The Offer and Listing

A.Offering and Listing Details

See “—C. Markets.”

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B.Plan of Distribution

Not applicable.

C.Markets

Our ADSs, each representing seven Class A ordinary shares, have been listed on the Nasdaq Global Market under the symbol “PT” since October 24, 2018.

On May 13, 2022, we amended the ratio of our ADSs representing its Class A ordinary shares from one (1) ADS representing seven (7) Class A ordinary shares to one (1) ADS representing thirty-five (35) Class A ordinary shares. The change was automatically made on the books of the depositary and no physical action by ADS holders was required.

Effective upon the commencement of trading on the Nasdaq on January 16, 2026, our ADSs will begin trading under the new name “J and Friends Holdings Limited” and new ticker symbol “JF.”

D.Selling Shareholders

Not applicable.

E.Dilution

Not applicable.

F.Expenses of the Issue

Not applicable.

Item 10.Additional Information

A.Share Capital

Not applicable.

B.Memorandum and Articles of Association

We are a Cayman Islands exempted company and our affairs are governed by our memorandum and articles of association and the Companies Act (As Revised) of the Cayman Islands, referred to as the Companies Act below. The following are summaries of material provisions of our amended and restated memorandum and articles of association, as well as the Companies Act (As Revised) insofar as they relate to the material terms of our ordinary shares.

Registered Office and Objects

Our registered office in the Cayman Islands is located at the offices of International Corporation Services Ltd., P.O. Box 472, Harbour Place, North Wing, 2nd Floor, 103 South Church Street, George Town, Grand Cayman KY1-1106, Cayman Islands. Our agent for service of process in the United States is Puglisi & Associates. The objects of our company are unrestricted and we have the full power and authority to carry out any object not prohibited by the law of the Cayman Islands.

Board of Directors

See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Board of Directors.”

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Ordinary Shares

General

All of our outstanding ordinary shares are fully paid and non-assessable. Our ordinary shares are issued in registered form and issued when issued in our register of members. Our company will issue only non-negotiable shares, and will not issue bearer or negotiable shares.

Under Cayman Islands law, we must keep a register of members and there should be entered therein:

●

the names and addresses of the members, a statement of the shares held by each member, and of the amount paid or agreed to be considered as paid, on the shares of each member;

●

the date on which the name of any person was entered on the register as a member;

●

the date on which any person ceased to be a member; and

●

whether each category of shares held by a member carries voting rights under the articles of association of the company and, if so, whether such voting rights are conditional.

Under Cayman Islands law, the register of members of our company is prima facie evidence of the matters set out therein (i.e. the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register of members is deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register of members. Upon the closing of our initial public offering, the register of members was updated to record and give effect to the issue of shares by us to the Depositary (or its nominee) as the Depositary. Once our register of members has been updated, the shareholders recorded in the register of members should be deemed to have legal title to the shares set against their name.

If the name of any person is entered in or omitted from our register of members without sufficient cause, or if there is any default or unnecessary delay in entering on the register the fact of any person having ceased to be a member of our company, the person or member aggrieved (or any member of our company or our company itself) may apply to the Cayman Islands Grand Court for an order that the register be rectified, and the Court may either refuse such application or it may, if satisfied of the justice of the case, make an order for the rectification of the register.

Ordinary Shares. Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. Holders of our Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Each Class B ordinary share shall entitle the holder thereof to fifteen (15) votes on all matters subject to vote at our general meetings, and each Class A ordinary share shall entitle the holder thereof to one (1) vote on all matters subject to vote at our general meetings. Until the date when one or more of Mr. Wei Wei, Mr. Jun Dong and Ms. Xiaomei Peng on an aggregate basis cease to beneficially own no less than 10,356,499 ordinary shares (including both Class A ordinary shares and Class B ordinary shares), representing 20% of the total issued and outstanding Class B ordinary shares immediately prior to our initial public offering, as adjusted for share splits, share dividends, recapitalization and the like, each Class B ordinary share will entitle its holder to fifteen (15) votes. Immediately following the foregoing date, each Class B ordinary share will entitle its holder to only one vote, rather than fifteen. Our ordinary shares are issued in registered form and are issued when registered in our register of members.

Conversion. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale of Class B ordinary shares by a holder thereof to any person other than our three core founders, Mr. Wei Wei, Mr. Jun Dong and Ms. Xiaomei Peng, or any entity which is not affiliated with any of the three core founders, such Class B ordinary shares are automatically and immediately converted into the same number of Class A ordinary shares. Each Class B ordinary share beneficially owned by any core founder is automatically converted into one Class A ordinary share, if at any time the core founder ceases to be a director or employee of our company or ceases to have the capability to make business decisions on behalf of our company due to health reasons.

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Dividends

The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors or shareholders in general meeting (provided always that dividends may be declared and paid only out of funds legally available therefor, namely out of either profit or our share premium account, and provided further that a dividend may not be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business).

Voting Rights

Holders of ordinary shares have the right to receive notice of, attend, speak and vote at general meetings of our company. Holders of ordinary shares shall, at all times, vote together as one class on all matters submitted to a vote by the members at any such general meeting. Each holder of Class B ordinary shares is entitled to fifteen votes per share, subject to certain conditions, and each holder of our Class A ordinary shares is entitled to one vote per share on all matters submitted to them for a vote. Voting at any meeting of shareholders is by show of hands unless a poll is demanded. A poll may be demanded by the chairman of such meeting or any one shareholder present in person or by proxy.

Travers Thorp Alberga, our counsel as to Cayman Islands law, has advised that such voting structure is in compliance with current Cayman Islands law as in general terms, a company and its shareholders are free to provide in the articles of association for such rights as they consider appropriate, subject to such rights not being contrary to any provision of the Companies Act and not inconsistent with common law. Travers Thorp Alberga has confirmed that the inclusion in our amended and restated memorandum and articles of association of provisions giving weighted voting rights to specific classes of shareholders generally or to specific classes of shareholders on specific resolutions is not prohibited by the Companies Act. Further, weighted voting provisions have been held to be valid as a matter of English common law and therefore it is expected that such would be upheld by a Cayman Islands court.

An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes attached to the ordinary shares cast by those shareholders who are present in person or by proxy at a general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes attached to the ordinary shares cast by those shareholders who are present in person or by proxy at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been duly given. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of our company entitled to vote, as permitted by the Companies Act and our memorandum and articles of association. A special resolution will be required for important matters such as a change of name or making changes to our memorandum and articles of association.

Transfer of Ordinary Shares

Any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by our board of directors.

However, our board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which our company has a lien. Our board of directors may also decline to register any transfer of any ordinary share unless:

●

the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

●

the instrument of transfer is in respect of only one class of shares;

●

the instrument of transfer is properly stamped, if required;

●

the ordinary shares transferred are free of any lien in favor of us;

●

any fee related to the transfer has been paid to us; and

●

in the case of a transfer to joint holders, the transfer is not to more than four joint holders.

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If our directors refuse to register a transfer they are required, within three months after the date on which the instrument of transfer was lodged, to send to each of the transferor and the transferee notice of such refusal.

Liquidation

On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of ordinary shares), assets available for distribution among the holders of ordinary shares will be distributed among the holders of the ordinary shares on a pro rata basis. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders proportionately. We are a “limited liability” company registered under the Companies Act, and under the Companies Act, the liability of our members is limited to the amount, if any, unpaid on the shares respectively held by them. Our memorandum of association contains a declaration that the liability of our members is so limited.

Calls on Ordinary Shares and Forfeiture of Ordinary Shares

Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their ordinary shares. The ordinary shares that have been called upon and remain unpaid are subject to forfeiture.

Redemption, Repurchase and Surrender of Ordinary Shares

We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders thereof, on such terms and in such manner as may be determined, before the issue of such shares, by our board of directors or by a special resolution of our shareholders. Our company may also repurchase any of our shares provided that the manner and terms of such purchase have been approved by our board of directors or are otherwise authorized by our memorandum and articles of association. Under the Companies Act, the redemption or repurchase of any share may be paid out of our company’s profits or out of the proceeds of a fresh issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if our company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding, or (c) if the company has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.

Variations of Rights of Shares

If at any time, our share capital is divided into different classes of shares, all or any of the special rights attached to any class of shares may only be materially adversely varied with the consent in writing of the holders of two-thirds of the issued shares of that class or with the sanction of a resolution passed at a separate meeting of the holders of shares of that class by the holders of two-thirds of the issued shares of that class. The rights conferred upon the holders of the shares of any class issued with preferred or other rights will not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be materially adversely varied by the creation or issue of further shares ranking pari passu with such existing class of shares. The rights of the holders of shares shall not be deemed to be materially adversely varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights.

General Meetings of Shareholders and Shareholder Proposals

As a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders’ annual general meetings. Our memorandum and articles of association provide that we may (but are not obliged to) in each year hold a general meeting as our annual general meeting in which case we shall specify the meeting as such in the notices calling it, and the annual general meeting shall be held at such time and place as may be determined by our directors.

Shareholders’ annual general meetings and any other general meetings of our shareholders may be convened by the chairman or a majority of our board of directors. Advance notice of at least ten calendar days is required for the convening of our annual general shareholders’ meeting and any other general meeting of our shareholders. A quorum required for a general meeting of shareholders consists of at least one shareholder present or by proxy, representing not less than one-third of the total voting power of the outstanding shares in our company.

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Cayman Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our memorandum and articles of association allow any shareholders holding shares representing in aggregate not less than one-third of all votes attaching to all issued and outstanding shares of the company, to requisition an extraordinary general meeting of the shareholders, in which case our directors are obliged to call such meeting and to put the resolutions so requisitioned to a vote at such meeting; however, our memorandum and articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders.

Election and Removal of Directors

Unless otherwise determined by our company in general meeting, our articles provide that our board will consist of not less than three directors. There are no provisions relating to retirement of directors upon reaching any age limit.

The directors have the power to appoint any person as a director either to fill a casual vacancy on the board or as an addition to the existing board.

Our shareholders may also appoint any person to be a director by way of ordinary resolution.

A director may be removed with or without cause by ordinary resolution.

Proceedings of Board of Directors

Our memorandum and articles of association provide that our business is to be managed and conducted by our board of directors. The quorum necessary for board meetings may be fixed by the board and, unless so fixed at another number, will be a majority of the directors.

Our memorandum and articles of association provide that the board may from time to time at its discretion exercise all powers of our company to raise or borrow money, to mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of our company and issue debentures, bonds and other securities of our company, whether outright or as collateral security for any debt, liability or obligation of our company or of any third party.

Inspection of Books and Records

Holders of our ordinary shares have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, we intend to provide our shareholders with annual audited financial statements.

Changes in Capital

Our authorised share capital is US$250,000 divided into 2,000,000,000 shares of a par value of US$0.000125 each, comprising of (i) 750,000,000 Class A Ordinary Shares of a par value of US$0.000125 each, (ii) 250,000,000 Class B Ordinary Shares of a par value of US$0.000125 each, and (iii) 1,000,000,000 shares of no specific class of a par value of US$0.000125 each.

Subject to our amended and restated memorandum and articles, all shares for the time being unissued shall be under the control of the directors who may, in their absolute discretion and without the approval of the shareholders, cause us to:

(a)

issue, allot and dispose of shares (including, without limitation, preferred shares) (whether in certificated form or non-certificated form) to such persons, in such manner, on such terms and having such rights and being subject to such restrictions as they may from time to time determine;

(b)

grant rights over shares or other securities to be issued in one or more classes or series as they deem necessary or appropriate and determine the designations, powers, preferences, privileges and other rights attaching to such shares or securities, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers, preferences, privileges and rights associated with the then issued and outstanding shares, at such times and on such other terms as they think proper; and

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(c)

grant options with respect to shares and issue warrants or similar instruments with respect thereto.

The directors may authorise the division of shares into any number of classes and the different classes shall be authorised, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different classes (if any) may be fixed and determined by the directors or by an ordinary resolution of the shareholders. The directors may issue shares with such preferred or other rights, all or any of which may be greater than the rights of our ordinary shares, at such time and on such terms as they may think appropriate. The directors may issue from time to time, out of our authorised share capital (other than the authorised but unissued ordinary shares), series of preferred shares in their absolute discretion and without approval of the shareholder; provided, however, before any preferred shares of any such series are issued, the directors shall by resolution of directors determine, with respect to any series of preferred shares, the terms and rights of that series.

Our shareholders may from time to time by ordinary resolution:

●

increase our share capital by such sum, to be divided into shares of such amount, as the resolution shall prescribe;

●

consolidate and divide all or any of our share capital into shares of a larger amount than our existing shares;

●

sub-divide our existing shares, or any of them into shares of a smaller amount, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; or

●

cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled.

Our shareholders may, subject to compliance with the Companies Act of the Cayman Islands, reduce our share capital or any capital redemption reserve in any manner permitted by law.

Exempted Company

We are an exempted company with limited liability under the Companies Act of the Cayman Islands. The Companies Act in the Cayman Islands distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:

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an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies;

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an exempted company’s register of members is not required to be open to inspection;

●

an exempted company does not have to hold an annual general meeting;

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an exempted company may issue no par value, negotiable shares;

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an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);

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an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

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an exempted company may register as a limited duration company; and

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an exempted company may register as a segregated portfolio company.

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“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder’s shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil). Upon the effectiveness of the registration statement on Form F-1 in connection with our initial public offering, we became subject to reporting and other informational requirements of the Exchange Act, as applicable to foreign private issuers.

Differences in Corporate Law

The Companies Act is derived, to a large extent, from the older Companies Acts of England but does not follow recent United Kingdom statutory enactments, and accordingly there are significant differences between the Companies Act and the current Companies Act of England. In addition, the Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

Mergers and Similar Arrangements

The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (a) “merger” means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company and (b) a “consolidation” means the combination of two or more constituent companies into a combined company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. The written plan of merger or consolidation must be filed with the Registrar of Companies together with a declaration as to the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Dissenting shareholders have the right to be paid the fair value of their shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) if they follow the required procedures, subject to certain exceptions. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement is approved by a majority in number of each class of shareholders or creditors with whom the arrangement is to be made and who must, in addition, represent seventy-five percent in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

●

the statutory provisions as to the required majority vote have been met;

●

the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;

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the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and

●

the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.

When a takeover offer is made and approved by holders of 90% of the shares affected, the offeror may, at any time within two months after the shareholder approval, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.

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If an arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

Shareholders’ Lawsuits

In principle, we will normally be the proper plaintiff and as a general rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands court can be expected to apply and follow the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto) which permit a minority shareholder to commence a class action against, or derivative actions in the name of, a company to challenge the following:

●

an act which is illegal or ultra vires;

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an act which, although not ultra vires, could only be effected duly if authorized by a special or qualified majority vote that has not been obtained; and

●

an act which constitutes a fraud on the minority where the wrongdoers are themselves in control of the company.

Indemnification of Directors and Executive Officers and Limitation of Liability

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our memorandum and articles of association provide that our directors and officers shall be indemnified against all actions, costs, charges, expenses, losses and damages incurred or sustained by such director or officer, other than by reason of such person’s own dishonesty, willful default or fraud, in or about the conduct of our company’s business or affairs or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we intend to enter into indemnification agreements with our directors and senior executive officers that will provide such persons with additional indemnification beyond that provided in our memorandum and articles of association.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Anti-Takeover Provisions in the Memorandum and Articles of Association

Some provisions of our memorandum and articles of association may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our memorandum and articles of association, as amended and restated from time to time, for a proper purpose and for what they believe in good faith to be in the best interests of our company.

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Directors’ Fiduciary Duties

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction and that the transaction was of fair value to the corporation.

As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore he owes the following duties to the company—a duty to act in good faith in the best interests of the company, a duty not to make a personal profit based on his or her position as director (unless the company permits him to do so), a duty not to put himself in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party and a duty to exercise powers for the purpose for which such powers were intended. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.

Shareholder Proposals

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. The Delaware General Corporation Law does not provide shareholders an express right to put any proposal before the annual meeting of shareholders, but in keeping with common law, Delaware corporations generally afford shareholders an opportunity to make proposals and nominations provided that they comply with the notice provisions in the certificate of incorporation or bylaws. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

However, our memorandum and articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders. As an exempted Cayman Islands company, we are not obliged by law to call shareholders’ annual general meetings.

Cumulative Voting

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. Cayman Islands law does not prohibit cumulative voting, but our articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

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Removal of Directors

Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our memorandum and articles of association, directors may be removed by ordinary resolution of our shareholders.

Transactions with Interested Shareholders

The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation or bylaws that is approved by its shareholders, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting stock or who or which is an affiliate or associate of the corporation and owned 15% or more of the corporation’s outstanding voting stock within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and for a proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.

Dissolution; Winding Up

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.

Variation of Rights of Shares

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Islands law and our articles of association, if our share capital is divided into more than one class of shares, we may materially adversely vary the rights attached to any class only with the written consent of the holders of two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a general meeting of the holders of shares of that class.

Amendment of Governing Documents

Under the Delaware General Corporation Law, a corporation’s certificate of incorporation may be amended only if adopted and declared advisable by the board of directors and approved by a majority of the outstanding shares entitled to vote and the bylaws may be amended with the approval of a majority of the outstanding shares entitled to vote and may, if so provided in the certificate of incorporation, also be amended by the board of directors. Under the Companies Act, our memorandum and articles of association may only be amended by special resolution of our shareholders.

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Rights of Non-Resident or Foreign Shareholders

There are no limitations imposed by our memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.

Directors’ Power to Issue Shares

Under our memorandum and articles of association, our board of directors is empowered to issue or allot shares or grant options and warrants with or without preferred, deferred, qualified or other special rights or restrictions.

C.Material Contracts

We have not entered into any material contracts other than in the ordinary course of business and other than those described in “Item 4. Information on the Company” or elsewhere in this annual report.

D.Exchange Controls

See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations Relating to Foreign Currency Exchange.”

E.Taxation

The following summary of material Cayman Islands, PRC and U.S. federal income tax considerations of an investment in ADSs or ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This summary does not deal with all possible tax considerations relating to an investment in ADSs or ordinary shares, such as the tax considerations under state, local and other tax laws.

Cayman Islands Taxation

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to investors levied by the government of the Cayman Islands. The Cayman Islands is not party to any double tax treaties which are applicable to any payments made by our company.

People’s Republic of China Taxation

Although we are incorporated in the Cayman Islands, we may be treated as a PRC resident enterprise for PRC tax purposes under the Enterprise Income Tax Law. The Enterprise Income Tax Law provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC is treated as a PRC resident enterprise for PRC tax purposes. The implementing rules of the Enterprise Income Tax Law merely define the “de facto management body” as the “organizational body which effectively manages and controls the production and business operation, personnel, accounting, properties and other aspects of operations of an enterprise.” Based on a review of the facts and circumstances, we do not believe that J and Friends Holdings Limited or any of our subsidiaries in the British Virgin Islands or Hong Kong should be considered a PRC resident enterprise for PRC tax purposes. However, there is limited guidance and implementation history of the Enterprise Income Tax Law. If J and Friends Holdings Limited were to be considered a PRC resident enterprise, then PRC income tax at a rate of 10% would generally be applicable to any gain realized on the transfer of our ADSs or ordinary shares by investors that are “non-resident enterprises” of the PRC and to any interest or dividends payable by us to such investors.

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U.S. Federal Income Tax Considerations

The following discussion is a summary of U.S. federal income tax considerations generally applicable to the ownership and disposition of our ADSs or ordinary shares by a U.S. Holder (as defined below) that holds our ADSs or ordinary shares as “capital assets” (generally, property held for investment). This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations promulgated thereunder (“Regulations”), published positions of the Internal Revenue Service (the “IRS”), court decisions and other applicable authorities, all as currently in effect as of the date hereof and all of which are subject to change or differing interpretations (possibly with retroactive effect).

This discussion does not describe all of the U.S. federal income tax considerations that may be applicable to U.S. Holders in light of their particular circumstances or U.S. Holders subject to special treatment under U.S. federal income tax law, such as:

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banks, insurance companies and other financial institutions;

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tax-exempt entities;

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real estate investment trusts;

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regulated investment companies;

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dealers or traders in securities;

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certain former citizens or residents of the United States;

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persons that elect to mark their securities to market;

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persons holding our ADSs or ordinary shares as part of a “straddle,” conversion or other integrated transaction;

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persons that have a functional currency other than the U.S. dollar; and

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persons that actually or constructively own 10% or more of our equity (by vote or value).

In addition, this discussion does not address any U.S. state or local or non-U.S. tax considerations or any U.S. federal estate, gift, alternative minimum tax or Medicare contribution tax considerations. Each U.S. Holder is urged to consult its tax advisor concerning the U.S. federal, state, local and non-U.S. income and other tax considerations associated with an investment in our ADSs or ordinary shares in light of its particular situation.

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of our ADSs or ordinary shares that is, for U.S. federal income tax purposes:

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an individual who is a citizen or resident of the United States;

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a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in or organized under the laws of the United States, any state thereof or the District of Columbia;

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an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

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a trust that (i) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons or (ii) has a valid election in effect under applicable Regulations to be treated as a “United States Person” within the meaning of the Code.

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If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our ADSs or ordinary shares, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. A partner in a partnership holding our ADSs or ordinary shares is urged to consult its tax advisor regarding in the tax considerations generally applicable to it of the ownership and disposition of our ADSs or ordinary shares.

The discussion below assumes that the representations contained in the Deposit Agreement are true and that the obligations in the Deposit Agreement and any related agreement have been and will be complied with in accordance with its terms. If a U.S. Holder holds ADSs, such U.S. Holder should be treated as the beneficial holder of the underlying ordinary shares represented by those ADSs for U.S. federal income tax purposes.

Passive Foreign Investment Company Considerations

Anon-U.S. corporation, such as our company, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year, if either (i) 75% or more of its gross income for such taxable year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) during such taxable year produce or are held for the production of passive income. Passive income generally includes dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains. For this purpose, cash and assets readily convertible into cash are categorized as passive assets and the company’s unbooked intangibles associated with active business activity are taken into account as non-passive assets.

In addition, a non-U.S. corporation will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation in which it owns, directly or indirectly, 25% or more (by value) of the stock. Although the law in this regard is unclear, we treat our variable interest entities as being beneficially owned by us for U.S. federal income tax purposes because we control their management decisions, we are entitled to substantially all of the economic benefits associated with these entities, and, as a result, we consolidate their results of operations in our U.S. GAAP financial statements.

We believe our income from, and assets used in the historical business, which were divested in the latter part of the year, were treated as passive under the PFIC provisions. Based on annual income and the value and characterization of our assets throughout the year, as well as the value of our ADSs, it is likely that we were classified as a PFIC for our taxable year ended December 31, 2024. Accordingly, U.S. Holders should consult their tax advisors regarding the advisability of making a mark-to-market election (as described below under “—Passive Foreign Investment Company Rules”). Even if we are not currently a PFIC, changes in the nature of our income or assets, or fluctuations in the market price of our ADSs, may cause us to become a PFIC for future taxable years. In estimating the value of our goodwill and other unbooked intangibles, we have taken into account our market capitalization, which may fluctuate over time. Among other factors, if our market capitalization declines, we may continue to be classified as a PFIC for our taxable year ending December 31, 2025 or future taxable years. Under circumstances where revenues from our installment-sale business or other activities that produce passive income increase relative to our revenues from activities that produce non-passive income or where we determine not to deploy significant amounts of cash for working capital or other purposes, our risk of becoming classified as a PFIC may substantially increase. In addition, if it were determined that we are not the beneficial owner of our variable interest entities for U.S. federal income tax purposes, we may be treated as a PFIC for our taxable year ending December 31, 2025 and in future taxable years.

Dividends

Subject to the discussion below under “—Passive Foreign Investment Company Rules,” any cash distributions (including constructive distributions and any amount of any PRC tax withheld) paid on our ADSs or ordinary shares out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles, will generally be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by such U.S. Holder, in the case of ordinary shares, or by the Depositary, in the case of ADSs. Because we do not intend to determine our earnings and profits on the basis of U.S. federal income tax principles, any distribution we pay will generally be reported as dividend income for U.S. federal income tax purposes. Dividends received on our ADSs or ordinary shares will not be eligible for the dividends received deduction allowed to corporations under the Code.

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Individuals and certain other non-corporate U.S. Holders will be subject to tax at the lower capital gain tax rate applicable to “qualified dividend income” on dividends paid on our ADSs or ordinary shares, provided that certain conditions are satisfied, including that (i) the ADSs or ordinary shares on which the dividends are paid are readily tradable on an established securities market in the United States or, in the event that we are deemed to be a PRC resident enterprise under the PRC tax law, we are eligible for the benefits of the U.S.-PRC income tax treaty (the “Treaty”), (ii) we are neither a PFIC nor treated as such with respect to a U.S. Holder (as discussed below) for the taxable year in which the dividend was paid or the preceding taxable year and (iii) certain holding period requirements are met. Our ADSs are listed on the Nasdaq Global Market, which is an established securities market in the United States, and we believe that our ADSs should qualify as readily tradable, although there can be no assurances in this regard. Because we do not expect our ordinary shares will be listed on an established securities market, we do not expect that the dividends we pay on our ordinary shares that are not represented by ADSs will meet the conditions required for such reduced tax rates, unless we are deemed to be a PRC resident enterprise (as described above) and are eligible for the benefits of the Treaty. Assuming we are eligible for such benefits and the other requirements are met, dividends we pay on our ordinary shares, regardless of whether such shares are represented by the ADSs, would be eligible for the reduced rates of taxation applicable to qualified dividend income. As discussed above under “—Passive Foreign Investment Company Considerations,” however, it is likely that we were classified as a PFIC for our taxable year ended December 31, 2024. Accordingly, we do not expect that dividends paid on our ADSs or ordinary shares will meet the conditions required for such reduced tax rates.

For U.S. foreign tax credit purposes, dividends will generally be treated as income from foreign sources and will generally constitute passive category income. In the event that we are deemed to be a PRC resident enterprise under the PRC tax law, a U.S. Holder may be subject to PRC taxes on dividends paid on our ADSs or ordinary shares. A U.S. Holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any nonrefundable foreign withholding taxes imposed on dividends received on our ADSs or ordinary shares. A U.S. Holder who does not elect to claim a foreign tax credit on foreign tax withheld may instead claim a deduction, for U.S. federal income tax purposes, in respect of such withholding, but only for a taxable year in which such U.S. Holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex. Each U.S. Holder is urged to consult its tax advisor regarding the availability of the foreign tax credit under its particular circumstances.

Sale or Other Taxable Disposition of our ADSs or Ordinary Shares

Subject to the discussion below under “—Passive Foreign Investment Company Rules,” a U.S. Holder will generally recognize capital gain or loss upon the sale or other taxable disposition of our ADSs or ordinary shares in an amount equal to the difference, if any, between the amount realized upon the sale or other taxable disposition and the U.S. Holder’s adjusted tax basis in such ADSs or ordinary shares. Any capital gain or loss will be long-term if the ADSs or ordinary shares have been held for more than one year and will generally be U.S.-source gain or loss for U.S. foreign tax credit purposes. The deductibility of a capital loss may be subject to limitations. In the event that gain from the disposition of the ADSs or ordinary shares is subject to tax in the PRC because we are deemed to be a PRC resident enterprise, and such gain is deemed to be U.S.-source gain, a U.S. Holder may not be able to credit such tax against its U.S. federal income tax liability unless such U.S. Holder has other income from foreign sources in the appropriate category for purposes of the foreign tax credit rules. However, a U.S. Holder that is eligible for the benefits of the Treaty may be able to elect to treat such gain as PRC-source gain. Each U.S. Holder is urged to consult its tax advisor regarding the tax considerations if a foreign tax is imposed on a disposition of our ADSs or ordinary shares, including the availability of the foreign tax credit under such U.S. Holder’s particular circumstances.

Passive Foreign Investment Company Rules

If we are classified as a PFIC for any taxable year during which a U.S. Holder owns our ADSs or ordinary shares, and unless the U.S. Holder makes a “mark-to-market” election (as described below), such U.S. Holder will generally be subject to special tax rules that have a generally penalizing effect, regardless of whether we remain a PFIC, on (i) any excess distribution that we make to such U.S. Holder (which generally means any distribution paid during a taxable year to such U.S. Holder that is greater than 125% of the average annual distributions paid in the three preceding taxable years or, if shorter, such U.S. Holder’s holding period for our ADSs or ordinary shares) and (ii) any gain realized on the sale or other disposition, including a pledge, of our ADSs or ordinary shares. Under the PFIC rules:

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the excess distribution or gain will be allocated ratably over a U.S. Holder’s holding period for the ADSs or ordinary shares;

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amounts allocated to the current taxable year and any taxable years in each U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC will be taxable as ordinary income; and

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amounts allocated to each of the other taxable years will be subject to tax at the highest tax rate in effect applicable to such U.S. Holder for that year, and such amounts will be increased by an additional tax equal to interest on the resulting tax deemed deferred with respect to such years.

If we are a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares and any of our subsidiaries (including any variable interest entity or subsidiary thereof) is also a PFIC, such U.S. Holder will be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC and would be subject to the rules described above on certain distributions by a lower-tier PFIC and a disposition of shares of a lower-tier PFIC even though such U.S. Holder may not receive the proceeds of those distributions or dispositions.

A U.S. Holder of “marketable stock” in a PFIC may make a mark-to-market election with respect to such stock to mitigate certain adverse tax consequences described above. Marketable stock is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange (such as the Nasdaq Global Market) or other market as defined in applicable Regulations. We believe that a U.S. Holder may make a mark-to-market election with respect to our ADSs, but not our ordinary shares, provided that our ADSs remain listed on the Nasdaq Global Market and that our ADSs are regularly traded. We anticipate that our ADSs should qualify as being regularly traded, but no assurances may be given in this regard. If a U.S. Holder makes this election, such U.S. Holder will generally (i) include as ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of our ADSs held at the end of the taxable year over the adjusted tax basis of such ADSs and (ii) deduct as an ordinary loss the excess, if any, of the adjusted tax basis of our ADSs over the fair market value of such ADSs held at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A U.S. Holder’s adjusted tax basis in our ADSs would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. Holder makes a mark-to-market election in respect of our ADSs and we cease to be a PFIC, such U.S. Holder will not be required to take into account the gain or loss described above during any period that we are not classified as a PFIC. If a U.S. Holder makes a mark-to-market election, any gain such U.S. Holder recognizes upon the sale or other disposition of our ADSs in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as ordinary loss, but such loss will only be treated as ordinary loss to the extent of the net amount previously included in income as a result of the mark-to-market election.

Because, as a technical matter, a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder would generally continue to be subject to the general PFIC rules described above with respect to such U.S. Holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.

We do not intend to provide the information necessary for a U.S. Holder to make a qualified electing fund election in the event that we are classified as a PFIC.

If we are classified as a PFIC, a U.S. Holder must file an annual report with the IRS. Each U.S. Holder is urged to consult its tax advisor concerning the U.S. federal income tax considerations of owning and disposing of our ADSs or ordinary shares if we are or become a PFIC, including the unavailability of a qualified electing fund election, the possibility of making a mark-to-market election and the annual PFIC filing requirements, if any.

Information Reporting

Certain U.S. Holders are required to report information to the IRS relating to an interest in “specified foreign financial assets” (as defined in the Code), including shares issued by a non-U.S corporation, for any year in which the aggregate value of all specified foreign financial assets exceeds US$50,000 (or a higher dollar amount prescribed by the IRS), subject to certain exceptions (including an exception for shares held in custodial accounts maintained with a U.S. financial institution). These rules also impose penalties if a U.S. Holder is required to submit such information to the IRS and fails to do so.

In addition, U.S. Holders may be subject to information reporting to the IRS and backup withholding with respect to dividends on and proceeds from the sale or other disposition of the ADSs or ordinary shares. Information reporting will apply to payments of dividends on, and to proceeds from the sale or other disposition of, ADSs or ordinary shares by a paying agent within the United States to a U.S. Holder, other than U.S. Holders that are exempt from information reporting and properly certify their exemption. A paying agent within the United States will be required to withhold at the applicable statutory rate, currently 24%, in respect of any payments of dividends on, and the proceeds from the disposition of, ADSs or ordinary shares within the United States to a U.S. Holder (other than U.S. Holders that are exempt from backup withholding and properly certify their exemption) if the U.S. Holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with applicable backup withholding requirements. U.S. Holders who are required to establish their exempt status generally must provide a properly completed IRS FormW-9.

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Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federal income tax liability. A U.S. Holder generally may obtain a refund of any amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS in a timely manner and furnishing any required information. Each U.S. Holder is advised to consult with its tax advisor regarding the application of the U.S. information reporting rules to its particular circumstances.

THE PRECEDING DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS INTENDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE TAX ADVICE. EACH U.S. HOLDER IS URGED TO CONSULT ITS TAX ADVISOR AS TO THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSIDERATIONS ASSOCIATED WITH AN INVESTMENT IN OUR ADSs OR ORDINARY SHARES.

F.Dividends and Paying Agents

Not applicable.

G.Statement by Experts

Not applicable.

H.Documents on Display

We previously filed our registration statement on Form F-1(Registration No. 333-226188), as amended, including the prospectus contained therein, with the SEC to register the issuance and sale of our ordinary shares represented by ADSs in relation to our initial public offering. We have also filed the registration statement on Form F-6 (Registration No. 333-227764) with the SEC to register the ADSs.

We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers, and are required to file reports and other information with the SEC. Specifically, we are required to file annually an annual report on Form 20-F within four months after the end of each fiscal year, which is December 31.

All information filed with the SEC can be obtained over the internet at the SEC’s website at www.sec.gov or inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of documents, upon payment of a duplicating fee, by writing to the SEC. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

We will furnish the Bank of New York Mellon, the Depositary of the ADSs, with our annual reports, which will include a review of operations and annual audited consolidated financial statements prepared in conformity with U.S. GAAP, and all notices of shareholders’ meetings and other reports and communications that are made generally available to our shareholders. the Depositary will make such notices, reports and communications available to holders of ADSs and, upon our request, will mail to all record holders of ADSs the information contained in any notice of a shareholders’ meeting received by the Depositary from us.

I.Subsidiary Information

Not applicable.

J.Annual Report to Security Holders

Not applicable.

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Item 11.Quantitative and Qualitative Disclosures about Market Risk

Foreign Exchange Risk

Historically, substantially all of our revenues and expenses are denominated in Renminbi. We do not believe that we currently have any significant direct foreign exchange risk and we have not used any derivative financial instruments to hedge exposure to such risk. Although our exposure to foreign exchange risks should be limited in general, the value of your investment in our ADSs will be affected by the exchange rate between the U.S. dollar and the Renminbi because the value of our business is effectively denominated in Renminbi, while our ADSs will be traded in U.S. dollars.

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. 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.

To the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we receive from the conversion. Conversely, if we decide to convert Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amounts available to us.

In November 2025, we disposed of our equity interests in Romantic Park and therefore divested our operations in mainland China.

Interest Rate Risk

We have not been exposed to material risks due to changes in market interest rates, and we have not used any derivative financial instruments to manage our interest risk exposure.

We do not expect rising or falling interest rates to have a material impact on our financial condition unless uncertainty about the direction and timing of interest rate changes materially affects the level of borrowing and lending activity in the economy. Our business is dependent upon the healthy functioning of the credit markets in Australia and China, and we cannot provide assurance that we will not be exposed to material risks in the event of a credit crisis or prolonged period of uncertainty in the credit markets.

Inflation Risk

Since our inception, inflation in China has not materially impacted our results of operations. According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for December 2023, 2024 and 2025 were decrease of 0.3%, increase of 0.2% and 0%, respectively. In November 2025, we disposed of our equity interests in Romantic Park and therefore divested our operations in mainland China.

Item 12.Description of Securities Other Than Equity Securities

A.Debt Securities

Not applicable.

B.Warrants and Rights

Not applicable.

C.Other Securities

Not applicable.

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D.American Depositary Shares

Fees and Charges Our ADS Holders May Have to Pay

The Bank of New York Mellon is the Depositary of our American Depositary Share (“ADS”) program. A holder of ADSs may have to pay certain fees to The Bank of New York Mellon, as depositary (the “Depositary”), and certain taxes, registration and transfer charges and fees and governmental charges and fees. The Depositary collects fees for delivery and surrender of ADSs directly from holders depositing shares or surrendering ADSs for the purpose of withdrawal, or from intermediaries acting for them. Effective May 16, 2022, we amended our ADS to Share ratio from one ADS representing seven (7) Class A ordinary shares (the “Shares”) to one (1) ADS representing thirty-five (35) Shares. The change was automatically made on the books of the Depositary and no physical action by ADS holders was required. “Deposited Securities” as of any time shall mean Shares at such time deposited or deemed to be deposited under the Deposit Agreement, including without limitation, Shares that have not been successfully delivered upon surrender of ADSs, and any and all other securities, cash or property received by the Depositary or The Hong Kong and Shanghai Banking Corporation Limited, as custodian for the Depositary (the “Custodian”), in respect of the Deposited Securities and at that time held under the Deposit Agreement. The Depositary’s office is located at 240 Greenwich Street, New York, New York 10286.


Persons depositing or withdrawing shares or ADS holders must pay:		For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)		Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property
		Cancellation of ADSs for the purpose of withdrawal, including if the Deposit Agreement terminates
$0.05 (or less) per ADS (or portion thereof)		Any cash distribution to ADS holders
A fee equivalent to the fee that would be payable if securities distributed to you had been Shares and the Shares had been deposited for issuance of ADSs		Distribution of securities distributed to holders of Deposited Securities (including rights) that are distributed by the Depositary to ADS holders
$0.05 (or less) per ADS (or portion thereof) per calendar year		Depositary services
Registration or transfer fees		Transfer and registration of shares on our Share register to or from the name of the Depositary or its agent when you deposit or withdraw Shares
Expenses of the Depositary		Cable and facsimile transmissions (when expressly provided in the Deposit Agreement)
		Converting foreign currency to U.S. dollars
Taxes and other governmental charges the Depositary or the custodian has to pay on any ADSs or shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes		As necessary
Any charges incurred by the Depositary or its agents for servicing the Deposited Securities		As necessary

Fees and Other Payments Made by the Depositary to Us

The Depositary has agreed to reimburse us annually for our expenses incurred in connection with investor relationship programs and any other program related to our ADS facility and the travel expense of our key personnel in connection with such programs. the Depositary has also agreed to provide additional payments to us based on the applicable performance indicators relating to our ADS facility. There are limits on the amount of expenses for which the Depositary will reimburse us, but the amount of reimbursement available to us is not necessarily tied to the amount of fees the Depositary collects from investors. In 2024, we did not incur any expenses in connection with investor relationship program and any other program related to our ADS facility and the travel expense of our key personnel in connection with such programs.

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PART II

Item 13.Defaults, Dividend Arrearages and Delinquencies

None.

Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds

Material Modifications to the Rights of Security Holders

See “Item 10. Additional Information—B. Memorandum and Articles of Association—Ordinary Shares” for a description of the rights of securities holders, which remain unchanged.

Item 15.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and acting chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report, as required by Rule 13a-15(b) under the Exchange Act.

Based upon that evaluation, our management has concluded that, as of December 31, 2025, our disclosure controls and procedures were not effective in ensuring that the information required to be disclosed by us in the reports that we file and furnish under the Exchange Act was recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act was accumulated and communicated to our management, including our chief executive officer and acting chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) under the Exchange Act. Our management, with the participation of our chief executive officer and acting chief financial officer, evaluated the effectiveness of our internal control over financial reporting based on criteria established in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2025.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Attestation Report of the Registered Public Accounting Firm

This annual report on Form 20-F does not include an attestation report of our independent registered public accounting firm due to rules of the SEC where domestic and foreign registrants that are “non-accelerated filer” which we are, are not required to provide the auditor attestation.

Internal Control over Financial Reporting

Prior to our initial public offering in October 2018, we were a private company with limited accounting personnel and other resources with which to address our internal controls. In the course of management’s preparation and our independent registered public accounting firm’s auditing of our consolidated financial statements as of and for the year ended December 31, 2025, we and our independent registered public accounting firm identified two material weaknesses in our internal control over financial reporting. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis, in accordance with the standards established by the Public Company Accounting Oversight Board of the United States.

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The material weaknesses that have been identified relates to (i) our lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP technical accounting issues and prepare and review financial statements and related disclosures in accordance with U.S. GAAP and reporting requirements set forth by the SEC; (ii) our lack of formal internal control framework over financial reporting, including lack of sufficient entity level control policies and procedures, and lack of appropriate segregation of functions and duties.

We have implemented and plan to implement a number of measures to address these material weaknesses:

●

we hired a consulting firm with U.S. GAAP experience to strengthen our financial reporting function;

●

we are in the process of establishing clear roles and responsibilities for accounting and financial reporting staff to address accounting and financial reporting issues, and we added additional professionals for our financial reporting team in 2019; and

●

we are continuing to further expedite and streamline our reporting process and develop our U.S. GAAP and SEC reporting process to allow early detection, prevention and resolution of potential financial reporting and U.S. GAAP issues, and have established an ongoing program to provide sufficient and appropriate training for financial reporting and accounting personnel, especially training related to U.S. GAAP and SEC reporting requirements.

●

we are in the process of establishing internal control framework over financial reporting and developing entity-level control policies and procedures to strengthen our internal control environment.

●

we are continuing to optimize segregation of functions and duties across financial reporting process adjust job responsibilities and authorization arrangements appropriately to enhance transaction oversight.

We plan to establish due diligence procedures for investment transactions, including credit assessment procedures to ascertain the financial position of investment targets and other parties involved in the investment transactions, and improve post-investment management activities to address these material weaknesses.

However, we cannot assure you that all these measures will be sufficient to remediate our material weaknesses in time, or at all. We did not undertake a comprehensive assessment of our internal control over financial reporting under the Sarbanes-Oxley Act for purposes of identifying and reporting any material weakness or significant deficiency in our internal control over financial reporting. Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional control deficiencies may have been identified. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—If we fail to maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.”

Changes in Internal Control over Financial Reporting

Other than as described above, there were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16A.Audit Committee Financial Expert

Our board of directors has determined that Mr. Sen Lin, an independent director (under the standards set forth in Nasdaq Stock Market Rule 5605 (a) (2) and Rule 10A - 3 under the Exchange Act) and chairman of our audit committee, is an audit committee financial expert.

Item 16B.Code of Ethics

Our board of directors adopted a code of business conduct and ethics that applies to our directors, officers, employees and advisors in July 2018. We have posted a copy of our code of business conduct and ethics on our website at https://ir.j-friends.com/.

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Item 16C.Principal Accountant Fees and Services

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by Marcum Asia CPAs LLP, our principal external auditors, for the periods indicated.


	For the Year Ended December 31,
	2023	2024	2025

	(in US$ thousands)
Audit fees⁽¹⁾	320	280	280
Audit-related fees⁽²⁾	—	—	30
Tax fees⁽³⁾	—	—	—
All other fees⁽⁴⁾	—	—	—

(1)	“Audit fees” means the aggregate fees incurred in each of the fiscal years listed for professional services rendered by our principal auditor for the audit or review of our annual financial statements or quarterly financial information and review of documents filed with the SEC.

(2)	“Audit-related fees” means the aggregate fees incurred in each of the fiscal years listed for permissible services to review and comment on the design of internal control over financial reporting rendered by our principal auditors.

(3)	“Tax fees” means the aggregate fees incurred in each of the fiscal years listed for professional services rendered by our principal auditors for tax compliance, tax advice, and tax planning.

(4)	“All other fees” means the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in footnotes (1) through (3).

The policy of our audit committee or our board of directors is to pre-approve all audit and non-audit services provided by Marcum Asia CPAs LLP, including audit services, tax services and other services as described above.

Item 16D.Exemptions from the Listing Standards for Audit Committees

Not applicable.

Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 16F.Change in Registrant’s Certifying Accountant

Not applicable.

Item 16G.Corporate Governance

As a Cayman Islands exempted company listed on the Nasdaq Global Market, we are subject to the Nasdaq Stock Market Rules corporate governance listing standards. However, Nasdaq Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq Stock Market Rules.

We have relied on and plan to continue to rely on home country practice with respect to our corporate governance. Specifically, we do not have a majority of independent directors serving on our board of directors and we also rely on home country practice exemption with respect to the requirement for an annual general meeting for shareholders. We may also continue to rely on this and other exemptions available to foreign private issuers in the future, and to the extent that we choose to do so, our shareholders may be afforded less protection than they otherwise would under the Nasdaq Stock Market Rules corporate governance listing standards applicable to U.S. domestic issuers. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our ADSs—We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.”

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Item 16H.Mine Safety Disclosure

Not applicable.

Item 16I.Disclosure Regarding Foreign Jurisdictions that Prevent Inspection

Not applicable.

Item 16J.Insider Trading Policies

The Company has adopted an insider trading policy governing the purchase, sale and other dispositions of our securities by directors, senior management and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to the Company. A copy of our Insider Trading Policy is incorporated herein by reference to Exhibit 19.1 to our annual report on Form 20-F (File No. 001-38712) filed with the SEC on April 30, 2024.

Item 16K.Cybersecurity

Information technology (IT) is critical to many of our operating activities and is subject to security threats and increasingly sophisticated cyber-attacks. As a result, we have policies and processes in place to assess, identify, and manage the strategic and operational IT-related risks as a component of our risk management program (ERM). These risks include the risk of cyber-attacks on IT infrastructure and intellectual property, as well as on cybersecurity for our online product offerings.

Management, led by the Company’s Chief Technology Officer (CTO), is responsible for the day-to-day assessment and management of our material risks from cybersecurity threats, has oversight responsibility for the cybersecurity strategy and program. Weekly internal updates are made by his IT security team to discuss specific cybersecurity incidents, planned or in progress responses, ongoing mitigation processes, and remediation efforts, as applicable. Our CTO, who reports to the CEO of the Company, has more than 20 years of experience in the field of cybersecurity, including more than 15 years working in the IT services industry building and delivering cybersecurity services across various geographies.

We have a dedicated Cybersecurity Operations Center under the direct management of the CTO that continuously monitors for threats and unauthorized access. The Cybersecurity Operations Center is staffed by appropriately qualified cyber and information security professionals. We have put in place controls and processes to inform and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents. These controls and procedures are designed to ensure prompt escalation and report of certain cybersecurity incidents from the designed personnel to our CTO (or CEO if the matter is serious), so that decisions regarding public disclosure and reporting of such incidents can be made by executive management and board of directors in a timely manner. The escalation processes are based on defined prioritization and severity assessment criteria.

We have training in place for all employees and contracted advisors on information security and privacy practices so that they understand their responsibilities with respect to data security and privacy. Annual training includes topics such as data protection and IT security essentials. We also annually host cyber crisis response simulations with management and employees to practice rapid cyber incident response. We work with third party business partners in the financial and business community to continually share and receive cyber threat intelligence.

To date, no cyber-attacks have had a material impact on operations or financial reporting.

PART III

Item 17.Financial Statements

We have elected to provide financial statements pursuant to Item 18.

Item 18.Financial Statements

The consolidated financial statements of J and Friends Holdings Limited and its subsidiaries are included at the end of this annual report.

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Item 19.Exhibits


Exhibit Number		Description of Document

1.1		Seventh Amended and Restated Memorandum and Articles of Association of the Registrant (incorporated herein by reference to Exhibit 99.1 to our current report on Form 6-K (File No. 001-38712) filed with the SEC on January 9, 2026)
2.1		Registrant’s Specimen American Depositary Receipt (incorporated by reference to Exhibit 4.3 to our registration statement on Form F-1 (File No. 333-226188), as amended, initially filed with the SEC on July 16, 2018)
2.2		Registrant’s Specimen Certificate for Class A Ordinary Shares (incorporated by reference to Exhibit 4.2 to our registration statement on Form F-1 (File No. 333-226188), as amended, initially filed with the SEC on July 16, 2018)
2.3		Deposit Agreement (incorporated by reference to Exhibit 4.3 to our registration statement on Form F-1 (File No. 333-226188), as amended, initially filed with the SEC on July 16, 2018)
2.4*		Description of Securities
4.1		2017 Share Incentive Plan of the Registrant (incorporated by reference to Exhibit 10.1 to our registration statement on Form F-1 (File No. 333-226188), as amended, initially filed with the SEC on July 16, 2018)
4.2		Amended and Restated 2018 Share Incentive Plan of the Registrant (incorporated herein by reference to Exhibit 99.1 to our current report on Form 6-K (File No. 001-38712) filed with the SEC on April 14, 2025)
4.3		Form of Indemnification Agreement between the Registrant and its directors and executive officers (incorporated by reference to Exhibit 10.2 to our registration statement on Form F-1 (File No. 333-226188), as amended, initially filed with the SEC on July 16, 2018)
4.4		Form of Employment Agreement between the Registrant and its executive officers (incorporated by reference to Exhibit 10.3 to our registration statement on Form F-1 (File No. 333-226188), as amended, initially filed with the SEC on July 16, 2018)
4.5*		Share Transfer Agreement dated September 3, 2025 by and between Pintec Technology Holdings Limited, ZIITECH PTY LTD and Certain Shareholders of ZIITECH PTY LTD
4.6*		Share Purchase Agreement dated September 3, 2025 by and between Pintec Technology Holdings Limited and Udesignlab Investments Pty Ltd
4.7*		Share Purchase Agreement dated September 3, 2025 by and between Pintec Technology Holdings Limited and TALENTOP PTY LTD
4.8*		Share Purchase Agreement dated September 3, 2025 by and between Pintec Technology Holdings Limited and Wzw Pty. Ltd
4.9*		Share Purchase Agreement dated September 3, 2025 by and between Pintec Technology Holdings Limited and Younghyun An
4.10*		Shareholders’ Agreement dated October 27, 2022, as Amended on September 1, 2023 and September 3, 2025, by and between ZIITECH PTY LTD, Pintec Technology Holdings Limited, and Certain Shareholders of ZIITECH PTY LTD

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4.11		Share transfer agreement dated November 7, 2025, by and among PINTEC, Vantage Capital Global Limited and Romantic Park Holdings Limited (incorporated by reference to Exhibit 99.2 to our current report on Form 6-K (File No. 001-38712) filed with the SEC on November 12, 2025)
4.12*		Debt assignment and assumption agreement dated November 7, 2025
4.13*		Debt assignment agreement dated November 7, 2025
8.1*		List of Principal Subsidiaries and Consolidated Affiliated Entities
11.1*		Code of Business Conduct and Ethics
12.1*		Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*		Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1**		Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2**		Certification by Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*		Consent of Shihui Partners
15.2*		Consent of Travers Thorp Alberga
15.3*		Consent of Marcum Asia CPAs LLP, Independent Registered Public Accounting Firm
19.1		Material Nonpublic Information and Prohibition of Insider Trading Policy (incorporated herein by reference to Exhibit 19.1 to our annual report on Form 20-F (File No. 001-38712) filed with the SEC on April 30, 2024)
97.1*		Clawback Policy
101.INS*		Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*	Filed herewith

**	Furnished herewith

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing its annual report on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.


J and Friends Holdings Limited

By:	/s/ Zexiong Huang
Name:	Zexiong Huang
Title:	Chief Executive Officer

Date: April 24, 2026

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J and Friends Holdings Limited

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


	PAGE(S)
Report of Independent Registered Public Accounting Firm (PCAOB ID: 5395)	F-2
Consolidated Balance Sheets as of December 31, 2024 and 2025	F-4
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023, 2024 and 2025	F-5
Consolidated Statements of Changes in (Deficit)/Equity for the years ended December 31, 2023, 2024 and 2025	F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2024 and 2025	F-7
Notes to Consolidated Financial Statements	F-8 ~ F-36

F-1

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of J and Friends Holdings Limited

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of J and Friends Holdings Limited (formerly known as Pintec Technology Holdings Limited) (the “Company”) as of December 31, 2024 and 2025, the related consolidated statements of operations and comprehensive loss, changes in (deficit)/equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 (e), the Company has incurred significant losses and operating cash outflows and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1 (e). The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

BEIJING OFFICE • Units 06-09 • 46th Floor • China World Tower B • No. 1 Jian Guo Men Wai Avenue • Chaoyang District • Beijing • 100004

Phone 8610.8518.7992 • Fax 8610.8518.7993 • www.marcumasia.com

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Business Combinations

Description of the Matter

As described in Note 4 to the consolidated financial statements, the Company completed the acquisition of Ziitech Pty Ltd. during fiscal year 2025 through issuance of 83,726,789 Class A ordinary shares of the Company, which was accounted for as a business combination. In connection with this acquisition, management recognized customer relationship, software copyright intangible assets of $3.8 million and goodwill of $3.8 million. Auditing the Company’s accounting for its acquisition of Ziitech Pty Ltd. was complex due to the use of subjective assumptions such as revenue growth, discount rates, royalty rates and customer churn rates in the valuation models used by management when determining their estimated fair value.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design of controls over the determination of the fair value of customer relationship, software copyright intangible assets. This included controls over management’s development of the assumptions described above.

To test the estimated fair value of the customer relationship, software copyright intangible assets, we performed audit procedures that included, among others, testing the significant assumptions used in the valuation model, including validating the completeness and accuracy of the underlying data supporting the assumptions and estimates. We performed sensitivity analyses to evaluate the changes in the fair value of the assets that would result from changes in the assumptions and compared those assumptions used by management to current industry and comparable companies’ data and the Company’s own historical results. In addition, we involved a valuation specialist to assist in our evaluation of the methodology used by the Company and the significant assumptions underlying the fair value estimates.

/s/ Marcum Asia CPAs LLP

Marcum Asia CPAs LLP

We have served as the Company’s auditor since 2019.

Beijing, the People’s Republic of China

April 24, 2026

BEIJING OFFICE • Units 06-09 • 46th Floor • China World Tower B • No. 1 Jian Guo Men Wai Avenue • Chaoyang District • Beijing • 100004

Phone 8610.8518.7992 • Fax 8610.8518.7993 • www.marcumasia.com

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J AND FRIENDS HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

(US$ in thousands, except for share and per share data, or otherwise noted)


		As of December 31,
		2024		2025
		US$		US$
ASSETS
Current assets:
Cash and cash equivalents		5		945
Accounts receivable, net		—		325
Inventories		—		134
Prepayments and other current assets		3		404
Current assets of discontinued operations		12,936		—
Total current assets		12,944		1,808
Non-current assets:
Goodwill		—		3,759
Intangible assets, net		—		3,660
Property, equipment and software, net		—		12
Operating right-of-use assets, net		—		99
Other non-current assets		—		9
Non-current assets of discontinued operations		1,228		—
Total non-current assets		1,228		7,539
TOTAL ASSETS		14,172		9,347
LIABILITIES
Current liabilities:
Short-term borrowing		250		—
Accounts payable		—		137
Accrued expenses and other liabilities		273		1,222
Operating lease liabilities, current		—		85
Current liabilities of discontinued operations (including amounts of consolidated VIEs of US$47,545 and nil, respectively)		67,053		—
Total current liabilities		67,576		1,444
Non-current liabilities:
Long-term borrowing		—		1,800
Operating lease liabilities, non-current		—		24
Non-current liabilities of discontinued operations (including amounts of consolidated VIEs of US$727 and nil, respectively)		727		—
Total non-current liabilities		727		1,824
TOTAL LIABILITIES		68,303		3,268
Commitments and contingencies (Note 16)
SHAREHOLDERS’ (DEFICIT)/EQUITY
Class A Ordinary Shares (US$0.000125 par value per share; 1,750,000,000 shares authorized as of December 31, 2024 and 2025, respectively; 503,747,680 and 595,974,469 shares outstanding as of December 31, 2024 and 2025, respectively; 507,239,098 and 599,465,862 shares issued as of December 31, 2024 and 2025, respectively)		63		74
Class B Ordinary Shares (US$0.000125 par value per share; 250,000,000 shares authorized as of December 31, 2024 and 2025, respectively; 50,939,520 and 42,439,520 shares issued and outstanding as of December 31, 2024 and 2025, respectively)		7		6
Additional paid-in capital		303,532		371,955
Statutory reserves		1,474		—
Accumulated other comprehensive income/(loss)		9,216		(364)
Accumulated deficit		(370,331)		(370,181)
Total shareholders’ (deficit)/equity		(56,039)		1,490
Non-controlling interests		1,908		4,589
TOTAL (DEFICIT)/EQUITY		(54,131)		6,079
TOTAL LIABILITIES AND (DEFICIT)/EQUITY		14,172		9,347

The accompanying notes are an integral part of these consolidated financial statements.

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J AND FRIENDS HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(US$ in thousands, except for share and per share data, or otherwise noted)


		For the years ended December 31,
		2023		2024		2025
		US$		US$		US$
Revenues		—		—		1,598
Cost of revenues		46		—		(455)
Gross profit		46		—		1,143
Operating expenses:
Sales and marketing expenses		229		(1)		(542)
General and administrative expenses		(264)		(293)		(1,442)
Research and development expenses		335		—		(499)
Total operating income/(expenses)		300		(294)		(2,483)
Operating income/ (loss)		346		(294)		(1,340)
Loss from disposal of subsidiaries		(5,421)		—		—
Interest expenses, net		(631)		(14)		(52)
Other (expenses)/income, net		—		(10)		585
Loss before income tax expense		(5,706)		(318)		(807)
Income tax benefit		—		—		65
Net loss from continuing operations		(5,706)		(318)		(742)
Net loss from discontinued operations, net of income tax		(5,699)		(1,736)		(799)
Net loss		(11,405)		(2,054)		(1,541)

Net loss from continuing operations attributable to non-controlling interests		—		—		(253)
Net (loss)/income from discontinued operations attributable to non-controlling interests		(352)		94		36
Net loss from continuing operations attributable to J and Friends Holdings Limited shareholders		(5,706)		(318)		(489)
Net loss from discontinued operations attributable to J and Friends Holdings Limited shareholders		(5,347)		(1,830)		(835)
Net loss attributable to J and Friends Holdings Limited shareholders		(11,053)		(2,148)		(1,324)

Other comprehensive income/(loss):
Foreign currency translation adjustments, net of nil tax		3,051		1,557		(1,349)
Total other comprehensive income/(loss)		3,051		1,557		(1,349)
Total comprehensive loss		(8,354)		(497)		(2,890)
Total comprehensive (loss)/income attributable to non-controlling interest		(352)		94		(226)
Total comprehensive loss attributable to J and Friends Holdings Limited shareholders		(8,002)		(591)		(2,664)

Loss per ordinary share
Continuing operations - basic and diluted		(0.01)		(0.001)		(0.001)
Discontinued operations - basic and diluted		(0.01)		(0.003)		(0.001)
Total net loss per ordinary shares - basic and diluted		(0.02)		(0.004)		(0.002)

Weighted average number of ordinary shares outstanding
Basic and diluted		494,712,397		554,687,200		581,991,927

Share-based compensation (reversal)/expenses included in
Cost of revenues		(46)		—		—
Sales and marketing expenses		(280)		—		3
General and administrative expenses		(311)		—		4
Research and development expenses		(335)		—		7

The accompanying notes are an integral part of these consolidated financial statements.

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J AND FRIENDS HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN (DEFICIT)/EQUITY

(US$ in thousands, except for share data and per share data, or otherwise noted)


																		Total
														Accumulated				J and Friends
												Additional		Other				Holdings Limited's				Total
		Class A Ordinary Shares				Class B Ordinary Shares				Statutory		Paid-in		Comprehensive		Accumulated		Shareholders’		Non-controlling		(Deficit)/
		Share		Amount		Share		Amount		Reserve		Capital		Income		Deficit		(Deficit)/Equity		Interest		Equity
				US$				US$		US$		US$		US$		US$		US$		US$		US$
As of December 31, 2022		249,232,020		31		50,939,520		7		4,651		298,061		(1,307)		(359,156)		(57,713)		21,882		(35,831)
Issuance of Class A Ordinary Shares		254,450,000		32		—		—		—		3,968		—		—		4,000		—		4,000
Exercise of options		65,660		—		—		—		—		—		—		—		—		—		—
Share-based awards to employee of the Group		—		—		—		—		—		(2)		—		—		(2)		—		(2)
Net loss		—		—		—		—		—		—		—		(11,053)		(11,053)		(352)		(11,405)
Appropriation to statutory reserve		—		—		—		—		53		—		—		(53)		—		—		—
Disposal of SCHL Group		—		—		—		—		(3,269)		—		5,915		3,269		5,915		(19,716)		(13,801)
Impact of adoption of ASC 326		—		—		—		—		—		—		—		(36)		(36)		—		(36)
Prior year adjustment		—		—		—		—		—		1,505		—		(1,115)		390		—		390
Foreign currency translation adjustments, net of nil tax		—		—		—		—		—		—		3,051		—		3,051		—		3,051
As of December 31, 2023		503,747,680		63		50,939,520		7		1,435		303,532		7,659		(368,144)		(55,448)		1,814		(53,634)
Net loss		—		—		—		—		—		—		—		(2,148)		(2,148)		94		(2,054)
Appropriation to statutory reserve		—		—		—		—		39		—		—		(39)		—		—		—
Foreign currency translation adjustments, net of nil tax		—		—		—		—		—		—		1,557		—		1,557		—		1,557
As of December 31, 2024		503,747,680		63		50,939,520		7		1,474		303,532		9,216		(370,331)		(56,039)		1,908		(54,131)
Net loss		—		—		—		—		—		—		—		(1,324)		(1,324)		(217)		(1,541)
Exercise of options		7,500		—		—		—		—		8		—		—		8		—		8
Share-based award compensation		—		—		—		—		—		14		—		—		14		—		14
Issuance of Class A ordinary shares for business acquisition		83,726,789		10		—		—		—		2,310		—		—		2,320		4,851		7,171
Conversion from Class B ordinary shares to Class A ordinary shares		8,500,000		1		(8,500,000)		(1)		—		—		—		—		—		—		—
Disposal of discontinued operations		—		—		—		—		(1,474)		66,091		(8,231)		1,474		57,860		(1,944)		55,916
Foreign currency translation adjustments, net of nil tax		—		—		—		—		—		—		(1,349)		—		(1,349)		(9)		(1,358)
As of December 31, 2025		595,981,969		74		42,439,520		6		—		371,955		(364)		(370,181)		1,490		4,589		6,079

The accompanying notes are an integral part of these consolidated financial statements.

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J AND FRIENDS HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(US$ in thousands, except for share data and per share data, or otherwise noted)


		For the years ended December 31,
		2023		2024		2025
		US$		US$		US$
Cash flows from operating activities:
Net loss from operations		(11,405)		(2,054)		(1,541)
Less: net loss from discontinued operations		(5,699)		(1,736)		(799)
Net loss from continuing operations		(5,706)		(318)		(742)
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities:
Depreciation and amortization		—		—		190
Amortization of operating lease right-of-use assets		—		—		25
Share-based compensation (reversal)/expense		(972)		—		14
Provision for credit losses		—		—		19
Deferred taxes		—		—		(65)
Loss from disposal of subsidiaries		5,421		—		—
Changes in operating assets and liabilities:
Accounts receivable		(20)		—		(29)
Prepayments and other current assets		278		5		(344)
Inventories		—		—		8
Accounts payable		—		—		35
Operating lease liabilities		—		—		(23)
Accrued expenses and other liabilities		137		48		4
Net cash used in operating activities from continuing operations		(862)		(265)		(908)
Net cash provided by/(used in) operating activities from discontinued operations		2,077		(1,807)		1,054
Net cash provided by/(used in) operating activities		1,215		(2,072)		146
Cash flows from investing activities:
Purchase of property, equipment and software		—		—		(5)
Cash acquired from a business combination		—		—		152
Net cash used in investing activities from continuing operations		—		—		147
Net cash provided by/(used in) investing activities from discontinued operations		4,981		(11)		(5,419)
Net cash provided by/(used in) investing activities		4,981		(11)		(5,272)
Cash flows from financing activities:
Repayment of short-term and long-term borrowings		(33,878)		—		—
Loan received from third parties		—		254		—
Proceeds from short-term and long-term borrowings		—		—		1,550
Repayment of convertible loans		(6,438)		—		—
Proceeds from issuance of ordinary shares		4,000		—		—
Net cash (used in)/provided by financing activities from continuing operations		(36,316)		254		1,550
Net cash provided by financing activities from discontinued operations		—		—		—
Net cash (used in)/provided by financing activities		(36,316)		254		1,550
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(618)		(203)		144
Net decrease in cash, cash equivalents and restricted cash		(30,738)		(2,032)		(3,432)
Cash, cash equivalents and restricted cash at beginning of the year		37,147		6,409		4,377
Including:
Cash and cash equivalents at beginning of the year		36,207		5,705		3,692
Restricted cash at beginning of the year		215		—		—
Non-current restricted time deposits at beginning of the year		725		704		685
Cash, cash equivalents and restricted cash at end of the year		6,409		4,377		945
Including:
Cash and cash equivalents at end of the year		5,705		3,692		945
Non-current restricted time deposits at end of the year		704		685		—
Less: cash, cash equivalents and restricted cash of discontinued operation at the end of the year		6,381		4,372		—
Cash, cash equivalents and restricted cash of continuing operation at the end of the year		28		5		945
Supplemental disclosure of cash flow information from continuing operations:
Cash paid for interest and funding cost		220		—		—
Cash paid for income tax expense		—		—		—
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities		—		543		—
Derecognition of assets other than cash upon disposal of SCHL Group		13,239		—		—
Derecognition of liabilities upon disposal of SCHL Group		18,648		—		—
Non-controlling interest recognized as other payable upon disposal of SCHL Group		19,678		—		—
Issuance of Class A ordinary shares for business acquisition		—		—		2,320

The accompanying notes are an integral part of these consolidated financial statements.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

1.	Organization and principal activities

(a)	Nature of operations

J and Friends Holdings Limited (the “Company”) is principally engaged in providing merchant digitalization and commerce-enablement solutions to small and medium enterprises (“SME”) in the international markets. The Company was incorporated in the Cayman Islands on March 2, 2017 as an exempted company with limited liability. The Company also offered certain financial solutions, including wealth management, insurance, business installment loan, and international installment loan solutions, till divestment of mainland China business. The Company, its subsidiaries and its controlled entities are collectively referred to as the “Group”.

The Company changed its legal name from Pintec Technology Holdings Limited to J and Friends Holding Limited in January 2026.

(b)	Acquisition of Ziitech

On September 3, 2025, the Company acquired 25% equity interests in Ziitech Pty Ltd (“Ziitech”) and its consolidated subsidiaries from third parties. Ziitech is engaged in providing merchant digitalization and commerce-enablement solutions to SMEs in the international markets. Pursuant to the share purchase agreement, the Company issued 83,726,789 Class A ordinary shares to certain shareholders of Ziitech, which was completed on September 3, 2025, the closing date of the acquisition, upon which the Group obtained control over and consolidated Ziitech through the contractual right to appoint two-thirds of Ziitech’s board of directors and a substantive veto right over all matters requiring shareholder resolution, including the determination of the number of seats on the board of directors. See Note 4.

(c)	Deconsolidation of RPHL Group

The Company signed a share transfer agreement on November 7, 2025 (the “Share Transfer Agreement”) with Vantage Capital Global Limited (the “Vantage”), an entity controlled by Jun Lang, an officer who has responsibility for planning, directing and controlling the activities of Pintec Jinke (Beijing) Technology Information Co., Ltd., a variable interest entity (“VIE”) of the Company before deconsolidation. Pursuant to the Share Transfer Agreement, with nil consideration, Vantage acquired 100% equity interest of Romantic Park Holdings Limited (“Romantic Park”), an entity with net liability position that was wholly owned by the Company. The transaction resulted in the divestment of the former wholly foreign-owned enterprises (“WFOE”) and all VIEs (together with Romantic Park, “RPHL Group”) which were consolidated by Romantic Park and previously conducted operations in mainland China (“RPHL Group Deconsolidation”). Accordingly, as of the date of issuance of the consolidated financial statements, the Company no longer maintains any operations in mainland China. The excess of the nil consideration over the carry value of the net liabilities of RPHL Group was recorded to the additional paid in capital because Jun Lang has significant influence on the previous operation in mainland China. After the divestiture, the Company focuses on providing merchant digitalization and commerce-enablement solutions to SME in countries and regions outside China mainland.

Upon completion of the divestiture of RPHL Group, the Company has no ownership interest in RPHL Group and deconsolidated the financial statements of RPHL Group from its consolidated financial statements since November 7, 2025.

The disposal of RPHL Group represents a strategic shift and has a significant impact on the Company’s result of operations. Accordingly, assets, liabilities, revenues and expenses and cash flows related to RPHL Group have been reclassified in the accompanying consolidated financial statements as discontinued operations for all periods presented. The consolidated balance sheets as of December 31, 2024 and 2025, consolidated statements of operations and comprehensive loss and consolidated statements of cash flows for the years ended December 31, 2023, 2024 and 2025 have been adjusted to reflect this change (See Note 5).

The Group has reclassified certain comparative balances in the consolidated balance sheet as of December 31, 2024 and certain comparative amounts in the consolidated statements of comprehensive loss for the years ended December 31, 2023 and 2024 to conform to the current year’s presentation. The assets and liabilities of the discontinued operations have been classified as assets of discontinued operations and liabilities of discontinued operations in the consolidated balance sheet as of December 31, 2024. The results of discontinued operations for the years ended December 31, 2023 and 2024 have been separately presented retrospectively in the consolidated statement of comprehensive loss as a single line item in accordance with U.S. GAAP. Cash flows from discontinued operations of the three categories for the years ended December 31, 2023 and 2024 were separately presented retrospectively in the consolidated statements of cash flows in accordance with U.S. GAAP.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

As of December 31, 2025, the principal entities of the Group are as follows:


		Date of acquisition		Place of incorporation		Percentage of ownership		Principal activities
Ziitech Pty Ltd (“Ziitech”)		September 3, 2025		Australia		25% owned by the Company		Merchant digitalization and commerce-enablement solutions
Zii Cloud Singapore Pte Ltd		September 3, 2025		Singapore		60% owned by Ziitech		Merchant digitalization and commerce-enablement solutions

(d)	Variable interest entities

People’s Republic of China (the “PRC” or “China”) laws and regulations impose restrictions on foreign ownership and investment in internet-based businesses such as distribution of online information, insurance brokerage, fund distribution and other value-added telecommunications services. The Company is a Cayman Islands company and the former PRC subsidiaries are considered foreign-invested enterprises from the view of PRC laws. To comply with PRC laws and regulations, the Company entered into a series of contractual arrangements, through the former PRC subsidiaries, with the former VIEs and the shareholders of the former VIEs to obtain effective control over the former VIEs and their subsidiaries. In connection with the RPHL Group Deconsolidation in November 2025, the Company did not have any variable interest entity or subsidiary in mainland China as of December 31, 2025.

The following is a summary of the contractual arrangements that the Company’s former PRC subsidiaries entered into with VIEs and their nominee shareholders:

Powers of attorney —Pursuant to the irrevocable power of attorney, the Company’s relevant PRC subsidiaries are authorized by each of the nominee shareholders as their attorney in-fact to exercise all shareholder rights under PRC law and the relevant articles of association, including but not limited to, the sale or transfer or pledge or disposition of all or part of the nominee shareholders’ equity interests, and designate and appoint directors, chief executive officers and general manager, and other senior management members of the VIEs. Each power of attorney will remain in force during the period when the nominee shareholder continues to be shareholder of the VIEs. Each nominee shareholder has waived all the rights which have been authorized to the Company’s relevant PRC subsidiaries under each power of attorney. The powers of attorney are irrevocable and remain in force continuously upon execution.

Exclusive business cooperation agreements — The Company’s relevant PRC subsidiaries and the VIEs entered into exclusive business cooperation agreements under which the VIEs engage the Company’s relevant PRC subsidiaries as their exclusive provider of technical services and business consulting services. The VIEs shall pay services fees to the Company’s relevant PRC subsidiaries, which are determined by the Company’s relevant PRC subsidiaries at its sole discretion. The Company’s relevant PRC subsidiaries shall have exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising from the performance of the agreement. During the term of the agreement, the VIEs shall not accept any consultations and/or services provided by any third party and shall not cooperate with any third party for the provision of identical or similar services without prior consent of the Company’s relevant PRC subsidiaries. These agreements will remain in effect for ten years, but can be terminated by the Company’s relevant PRC subsidiaries with 30 days’ advance written notice. These agreements can be extended at the sole discretion of the Company’s relevant PRC subsidiaries.

Equity pledge agreements — Pursuant to the relevant equity pledge agreements, the nominee shareholders of the VIEs have pledged all of their equity interests in the VIEs to the Company’s relevant PRC subsidiaries as collateral for all of the VIEs’ payments due to the Company’s relevant PRC subsidiaries and to secure the VIEs’ obligations under the above agreement. The nominee shareholders shall not transfer or assign the equity interests, the rights and obligations in the equity pledge agreement or create or permit to create any pledges which may have an adverse effect on the rights or benefits of the Company’s relevant PRC subsidiaries without the Company’s relevant PRC subsidiaries’ written consent. The Company’s relevant PRC subsidiaries are entitled to transfer or assign in full or in part the equity interests pledged. In the event of default, the Company’s relevant PRC subsidiaries as the pledgee, will be entitled to request immediate payment of the unpaid service fee and other amounts due to the Company’s relevant PRC subsidiaries, and/or to dispose of the pledged equity. These equity pledge agreements will remain effective until the variable interest entities and their shareholders discharge all their obligations under the contractual arrangements.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

Exclusive option agreements —The nominee shareholders of the VIEs have granted the Company’s relevant PRC subsidiaries the exclusive and irrevocable option to purchase from the nominee shareholders, to the extent permitted under PRC laws and regulations, part or all of their equity interests in these entities for a purchase price equal to the actual capital contribution paid in the registered capital of the VIEs by the nominee shareholders for their equity interests. The Company’s relevant PRC subsidiaries may exercise such option at any time. In addition, the VIEs and their nominee shareholders have agreed that without prior written consent of the Company’s relevant PRC subsidiaries, they shall not sell, transfer, mortgage or dispose of any assets or equity interests of the VIEs or declare any dividend. These agreements will remain effective for ten years and can be extended at the sole discretion of the Company’s relevant PRC subsidiaries.

The following consolidated financial information of the Group’s VIEs after the elimination of inter-company transactions and balances as of December 31, 2024 and 2025 and for the years ended December 31, 2023, 2024 and 2025 were included in the Group’s consolidated financial statements of discontinued operations as follows:


		As of December 31,
		2024		2025
		US$		US$
Total assets		12,525		—
Total liabilities		48,272		—


		For the years ended December 31,
		2023		2024		2025
		US$		US$		US$
Total net revenues		5,643		4,287		3,360
Net (loss)/profit		(1,902)		(543)		417


		For the years ended December 31,
		2023		2024		2025
		US$		US$		US$
Net cash provided by/(used in) operating activities		3,482		(332)		1,903
Net cash provided by/(used in) investing activities		5,085		(2,673)		1
Net cash provided by financing activities		—		—		—

In accordance with the contractual arrangements, the relevant PRC subsidiaries have the power to direct activities of the Group’s VIEs and VIEs’ subsidiaries, and can transfer assets out of the Group’s VIEs and VIEs’ subsidiaries. No assets of the VIEs and VIEs’ subsidiaries are collateral for the VIEs’ obligations and the Company believes that there are no assets held in consolidated VIEs and VIEs’ subsidiaries that can be used to settle the obligations of the VIE, except for paid-in capital, capital reserve and statutory reserves. Relevant PRC laws and regulations restrict the VIE from transferring a portion of its net assets, equivalent to the balance of its paid-in capital, capital reserve and statutory reserves, to the Group in the form of loans and advances or cash dividends. As the VIEs and VIEs’ subsidiaries are incorporated as limited liability companies under the PRC Company Law, the creditors do not have recourse to the general credit of the Group for the liabilities of the VIEs and the VIEs’ subsidiaries.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

(e)	Going Concern

The Group experienced net loss from continuing operation of US$5,706, US$318 and US$742 for the years ended December 31, 2023, 2024 and 2025, and net cash used in operating activities from continuing operation of US$862, US$265 and US$908 for the years ended December 31, 2023, 2024 and 2025, respectively. As of December 31, 2025, the Group had working capital of US$364. The Group’s operating results for future periods are subject to numerous uncertainties and it is uncertain if the Group will be able to reduce or eliminate its net losses for the foreseeable future. These conditions raise substantial doubt about the Group’s ability to continue as a going concern. In order to alleviate the pressure on capital turnover, the Group has reached an agreement with a third-party institution to obtain a line of credit facility with an amount up to US$40 million. Due to the unpredictable future of the capital markets and the industry in which the Group operates, there can be no assurance that the Group will be successful in achieving its budget goals, that the Group’s future capital raising will be sufficient to support its ongoing operations, or that any additional financing will be available in a timely manner or with acceptable terms, if at all. If the Group is unable to raise sufficient financing or events or circumstances occur such that the Group does not meet its budget goals, it may have a material adverse effect on the Group’s financial position, results of operations, cash flows, and ability to achieve its intended business objectives. The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Group’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements. The consolidated financial statements do not include any adjustments that might result from the outcome of such uncertainties.

2.	Summary of significant accounting policies

(a)	Basis of presentation

The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Significant accounting policies followed by the Group in the preparation of the consolidated financial statements are summarized below.

(b)	Principles of consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs for which the Company is the ultimate primary beneficiary, the subsidiaries of the VIEs and the entities controlled by the Company (see Note 4).

All significant intercompany transactions and balances between the Company, its consolidated subsidiaries and the consolidated VIEs have been eliminated upon consolidation.

(c)	Comparability and Reclassification Adjustment

The Group has elected to change its reporting currency from RMB to US$ starting from October 1, 2025. The aligning of the reporting currency with the underlying operations will better depict the Group’s results of operations for each period. The related financial statements prior to October 1, 2025 have been re-casted to US$ as if the financial statements originally had been presented in US$ since the earliest periods presented.

The change in reporting currency resulted in cumulative foreign currency translation adjustment to the Group’s comprehensive income/(loss) of US$3,051, US$1,557 and US$(1,349) for the years ended December 31, 2023, 2024 and 2025, respectively.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

(d)	Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities at the balance sheet dates, and the reported revenues and expenses during the reporting periods and disclosed in the consolidated financial statements and accompanying notes. Changes in facts and circumstances may result in revised estimates.

(e)	Business combinations

Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed, and any non-controlling interests of the acquiree at the acquisition date, if any, are measured at their fair values as of the acquisition date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any non-controlling interest of the acquiree and fair value of previously held equity interest in the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Common forms of consideration made in acquisitions include cash and common equity instruments. Consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition. Acquisition-related expenses and restructuring costs are expensed as incurred.

Where the consideration in an acquisition includes contingent consideration the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and is recorded as a liability, it is subsequently remeasured at fair value at each reporting date with changes in fair value reflected in earnings.

(f)	Discontinued operations

A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operation if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff).

(g)	Foreign currency translation and transactions

Effective October 1, 2025, the Company elected to change its reporting currency from Renminbi (“RMB”) to United States Dollar (“US$”). The functional currency of the Company and its international subsidiaries incorporated in the Cayman Islands, British Virgin Islands and Hong Kong is US$, the functional currency of Singapore entity is Singapore Dollar (“SGD”), the functional currency of the Australia entity is Australian Dollar (“AUD”), the functional currency of the PRC entity is RMB.

In the consolidated financial statements, the financial information of the Company’s entities located in the PRC, Singapore and Australia has been translated into US$. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the reporting period. Translation adjustments are reported as foreign currency translation adjustments, and are shown as a component of other comprehensive loss in the consolidated statements of comprehensive loss. The resulting foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income in the consolidated statements of changes in (deficit)/equity.

Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Net gains and losses resulting from foreign exchange transactions are included in other income/(expenses), net.

The Group recognizes the accumulated translation adjustment balance associated with disposed foreign subsidiaries as part of the gain or loss on disposal of foreign subsidiaries.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

(h)	Fair value measurement

Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:

●	Level 1 applies to assets or liabilities for which there are quoted prices, in active markets for identical assets or liabilities.

●

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

●	Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The carrying amount of cash and cash equivalents, accounts receivable, other receivables included in prepayments and other current assets, accounts payable, other payables included in accrued expenses and other current liabilities approximates fair value because of their short-term nature. The Group’s non-financial assets would be measured at fair value only if they were determined to be impaired.

(i)	Cash and cash equivalents

Cash and cash equivalents consist of funds held in deposit accounts with banks and third party payment platform, which are highly liquid and have original maturities of three months or less and are unrestricted as to withdrawal or use.

(j)	Accounts receivable, net

Accounts receivable represent amounts due from customers and are stated at the original amount less allowance for credit losses. Accounts receivable are recognized in the period when the Company has provided services to its customers and when its right to consideration is unconditional. The Company performs ongoing credit evaluation of its customers, and assesses allowance for credit losses of accounts receivable based on credit loss model on portfolio basis. Accounts receivable balances are written off after all collection efforts have been exhausted.

On January 1, 2023, the Group adopted ASC 326, Financial Instruments—Credit Losses, which requires recognition of allowances upon origination or acquisition of financial assets at an estimate of expected credit losses over the contractual term of the financial assets (the current expected credit loss or the “CECL” model) using the modified retrospective transition method. The Group’s financial assets subject to the CECL model include: accounts receivable and other receivables which are recorded as a component of the prepayments and other current assets.

For accounts receivable, the Group estimates the loss rate based on historical experience, the age of the receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. For other receivables, the Group reviews other receivables on a periodic basis and makes allowances on an individual basis when there is doubt as to the collectability.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

(k)	Inventories

Inventories, consisting of POS solution related products, are stated at the lower of cost and net realizable value. Cost of inventories is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as expiration aging, historical and forecasted consumer demand, and market conditions that impact pricing. Once inventory is written-down, a new, lower-cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. There was no inventory written-down recognized for the year ended December 31, 2025.

(l)	Prepayments and other current assets

Prepayments and other current assets primarily include prepayment to suppliers, advances to employees and deposits. Prepayments and other current assets are stated at the historical carrying amount net of the allowance for credit losses. The Group reviews other receivables, which include advances to employees and deposits, on a periodic basis and makes allowances on an individual basis when there is doubt as to the collectability. Other receivables are written off after all collection efforts have been exhausted.

(m)

Goodwill

Goodwill represents the excess of the purchase price over fair value of the identifiable assets and liabilities acquired in a business combination.

Goodwill is not depreciated or amortized but is tested for impairment on an annual basis as of December 31 of each balance sheet date and in between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. The Company first has the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If the Company decides, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of a comparison of the fair value of each reporting unit with its carrying amount, including goodwill. A goodwill impairment charge will be recorded for the amount by which a reporting unit’s carrying value exceeds its fair value, but not to exceed the carrying amount of goodwill. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units and determining the fair value of each reporting unit. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. There was no impairment loss of goodwill recognized for the year ended December 31, 2025.

(n)	Intangible assets, net

The Group performs valuation of the intangible assets arising from business combination to determine the relative fair value to be assigned to each asset acquired. The acquired intangible assets are recognized and measured at fair value. Intangible assets with useful lives are amortized using the straight-line approach over the estimated economic useful lives of the assets as follows:


Category		Estimated useful life
Software copyright		6 years
Customer relationship		7 years

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

(o)	Impairment of long-lived assets

The Group evaluates its long-lived assets with finite lives for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may not be fully recoverable. When these events occur, the Group evaluates the impairment by comparing carrying amount of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the long-lived assets over their fair value. Fair value is estimated based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. The Group recorded impairment of long-lived assets of nil for the years ended December 31, 2023, 2024 and 2025.

(p)	Revenue recognition

The Group’s revenues are mainly generated from payment platform partnership, Software-as-a-Service (“SaaS”) subscription services and other revenue which includes hardware sales and installment services, and software development services.

The Group recognizes revenue pursuant to ASC 606, Revenue from Contracts with Customers (“ASC 606”). In accordance with ASC 606, revenue is recognized when the control of the promised goods or services is transferred to the customers, and the performance obligations under the contract have been satisfied, in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services (excluding sales taxes collected on behalf of government authorities).

The Group determines revenue recognition through the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

The Group considers itself a principal and recognizes revenues on a gross basis as it controls the products or services based on that the Group is primarily responsible for fulfilling the promise to provide the specified good or service, has inventory risk before the specified good or service has been transferred to a customer and has discretion in establishing the price for the specified good or service.

Revenues from payment platform partnership

The Group establishes referral partnership with third-party payment platforms, providing referral services associated with each individual transaction generated by the merchants that Ziitech has successfully referred to the payment platform in exchange for incentive fees. The Group identifies one performance obligation as referral of each individual transaction. The transaction price is based on fixed percentage of referred transaction amounts, which is variable and constrained as such price is contingent upon the referred merchants’ transaction amounts. The Group recognizes revenue at point in time when the referred merchants have been approved by the payment platforms and when the variable consideration is not constrained after the periodic reconciliation report is agreed with payment platforms.

Revenues from SaaS subscription services

The Group provides SaaS subscription services to merchants for food and beverage solutions and retail solutions, enabling the merchants to improve order efficiency and better payment experience. The Group identifies SaaS subscription services as distinct and separately identifiable performance obligation. The monthly SaaS subscription service fee is fixed and pre-determined in the contracts. However, if the merchant’s monthly transaction volume meets certain threshold as pre-determined in the contract, that month’s SaaS subscription fee is waived by the Group. Therefore, the transaction price of SaaS subscription service is variable and constrained by the monthly transaction volume. The Group recognizes revenue from SaaS subscription service overtime on a monthly basis when it is probable that a significant reversal will not occur.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

Other revenues

Other revenue is mainly generated from hardware sales and installment services and software development services.

For hardware sales and installment services, the Group sells POS-related hardware and POS related installment services to customers. The Group’s performance obligation is to deliver products to customers and/or complete installment services based on the customers’ demand. Prices listed in the contract are fixed amounts and no other financial elements are identified. Revenues from hardware sales and installment services are recognized at the point when customer acceptance is completed.

For software development services, the Group offers end-to-end white label software that enables customers to launch their own branded POS platform. The Group recognizes revenue from customization of platform service at point in time upon acceptance.

Contract balance

Contract balances include advance from customers, which are presented in accrued expenses and other current liabilities on the consolidated balance sheet. As of December 31, 2024 and 2025, the Group had nil and US$123 of advance from customers, respectively. The difference between the opening and closing balances of the Group’s contract liabilities primarily results from the timing difference between the Group’s satisfaction of performance obligation and the customer’s payment.

The Group elected the practical expedient to not disclose the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, as substantially all of the contracts have an original expected duration of one year or less.

Revenue disaggregation

The Group disaggregates revenue into revenue streams as follows:


		For the years ended December 31,
		2023		2024		2025
		US$		US$		US$
Payment platform partnership		—		—		740
SaaS subscription services		—		—		367
Other revenue
Hardware sales and installment services		—		—		436
Software development services		—		—		55
Subtotal		—		—		491
Total		—		—		1,598

The following table summarizes the Group’s revenues recognized at a point in time or over time:


		For the years ended December 31,
		2023		2024		2025
		US$		US$		US$
Revenues recognized at a point in time		—		—		1,217
Revenues recognized over time		—		—		381
Total		—		—		1,598

(q)	Cost of revenues

Cost of revenues primarily includes POS related hardware cost, fees paid to cloud server providers, fees paid to payment platform providers, staff costs and other costs.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

(r)	Selling and marketing expenses

Selling and marketing expenses primarily include staff expenses, commission expenses and entertainment expenses. During the years ended December 31, 2024 and 2025, the promotional and advertising expenses were nil.

(s)	General and administrative expenses

General and administrative expenses primarily include professional expenses, depreciation and amortization expenses, staff expenses, office expenses and rental expenses.

(t)	Research and development expenses

Research and development expenses consist primarily of IT consulting expenses and staff expenses. All research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant.

(u)	Share-based compensation expenses

All share-based awards granted to employees, including restricted ordinary shares and share options, are measured at fair value on grant date. Share based compensation expense is recognized using the straight-line method or graded vesting method, net of estimated forfeitures, over the requisite service period, which is the vesting period.

The Binomial option pricing model is used to estimate fair value of the share options. Restricted ordinary shares are measured based on the fair value of ordinary shares at the grant date. The determination of estimated fair value of share-based payment awards on the grant date using an option pricing model was affected by the fair value of underlying ordinary shares as well as assumptions regarding a number of complex and subjective variables. These variables include the expected value volatility over the expected term of the awards, actual and projected employee share option exercise behaviors, a risk-free interest rate, volatility and any expected dividends. Shares that do not have quoted market prices, were valued based on the income approach. Determination of estimated fair value of shares that do not have quoted market prices requires complex and subjective judgments due to their limited financial and operating history, unique business risks and limited public information on similar companies in Australia.

Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate pre-vesting option and records share based compensation expenses only for those awards that are expected to vest.

(v)

Leases

The Group accounts for leases under ASC 842. The Group categorizes leases with contractual terms longer than 12 months as either operating or finance lease. The Group elected not to present short-term leases on the consolidated balance sheets as these leases have a lease term of 12 months or less at commencement date of the lease. The Group did not enter into finance leases for any of the periods presented. The lease terms of operating leases vary from one year to three years.

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. To assess whether a contract is or contains a lease, the Group assesses whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from the use of the asset and whether it has the right to control the use of the asset.

The Group estimates its incremental borrowing rate for its leases at the commencement date to determine the present value of future lease payments when the implicit rate is not readily determinable in the lease. In estimating its incremental borrowing rate, the Group considers its credit rating and publicly available data of borrowing rates for loans of similar amount, currency and term as the lease.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

Right-of-use (“ROU”) assets represent the Group’s rights to use underlying assets for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date. After lease commencement, operating lease liabilities are measured at the present value of the remaining lease payments using the discount rate determined at lease commencement. ROU assets are measured at the amount of the lease liabilities and further adjusted for prepaid or accrued lease payments, the remaining balance of any lease incentives received, unamortized initial direct costs and impairment of the ROU assets, if any. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease terms.

(w)

Taxation

Income taxes

Current income taxes are provided on the basis of net income (loss) for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions.

Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carry forwards and credits. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the consolidated statement of operations and comprehensive loss in the period of the enactment of the change.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Group considers positive and negative evidence when determining whether a portion or all of its deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry-forward periods, its experience with tax attributes expiring unused, and its tax planning strategies. The ultimate realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry-forward periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization of deferred tax assets, the Group has considered possible sources of taxable income including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry-forwards, (iii) future taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected within the industry.

Uncertain tax positions

In order to assess uncertain tax positions, the Group applies a more-likely-than-not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more-likely-than-not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likelihood of being realized upon settlement. The Group recognizes interest and penalties, if any, under accrued expenses and other current liabilities on its consolidated balance sheets and under income tax expenses in its consolidated statements of operations and comprehensive loss.

(x)	Segment reporting

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer (“CEO”) is the Company’s CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates as one operating segment. The Company has concluded that consolidated net loss is the measure of segment profitability. The CODM assesses performance for the Company, monitors budget versus actual results, and determines how to allocate resources based on consolidated net loss as reported in the consolidated statements of operations. See Note 17 for significant expenses regularly provided to the Group’s CODM.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

The Group’s long-lived assets are all located in Australia and substantially all of the Group’s revenues from continuing operations are derived from within Australia. Therefore, no geographical segments are presented.

(y)	Loss per share

Loss per share is computed in accordance with ASC 260. The two-class method is used for computing earnings per share in the event the Group has net income available for distribution. Under the two-class method, net income is allocated between ordinary shares and participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed.

Basic loss per share is computed using the weighted average number of ordinary shares outstanding during the period. Diluted loss per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period. Potential ordinary shares include ordinary shares issuable upon the exercise of outstanding share options and restricted shares using the treasury stock method, and convertible loan under if-convertible method. The computation of diluted net loss per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net loss per share. Net loss per ordinary share is computed on Class A Ordinary Shares and Class B Ordinary Shares on a combined basis, because both classes have the same dividend rights in the Company’s undistributed net income.

(z)	Comprehensive loss

Comprehensive loss is defined to include all changes in shareholders’ deficit of the Group during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Accumulated other comprehensive income, as presented on the consolidated balance sheets, consists of accumulated foreign currency translation adjustments.

(aa)	Recently adopted accounting pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. The Group has adopted ASU 2023-09 from January 1, 2025 on a retrospective basis. The adoption did not have material impact on the consolidated statements but resulted in certain additional disclosures as required by ASU.

(bb)	Recently issued accounting pronouncements not yet adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) which requires detailed disclosures in the notes to financial statements disaggregating specific expense categories and certain other disclosures to provide enhanced transparency into the nature and function of expenses. The FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements should be applied on a prospective basis while retrospective application is permitted. The Group does not expect to adopt this guidance early and does not expect the adoption of this ASU to have a material impact on its future consolidated financial statements.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This amendment introduces a practical expedient for the application of the current expected credit loss (“CECL”) model to current accounts receivable and contract assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Group is currently evaluating the impact of adopting the standard.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting, Narrow-Scope Improvements. The ASU was updated to improve the navigability of the required interim disclosures within ASC No. 270 and to clarify when the guidance applies. This ASU is not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. This ASU is effective for interim periods within fiscal years beginning after December 15, 2027 for public business entities, and for fiscal years beginning after December 15, 2028 for non-public entities. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Group is currently evaluating the impact of adopting the standard.

Recently issued ASUs by the FASB, except for the ones mentioned above, are not expected to have a significant impact on the Group’s consolidated results of operations or financial position.

3.	Concentration and risks

(a)	Concentration of customers and vendors

The following table sets forth a summary of single customers who represent 10% or more of the Group’s total accounts receivable:


		As of December 31,
		2024		2025
Customer B		*		32	%
Customer A		*		28	%

The following table sets forth a summary of single customer who represents 10% or more of the Group’s total revenues:


		For the years ended December 31,
		2023		2024		2025
Customer A		*		*		22	%
Customer B		*		*		11	%

The following table sets forth a summary of single suppliers who represent 10% or more of the Group’s total accounts payable:


		As of December 31,
		2024		2025
Supplier A		*		25	%
Supplier C		*		21	%
Supplier B		*		17	%

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

The following table sets forth a summary of single suppliers who represent 10% or more of the Group’s total cost of revenues:


		For the years ended December 31,
		2023		2024		2025
Supplier B		*		*		14	%

*Representing percentage less than 10%

(b)	Credit risks

Assets that potentially subject the Group to significant concentrations of credit risk primarily consist of cash and cash equivalents, accounts receivable, net, prepayments and other current assets, net. The maximum exposure of such assets to credit risk is their carrying amounts as of the balance sheet dates. All of the Group’s cash and cash equivalents are held with financial institutions that Company’s management believes to be high credit quality. The Company periodically evaluates the creditworthiness of the existing customers and suppliers in determining provision for expected credit losses.

4.	Business combination

On September 3, 2025, the Group acquired 25% equity interests in Ziitech and its consolidated subsidiaries from third parties. Ziitech is engaged in providing merchant digitalization and commerce-enablement solutions to SMEs in the international markets. Pursuant to the share purchase agreement, the Company issued 83,726,789 Class A ordinary shares to certain shareholders of Ziitech, which was completed on September 3, 2025, the closing date of the acquisition, upon which the Group obtained control over and consolidated Ziitech.

The Company obtained control of Ziitech through legally enforceable rights derived from the Shareholders Agreement and Deed of Variation of Ziitech’s Constitution signed on September 3, 2025. These rights, which collectively demonstrate the Company’s ability to direct the activities that most significantly impact Ziitech’s economic performance, include but are not limited to the following:

The contractual right to appoint two-thirds of Ziitech’s board of directors. Pursuant to the Shareholders Agreement, Ziitech’s most significant financial and operating activities are exclusively decided by the board, enabling the Company to dominate key decision-making processes that drive Ziitech’s financial returns;

A substantive veto right over all matters requiring shareholder resolution, including the determination of the number of seats on the board of directors. Such right provides the Group with effective participation, i.e. the ability to block significant decisions proposed by other investors who have 75% voting interest in aggregate, as such the control does not rest with the remaining 75% equity interest holders because they cannot cause Ziitech to take an action that is significant in the ordinary course of business if it has been vetoed by the Group; combined with the contractual right to appoint two-thirds of Ziitech’s board of directors, the Group ensures its control over Ziitech and prevents presumption of control by the remaining 75% equity interest holders of Ziitech.

Through the acquisition of Ziitech, the Group manages merchant digitalization and commerce-enablement solutions businesses and can expand its network in Australia and Singapore which will further strengthen its business presence and will help it to explore expansion opportunities on a global scale.

The identifiable assets acquired and liabilities assumed in the business combination were recorded at their fair values on the acquisition date and consisted of the following major items.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)


		Amount
		US$
Fair value of issuance of Class A Ordinary Shares for acquisition of Ziitech		2,320
Fair value of non-controlling interests(i)		4,851
Total		7,171
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		152
Accounts receivable, net		315
Inventories		142
Prepayments and other current assets		36
Intangible assets, net		3,847
Property, equipment and software, net		10
Operating right-of-use assets, net		124
Other non-current assets		31
Accounts payable		(102)
Accrued expenses and other liabilities		(946)
Operating lease liabilities, current		(86)
Deferred tax liabilities		(65)
Operating lease liabilities, non-current		(46)
Goodwill(ii)		3,759
Total		7,171

(i) Non-controlling interests mainly represent the interests allocated to shareholders with 75% equity interest in Ziitech. Fair value of the non-controlling interests was estimated with reference to the purchase price per share as of the acquisition date, with assistance of independent appraiser.

(ii) Goodwill represents the excess of the purchase price over the fair value of the identifiable assets acquired and liabilities assumed in the acquisition. Goodwill primarily represents the expected synergies from combining operations of Ziitech in Australia with those of the Group. The goodwill is not deductible for tax purposes.

The revenue and net loss of Ziitech since the acquisition date and that were included in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2025 are US$1,598 and US$340, respectively. Prior to the acquisition, Ziitech did not prepare its financial statements in accordance with US GAAP and had a different fiscal year end from the Group. The Group determined that the cost of reconstructing the financial statement of Ziitech for the periods prior to the acquisition outweighed the benefits. Thus the Group’s management believes that the presentation of pro forma financial information with respect to the results of operations of the Group for the business combination is impractical.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

5.	Deconsolidation

(a)	Disposal SCHL Group

On May 26, 2023, the Company entered into an equity transfer agreement with Otov Alfa Holdings Limited (“Otov Alfa”), a British Virgin Islands business company designated by Ningxia Fengyin Enterprise Management Consulting LLP (“Ningxia Fengyin”), under which the Company transferred 100% of its equity interest in subsidiaries including Sky City Holding Limited, and its subsidiaries (collectively “SCHL Group”) to Otov Alfa, at nil consideration (the “Deconsolidation”), in order to settle all outstanding convertible loan owed by the Group to Ningxia Fengyin. SCHL Group mainly served as a holding company for a group of investment companies with no material operations, and meanwhile, as the obligator of the outstanding convertible loan and interest. The Deconsolidation of SCHL Group was not a strategic shift as it has no material impact on the Group’s business, therefore it was not qualified as discontinued operation. Upon the completion of the Deconsolidation, the control of SCHL Group was transferred to Otov Alfa on May 30, 2023 (the “Closing Date”), and the assets and liabilities of SCHL Group, including the outstanding convertible loan and interest payable, cash in bank, property and some other assets and liabilities with a net liability balance of RMB6,711 were transferred to Otov Alfa, resulting in settlement of the outstanding convertible loan and a gain from disposal of RMB6,711. The cumulative foreign currency translation loss (recorded as accumulated other comprehensive loss) related to SCHL Group of RMB45,594 was released as a loss on disposal, with a total loss of RMB38,883 recognized related to the disposal of SCHL Group for the year ended December 31, 2023.

(b)	Deconsolidation of RPHL Group

The Company entered into a share transfer agreement transaction on November 7, 2025 (the “Share Transfer Agreement”), with Vantage Capital Global Limited (the “Vantage”), an entity controlled by Jun Lang, an officer who has responsibility for planning, directing and controlling the activities of Pintec Jinke (Beijing) Technology Information Co., Ltd., a variable interest entity of the Company before deconsolidation. Pursuant to the Share Transfer Agreement, Vantage acquired 100% equity interest of Romantic Park Holdings Limited (Romantic Park”), an entity was wholly owned by the Company. The transaction resulted in the divestment of some of the former WFOEs and all VIEs (together with Romantic Park, “RPHL Group”), which previously conducted operations in mainland China. The excess of the consideration over the carry value of the net assets of RPHL Group was recorded to the additional paid in capital because Lang Jun has significant influence on the previous operation in mainland China. Upon completion of the divesture, the Company lost its control over RPHL Group and accordingly, the Company deconsolidated RPHL Group’s financial statements since November 7, 2025 (the “disposal date”).

The divesture represented a strategic shift that had a major effect on the Group’s operations and financial results and was accounted for as discontinued operations. The Group has classified the historical financial results of RPHL Group as discontinued operations in the Group’s consolidated statements of comprehensive loss for all periods presented. Additionally, the related assets and liabilities associated with discontinued operations in the prior year consolidated balance sheet were classified as assets/liabilities of discontinued operations to provide the comparable financial information. In connection with the divesture of RPHL Group, the Company recorded the excess amount of US$66,091 between nil consideration and the carry value of the net liability of RPHL Group in additional paid in capital, net of tax of nil, in the consolidated balance sheets, as the transaction is with a related party of the Group.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

The assets and liabilities are included in the captions “Current assets of discontinued operations”, “Non-current assets of discontinued operations”, “Current liabilities of discontinued operations” and “Non-current liabilities of discontinued operations”, in the accompanying consolidated balance sheets as of December 31, 2024 and consist of the following:


		As of December 31, 2024
		US$
Cash and cash equivalents		3,687
Accounts receivable, net		472
Short‑term financing receivables, net		8,554
Prepayments and other current assets, net		223
Current assets of discontinued operations		12,936

Non-current restricted cash		685
Long‑term financing receivables, net		223
Operating lease right-of-use assets		245
Other non-current assets		75
Non-current assets of discontinued operations		1,228

Accounts payable		561
Tax payable		2,593
Amounts due to related parties		41,496
Accrued expenses and other liabilities		22,176
Operating lease liabilities, current		227
Current liabilities of discontinued operations		67,053

Operating lease liabilities, non-current		164
Other non-current liabilities		563
Non-current liabilities of discontinued operations		727

The condensed cash flows of RPHL Group were as follows for the years ended December 31, 2023 and 2024 and for the period from January 1, 2025 through the disposal date, the date immediately preceding the RPHL Group Deconsolidation, are included in the consolidated statements of cash flows of the Company as cash flow from discontinued operations.


						From the period from
		For the years ended December 31,				January 1, 2025 through
		2023		2024		the disposal date
		US$		US$		US$
Net cash provided by/(used in) operating activities		2,077		(1,807)		1,054
Net cash provided by/(used in) investing activities		4,981		(11)		(5,419)
Net cash provided by financing activities		—		—		—

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

The comparative consolidated statements of operations have been represented to show the discontinued operations separately from continuing operations. Results of operations of RPHL Group for the period from January 1, 2025 through the disposal date, the date immediately preceding the RPHL Group Deconsolidation, and for the years ended December 31, 2023 and 2024, shown in the table below, are included in the consolidated comprehensive loss as “net loss from the discontinued operations, net of income tax” for those respective periods, after intercompany eliminations, as applicable.


			From the period from
	For the years ended December 31,		January 1, 2025 through
	2023	2024	the disposal date
	US$	US$	US$
Major classes of line items of discontinued operations
Revenues:
Technical service fees	3,379	1,011	530
Installment service fees	1,906	1,856	1,445
Wealth management service fees	2,160	2,017	1,606
Total revenues	7,445	4,884	3,581
Cost of revenues:
Funding cost	(1,374)	—	(2)
Reversal/(provision) of credit losses	78	(304)	(544)
Origination and servicing cost	(4,587)	(1,643)	(869)
Reversal of guarantee	443	163	—
Cost of revenues	(5,440)	(1,784)	(1,415)
Gross profit	2,005	3,100	2,166
Operating expenses:
Sales and marketing expenses	(3,002)	(2,627)	(2,007)
General and administrative expenses	(2,937)	(1,624)	(671)
Research and development expenses	(352)	(315)	(539)
Impairment on long-lived assets	(1,948)	(199)	—
Total operating expenses	(8,239)	(4,765)	(3,217)
Operating loss from discontinued operations	(6,234)	(1,665)	(1,051)
Interest income, net	—	30	42
Other expenses, net	(1,428)	(6)	(68)
Loss before income tax expense	(7,662)	(1,641)	(1,077)
Income tax benefit/(expense)	1,963	(95)	278
Net loss from discontinued operations, net of income tax	(5,699)	(1,736)	(799)

6.	Accounts receivable, net

Accounts receivable, net, consists of the following:


		As of December 31,
		2024		2025
		US$		US$
Accounts receivable		—		417
Provision for credit losses		—		(92)
Accounts receivable, net		—		325

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

The movements in the allowance for credit losses for the years ended December 31, 2023, 2024 and 2025 were as follows:


		For the years ended December 31,
		2023		2024		2025
		US$		US$		US$
Balance at beginning of the year		—		—		—
Additions upon acquisition of Ziitech		—		—		70
Additions		—		—		19
Foreign exchange impact		—		—		3
Balance at end of the year		—		—		92

For the years ended December 31, 2023, 2024 and 2025, no write-off or recoveries of allowance for credit losses were recorded.

7.	Prepayments and other current assets

Prepayments and other current assets, net, consist of the following:


		As of December 31,
		2024	2025
		US$	US$
Prepayment to suppliers		3	325
Advances to employee		—	50
Deposits		—	29
Total prepayments and other current assets		3	404

For the years ended December 31, 2023, 2024 and 2025, no allowance for credit losses of prepayments and other current assets was recorded.

8.	Intangible assets

Intangible assets, net consist of the following:


		As of December 31,
		2024		2025
		US$		US$
Software copyright		—		1,054
Customer relationship		—		2,793
Total cost		—		3,847
Less: accumulated amortization		—		(187)
Intangible assets, net		—		3,660

Amortization expenses for the years ended December 31, 2023, 2024 and 2025 was nil, nil and US$187, respectively. The estimated amortization expense for intangible assets in each of the next five years and thereafter are US$575, US$575, US$575, US$575, US$575 and US$785, respectively.

9.	Borrowings

As of December 31, 2024 and 2025, the Group had short-term borrowing of US $250 and nil, and long-term borrowing of nil and US$1,800 from a third-party company BitTo Inc. The maturity period of the borrowings that were borrowed during the years ended December 31, 2024 and 2025 was September 30, 2027 with an annual interest rate of 7%.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

10.

Accrued expenses and other liabilities

Accrued expenses and other liabilities consist of the following:


		As of December 31,
		2024		2025
		US$		US$
Interest payable		11		270
Loans from non-controlling interest shareholders⁽¹⁾		—		228
Wage payable		50		173
Advance from customers		—		123
Other payable to third parties		199		181
Tax payable		—		83
Accrued expenses		—		70
Loan from management		—		54
Commission payable		—		33
Others		13		7
Total		273		1,222

(1)	represents loans borrowed from non-controlling interest shareholders of Ziitech for daily operations with daily interest of 0.03%. The loans have been fully repaid in February 2026.

11.

Lease

The Group has operating leases for its office space including lease arrangements with third parties. Short-term leases include office leases with a term of 12 months or less. The Group has elected to apply the practical expedient to not separate the lease component and its associated non-lease component.

The following components of lease costs are included in the Group’s consolidated statement of operations and comprehensive loss:


	For the years ended December 31,
	2023	2024	2025
	US$	US$	US$
Long-term lease expense	—	—	30
Short-term lease expense	—	—	15
Total lease costs	—	—	45

For the years ended December 31, 2023, 2024 and 2025, no impairment of right-of-use assets was recorded from continuing operations.

The following table presents supplemental information related to operating leases:


	For the years ended December 31,
	2023	2024	2025
	US$	US$	US$
Other information
Cash paid for amounts included in the measurement of operating lease liabilities
Operating cash flows for operating leases	—	—	27
Supplemental lease cash flow disclosure
Right-of-use assets obtained in exchange for new operating lease liabilities	—	—	—
Weighted-average remaining lease term (years)	—	—	1.25
Weighted-average discount rate	—	—	6.0	%

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

As of December 31, 2025, future minimum lease payments are as follows:


For the year ending December 31,		Amount
		US$
2026		88
2027		24
Total lease payments		112
Less: imputed interest		(3)
Present value of lease liabilities		109

12.

Taxation

Cayman Islands

Under the current laws of the Cayman Islands, the Group is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.

British Virgin Islands

Under the current laws of the British Virgin Islands, entities incorporated in British Virgin Islands are not subject to tax on their income or capital gains. The British Virgin Islands do not impose a withholding tax on dividends.

Hong Kong

In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. In March 2018, the Hong Kong Government introduced a two-tiered profit tax rate regime by enacting the Inland Revenue (Amendment) (No.3) Ordinance 2018 (the “Ordinance”). Under the two-tiered profits tax rate regime, the first HK dollar 2 million of assessable profits of qualifying corporations is taxed at 8.25% and the remaining assessable profits at 16.5%. The Ordinance is effective from the year of assessment 2018-2019. The Hong Kong subsidiary did not have assessable profits that were derived from Hong Kong during the years ended December 31, 2023, 2024 and 2025. Payments of dividends by the Hong Kong subsidiary to the Group are therefore not subject to withholding tax in Hong Kong.

Australia

All companies are subject to a federal tax rate of 30% on their taxable income, except for ‘small or medium business’ companies, which are subject to a reduced tax rate of 25%. The reduced tax rate applies only to those companies that, together with certain ‘connected’ entities, fall below the aggregated turnover threshold of AUD 50 million. One subsidiary of the Group incorporated in Australia is subject to a reduced tax rate of 25%.

Singapore

The Company’s subsidiary incorporated in Singapore, is subject to Singapore Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Singapore tax laws. The applicable corporate income tax rate is 17% in Singapore, with 75% of the first SGD 10,000 taxable income and 50% of the next SGD 190,000 taxable income are exempted from income tax.

PRC

Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign invested enterprises is 25%. Effective January 1, 2008, the EIT Law in China unifies the enterprise income tax rate for the entities incorporated in China at 25% if they are not eligible for any preferential tax treatment.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law merely define the location of the “de facto management body “as” the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, property, of a non-PRC company is located.” Based on a review of surrounding facts and circumstances, the Group does not believe that it is likely that its operations outside of the PRC should be considered as a resident enterprise for the PRC tax purposes for the years ended December 31, 2023, 2024 and 2025.

For qualified small and low-profit enterprises, from January 1, 2023 to December 31, 2027, 25% of the first RMB 3.0 million of the assessable profit before tax is subject to the tax rate of 20%. For the year ended December 31, 2025, one PRC subsidiary is qualified small and low-profit enterprise, and thus is eligible for the above preferential tax rates for small and low-profit enterprises.

Withholding tax on undistributed dividends

The EIT law also imposes a withholding income tax of 10% on dividends distributed by a foreign investment enterprise (“FIE”) to its immediate holding company outside China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. The Cayman Islands, where the Company is incorporated, does not have such tax treaty with China. According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by an FIE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5%. The Group did not record any dividend withholding tax, as the Group’s FIE has no retained earnings in any of the period presented.

Loss before income tax expense from continuing operations was attributable to the following geographic locations:


		For the years ended December 31,
		2023		2024		2025
		US$		US$		US$
Australia		—		—		(400)
All other non-Australia		(5,706)		(318)		(407)
Total loss before income tax expense		(5,706)		(318)		(807)

The following table sets forth current and deferred portion of income tax expense of the Company’s continuing operations:


		For the years ended December 31,
		2023	2024	2025
		US$	US$	US$
Current income tax expense
Australia		—	—	—
All other non-Australia		—	—	—
Total current income tax expenses		—	—	—
Deferred income tax benefit
Australia		—	—	(65)
All other non-Australia		—	—	—
Total deferred income tax benefit		—	—	(65)
Total income tax benefit
Australia		—	—	(65)
All other non-Australia		—	—	—
Total income tax benefit		—	—	(65)

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

A reconciliation of the Group’s statutory tax rate to the effective income tax rate was as follows:


		For the years ended December 31,
		2023				2024				2025
		Amount		Percentage		Amount		Percentage		Amount		Percentage
		US$				US$				US$
Loss before income tax		(5,706)		100.0	%	(318)		100.0	%	(807)		100.0	%
Australia statutory income tax rate		30	%	30	%	30	%	30	%	30	%	30	%

Computed income tax benefit with Australia statutory income tax rate		(1,712)		30.0	%	(95)		30.0	%	(242)		30.0	%
Domestic tax effects
Preferential tax rate		—		0.0	%	—		0.0	%	20		(2.5)	%
Changes in valuation allowance		—		0.0	%	—		0.0	%	31		(3.8)	%
Non-deductible expenses		—		0.0	%	—		0.0	%	4		(0.5)	%
Foreign tax effects
Cayman Islands
- Statutory tax rate difference between Cayman Islands and Australia		1,712		(30.0)	%	95		(30.0)	%	96		(11.9)	%
PRC
- Preferential tax rate		—		0.0	%	—		0.0	%	10		(1.2)	%
- Other		—		0.0	%	—		0.0	%	5		(0.6)	%
Other foreign jurisdictions		—		0.0	%	—		0.0	%	11		(1.4)	%
Effective income tax rate		—		0.0	%	—		0.0	%	(65)		8.1	%

Income taxes paid by jurisdiction are as follows:


	For the years ended December 31,
	2023		2024	2025
	US$		US$	US$
Australia	—		—	—
All other non-Australia	—		—	—
Total loss before income tax expense	—		—	—

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

Deferred tax assets and deferred tax liabilities

The following table sets forth the significant components of the deferred tax assets and deferred tax liabilities:


		As of December 31,
		2024		2025
		US$		US$
Deferred tax assets:
Net operating loss carry forwards		—		929
Allowance for credit losses		—		23
Operating lease liabilities		—		28
Subtotal		—		980
Less: valuation allowance		—		(40)
Total deferred tax assets, net		—		940
Net off against deferred tax liabilities		—		(940)
Net deferred tax assets		—		—

Deferred tax liabilities:
Operating right-of-use assets		—		(25)
Intangible assets acquired in a business acquisition		—		(915)
Total deferred tax liabilities		—		(940)
Net off against deferred tax assets		—		940
Net deferred tax liabilities		—		—

Changes in valuation allowance are as follows:


		As of December 31,
		2023		2024		2025
		US$		US$		US$
Balance at beginning of the year		—		—		—
Additions		—		—		40
Balance at end of the year		—		—		40

The Group’s valuation allowance is considered on each individual subsidiary. The Group has recognized the valuation allowance against deferred tax assets as the Group believes that it is more likely than not that its deferred tax assets will not be realized considering the historical losses and it does not expect to generate sufficient taxable income in the near future.

For entities incorporated in Australia, Singapore and Hong Kong, net loss can be carried forward indefinitely; for entities incorporated in PRC, net loss can be carried forward for five years. As of December 31, 2024, the Group had net operating loss carryforwards of nil. As of December 31, 2025, the Group had net operating loss carryforwards of approximately US$3,683, US$5, US$33, and US$51 for entities incorporated in Australia, Singapore, Hong Kong and PRC, respectively. As of December 31, 2025, the net operating loss carryforwards from PRC will expire, if unused, in 2030.

Uncertain Tax Position

The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2024 and 2025, the Group did not have any unrecognized uncertain tax positions. For the years ended December 31, 2023, 2024 and 2025, the Group did not incur any interest and penalties related to potential underpaid income tax expenses.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

Generally, the Commissioner of Taxation of Australia may amend an assessment within four years after the day of which an assessment is given to a company. The tax years ended December 31, 2021 through 2024 for the Group’s subsidiary in the Singapore are generally subject to examination by the Singapore tax authorities. The tax years ended December 31, 2019 through 2024 for the Group’s subsidiary in Hong Kong are generally subject to examination by the Hong Kong tax authorities. The tax years ended December 31, 2020 through 2024 for the Group’s subsidiary in the PRC are generally subject to examination by the PRC tax authorities.

13.

Share-based compensation expenses

For the years ended December 31, 2024 and 2025, total share-based compensation expenses were nil and US$14, respectively. For the year ended December 31, 2023, the reversal of share-based compensation expense was US$972.

(a)Share options issued by Jimu Parent to employees of the Company

Starting from 2014, Jimu Parent granted multiple tranches of share options with tiered vesting commencement dates to employees, including employees of the Company. The options are generally scheduled to be vested over four years, one-fourth of the awards shall be vested upon the end of the calendar year in which the awards were granted or the first anniversary dates of the grants, and the remaining of the awards shall be vested on straight line basis. Options granted typically expire in ten years from the respective vesting commencement date as stated in the grant letters.

A summary of activities of the service-based share options granted to the employees of the predecessor operations of the Company for the year ended December 31, 2025 is presented below:


		Options		Weighted Average		Weighted Average Remaining		Average
		Outstanding		Exercise Price US$		Contractual Life (In years)		Intrinsic Value
Outstanding as of December 31, 2024		25,895		1.00		0.22		—
Granted		—		—		—		—
Exercised		(7,500)		—		—		—
Forfeited		(12,090)		1.00		—		—
Outstanding as of December 31, 2025		6,305		—		0.00		—
Vested and exercisable as of December 31, 2025		6,305		—		0.00		—

For the years ended December 31, 2023, 2024 and 2025, no share-based compensation expenses were recognized associated with the service-based share options granted to employees of the predecessor operations of the Company and allocated to the Company.

As of December 31, 2025, there was no unrecognized share-based compensation expenses related to the share options granted to employees of the predecessor operations of the Company and allocated to the Company.

(b)	Restriction of ordinary shares held by management and employees

The Company granted 1,863,043 restricted shares on June 28, 2019 to its employees and management. The shares subject to vesting thereafter in 4 equal and continuous yearly installments following the grant date provided that the employees’ and managements’ continuous service. The fair value of the restricted shares on the grant date equal to the market price of the Company’s ordinary shares, which was US$0.42 per share.

The fair value of the ordinary shares at the grant date is recognized as compensation expenses using graded vesting method over the requisite service period, which is the vesting period.

There are no activities of the total restricted ordinary shares for the year ended December 31, 2025.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

For the years ended December 31, 2023, 2024 and 2025, share-based compensation expenses recognized associated with the restricted ordinary shares and allocated to the Company were US$1, nil and nil, respectively. As of December 31, 2025, there was no unrecognized compensation cost related to non-vested service-based restricted ordinary shares.

(c)Share options granted by the Company to employees of the Company

The Group granted 16,042,500 share options and 740,000 share options on May 31, 2018 and July 31, 2018, respectively, to its employees and directors of the Company under the First Plan with an exercise price of US$0.000125. The fair value of the Company’s options was estimated to be $1.2785 per option granted on May 31, 2018, and $1.4506 per option granted on July 31, 2018 under the plan. These awards have a service condition and an initial public offering performance condition. For share options granted with performance condition, the share-based compensation expenses are recorded when the performance condition is considered probable. As a result, the cumulative share-based compensation expenses for these options that have satisfied the service condition was recorded upon the completion of the IPO.

In 2018, the Company created a second share incentive plan (the “Second Plan”) under which the maximum aggregate number of shares which may be issued under the Second Plan shall initially equal to 2.0% of the total number of shares issued and outstanding as of the effective date, plus an annual increase on September 1 of each year during the ten-year term of this Second Plan commencing with September 1, 2019, by an amount equal to 2.0% of the total number of shares issued and outstanding on August 31 of each year. Share options under this plan may vest over a service period, performance condition or market condition, as specified in each award. Share options expire ten years from the grant date.

A summary of activities of the service and performance-based share options granted to the employees and directors of the Company for the year ended December 31, 2025 are presented below:


						Weighted Average
				Weighted Average		Remaining		Average
		Options		Exercise		Contractual		Intrinsic
		Outstanding		Price US$		Life (In years)		Value
Outstanding as of December 31, 2024		1,961,750		0.3015		4.95		5
Exercised		—		—		—		—
Forfeited		—		—		—		—
Outstanding as of December 31, 2025		1,961,750		0.3015		3.95		5
Vested and exercisable as December 31, 2025		1,961,750		0.3015		3.95		5

For the years ended December 31, 2024 and 2025, share-based compensation expenses recognized associated with share options granted by the company were nil. For the year ended December 31, 2023, the reversal of share-based compensation expense recognized associated with share options granted by the company was US$973. As of December 31, 2025, there was no unrecognized share-based compensation related to the share options granted to the Group’s employees and directors. There were no new granted options for the years ended December 31, 2023, 2024 and 2025. The total intrinsic value of options exercised during the years ended December 31, 2023, 2024 and 2025, was US$1, nil and nil, respectively.

(d)Class C shares options granted by Ziitech to employees

Ziitech granted 89,442 Class C shares options of Ziitech on July 1, 2024 to its employees. The shares subject to vesting thereafter in 4 equal and continuous yearly installments following the grant date provided that the employees’ continuous service. The fair value of the options with exercise price of nil on the grant date was US$2.19 per share options.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

The fair value of the Class C ordinary share options at the grant date recognized as compensation expenses using graded vesting method over the requisite service period, which is the vesting period.


		Weighted Average
	Number	Grant Date
	Outstanding	Fair Value (US$)
Unvested as of December 31, 2024	—	—
Acquisition of Ziitech	54,157	2.19
Vested	—	—
Forfeited	—	—
Unvested as of December 31, 2025	54,157	2.19

For the years ended December 31, 2023, 2024 and 2025, share-based compensation expenses recognized associated with the Class C share options were nil, nil and US$14, respectively. As of December 31, 2025, unrecognized compensation cost was US$55, which was expected to be recognized in a weighted average period of 2.5 years.

The estimated fair value of Class C shares options granted by Ziitech to employees was determined using the binomial option valuation model, with the assistance from an independent third-party appraiser. The binomial model requires the input of highly subjective assumptions, including the expected share price volatility. The key inputs are summarized below:

1)	The expected volatility was 53.63% and referred to historical volatilities of several comparable companies;

2)	The dividend yield was 0% and estimated based on the Company’s expected dividend policy over the expected term of the options;

3)	The risk-free rate for periods within the contractual lives of the options was 4.38% and based on Australian government bond yields;

4)	The estimated fair value of Class C ordinary share, at the option grant dates, was US$2.19.

14.

Defined contribution plan

Full time employees of the Group in the PRC, Australia and Singapore participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefit expenses, which were expensed as incurred, were nil, nil and US$67 for the years ended December 31, 2023, 2024 and 2025.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

15.Loss per share


		For the years ended December 31,
		2023		2024		2025
		US$		US$		US$
Numerator:
Net loss from discontinued operations attributable to J and Friends Holdings Limited shareholders		(5,347)		(1,830)		(835)
Denominator:
Weighted average ordinary shares outstanding
—basic and diluted*		494,712,397		554,687,200		581,991,927
Basic and diluted net loss per share from discontinued operations attributable to ordinary shareholders		(0.01)		(0.003)		(0.001)
Numerator:
Net loss from continuing operations attributable to J and Friends Holdings Limited shareholders		(5,706)		(318)		(489)
Denominator:
Weighted average ordinary shares outstanding
—basic and diluted*		494,712,397		554,687,200		581,991,927
Basic and diluted net loss per share from continuing operations attributable to ordinary shareholders		(0.01)		(0.001)		(0.001)

For the years ended December 31, 2023, 2024 and 2025, restricted shares, share options and warrants were anti-dilutive and thus excluded from the calculation of diluted loss per share. The potential dilutive securities that were not included in the calculation of dilutive loss per share in those periods are 529,450, 507,352 and 208,793 respectively, for the years ended December 31, 2023, 2024 and 2025.

16.Commitments and contingencies

Commitment

The Group had no purchase commitment as of December 31, 2025.

Contingencies

In the normal course of business, the Group is subject to commitments and contingencies, including legal proceedings and claims arising out of its business that relate to a wide range of matters, such as government investigations and tax matters. The Group recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Group may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.

The Company is not aware of any pending or threatened claims and litigation as of December 31, 2025 and through the issuance date of these consolidated financial statements.

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J AND FRIENDS HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(US$ in thousands, except for share data and per share data, or otherwise noted)

17.Segment reporting

The Group’s CODM is its CEO, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. The Group manages its operations and allocates resources as a single operating segment.

The following table includes the significant expense categories and amounts that are regularly provided to the CODM:


	For the years ended December 31,
	2023	2024	2025
	US$	US$	US$
Revenues	—	—	1,598
Less:
Cost of revenues ⁽¹⁾	—	—	(455)
Sales and marketing expenses ⁽¹⁾	(51)	(1)	(539)
General and administrative expenses ⁽¹⁾	(575)	(293)	(1,438)
Research and development expenses ⁽¹⁾	—	—	(492)
Share-based compensation reversal/(expenses)	972	—	(14)
Interest expenses, net	(631)	(14)	(52)
Other segment items ⁽²⁾	(5,421)	(10)	650
Net loss from continuing operations	(5,706)	(318)	(742)

(1) Exclusive of share-based compensation expenses.

(2) Other segment items included loss from disposal of subsidiaries, other expense/(income) and income tax expense.

18.Subsequent events

The Company has evaluated subsequent events through the issuance of the consolidated financial statements and concluded that no subsequent events have occurred that would require recognition or disclosure in the consolidated financial statements other than as disclosed below.

On February 9, 2026, the Company established Beijing YJZY Tech Co., Ltd. in PRC.

In April 2026, a wholly-owned subsidiary of the Company borrowed RMB1,100 (approximately US$157) from a third party for daily operation. The loan has an annual interest of 6% and a one-year maturity.

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ATTACHMENTS / EXHIBITS

ATTACHMENTS / EXHIBITS